Dunn v Arniotes
Annotate this CaseDecided on May 29, 2007
Supreme Court, Kings County
John Dunn, Plaintiff,
against
Marc V. Arniotes and Arge Arniotes, Defendants.
34378/2005
Wayne P. Saitta, J.
Defendants MARC V. ARNIOTES and ARGE ARNIOTES, (hereinafter "Defendants"), filed a Notice of Motion pursuant to CPLR §3212 seeking summary judgment, dismissing the complaint of Plaintiff JOHN DUNN, (hereinafter "Plaintiff"), awarding Defendants liquidated damages arising from Plaintiff's breach of contract in the amount of $57,500.00, and for such other and further relief as the Court may deem just, proper and equitable.
Upon reviewing Defendants' Notice of Motion, dated December 13th, 2006, together with the Affirmation in Support of Simon H. Rothrug, Esq., counsel for the Defendants, together with the affidavit of Defendant Marc V. Arniotes, dated December 13th, 2006, and all exhibits annexed thereto; the Affidavit in Opposition of John Dunn, Plaintiff, dated January 29th, 2007, together with the Affirmation in Opposition of Mary Margaret Looby, Esq., counsel for the Plaintiff, dated March 29th, 2007, and all exhibits annexed thereto; the Reply Affirmation in further support of the Motion of Summary Judgment of Defendants, dated April 11th, 2007; all the proceedings had herein and after due deliberation, Defendants' motion is granted.
FACTS
The parties to this action negotiated and entered into a contract for the sale of 296 Avenue P, Brooklyn, NY, (hereinafter "the premises" or "the property"). [dated "January ___ 2005"]
The contract reads, in relevant part, that the property will be sold for a total price of [*2]$1,150,000.00, with a down payment of $57,500.00 due upon the signing of the contract. The downpayment, together with four copies of the signed contract were tendered by the Plaintiff to Defendants on or about January 18th, 2005.
Neither party contests that the agreement was duly executed or that the downpayment was paid to Defendants in accordance with the terms of the contract. Clause "15" of the contract sets the closing date and time as "on or about June 30, 2005" at 11:00 a.m.
Plaintiff alleges that both parties were aware that the selling price was significantly over market value and that he agreed to purchase the premises for that price because he planned to build condominiums there.
Clause "9(a)" of the contract addresses zoning of the property and reads, in relevant part, as follows: 9. Permitted Exceptions. The Premises are sold and shall be conveyed subject to (handwritten) the following provided title is not rendered unmarketable in accordance with its standard form policy, (a) Zoning and subdivision law and regulations, and landmark, historic or wetlands designation, provided that they are not violated by the existing buildings and improvements erected on the property of their use;
Clause "28" of the contract is a merger clause and reads, in relevant part, as follows: 28. Miscellaneous. (a) All prior understandings, agreements, representations and warranties, oral or written, between Seller and Purchaser are merged in this contract. It completely expresses their full agreement and has been entered into after full investigation, neither party relying upon any statement made by anyone else that is not set forth in this contract. (b) Neither this contract nor any provision thereof may be waived, changed or cancelled except in writing....
No writing within the contract made the sale of the property contingent upon the property maintaining any particular zoning classification.
At the time the contract was negotiated, the property was zoned "R6". At some point prior to the contracted closing date, June 30, 2005, the New York City Planning Commission began the process of considering more restrictive zoning regulations for the area. As part of that process, community meetings were held at which the public had an opportunity to state their position on the proposed changes. It is not contested that Defendant Marc V. Arniotes attended community meetings and advocated against the proposed zoning changes. The City Council enacted the downzoning in June of 2005.
On or about March 17th, 2005, by and through its counsel, Plaintiff wrote Defendants [*3]stating that the property had been "downzoned" from R6 to R4, and that Plaintiff "finds it impossible to continue with this transaction". Plaintiff sought return of the downpayment tendered.
On March 23rd, 2005, Defendants responded to the Plaintiff's letter, rejecting the request for the return of the contract deposit. Defendants' counsel informed Plaintiff's counsel that the zoning changes had been proposed but not enacted and the Defendants intended to close on June 30th, 2005. On June 1st, 2005, Defendants reaffirmed their intent to close in a letter to Plaintiff.
On June 20th, 2005, Plaintiff sent Defendants a letter rescinding the contract on "various grounds, including but not limited to a mutual mistake with respect to the zoning of the property as of the time of closing".
ARGUMENTS
Defendants argue they are entitled to summary judgment as the contract was not conditioned upon the zoning of the property remaining unchanged and therefore there is no mutual mistake which renders the contract voidable.
Defendants further argue that since both parties were represented by counsel, and because Plaintiff held himself out to be a licensed real estate professional, there is no basis to rescind the contract.
Defendants further argue that any allegation of fraud on the part of the Defendants in trying to conceal the potential zoning change is without merit and is simply an effort by the Plaintiff to recover the downpayment, to which he is not entitled.
Plaintiff argues that there are facts in dispute including whether Defendants knew Plaintiff intended to build condos, whether Defendants were aware of the potential changes in the zoning regulations, and whether Defendants concealed that knowledge in an attempt to defraud the Plaintiff. Plaintiff argues that Defendants knew of the zoning changes "from the time they entered into the contract with the Plaintiff".
Plaintiff finally contends that Defendants purposely stalled and were otherwise unwilling to close the transaction.
ANALYSIS
A motion for summary judgment will be granted "if, upon all the papers and proof submitted, the cause of action of defense shall be established sufficiently to warrant the court as a matter of law in directing judgment in favor of any party". CPLR §3212 (b). The "motion shall be denied if any party shall show facts sufficient to require a trial of any issue of fact." Id. [*4]
When considering a summary judgment motion for failure to make out a case, this Court is required to accept the Plaintiff's evidence as true and give it the benefit of "every reasonable inference which can be reasonably drawn from that evidence." Secof v. Greens Condominium, 551 NYS2d 563, {158 AD2d 591} citing, Goldstein v. Hauptman, 131 AD2d 724.
Plaintiff argues that there are material facts in dispute and asks this court to deny the instant motion to permit the discovery process to proceed. However, based upon the arguments alleged by the Plaintiff, giving the Plaintiff's evidence the benefit of every reasonable inference, Defendants are entitled to judgment as a matter of law.
The contract of sale memorialized the intent of the parties and included a clause, Clause "28", which merged "all prior understandings, agreements, representations and warranties, oral or written, between Seller and Purchaser" into the contract. The contract further reads that it "completely expresses [the parties'] full agreement and has been entered into after full investigation, neither party relying upon any statement made by anyone else that is not set forth in this contract." (Emphasis supplied.)
Clause 28, subparagraph (b) reads "Neither this contract nor any provision thereof may be waived, changed or cancelled except in writing....". No additional writing has been submitted so as to modify the contract.
The contract contains a specific provision which addressed zoning issues.
9. Permitted Exceptions. The Premises are sold and shall be conveyed subject to... (a) Zoning and subdivision law and regulations, ..
There is no clause in the contract that conditions the sale on the property remaining zoned R6.
Plaintiff also seeks to rescind the contract on the basis of, including but not limited to, "mutual mistake" as to the zoning classification. This attempt to rescind the contract is misplaced. There was no mutual mistake as the zoning was R6 at the time the contract was entered into and the proposed zoning changes were only possibilities that might never occur. Even if both parties assumed the zoning would remain the same that does not constitute a mutual mistake of fact.
No additional discovery is required to analyze the four corners of the written contract executed between the parties. Both parties were represented by counsel and their stated intent was clear. Had they intended to make provision for recission of the contract in the event of a change in zoning, that could have been included in the contract terms.
Plaintiff further claims that the Defendants defrauded him by concealing the potential changes in the zoning regulations prior to the date of the contract.
In an apparent attempt to demonstrate Defendants' knowledge of the proposed changes, Plaintiff describes Mark V. Arniotes' participation in a community meeting on March 9th, 2005 concerning the proposed changes. Plaintiff has offered no evidence either that Defendants knew of the proposed zoning changes prior to entering into the contract, or that Defendants made any representations or warrants concerning the zoning before entering into the contract. [*5]
Mr. Arniotes does not deny knowing changes to the zoning were proposed; indeed Mr. Arniotes attended the meetings after entering into the contract to oppose the proposal, acting in Plaintiff's interest, a fact Plaintiff admits. The zoning change to the property was not actually effected until June of 2005. Plaintiff's suggestion that Mr. Arniotes sought to conceal his knowledge of the proposed changes from Plaintiff in anticipation of the closing date, while opposing them in public community board meetings as early as March, 2005, is without merit.
The proposed zoning change was subject to the City's Uniform Land Use Procedure which requires public notice and public hearings on the proposals. Thus the proposed zoning changes were public knowledge. Plaintiff neither offers evidence or a basis to believe evidence exists that Defendants had inside information as to the proposed zoning modification by the New York City Planning Commission, nor that Defendants had access to the information any earlier than the general public.
Furthermore, Plaintiff held himself out to be a real estate professional who approached the Defendants about purchasing the premises. In a handwritten addition to the contract, Plaintiff represented himself to Defendants, in Clause "27(a)", that "he is a liscenced [sic] NYS Real Estate Broker and real estate developer". It is reasonable to assume a licensed real estate professional would inquire as to pending zoning changes before that real estate professional entered into a contract to buy property. Plaintiff had the same opportunity to obtain knowledge of the proposed zoning changes as did Defendants. Even had the Defendants had knowledge of that zoning changes were being proposed, they were under no obligation to provide that information because the proposed changes were potentialities that were outside of their control that might occur well after Plaintiff constructed his condominiums, or might never have occurred. There is no requirement for a seller to advise a buyer about every potential occurrence that might impact on the value of the property. This is particularly so where the potential occurrences are both outside of the seller's control and are of public record.
Plaintiff further alleges he had no knowledge of the zoning change prior to June of 2005. However he not only indicated in his letter of March 17th, 2005 that he found it "impossible to continue with this transaction" because the property had been downzoned', but he further admits to having had more than ten discussions with the Defendants with regard to "the amount of money that was going to exchanged [sic], as well as the the growing concern over the R6 zoning issue".
Lastly, the allegation that the Defendants stalled or prevented the closing date is also without merit. The closing date set forth in the contract was June 30, 2005. Plaintiff states his intentions were clear that he wanted to close prior to the scheduled closing date but yet he provides nothing to substantiate that claim. The correspondence between the parties not only shows that the Defendants wanted to go forward with the closing, but there is an absence of any request by the Plaintiff to close earlier. Indeed it was the Plaintiff who attempted to rescind the contract in his letter of March 17th, 2005.
Plaintiff has no basis to bring an action against Defendant. If Plaintiff sought to have the sale conditioned upon the development potential of the premises, he should have ensured the contract reflected that intent. No action undertaken by the Defendant alters the clear intent of the parties since the contract was signed. It was Plaintiff who, by refusing to comply with its terms, [*6]breached the contract.
By reason of the foregoing, Defendants' motion for summary judgment dismissing the Summons and Complaint filed herein is granted and Defendants are hereby awarded $57,500.00 in liquidated damages pursuant to the contract terms.
This constitutes the decision and order of the Court.
E N T E R,
______________________________
J.S.C.
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