Jericho 99 Partners, LLC v Concord Mtge. Corp.
Annotate this CaseDecided on July 14, 2005
Supreme Court, Nassau County
Jericho 99 Partners, LLC, Plaintiff,
against
Concord Mortgage Corp., RICHARD CHIERT, MITCHELL CHIERT, DONALD CHIERT, EDWARD GILBRIDE, MARK GALLAGHER and CARMINE NOTARO, Defendants.
005368/2004
For defendants Gallagher, Gilbride and Notaro: Peter C. Kaiteris (Butler & Kaiteris, P.C., Ronkonkoma)
For defendant Concord: James M. Wicks and Rebecca Kittrell (Farrell Fritz, P.C., Uniondale)
For Plaintiff: Martin Unger and Thomas Bizzaro (Certilman Balin, LLP East Meadow.
Ira B. Warshawsky, J.
The motion by defendants Gilbride, Gallagher and Notaro for summary judgment [*2]dismissing the first, second, third, fifth and sixth causes of action is granted and the complaint is dismissed as to those three defendants. CPLR § 3212.
The cross motion of defendant Concord Mortgage Corp. for summary judgment dismissing the first, second, fifth and sixth causes of action is granted and the complaint is dismissed as to that defendant. CPLR § 3212.
The cross motion of plaintiff to amend the fourth cause of action against defendant Concord Mortgage Corp. to increase the amount demanded on that cause of action from $77,500.00 to $90,000.00 is granted. CPLR § 3025. However, insofar as said motion seeks to assert the fourth cause of action on behalf of a non-party, one Bruce Sharek, the plaintiff's cross motion is denied because Sharek is not properly a plaintiff in this action. See CPLR § 1013, and CPLR § 3025 applies only to a party. Defendant Concord shall be permitted to conduct additional discovery with respect to the additional claimed damages.
The three Chiert defendants have not moved or participated in these motions.
On October 1, 2003 plaintiff and defendants Gilbride and Gallagher entered into a letter of intent for the purpose of owning and operating a mortgage banking business. None of the parties have made any serious argument that this agreement was binding.
On October 24, 2003 a new letter of intent (the Agreement) was signed among three groups for the purpose of owning and operating a mortgage banking business. The groups consisted of a group composed of the Chiert defendants who controlled defendant Concord, a group composed of defendants Gilbride, Gallagher, Notaro and non-party Sirabella, and a group identified as Jericho 99 composed of non-parties Sharek, Weinstein and Sanders. Jericho 99 Partners, LLC (plaintiff herein) was not a party to the Agreement and Concord was not a party to the Agreement. The letter was not signed by all of the parties but rather Gilbride signed for his group, Allen Weinstein signed for "Jericho 99" and Richard Chiert signed for "CMC". The Agreement does not specify whether the three "groups" were to remain as separate entities of some type or become part of a larger structure. The Agreement refers in various places to a "joint venture", a "corporation", a "new board of directors" and to an "Operating Agreement" leaving unsaid what organizational framework was intended.
Salaries and expenses are allocated to the three groups without reference to any further subdivision. The Agreement also contemplates approval by the State Banking Department with no mention of the consequences of lack of such approval. Significantly left open for future negotiation are restrictions on stock transfer and stock value. Also left undefined is how "net profits" are to be computed and whether the term "net profits" is to mean something other than "profits", a term that is also employed in parts of the Agreement.
Plaintiff alleges breach of contract (first cause of action), breach of the implied covenant of good faith and fair dealing (second cause of action), tortious interference with contract as to Gallagher and Gilbride (third cause of action), breach of implied contract (fifth cause of action), and unjust enrichment (sixth cause of action).
The fourth cause of action alleges loans from plaintiff to Concord and defendants have not moved against this cause of action.
At issue here is whether the Agreement was binding or merely an agreement to agree to a future contract.
In order to invoke the power of the courts to enforce a promise, it must be sufficiently [*3]specific so that what was promised can be ascertained otherwise the court would be imposing its own concept of the agreement. What is required is definitiveness as to material matters rather than vagueness and uncertainty. In short, a mere agreement to agree in which a material term is left for future negotiations is unenforceable. Joseph Martin, Jr. Delicatessen v. Schumacher, 52 NY2d 105, 109 (1981) reversing 70 AD2d 1.
Before rejecting an agreement as indefinite, a court must be satisfied that the agreement cannot be rendered reasonably certain by reference to an extrinsic standard that makes its meaning clear. Cobble Hill Nursing Home, Inc. v. Henry and Warren Corp., 74 NY2d 475, 483 (1989). See also, Matter of 166 Mamaroneck Avenue Corp. v. 151 East Post Road Corp., 78 NY2d 88 (1991).
Here, the Agreement is vague and indefinite as to the organizational structure of the proposed entity, referring first to a joint venture among three distinct groups, then to Concord as a corporation, and, lastly, to an Operating Agreement and a board of directors. The identities of assets and liabilities are omitted. The Agreement states that the parties will "negotiate and execute a definite written Operating Agreement" and the "Agreement is subject to review and approval by the attorneys for the respective parties."
Most tellingly, the Agreement was not signed by all of the parties. Edward Gilbride signed for the "GG Group". This "group" is identified as four individuals and it is not possible to determine if the signer can bind the other three individuals.
Allen Weinstein signed for "Jericho 99" and not for individuals Sharek and Sanders. Absent is an identification of the nature of Jericho 99 and its relationship to the two non-signing parties. Richard Chiert signed for CMC, however, he does not identify in what capacity, i.e. officer or individual he is signing for CMC and whether he binds Mitchell Chiert or Donald Chiert.
Most revealing that the parties intended only an agreement to agree is the provision for approval by the attorneys for the respective parties. It is well settled that when the language of a contract makes the agreement subject to the approval of attorneys, then the contract is not binding and enforceable until approved. Ayro Communications, Inc. v. Jaymer Communications Corp., 6 Misc 3d 1022A (Sup. Ct. Kings County 2005) citing Pepitone v. Sofia, 203 AD2d 981 (4th Dept. 1994). See also, Schreck v. Spinard, 13 AD3d 1027 (3rd Dept. 2004); Niederhofer v. Lindner, 6 AD3d 1218 (4th Dept. 2004) and Pelusio v. Chen, 3 Misc 3d 1106A (Sup. Ct. Monroe County 2003).
Because there can be no claim for breach of contract there can be no claim for breach of an implied covenant of good faith and fair dealing, Skillgames, LLC v. Brody, 1 AD3d 247, 251 (1st Dept. 2003), and because there was no contract defendants Gallagher and Gilbride could not have wrongfully induced its breach. Hence, the second and third causes of action fail.
The fifth and sixth causes of action claim a commission or fee for introducing the parties to the transaction. However, there is no evidence of any agreement to pay a commission or fee to the plaintiff and, in any event, there was no contract upon which a fee or commission could be earned. There is no suggestion anywhere that plaintiff was acting as a broker and not as a principal party to the transaction and there is no evidence in any of the submissions that any party was to pay any remuneration to any other party. Finally, contracts to pay fees or commissions on a transaction of the type described herein must be in writing as set forth in GOL § 15-701(a)(10). [*4]
Further, plaintiff's claim of unjust enrichment must be dismissed for the additional reason that such a claim will not lie where the same transaction is the subject of a written contract. Clark-Fitzpatrick v. Long Island Railroad Company, 70 NY2d 382 (1987).
Based on the foregoing, except for the fourth cause of action, as amended, all of the causes of action against the moving defendants are dismissed.
This constitutes the decision and order of the court.
Dated: July 14, 2005
J.S.C.
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