Romanoff v Levitas

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Romanoff v Levitas 2012 NY Slip Op 32121(U) August 6, 2012 Supreme Court, New York County Docket Number: 101431/2010 Judge: Debra A. James Republished from New York State Unified Court System's E-Courts Service. Search E-Courts (http://www.nycourts.gov/ecourts) for any additional information on this case. This opinion is uncorrected and not selected for official publication. [* 1] Check One: Check if appropriate: FINAL DISPOSITION DO NOT POST NON-FINAL DISPOSITION 0 REFERENCE [* 2] of Sale for Unit #1 ( the Contractn) between plaintiffs and James Levitas and Donna Levitas, t h e individual defendants who owned the shares and p r o p r i e t a r y lease ( the sellers ). Paragraph 1.1.2 of t h e Contract states: PurchaserN: RICHARD ROMANOFF and DEBRA ROMANOFF***(see Rider s option to assign to Omni Food S a l e s , Inc., a New York corporation Address: 355 Food Center Drive, Bronx, New York 10474 [sic] . The Contract includes a Disclosure of Information on Lead-Based Paint a n d / o r Lead-Based Paint Hazards form signed as of August 1 , 2009 by the plaintiffs, personally, and by the sellers, and plaintiffs r e m i t t e d a $155,000 Contract Deposit to t h e Escrowee. P a r a g r a p h 1 . 6 provides that t h e name of the cooperative housing corporation ( Corporation ) is 10 E , 81 Realty Corp. 76.1 s t a t e s t h a t This sale is s u b j e c t to the unconditional c o n s e n t of the Corporation and 8 1 3 . 2 provides that In t h e event of a default o r misrepresentation by Seller, P u r c h a s e r shall have such remedies a s P u r c h a s e r i s entitled t o at law or in equity, including specific performance, because the Unit and possession thereof cannot be duplicated. A s pointed out by plaintiffs, paragraph 54 of the Rider to, and P a r t : of the Contract provides t h a t the Contract w o u l d remain in full f o r c e and effect and t h e plaintiffs would purchase the apartment as individuals, without an assignment to any corporate entity, should the C o r p o r a t i o n prohibit such 2 [* 3] assignment. Plaintiffs submitted a purchase application f o r Unit # 1, along with a letter dated August 5 , 2009 from their attorney requesting t h a t title t o above captioned apartment be held under the name of the newly formed Limited Liability Company which will be a wholly owned subsidiary of Omni Food Sales, Inc, a company owned by Richard and Debra Romanoff. Such ownership is requested i n o r d e r to f u r t h e r M r . and Mrs. Romanoff s complex estate plan. By letter dated October 2, 2009, t h e Corporation wrote. plaintiffs that after c a r e f u l deliberations the Board of 10 E. 81 Realty Corp. has denied your purchase application. Regretfully the Board s decision is final. Plaintiffs allege that the s e l l e r s and 10 E. 81 Realty Corp. breached the Contract because in bad f a i t h the sellers contacted the members of t h e 10 E. Realty Corp. s Board of Directors and p e r s u a d e d them to disapprove the application, and t h a t such 1 0 E . 81 Realty Crop. Board denied approval of their application in bad faith and to benefit the sellers, and f o r no legitimate business reason. As evidence of such bad faith, plaintiffs argue 10 E. 81 Realty Corp. knew that as provided, under the Contract, they stood ready, willing and able to c l o s e without any assignment of the shares and proprietary lease to a corporate e n t i t y in accordance w i t h any Board restriction or disapproval of such assignment. 3 [* 4] 10 E . 81 Realty Corp. moves for an order of summary judgment dismissing the complaint, contending that it breached no duty, contractually or otherwise, owed to the plaintiffs with Co-defendants, the sellers, respect to the sale of Unit #1. support the motion, arguing that plaintiffs misconstrue the applicable law in that regard. They further u r g e that assuming arguendo that 10 E. 81 Realty C o r p . owes some duty to plaintiffs, plaintiffs responsive papers contain no admissible evidence that tends to show a breach of any s u c h duty. They also contend that even if 10 E. 81 R e a l t y Corp. mistakenly determined that the Contract mandated that shares be assigned to a corporate entity, such mistake does not constitute a breach of the business judgment rule enunciated in platter of Levandusky v One F i f t h Avenue ADt. Corp., 75 NY2d 5 3 0 (1990). This c o u r t c o n c u r s with 10 E. 81 Realty Corp. that plaintiff [SI as . . , mere contract vendee[sl of shares rather than a S h a r e h o l d e r , [do] not have a cause of action f o r breach of (see85 contract against the cooperative Fifth Ave. 4 t h F l w r , LLC v I.A. Selis, LLC, 45 A.D.3d 333349 . . . [(lst Dept) ZOO71 (Harris v Seward Park Houginq Corporation, 79 A.D.3d 425, 426 [IaL Dept 20101). alsg Woo v Irvinq Tenants C o r p . , 276 A.D,2d 380 ( I S tDept 2000 and GSG Holdinqs v Multi Boro Realtv Corp., 2 4 0 A.D.2d 159 ( l H t Dept 1997. Of course, under the civil rights laws, 10 E. 81 Realty Corp. owes a d u t y to plaintiffs not 4 [* 5] to engage in invidious discrimination in reaching its decision with respect to consent (Hirschmann v Haseapoyanneg, 5 2 AD3d 221 [IE' 2008]), Dept but the plaintiffs make no s u c h claim here. In opposition to 10 E. 81 Realty C o r p . ' ~ application for summary dismissal of t h e complaint, one of the plaintiffs states by affidavit, that one of his friends, whose name is Tillis, told plaintiff that one of Tillis's friends, an alleged Board member named Wuhl, advised Tillis that the Board had not distributed copies of the application to the Board members f o r their review and that the sellers pressured the Board members to deny t h e application so that the sellers could sell Unit #1 f o r more than the purchase price under the Contract. Putting aside that the absence of privity is fatal t o plaintiffs' breach of contract cause of action against 10 E. 81 Realty Corp., the plaintiffs' "hearsay within hearsay" evidence of bad faith is insufficient to defeat defendant's motion, or to rebut 10 E. 81 Realty Corp.'s testimony that Wuhl was not on the Board. Arnold Herstand 77 & Co. (' Dept 1995). 1' v Gallery: G e r t r u d e Stein, Inc., 211 A.D.2d Nor do any of plaintiffs' blunderbuss demands for documents or interrogatories seek any discovery that r e f e r s to Wuhl or Tillis, and therefore "plaintiff [SI ha [vel failed to establish how discovery will uncover further evidence or material in t h e exclusive possession of defendants, as required under CPLR(f)" ( K e n t v 5 3 4 E . l l t hSt, 8 0 AD3d 106, 114 5 [* 6] Dept 20101). Accordingly, it is ORDERED that t h e motion of defendant 10 E. 81 Realty Corp. f o r summary judgment is granted and the complaint is dismissed as to o n l y defendant 10 E. 81 Realty Corp. with costs and disbursements to defendant 10 E. 81 Realty Corp as taxed the Clerk upon submission of an appropriate bill of costs. Dated: Auqust 6 , 2012 ENTER : FILE AUG 0 9 2012 NEW YORK COUNTY CLERKS OF 6

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