Platinum Estates, Inc. v Vestervelt Props. LLC

[*1] Platinum Estates, Inc. v Vestervelt Props. LLC 2007 NY Slip Op 51434(U) [16 Misc 3d 1115(A)] Decided on July 26, 2007 Supreme Court, Richmond County Minardo, J. 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 This opinion is uncorrected and will not be published in the printed Official Reports.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 July 26, 2007
Supreme Court, Richmond County

Platinum Estates, Inc., Plaintiff,

against

Vestervelt Properties LLC and Peter Zahakos, Esq., Defendants.



080249/06

Philip G. Minardo, J.

This action arises out of a real estate transaction between defendant Vestervelt Properties LLC (hereinafter "Vestervelt") and plaintiff Platinum Estates, Inc.

(hereinafter "Platinum"), pursuant to which plaintiff agreed to purchase a parcel

of vacant land designated as Block 39, Lots 29 and 43 in Richmond County, Staten Island, New York from defendant Vestervelt. As a result, a $100,000 down payment was deposited by Platinum with the seller's attorney, Peter J. Zahakos, Esq. According to defendants, the closing was scheduled for November 13, 2003 and "time [was] of the essence." Four days after plaintiff failed to appear at the closing, the seller's attorney (Zahakos), wrote to the purchaser's attorney electing to cancel the contract. Then, approximately one month later, Zahakos, as escrow agent, released Platinum's $100,000.00 down payment to Vestervelt as liquidated damages. It is alleged that Platinum was notified of the pending release and did not object.

In these proceedings, commenced approximately three years later, plaintiff seeks (1) the return of its down payment plus interest, (2) a direction that defendants, or a duly appointed referee, convey "marketable" title to plaintiff upon the removal of all encumbrances of record and/or restrictive declarations, (3) monetary losses in the sum of $200,000.00 associated with plaintiff's forfeiture of the subject property, (4) $1,000,000.00 in punitive damages based on defendants' alleged "willful [and] deceitful conduct", and (5) a similar sum based on defendants' alleged fraudulent

misrepresentation of the ability to convey good title.

In moving for summary judgment dismissing the complaint, defendants maintain that plaintiff's failure to attend the scheduled "time of the essence" closing constituted a willful default. As a result, defendants assert a contractual right to cancel the contract, as well as the further right upon "15 days... written notice of such election to the purchaser or his attorney at their last known address...[to] retain all monies [previously] paid as liquidated damages" (Rider to Contract, paragraphs "R7" [entitled "Wilful [*2]

Default"] and "R19" [entitled "Rider Controls"]). Defendants also maintain that plaintiff's claims are barred by the doctrine of laches since it never objected to the

escrow agent's "written notification of the release of the funds" at any time during the three years which preceded the commencement of this action. According to defendants, this unreasonable and unjustified delay has caused unspecified prejudice to their

defense.

In opposition, plaintiff contends that Zahakos failed to comply with the " notice" provisions of the contract of sale. According to plaintiff, all written notifications were required to be mailed to plaintiff's principal rather than its attorney. Plaintiff also

claims that the escrow agent should have deposited the disputed funds with the Clerk of the Court pendente lite, and claims that the existence of a purported "stop work order

and other violations" raise questions of fact as to defendants' ability to convey clear

title. Finally, plaintiff contends that Zahakos concealed his role as a principal of Vestervelt, as well as its attorney.

It is well settled that on a motion for summary judgment and dismissal of the complaint, the initial burden is on the movant to establish his or her defense by means of admissible evidence sufficient to warrant a favorable judgment as a matter of law (see Zuckerman v City of New York, 49 NY2d 557, 562). In the opinion of this Court, defendants have sustained this initial burden by demonstrating prima facie that Vestervelt fully complied with the notice provisions set forth in the contract of sale (see Rider to Contract, paragraph "R7").

Contrary to plaintiff's position, the contract did not require that copies of the pertinent notices be sent to its principal. Moreover, noting that the provision in the contract of sale requiring the removal of "Governmental Violations and Orders" (paragraph "10") had been stricken, plaintiff cannot successfully argue that the purported existence of a "stop work order and other [unspecified] violations" prevented

the closing of title. In this regard, it is relevant to note that paragraph "14" of the

contract of sale requires the purchaser to deliver title in fee simple "free of all encumbrances, except as otherwise" provided (emphasis added). Thus, defendants

alleged liability to convey title free of "all notes or notices of violations of law or municipal ordinances, orders or requirements noted or issued...by any governmental department" as required in the stricken paragraph has been specifically excepted.

Similarly unavailing is plaintiff's speculative assertion that Zahakos may also have been a principal of the seller, as it is irrelevant to the completion of this

transaction.

Finally, plaintiff has failed to cite any contract provision or legal authority in support its position that a copy of the letter making "time of the essence" was required to be sent to the client rather than its attorney.

Accordingly, it is

ORDERED, that defendants' motion for summary judgment is granted and the complaint is hereby dismissed; and it is further

ORDERED, that the Clerk enter judgment accordingly. [*3]

ENTER,

Dated: July 26, 2007s/ Philip G. Minardo

J.S.C.