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Adam Leitman Bailey, P.C. Secures Victory for Title Company in a 100-Year-Old Easement Action

Adam Leitman Bailey, P.C. was recently retained by a Title Company in an action in the Supreme Court of the State of New York, County of Queens, where the plaintiff alleged that the title company failed to disclose the existence of a 100-year-old easement which severely depressed the value of his property. Instead of informing the title company, the plaintiff sold the property for a reduced value based upon the existence of the easement. The plaintiff then brought an action against the title company for breach of contract to produce a marketable and insurable title report, breach of fiduciary duty to deliver a marketable and insurable title, and for attorney fees.

Once retained by the title company, Adam Leitman Bailey, P.C. began reviewing the records of the area. The property is located in Astoria, and in reviewing records of the area, it was unclear where the purported easement could have been located. Adam Leitman Bailey, P.C. immediately undertook a thorough site visit and investigated both the property and the adjacent properties. This strategy is normally employed by Adam Leitman Bailey, P.C. because many times there is valuable information that can only be discovered by visiting the property.

When investigating the property, Adam Leitman Bailey, P.C. came equipped with the recorded deeds and surveys; and used that information to examine the front, back, and sides of the property. Adam Leitman Bailey, P.C. interviewed the current and former owners of the property, as well as the neighbors. Finally, when looking at where the purported easement could be, it dawned on Adam Leitman Bailey, P.C. that similar light and air easements were routinely given in the late 1800s and early 1900s when properties were being developed in that area. These easements would generally terminate at a specific time thereafter.

Adam Leitman Bailey, P.C. suspected that the easement terminated but searching for land records in New York City that were created prior to 1966 was a daunting and time-consuming task because those documents would not be available online on the New York City Department of Finance Automated City Register Information System (“ACRIS”) website. To retrieve those documents one would have to go to the city register office for that borough and physically search the land record books.

Even though Adam Leitman Bailey, P.C. believed that its search of the land records would ultimately uncover documentation showing that the easement was terminated, Adam Leitman Bailey, P.C. did not want to unnecessarily waste the title company’s time by waiting until such documents were found. Instead, Adam Leitman Bailey, P.C. filed a motion to dismiss based upon numerous legal theories while it simultaneously conducted the land records search.

Adam Leitman Bailey, P.C. argued that: (i) the title policy did not constitute a promise or guarantee to the plaintiff that the title to the property is free from any defects; (ii) insurance companies do not owe their policyholders a fiduciary duty; and (iii) an insured is not able to recover attorney’s fees against an insurance company to settle any rights under the policy absent a contractual or policy provision permitting same. Furthermore, to the extent that the plaintiff’s complaint could be construed as claiming some right to coverage under the title policy, Adam Leitman Bailey, P.C. argued that the complaint should still be dismissed because: (i) the plaintiff failed to promptly, or at all, notify the title company of the alleged easement prior to selling the property; (ii) the plaintiff undertook to settle the issue without the consent of the title company; and (iii) since the plaintiff no longer holds any estate or interest in the property, any obligation on the part of the title company to provide coverage with respect to the alleged easement terminated pursuant to the express terms and conditions of the title policy.

In opposition, the plaintiff’s arguments dealt a lot with the existence of the easement. Adam Leitman Bailey, P.C. knew that its legal arguments should be sufficient to prevail in the action, but Adam Leitman Bailey, P.C. wanted to further ensure a successful result for its clients by showing the easement terminated. While the motion was pending, Adam Leitman Bailey, P.C. was able to discover a 1906 easement agreement that specifically provided that the easement would terminate on July 1, 1931.

Adam Leitman Bailey, P.C. incorporated the termination of the easement along with further support of its legal arguments in its reply papers. The decision by the court fully adopted Adam Leitman Bailey, P.C.’s legal arguments and dismissed the complaint in its entirety.

Adam Leitman Bailey, Esq., Jackie Halpern Weinstein, Esq., and Danny Ramrattan, Esq. at Adam Leitman Bailey, P.C. secured this result for the title company.

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