Rensselaer County Indus. Dev. Agency v Fuccillo Automotive Group, Inc.
Annotate this CaseDecided on July 13, 2006
Supreme Court, Rensselaer County
Rensselaer County Industrial Development Agency, Plaintiff,
against
Fuccillo Automotive Group, Inc., Defendant.
216587
APPEARANCES:
HODGSON RUSS LLP
Attorneys for Plaintiff
(Richard L. Weisz, Esq., of Counsel)
677 Broadway Suite 301
Albany, New York 12207
MELVIN & MELVIN
Attorneys for Defendant
(Robert S. Scalione, Esq., of Counsel)
217 South Salina Street
Syracuse, New York 13202
Michael C. Lynch, J.
Plaintiff moves for summary judgment pursuant to CPLR 3212 seeking a
judgment in the amount of $175,000.00 pursuant to a Conditional Assignment of a Purchase and
Sale Agreement. Defendant opposes the motion and also cross-moves for summary judgment
seeking the dismissal of the complaint.
On May 14, 2003, plaintiff entered into a Purchase and Sale Agreement with Trustco Bank for the purchase of 158 acres of land on Mannix Road in the Town of East [*2]Greenbush, County of Rensselaer, State of New York for $3,750,000.00. Plaintiff paid Trustco the sum of $100,000.00 upon the execution of the Agreement. The Agreement provided for the purchase of the property by November 1, 2004, time of the essence. If plaintiff was unable to purchase the property, the down payment would be forfeited. By September, 2004 the parties entered into discussions relating to plaintiff's assignment of the Agreement to defendant. On October 29, 2004 plaintiff signed an Extension Agreement with Trustco Bank for twelve months and paid an additional $100,000.00 as a non-refundable deposit. On November 22, 2004, the parties entered into a Conditional Assignment of the original Purchase and Sale Agreement which reservedto Defendant a seven month period to conduct a due diligence investigation of the site and either accept or reject the Assignment of the contract. Defendant paid $25,000.00 as a non-refundable deposit with the Conditional Assignment. The Court notes that a key development concern involved wetlands on site and, in accord with the Assignment, plaintiff provided to defendant a "Federal Wetland Delineation Map" dated November 22, 2004, i.e. the inception of the investigation period.
The crux of plaintiff's claim is that defendant failed to provide timely written notice rejecting
the assignment and is thus obligated under the Conditional Assignment to
reimburse plaintiff for the sums advanced to Trustco under the purchase agreement.*
Where, as here, a contract clearly requires a written notice to terminate an agreement within
a defined time frame, the parties right to cancel is limited by the actual terms of the agreement
(Maxon Builders, Inc. v. Lo Galbo, 68 NY2d 373, 378; Perrino v.
Hogan, 175 AD2d 478). The pertinent provisions of the Conditional
Assignment are as follows:
"3(c) If the results of any of the Investigations are unacceptable to Fuccillo for any reason
in conjunction with the Intended Use and Intended Improvements, Fuccillo shall notify the
Agency in writing (the results need not be disclosed) and thereafter the Agency may rescind this
Conditional Assignment or Fuccillo can reject this Conditional Assignment and the parties shall
have no further obligations to each other and Fucillo shall forfeit any monies paid to
the Agency under the terms of this Agreement.
(d) In the event that Fucillo has not delivered a notice of unacceptable results to the Agency by the close of business on the last day of the Investigations Period, or the Extended Investigations Period, if applicable, this due diligence contingency shall be deemed waived by Fucillo.
4. Acceptancy of Assignment by Fuccilo. In the event that Fuccillo has
not delivered a notice of unacceptable results to the Agency by the close of business on the last
day of the Investigations Period, or the Extended Investigations Period, if applicable, [*3]or Fuccillo shall have affirmatively accepted this assignment in
writing to the Agency prior to the close of business on the last day of the
Investigations period, or the Extended Investigations Period, if
applicable, then this Conditional Assignment shall be deemed
____________________________________________________________________
________
*In October, 2005, plaintiff informed Trustco that the purchase transaction would
not be consummated, and thus limited its claim to the deposit moneys forfeited under the Trustco
Agreement.
completed with all conditions between the parties being satisfied and Fuccillo
being obligated thereafter to Trustco in accordance with the terms and conditions of the Purchase
and Sale Agreement, as amended. Within ten (10) days following Fuccillo's acceptance of
this Conditional Assignment, Fucillo shall reimburse the Agency the sum of One Hundred
Thousand and 00/100 Dollars ($100,000.00) representing the Deposit paid by the Agency to
Trustco under the Purchase and Sale Agreement and an additional sum equal to the difference
between the amount paid by the Agency to Trustco for the "Closing Date Extension" as provided
for in subparagraph 1(a) above, and the amount paid to the Agency by Fuccillo pursuant to the
provisions of paragraph 2 and subparagraph 3(a) above, all of which must be applicable against
the purchase price for the Premises under the Purchase and Sale Agreement, as amended."
The underscored phrases of contract paragraphs 3(c), 3(d) and 4 quoted above
confirm that defendant was required to provide a written notice of unacceptability by the last day
of the "Investigations Period", i.e. by June 22, 2005, in order to terminate its obligations under
the Conditional Assignment agreement. Paragraph 3 (c) expressly requires a written notice that
the site was not acceptable; paragraph 3(d) expressly provides that a failure to timely provide the
required notice constitutes a waiver of defendant's "due diligence contingency"; and paragraph 4
confirms that upon a failure of due notice, defendant remains obligated under this Conditional
Assignment. Given these contract terms, defendant's contention that plaintiff's executive director
was verbally informed in May, 2005 that defendant deemed the site unacceptable is unavailing
(Id.). Nor has there been a written modification of the assignment notice requirements (see GOL
Section 15-301[4]; Chemical Bank v. Wasserman, 37 NY2d 249). Accordingly, the Court
finds that in the absence of a timely, written notice of unacceptability, defendant remains bound
under the Conditional Assignment.
With respect to the question of damages, the record confirms that plaintiff initially paid $100,000 to Trustco Bank to reserve a contract period through November 1, 2004, before negotiations even began with defendant. The Conditional Assignment to defendant was authorizing by resolution adopted by the plaintiff agency on October 14, 2004, but not fully executed by the parties until November 22, 2004. In the meantime, plaintiff had procured an extension of the underlying Trustco Bank agreement through November 1, 2005 upon the [*4]payment of an additional $100,000. As consideration for the Conditional Assignment defendant paid to plaintiff $25,000.
Defendant's basic argument is that at no point did it agree to pay more than the $25,000 consideration for the Conditional Assignment, emphasizing plaintiff was already committed for the initial $100,000 paid to Trustco Bank under the original purchase contract. The court is mindful that plaintiff procured the Trustco contract extension before the initial November 1, 2004 deadline and that the Conditional Assignment was not executed until three weeks later. Defendant's argument fails, however, given that under paragraph 4 of the Conditional Assignment, defendant assumed the obligation to fully reimburse plaintiff for the $200,000 paid to Trustco, less the $25,000 already paid under the Conditional Assignment upon defendant's "acceptance of this Conditional Assignment" (see Conditional Assignment, paragraph 4, second full sentence). As discussed above, having failed to timely cancel the Conditional Assignment, defendant is deemed to have accepted same and is thus obligated to reimburse plaintiff the sum of $175,000 due under paragraph 4 of the assignment.
This Memorandum constitutes the Decision and Order of the Court. All papers including this
Decision and Order are returned to the attorneys for Plaintiff. The signing of this Decision and
Order shall not constitute entry or filing under CPLR 2220. Counsel is not relieved from the
applicable provisions of that Rule respecting filing, entry and Notice of Entry.
SO ORDERED
ENTER
Dated: Albany, New York
July 13, 2006
Michael C. Lynch
Justice of the Supreme Court
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