Commonwealth Tit. Ins. Co. v 535 W. 162nd St. Equities, Inc.
Annotate this CaseDecided on November 8, 2004
Supreme Court, Nassau County
COMMONWEALTH TITLE INSURANCE COMPANY, Plaintiff,
against
535 W. 162nd STREET EQUITIES, INC., Defendants.
18871-03
COUNSEL FOR PLAINTIFF
Law Offices of Karen J. Rudolf
200 Old Country Road - Suite 590
Mineola, New York 11501
COUNSEL FOR DEFENDANT
Steckle, Gutman, Morrissey & Murray, Esqs.
60 East 42nd Street
New York, New York 10165
Leonard B. Austin, J.
BACKGROUND
Plaintiff, Commonwealth Land Title Company ("Commonwealth"), is a title insurance company. Defendant, 535 West 162nd Street Equities, Inc. ("Equities"), was the owner of real [*2]property located at 535 West 162nd Street, New York, New York. Defendant, Steven Green ("Green"), was the President of Equities.
On February 27, 1998, Equities sold the property. The title report reflected several judgments and liens on the property filed by the New York City Department of Housing Preservation and Development ("HPD") and the Environmental Conservation Board ("ECB").
At the closing, to induce Commonwealth to omit these judgments and liens as objections to title, Green executed an affidavit agreement ("Agreement") which stated, in Paragraph 8, "That I undertake to pay the open emergency repair liens, ECB's and HPD's." The affidavit further provided in Paragraph 9, "I indemnify and hold Madison Abstract and Commonwealth harmless from any liability as a result of the open emergency repair liens, ECBS and HPDS." Paragraphs 8 and 9 are handwritten additions to a printed form affidavit.
Neither Green nor Equities ever paid the open judgments. As a result, Commonwealth paid the sum of $93,000.00 to settle these judgments and liens and have them discharged of record. Commonwealth now seeks to recover this sum from Equities and Green.
Green concedes that neither Equities not he ever paid these sums but asserts that the obligation to make these payments is an obligation solely of Equities and that he did not personally obligate himself to make these payments. He asserts that he signed the Agreement in his capacity as President of Equities. He further asserts that the agreement is ambiguous since it does not indicate which specific judgments and liens Equities was obligated to pay.
Equities was dissolved by proclamation of the New York State Secretary of State as of September 28, 1994 for non-payment of corporate franchise taxes. The Equities dissolution has not been annulled.
Although Equities has been named as a Defendant in this action, it has not appeared. The record does not reflect whether the summons and complaint has been served upon Equities and, if so, whether Equities is in default.
DISCUSSION
Equities was dissolved by proclamation in September 1994. Equities was, therefore, permitted to conduct business only to the extent necessary to wind up its affairs. See, Tax Law 203-a; Business Corporation Law §1005; and Lorisa Capital Corp. v. Gallo, 119 AD2d 99 (2nd Dept., 1986). Since Equities had been dissolved prior to this transaction, it had neither de facto nor de jure existence. Brandes Meat Corp. v. Cromer, 146 AD2d 666 (2nd Dept., 1989). See also, Lorisa Capital Corp. v. Gallo, supra . An individual who enters into a contract on behalf of a corporation that has neither de facto nor de jure status is individually obligated on that contract. Puro Filter Corporation of America v. Trembley, 266 App.Div. 750 (2nd Dept., 1943). See, Brandes Meat Corp. v. Cromer, supra ; and Imero Fiorentino Assocs., Inc. v. Green, 85 AD2d 419 (1st Dept., 1982).
Since Green signed the obligation on behalf of a corporation that did not exist based on it having been dissolved by proclamation, he is personally liable, even if he intended to make only Equities responsible for these obligations.
Additionally, Green is personally liable because he personally undertook to the obligation to pay these judgments and liens and to indemnify Commonwealth.
An agreement that is clear and unambiguous will be enforced in accordance with its terms. Greenfield v. Philles Records, Inc., 98 NY2d 562 (2002); and Russack v. Weinstein, 291 AD2d 439 (2nd Dept., 2002). The Court will determine the intent of the parties from the language of the agreement. Greenfield v. Philles Records, Inc. , supra ; and W.W.W. Assocs. v. [*3]Giacontieri, 77 NY2d 157 (1990). The terms of a contract are to be interpreted in accordance with their plain meaning. Computer Assocs. International, Inc. v. U.S. Balloon Mfg. Co., Inc., AD3d , 782 NYS2d 117 {10 AD3d 699} (2nd Dept., 2004); and Tikotzky v. New York City Transit Auth., 286 AD2d 493 (2nd Dept., 2001).
The court is to give "...practical interpretation to the language employed and the parties reasonable expectations." Slamow v. Del Col, 174 AD2d 725, 726 (2nd Dept. 1991), aff'd., 79 NY2d 1016 (1992). See also, AFBT-II, LLC v. Country Village on Mooney Pond, Inc., 305 AD2d 340 (2nd Dept., 2003); and Del Vecchio v. Cohen, 288 AD2d 426 (2nd Dept., 2001).
Ambiguity does not exist simply because the parties urge a different interpretation of the terms of an agreement. Bethlehem Steel Co. v. Turner Const. Co., 2 NY2d 456 (1957); and Ellestson v. Bonded Insulation Co., Inc., 272 AD2d 825 (3rd Dept., 2000).
There is no question but that Green undertook to personally indemnify and hold Commonwealth harmless from any liability incurred for the HPD emergency repair liens.
Paragraphs 8 and 9 of the Agreement use the first person singular "I" to indicate that it is Green who was undertaking these obligations. In the context of the Agreement, the word "I" can only be referable to Green.
It is not logical to expect that a title insurance company would agree to omit these liens and judgments which were existing objections to title based solely upon an agreement by a dissolved corporation that was selling its only asset to indemnify and hold it harmless. The reference to Green being President of Equities in the Paragraph 1 of the Agreement describes his position with Equities so as to establish his authority to execute documents on behalf of Equities.
The Agreement refers to Equities as "owner." Paragraphs 8 and 9 of the agreement uses the term "I" and not "owner", "seller" or Equities to unambiguously indicate who was undertaking the obligations.
Green's assertion that the Agreement is unclear regarding the obligations he was undertaking is also meritless. The title report contained specific liens and judgments which were known at the time of the closing and which were objections to title. These objections were omitted based upon Green's undertaking to pay those judgments and liens and to indemnify Commonwealth should it be required to pay those sums.
When determining a motion for summary judgment, the court must determine if triable issues of fact exist. Matter of Suffolk County Dept. of Social Services v. James M. 83 NY2d 178 (1994); and Sillman v. Twentieth Century-Fox Film Corp., 3 NY2d 395 (1957). In this case, no triable issues of fact exist. Thus, Plaintiff is granted summary judgment.
Accordingly, it is,
ORDERED, that Plaintiff's motion for summary judgment is granted; and it is further,
ORDERED, that the County Clerk, Nassau County is directed to enter a judgment in favor of the Plaintiff and against Defendant Steven Green in the sum of $93,000.00 together with interest from May 11, 2001 together with costs and disbursements as taxed by the Clerk.
This constitutes the decision and order of this Court.
Dated: Mineola, NY________________________________
November 8, 2004 Hon. LEONARD B. AUSTIN, J.S.C. [*4]
XXX
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