STATE OF NEW YORK
SUPREME COURT : COUNTY OF ERIE
ROSE Z. LUBKOWSKA,
vs. Index No. 1996/7549
HOLIDAY BUILDING CO., INC. and
Appearances: FRANCIS J. MARTIN, ESQ.
Attorney for Plaintiff, Rose Z. Lubkowska
RALPH C. LORIGO, ESQ.
Attorney for Defendants, Holiday
Building Co., Inc. and Henry Lubkowski
Pursuant to the Order of the Honorable John A. Michalek, granted May 12, 2000 a Hearing was held in the instant action to determine the reasonable buy out price for Defendant, HENRY LUBKOWSKI, to purchase Plaintiff's interest in real property located at 49 Summit Avenue in the Town of Orchard Park and to determine whether Defendant is entitled to any offsets against the net proceeds. Previously, Justice Michalek ordered that the property be sold and the proceeds be divided between the parties.
A Hearing was held on June 19, 2000 at which both Plaintiff, ROSE Z. LUBKOWSKA, and Defendant, HENRY LUBKOWSKI, testified. Eighteen (18) exhibits were marked and entered into evidence. The parties were given until August 19, 2000 to submit post hearing Findings of Fact and Conclusions of Law. Both Plaintiff and Defendant have done so.
MR. LUBKOWSKI was straight forward and credible, backing up his testimony with documentary evidence in most instances. He has worked as a residential building contractor for the past twenty five to thirty years. MR. LUBKOWSKI testified that he, through his company, Defendant, HOLIDAY BUILDING CO., INC., built the property located at 49 Summit Avenue in the Town of Orchard Park in 1994. It is a two (2) unit residential dwelling originally owned by Defendant, HOLIDAY BUILDING CO., INC. In 1995 the property was transferred to the Plaintiff and Defendant herein, who are sister and brother, as tenants in common. The property was built for the purpose of being sold.
For a time, Plaintiff and Defendant each occupied the property, Plaintiff residing in the upper unit and Defendant living in the lower unit. Plaintiff moved out in May of 1996. After she left the premises, Plaintiff made no financial contribution toward the property's expenses. All expenses of the property incurred after Plaintiff moved out were paid either by MR. LUBKOWSKI through a checking account he established specifically for that purpose or through his company, Defendant, HOLIDAY BUILDING CO., INC.
During the course of his testimony, MR. LUBKOWSKI detailed the tenant situation with respect to both the upper and lower units subsequent to May of 1996. Over the four (4) year period spanning the time of Plaintiff's vacating the premises up to the time of the Hearing herein, MR. LUBKOWSKI collected total rents in the amount of Thirty Eight Thousand Seven Hundred Fifty Six Dollars and Sixty Five Cents ($38,756.65) The total expenses incurred and paid by either MR. LUBKOWSKI directly or through his company, HOLIDAY BUILDING CO., INC. for property maintenance and in connection with efforts to market the property for sale totaled Seventy Three Thousand Three Hundred Eighty Six Dollars and Eleven Cents ($73,386.11). Thus, during the four years at issue, MR. LUBKOWSKI contributed Thirty Four Thousand Six Hundred Twenty Nine Dollars and Forty Six Cents ($34,629.46) toward the property over and above the rents received.
With regard to the efforts made to market the property for sale, MR. LUBKOWSKI testified that a realtor selected by the Plaintiff placed an asking price on the property of One Hundred Forty Nine Thousand Five Hundred Dollars ($149,500.00). Over the course of three years, no offer has been made. Based on his experience as a residential building contractor for the past twenty five to thirty years, MR. LUBKOWSKI stated that potential buyers will never give the seller the asking price. Also based on his experience in the business, MR. LUBKOWSKI testified that a typical "negotiating factor" is 3% to 5% of the asking price, and the typical sales commission is 7% of the sales price.
According to MR. LUBKOWSKI and documentary evidence he presented, there is a current mortgage balance with respect to the property in the amount of One Hundred Nine Thousand Four Hundred Twenty Five Dollars and Sixty One Cents ($109,425.61). Additionally, the outstanding 2000 tax bill is Two Thousand Three Hundred Forty One Dollars and Eighty Three Cents ($2,341.83).
MR. LUBKOWSKI testified that he is willing and able to buy out plaintiff's interest in the property.
ROSE Z. LUBKOWSKA'S testimony was brief. She was extremely non-responsive as a witness and appeared to obfuscate quite frequently. When asked specific questions by her attorney, she was often evasive and/or would provide answers to other questions or lines of inquiry which were not being addressed at the time.
MS. LUBKOWSKA testified that the property was not built to be sold. She also testified that her brother threw her out. Plaintiff makes no claim that there was ever an agreement that her brother would pay rent while living at the premises.
MS. LUBKOWSKA testified that she never made any financial contribution toward the property, either in the form of rental payments or expenditures for routine maintenance or property improvement. Later, she contradicted this testimony in part by asserting she had contributed financially toward property maintenance. She provided no specifics in this regard and submitted no documentary evidence in support of this claim. Finally, MS. LUBKOWSKA confirmed that since May of 1996, she has made no financial contributions to the property.
MS. LUBKOWSKA testified that she does not want to sell the property, and that she prefers instead to live in the premises located at 49 Summit Avenue in the Town of Orchard Park. However, she did acknowledge that if she and her brother were offered One Hundred Forty Five Thousand Dollars ($145,000) today for the property, she would consider selling it.
FINDINGS OF FACT
The subject property is currently owned by Plaintiff and Defendant, HENRY LUBKOWSKI. It has been on the market for three years at an asking price of One Hundred Forty Nine Thousand Five Hundred Dollars ($149,500) and has not sold. Plaintiff voluntarily moved out in May of 1996. Since that time, she has not contributed financially to the property in any manner. Following Plaintiff's vacating of the premises, there was no agreement, either oral or written, between the parties that Defendant, HENRY LUBKOWSKI, would pay rent.
A reasonable selling price for the property is One Hundred Forty Five Thousand Fifteen Dollars ($145,015). Gross equity in the property after deduction of the real estate commission, the outstanding taxes and the mortgage payoff is Twenty Three Thousand Ninety Six Dollars and Fifty One Cents ($23,096.51). The cost of the sale will total Two Thousand Five Hundred Fifty Five Dollars ($2,555), thus making the net equity in the property Twenty Thousand Five Hundred Forty One Dollars and Fifty One Cents ($20,541.51).
Total expenses for the property since May of 1996 were Seventy Three Thousand Three Hundred Eighty Six Dollars and Eleven Cents ($73,386.11). These expenses were reasonable and necessary. Defendant, HENRY LUBKOWSKI, paid all these expenses with no contribution thereto from Plaintiff, ROSE Z. LUBKOWSKA.
In light of the reasonable sale price of One Hundred Forty Five Thousand Fifteen Dollars ($145,015), the net equity in the amount of Twenty Thousand Five Hundred Forty One Dollars and Fifty One Cents ($20,541.51) and the property expense credits due to Defendant, HENRY LUBKOWSKI, in the amount of Thirty Four Thousand Six Hundred Twenty Nine Dollars and Forty Six Cents ($34,629.46), the amount due to Defendant, HENRY LUBKOWSKI, from Plaintiff, ROSE Z. LUBKOWSKA, is Seven Thousand Forty Three Dollars and Ninety Eight Cents ($7,043.98).
With regard to plaintiff's contention that Defendant, HENRY LUBKOWSKI, owes rent
for the time period during which he occupied the premises, the law is well-settled. Absent an agreement to the contrary, rental value cannot be received from a tenant in common who occupies the premises with the acquiescence of the co-tenant, unless he has interfered with the right of the co-tenant to also occupy the premises or unless there exists an agreement to pay rent. Friegang v. Friegang, 256 A.D. 2d 539 (2d Dept 1998), Haberman v. Haberman, 216 A.D. 2d 525 (2d Dept 1995). In the instant action there was neither ouster of plaintiff from the premises by defendant nor any agreement by defendant to pay rent. Thus, Defendant, HENRY Lubkowski, had no obligation to pay rent while living in one of units and has no outstanding rental obligations.
As to defendant's claim for a set-off due to his expenditures for maintenance and improvement of the property, as well as his efforts at marketing it for sale, it has been held that "a tenant in-common may be allowed reimbursement for money expended in repairing and improving the property if the repairs and improvements were made in good faith and were necessary to protect or preserve the property." Worthing v. Cossar, 93 A.D. 2d 515 (4th Dept 1983). Therefore, as a co-tenant, Plaintiff, ROSE Z. LUBKOWSKA, owes defendant one-half of the expenses which were paid in full by Defendant, HENRY LUBKOWSKI.
In accordance with the evidence and findings herein, as well as the legal principles enunciated in Goergen v. Maar, 2 A.D. 2d 76 (3d Dept 1956) and the other case law cited, it is the recommendation of the Referee that the property at 49 Summit Avenue in the Town of Orchard Park be transferred to Defendant, HENRY LUBKOWSKI, individually, by the Plaintiff, ROSE Z. LUBKOWSKA, and Defendant, HENRY LUBKOWSKI, be awarded a judgment in the amount of Seven Thousand Forty Three Dollars and Ninety Eight Cents
($7,043.98) against Plaintiff, ROSE Z. LUBKOWSKA.
Additionally, it is the recommendation of the Referee that the action against Defendant, HOLIDAY BUILDING CO., INC., be dismissed on the merits and with prejudice as said Defendant has no ownership interest in the subject property.
Lynn A. Clarke, Esq.
Ratified and Adopted as the Decision,
Order and Judgment of the Court.
Hon. John A. Michalek
Supreme Court Justice
September 14, 2000
Buffalo, New York