Currid v 360 Brooklyn Invs., LLC

[*1] Currid v 360 Brooklyn Invs., LLC 2009 NY Slip Op 52547(U) [25 Misc 3d 1242(A)] Decided on December 9, 2009 Supreme Court, Kings County Schneier, 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 This opinion is uncorrected and will not be published in the printed Official Reports.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 December 9, 2009
Supreme Court, Kings County

Aideen Currid, Plaintiff,

against

360 Brooklyn Investors, LLC, Defendant.



2817/09



ATTORNEY FOR THE PLAINTIFF

RYAN O. MILLER, ESQ.

LAW OFFICES OF BRYAN W. KISHNER & ASSOCIATES

420 LEXINGTON AVENUE, SUITE 300

NEW YORK, NEW YORK 10170

212-585-3425

ATTORNEYS FOR DEFENDANT

EVAN R. SCHIEBER, ESQ.

STARR ASSOCIATES LLP

245 FIFTH AVENUE

SUITE 1102

NEW YORK, NEW YORK 10016

212-620-2680

Martin Schneier, J.

The instant case is but another example of how the recent national financial crisis has unfortunately snared another innocent victim. The housing bubble burst and property values spiraled downward. The plaintiff-purchaser's luxury condominium apartment on the Brooklyn waterfront which she had agreed in her November, 2007 Purchase Agreement to buy for $1,995.000, is now for sale for 35% less or $1,300,000. It is obvious to the Court that plaintiff would lose a [*2]considerable sum of money due to the substantial decreased value of the condominium apartment if she had proceeded with its purchase. Perhaps that was the reason plaintiff chose not to consummate the sale.

Plaintiff Aideen Currid, ("Purchaser"), commenced this action to rescind the Purchase Agreement ("Contract") to purchase a condominium apartment and for the return of her deposit and any accrued interest. Defendant, Brooklyn Investors, LLC ("Sponsor"), counterclaimed for judgment declaring that defendant is entitled to the deposit and all accrued interest. Pursuant to CPLR Section 3212, both parties move for summary judgment.

Background

This litigation arises out of the Purchase Agreement, dated November 13, 2007 in which the Purchaser agreed to purchase from the Sponsor the condominium apartment Unit 1036 in premises 360 Furman Street, Brooklyn, New York , known as the One Brooklyn Bridge Park Condominium, ("One Brooklyn"), for the agreed price of $1,995,000., of which $199,500. was paid by Purchaser to Sponsor as a deposit ("Deposit"). The Deposit is being held in the escrow account maintained pursuant to the Offering Plan by Lampiasi & Associates, LLC.

The One Brooklyn Bridge building, built in 1928 and located on the Brooklyn waterfront, was formerly a warehouse distribution facility for the Jehovah's Witnesses which has been converted into 449 luxury condominiums. A penthouse condominium in the One Brooklyn Bridge Park Condominium with panoramic views of the New York Harbor, lower Manhattan, the Statute of Liberty and the Brooklyn Bridge sold in March, 2008 for the borough-record price of $6.6 million ( Rich Caldor, B'klyn Beckons, New York Post [March 3, 2008]).

The Rider to the Contract contained a rescission clause that provided in pertinent part, that: "2. Notwithstanding anything in the Agreement to the contrary, in theevent that the Sponsor fails to close title to the Unit with the Purchaser on or before September 30, 2008 ("Outside Closing Date"), through no fault of the Purchaser, Purchaser shall have the right to terminate the Contract by delivering a rescission notice to Sponsor within ten (10) days after the Outside Closing Date. If Purchaser timely elects to terminate the Contract, Sponsor shall return to Purchaser all sums deposited by purchaser under the Contract, together with interest earned thereon, if any.

The Purchase Agreement provides that the Offering Plan for One [*3]

Brooklyn is, "incorporated herein by reference and made a part hereof with the same force and effect as if set forth at length."

The Offering Plan states in pertinent part that: "The closing to each Residential Unit shall take place only after or concurrently with the following events:(a) the Plan has been declared effective in accordance with its terms and the amendment to the Plan disclosing same has been accepted for filing by the Department of Law;(b) a Temporary or Permanent Certificate of Occupancy for the Apartment Unit is in effect.....(c) the recording or filing of the Declaration, By-Laws, Floor Plans...(d) the release of the Residential Unit and its Common Interest from the lien of all mortgages, if any;(e) the delivery to Purchaser of written notice of the time and place of the closing at least 30 days prior to the Closing Date specified therein,

... Sponsor shall be entitled to deliver a 30 day closing notice to Purchaser prior to meeting the closing prerequisites set forth in items (b) through (i) above."

Thus, the Offering Plan specifically authorizes Sponsor to serve a Closing Notice prior to obtaining a Temporary Certificate of Occupancy.

Purchaser's attorney, Howard Brickner, Esq. (Brickner), was notified by Sponsor's general counsel Jeffrey Lampiasi, Esq. (Lampiasi), on August 20, 2008 that: "We are scheduling the closing of title for your client's Unit to take place at the offices of Lampiasi & Associates LLP,....on the following date and time (the "Scheduled Closing Date") 9/30/08 at 11:00 A.M."

Purchaser then personally by an email to Lampiasi dated August 25, 2008, requested an adjournment of the closing as follows: "Thank you for the notification of closing on Unit 1036. I have spoken with my attorney Howard Brickner, and explained that I will be out of the country from September 14th until October 7th. I have requested a walk-through appointment from Suzanne Gappa for October 8th. I would like to close on the 15th, 16th or 17th October. I hope these dates work out for all parties. Aideen Currid"[*4]

Lampiasi then responded to Purchaser's e-mail with his own email on August 25, 2008, as follows:

"Aideen "I'm currently out of the country myself, but I'm sure we can accomodate a mid-October closing. I'll work out a date with your attorney and you upon my return on September 2nd.

JML"

Then on September 15, 2008 by letter from Brickner to Lampiasi, a new closing date of October 15, 2008 was confirmed as follows:

"CLOSING CONFIRMATION" It is hereby confirmed that closing of the above referenced transaction is scheduled for:

DATE: October 15, 2008."

Also on September 15, 2008, the investment bank Lehman Brothers declared bankruptcy and Merrill Lynch sold itself to Bank of America. The real estate market in New York collapsed and was decimated. One Brooklyn was also severely adversely affected, as Robert Levine, the mastermind of One Brooklyn succinctly stated, "we were killed"

(Sharon L. Lynch and Jonathan Keener, One Brooklyn Condo Demand "killed" as Market Slides, http://www.bloomberg.com/apps/news?sid=apwjoXx2HYMQ & pid=20601103,[November 3, 2008]) Presently, some of the units are being rented and prices have dropped as much as 35%. (Brownstoner, Price Cuts at One Brooklyn Bridge Park, http://www.brownstoner.com/brownstoner/

archives/2009/08/price_cuts_at_o.php [August 18, 2009]) Two-thirds of the 449 Units in the condominium remain unsold and the Sponsor is now giving a free Audi sedan and a free parking space to anyone who buys a $2 million condominium apartment ( Ben Muessig, Ins and Audis at One Brooklyn Bridge Park, The Brooklyn, Paper [September 10, 2009]).

Purchaser then, through her counsel both orally and in writing, requested that the closing be postponed again. On October 10, 2008 Brickner confirmed the new closing date of November 3, 2008 as follows: "Jeffrey:Pursuant to our phone conversation, we have agreed to postpone the above closing (without cost or penalty to buyer) until November 3, 2008....Thanks. Howard"[*5]

The Sponsor on October 15, 2008 had secured from the New York City Buildings Department a Temporary Certificate of Occupancy for Purchaser's condominium apartment Unit.

Purchaser failed to appear at the new scheduled closing on November 3, 2008. It is undisputed that on the closing date of November 3, 2008, Sponsor was ready, willing and able to close. Sponsor had secured a Temporary Certificate of Occupancy and had satisfied all of the closing prerequisites set forth in the Offering Plan.

Lampiasi, by letter dated January 7, 2009 notified Brickner that his client, Purchaser, Aideen Currid was in default of her obligations pursuant to Paragraph 13.2 of the Purchase Agreement as follows: "Your client's failure to consummate the closing constitutes an Event of Default under the Purchase Agreement, since the Sponsor was ready, willing and able to close on such date...Sponsor has elected to terminate the Purchase Agreement...the Purchase Agreement will be deemed cancelled, and Sponsor shall be entitled to retain your client's entire Downpayment for such Unit and all interest that shall have accrued thereon as liquidated damages."

On or about February 3, 2009 Purchaser commenced the instant action. Purchaser, in her affidavit in support of the motion avers in pertinent part that:

"24.Defendant was not ready, willing and able to close on September 30, 2008. As such, my contact with Lampiasi and his direct response to me should be deemed tantamount to my exercising of my notice of my Right of Rescission and same should be enforceable, and the Purchase Agreement terminated and Contract Deposit returned."

Sponsor also requests an award of attorneys fees incurred by Sponsor in defending or enforcing its rights pursuant to Paragraph 30 of the contract.

Discussion

Summary judgment is a drastic remedy that should only be employed when there is no doubt as to the absence of any triable issues of a material fact (Kolivas v Kirchoff, 14 AD3d 493 [2nd Dept 2005]). "Issue finding, rather than issue determination is the court's function. If there is any doubt about the existence of a triable issue of fact, or a material issue of fact is arguable, summary judgment should be denied." (Celardo v Bell, 222 AD2d 547 [2nd Dept 1995]).

A party moving for summary judgment must make a prima facie showing of [*6]entitlement to judgment as a matter of law, offering sufficient evidence to demonstrate the absence of any material issues of fact. (Alverez v Prospect Hosp., 68 NY2d 320 [1986]; Napolitano v. Suffolk County Dept of Public Works, 65 AD3d 676 [2d Dept 2009]). Once the movant has satisfied this obligation, the burden shifts and the party opposing the motion must now demonstrate by admissible evidence the existence of a factual issue requiring a trial of the action (Alvarez v. Prospect Hosp., supra ; Zuckerman v. City of New York, 49 NY2d 557, 560 [1980]).

Plaintiff argues that defendants representations that Unit 1036 would close on September 30, 2008, implied that the Temporary Certificate of Occupancy would be in effect before the closing. Plaintiff asserts that, because of this, she was fraudulently induced not to exercise her rescission rights under the contract and was misled into relinquishing the "rights" she had under this contract to rescind the Purchase Agreement if the closing did not occur by the "Outside Closing Date" of September 30, 2008.

The elements of a cause of action for fraudulent inducement are representation of a material existing fact, falsity, scienter, reliance, and injury (Channel Master Corp. v Aluminium Ltd. Sales, 4 NY2d 403, 407 [1958]; Urstadt Biddle Properties, Inc. v. Excelsior Realty Corp. 65 AD3d 1135, 1136-37 [2d Dept 2009]). In the instant case, the representations regarding the Certificate of Occupancy are non-actionable because they related to future expectations and not an existing fact (Goldman v. Strough Real Estate, Inc., 2 AD3d 677 [2d Dept 2003]).

Furthermore, "[w]here a party has the means to discover the true nature of the transaction by the exercise of ordinary intelligence, and fails to make use of those means, he cannot claim justifiable reliance on [his adversary's] misrepresentations" (Stuart Silver Assoc. v Baco Dev. Corp., 245 AD2d 96, 98-99 [1st Dept 1997]). A Temporary Certificate of Occupancy is a public record which was accessible to the plaintiff; accordingly, her alleged reliance on its existence was unreasonable (Jordache Enterprises, Inc. v. Gettinger Associates, 176 AD2d 616 [1st Dept 1991]).

With respect to the cross-motion, defendant met its prima facie burden of establishing entitlement to summary judgment as a matter of law by demonstrating that it was ready, willing, and able to perform on the closing date of November 3, 2008, when plaintiff failed to appear to proceed with the closing (Stenda Realty, LLC v. Kornman, 2009 WL 4067222 [2d Dept]). In opposition, plaintiff relies on her allegations of fraudulent inducement which are not legally [*7]sufficient. Accordingly, the plaintiff's opposition papers fail to raise a triable issue of fact.

Conclusion

Based on the foregoing, the plaintiff's motion for summary judgment is denied. The defendant's cross-motion for summary judgment is granted to the extent that the Sponsor shall retain as liquidated damages the Deposit and all accrued interest. The Court, in the interests of justice, declines the request of the Sponsor to award attorney's fees pursuant to the Purchase Agreement.

This constitutes the Decision and Order of the Court.

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J.S.C.