Siegmund Strauss, Inc. v East 149th Realty Corp.

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[*1] Siegmund Strauss, Inc. v East 149th Realty Corp. 2006 NY Slip Op 51753(U) [13 Misc 3d 1209(A)] Decided on September 19, 2006 Supreme Court, New York County Fried, J. Published by New York State Law Reporting Bureau pursuant to Judiciary Law § 431. This opinion is uncorrected and will not be published in the printed Official Reports.

Decided on September 19, 2006
Supreme Court, New York County

Siegmund Strauss, Inc., Plaintiff,

against

East 149th Realty Corp., WINDSOR BRANDS, LTD., TWINKLE IMPORT CO., INC., TERESA RODRIGUEZ and ROBERT RODRIGUEZ, Defendants.



601991/2006



Attorneys for the Plaintiff:

Adrian Zuckerman, Esq.

Ralph Berman, Esq.

Andrew R. Tulloch, Esq.

Lowenstein Sandler, P.C.

1251 Avenue of the Americas, 18th Floor

New York, New York 10020

Attorneys for the Defendants:

Jay Joseph Friedrich, Esq.

David Friedrich, Esq.

Jay Joseph Friedrich, LLC

203 Godwin Avenue

Ridgewood, New Jersey

07450

Bernard J. Fried, J.

Plaintiff Siegmund Strauss, Inc. ("Strauss") moved by an Order to Show Cause on June 9, 2006, seeking a temporary restraining Order ("TRO") and an injunction, pursuant to CPLR § 6301, against Defendants Windsor Brands, Ltd. ("Windsor"), Twinkle Import Co., Inc. ("Twinkle"), Robert Rodriguez ("Robert") and Teresa Rodriguez ("Teresa").[FN1] In essence, the relief sought is an [*2]Order declaring that Plaintiff, and not Defendants, has the sole right to possession of the property at 520 Exterior Street, Bronx, New York, a/k/a 110 East 149th Street, Bronx, New York (the "property" or "premises"), by virtue of partial performance of an agreement that the parties never executed.[FN2] The Honorable Karla Moskowitz set an oral argument date of June 13, and the parties entered into an interim stipulation dated June 9, 2006.

Defendants submitted a cross-motion by an Order to Show Cause on June 12, 2006,[FN3] in which they essentially sought an Order declaring that they, and not Plaintiff, had sole right to possession of the property, because Windsor is the tenant of record on the lease.

After hearing argument on June 13, 2006, I did the following: (1) denied both parties' requests for a TRO, (2) scheduled a preliminary injunction hearing on July 5, 2006, (3) directed the parties to engage in discovery limited to the question of whether there had been partial performance of the alleged oral agreement between the parties, and (4) further directed the parties to negotiate terms on which both parties could use the premises, pending the hearing date. The parties then entered into a stipulation, which I so-ordered, in which they agreed, inter alia, that Strauss would pay Defendants $40,000, and that Strauss would "be entitled to exclusive possession and occupancy of [the property] thru [sic] the hearing of July 5, 2006 and or any adjourned date thereafter." The July 5 hearing was adjourned to permit the parties to resolve their dispute, but they were unable to do so.

An evidentiary hearing on the cross-motions for a preliminary injunction was held on July 21 and 24, 2006. The parties agreed that I could consider the deposition transcripts and/or affidavits of witnesses, which I received as part of Plaintiff's presentation of its case, as part of the record, subject to Defendants' cross-examination. The parties made further submissions at my direction, and further argument took place on August 1.

Background

Plaintiff Strauss is a food brokerage business that operated in the Bronx Terminal Market for some years prior to May 2006. The president of Strauss is Stanley Mayer ("Stanley"), and Marc Strauss ("Marc") is its secretary.

Defendant Twinkle is in essentially the same business as Strauss or, at least, it was prior to May 2006, when it ceased to operate its business. Both businesses sold similar merchandise meat, paper and plastic products, and non-perishable foods for wholesale distribution.

Defendant Windsor is the tenant currently named on the lease of the property. Windsor's lease expires on August 31, 2007. Until May 2006, Twinkle paid Windsor rent as a subtenant and [*3]operated its business at the property in dispute. Windsor employed Twinkle's employees and leased them to Twinkle. Prior to May 2006, Twinkle (or Windsor) employed 28-30 people. Defendants Robert and Teresa (collectively, the "Rodriguezes") are the principals of Twinkle and Windsor.[FN4]

Mayer and the Rodriguezes met in late 2005 or early 2006 through their mutual accountant, Allan Moroknek.[FN5] Strauss was in a predicament: the Bronx Terminal Market was going to be closed, and Strauss was about to lose its lease. Strauss had nowhere to move its business.[FN6] Meanwhile, Twinkle was on uncertain financial footing and needed some help to stay in business. (Moroknek Dep. at 26.)[FN7] Moroknek suggested that the two businesses merge and move onto the same property. They would operate from Twinkle's property, but Strauss would be the surviving entity, and both Twinkle and Windsor would eventually be dissolved. The parties began to negotiate the details of this arrangement sometime during the first several months of 2006 with Moroknek's help.

Strauss wrote two checks for $25,000 the amount of the monthly rent on the property to the Rodriguezes in February and March 2006. By the end of April 2006, the parties' handshake agreement had been "pretty well finalize[d]." (Moroknek Dep. at 141.) Moroknek outlined the structure of the arrangement and prepared draft agreements for the parties to sign. On April 26, the parties received by facsimile two letter agreements (the "April 26 letter agreements") drafted by Moroknek: one between Strauss and Windsor (the "Windsor letter"), and one between Strauss and Twinkle (the "Twinkle letter").

The Windsor letter provided that, at closing: (1) Strauss would purchase all of Windsor's equipment and fixtures for a total of $100,000; (2) Windsor would terminate its business, be dissolved, and use its best efforts to negotiate a new lease between its landlord and Strauss; (3) Strauss would reimburse Windsor for its $100,000 security deposit; (4) Strauss would give Windsor its balance sheet as of April 29; and (5) Robert or Teresa would purchase a one-third ownership of Strauss based on its net book value on its April 29, 2006 balance sheet.

The Twinkle letter provided that: (1) Strauss would purchase Twinkle's inventory of goods at Twinkle's "cost as reflected on its books and records"; (2) Twinkle would furnish Strauss with an itemized bill of sale for its inventory; (3) Twinkle would terminate its business; and (4) Twinkle would act as Strauss's sales representative, earning a ¾% commission on Strauss's net sales.

Both letters were dependent on Strauss obtaining a five-year lease from Windsor's landlord.

On a page of the Windsor letter, Moroknek had scribbled a note stating that he had "added [*4]the [following] underlined sentence" into paragraph 5: "Upon said purchase you or your wife shall become a full one-third (1/3) owner of Strauss except that you will not have a claim to any payments or grants that Strauss shall receive from the City of New York and/or its agencies.... Only the prior stockholders of Strauss shall be entitle [sic] to these monies." ("Moroknek's addition"). This language refers to approximately $800,000 in grant funds from the City or its agencies (the "grant money") that Strauss hoped to receive after moving into Twinkle's property, as a result of relocating close to its former site at the Bronx Terminal Market.

There is no dispute that the parties never reached an agreement that Defendants would share in the grant money. (Trans. at 329.) The parties do dispute, however, whether the parties agreed to Moroknek's addition, i.e., that Stanley and Marc alone would receive the grant money.

Moroknek and Stanley testified that Defendants agreed to this addition. (Moroknek Dep. at 142; Trans. at 63, 277-78.) Stanley testified that Robert told him that "I [Stanley] had worked very hard for that money" and "that I was entitled to those benefits and grants from the City. I and Marc, Siegmund Strauss Inc., were entitled to those benefits and grants." (Trans. at 292.) Stanley asserted that Robert had never expressed "any concerns or objections" to Moroknek's addition before the June 21, 2006 hearing. (Trans. at 280.) Moroknek gave more ambiguous and tentative testimony: Robert did not "sign off" on Moroknek's addition, but Moroknek "think[s]" that Robert agreed to give up the grant money. (Trans. at 142.)

Defendants have denied ever agreeing to Moroknek's addition. Robert testified that he never agreed "to give up any claim to the approximate[ly] $800,000 that would be paid if Siegmund Strauss relocated its business into the Windsor leasehold," or ever agreed "to give up a portion of that money." (Trans. at 319-20.) Robert maintained that, as to sharing the grant money, no agreement of any kind was ever reached "to [his] satisfaction." (Robert Dep. at 75-76.) Robert claimed that the subject had never come up before April 26, (Trans. at 330), and that when he saw Moroknek's addition, he called Moroknek and questioned it.

In any case, no one disputes that Robert never told Strauss that this language would be an impediment to the deal. (Trans. at 332.) In fact, during the weekend of April 29-30 just a few days after receiving Moroknek's facsimile, Defendants used their trucks and employees to help Strauss move its food brokerage business onto their property. Twinkle's employees went to work for Strauss beginning May 1, so that Strauss now employs about 40 people. The Rodriguezes also joined Strauss's payroll beginning May 1. Strauss wrote a $27,000 check dated May 1 payable to the landlord.[FN8]

On May 1, Moroknek gave the parties a draft of the Windsor letter that contained Moroknek's addition, without any underlining. (Trans. at 77-78.) As it turned out, the parties did not execute the letter agreements. Stanley claimed that "the main reason" they were not signed was that Strauss had not yet received a new lease in Strauss's name and Defendants had not yet surrendered their lease. (Trans. at 304, 306.)

Meanwhile, the relationship between Stanley and the Rodriguezes soon began to sour. By sometime during the third week of May, Stanley told the Rodriguezes that the relationship "[wa]sn't working out, I want you out, just give me a number." (Robert Dep. at 112-14.) The parties began [*5]negotiating a money settlement. The negotiations were soon carried out through through the parties' respective counsel Lowenstein Sandler, P.C. for Plaintiff and Alan Berkowitz, Esq. for Defendants and reached a stalemate by the end of May. Stanley claimed that "different things... led me to question the credibility" of Robert. (Trans. at 305.) By June 1, Strauss had changed the locks on the property. (Robert Dep. at 151.) On June 5, the Rodriguezes were fired and taken off the payroll. (Robert Dep. at 104, 112.) The Rodriguezes were not permitted to enter the premises when they attempted to do so on June 6. The Rodriguezes called the police. Two days later, the Rodriguezes were prevented from entering the property by Strauss's security guards.

Meanwhile, since taking possession of the property in May 2006, Strauss had installed new sinks, urinals, and toilets in the restrooms. (Mayer Aff. ¶ 11.) Strauss had also built a fully-enclosed cashier's office, out of plywood, about 10 x 24 feet wide, inside the warehouse. (Mayer Aff. ¶ 11; Robert Aff. at 130; Trans. at 135-37.)

Before parties' relationship soured, Strauss had submitted an application to the U.S. Department of Agriculture ("DOA") for a license under the Perishable Agricultural Commodities Act (PACA). The application listed three directors: Stanley (President), Marc (Secretary), and Teresa. The application, signed by Marc on May 1, 2006, represented that each of the three owned 33 % of Strauss.

In a letter dated June 21, 2006, Stanley informed the DOA that Strauss was amending its May 1 PACA license application to drop Teresa as a director, so that Stanley and Marc would be the only directors of Strauss. In this letter Stanley wrote: "Prior to May 1, 2006, we had a verbal understanding with TERESA RODRIGUEZ wherein the corporation would sell her 50 shares of its common stock and that she would become a director of the corporation. So that after this sale all three parties would each own a 1/3 interest in the corporation."

Strauss paid the rent in June. Defendants paid the July rent. I ordered Strauss to reimburse Defendants for the July rent and to pay the August rent at the August 1 hearing.

In a complaint filed by Defendants against Strauss, Stanley, and Marc in the Superior Court of New Jersey, Bergen County, dated June 6, 2006 (the "New Jersey action"), Defendants alleged many of the same facts as they have alleged in this case and twice referred to an oral agreement between the parties. (Compl., Rodriguez v. Mayer (N.J. Super. Ct., Bergen County), Count I ¶ 23, Count II ¶ 2.) In their complaint, Defendants demanded damages based on four causes of action, but they did not challenge Strauss's possession of the property. It is difficult to discern the legal basis for the causes of action, which are unnamed, but they appear to include fraudulent misrepresentation, conversion, and possibly tortious interference and a request for an accounting.

In order to be entitled to a preliminary injunction, a movant must show "a probability of success, danger of irreparable injury in the absence of an injunction, and a balance of the equities in [its] favor." Aetna Ins. Co. v. Capasso, 75 NY2d 860, 862 (1990). Under New York law, the movant bears the burden of proof, which generally requires a "strong showing in affidavits and other proof supplying evidentiary detail." David D. Siegel, NY Practice, 499 (3d ed., West 1999).

Probability of Success

To prevail on this motion, Plaintiff must show a probability of success on two issues: (1) that the parties reached an oral agreement, which was sufficiently definite as to its material terms, and (2) that the oral agreement is enforceable under the partial performance exception to the statute of frauds. [*6]

(1) Whether the parties had reached a definite oral agreement by May 1, 2006

"To create a binding contract, there must be a manifestation of mutual assent sufficiently definite to assure that the parties are truly in agreement with respect to all material terms." Express Indus. & Terminal Corp. v. New York State Dept. of Transp., 93 NY2d 584, 589 (1999). There must be "an objective meeting of the minds sufficient to give rise to a binding and enforceable contract." Id. "[A] mere agreement to agree, in which a material term is left for future negotiations, is unenforceable." Joseph Martin, Jr., Delicatessen, Inc. v. Schumacher, 52 NY2d 105, 110 (1981). The requirement of definiteness can be satisfied, however, if the missing term depends on an objective extrinsic event or standard or the agreement contains a methodology for determining the missing term. Id.

"[N]ot all terms of a contract need be fixed with absolute certainty." Express Industries, 93 NY2d at 589. "[A]t some point virtually every agreement can be said to have a degree of indefiniteness," and "parties also should be held to their promises." Cobble Hill Nursing Home, Inc. v. Henry and Warren Corp., 74 NY2d 475, 483 (1989). Courts will not apply the doctrine of indefiniteness to "defeat the reasonable expectations of the parties in entering into the contract." Id.

Based on the documentary evidence and the testimony taken as a whole, it appears probable that Plaintiff will be able to demonstrate at trial that the parties had reached an agreement as to the material terms of their arrangement by the end of April 2006.[FN9] This agreement is summarized in the two April 26 letter agreements.

It is undisputed that the parties agreed to most of the terms of the April 26 letter agreements including the provision stating that one of the Rodriguezes would become a one-third owner of Strauss. The only term as to which there is a dispute is Moroknek's addition concerning the grant money. (Trans. at 17; (Defs.' Reply at 2 (July 26, 2006) ("Defs.' Reply").) Plaintiff maintains that Defendants agreed to the additional language, (Trans. at 17), and the Rodriguezes contend that this item was still under negotiation when Strauss moved in. (Defs.' Reply at 2.)

While it is hard to credit Stanley's testimony that Robert agreed to give up the grant money early on in the negotiations and never again raised the issue until the hearing, even Robert admits that he never told Strauss that Moroknek's addition would be an impediment to the deal. (Trans. at 332.) In fact, Robert admitted he fully expected to sign the letter agreements on or about May 1. (Robert Dep. at 79.) The only draft agreements produced in this case were those containing Moroknek's addition. It is unreasonable to suppose that Robert expected to sign a different version of the agreements.

Furthermore, receipt of the draft letter agreements containing Moroknek's addition did not make the Rodriguezes step back from the deal. On the contrary, just a few days later, the Rodriguezes helped Strauss move its entire business onto the property. Whatever reservations they [*7]had about Moroknek's addition also did not prevent the Rodriguezes, together with Twinkle's employees, from going to work for Strauss on May 1. Consequently, the Rodriguezes' conduct after April 26 is inconsistent with the claim that Moroknek's addition was a deal-breaker for them.

This interpretation of the Rodriguezes' conduct is further supported by Robert's deposition testimony. At his deposition, Robert maintained that he "had no objection [to Strauss's keeping the City's grant money] if somehow we were compensated for going into the overall company." (Robert Dep. at 89-90.) While Robert quibbled about the details of the arrangement, he thought the parties "in general" had an agreement prior to May 1. (Robert Dep. at 88-89; id. at 86 ("there was an agreement in place, yes.").) Robert did not consider any of the unresolved details of their agreement "a deal breaker." (Robert Dep. at 94.) Moroknek's testimony on the issue is too vague to be credited.

Consequently, I disregard Robert's testimony that Moroknek's addition was a "deal breaker." (Trans. at 331.) Based on Robert's conduct and deposition testimony, I conclude that Plaintiff is likely to prevail on its claim that the parties had reached an oral agreement on the terms proposed in the April 26 letter agreements, with Moroknek's addition by the end of April 2006.[FN10]

(2) Partial Performance

Generally, a lease interest in real property for a term exceeding one year cannot be altered or created by an oral agreement. Gen. Oblig. Law § 5-703(1). Courts have equitable power, however, "to compel the specific performance of agreements in cases of part performance." Id. § 5-703(4). "[A] party asserting the statute of frauds may lose the benefit of the defense, or waive its protections, by inducing or permitting part performance of an oral agreement by the party seeking to enforce it." Yenom Corp. v. 155 Wooster St., Inc., 818 NYS2d 210, 213 (1st Dept. 2006).

The doctrine of partial performance applies "only where the part performance is unequivocally referable' to the oral agreement." Id. (quoting Burns v. McCormick, 233 NY 230 (1922)). This means that the plaintiff's conduct must be "unintelligible or at least extraordinary, explainable only with reference to the oral agreement." Anostario v. Vicinanzo, 59 NY2d 662, 664 (1983) (internal quotations omitted). In addition, the partial performance cited by the plaintiff "must have been known to, and permitted by, the defendant." Yenom, 818 NYS2d at 214. E.g. Tuttle, Pendelton & Gelston, Inc. v. Dronart Realty Corp., 90 AD2d 830, 831 (2d Dept. 1982) (affirming denial of summary judgment based on partial performance of unsigned lease agreement, finding [*8]triable issues as to tenant's improvements to premises and landlord's actions to "acknowledge the existence of the new lease" and "induce[]" the plaintiff to move onto the premises).

"[P]ossession or improvements [to a property], when combined with the payment of rent, may be sufficient" to constitute part performance. Club Chain of Manhattan, Ltd. v. Christopher & Seventh Gourmet, Ltd., 74 AD2d 277, 283-84 (1st Dept. 1980) (affirming denial of preliminary injunction enforcing alleged oral lease agreement based on the doctrine of partial performance but also denying defendant's summary judgment motion dismissing complaint, where plaintiff had changed artwork on property and paid and the defendant accepted rent for eleven months). See also Calo v. Chui, 254 AD2d 191, 192 (1st Dept. 1998) (affirming grant of preliminary injunction based on plaintiff's partial performance of an oral agreement to purchase occupancy rights to a cooperative apartment, concluding that "where plaintiff faced possible eviction by defendants, the equities lie in favor of preserving the status quo").

I conclude that it is likely that Plaintiff will prevail on the merits of its claim that the oral agreement is enforceable based on the doctrine of partial performance. Nobody disputes that the parties' April 26 letter agreements contemplated that Strauss would move its business onto the property and take over Windsor's lease. Plaintiff's conduct in moving its business onto the property, repairing the bathrooms and constructing a cashier's booth, and making payments to the landlord are inexplicable except for the alleged oral agreement.

Furthermore, Strauss took these actions with the acquiescence and cooperation of Defendants. Defendants helped Strauss set up its business on and move its inventory onto their property; they lent Strauss their employees' labor and trucks. The Rodriguezes, along with their employees, went to work for Strauss on May 1. By these actions, the Rodriguezes acknowledged the existence of the oral agreement alleged by Strauss.[FN11]

Under these circumstances, I conclude that Plaintiff is likely to succeed on the merits of its claim that specific performance of the oral agreement can be compelled based on the doctrine of partial performance, under Gen. Oblig. Law § 5-703(4).

Irreparable Injury

Plaintiff has shown that it would suffer irreparable injury if its motion is denied, because if it loses possession of the property, it would lose the space in which it operates its business.

Even were Defendants likely to prevail on the merits of their cross-motion, I conclude that they would not suffer irreparable injury, for two reasons: (1) after I denied both parties' TRO motions on June 13, Defendants willingly entered into a stipulation permitting Strauss the exclusive possession of the property, upon payment of $40,000, until the hearing in this case "and or any adjourned date thereafter"; and (2) in the New Jersey action, Defendants sought only money damages and did not challenge Strauss's possession. Based on these two actions by Defendants, I cannot [*9]conclude that any injury suffered by them in this matter would not be compensable by money damages.

Balance of Equities

This is the hardest part of the inquiry; both parties fell short of complying with the terms of their deal. For example, Windsor let Strauss move its business onto the property but did not terminate its lease, as provided in the Windsor letter.[FN12] (Robert Dep. at 79-80.)

Strauss also did not comply with the April 26 letter agreements. Since moving onto the property at the end of April 2006 with the help of Twinkle's trucks and labor Strauss has hired Twinkle's employees, has used Twinkle's equipment and fixtures, has sold (some of) Twinkle's inventory, and now sells to Twinkle's former clients all benefits contemplated in the April 26 letter agreements. (Trans. at 34, 40, 42-44, 48, 163.) Despite enjoying these benefits, Strauss has not sold a one-third ownership of its capital stock to Teresa, has not reimbursed Defendants for Windsor's security deposit, and has failed to pay for Twinkle's equipment, fixtures, and inventory, as the parties contemplated in the April 26 letter agreements (which it claims I should enforce).[FN13] (Trans. at 298-99.)

Strauss also does not seem to have tried very hard to make the relationship with the Rodriguezes work. After negotiating the deal with the Rodriguezes over the first four months of 2006, Stanley asked them to leave just three weeks after moving into the property. Within two more weeks, the Rodriguezes had been fired.

Furthermore, although Strauss has enjoyed exclusive possession of the property since early June (via the parties' June 13 stipulation), Strauss did not pay the July and August rent until I expressly ordered it to do so.

All of this conduct would be highly relevant if the question before me were whether to award damages to either party. Instead, however, the issue is which party is likely to prevail on its motion for a declaration of its right to exclusive possession of the property. For these purposes, I conclude that the equities tip in favor of Strauss, because Strauss is likely to suffer considerable hardship, including the potential loss of its business, if an injunction in its favor is not granted, and I do not believe that Defendants would suffer a similar hardship.

Accordingly, it is

ORDERED that Plaintiff's motion for a preliminary injunction (Mot. Seq. No. 001) is GRANTED in part; and it is further [*10]

ORDERED that Plaintiff shall be entitled to exclusive possession and occupancy of the property known as 110 East 149th Street, Bronx, New York, and all rent, utilities, and telephone services for that property shall be the responsibility of Plaintiff; and it is further

ORDERED that Plaintiff's motion for a preliminary injunction is in all other respects DENIED; and it is further

ORDERED that the cross-motion for a preliminary injunction by Defendants Windsor Brands, Ltd., Twinkle Import Co., Inc., Robert Rodriguez, and Teresa Rodriguez is DENIED; and it is further

ORDERED that Plaintiff shall post a bond of $25,000; and it is further

ORDERED that the parties shall appear before me on October 18, 2006 at 12:30 p.m. for a preliminary conference.

Dated:September 19, 2006

ENTERED:

_______________________

J.S.C. Footnotes

Footnote 1:

No relief has been sought against the fifth Defendant named in the Complaint: East 149th Realty Corporation. In this memorandum opinion, "Defendants" refers only to the other four Defendants.

Footnote 2:Plaintiff filed its Complaint on June 6, 2006, bringing five causes of action for a declaratory judgment, specific performance, fraud, a permanent injunction, and tortious interference with prospective business opportunities, seeking damages, fees and costs.

Footnote 3:In their cross-motion, Defendants misidentified Plaintiff-Counterclaim Defendant as "Defendants" and Defendants-Counterclaim Plaintiffs as "Plaintiff."

Footnote 4:Robert is the sole owner, shareholder, and officer of Twinkle. Teresa is the sole owner and shareholder of Windsor, and Robert is Windsor's only officer.

Footnote 5:Moroknek is also an attorney and provided legal services to Defendants from time to time.

Footnote 6:

Defendants were the only parties with whom Strauss was negotiating to rent premises during 2006. (Trans. at 292-93.)

Footnote 7:

I will include citations to hearing testimony or depositions where the factual allegations are disputed.

Footnote 8:

The parties dispute whether this sum was used for rent.

Footnote 9:

When asked at his deposition whether there was an agreement in place on May 1, Robert said: "There was a failure to perform under this agreement, but there was an agreement in place, yes." (Robert Dep. at 86.) He further stated that he helped Strauss move into the property and accepted employment with Strauss, pursuant to this agreement. (Robert Dep. at 86-87.) Robert "absolutely" took the position that Teresa was entitled to be a one-third owner of Strauss, based on the terms of the April 26 letter agreements. (Robert Dep. at 82, 85-88.)

Footnote 10:Marc gave contradictory testimony as to whether Strauss entered into an agreement with Defendants. Marc testified on cross-examination that he never intended to enter into an agreement with Defendants:

Q... Did you was it your intent to ever enter an agreement with the Rodriguezes?"

ANo.

(Trans. at 166.) He also testified on redirect-examination that

Q... [W]as it your understanding that there was an agreement between you and your partner, Mr. Mayer, on the one hand and the Rodriguezes, on the other hand?

...

AYes.

(Trans. at 170.)

Footnote 11:

The evidence about the payment of rent is more ambiguous. Strauss wrote two $25,000 checks the monthly rent for the property to the Rodriguezes in February and March 2006. It appears that Strauss began to reimburse Defendants for the rent or pay it directly from the March through June. Strauss did not reimburse Defendants for the July rent or pay the August 2006 rent, until I ordered it to do so at the August 1 hearing.

Footnote 12:Robert says he began to negotiate the terms of a new lease with Strauss with his landlord in February 2006 a negotiating role that was later taken over by Plaintiff's counsel, Lowenstein Sandler, (Robert Dep. at 80-82), but no such lease was ever executed.

Footnote 13:

The parties agree that Strauss agreed to purchase Twinkle's inventory, but they do not agree on how much it was worth. Defendants kept track of their inventory on their computer. (Moroknek Dep. at 62.) Defendants gave Strauss a print-out of it. (Trans. at 90-91.) Plaintiff conceded that the Twinkle letter agreement did not require Defendants to complete a physical inventory. (Trans. at 56-57.) It is undisputed that Strauss has sold (some of) Twinkle's inventory and has not paid Defendants for it.



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