State of New York
Supreme Court, Appellate Division
Third Judicial Department
Decided and Entered: December 8, 2016 522886
________________________________
HENRY J. KROL JR.,
Respondent,
v
KATHERINE YAGER-KROL,
Individually and as MEMORANDUM AND ORDER
Executor of the Estate of
JULIA YAGER,
Appellant,
et al.,
Defendants.
________________________________
Calendar Date: October 14, 2016
Before: McCarthy, J.P., Garry, Lynch, Devine and Clark, JJ.
__________
Robert M. Winn, Granville, for appellant.
Harlem & Jervis, Oneonta (Richard A. Harlem of counsel),
for respondent.
__________
Garry, J.
Appeal from a corrected order of the Supreme Court (Burns,
J.), entered June 26, 2015 in Otsego County, which denied
defendant Katherine Yager-Krol's motion for summary judgment
dismissing the complaint.
Plaintiff and defendant Katherine Yager-Krol (hereinafter
defendant) were married in 1989. During the marriage, defendant
inherited property known as the Yager Farm from her mother, Julia
Yager, who died in 2005. Plaintiff commenced a divorce action in
2010, and the parties were divorced in 2012. The divorce
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judgment incorporated stipulations by which the parties resolved
various issues, including their agreement that Yager Farm was
separate property for purposes of the divorce litigation but that
plaintiff reserved any claims to the property that he might have
"under a theory of constructive trust or otherwise exclusive of
any claim because of the marriage directly."
Thereafter, plaintiff commenced this action seeking to have
a constructive trust placed upon Yager Farm on the ground that he
had expended funds and made improvements to the property in
reliance upon defendant's promise to share ownership with him.
Following joinder of issue, defendant moved for summary judgment
dismissing the complaint against her. Supreme Court denied
defendant's motion, finding, as pertinent here, that the claim
was not barred by res judicata and that there were questions of
fact as to whether a constructive trust should be applied.
Defendant appeals, and we affirm.
Ordinarily, principles of res judicata preclude a party
from separately litigating issues of title to property that were
or might have been raised in a matrimonial action, as such
matters are closely interrelated with the core objective of
dissolving the marital relationship (see O'Connell v Corcoran, 1
NY3d 179, 184-185 [2003]; Boronow v Boronow, 71 NY2d 284, 290
[1988]; Eickhoff v Eickhoff, 12 AD3d 741, 741-742 [2004]; see
also Rainbow v Swisher, 72 NY2d 106, 110 [1988]). However, when
a party's right to maintain a cause of action has been expressly
reserved in a prior action, "[i]t would be inequitable to
preclude [the] party from asserting [the] claim under the
principle of res judicata" (Landau, P.C. v LaRossa, Mitchell &
Ross, 11 NY3d 8, 14 [2008] [internal quotation marks and
citations omitted]; see Travelers Prop. Cas. Co. of Am. v Sanco
Mech., Inc., 126 AD3d 527, 527-528 [2015]). Here, the parties
freely agreed to the stipulation by which plaintiff reserved his
constructive trust claim, which is contractually binding upon
them (see Barlette v Barlette, 95 AD3d 1624, 1624 [2012]; Hoyt v
Hoyt, 307 AD2d 621, 622 [2003]). Defendant has made no claim of
any unfairness, inequitable conduct or other reason to question
the knowing and voluntary nature of the stipulation (see Varriale
v Varriale, 160 AD2d 1121, 1122-1123 [1990]). We thus agree with
Supreme Court that res judicata does not preclude plaintiff from
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raising the constructive trust claim (compare Xiao Yang Chen v
Fischer, 6 NY3d 94, 102 [2005]; Partlow v Kolupa, 122 AD2d 509,
509-510 [1986], affd 69 NY2d 927 [1987]).1
We further reject defendant's contention that Supreme Court
erred in denying summary judgment because plaintiff did not
submit evidence that defendant promised to convey an interest in
Yager Farm to him. A constructive trust may be imposed upon
proof of "(1) a confidential or fiduciary relation, (2) a
promise, express or implied, (3) a transfer made in reliance on
that promise, and (4) unjust enrichment" (Bankers Sec. Life Ins.
Socy. v Shakerdge, 49 NY2d 939, 940 [1980]; accord Consumers
Union of U.S., Inc. v State of New York, 5 NY3d 327, 347 n 14
[2005]). "In the marital context, constructive trusts have been
imposed when the party seeking this relief has demonstrated a
transfer of funds or expenditure of effort, in reliance upon a
promise, over and above that which could normally be attributed
to the give and take of the marital relationship" (Tidball v
Tidball, 93 AD2d 954, 955 [1983] [citation omitted]).
Defendant asserted that neither she nor her parents – the
prior owners of Yager Farm – ever agreed to convey an interest in
the property to plaintiff, and that she never made any express or
implied promise to develop or utilize the farm for plaintiff's
benefit as co-owner. She further asserted that defendant made
few expenditures of money or time for the benefit of the
property, and that the costs he did cover were nothing more than
typical marital expenses. In opposition, plaintiff asserted that
he and defendant had frequent conversations throughout their
marriage regarding their plans to move to Yager Farm after its
ownership passed to defendant and to renovate it as co-owners.
He further asserted that, in reliance upon these conversations,
he invested substantial amounts of time, labor and money for the
property's benefit throughout the marriage, including purchasing
various pieces of farm equipment, paying taxes and insurance,
1
Defendant's further argument that res judicata bars
plaintiff's claims of unjust enrichment and quantum meruit was
not raised in Supreme Court and is thus unpreserved for appellate
review (see Matter of Ramos v Goord, 309 AD2d 1096, 1097 [2003]).
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performing haying and lumbering operations and repairing and
renovating farm buildings and a log cabin, and helping to pay
counsel fees, expenses and the cost of settlement of certain
litigation involving the property. He further produced a 2010
written communication from defendant to plaintiff in which, among
other things, she stated that she hoped that his business address
would soon be that of Yager Farm, as well as an affidavit from
the parties' son stating that he recalled family discussions
between plaintiff and defendant about their plans to renovate and
move into Yager Farm, and that he had never heard defendant state
that she did not intend to convey an ownership interest to
plaintiff.
The elements of a constructive trust are applied flexibly,
"and, as an equitable remedy, a constructive trust may be imposed
whenever necessary to satisfy the demands of justice" (Cinquemani
v Lazio, 37 AD3d 882, 882 [2007]; see Booth v Booth, 178 AD2d
712, 713 [1991]). Here, the parties' contradictory claims as to
whether defendant intended to share ownership of the farm with
plaintiff present credibility issues for factual resolution. We
agree with Supreme Court that defendant's submissions established
triable issues as to whether plaintiff's labor and expenditures
were made in reliance upon an express or implied promise and
whether a constructive trust should be applied (see Marini v
Lombardo, 39 AD3d 824, 825-826 [2007]; Moak v Raynor, 28 AD3d
900, 902-903 [2006]; Leire v Anderson-Leire, 22 AD3d 944, 945-946
[2005]). Accordingly, defendant was not entitled to summary
judgment dismissing the complaint.
McCarthy, J.P., Lynch, Devine and Clark, JJ., concur.
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ORDERED that the corrected order is affirmed, with costs.
ENTER:
Robert D. Mayberger
Clerk of the Court