“Cain/Able” Legal Duel Over Property in Queens:

This was originally posted on the SGR Blog.

Did Brother Establish a Constructive Trust?

Subodh C. Sarker and Nirmal C. Das are brothers. Das is the title owner of real property in Queens, which he acquired from Sarker by bargain and sale deed dated August 26, 2002. Sarker continued to reside at the property after the sale.

In May 2018, Das started a holdover proceeding in the Civil Court to evict Sarker from the property. Das was successful in the holdover proceeding and a warrant for eviction was ultimately issued.

Prior to the scheduled eviction, Sarker filed an action against Das to impose a constructive trust on the property and to recover damages for breach of fiduciary duty and unjust enrichment. Sarker moved for a preliminary injunction staying the holdover proceeding pending determination of the subsequent action. By order entered January 23, 2019, the Supreme Court granted Sarker’s motion. Das appealed.

The decision to grant or deny a preliminary injunction was within the sound discretion of the Supreme Court. Although the purpose of a preliminary injunction is to preserve the status quo pending a trial, the remedy is considered a drastic one, which should be used sparingly. To be entitled to a preliminary injunction, a movant must establish: (1) a probability of success on the merits; (2) a danger of irreparable injury in the absence of an injunction; and (3) a balance of the equities in the movant’s favor.

The elements of a constructive trust are: (1) a fiduciary or confidential relationship; (2) an express or implied promise; (3) a transfer in reliance on the promise; and (4) unjust enrichment.

The elements of a cause of action to recover for unjust enrichment are: (1) the defendant was enriched; (2) at the plaintiff’s expense; and (3) it is against equity and good conscience to permit the defendant to retain what is sought to be recovered.

And the elements of a cause of action to recover damages for breach of fiduciary duty are: (1) the existence of a fiduciary relationship; (2) misconduct by the defendant; and (3) damages directly caused by the defendant’s misconduct.

The appeals court found that Sarker failed to establish a likelihood of success on the merits on any of the causes of action asserted in the complaint. Sarker’s allegations in his affidavit that he conveyed the property to Das in reliance on a promise–that Das would convey the property back to Starker once he obtained a certain legal status–was contradicted by the documentary evidence offered, which demonstrated that the property was conveyed to Das in exchange for valid consideration. Das’ purchase of the property was funded by a note in the sum of $140,000, which was secured by a mortgage that Das executed in favor of a third party. And the HUD-1 settlement statement executed by the parties in connection with the transfer recited a contract sales price for the property in the sum of $380,000.

Although a party moving for a preliminary injunction need not introduce conclusive evidence, and there may be questions of fact for trial, that did not preclude the Court from exercising its discretion in granting an injunction. But Sarker failed to present any probative evidence demonstrating a likelihood of success on the merits. Accordingly, his motion for a preliminary injunction should have been denied.

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