Pike Realty Co., LLC v Cardinale

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Pike Realty Co., LLC v Cardinale 2008 NY Slip Op 31833(U) June 27, 2008 Supreme Court, Suffolk County Docket Number: 0031749/2007 Judge: Thomas F. Whelan Republished from New York State Unified Court System's E-Courts Service. Search E-Courts (http://www.nycourts.gov/ecourts) for any additional information on this case. This opinion is uncorrected and not selected for official publication. [* 1 ] INDEXNo. 07-31749 SUPREME COURT - STATE OF NEW YORK I.A.S. PART 33 - SUFFOLKCOUNTY I R E S E i 7: 1 % THOMASF. WHELAN Justice of the Supreme Court MOTION DATE 11-8-07 ADJ. DATE 6-6-08 Mot. Seq. # 001 - MD i011. - X . i lK!.: RE.41 I Y COMPANY, LLC, MAIMONE & ASSOCIATES PLLC Attorneys for PIaintiff 170 Old Country Road, Suite 609 Mineola, New Yorlc 11501 Plaintiff, - against i ) f i l l , l P f ( AIIDTNALE, TOWN OF / < I \ EKHEAD COMMUNITY DEVELOPMENT I(;t!NC V, TOWN OF RIVERHEAD PUBLIC I AKKING DISTRICT NO. 1, and TOWN OF Rf\ FKHFALI, Defendants. : : DAWN C. THOMAS, ESQ. Attorney for Defendants 200 Howell Avenue Riverhead, New York 11901 : X lollowing papers numbered 1 to 10 read on this motion (#001) bv the plaintiff for ~reliininary m r i c t i c e I elief ; Notice of Motion/ Order to Show Cause and supporting papers 1 - 3 ; Notice of Cross Motion and ,uppoi-tiiigpapers --;Answering Affidavits and supporting papers 4 - 5 ; Replying Affidavits and supporting papers - -- ; Othei )(Exhibits); 10 (Memorandum) of Law) ; ( 8 1 l p c the ~ 7mtfim)I t I \ ORDERED that this motion (#001) by the plaintiff for an order awarding it a preliminary *ll\iillctloll restraining and enjoining the defendants from exercising a right of reverter contained in a deed .uic! other documents executed by the parties and froin making public statements with respect thereto is :oii>itiercd under CPLR 63 11 and is denied; and it is further ORDERED that a compliance conference is presently scheduled for December 16,2008, at 9:30 I i i i in Par! 33, at the courthouse located at 1 Court Street, Riverhead, New Yorlc. In Novei-nber of 2004, the plaintiff was designated as the qualified and eligible sponsor for those vor iioris of the Town of Riverhead s downtown urban renewal plan which were aimed at renovating, i ~ t i u t iand transforming the historic theater building situated on Main Street into a performing arts y [* 2 ] Pike Realty v Cardinale liidev Yo. 07-3 1749 Pagcnio 7 :enter On February 5,2005, an Agreement of Sale setting forth the terms of the plaintiffs purchase of the theater building and the land on which it sits, was executed by the plaintiff and defendant Town of Kiverhead Community Development Agency (hereinafter the CDA ). By deed dated February 17,2005, the ( DA conveyed title to the subject premises to the plaintiff. In December of 2006, the parties executed contract Addendum in conjunction with the Town s conveyance of an easement over town land to the plaintiff enabling it to comply with certain zoning requirements.. . I in both the Agreement of Sale and the deed, the CDA retained a reverter interest in the premises. i he reverter clauses provide that the premises will revert to the CDA in the event, inter alia, the plaintiff tails to restore and improve the theater within three years from the date of closing. Similar reverter clauses \wrc included in the December 8, 2006 Addendum to the Agreement of Sale and easement granted by thc Town to the plaintiff that same day. Under each of these clauses, the plaintiff was required to c oinplete its redevelopment of the of the theater not later than February 18,2008. However, the plaintiff failed to fulfill its obligation to renovate the theater building and transform it into a performing arts center h~ February 18,2008, as the subject premises still house the old theater building and no performing arts lenter operates therefrom. By the complaint served and filed in this action, the plaintiff seeks a judgment reforming the kcbruary 5,2005 Agreement of Sale and all subsequent documents including the February 12,2005 deed, (7 that the reverter clause cannot be exercised until two years and nine months have expired from the date iinai permits are issued. The plaintiff also demands permanent injunctive relief prohibiting the defendants 1rom exercising the reverter clauses and from making threats and public comments evincing an intention 10 exercise said reverter. Finally, the plaintiff demands damages incurred by reason of the defendants purported breaches of the implied covenant of good faith and fair dealing and purported violations of the plaintifi s due process rights. In support of its demands for judicial reformation of all reverter clauses, the plaintiff relies upon paragraph 18(b) of the Agreement of Sale (hereinafter Renovation Standard Clause ) which provides the plaintiff with two years and nine months after receipt of all of the necessary municipal approvals to complete the project. The plaintiff contends that this clause, which directly conflicts with the reverter L,l~uses would have no meaning or effect if the reverter clauses were enforceable as written. In support its claims for damages, the plaintiff asserts that the defendants dilatory and wrongful conduct in imccssing and reviewing the plaintiffs applications for municipal approvals and conveyances caused the plaintiff to default in complying with the time limitations imposed upon the completion of the project under the reverter clauses. 1 1 t l he defendants oppose the plaintiffs motion and deny any wrongful conduct on their part. The ,iefendants contend, inter alia, that the plaintiffs failure to complete the renovation of the theater is solely dtributable to the plaintiffs decision to expand the project by the construction ofthree floors ofresidential iipnrtments and/or office space atop the renovated theater. The defendants argue that these circumstances [warrant the denial of the plaintiffs motion and the dismissal of the plaintiffs complaint. [* 3 ] established that a motion for preliminary injunction opens the record and gives the court , c ~ t I l oiit ) lo piss upon the sufficiency ofthe underlying claims (see Giiggertheimer v Ginzburg, 43 NY2d '0s 30 1 Y\rrS2d 182 [ 19771). However, the court's inquiry is limited to detemiining whether the plaintiff Z I ~ S cause of action as the court's power does not extend to an evaluation of conflicting evidence (see h ' K i i u i i s Holding, Inc. v Burns Street Owners Corp., 18 AD3d 857,796 NYS2d 677 [2nd S Dept. 20051). It I S \\ell L~ well established that to prevail on a motion for preliminary injunctive relief, the movant , ! i i i c , i L IcarI> demonstrate a likelihood of success on the merits, the prospect of irreparable harm or injury ! ti~c !.chef IS withheld and that a balance of the equities favors the movant's position (see Pearlgreeit Gorp v I m Chi CIiii, 8 AD3d 460,778 NYS2d 5 16 [2'ldDept. 20041). The decision to grant a preliminary i !iiLiiictwri I S committed to the sound discretion of the court (see Bergen-Fine v OiZHeat Institrite, Iitc., I S 0 AD2d 504. 720 NYS2d 378 [2ndDept. 2001]), as the remedy is considered to be a drastic one (see ~ I O CI*h e l r o d , 73 NY2d 748, 536 NYS2d 44 [1988]). ? 11 15 d s o 1 clear legal right to reliefwhich is plain from undisputed facts must be established (see Gagiton B u s Cbntyany, Inc. v Vallo Transportation, Ltd., 13 AD3d 334, 786 NYS2d 107 [2"d Dept. 20041; IZfiicberries Gourmet v Avis Realty, 255 AD2d 348, 680 NYS2d 557 [2"dDept. 19981) and the burden J! <lioning an undisputed right to the injunction rests with the movant (see Doe v Poe, 189 AD2d 132, NYS2tl 503 [ 2 ' I d Dept 1993). Factors militating against the granting of preliminary injunctive relief iicliitlc that the movant can be hlly recompensed by a monetary award or other adequate remedy at law Y ll'hite Bay Enterprises v Newsday, Inc., 258 AD2d 520, 685 NYS2d 257 [2nd Dept. 19991) and that lie granting of the requested injunctive relief would confer upon the plaintiff the ultimate relief requested I I the xtion or effect an alteration, rather than apreservation ofthe status quo (seeMcIntyre v Metropolitan Lije Insiiuance Conzpnny, 221 AD2d 602, 634 NYS2d 180 [2"dDept. 19951; Rosa Hair Stylists, Inc. v .laher Food Corp., 218 AD2d 793, 631 NYS2d 167 [2"dDept. 19951). <I hci-c, the plaintiffs demands for preliminary injunctive relief are not dependent upon its claims : o i dciinctgescis such claims provide an adequate remedy at law and negate all entitlement to the drastic i.ei ICJ that a preliininary injunction affords. Nor are its demands for preliminary injunctive relief Icpeiiticnt upon its pleaded claims for permanent injunctive relief. Review of the instant moving papers I CY eals tliat the plaintiffs demands for a preliminary injunction are aimed principally at forestalling the de 1eiidants ' exercise of their rights ofreverter. Although the plaintiff also demands preliminary injunctive T I I C [ restraining the defendants from "making any threats or other public expressions evincing an j nteiitior; t o exercise the aforementioned reverter", these demands are wholly lacking in merit. The iic 1 i.iidants' speech and expressions of opinion are constitutionally protected and the plaintiff failed to ,Icinonstrate any entitlement to curtailment thereof by prior restraint or otherwise ( e Rose v Levine, 37 se 4L)3d 691.830NYS2d 732 [2ndDept. 20071; RoseizbergDiainondDevelopmeizt Corp. v Appel, 290 AD2d ' 3 5 N\r7S2ci528 [lst Dept. 20021). I i ii thus apparent that the plaintiffs equitable claim for reformation of the reverter clauses ~oiitaineclin thc subject documents is the only pleaded claim upon which its demand for preliminary iii~iinctive reliefproperly rests. To be entitled to the preliminary injunctive relief that is the subject ofthis [* 4 ] plaintiff must establish a likelihood of success on the merits of its reformation claim and the elements of a successful motion for preliminary injunctive relief. i o ~ ~ t ) i the i, lilie: I lie court finds, however, that the plaintiff failed to establish a likelihood of success on the merits t i t < ret'oi-matioii claim. It is not disputed that the two year, nine months time frame that runs from receipt I .ii I necessary nirinicipal approvals that is set forth in the Renovation Standard Clause of the Agreement , ) I 5Lilc. ccmtlicts with the three year from closing time frame that is imposed upon the completion of the i)l-t)\i'ci l ~ the reverter clause of said Agreement and those set forth in the deed the contract addendum v , liicl casement of December 2006. The plaintiff claims that the conflict between the reverter clauses and he Keno\ ation Standard Clause was the result of a mutual mistake. The plaintiff argues that if the reverter Iriii\cs are not reformed so as to replace the three year from closing time frame contained therein with the i i o i i expansive time frame contained in the Renovation Standard Clause of the Agreement of Sale, said ' ticiii)\ LitionStandard Clause will be rendered meaningless and without force and effect. According to : h ~ l l ~ m tfl: such a result is repugnant to well established principles of contract law (see e.g. McCabe p i 1' Il'itt~weii. 34 AD3d 652, 825 NYS2d 499 [2nd Dept. 20061). 1, If tiowcvei ,the court rejects as unmeritorious, the foregoing contentions of the plaintiff. Its reliance { ) i i cs~tblislicd rules of contract interpretation rather than on the law goveining the equitable remedy of i-cf;)t-riiatioii and the doctrine of mutual mistake is misplaced (see CIzimart Associates v Pnzil, 66 NY2d 1. 498 N'E'SM 344 [ 19861; George Backer Maizagenzent Corp., v Acme Qziiltivlg Co., Im., 46 NY2d 2 I . 4 I ? NYS2d 135 [1978]). The rules of contract interpretation cited by the plaintiff provide the -.IiLccssful proponent with remedies such as specific performance or damages or recision for breach of i L ) i i f r x t (sec e.g. McCabe v Witteveen, 34 AD3d 652, supra). They do not aid the plight of parties m.~k reformation of contracts or other documents. iiig Ihe remedy of reformation is properly granted only where parties have a real and existing q t cciiient, but unknown to them, their signed writing does not accurately reflect that agreement (see O ' V d I' 7bwiz o Fishkill, 134 AD2d 487, 521 NYS2d 272 [2nddept. 19871). To be entitled to f c~oi-~iiat~oii basis of mutual mistake, as is claimed herein by the plaintiff, the mistake must have on the c\.isrzti at the time the contract was entered into, the facts about which the parties are mistaken must be ~ i ~ t t e r i ~ l l both parties must have been mistaken as to the same fact (see Harris v Uldendorf, 24 NY2d and 46.3 30 I YYS2d 53 [ 19691. An instrument may not be reformed to include a provision that one party ' ~ d,iiiced but the otherrejected (seeSchmidtvMagiteticHend Corp.,97 AD2d 151,468 NYS2d 649 [2"d \ I )cpi 1 9831). Since the purpose of reformation is to make the writing accurately reflect the agreement rli'it the parties reached, reformation is inappropriate absent clear and convincing evidence that there had I-ICC~I a mcct~iig the minds between the contracting parties with respect to the term or temis the court of I \ t-icitig asked to impose (see ClzinzartAssociates vPaul, 66 NY2d 570, supra; Hayes v City of Yonkers, 4D2d 860, 182 NYS2d 160 [2ndDept. 1959]Issacsv Schmuck, 245 NY 77, 156 NE 621 [1927]). 1 KcL iew of the record adduced on the instant motion reveals that the plaintiff failed to demonstrate i l i , t i ' t iias a cognizable claim for reformation of the subject documents. Such record is devoid of any LY irteiice tending to establish that the plaintiff and the defendant CDA agreed that the time within which [* 5 ] ~~laint~ff had to complete its redevelopment of the site and to open it as a performing arts center was : I) hears and nine months after its receipt of all necessary municipal approvals. Indeed, the record I Ic~lides,tinple proof that the defendants never agreed to any project completion date other than that set t l 11 I the re\ erter clauses and that the plaintiff also agreed to the time limitations set forth in the reverter 1 IC i l,lLl\ei i ndcr these circumstances, the plaintiffs motion for a preliminary injunction is denied and the nlciiiiti f f s pleaded claims for reformation and permanent injunctive relief are dismissed. The defendants i i e i i i i l i i d b for an award of the affirmative relief demanded in their counterclaim is denied, without as !)~qiidice. procedurally improper for want of service of a notice of cross motion as required by CPLR 12 1 The plaintiffs pleaded claims for recovery of damages and the counterclaim asserted by the ietncimts are continued herein.

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