United Tit. Agency, LLC v Surfside-3 Mar., Inc.

[*1] United Tit. Agency, LLC v Surfside-3 Mar., Inc. 2008 NY Slip Op 52248(U) [21 Misc 3d 1127(A)] Decided on November 7, 2008 Supreme Court, Nassau County Austin, 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 This opinion is uncorrected and will not be published in the printed Official Reports.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 November 7, 2008
Supreme Court, Nassau County

United Title Agency, LLC, Plaintiff,

against

Surfside-3 Marina, Inc. and Chrisbar Enterprises I, Inc., Defendants. x CHRISBAR ENTERPRISES I, INC. f/k/a SURFSIDE-3 MARINA, INC., Third Party Plaintiff, MARINEMAX OF NEW YORK, INC., Third Party Defendant.



1283/2007



COUNSEL FOR PLAINTIFF

Neil H. Greenberg & Associates, P.C.

900 Merchants Concourse, Suite 214

Westbury, New York 11590

COUNSEL FOR DEFENDANTS

Marshall, Dennehey, Warner, Coleman & Goggin 425 Eagle Rock Avenue, Suite 302

Roseland, New Jersey 07068

Leonard B. Austin, J.

Defendants, Marinemax of New York, Inc. ("Marinemax") and Chrisbar Enterprises I, Inc. f/k/a Surfside-3 Marina, Inc. ("Chrisbar")[FN1], move to dismiss the first and third causes of action asserted in the complaint of Plaintiff, United Title Agency, LLC's ("United"), pursuant to CPLR 3212.

BACKGROUND

On January 16, 2006, United entered into a New Boat Purchase Agreement with Surfside-3 Marina ("Surfside") to buy a 2007 62-foot Azimut yacht for $1,650,000. United tendered a down payment deposit of $160,000 at the time the contract was signed.

On the same day, a separate Trade-In Agreement relating to the purchase of the 2007 boat was also executed regarding a 2004 55-foot Azimut ("trade-in boat") owned by Fred Assini/Franklin First. Fred Assini ("Assini") is one of the owners of United, a title insurance company. The Trade-In Agreement indicated that the trade-in allowance for the trade-in boat was $800,000. At the time the Trade-In Agreement was entered into, the trade-in boat was in Florida. The Trade-In Agreement noted that "(i)f repairs need to be made they will be deducted from the trade in value, unless said repair has been noted on face of this agreement. Trade in will be inspected within 30 days of its arrival to Surfside-3 Marina." The trade-in value was to be deducted from the purchase price of the new boat being purchased by United.

The purchase of the new boat was never completed resulting in this litigation. In its suit, Plaintiff claims the following causes of action: (1) breach of contract; (2) conversion of United's down payment of $160,000; (3) fraudulent inducement into entering the agreement to purchase the new boat given Defendants' fraudulent representation that a trade-in value of $800,000 would be applied towards the purchase price of the new boat; and (4) unjust enrichment based upon Defendants' retention of the down payment.

According to Plaintiff's amended complaint, the Defendants attempted to lower the $800,000 trade-in value of the trade-in boat and failed to present the new 2007 boat to Plaintiff in a ready condition to close. Plaintiff alleges that at the time the new boat was inspected, it did not have four underwater lights installed on it and the bottom was not painted blue as required by the New Boat Purchase Agreement. In addition, Plaintiff alleges that Defendants breached the agreement by failing to schedule a closing date; by failing to inform Plaintiff that failure to close by a date certain would cause Plaintiff to lose its deposit; by requiring Plaintiff to close on the new boat before the boat had passed a sea trial; by requiring Plaintiff to close on the new boat when it failed the sea trial since it could not perform over 22 knots per hour and vibrated uncontrollably at that speed making it unsafe; by denying Plaintiff the opportunity to [*2]conduct a second sea trial; and by selling the new boat to another party and refusing to return the down payment despite demand for same.

In their motion, Defendants argue that the first and third causes of action should be dismissed based upon the deposition testimony of Assini that the $800,000 value of the trade-in boat was not altered or reduced. Specifically, Defendants point to Assini's testimony that he does not "recall any conversations with Andrew, Michael or Matthew about decreasing the value of my trade" or any one else on behalf of from the Defendants (Assini EBT Transcript, p. 124, ll. 7-20). Furthermore, Assini stated that he never got into an argument with Surfside about the value of the trade-in boat (Id. at p. 131, ll. 16-23).

In opposition to Defendants' motion, Plaintiff maintains that Defendants' motion should be denied because Defendants challenge the original complaint and not the amendment and that the first cause of action for breach of contract as amended alleges several different instances in which Defendants breached the agreements between the parties. Moreover, with respect to the value of the trade-in boat, Plaintiff refers to the deposition testimony of Matthew Barbara ("Barbara"), current Northeast district manager of Marinemax and one of the owners of Surfside in 2006, in which Barbara explained how the value of the trade-in boat was going to be altered or, in the alterative, Assini would be required to pay for the repairs to the trade-in boat.

DISCUSSION

1.Summary JudgmentStandard

The party seeking summary judgment must establish an entitlement to judgment as a matter of law. Alvarez v. Prospect Hosp., 68 NY2d 320 (1986); and Zuckerman v. City of New York, 49 NY2d 557 (1980). If the party moving for summary judgment fails to establish a prima facie entitlement to judgment as a matter of law, the motion must be denied. Winegrad v. New York University Medical Center, 64 NY2d 851 (1985); Widmaier v. Master Products, Mfg., 9 AD3d 362 (2nd Dept. 2004); and Ron v. New York City Housing Auth., 262 AD2d 76 (1st Dept.1999).

Once the party seeking summary judgment makes a prima facie showing of entitlement to judgment as a matter of law, the party opposing the motion must come forward with proof in evidentiary form to establish the existence of triable issues of fact or must demonstrate an acceptable excuse for its failure to do so. Zuckerman v. City of New York, supra; Davenport v. County of Nassau, 279 AD2d 497 (2nd Dept. 2001); and Bras v. Atlas Construction Corp., 166 AD2d 401 (2nd Dept. 1991). A.First Cause of Action Breach of Contract

The elements of a cause of action for breach of contract are the existence of a contract between the plaintiff and defendant, consideration, performance by the plaintiff, breach by the defendant and damages resulting from the breach. Furia v. Furia, 116 AD2d 694 (2nd Dept. 1986).

Defendants argue that in light of Assini's deposition testimony, the first cause of action alleging breach of contract must be dismissed as a matter of law: Defendants' argument fails to acknowledge that Plaintiff's breach of contract claim contains numerous allegations which do not pertain to the value of the trade-in boat. For example, the New Boat Purchase Agreement indicates on Addendum C, which is [*3]referenced on the front page of the agreement that Addendum C pertains to factory and dealer options and was attached by Defendants as part of the agreement even though it is not signed by Surfside [FN2], that "underwater lights (4)" were to be included in the purchase. There is no evidence that the new boat was furnished with these lights in compliance with the New Boat Purchase Agreement. Furthermore, the first page of the New Boat Purchase Agreement references additions to Addendum C so the terms contained in Addendum C were clearly part of the New Boat Purchase Agreement.

In light of the numerous allegations comprising Plaintiff's claim for breach of contract, most of which were not addressed by Defendants in their moving papers, Defendants' motion to dismiss the first cause of action must be denied.

B.Third Cause of Action Fraudulent Inducement

In order to assert a claim for fraud in the inducement, plaintiff must establish that the defendant made material misrepresentations that were false, the defendant knew the representations were false when made, the misrepresentations were made with intent to deceive the plaintiff, the plaintiff justifiably relied upon these representations and plaintiff was damaged as a result of relying upon these misrepresentations. Leno v. DePasquale, 18 AD3d 514 (2nd Dept. 2005).

The party to whom the false statement has been made may not rely thereon if the truth of that statement can be verified through the exercise of ordinary intelligence or reasonable diligence. Huron Street Realty Corp. v. Lorenzo, 19 AD3d 450 (2nd Dept 2005); Sanzotta v. Continuing Development Services, Inc., 262 AD2d 1047 (4th Dept. 1999); and Curran, Cooney, Penney, Inc. v. Young & Koomans, Inc., 183 AD2d 742 (2nd Dept. 1992). A party fails to exercise reasonable diligence and cannot recover when the actual nature of the transaction could have been ascertained through the exercise of ordinary care or intelligence and the party failed to do so. P. Chimento Co, Inc. v. Banco Popular de Puerto Rico, 208 AD2d 385 (1st Dept. 1994).

At the bottom of the New Boat Purchase Agreement it states "(t)he front and back of this order comprise the entire agreement affecting this purchase and no other agreement has been made or entered into or will be recognized except a trade in agreement." The copy of the New Boat Purchase Agreement submitted by Defendants in support of the motion has no writing on the back; however, there is another page included within the exhibit concerning the New Boat Purchase Agreement which is entitled "Terms and Conditions". It appears from the language at the top of this document which states "(t)he order on the reserve side hereof is subject to the following terms and conditions which have been mutually agreed upon" that this document is the [*4]back page of the New Boat Purchase Agreement. Paragraph 2 of the Terms and Conditions sets forth that, "(i)f the said used boat is not to be delivered to the dealer until the delivery of the new boat, the used boat shall be reappraised at that time and such reappraisal value shall determine the allowance made for such used boat." At that time that the New Boat Purchase Agreement was entered into, the trade-in boat was in Florida and apparently not available for inspection at the time the Trade-In Agreement was negotiated. Therefore, the value of the trade-in boat was partially based upon information provided by Assini and not an inspection by the Defendants. Furthermore, the bottom of the Trade-In Agreement, immediately before the signatures of Assini as customer and a representative of Surfside, clearly indicates that "if repairs need to be made they will be deducted from the trade in value". In light of the language of the Trade-In Agreement and that contained on the back of the New Boat Purchase Agreement, Plaintiff could not have reasonably relied on any representation that the firm trade-in value of the trade-in boat was $800,000. Therefore, Plaintiff's arguments concerning the diminution of the trade-in value are unavailing since the clear language of the agreements between the parties disclosed the fact that the trade-in value was subject to change.

Thus, Defendants' motion to dismiss the third cause of action for fraudulent inducement must be granted.

Accordingly, it is

ORDERED, that Defendants' motion for partial summary judgment is denied in part with respect to the first cause of action and granted in part with respect to the third cause of action.

This constitutes the decision and Order of this Court.

Dated: November 7, 2008

Mineola, NY

____________________________Hon. LEONARD B. AUSTIN, J.S.C. Footnotes

Footnote 1: On March 20, 2007, Chrisbar filed a third-party complaint against Marinemax seeking indemnification and contribution. Thereafter, on August 20, 2007, Marinemax assumed the defense of Chrisbar.

Footnote 2: The New Boat Purchase Agreement appears to have been signed by a representative of Surfside since there is a signature next to the word "Accepted". Next to that signature is the word "Buyer" and then a line for a signature. The signature of the Buyer appears at the bottom of Addendum C and does not mach the signature on the front page of the New Boat Purchase Agreement. Furthermore, Defendants do not deny that Surfside entered into the New Boat Purchase Agreement, including Addendum C, and have annexed it in total as an exhibit to their moving papers.