Topp v. Pincus

Background

Sylvia Topp sued Harry and Monica Pincus seeking partition by sale under Article 9 of New York’s Real Property Actions and Proceedings Law. Partition is the legal process for dividing jointly held property or, when physical division would substantially harm the owners, selling the property and dividing the proceeds. Topp also sought a related accounting of the property’s income and expenses. The parties cross-moved for summary judgment on Topp’s partition claim.

The dispute concerns the fifth floor of a cooperative building. In 1975, Topp and Harry Pincus each purchased one share of the cooperative corporation and received separate proprietary leases describing the fifth floor. The parties later treated the floor as two separate apartments, including by constructing interior walls, bathrooms, and kitchens. The cooperative’s operative 1979 certificate of occupancy, however, identifies the fifth floor as one dwelling. The Department of Buildings later issued violations stating that the floor had been illegally divided into two apartments. The Department had denied at least three requests for a variance, and the parties had been unable to obtain a legal division.

Summary-judgment ruling

The court granted Topp’s motion and denied the Pincuses’ motion. It concluded that no genuine dispute of material fact prevented judgment as a matter of law.

One legal unit and tenancy in common

The court held that the fifth floor is one legal unit. Under New York law, the court explained, a building’s legal designation is established by its certificate of occupancy. The operative certificate lists the fifth floor as a single dwelling, and the Department of Buildings’ violations likewise describe the two-apartment arrangement as illegal. The court rejected the argument that the parties’ intentions when they purchased the property, their separate stock certificates, or their separate leases established two legal dwellings.

The court also held that Topp and the Pincuses hold the fifth floor as tenants in common. A tenancy in common means that two or more people each hold an undivided ownership interest in property. The court noted that the defendants did not argue that the parties held the property as joint tenants, and the record did not show that they did.

Partition by sale

The court held that partition by sale was proper because physical partition could not be completed without great prejudice to the owners. The parties had tried to make the two sides legally independent for many years without success. In particular, windows on the south half of Topp’s apartment were lot-line windows that did not provide the light and air required for an independent apartment. Removing the obstacles would apparently require purchasing an adjacent lot, which Harry Pincus valued at approximately $2.3 million, along with other changes that might affect additional cooperative units.

The defendants argued that the cooperative, rather than the parties, should bear the cost of physically separating the floor. The court found that argument did not create a factual dispute about whether physical partition could be accomplished without great prejudice today. It therefore concluded that sale-based partition was proper under the New York statute.

Cooperative corporation and Rule 19

The court denied the defendants’ argument that the cooperative corporation had to be joined under Rule 19 of the Federal Rules of Civil Procedure. Rule 19 concerns people or entities whose absence might prevent the court from providing complete relief or might impair their interests.

The court found that it could provide the requested relief without the cooperative corporation. It also found that the cooperative did not claim an interest in the action. The defendants’ argument that the cooperative’s participation would provide more information about the stock certificates, leases, certificate of occupancy, and parties’ intentions did not make the cooperative a necessary party.

Accounting and disposition

The court explained that an accounting of the property’s income and expenses is generally part of a partition action and ordinarily occurs before the property or sale proceeds are divided. The court did not resolve the accounting issues in this opinion. Instead, it directed the parties to meet and confer and file a joint letter proposing a briefing schedule and procedures for the accounting.

Judge Lorna G. Schofield’s final disposition was that Topp’s motion was granted and the defendants’ motion was denied. The Clerk was directed to close the two motions.