Peek v Scialdone
Annotate this CaseDecided on May 22, 2007
Supreme Court, Dutchess County
Ryan Peek and DANA PEEK, Plaintiffs,
against
John Scialdone and ERIC GOLDFINE, SERPT, Defendants.
0778/06
TO:CRAIG M. WALLACE, ESQ.
WALLACE & WALLACE, LLP
Attorneys for Plaintiffs299 Main Street
Poughkeepsie, New York 12601
JUDITH REARDON, ESQ.
Attorney for Defendant/
Third-Party Plaintiff
JOHN SCIALDONE
20 Babbit Road
Bedford Hills, New York 10507
Law Office of MATTHEW ROACH
Attorney for Defendant
ERIC GOLDFINE
1929 Commerce Street
Yorktown, New York 10598
A. MICHAEL FURMAN, ESQ. and
KRISTOPHER M. DENNIS, ESQ.
KAUFMAN, BORGEEST & RYAN, LLP
Attorneys for Third-Party Defendant
CRAIG M. WALLACE
99 Park Avenue, 19th Floor
New York, New York 10016
MICHAEL NATIELLO, ESQ.
FRANCIS J. DeVITO, P.A.
Attorneys for Third-Party Defendant
WELLS FARGO BANK, N.A.
150 Broadway, Suite 1307
New York, New York 10038
JOAN H. McCARTHY, ESQ.
Referee
Cedar Hill Road
P.O. Box 360
Fishkill, New York 12524
James D. Pagones, J.
The plaintiffs move for summary judgment. The third-party defendants move separately for summary judgment dismissing the third-party complaint. The relevant facts are not in dispute on these motions. The plaintiffs and defendants entered into a contract for the purchase by the plaintiffs of new construction on a lot owned by defendant Scialdone. The contract of sale advised that defendant Scialdone, as seller, was constructing a new single family home which, upon completion, would be transferred to the plaintiffs for the sale price of $855,000.00. An addendum to the parties' agreement permitted the release of the purchasers' down payment to the seller in exchange for a mortgage from seller. The purchasers' counsel returned two copies of executed contracts along with the requisite down payment to sellers' attorney on July 26, 2005. On August 8, 2005, the seller's attorney returned two fully executed contracts of sale along with an original note and mortgage to the purchasers' attorney. At that time, seller's counsel advised that:
"The construction of this property is quite close to completion. Consequently, it would be prudent for you to order title as soon as possible." [*2]
Paragraph 22 of the parties' agreement provides:
"In the event of a willful and intentional default on the part of the Purchaser in the performance of this contract, this contract shall be deemed to be automatically canceled without any further act on the part of the Seller and the Purchaser agrees that any and all amounts paid by the Purchaser to the Seller may be retained by the Seller as liquidated damages and that the Purchaser is not entitled to lien the property for same. Seller must provide Purchaser with notice of default and the Purchaser shall have a ten day period to cure such default."
The parties' agreement provided for a closing on or about October 31, 2005. The closing did not take place on or about that date. Thereafter, the plaintiffs duly recorded the note and mortgage. By letter dated January 5, 2006, the purchasers' attorney declared law day by advising that a closing must take place on January 26, 2006. The purchasers' attorney advised seller's counsel that the plaintiffs were ready, willing and able to close at that time. On January 13, 2006, the seller's attorney sent a letter to the purchasers' attorney advising that the purchasers were in default. In the same letter, the seller's attorney stated:
"The contracts are hereby terminated. Our client will be actively marketing the property immediately."
The plaintiffs' complaint asserts seven causes of action which seek the return of the plaintiffs' down payment and to foreclose on the subject mortgage. Seller/defendant Scialdone instituted a third-party action against the purchasers' attorney, Craig M. Wallace, and purchasers' proposed lender, Wells Fargo Bank, N.A. Scialdone's first cause of action alleges that the third-party defendants "wrongfully, knowingly, intentionally, maliciously and without reasonable justification or excuse, induce (sic), persuaded, enticed and/or aided Plaintiffs to violate, repudiate and break the Contract of Sale." The seller's second cause of action alleges that the third-party defendants intentionally fabricated a revised mortgage commitment to permit the purchasers to "wrongfully, falsely, deceptively and fraudulently claim that they complied with the Contract of Sale." The seller's third cause of action alleges a conspiracy by the third-party defendants to "create a scenario to make it appear that Scialdone breached the Contract of Sale by allegedly failing to complete construction and being unable to deliver certificate of occupancy." The seller's fourth cause of action alleges that the third-party defendants wrongfully filed the mortgage which is the subject of the plaintiffs' action.
It is well settled that in order "to obtain summary judgment, it is necessary that the movant
establish his or her cause of action or defense sufficiently to warrant the court as a matter of law
in directing judgment' in his or her favor (CPLR 3212[b]), and he or she must do so by tender of
evidentiary proof in admissible form." (Friends of Animals, Inc. v. Associated Fur Mfrs.,
Inc., 46 NY2d 1065, 1067 [1979].) Parties opposing a motion for summary judgment are
obliged to lay bare their evidentiary proof in admissible form in order to show that their
allegations are capable of being established at a trial. (Albouyeh v. County of Suffolk, 96
AD2d 543 [2d Dept. 1983] aff'd 62 NY2d 681 [1984].) Bare conclusory allegations,
expressions of hope or unsubstantiated assertions are insufficient. (Zuckerman v. City of
New York, 49 NY2d 557, 562 [1980].)
THIRD-PARTY COMPLAINT
The third-party defendants have each established, on a prima facie basis, that they are [*3]entitled to judgment as a matter of law dismissing the plaintiff's third-party complaint. Third-party defendant Wells Fargo has established, on a prima facie basis, that it did not induce the plaintiffs to breach their agreement with the defendant and did not otherwise interfere with the parties' agreement. Additionally, Wallace has established his nonliability on the first cause of action since the advice of an attorney to a client is not actionable as tortious interference of contract. (Beatie v. DeLong, 164 AD2d 104 [1st Dept. 1990].)
As to the second cause of action, the documentary evidence establishes that the third-party defendants did not intentionally conceal the status of purchasers' mortgage commitment. Both third-party defendants have established, on a prima facie basis, that the revised mortgage commitment was not false or fraudulent as alleged.
Regarding the third cause of action, third-party defendant Wallace has established, on a prima facie basis, that there was no conspiracy to create a scenario to make it appear that the third-party plaintiff breached the contract of sale.
Scialdone's fourth cause of action alleges that third-party defendant Wallace knew that the plaintiffs "were not entitled to file the Mortgage that Third-Party Plaintiff Scialdone had executed." The third-party defendant has established, on a prima facie basis, the plaintiffs' contractual entitlement to file the subject mortgage. In addition to Wallace's affirmation, the third-party defendant has presented a letter dated October 5, 2005 from Scialdone's attorney to Wallace in which she states "I suggest at this juncture that you file your clients (sic) mortgage since there is no guarantee that there will be a meeting of minds' any future negotiations (sic) should it be determined that Article 37 is applicable." Seller's counsel unequivocally authorized the filing of the subject mortgage.
In response to the respective motions of the third-party defendants, the third-party plaintiff
has failed to present any evidence that there are triable issues of fact with regard to the four
causes of action asserted in the third-party complaint. Therefore, it is ordered that the respective
motions of the third-party defendants are granted and the third-party complaint of John
Scialdone is dismissed. It is further ordered that the third-party complaint is severed.
FORECLOSURE
The plaintiffs assert that defendant Scialdone has defaulted under the provisions of the duly executed and filed note and mortgage. The note which forms the basis of defendant Scialdone's obligation to the plaintiffs provides that he is indebted to the plaintiffs in the sum of $85,500.00 "in the event of (Scialdone's) default under the terms of a contract of sale entered into between the parties dated Aug. 5, 2005."
It is uncontroverted that on January 13, 2006 Scialdone, through his attorney, terminated the parties' contract due to purchasers' alleged default. The parties' agreement, in paragraph 22, mandates that before the contract may be deemed terminated due to the purchasers' default, Scialdone "must provide Purchaser with notice of default and the Purchaser shall have a ten day period to cure such default." The movants have established that the first notice of default and demand to cure occurred in a January 11, 2006 letter from Scialdone's attorney. Scialdone waited less than two full days thereafter to terminate the parties' agreement without providing the purchasers with the required ten day period to cure the default.
"The doctrine of anticipatory breach is applicable to bilateral contracts which contemplate some future performance by the nonbreaching party (citation omitted). Pursuant to this doctrine, [*4]a wrongful repudiation of the contract by one party before the time for performance entitles the nonrepudiating party to immediately claim damages for a total breach (citation omitted). The nonrepudiating party need not, however, tender performance nor prove its ability to perform the contract in the future (citation omitted). Rather, the doctrine relieves the nonrepudiating party of its obligation of future performance and entitles that party to recover the present value of its damages from the repudiating party's breach of the total contract (citation omitted)." (American List Corporation v. U.S. News and World Report, Inc., 75 NY2d 38, 44 [1989].)
The January 13, 2006 statement by Scialdone's counsel on his behalf unequivocally repudiates the parties' agreement prior to the expiration of the mandated period for purchasers to cure any default and constitutes an anticipatory breach of the agreement. Under the circumstances, the purchasers were relieved of any obligation for future performance and are entitled to damages stemming from the seller's breach of the contract. The defendant has submitted no evidence that there are any questions of fact with regard to the anticipatory breach of the parties' agreement. Under the circumstances, I find that defendant John Scialdone defaulted under the terms of the parties' contract of sale by prematurely terminating the agreement. Pursuant to the note dated August 5, 2005, Scialdone is indebted to the plaintiffs in the sum of $85,500.00, which sum he has failed to pay although demanded. I find that the plaintiffs are entitled to a judgment of foreclosure. Therefore, it is ordered that the plaintiffs' motion is granted and the plaintiffs shall have judgment for foreclosure. It is further ordered that attorney Joan H. McCarthy with offices at Cedar Hill Road, P.O. Box 360, Fishkill, New York 12524 and telephone number (845) 896-0940 is hereby appointed referee to ascertain and compute the amount due to the plaintiffs herein for principal and interest on the note and mortgage sued upon and any other expenses that the plaintiffs have paid or may pay in connection with the protection of their security against the mortgaged premises and to examine whether the mortgaged premises can be sold in one parcel.
The Court read and considered the following documents upon this application:
The foregoing constitutes the decision and order of the Court.
Dated:Poughkeepsie, New York
May 22, 2007
ENTER
Hon. James D. Pagones, A.J.S.C.
051807 decision & order
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