Harris v Seward Park Hous. Corp.
Annotate this CaseDecided on December 4, 2009
Supreme Court, New York County
Thorner Harris, Plaintiff,
against
Seward Park Housing Corporation d/b/a THE RUDD GROUP, LTD., KAREN WOLFSON, CARLOS ROSADO, ERIC MANDELBAUM, FRED RUDD, STANLEY FRIEDLAND, DEE SLATER, SEAN BENSON, FREDA FRIED, TERRY MacAVERY, FRAN MARINO, SHELLY TORRES, NETTLETON, and "JOHN DOE,", Defendants.
112406/08
Attorneys:
For Plaintiff
Lawrence J. Silberman, PC
by Lawrence J. Silberman
146 East 37th Street
New York, NY 10016
For Defendants
The Law Offices of Edward Garfinkel
12 Metrotech Center, 28th Floor
Brooklyn, NY 11201
Carol R. Edmead, J.
MEMORANDUM DECISION
Plaintiff, Thorner Harris ("plaintiff"), commenced this action against defendants Seward Park Housing Corporation ("Seward Park") d/b/a The Rudd Group, Ltd. ("Rudd"), and Karen Wolfson, Carlos Rosado, Eric Mandelbaum, Fred Rudd, Stanley Friedland, Dee Slater, Sean Benson, Freda Fried, Teny MacAvery, Fran Marino, Shelly Torres Nettleton, and "John Doe" (the "Board") (collectively "defendants"), alleging, inter alia, breach of contract, negligent misrepresentation, and discrimination based upon his race and his disability. By Decision and Order dated June 19, 2009, this Court granted defendants' motion for summary judgment dismissing the Complaint pursuant to CPLR §§3211 (a)(7) and (a)(2).
Plaintiff now moves pursuant to CPLR §2221 for leave to renew and reargue the Court's [*2]decision, and upon renewal, modifying same to the extent of reinstating plaintiff's first and second causes of action.
Factual Background
Plaintiff alleges that on January 31, 2007, he entered into a written Contract of
Sale (the "Contract") with Seward Park to purchase Unit F1203 at the cooperative residential housing development at 413 Grand Street, New York, New York. The Contract was countersigned by the President of the Board. After plaintiff's interview with the Board, his application was rejected, and in August 2009, plaintiff filed a complaint with the Human Rights Commission (the "HRC Complaint"). In September 2009, plaintiff filed the instant Complaint, alleging, inter alia, that defendants breached the Contract "without proper legal justification," in that defendants "elected to deny Harris' purchase application based on their claim that the purchase price contained in the duly executed Contract of Sale was insufficient" (first cause of action). Plaintiff also alleges that "[b]ased on the representations of Defendant, Rudd that the application process was routine, perfunctory and that the Board's approval was imminent," plaintiff relinquished his rent stabilized apartment in contemplation of closing on the sale, resulting in plaintiff having to obtain alternative housing at an increase monthly cost of nearly $3,000.00 (second cause of action).
On October 2, 2008, the HRC dismissed plaintiff's HRC Complaint, holding that there was no probable cause to believe that defendants engaged in the unlawful discrimination practices alleged by plaintiff (the "Determination"). Although the HRC discussed plaintiff's breach of contract claim in the Determination, HRC stated that it has no jurisdiction over the claim: Complainant first claims that Respondent breached the January 31, 2007, Contract of Sale ("Contract"). Complainant, however, misunderstands the conditional nature of the Contract. Section 6 of the Contract clearly explained that additional procedures were required to finalize the sale. Section 6.1 of the Contract reads, "This sale is subject to the unconditional consent of the Corporation." Accordingly, the Contract would have become final only after Respondent's Board of Directors approved the sale. Prior to Board approval, the Contract had no binding effect of Respondent. In any event, a breach of contract is not within the jurisdictional purview of the Commission.
(Emphasis added) (Determination, p. 2)
On appeal, the HRC affirmed the Determination (the "Order Affirming the Determination").
Defendants herein then moved to dismiss the Complaint, and this Court granted dismissal. As to plaintiff's breach of contract claim, the Court held, inter alia, "although plaintiff's breach of contract claim does not arise from the same facts and circumstances as plaintiff's HRC Complaint, plaintiff, nevertheless, failed to state a cause of action for breach of contract." (P. 18). Specifically, the Court held: The clear terms of the Contract flatly contradict plaintiff's allegation. Under the heading "Required Approval and References," the Contract states: "This Sale is subject to the unconditional consent of [the Board]" (Contract, §6.1). Nowhere in the Contract is approval by the Board guaranteed. In fact, §6.3 implies the opposite: "Either Party, after [*3]learning of the Corporation's decision, shall promptly advise the other Party thereof. . . . If such consent is refused at any time, either Party may cancel this Contract by Notice'' (Contract §6.3). Thus, it is clear from the language of the Contract that the approval of plaintiff's purchase application was conditioned on the Board's approval. The Contract does not list any criteria by which the Board was to assess the application of potential purchasers. Nor does the Contract require the Board to give a potential purchaser a reason for rejection. Therefore, based on the language of the Contract, defendants' rejection of plaintiff's application to purchase the Premises did not constitute a breach of the Contract. . . .
In dismissing plaintiff's second cause of action, the Court held: In alleging that Rudd was the managing agent of Seward Park and the real estate broker for the Premises, plaintiff has merely alleged that he had a contractual, arm's length relationship with Rudd. A plaintiff also has to allege a special relationship, independent of the contract, from which a duty of care would arise, although it may be connected with or dependent on the contract . . . . The "special relationship" has to rise to the level of the "functional equivalent of privity" . . . . As plaintiff failed to allege that he was in a special relationship with Rudd, from which a duty of care would arise, plaintiff has failed to state a cause of action for negligent misrepresentation.
Plaintiff's Motion
Plaintiff argues that the Court either overlooked relevant facts and/or misapplied seminal case law in granting defendants' motion for summary judgment. The HRC specifically determined that plaintiff's breach of contract of claim was not under its jurisdiction. Although the HRC simply conducted an "investigation," its process never required sworn testimony, but merely accepted defendants' self-serving denials that they did not engage in any acts of discrimination. Defendants' statements in response to the HRC complaint demonstrate a baseless justification for breaching the parties' contract of sale.
This Court held it would not address the breach of contract claim even though it had sufficient facts to conclude that defendants' denial of plaintiff's application was based on discrimination or financial grounds impermissible under law. The Court failed to fully consider the following undisputed facts: (a) consistent with consent to proceed to closing, the Cooperative Corporation's President accepted plaintiff's offer to purchase the subject Cooperative apartment, countersigned the Contract, on January 31, 2007, and had its attorneys deposit plaintiff down payment, after plaintiff increased his offer to $496,000.0; (b) in accordance with the Contract plaintiff submitted a completed application including financials and references; (c) Rudd Management, the Coop's Managing Agent received the application on March 17, 2007, and scheduled a applicant screening before the Board for April 24, 2007, and the Board claimed the sale price was the reason for denial; (d) on April 25, 2007 the Board denied plaintiff's application without explanation; and (e) however, on or about November 30, 2007, asserting that the Board refused to allow the Contract to proceed to closing because it was unwilling to accept the initially agreed upon purchase price. (Between the signing of the contract and the Board interview, the [*4]apartment increased in value).
The Court erred in its determination that plaintiff's breach of contract of claim could not be sustained because the contract was subject to Board approval and its denial was permissible. However, if the denial was based purely on the fact that during the period between the parties' signing of the Contract and the Board interview, market conditions resulted in an increase in purchase prices, then the Board's wrongful denial of plaintiff's purchase application is a classic case of unilateral breach of contract. The basis for the Board's denial, that a higher purchase price could be secured, is not a legally recognizable justification. Had the Board approved plaintiff's application, and the apartment depreciated in value, defendants would have the contractual right to impose a penalty in the form of a forfeiture of plaintiff's down payment if plaintiff canceled the Contract.
Moreover, plaintiff never had an opportunity to conduct any discovery, either in the HRC investigation or in this case, which would have disclosed that the defendants discussed the Contract and never sought to cancel it based on the initially accepted purchase price, and once it was discovered that plaintiff's income was derived from disability payments, it needed to manufacture a reason to deny the application. If it can be established that full consent of the Board occurred prior to the April 24, 2007, defendants' November 30, 2007 claim of that the $496,000.00 "offer" failed to meet financial goals is false, and a breach of contract did occur. Conversely, plaintiff needs an opportunity to prove that the Board did not approve the "offered" price until the day of the applicant screening on April 24, 2007.
It is incredulous to believe that the Board reviewed the mortgage commitment letter, financial documentation, release of criminal record, credit report, letters of reference, and completed application prior to the applicant screening interview on April 24, 2007.
If it is accepted that a Contract was not in place on April 24, 2007 and that defendants operated within the law and in good faith, there is no reason why plaintiff was not told that the $496,000.00 offer was not an adequate "offer" on April 25, 2007. Yet earlier, prior to meeting the plaintiff, the Board's President communicated that a $490,000.00 was too low but accepted an offer and provided a contract for the higher offer of $496,000.00. Plaintiff, an African American, was a buyer with several hundred thousand dollars post closing cash, a nearly perfect credit score, flawless letters of reference, and who was disabled with HIV. There is no reason the Board did not simply say that the "offer" was too low, and permit plaintiff to make a higher offer. Nor is there any reason defendant sought another buyer six months later, when plaintiff could easily afford the higher price sought.
The Court should not permit defendants to unilaterally cancel the contract by merely claiming that it could deny an application in its discretion without offering a valid reason for said denial.
Defendants' Opposition
Defendants argue that plaintiff's motion to reargue is timed barred. The Court's Memorandum Decision and Order was entered by the New York County Clerk's Office on June 25, 2009. Defendants served upon plaintiff, by regular mail, a copy of the decision and order, together with Notice of Entry on July 1, 2009. Plaintiff purportedly served defense counsel with the instant motion to "renew and reargue" by the affidavit of service of Olivia Rodriguez on September 9, 2009. As plaintiff only seeks to establish that the Court "erred in its determination [*5]. . . " and adds no new facts or law, plaintiff's motion is a motion to reargue. Further, plaintiff presents no justification for his failure to present any facts or law that he now claims were not made in opposition to the original motion.
Thus, pursuant to CPLR §2221(b)(3), plaintiff's motion to reargue must have been served within 30 days after service of a copy of the order with Notice of Entry, which was served upon the plaintiff on July 1, 2009. The plaintiff mailed the instant motion on September 9, 2009. The plaintiff had 30 days from July 1, 2009 plus five days for mailing. Thus, the last day plaintiff had to serve this motion was August 5, 2009. By his own affidavit of mailing, plaintiff mailed the motion September 9, 2009. Thus, the motion is 35 days late and is therefore time barred.
Since plaintiff has not served a Notice of Appeal, and the time to do so has longed expired, there is no appeal pending. Any exception to the requirement of CPLR §2221(b)(3) is not warranted. In any event, this Court neither overlooked nor misapprehended any fact or law.
Plaintiff's motion to reargue is clearly simply a restatement of its prior arguments. Plaintiff continues to press his argument that defendants' motivation in rejecting plaintiff's offer was the fact that he "happens to be African American and disabled with HIV." These facts are couched in a form of an argument for breach of contract, and were properly dealt with in this Court's prior decision based upon a very specific applicable statute. It is uncontroverted that New York City Administrative Codes §8-502(a), New York State Human Rights Law, Executive Law §297(9) and New York State Human Rights Law, Executive Law §300 allowed plaintiff to choose the administrative procedure or a judicial procedure, but not both.
In addition to the arguments made in its previous motion and reply papers, defendants contend that the HRC Complaint and the Complaint herein allege the same facts and circumstances. Further, there was a decision made on the merits that there had been no evidence of discrimination in the defendants' decision to reject plaintiff's offer. This decision was then affirmed on appeal to the agency. The discrimination was thereby determined and can never again be proposed argued or stand as the basis for a decision against the defendants herein.
With respect to plaintiff's argument relevant to his breach of contract causes of action, the Court correctly determined that (1) the sale was conditioned on the unconditional consent of the Board; (2) if consent was refused either party could cancel the Contract by Notice; (c) the Contract did not include any criteria on which the decision by the Board must be made; (d) there was no requirement that the Board give plaintiff a reason for their rejection.
Plaintiff's argument that defendants unilaterally breached the Contract based on the upward change in market conditions was addressed by the Court, which found that the Contract is totally conditional on Board approval. Further, the Board's approval can in fact be based upon a change in market conditions or simply a decision not to sell. To declare something in "illegal" does not make it so.
Reply
Any delay in submitting the instant motion was unintentional due to circumstances beyond plaintiff and his attorney's control and defendants have not shown any prejudice if the Court determines this motion on the merits. Plaintiff, who was assisting his parent who was suffering from severe illness, was unable to tend to this matter as he was out of the State for an extended period of time and unable to assist in the preparation of the instant motion. Similarly, the undersigned was required to provide assistance to his mother who had extensive surgery and [*6]was home bound for nearly two (2) months covering the period of June 5, 2009 through and including August 1, 2009. During this period of time, the undersigned as a solo practitioner, spent substantial time handling his family's health concerns facts which were known to defendants' attorneys. Thus, plaintiff and the undersigned were able to finalize the instant motion around the end of August 2009 and submitted same for consideration on September 8, 2009. Plaintiff points out that despite the fact that the motion was initially returnable on September 24, 2009, defendants failed to timely oppose same and requested a lengthy adjournment to October 28, 2009. Despite having nearly two (2) months to oppose the motion, on the adjourned date of October 28, 2009, defendants' attorneys made an additional request to adjourn the motion and the matter was ultimately adjourned and an additional week. On October 3, 2009, after regular business hours, the undersigned received defendants' opposition which primarily opposes the instant motion based on timeliness and not substantive reasoning. Accordingly, the Court should determine the instant motion on the merits and excuse any unintentional delay in pursuing the relief sought therein.
The Court failed to take into consideration that the HRC determination that held that although it did not find probable cause of discrimination it held that the breach of contract claims were beyond its jurisdiction. Accordingly, this Court misapplied cases indicating that the HRC's Determination is res judicata on pursuing a judicial finding. Despite same, the Agency's inability to explore the allegations relating to the breach of contract claim does not bar judicial review. In opposition to defendants' previous motion, plaintiff argued that the defendants' refusal to close on the subject transaction constituted a willful breach of contract based on a change of circumstance on the market value of the unit which is not a legally recognized basis to unilaterally cancel said agreement. The Court's refusal to accept this rationale warrants reversal.
Moreover, the Court did not properly analyze the Contract, as well as, Seward Park's By-Laws, specifically Article VIII Section 2 thereof, which provides, inter alia, that the officers and directors of the Corporation cannot enter into oral or written contracts on behalf of the Corporation without a) the approval of the Board of Directors; or b) in accordance with the authority expressly granted to them by resolution of the Board of Directors. Plaintiff argues that at the time Seward Park's President countersigned the subject contract, the full Board of Directors consented thereto and accepted plaintiff's offer to purchase the subject Premises.
If this Court is bound by the alleged findings of HRC, then this Court erred in finding that plaintiff could not sustain a breach of contract cause of action based upon a clear example of a unilateral and improper termination of a contract.
Further, the Court failed to consider plaintiff's argument that the Board's denial was based on a change in the value of the unit, which would permit a Seller to merely change its mind if the property at issue appreciates in value from the moment the contract is fully executed to the date of Closing. If the Court truly intended to set a precedent whereby a party could back out of a binding contract based on a change of value, same would create a ripple effect that would have drastic consequences on contract law.
Discussion
Fundamental differences exist between a motion to reargue and one to renew.
The motion to renew, when properly made, posits newly discovered facts that were not previously available or a sufficient explanation is made why they could not have been offered to [*7]the Court originally (see Alpert v Wolf, 194 Misc 2d 126, 133, 751 NYS2d 707 [New York City Civ. Ct. 2002]; D. Siegel, New York Practice § 254 [3rd ed.1999]). A motion to renew, "is intended to draw the court's attention to new or additional facts which, although in existence at the time of the original motion, were unknown to the party seeking renewal and therefore not brought to the court's attention" (Beiny v Wynyard, 132 AD2d 190, 522 NYS2d 511 [1st Dept 1987], lv. dismissed 71 NY2d 994, 529 NYS2d 277 [1988]).
The motion to reargue, on the other hand, "is addressed to the sound discretion of the court and may be granted only upon a showing that the court overlooked or misapprehended the facts or the law or for some reason mistakenly arrived at its earlier decision'" (William P. Pahl Equipment Corp. v Kassis, 182 AD2d 22 [1st Dept] lv. denied and dismissed 80 NY2d 1005, 592 NYS2d 665 [1992], rearg. denied 81 NY2d 782, 594 NYS2d 714 [1993]). Reargument is not designed to afford the unsuccessful party successive opportunities to reargue issues previously decided (Pro Brokerage v Home Ins. Co., 99 AD2d 971, 472 NYS2d 661) or to present arguments different from those originally asserted (Foley v Roche, 68 AD2d 558, 418 NYS2d 588; William P. Pahl Equip. Corp. v Kassis, supra). On reargument the court's attention must be drawn to any controlling fact or applicable principle of law which was misconstrued or overlooked (see Macklowe v Browning School, 80 AD2d 790, 437 NYS2d 11 [1st Dept 1981]).
Plaintiff's motion to renew and reargue is essentially a motion to reargue since he did not submit any new evidence on the motion, and argues that the Court overlooked facts and misapplied caselaw. Thus, renewal is denied.
Timeliness of Reargument Motion
CPLR 2221(d)(3) provides, in relevant part, that a motion for leave to reargue "shall be made within thirty days after service of a copy of the order determining the prior motion and written notice of its entry." It is undisputed that plaintiff's motion, as characterized as one for reargument, is untimely. However, it has been stated while "technically untimely pursuant to CPLR 2221(d)," an untimely motion to reargue may be considered by the motion court (Schaeffer & Krongold LLP v Richter, 14 Misc 3d 1217, n. 2, 836 NYS2d 489 [Sup Ct New York County 2005] citing Garcia v Jesuits of Fordham, Inc., 6 AD3d 163, 774 NYS2d 503 [1st Dept 2004]). A court, "regardless of statutory time limits concerning motions to reargue, retains continuing jurisdiction to reconsider its prior interlocutory orders during the pendency of the action" (Liss v Trans Auto Systems, Inc., 68 NY2d 15, 20, 505 NYS2d 831 [1986]). Therefore, notwithstanding the untimeliness of plaintiff's motion to reargue, the Court proceeds to address the merits of plaintiff's motion.
Merits of Reargument Motion
Contrary to plaintiff's contention, this Court did not decline to address plaintiff's breach of contract claim. Instead, this Court assessed whether plaintiff's allegations stated a cause of action for breach of contract in light of the unambiguous terms of the Contract at issue. As indicated in this Court's previous determination, to the extent plaintiff's breach of contract claim rests on alleged discriminatory acts of defendants, such allegations were raised before the HRC and cannot serve as a basis for any claim in this action. To the extent plaintiff claims that the Board declined to approve the sale to the plaintiff, the Contract expressly provided the Board with the "unconditional" right to deny plaintiff's application, without reason. Thus, even if, as plaintiff alleges, the Board denied plaintiff's application in order to obtain a higher selling price in the [*8]future, such reason is not precluded by the Contract.
As to plaintiff's argument, that the Court did not properly analyze Article VIII Section 2 of Seward Park's By-Laws, regarding the officers' and directors' ability to enter into oral or written contracts on behalf of the Corporation without Board approval or pursuant to the Board's express grant of authority by Board resolution, raised for the first time in this motion and for the first time in reply, is improper and cannot be considered.
Therefore, although the Court grants reargument as to plaintiff's first cause of action for breach of contract, upon reargument, the Court adheres to its previous determination.
Negligent Misrepresentation
Plaintiff does not assert or argue that the Court misapplied the law or facts in dismissing the second cause of action. In any event, the Court's previous determination noted that plaintiff's opposition papers never addressed defendants' arguments to dismiss this cause of action. Therefore, plaintiff's motion for leave to reargue the Court's prior determination to the extent of reinstating the second cause of action is denied.
Conclusion
Based on the foregoing, it is hereby
ORDERED that plaintiff's motion pursuant to CPLR §2221 for leave to renew this Court's Decision and Order, dated June 19, 2009, is denied; and it is further
ORDERED that plaintiff's motion pursuant to CPLR §2221 for leave to reargue this Court's Decision and Order, dated June 19, 2009, is granted as to plaintiff's first cause of action; and it is further
ORDERED that plaintiff's motion, upon reargument, for an order modifying this Court's Decision and Order, dated June 19, 2009, to the extent of reinstating plaintiff's first cause of action, is denied; and it is further
ORDERED that plaintiff's motion pursuant to CPLR §2221 for leave to reargue this Court's Decision and Order, dated June 19, 2009, is denied as to plaintiff's second cause of action; and it is further
ORDERED that defendants serve a copy of this order with notice of entry upon plaintiff within 20 days of entry.
This constitutes the decision and order of the Court.
Dated: December 4, 2009__________________________________
Hon. Carol Robinson Edmead, J.S.C.
In accordance with the accompanying Memorandum Decision, it is hereby
ORDERED that plaintiff's motion pursuant to CPLR §2221 for leave to renew this Court's Decision and Order, dated June 19, 2009, is denied; and it is further
ORDERED that plaintiff's motion pursuant to CPLR §2221 for leave to reargue this Court's Decision and Order, dated June 19, 2009, is granted as to plaintiff's first cause of action; and it is further
ORDERED that plaintiff's motion, upon reargument, for an order modifying this Court's Decision and Order, dated June 19, 2009, to the extent of reinstating plaintiff's first cause of action, is denied; and it is further
ORDERED that plaintiff's motion pursuant to CPLR §2221 for leave to reargue this Court's Decision and Order, dated June 19, 2009, is denied as to plaintiff's second cause of action; and it is further
ORDERED that defendants serve a copy of this order with notice of entry upon plaintiff within 20 days of entry.
This constitutes the decision and order of the Court.
Some case metadata and case summaries were written with the help of AI, which can produce inaccuracies. You should read the full case before relying on it for legal research purposes.
This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.
