Knoff v Johnson

[*1] Knoff v Johnson 2004 NY Slip Op 51173(U) Decided on September 30, 2004 Supreme Court, Kings County 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 This opinion is uncorrected and will not be published in the printed Official Reports.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 30, 2004
Supreme Court, Kings County

SOL KNOFF, Plaintiff, -

against

HUGH JOHNSON, Defendant.



30206/03

Francois A. Rivera, J.

By order to show cause defendant moves pursuant to CPLR §3212 for an order dismissing plaintiff's complaint and granting defendant's counterclaims. Plaintiff opposes defendant's motion and cross moves for sanctions against the defendant pursuant to 22 NYCRR 130-1.1(c). Defendant opposes the cross motion.

On August 19, 2003, plaintiff commenced an action against the defendant by filing a summons and complaint and a notice of pendency with the Kings County Clerk. Plaintiff's complaint seeks specific performance by the defendant of a contract to sell his property known as 1298 Rogers Avenue, Brooklyn, New York and damages based on breach of said contract. On November 17, 2003, defendant served the plaintiff and filed with the Kings County Clerk a verified answer and cross-claim. Defendant's verified answer asserts five affirmative defenses and four counterclaims against the plaintiff.

Defendant's first affirmative defense contends that the complaint fails to state a cause of action for which relief may be granted. The second, fourth and fifth affirmative defense allege in sum and substance that a valid contract of sale never existed or in the alternative, if a valid agreement existed, that the plaintiff breached the agreement. The third affirmative defense alleges that plaintiff accepted and deposited the return of his security deposit on the contract of sale.

Defendant's first and second counterclaim allege that the complaint is frivolous and seek damages of fifteen thousand ($15,000.00) and one hundred and seventeen thousand dollars ($117,000.00) respectively. Defendant's third and fourth counterclaim allege that the notice of [*2]pendency is invalid based on procedural defects.

The salient facts are undisputed. Defendant is the fee simple owner of real property known as 1298 Rogers Avenue, Brooklyn, New York. On April 11, 2003, defendant's counsel prepared and forwarded to plaintiff's counsel a contract of sale for this premise for a purchase price of four hundred and fifty thousand dollars ($450,000.00). The contract did not set forth a mortgage contingency provision. Paragraph 72 of the contract rider set forth the following language: "the date for closing of title herein is the anticipated time when the parties believe they can close and shall attempt to do so. However, if (it) is agreed that neither party or their attorney shall, in any manner, attempt to make any date "time of the essence" for such closing sooner than thirty (30) days after the date set for closing herein."

On or about May 13, 2003, plaintiff executed the contract and hand delivered it to defendant's counsel with a down payment of forty-five thousand dollars ($45,000.00). On May 14, 2003, defendant reviewed the contract and signed it.

On June 2, 2003, plaintiff's counsel sent a letter to defendant's counsel stating: "As discussed, our clients "due diligence period" expires at the end of the day. Our client is prepared to proceed with this transaction based upon a new contract showing the price to be $530,000, with an assertion in the rider that the purchaser buying the premises in its "as is" condition, subject to all repairs, and will pay all its own closing costs and expenses. Upon our receipt of the above, our client will execute the amended contract and the "due diligence" will be met."

In response, defendant's attorney sent a letter dated June 3, 2003, to plaintiff's counsel returning plaintiff's forty-five thousand dollars ($45,000.00) deposit and stating: "Enclosed please find return of your client's deposit. My client is not willing to make any changes you requested in the contract of sale. Based on the due diligence period, we are returning your client's deposit and declaring the contract null and void. "

Plaintiff's counsel sent a letter dated June 4, 2003, to defendant which stated in pertinent part: "Our client is willing to accept this contract, based on the following amended clause#2A ...Upon our receipt of the amended Rider page, our client will immediately acknowledge that the contract is binding with no further contingency or condition"

On June 5, 2003, plaintiff's counsel forwarded to defendant's counsel an amendment to the contract signed by the plaintiff. The proposed amendment provided for an increase in the purchase price from four hundred and fifty thousand dollars ($450,000.00) to five hundred and thirty thousand dollars ($530,000.00), inclusion of a seller's concession in the amount of eighty thousand dollars ($80,000.00), and postponement of the closing date from May 15, 20003 to August 5, 2003.

It is well settled that a party moving for summary judgment must make a prima facie showing that it is entitled to judgment as a matter of law (Zarr v. Riccio, 180 AD2d 734 [2nd Dept. 1992]). Once a showing has been made, the burden shifts to the party opposing the motion to produce evidentiary proof, in admissible form, sufficient to establish the existence of material [*3]issues of fact which require a trial of the action (Romano v. St. Vincent's Medical Center of Richmond, 178 AD2d 467 [2nd Dept. 1991]).

Plaintiff's three letters to the defendant dated June 2, 4, and 5, of 2003 demonstrate an effort to amend the terms of the May 14, 2003 contract of sale. Defendant's letter of June 3, 2003 establishes the unequivocal rejection of the proposed amended terms and plaintiff's decision to treat same as a counter-offer and as a repudiation of the May 14, 20003 contract.

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. Generally, courts look to the basic elements of the offer and the acceptance to determine whether there is an objective meeting of the minds sufficient to give rise to a binding and enforceable contract (Robison v. Sweeney 301 AD 2nd 815 [3rd Dept 2003]). In the case at bar, the parties executed a valid an enforceable contract of sale on May 14, 2003. The contract covered all material terms for the purchase of the premise known as 1298 Rogers Avenue, Brooklyn, New York. It included a purchase price of four hundred and fifty thousand dollars ($450,000.00), a down payment by the plaintiff of forty-five thousand dollars ($45,000.00), no mortgage contingency and flexibility on the closing date for the purchase.

The plaintiff's letter to defendant dated June 2, 2003, amounted to a counter-offer which materially changed essential terms of the May 14, 2003 contract of sale. The specific language referenced a new contract with a purchase price of five hundred and thirty thousand dollars ($530,000.00), and inclusion of a seller's concession in the amount of eighty thousand dollars ($80,000.00). It also attempted to add additional conditions.

Plaintiff's letter of June 2, 2003 was an unequivocal notice to the defendant of an intention not to go through with the May 14, 2003 contract of sale conditions. The proposed counter offer was one which the defendant was free to reject. A vendee in a contract of sale must act within the terms set forth in the contract. By making a counter offer which materially alters the terms, the vendor is free to reject same and may treat the counter offer as an anticipatory breach of the original contract. Even when said counter-offer is withdrawn and the vendee sets forth the desire to adhere to the original terms, the vendor is free to reject the withdrawal of the counter offer (Lamanna v.WingYuen Realty, Inc.283 AD2d 165[1st Dept.2001]; see also Hands-On-Mgt, Inc. v. C.D.O Realty Corp., 306 AD2d 187 [1st Dept.2003]).

Applying this analysis to the case at bar renders irrelevant plaintiff's contention that he forwarded a letter to defendant dated, June 11, 2003, which returned plaintiff's forty-five thousand dollars ($45,000.00) deposit and expressed a desire to go forward within the terms of the original contract of May 14, 2003. The court, therefore, need not address defendant's contention that he never received this letter.

It is noted that plaintiff did not oppose defendant's motion for summary judgment but rather relied on the court's prior rulings to seek sanction against the defendant for making the instant motion. Furthermore, plaintiff offered no evidence to demonstrate that the defendant changed his position as expressed in his letter to the plaintiff dated June 3, 2003.

Where, as here, a party commits an anticipatory breach of a real property sale contract, the selling party is relieved of any duty to tender performance or wait for the time of performance to arrive before suing or agreeing to sell the property to someone else (Bucciero v. Li, 191 AD2d [*4]

887-890 [3rd Dept. 1003]).

Plaintiff's actions in repudiating the original contract terms and in making a counter offer with different and additional conditions demonstrated that he was not ready, willing and able to perform the original contractual obligations, and thus was not entitled to specific performance (Huntington Mining Holdings, Inc. v. Cottontail Plaza, Inc. 60 NY2d 997 [1983]; see also Ferrone v. Tupper 304 AD2d 524 [2nd Dept. 2003]).

For the foregoing reasons plaintiff's cause of action for specific performance of the contract of sale is denied and the action is dismissed. Defendant's motion for summary judgment finding no liability to the plaintiff in contract is granted. After review of the instant pleadings, the court finds that defendant has not establishes his entitlement to summary judgment on the counterclaims as a matter of law.

The court now turns to plaintiff's request for an order sanctioning the defendant. The claim is premised in part on a contention that defendant's instant motion is without merit in law or undertaken to harass or maliciously injure another. Inasmuch as the parties were given an opportunity to give oral argument on record, the court finds that defendant had due notice that the issue of sanctions would be considered (First National Bank v. Van Allen, 277 AD2d 859 [3rd Dept. 2000]).

Pursuant to the Rules of the Chief Administrator of the Courts Part 130 as set forth in

22 NYCRR §130-1.1(a), the court may award to any party or attorney in a civil matter costs in the form of reimbursement for actual expenses reasonably incurred and reasonable attorney fees, resulting from frivolous conduct.

For the purpose of this Part conduct is frivolous if: (1) it is completely without merit in law and cannot be supported by a reasonable argument for an extension, modification or reversal of existing law; (2) it is undertaken primarily to delay or prolong the resolution of the litigation, or to harass or maliciously injure another; or (3) it asserts material factual statements that are false (22 NYCRR 130-1.1(c)).

The decision as to whether to award sanctions is within the sound discretion of the court. (Wagner v. Goldberg, 293 AD2d 527 [2nd Dept., 2002]). In order to impose sanctions, the court must find that defendant's motion asserts material falsehoods or is without legal merit and undertaken primarily to delay or prolong the litigation, or to harass or maliciously injure another (Premier Capital v. Damon Realty Corp., 229 AD2d 158 [1st Dept. 2002]; see also Jason v. Dumel, 3 Misc.3d 1101(A), [NY Sup 2004]).

The court does not find that defendant's instant motion for summary judgment to be frivolous conduct within the meaning of aforementioned rules. In fact, the court's determination to grant partial summary judgment establishes that the motion is indeed not frivolous.

It is noted that plaintiff's motion for sanctions is based in part on this court's decision dated March 5, 2004 which denied plaintiff's prior motion for summary judgment. Plaintiff had previously moved by order to show cause for summary judgment on the cause of action for [*5]specific performance and for summary judgement dismissing defendant's counterclaims. The court found there were issues of fact precluding the relief requested. Plaintiff contends that the prior decision applies to the defendant's current motion and as a result renders the motion frivolous. Plaintiff's contention is erroneous. Defendant's responsive pleadings, which yielded the aforementioned court order, did not seek summary judgment in defendant's favor; that relief being requested for the first time in the instant motion.

Pursuant to CPLR § 3212(b) the court has the authority to search the record and grant summary judgment to a non moving party. The court's power to do so is not boundless. As set forth by the Court of Appeals in its decision in Dunham v. Hilco Const. Co., Inc., 89 NY2d 425 [1996]: "Recognizing that "[a] motion for summary judgment must be addressed to one or more specific causes of action or defenses" ( Conroy v. Swartout 135 AD2d 945-947 ) the Appellate Divisions have uniformly held that a court may search the record and grant summary judgment in favor of a nonmoving party only with respect to a cause of action or issue that is the subject of the motions before the court. The need for such a limitation is obvious. Apart from considerations of simple fairness, allowing a summary judgment motion by any party to bring up for review every claim and defense asserted by every other party would be tantamount to shifting the well-accepted burden of proof on summary judgment motions (see, GTF Mktg.v. Colonial Aluminum Sales 66 NY2d 965, 967-968 [a moving party must assert some basis in support of its summary judgment motion before an opposing party has the burden of producing contrary evidence]) Dunham v. Hilco Const. Co., Inc., supra 89 NY2d 430-431.

The court's power to search the record and grant summary judgment in favor of a non moving party is permissive and not mandatory. Plaintiff's prior pleadings did not establish entitlement to specific performance of the contract of sale as a matter of law. Thus, the burden to show the existence of a triable issue of fact on plaintiff's claim for specific performance never shifted to the defendant. Defendant did not request and the court did not determine defendant's entitlement to summary judgment on the counterclaim. Upon review of plaintiff and defendant's prior pleadings and pleadings in the instant motion, the court finds that there are issues of fact which preclude the granting of summary judgment in defendant's favor on the counterclaims.

The foregoing constitutes the decision and order of this court.

Dated: September 30, 2004

J.S.C.