Bouffard v. Befese, LLC
New York Supreme Court, Appellate Division
111 A.D.3d 866, 976 N.Y.S.2d 510 (2013)
- Written by Salina Kennedy, JD
Facts
Ricardo Tedesco (plaintiff) owned property but was facing foreclosure. Jerry Bouffard (plaintiff) bought the property, financed the purchase with a $209,000 mortgage, and held the property on Tedesco’s behalf. Several years later, Tedesco wanted to borrow $200,000 to finance a business venture, but he was unable to obtain traditional financing. At that time, the property was worth approximately $500,000 and was encumbered by $385,000 of debt. Jeff Reback had previously made Tedesco a loan, but Tedesco had not repaid it. Rather than loan Tedesco more money, Reback proposed that Befese, LLC (Befese) (defendant), a company owned by Reback, buy the property for $200,000, take the deed to the property, and enter into an option agreement permitting Bouffard and Tedesco to buy the property back within 90 days at an option price of $220,000. Reback offered these terms because he wanted to avoid the foreclosure process if Tedesco defaulted on the loan. Tedesco and Bouffard agreed, and Befese bought the property. Reback accepted the deed, but he neither recorded it nor took possession of the property. Tedesco and Bouffard failed to repurchase the property within the 90-day option period or within two extension periods. Title to the property was eventually conveyed to Hawkes Crossing, LLC. Tedesco and Bouffard sued Befese, seeking to set aside the deed. Hawkes Crossing intervened to protect its title to the property. The trial court concluded that the 2004 deed was intended to act as a mortgage security for the $200,00 loan rather than as a conveyance. Based on the terms of the option agreement, the court determined that the loan was usurious and therefore void and that Bouffard held title to the property. Hawkes Crossing appealed.
Rule of Law
Issue
Holding and Reasoning ()
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