Lee v Ciaramella
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Lee v Ciaramella 2011 NY Slip Op 34176(U) October 24, 2011 Supreme Court, Bronx County Docket Number: 381107-07 Judge: Howard H. Sherman Cases posted with a "30000" identifier, i.e., 2013 NY Slip Op 30001(U), are republished from various state and local government websites. These include the New York State Unified Court System's E-Courts Service, and the Bronx County Clerk's office. This opinion is uncorrected and not selected for official publication. [* 1] I IL..L-L.I 1-.vv Iv LV I I LJI VI II\ \JUUi ny Vivi"' p.3 SUPREME COURT OF THE STA TE OF NEW YORK. COUNTY OF BRONX -PART IA-4 . . ' ·-------•·----~-----~---~•w--~--·~-•••-•••~----~••-••-•••••-~•-------~x: THOMASLEE1 Plaintiff1 DECISION/ORDER AN1HONY CIARAMELLA, YOLANDA SELVAGGI, and "'JOHN DOE lil" · through and·induding "JOHN DOE · #10", said names being fictitious, the persons or parties, corporations or entities; if any, having or claiffiing an interest or lien upon, or oceupying the premises described in the complaint, Index No.: 381107-07 Present: fu&ard H. Sherman. J.S.C. Defendants. . This is an action seeking, amongst other things,. the specific performance of a contract to develop a vvaterfront parcel 0£ land, money damages, 'IAlith additional causes of action sounding in unjusb enrichment, impression of an equitable Hen, imposition of a. . ' C(~nstructive trust, fraud, and an acc6unting. . Two ether causes of action based on mechanics liensforworkandmaterialsfumished were di3missed by order of Justice SUa1·ez dated February 1, 2010. The defendants Anthony CiarameUa ["Ciaramella"] and Yolanda · Selvaggi. have counterclaim.ed.for money damages for alleged breach o.f contract by the plaintifiThomas Lee ["Lee'"]. I will also refer to Ciaramella as "defendant" si.n.ce the Codefendant Yolanda Selvaggi - Mr. Ciaramella's mother - ·has been µamed as a defendant ·1- [* 2] I ILLLJ I ... VY IV L.V I I LJI V l l A V V U l l l J Vivi"- p.·4 in this matter solely to effectuate specific performance as alleged in the complaint, as she was not an active participant in the. contractual negotiations or transactions, real or imagined, between Lee and Ciaramclla. The trial without a jury was conducted before me on February 14 and 15; 2011. The witnesses at the trial were the plaintiff Lee, the defendant Ciaramella/ the def~:ndant Ciaramella's mother m law Nicoletta Sofia, and an architect, Michael DePasquale. The plaintiff Lee was represented by Ma.izes & Maizes by Michae,l H. Maizes Esq, while the defend an ts were represented by Delbello, Donnellan Weingarten Wise &: Wied.erkehr LLP . . by Brian T. Belowich Esq. lliAttQf the Deal Q. Let me ask you this: . Putting aside Exhibit F, do you have any proof in of the. documents that we discussed _or tha~ have been introduced that Tommy, on Janua.ty 4, 20051 agreed to pay you 139 thousE1nd dollars. A Do 1 hav.e any proof? Q. Yes, other thun your word. A. I have a witne.ss. Q. We heard your witness. Do you have anything in writi.."1.g? A. There was nothing in writing m the whole deal. any 11 Trial Transcript [ Tr"] 275:5-275:15. At i<lsue in tlus matter is an alleged oral contract, or series of oral con tracts.between Lee and qar~mella.to develop real 'property located at 1426-1428-1430 Lake Shore Drive in 'the Bronx. -2· [* 3] I IL.LL.I l'IUV IVl'-.VI I LJIUlll'l.vUUllLY vlCll'\ p.S . . The defend!lnt Ciaramella acquired title to 1430 Lake Shore Drive, Bronx New York on July 18, 2001. The purchase.price was $105 10001 financed with a mortgage of $365,000, with the balance in cash. His attorney at the closing was the plaintiff Thomas Lee, who had repre9ented Ciaramella for many years, As the parcel consisted of three lots with beach front access and riparian rights, in addition to a one family residential dwelling, Ciatamella had purchased it with the intention of subdividing the parcel an·d building two additional· structures on the hvo other lots. He entered in to an ornl agreement wi.th Lee to accomplish this. Ciaramella moved into the existing home s.t .1430 Lak~ Shore _Drive jn 2.001, and he continues· to reside in this home. The initial agreementwas that Lee would. :undertake a subd~viBion and demapping' . I of the parcel at his own expei1se, and also pay the cost of the trvo new homes· to be constructed, while Ciaramella would, in addition to providi.rlg the land, pay the carrying costs on thelot, including taxes and mortgage payment:;. Nothing was proven at trial.as to the sp,ecifkations for these new houses, but presumably both would be single family homes. The cornplamt also indicates that an agreement to rehab~litate the existing house .- which Ciaramella continues to live in - was·al.so a part of the contract, l.>ut the proof a.t" trial did not touch on this additional matter. The parties agree that this agreemen': wa8 struck sometime In May 2001, two mo.nths before the closing. Ciar~mella asserts that Lee repres.ented thatthe entire process, including -3- [* 4] I ILLL..I l'llVV IVL.VI I LJIVllA VVUllLJ Vlvln. p. '6 de-mapping, subdivision, and construction of the two·homest would take no more than one year. As there is no written contract, we have only Ciaramella's representation that this one year term was a material part of their agreement. There is no dispute, however, that the parties agreed that upon completion of the two homes, L1::e would receive one of the homes:, and Ciaramella the other; to live in, sell, or make such.use of as they chose. Which hou5e would go to which man, and the specificatiom for eath, does not seem to have been part of U1eir·condudcd ncgotiationi at least at first. The construction did not proceed as anticipated. Lee contei~ds that Ciaramella selected an architect to file the bllilding plans, Michael Depasquale, who fatled to file until November 7, 2002 .. CLaramelia teiitified that Lee continuously misrepresented the status of the subdivision and de-mapping proce.!J5. Indeed, the evidence establishes that the de- mapping application was not filed unHl January 5, 2005, more than three years after the initial agreement. . . Sometime in June 2002, a.s the defendant complained that he was not working, that , he was "broke", and facing foredot->ure since no construction had commenced, the parties agreed that Lee would absorb some of Ciaraniella's carrying costs. TI1r. defendant daimed th at Lee specifically promised to pay him $3000 per rnonth until the project was completed, I . . while Lee ~tated that lie merely agreed ·to pay Ciararneila money from time to time to help ward off foreclosure. The consideration'for this additional financial contribution by Lee -4- [* 5] I ILLL.I l'IUV IVL.VI I U I U l l A \JUUlllJ \JIGll'. was.alleged by the. defendant to be Ciarmella's agreement to refrain from bringing suit against Lee. Lee stated that he agreed to th.i9 merely because he did not want the deal to collapse. Although construction began) theDepartment of Buildings is~ued two stop work orders. in 2003 halting· construction because the properties had not been first subdivided or de-mapped. Construction re-commenced, without de-mapping, in.2004, and the parties engaged in· acrimony ovP..r. th~ slow pac:e of construction, but the evideni=e at trial showed · that at no time in the course of their dealings djd Ciaro.mclJa fire Lee, force the builder off the land , or cancel the agr~ement. The matter reached a crisis point on I anuatjr 4, 2005. Ciar.arnelfa and C"iar~mella's home, on ;-i ~e ~et at day when the defendant's mother in law, Nic:oletta Sofia, was on an upper floor at the house caring for the defendant's infant daughter:. Ciararnella claims that on that date. Lee sweetened the deal further, in consideration for the slow .pace of construction, and Ciaramella's renewed agreement to refrain froni filing suit. First, Lee would pay a lump st1m of $139,000 to CiaramQlla imm<rdiatcly, from the proceeds .of a clos:lng that was imminent. This was allegedly payment for arre;1ragc in the $3000 per . month schedule, which T.ee had been meeting only sporadically. In a~dition, defendant contends that lee further agreed to pay him $500,000.00 at .the time of ,closing,. this apparently intended to occur upon the-sale of both houses. These were allegedly damages -5- [* 6] I ILL-LJ l'llVY IV L.V I I UIVllA VVUlllJ V i v i I"\ F'. 8 for five years of lost profits suffered by the defend ant due to the delay in completion of the project. Again, the consideration for this second, more generous, revision of the original eigreement, purpo1·tedl'y / was Ciararrella' s agreement to r~frain from filing suit against Lee for breach of their agreement, as revised in 2002. The defendant produced a witness to these ~vents1 his mother in law, Nicoletta Sofia. Ms. Sofia told the Court that the raised voices of Lhe two men made her break from her baby-sitting duties, in time to hear Lee specifically agree to pay the sums of $139,000 and $500,000, but, aside from.these two monetary figures, she had ahnostno recollection of any other de.t,Jils of the incident. Ms. Sofia was identified as I' witness in thiR matter in 2008,· and was iropreci..se in her .testimony: Q, Is it yo\.lT te~timony that you had no conversation5 with your son-in law about (he events that. took place on. the date that you de~cribed up until the time he asked you to. come to' Court? A. I think once or twice but· Q. tie did not c:'aJ1 you up ar.d tell }'OU rhar Tommy i~ tiuing me and you are'going to need to be a witness. ~ts go over it. A. Once 01 lwlce. There is nothing to go over. Tr. j88:11-1B8:17. The answer filed by Ciaramela, as noted at the 1rial,-contains an afflrmative claim that the alleged promil'ic! to pay $500,000 was made by l.ee in February 2005, not January, as alleged by the defendant and his witness at trial. -6- ' [* 7] I ILL-LI 1 .. VV IVL.VI I U I V l l A VVUllLY \Jlt:;ll'\ p.9 ., ' .Gil.ll ln Writing Q. When was the first time, in writing, that you ever allege that there was a deal in. pface for Mr. Lee to pay you 139 thousand i:iollars7 A. The first time when I spoke with my attorneys. Q. After the lawsuit had ciJread y started; correct? A. Okay. Q. No time prior to you being sued dld you make a written st~ tement that Mr. Lee agreed to pay you 139 thousand dollars? . A. No, w.e knew what our agreement was. vVhy do I have to write.it to him? Tr. 276:3-276:12 · Lee contended -- inconsi~tently as we shall sec - ~hat the sum· of $139,000 was the amount of monies tho the had already paid to CiaxameLla, not a sum that he agl:eed to pa.y prospectively. As to the fm;'l:her sweetener of .$500,000, Lee's attorney characteri.z.es this as ' a figment of _Ciaramella's imagination. .'.\Ione of the written proofs, jncluding nume,..ous. . emails exchanged by t.he parties, make unambiguous reference to any allege~ promise by Lee to pay $139,000 or $500,000 prospectively, a remarkable omission u:nder the circwnstances. Th.ere is at lea~t on~ highly 1.l.mbigvous reference to a portion of Mr. Ciaramella's claim, however. Some tirneafter Lee relocated to Florida, in2007, Oaramella went to Lee's former law·office and pk:ked up the file maintained by Lee conc.:erning these transactions. One of the documents \Vhich he retrieved included Defendant's Exhihit F, which contains Lee's typed notation that :reads in pertinen~ part as follciws: "139 3k per month as agreed 1/4/05. 11 ~7- [* 8] I ILL..LJ I ~UV IV L..V I I UI VllA VVUI ILJ \JIGI 1'. p. 10 Ciaramella would h~ve. the Court interpret this cryptic entry as a memorialization of, Lee's alleged· promise of January 4, 2005 , to pay a further $139;000, although this d0es nothing to bo!ater defendant' B c!aim with respect to the additional $500,000, Lee argues1 to the contrary, that this is pr9of that on January 4, 2005 he had merely a.greed to pay Ciararnella $3000 monthly, ' as well as Lee's cakuJaHon that he had already paid hlm $139,000 to that point to keep the transacti011 vjabie. Although this is a precarious endeavor~ the Court finds the pl ain tiffs interpretation of this unsigned exhibit to be slightly more credible, noting that the reference to "139" is . proceeded by a listing of alleged expenditures to Mr. Ciaramella and others. The total of this list of expenditures approximates, but does not precisely add up to $139,000: Q. So, is it yow· testimony if you add up all of those items, the ones to Anthony C. or Anthony Ciaramella, they equal 139 thousand dollars? A [Lee]. No1 if yo.u take the 86 from the first page and then you look at the dates subsequent to tI'.ut on tht" final page, monies that I paid on his behalf to Lo· Long Coi;i.structlon, it adds up to 133 thousand and 5 tliousand, not acco.unted for in the top of the. third page, which.is five thousand, you add those three numbers together; r believe you get 136 or 137 tho~sand dollars. . Tr. 106:1-106:9. The confu5ion i.n the question and the hnpred~ion in the anm.yer, paradoxically, lends it credibi1it)1 as a plausible explanation of what fhe exhibit was intended to mean, at· least as a rnemorializ.ation of'what the plaintiff thougr.t the parties had agreed upon. The reference tc "139'', interestingly, is set -8~ updrt from the reiit of the cryptic [* 9] I ILL.LJ l'IUY IV £..VI I LJIVllA V'1UllLY Vl<::ill'. p. ·11 .... · Ar\DM statemerit, in the manner of a column entry on a spreadsheet, although not di!ectly .under the 'list of expenditures which precedes it. Whatever was resolved in January 2005, the remainqer of that year was marked by events of great significance to the parties and to the completion of their enterprise. In August 2005 Lee pleaded guilty to criminal racketeering for activities unrelated t~ th.is Jitigation1 an4 was thereafter disbarred, He moved to Floi-ida, where he had been pmsuing other real estate projects during this· time. On August ts, 2005, thcDepartmentuf Buildlngs issued a final construction sign-off cm the project. The de-m~pping application was finally approved on December 6, 2005. However, there were diiiiculties with the builder retained by Lee, Lurry Chen of Lo-Long C.onstruction, and the delays compe11ed Lee to engag~ a different builder to complete the project. Temporary certificates of occupancy were issued .on January 18, · 2007 .. The . ' construction of the houses was finished on Se.ptember 10, 2007, when final cer~ficates of occupancy were issued . Ciamarella contends, amongst other things, that Lee was obligated to pay him $3000 per mbnUl from June 2002, when Lee first agreed to help the defondant avoid foredosure, ' ' ' and.continuing ~ough the issuance of the final certificates 'of occupancy. · . ' On October 9, 2007, vvith T.ee now Ln Florida, Ciarru...,,.ella sold the house located at 1426 Shore Road to a certain Vincent. Tart~rone for $775,000, ·using some of the proceeds [* 10] I ILLLJ l,.UV IV L.V I I LJIUllA \JUUlllJ VICI!\. . -.-, .... p .·12 to pay off the mortgage on 1430 Shore Road. He also subdivided and deeded an additional portion of the parcel to Tartarone, alleging at trial that it was the only way to satisfy the purchi:iser. He .then re-financed 1428 Shore Drive tor $200,000, and entere.d into a one year lea5e 0£ 1428 with NextGen for 53000 per month: Upon expiration of that lease, a se~ond month- to- month tenancy wa.9 begWl at a r~t of $2000 per month. In 2008, Ciaramclla and hi9 wife file.ct their tax rct1.1n1s; reporting the sale of 1426 Shore Road Ln the prior year. In this return Ciaramella attributed a cost basis to this. property of $431,110. t trial, Ciarainella testified inconsistently as to where this number came from.. He alleged that Lee, who was then livi~g in another stale, was refusing to supply the financial numbers needed to complete the return. However, when Cjaramella had picked.up his tile from Lee's office in 2007, he disc;overed that the file included Le~' is o~n calculations of the costs of construction. This was marked Defend11nt'.11 F.xhibit Il at trial Defendant made a series of statements about this exhibit. Q, It is alBo yum positio!1 that you held no accounting wha.t'lo~ver from Mr. Lee and . that you and your acc:ounlant made up the numbeY for capital gains purposes, c:orrect? A. No, tha~s not my position. I said l took it off [Exhibit] F, let me make ~u.re I go~ Fright. That F was a single pllgc, it was not all connected. If that's what you're trying to tell me, If you are trying to.tell me this.and F was cormected, it was not. Q. You are saying your first page or Exhibit Fis what you and your accountant came up V'llith, 400 thousand doJlars basis [sicJ for the proper:)" in question. A. Let me get to number F. -10- [* 11] I ILLL-1 l'IVV IV ,LV I I LJIUllA v\.JUlllY 1.1 n I n vlCI!'. c:: !'.'." Q .1 i:: T FAX · Q. Righ~ in the front page; A. This cover page here, that was the clo.sest accounting that I could get fr9m Tommy was aasuming his house cost the 450 of the build, that was the best I could get out of him. . Q. Your position is you and your accountant came up with the basis on the cost of' this house, based on th.e first page of Defendant's Rxhibit F7 A. That's right. That was the best I could come up with. Tr.265:23-266:17. Later in his testimony the ·defendant offered this. Q. It is your position that you and your accountant made up that .number because Mr. Lee didn't provide you with documents setting forth his costs in building your house? A. That's rigb t. He did not provide me wi¢ it so I did the best I ~ould to take care of the tax man. · Tr. 271:2-271:6 And sti11 later: Q. So let's go through the. first page and tell us how or where you came up with the cost basis for this property of $431, 110 doilars. Tell us where on that piece of paper. A. I did not, my llr:countant did. J don1t come up with figures, otherwise I would do them myself. Tr. 271:22-272:2·. In the face of this apparent inconsisteri.C}', the Court concludes that defendant used the plaintiff's own estimilte of cost incurred in the construction of lhe home that was sold in 2007- Defendant's Exhibit F ··in order to, as he put it, "take care of the tax man," At trial, Lee a.ttem~wd to prove the precise amount that he· had expended.in the -11- [* 12] I ILLLI l'llVV IVL.VI I LJIVllA \JVUllLY \Jlvll'\ p.] 4 .construction. Due to hjs relocation to Florida, and subsequent criminal conviction and disbarment, as wen a8 the delay that resulted thereafter, he was unable to produce documentation of all of the.exp<:ndit11res that he daims to have made, both in furtherance of the construction, .and in direct payment to Ciarame11a .. The Cvurt .did not permit plaintiff to use photocopies· of checks or bank.statements, or trial, as evidentiary proof 0£ hts actual expenditur~s, spreadsheet~ prepared for eithf;r to third parties or to the defendant. 'This Court finds no basis for the suspension of the rules of evidence and for I inadmissible evidence to be given credence to aid a party whose conduct has caused his own predicament As noted by defendant, in sp:ite o!Lee's claim that he pa.id approximately $400,000 to various contractor~ in order to get the two houses bui:t _.,in addition to $60,000 in "soft · c.osts" - the admissible evidence of expenditures produced by the plaintiff a~ounts to the lc>.Bs impressive sum of 5195,215. Ev~n with this result, ddendani denies th(.lt Lee has .9atisfactorily demonstrated that these expenditures were all related to t~is project, given the fact that L~e was engaged at this time in othe~ ptojcct.'1 with many of the same payees. Morever, CiaramelJa con.tests Lee's daim that he paid approximately $180,000 directly to Ciaramella during the course of the project. Instead, the admissible evidence shows that the total sum <?f $24,000 '\•vas paid to Ciaramella in monthly increments of $3000 each, in addition to the purchase of a television set for $3500. ~ 12- [* 13] I ILL-LJ l'IVV IV LV I I UIVllA \.JUUlllY vlulf\ p. 15 Q. Let me ask you this. Is it your testimony that ther~ was a total of three deals between you and Tommy? A. (Cianune11~]. The original1 the 2002 and then the 2005. Tr. 259:13~259:·16. What did the parties agree to change about the initial agreement, and when? The task is akin to hitting Ft moving turget, as the parties appeured to change the deal, and what would be considered by most reasonable people to be essentia.1 terrns 1 almotit at will. The . . settled proposition is that any ch~ge ~nan existing contract mu!lt ha ye a new consideration to support it. Estate of Anilin ex rel. Dwyer y. Est.>'lte 0£ !<ely ~ rel. K@lly. 270 A.D .2d 853,855 f4lll Dept. 2000]. I find that the 2002 re-adjustment w_as undertaken by Lee, not in consideration for the defend ant's alleged agreement not to sue, but solely in his ov.rn se lf-inte~est, ·Plaintiff's. ' explanation.of the so-called modification of t..\e initial agreement was entirely plausible, in thi.8 Court's view. "Q. Tell the Court the first time that you r~call .tht: defendant objecting to the delay? . A I believe it was so:rp.e time in 2003 when I ,recalHun:i.-200.2 or 2003, he complained that he was broke, he was not working, he had no money and he couldn't get money, He wao; going to be forced to~ the properties :w~re g~ing to be foreclosed upon. Q. In response to that objection, what if anything did the two of you agree upon? A. We sort of modified what we origL,,,ally agret!d On and I wanted to protect my investment. I told him I would give him money from time to time to help him 'With · -13- [* 14] I ILLL.1 l ... VV IV L.V I I UIVllA VVUllLJ VICI"- F. 16 his Tr expen~s." .19:13~24. In seeking to n<lvi gate this min~eld of du~ious ace.aunts and uns\..4 pported claims, this co:ntention by Lee has, to quote a memorable malapropism, 'the wring of authenticity.' . As Lee averred in a related context under cross-examlnation, explaining his attitude towards this transaction: Q, Isn't it true that you suggeBted to Mr. Ciam.ramella that he us~ the rental proceeds in order to pay the mortgage on the property? A. Yes, as I explained at that point he told me :if he did not pay the mortgage they were going to foreclose on my property and he had nomoney to pay it. Sci I had to pick the le~ser 1 ' of two evils." femphasiR ~t1ppli.l'ldJ Tr. At 137:20-138:1. In return for Lee's undertaking to help With the mortgage based on self-interest, we have the a1Jeged consideration by defendant to refrain from filing n lawsuit in ~002. However, defendant h;:id· no damages in. 2002; and as we shall see, made no effort to cancel the ·contract even 5 years Jater. In 2002,. defendant was si.mply residing in a horoe that he had purchased, with a mortgage and carrying'custs that he wcis legally obligated ·ro pay, and which, provld.enliaUy, had an additional two lot'> on which construction had not yet commenced. The Court fin~s it impossible to ~elieve that Lee regarded this alleged forbec:irance by defendant as con~ideration for his gratuitous and unenforceable corrunitment,"Whkh wae based solely on his own dcslreto pre~erve the integrity of the ~14- [* 15] I IL.L-LJ l'\IVV IV £..VI I L l l V l l A \.JUUllLY \.Jl<Jll'. project. The 139 Thousand DollarJ.!m Q. When was the first time, in writing, that you ever allege that there was a deal in place for Mr. Lee to pay you 139· thousand dollera? A. The first tin1e when I spoke with my attorney9. Q. After lawsuit had already started; corre'-'t? A. Okay. . Q. No time prior to you being sued did you make a written statement that Mr, Lee agreed to pay you 139 thousand dollar.s? . A. No, we knew what our agreement w~s- Why do I have to write it to him? the Tr. 276:3.276:12 I find no persuasive evidence ii:. support of defendant'.s dnim that the plaintiff agr~ed on January 2005 to pay an additional $139,9ooto the defen_dant, allegedly from the proceeds of~ ilnpen.ding closing. The Court reaches th ts conclusion in spite ohhe fact fl1;at Mr. Lee engaged in e spirited debate with himself on·this topi,c: Q. The question is this; D.o .you deny that you agre@d to pay Ml'. Ciaramella 139 thou&and dollars on or· about January 4, 20057 A I am not certain. THE COURT: fust to clarify in terms of conf u9ion, you are not asking him if he agreed on Janueiry 4. On January 4, did you agreed to this or on January 4 did ybu .give him- · · · MR. BELOWICH: No. . THE COURT: That's all he is asking you, not what you gave befol'e. Not what Lt reilects. OnJanu.ary 4, 2005, did you agree, on that day; to pay the defendant 139 thou.sand dolbrs? THE 'WITNESS: Ko. THE COURT: Okay. Q. No, you did not?· A.No. ' -15- [* 16] I ILLL/ l'IVV IU £.VI I L l l V l l A vVUllLY Vivi!' p; I l I U t ti.' I I I I to I I t I I I • I I I I I t 1 ~I U 11 11 I r If It l I•• J • • • • • ~ 1 • I • I I I~ I I •I 1 I I " I I I I I I ll 4 t t4 Q. Did I ask you the follow;ing guestions did yol,l give the. fol1o~ing answer? "QUESTlON: Do you deny that y9u agreed to pay Mr. Ciaramella 139 thoi.isand dollars on or about January 4, 2005? ANSWER: As I said, 1 am not certain. QUESTJON: You don't recull'( ANSWEH.: Sol don't admit or deny. QUESTION: You cru.mot recall one way or the other? ANSWER I am not certain if that was the number." Was tha~ your testimony? A. That was my testimony, ye."I. Tr.91:7-91 :23, 92:1p-:92:23. Nonetheless, the Court sees no probative evidence that a binding ag~eemen t to pay an additicmal $139,000 from an immimrnt closing was ever made by Lee, although the Court has no doubt that the plaintiff was capable of making any representation to the defendant to· assuage him, and to convince him to let Lee press on with the project. Certainly, the absen::E: of any written mention of this alleged commitment in . the voluminous exchange8 of emails, and th~ ine:x:p licable faihue of defend ant to make demand . . for payment of this money in the nearly- three years which foUowcd this meeting speaks volumes about whether it ever occurred, or if it was, whether it was taken seriously. If I Had Half a Million The alleged agreement by Lee to pay defendant. ai: additional$ 500,000 at the time of dosing is amongst the least credible of the cont~htions by these parties: l will perffi.it the defendant's testimony (m tM!dssue to speak for itself. -16- 18 [* 17] I ILL..L..I l'<IUV IV L V I I LJIUllA VUUllLJ VIOlr.. p .. 19 Q. What was thi:i 500 thousand dollars for? A: That was for while he had me burying money in this.pit and hew.as building houses everywhere, like I would have liked to have been doing: Q. How did you arrive at 500 thousand dellarB? A; I said; what if l did one flip a.year, lOO thousand dollars, compensate me for one flip. I told him that i:n the course of the argument. Q. It was a hund.red thousand dollars for five years, essentiaDy? A. Right. . Q. And how did you date that back, in other word~, how did you arrive at five years? · A. It started in 2001, 2002, 2003, 2004, 2005. Tr. 221 :20-222:8. Q. The way you ca.me up with that numbe: was 100 thousand dollars·.:.A. Yes, I said Tommy, I could have flipped a hou~e.in 2001, 2002, 2003, 2004 and 2005 and· I went like with my .hands, one, two, three, f~r, flve. · Q. You could not have flipped it in 2001, it was not buUt yet? A. He could have turned around and said ·that I couldn't flip it in 2001. Q. lie gratuitously offered you too much money? A. He agreed to it, that't' all 1 am telling you. Tr. 344:25-345:10. Defendant's counsel has. made an energetic and creative attempt to extrapolate evidence of this ollcgcd $500,000 de.a.I from n ~ingk statement iC\ an email by Lee -- defendant's exhibit DDD -- in which Lee observed that if the homes were sold at the cunent asking prke "we would have lost nothing/' with accompanying calculations.· Although imaginative, it is not convincing. The Court £in.ds tli.at defendant has wholly failed to support this contention of a ' ' binding offer by the plaintiff to make such a gratuHous and gener~us gift to the defendant · -17- [* 18] I ILLL.I l"VV IVLVI I UIVllA VVUlllJ Vl<Jll'. p •. 20 with convincing proof. Thkini Care of tbe Tax Man The issue of the ·admfsS!bili.ty of the tax returns filed by defendant Oar~mella a~d his wife for the tax year 2007 was pivotal for the plaintiff in establishlng what amount he had expended in developing the properties. It is. neces~ary to quote the lengthy colloquy thutrl!SUlted from the plaintiff's use of these returns in support of his testimony. Q. Now, 1am gciin.g·to call your attention to the document that was provided to you ir. dis1:overy which is labeled as Defendant's Exhibit- sorry, Plaintiffs F03 throu$h F16. Can you look al' the document ~nd tell us what that is. A. Yes, I recogni7.e this document. Q. What 1s it? A. F03 wa~ Anthony Caramella and his Wife's 20071040 United States tax :return • • • • • • • , , • • • • • • • • • • • • , • •f ·~ ., ., ., , ••4, , •.. , , , ~ •.••• , ................ ,.,I •.• [ collc:iquy] THE COURT: /\re~ you goil1g. to offor the tax returns into evidence? MR MAIZES: A portion of where he takes capital gains treatment based on the. numbers that.were suppli~d by Mr. Lee, . He used his tax hasis as the r.xad a.mount that Mr. Lee spent on his behalf for building the hquse. · tvm. 'BELOWICH~ The tax ret:uin is completely irrelevant. It has no bearing on the issued involved in this case, There i.9 no dispu.~e that one> o! the properties was closed. J'he amount of tax basis that was reported on and income tax return hns no bearing· on any issue in th.is case and it is compl~tely irrelevant. · MR. MAIZES: I d.isagree your honor. He said they are disputing that Mr. Lee made payments. Mr: Lee apprised Wm with the amount that he paid and he takes a tax deduction for capital gains purposes and used it and it ism admission and judicial estoppel and corroborat.cs the proof that we just epoke to. MR BELOWICH: .Mr. Lt!e ·..vas obligated under the agreements to build the houses -18- [* 19] I ILLLJ l'llVV IVLVI I LJIVll/\ '--'"UlllY vlCll'\ F .·21 under his-with his, at hi.B sole cost and expense. So the fact that he may O!l'!\B-Y not have provided M.r. Ciaramella with information showing .how n'\uch he actually spent building the houBea, that has no connection orbeari:ng onthe tax return itself. MR. MAIZES: He provided the goven,ment with a tax basis which he.did not pay for, whichil)y client paid for. It is an unjustenridunentwhere he got·a benefit from or an admission that my client paid the monies that he is now c~ntesting, saying he did not pay and filed a tax return on it and· produced it. It is part of the r.nsc. It is a.n admission 1 it is a judicia: estoppel, corroborates aU the . payment that my dient made and shows that this defendant went ahead, not onJy sold at\d received the property, the proc~eds, but then rep~rted to tl'\egovE;:rnment that he incurred expen.qes iTI building it, which he is entitled to a deduction for. That's it. THE COURT: I am going to overrule[] the objection. Tr. 55:23-56:6; 56: 17-58:,7. Although thls p<irticular exhibit was not th~nformally marked into evidence, it wa~ the intention of this Court to enter it into evidence, and giv~n tht! fa'ct t_hat thP.TP. was no juryl the omission to mark it at th.at time ·was of technical significance o~ly, especta11y wherethedocumet\tinquestion waslaterutiliiecl by the defendar.ttoelicittestimcnyfrom his own witness. Indeed, it is manifest from a review of the ~ankript that there was some con~sion at the time as to whether this exhibit was formally in evidence or not., as the defe.ri.dant' 8 . . . ' coun.s~l observed when he used these same exhibits to question ruR client: Q. Did he provide \vi.th you any verbal information? Did he t~ll you, for example, this is how much 1 paid in connection with the project? . A., No. Q.. Let me show you ~ copy of a tax return that's, I believe, in evidence. [emphasis 8Hpplied) Have you seen that tax return before Mr. Ciaramella? -19~ ' [* 20] I ILL...L.I 1 'IUV IV /LV I I UI VI IA \JUUi llY VICI I'\ p.22 A·· Yes. Q. ls that a ~ax return of you and your wife? A. Yes. · Q. Look at pages marked F10 and Fll. A. Okay. Q. You wilI'see i·hat it reflects a basis of 431,110 and a gain of 323,890 dollars. Doyou see that? A. Okay .. Q. Do you have any understanding as to what those numbers represent? A. I tell you no, not really. Q. Oid ycu pr~~pare that tax return? A. My a~countant did. Q. Do you know whe:z:e he arrived at U1ese figures? A. These figures over here, whete did he get them.from? I am trying to.go back based on memory. I think there is a sheet over here. If I am not mistaken, the sheet, that d~al as i~ or de<il as should be. I may have had that at that point. · Tr.236'.8-2:17:8 . . The plaintiff's exhibits F3~F16, which includes d€fendant's capital gains tax return for 2008, are herewith marked. into evidence rnmc pro tune. Iake a Hoµse, Any Hous~ With this housekeeping truik completed, the Court tums to the plaintiffs cause of action seeking specific performance. Lee seeks an order against the defendants dir~cting the conveyance of title of the home located at 1428 Lak~ Shore'Drive ·-·sine~ 1426 has been sold to a third party -.. to the plaintiff. A Co.urt may only av.:ard a decree of specific performance where 1. there 16 a valid . . contract between the parties; 2. the plaintiff has substantially performed under the contract and is willing and abl~ to perform its remaining obligations; 3. the defendantis able.to -20- [* 21] I ILL-LI 1'4VV IVL.VI I LJIVll/\ \.../\.Jl411LY \.JIVlr\. p:23 perform its obligations, and 4. The plaintiff has no adequate remedy at law. ·Niagara Mohawk Power Corp. y. Graver Tank & Mfs. Co .. 470· F. Supp. 1308 [D.C.N.Y. 1979J. The· elements of specific performance include the fot:mation of a contract to which · to be bo@d. "To eBtablish the existence of an enforceable agreemt:nt, the plaintiff must estabbsh an offer, acceptance of the offer, corn~ideration, mutual assent, and an intent to be bound. That meeting. of the mhlds must include agreement on all essential .terms'~ Kowalchuk y. Strou.p..4-61AD3d 118, 121 (1" Dept. 2009]. There must be a manifestation of mutual assent sufficiently definite to _assure that the parties are tntly in afP'ecmept with . rr.:f!pect to all iriateriaLterms. Gulf Ins. Co.y. Transatlantic Rein:rurance Co., 69 AD 3d 71, 94 [l't Dept. 2009]. "[AJ mere .:ip:c:cment to agree, h1 which .:i material term is left for future negotiattons, is unenforceable,; .. The rt,tle applies all the more, and not the less, when, as . here, the extraordinary remedy of specific .Performance is sought." Joseph Martin Ir. QelicateSsenlnc~..Y..-~S2NY2d 105, 109·Tl0 [1981]. Definiteness is required both in the tern1s of the agreement dnd in the intention to . . be bound; if the court cannot tell what the parties. agreed to, i:t can.not accurately deterr~dne whether there has bt;ien a breach or how to fashion a remedy. The Court cou1d otherwise impose terms and conditions never agreed to by the parti~fi. Marlkl_y_, McLaui,hlin:288 AD 2d 97 [1 ~Dept. 2001], l v to app. den. 98 !'fY 2d 607 [20C2], .21. [* 22] I IL..L...L.I I 'IVY I v LU I I UI VIII\. \JUUi ny Vivi" p.24 The parties' course of performance under the contract is con8idered to be the mo.9t persuasive evidern:e of the agreed intention of the parties. The pra,~tical inter~retat]on of a contract by the parties to it for an considerable period of time before it comes to be the subject of cohtroveri>y is deemed of great, if not controlling, influence. Gulf Ins. Co. v. ·Transatlantic Reinsurance Cg_.,, supra. For reasons previously s~ated, the Court does not find that a valld and enforceab~e contract was formed in this matter, as there is insufficient definiteness in the terma indeed, some of the terms were simply omitted· - and there was lacking the essential · m.tention to be bound with respect to other terms, as evidenced by the la~k of effort by either side1 mostly the defend!filt, to.enforc~ st.ich terms. However, even if this Court were somehow to de t~ rrnine that there had been av alid and enforceable con tract, the plaintiff has wholly failed to explain why he lacks an adequate remedy ln the form of money damages, Indeed, the history of correspondence Detween the parties, at all times, faiis to demonstrate any partkular attachment on the part of either party to eHht•t of the newly-constructed houst!s. lt did not seem. to matter.what the co~pleted house consisted of, .or which house wt>nt to which .man, or what ·rhe terms .. would be: that would accompany the conveyari.ce. The dealings of the parti.es wP-re fataJly imprecise trom their bception, and the Court was persuaded throughout the testimony of both men that the sole reason for thi.~ transaction was alwayB about the money, not the -22- [* 23] I ILLLJ l'IVV IVL.VI I LJIUll.I\. V\..JUJILY \...llClf\ house. or either one uf theiit. The M.o!:her 0£ All Real.Estate Deale It cannot be understated just how free-wheeling and casual were the dealings behveen these parties, an informality which negates any serious inlention on their part of · being bound by the terms of the alleged contract. The history of this matter eifrablished that the deal could be Changed .in material terms almost at ''\'ill. Memorably, there was no meeting of the minds cvr.n as to such a fundamental matter ~-fundam~mtal at1east to most reasonable people - ~s to whe.ther beach rights or beach front would be transferred by Ciararnella tt> Lee'together with the purported beach house. Q. Do you remember when l deposl!d you back on April.24, 2009 and I asked you if there were •my difference between the two lots that were 1428? fCiaramella]A. Yes. ~ubdivided, 1426 and Q. Let'~ turn to page.26 of your deposition line 3 through 17. Do you remember me asking you the follo'Vlring question. and you giving the following· answc1·. ' ....................... ,..... . · "QUES'flON:-Just explain to me the differences behivecn the two houses? ANSWER: The houses are built i.dentkal, 1426 is further, 1428 is closer. I owned the beach behind both houses. His mother was going to 11 ve there, so . him being closer if ever ddwn the line I was going .to sell part of the beach,· I would have sold the further away arid then his mom, r would have let her use the beach. QUESTION: Okay, as part of the ownership of these hv-0 lots, 1428 and 142.6 do they both have use of beach fmnt property or do they have what's called riparian rights? · ANSWER: Yes. [sic]" -23- [* 24] I ILLL.J l'IVV IVL.VI I LJIVllA v~~UlllY v101r. p:26 Q. The question is, when you sold 1426 to those parties, did they get the benefit of the use of th<:~ beach fro!1t that adjoined that property? A. I had to get another .subdivision and enlarge it." Q. And that wei.s part of your agreement with M):'. Lee that if he had retained title to · one of the.properties, he would get the beach front ..rights? A. !'Jo, it is not. You ari:! asking mr.;, allow me to answer. Q. Itis ay~.~ or.no. A. Let xr.e answer. Q. Tum to page 27 at your deposition 'beginning at line 11 and ending at line 197 Do you remember this question 7 · "QUES'I10N: I got it, okay, neither 1428 or 1426 has ownership or riparian · , ·rights other thar:. the beach? A. What page are.you on? Q. Page 27. "A:'\J'S\VER: Now 1426 and when I sold it a~ that point t changed it because they would not buy the ho.use without th,e beach. QUESTION; Understood. . ANSWER: So now 1426 has beach right.,. Do you remember me asking you these questions rind you. giving these answers? A, Yes, okay. Q. Does that refresh your recollection 0£ what you agreed to do? 'A. Yes; I am reading it, right. Q. Now turn to page 28 line 4. 0 QUESTJON: His consideration would be that you.would tran8for to Y...iru one prope~ty which was 1428 without riparian or beach front rights? ANSWER: Right.. . . QUESTIO~: How~ver, you would let them use fr b.ecauae you liked them or you 11).<ed the mother? ANSWER: Right. If I liked the mom I would let them use it. But they wo'J.ld not own .it and .there would be no dee\'.i.. ;, Do you remember me asking those questions and giving those answers, is that correct? A. Correct. . . Q. So your understanding was if thig deal would go through with Mr. Lee you would not deed Wm the property but the right to use the beach?· [* 25] I ILL..LJ I '\IVY IV L.V I I UI VI I;'\ \JUUi l l J \...1101" A. That's not m)r understanding. Q. Okay. . A My undersi:anding was Tommy says he . was going to take hiA mother's house for himself and let hi a mother live in this house. So, I says, well, if your mother is going to be· there, this was as the hou~es were being built, I said if your motheds living there and she ls next to me, I will let her use the beach and keep an eye on her as a friendly gestu~e . TR. 292!1-292:4; 292:11-292:14; 292:18-293-5; 293;12 - 493:15; 293:18-295:15. The Court concludes Lhat ~here was no binding agreement betw~c,m the p<i.l'ties, that .rr~aterial terms were not agreed upon, and that there was no intention to be bound by alieged material terms of the agreement. .Things You, R~merober Fro:tn Law Scluzol. . Q. You were en ottomey in 2001, correct? A [LEE]. Yes, ;:iir. Q. Ar>d w€re you, at that point, familiar ""rith th€ statute of frauds? A . .I did not do much civil work, but I heard about it.in law school. Q. Did you know from your law school.days ~nd your limited experience as an attorney that an oral agreement is void if ids not capable of being performed within ·one year?., .... A. I was not aw.1re of the nuances of the staitute of frauds . . Tr 71:17~11:2S, 12:10-72:11. General Oblijj'at.ions Law Section 3-703 Subsection 1: 1\.n estate or interest in reaJ property, other than a lease for a . term not exceeding one year, or any trust or power, over or co::cerning real· property/ or in any manner relahng thereto, cannot be ~rcated, granted, assigned) surrendered or declared, unless by act or operation of raw, or by a deed or· co~vey ance ih writing, subscribed by the per 9on erea ting, granting, assigning,' surrendering or declaring the same1 or by his lawful· agent, thereunto authorized by writing. But this subdivision docs not ¥feet the power of a te.iitaror in the disposition of his real property by will; nor prevent 11 -25- [* 26] I ILLL..I l'\IUV IV L.V I I UIVlll\. V U U l l l J \...JIVIJ\. p.•28 ·any trust from arising or being. extinguished by implication or operation of law, nor any declaration of trust from being proved by a writing subacri!:>ecl: by the person declaring the same. . Subsection 2: "A contract for the leasing for a Iongerperiod tban one year, or for the sale o{ any real property, or an interest !.herein, is void unless the contractor some note of memorandum thereof, expressing the consideration, is in writing, subscribed by the party to be charged 1 or by his la\'\rful_ agent lhereunto authorized by writing. Subsection 3: "A contract t~ devise real property or ~stabfollt a trust of r~a1 property, or any interest therein or right with reference thereto, i~ void unless. the contract or some note or memorandum thereof is in writing _and. subsc:dbed by the· party to be charged therewith, ot by his lawfully authorized agent." Subsection 4: "Nothing c:ontaineC. in thjs section abridge~ the powers of courts of equity to compel the specifk performance of agreements in cases of part peTfonnance." · To satisfy the stu.tUte of frsud9, a writing must be subscribed by the party to·be charged and must dc~i gnate the parties, identify and describe the subject matte~, and state all of the" essential terme> of a complete.agreement. .The purpose of the stature is stated in Pennim.;m v. Hart12horn, 13 Masa. 87, 90. "(TJhe bargain shall be proved by writing, and not by parol, in order that purchasers shall not be caught up onloo~e conversation,, or that the proof of the contrnct shall not rest upon . . the rec0Uecti0n or integrity of ·witnesses." Where a party has admitted the .essential terms and actual existence of an alleged oral contract, the Statute of Frauds may not be invoked as a defe:r.se·(Concordla General Contractin5" vJ.'_~]j:0/ 11 AD 3d 502, 503 [2nd Dept. 2004]). -26· [* 27] I IL.LL.I l"UV IV L.V I I L>IUllA V U U l l l J VICll'\ The signific;ance of the Statut~ is ampJ.ified. iri real.estate matters: "Real estn te negotiations are often characterized by a series of .tentative oral agreements betWeeii: the ·parties. The parneg are nonethel~RFl free to decide agairnit entering into the sale, until the final lerms are reduced to writing. The very purpose of the Statute uf Fraud~, as applied to real estate sales, is to .distingufsh th~l[le provisiona.1 "agreeme:nts to asree" fro.m the £ina~, binding contra~t. [see, Fox. C.o v. Kau;man Or~ .. 74 NY 2d 136, 140 ('1(t)he pu,rpose.of Statµte of Frauds is to avoid fraud by preventing tl~e enforcement of contracts thr;it were never in fact made.")]" Sgnnenachein y,_SJl!man-Gilioons & Ives, 274 Ab 2ct 244, 248-249 [1 11 Dept. 2000). ~eeing tQ Ai*ee Q. The ~odific.:at:i on that you. ~Uscu9sed with the Court; what was your und.ers~ding of what happened. to that dea~ and to the monies that you would have paid to the defendant pursuant to that.deal? . A. Anthony wa5 using those monies for whatever he was using them for and I was paying help because I wa~ fea~rul ii I did not pay them, the property would be ~oredose~ on, I was' hoping at the end we would do an t1.ccou11ti11g.and !would get what I pitt tn. [emphasis supplied]." .. , .Q. What was your.under~tanding? A. I would get the house back and reimbursements for anr. ol the payment that I made.' Q,How did the tvm.of you communicate? A. Usually yelllrie is how we communicated." Tr. 21~3-21:12,, 21:16-21:20 .The ceaseless modifications that the parties testified to, real and imagined, gave rise to the preci5e c:ircurost~nce which the Statute of Frauds was designed to obviate, the so- called agreemeri.t to a.gre~. Thftt iH what resulted from the series of inte:::actions of these . parties. Q. What was your understanding of the negotiations.and dealin~s (hat you had with Mr. Ciaramella in Januat}' 0£ 2005? A. My understanding was thot iny original deal still stood. At th~ end, when it was either .27. [* 28] I ILLLJ l'IVV IV £..VI I UIVllA ~'JUlllJ ~1011'\ p.30 tran.sferred to me or sold, that I woul4 recoup the monies that I invr.sted i.ri th~ propel"ties. Q. 'Did you discw~s .with Mr. Ciaramella modifying .the deal '"''he:reby would be reiJ:nbui:sed for the costs of building and there was a. split of profit.R? ¥R· SELOWICH: Objection. THE COURT: Overroled. A. Yes. We discussed at some point in that time frame that we could ::iell both, pay oif any of the mortga.ges 1 any of the expenses and then we would split the net proceeds equally . . 'He would get a credit for the land portion. you. Tr. at 32.:5-32:19. A mere agreement .to agree . in whJch a material term is left for future negotiations, is unenl'.orceable. 166 Mamaroneck Ave Corp. v 1 151 E§b'lt Post Road Corp., 78 NY 2d 88 [1991 ]. ·For e.Yample, a lease tetm of" approximately twenty years" wa$ deemed too vague to be enforced 1n 180 \Yater Sb:~~})\ssociates ~il?. y. t,ehroan Brother,~ Hcl\iin,gs Inc .. 7 AD 3d 316 [1'1 Dept. 2004]. ln this matter, as we have seen, material terms came and went with the passing tides. According1y, with respect to the plaintiff's cause of action for breach of contract, .the Court finds that the alleged c~nt:ra.ct, in its varimrn pennutatious, was consist~ntly revised, and too indefinite to be susceptible to ertforcem~nt by the plaintiff.. Moreover, the defendant's obligations on the contract-- at all times up to and including the issuani;e of the fi.nal ~ertificates of occupancy:- consisted. in tot·o of oi~va.Wng the compl~tion of construction _by the plaintiff and his contractors, aside from ma)qng payment~ on the mortgage. The d:efendrui.t1s breach, such as it' was, consisted, not of the sale of.the property at 1426 Lake · Shore Drive. - which Lee was enthusia~tically in favor of, even thot:.gh it wa.q not part of the original agreement- but of the retention of the proceeds. But t1w property that Vi'as sold -28- [* 29] I IL-L-L.I l'fUV IV L V I I UIUllA vUUlllJ VICI" to a third party was of a parcel that had been enlarged, augmented from a different pqrtion of the parcel, a circu.mstance which was no.t contemplated in the original transaction. tee has simply not proven the exir;;tence of a valid and enforceable contract, a.S circumstances . - . thanged over time 1 'md the conditions underlying the simple-to-understand contract of. May 2001 - albeit a contract with gaping holes m it - · no longer existed. The parties themselves recognized this in U1e form of their continued discu;:sions as to how to ultimately:rt!solve the transaction. Thi::! was a.deal to make a deaL A word is in ordei: about the delay. Although Lee ultimately co~pleted the ptoject, . . his excuse$ for the delay are not convincing. He has faiJC;'!d utterly to cxpiain why the de~ mapping process was delayed for several years, arid us ht= -....ras acting as both legal adviser on this transaCti.on and gen~ral contractor, th~ Court is not persuaded by his efforts to blame the a~dutect for the delay. As it was, the architect filed his plans onNovember 7, 2002, but the de-mdpping pl.ans were not filed until Januaty 11 . 2005, perhaps nof coincidentally.the same day that defendant demanded a meeting ·With Lee in his home. The de~mapping plans Wt~rc filed by .:in attorney hired by Lee, not by the architect. Lee admits • I ' • • ' • that the DOB i~sued stop work orders fo 2003 because the properties had not been subdivided or de-mapped. TI1e contractor Lo-Long .Constructic.m, who was apparently a substantial C~J.lSe Of delay in the final completion of thl! home9, W'18 selected by lee. However, even had there been a pindins con:t'ruc:t, Lee's lateness and other acts of· -29- [* 30] I ILLLJ l'IVV IV£.VI I UIVllAVUUlllJ Vivi!'\ p.32 non-fuasance were wnived by the defendant, who never ended the project, and who, even . after Lee failed to make payment of the mort:~age, failed to make writt;;n demand for these monies. .J;2amaaes The defendant, who purchased a home in 2001 in which he stlll resides, that was situated on a parcel large ·enough to be subdivided and developed, seeks damages for breach of a series of alleged contracts to develop this parcel. But this claim is based solely on a conjectural assun'.prion of lost profits, which fail tci survive serioµs scruti:ny. The parties take different perspe,ctives of their dealings together. The plaintiff's view of this matter is that he performed ajl of his obligations under the ·c-c.intract, albeit in an untimely rnanne:r:, chiefly .due to delays caused by others, and that the defendant has reaped a windfall as a reflult.1:he defendant contends that he sustained damages due to the plaintiff's persistent delay and r.epecited breaches of a series of contracts, all of which were freely entered into in considera lion 0£ the defendant's refraining from bringing suit again.st the plaintiff These alleged damage~ consist of the defendemt' s anticipation of substantial profits that could have been gerterated both by the timely completion ·of th~ real e~tate transaction.as well as ol:.her potential transactions that defendant was t.tnable to enter into because, as he put it, he was "burying money in this pfr." The Court finds little merit in these allegations by the two parties. The.defendant's -30- [* 31] I ILL..L.J I '\IVY Iv LV I I WI VI I/\ vu~•11ly VICI I'\ ~.33 anticipation 0£ profits is t:oo hypothetical to be a plauslhle basis for an aw a.rd, even.had the parties entered·into a binding contract, while} as previously stated,. the plaintiffs excuses for delay are unconvincing in the extreme. Clearly1 the plaintiff neglected tros .specific. project, and his neglect waB. thc·chiefj thoitgh not the sole, cause uf the delay in completing ·it, probably due to his pte~occupati.on with 0th.er projects. However, the defendant has failed. to demonstrate how he has been damaged by the plaintiff's delay, as he has profit~bly emerged from the en.tire transaction. One of the ~:omplded a handsome price - especially since defend.ant paid nothing for the. h.omes was sold at ~onstruction, and because the sale took place before the real est.ate implosion that began in.2008 - while he ' . remains in sole posgeB:~ion of the other. Two home~ arose from the V>Kant land adjoining his house without any significant expenditures on his part. The Court finds no basis for an award' of damages for breach of contract to either. p;1rty, but turns now to the plaintiff's causeof action seeking damages based on principles. of unjust enrichment P,.lwaye Keep Your Receipts ·a. Can you tell the Court what that documer1t is? A Yes, this is an ema:IL the original email ·was from Anthony to myself dated November . .4, 206. I responded to him on November 6, same date, 2006. Q. Whatwas tht) event that were tnmspir.ing at or about that time? A. Once again the project was ve:ry close to' gettiI'.g a te.r:npo1ary CO and I was giving him an update about a couple of the minor things, about the Con Edison being· turned on and .the lights. I explained to him, if you.see the third paragraph regarding hie financial woes, I am willing to trad"' his for ml.1\e and 'l have given you everythini-; you asked for, tr\ fact 1 I have financed th~ entireprojec:t without encumbering at all.' -3 .l • [* 32] I ILL.LJ I 'iUV IV L.V I I LJI UI 11' VUUI l l J Vivi" p.34 Q. Did.he deny that you financed the enthe pr.oject? A.No. Q, Why not? A. l3ecause I did.'' Tr. 155:1- 155:17. In the complaint Lee contends that he expended approximately $620,000 out of pocket to construct the t\-vo homes, but he failed to fumi~h evidentiary proof of more than ' a small percentage of tlwse expcndltureR. The Court ruled that spreadsheets, carbon copies .of checks, un-endorsed checks and bank statements were inadmissible evidence of these expenditures .. Moreover, Lee's attempt to rely on a spreadsheet that he prepared in anticipation of litigation, piaintili'.i; Exhibit F, was unav;ijling, as there was incomplete documentary proof of the expenditure~ alleged in it AlthQugh another'l'!preadsheet prepared by the plaintiff, Exhibit H -- which was alleged to be the 'completion' of Exhibit F ·• was admitted into evidence without determining v.,rhat Y•e1ght it -~.;ould be given, [Tr 150;10-150'.loj it, too, is not conciusive evidence of actual expenditures made by the plaintiff, as documentary back up for certain claimed· expenses was not introduced at trial. The Court declines to ghre it weight as evidence it'I. support of plaintiff's claims of expenditures mad.eon the project. At. trial, Lee wa.'l also able to show that he paid a tota1 of $27;soo to Ciararn.ella, apparently as payments on the mortgage, with $3500 of this being payment for a large screen television set. -32- [* 33] I 11...L.L..I l'IUV IVLVI I UIUllA v~JUlllY VICI!'\ p.35 .Time Not So Much of the Essence [Defendant] ''I sa.id, the market dropping Js not my problem, you took the seven years to do it, not me. So I told him,Tommy,·sue me. I would like to have sued him, bu.t because he was not available, I had to wait for him to sue me. 11 · Tr. 22.5:1 - 225~5. While a promise to forego future litigation c:an c:onstitut~ valid consideration, the· mere fact that the pcirty does not bring suit for a pP:dod of time is insuificient, absent evidence that the party's forbearance V.'as given in exchange for· the other's promise to dq some.act or provide some benefit. Wood Realty Trust v."·N. Storonsks: CooRerage Co., 229 AD 2d 821 [3d Dept. 1996]. It is inahifest from the testimony that the defendant's forbearancewas motivated solely for the purpose of enabling the plaintiff to complete the construction, wi~ the intention, ultimately, of obtaining some or all the benefit for himself. Even when the plaintiff Lee failed to make the $3000 payments !n regular fashion, the defendant continued to con duel himself as if lhe agrcemlmtpr.raistC:'d., comp1aining, but always pu~hing for completion. Aft.er Lee fled to 'µforida, and was. ultimately forced to hire a different contractor to finish the job, the defendant did not abrogate the agreement. Even after the defendant sent an email on Ap:ril 2.2, 2006 ddivcring an orn.inou5- sounding series of ultimatums ["I will not allow anothet useless w~k to p.ass .. l will take it upon myself to hav~ the job finish~d .. any work not completed by thurs Spm, I will take upon myself to compJ4;1te ... "], which is defendant's exhibit RR, the defendant acquiesced to -33- [* 34] I ILLL-1 I 'IVY IV L.V I I UI VI II\ \JlJlH llY VICI"- F'. 36 Lee's respondui.g email on April 26 1 2006 bemoaning his reduced economic circumstances [ 1 'I'm living in a one bedroom apartmentvvith my wife and tluee kids ' ],.promistng .speedy 1 completion of the project, which he alleged was more important fot his own financial needs than they were for Ciaramella's. In defendant's exhibit DDD, an exchange of email messages both dated December 18, 2006, the two men discussed. marketing and selling the · property. As late as April 12, 2007, the defendant.. discussed punehlist items yet . . uncompleted, and requested information for use in preparing his taxes, while the P.laintiff responded by reque1:1ting'that def~nda.nt deed the property to the pl~inti.££ or his wife, and discussing the di.vi.sion of t~x liabilities between !±le two erstvvhile partners. Defendant's . Exhibit NNN. In Def. Exhlbit SS the defendant explicil'ly admitted that "I d~d not try- to imply at all thatthis delay.is caused by you, nor do I blame you." The defendant simply cannot establish that lie took the appropriate rneasurn~ to can.eel this agreement between the parties, as the evidence is overwhel:ming that he purposely walved compliance with any additional monelnry contr.ibutiohs by Lee, or with substant1a1 d~l.~y91 so that he could s£t back, allow Lee to complete the project, and accept the bPJ1cfits. Unjust Enriclunrn! Q."What was going on at that time? A. Once again Anthony had sold the house, refinanced the other house, received the proceeds of the ~<il~ of that house, 775 thousand dollars and netted app1oximately three or 400 thou!\and doHu_r.s, And I am aBki.ng him~ why docsn' the he fo:ix, -that I don't want to sue him and why c~11·, we workt.his out, · Q ..What was his r.,i:>ponse when you told him you didn't want to sue him? -34- [* 35] I ILL...L..1 l'IVV IVL.VI I LJIVllA \ J V U l l l J Vivi" A. He told me to dot my I's and cross my T's." Tr.' 165:2-lt:l5:10. The plaintiff implicitly urges the Court to take judicial notice that houses do no.t build themselves w1thout expenditures by_ somebody for labur and materials. As Ciaramella: foiled to present evidence that he made these expenditures, the cast of possible suspects is not large. The plaintiff's cause of acti.on based on unjust enrichment is in. the context of his complaint, the last man standing. To prevail on a claim of unjust enrichment, a party must show 1. That the other party w.as enriched, ·2. At that party's expense, and 3. That it is agilinsr equity cmd good conscience to permit the ·other party to retain what is sought to be recovered. ~andarin I;adi;ug Ltd, y, Wildenstein. 16 N.Y.3d 173, 182 [2011] 'Unjustenrklunent does not require a wrongful act on ~he part of the party enriched. Simonds v.$1monds, 45 NY 2.d 233 [1978J, The principle ofrestitution iBbased ona theory of qhasi-conttact, although ili fact there is no contract at all, but an obligation created by law because the defendant has obtained something of value from the plain tiff under such nrcumstances that in eq,.iity and good consdence he ought not to retain it Du:ty, and not. a promise or agreement or intention of the person sought to be chargpd defines it. Mil1eI v. Schlo®. 218 NY ~DO [191~]. -35- [* 36] I ILL-L..I l .. VV IVLVI I LJIVllAVVUllLJ \Jl<:Oll'\ Although the plaintiff has sustained a £allure of proof in producing actual documentary proof of his e>c:penditures, the defendant's rep9rt of the cost of the construction to the tax authorities - the accuxacy of which is subject to criminal penalties - provides a more than adequate substitute, based on principles of (;~toppel. The doctrine of judicial estoppclis applicable whP.re, as here, a pat::>' takes a position - . . in one legal proceeding which is contrary' to that which he took in a prior proceeding, simply because hls interests hav_e changed'. W.tin~_,_llQ..rkh,. 32 AD 3d. 412 l2d Dept. 2006]. The purpose of the doctrine is to avoid a fraud ~m thf' Court ;ind a mockery of the truth-seeking function. Having preViously employed the figures derived from Lee's records to utiliz-e as evidence of. construction costs and basis in order to save hundred of thousands dollars in taxes, Ciaramella cannot now be pertnitted to deny_ that this sum which he provided to ''the tax man" was invalid, and he is cstopped from contending otherwise. Although Lee argues that he should receive the sum· of $775,000, the sale price of 1426 Shore Drive, .as the value of ~e services he provided, th.is is not an accurate ga.-uge for the value of his services, as the sale price to a third partypurchas('r is not aneqtrivalent. Having failed to·demorwtrate the existertc:e of an enf.orceable contract, that plaintiff cannot now argue that he should'receive ~e benefit of this W\enforceable bargain, which ID.eludes the profit of real estate 9peculation.. Moreover1 the house in question was sold with additional land borrowed from the defend(lnt' .s other property, dearly not a circUir1stance -36- [* 37] I IL.L-L.J 1'\IVV IVL.VI I UIVllA '-'"UlllY VICI!'\ that was ~ntidpated ln the orLgi~l deal, and the actual sale price of this altered parce.~ is therefore ;not an appropriate measure. In a litigation in· which the parti(l.S rely to such a· large extent on testimonial' credibility, the non-legal doctrine of death and taxes comes into play. Ciaramella has filed a tax return, subject to very serious criminal penalties, averring that' the cost of .the construction was $431, 1 ·~o. It i9 significant that this represeDtation to the taxing authorities yielded a beneficial tax treatment of substantial benefit to the defendant. Therefano other cr.eP.ible calculation upon which the Court can rely, so in fixing the value of Lee's services, and the extent to which it can be concluded that th~ defendant was unjustly enriched, this figure of $431,110 will b1.~ adopted .. Lee's Other Clailns Little time is warranted in the discussion of those causes of.action seeking damages for fraud, and indeed, plaintiff ha$ made no defense of thi~ muse of action in his proposed Bndings of fact which were submitted post-trial The Court find)) no evidenc¢ that the defendant ever sought to conceal the fact that he was selling the 1426 Shore Drive property from Lee, and'indeed, tlw plaintiff urged him to do so in view of his uv,rn financial difficulties. f Iis objection;; were Umited to the fact tljat the defendant thereafter cu.t off contact with him,. and retained the proceeds. Similarly, the · eviden.ce that Ciaramella surreptitiously leased ~.he 1428 Share D~ive home is lacking, or even less probably, tht:' contention in th€ complaint that the defendant defrauded Lee by -37- [* 38] I ILL-L.I I ... UV IV L.V I I L.JI VII/\ \.JUUi ILJ \.JICI l'I. P· "tO . . adding Selvaggi a9 an owner of 1130 Shore D dve, a transa~tion in whkh Leep articipated. The fraud causes of action in lhe complaint are diBmisscd. The cause of acti0t::t seeking the impre5sion of an eqqitable lien on 1428 Shore Drive . '' . ' is without merit, as there was no confidential relationship between the parties, no proof" that ciaramella owe<l Lee.a fiduciary duty, and no agreement that the premises would be held as security for the obligation·. Home Fetleral S·avi?~S &. Loan Aru;n.v. Four. Star &ights. 70 Misc 2d 118 [Sup Ct. Kings County, 1~71]. The'plaintiff r<tpeatedly viewed the two home1> as int<~rch:mgeablc, and there was no agrec,-ment eit any time that thi.s specific property, 1428 Shore Driver would b~ held as security for payment of his ptofits under the deaL The absence of a confidential or fiduciary relation~hip is simUarly fatal to the cause of action based .on a constructive trust, as well as the Claim for an·a<:rnunting. Mendel y . .tie.:wjtt, 161 A.D.2d 819 .pd Dept. 1990]; Kaminslnr !l, Kahn, 20 N.Y.2.d 573 [1967] .. · CondusiouQ. Now why wits thl!'!.agreement that you just described not fonnalize<l in writing? A. Tomtr_y told lllC that an oral a.greem{'nt was as binding as any written agreement. 'VlheTI I asked him about me gettiny, ii lawyer; 1 sa.id, should J use Peter? l Le said, you don'.t need ar.y other attor.be.ys it is anothE>..r expense for you. I am your attomt)y, l h<we always been your attorney, !-le ~ay.!> 1 I don't foreaee any problern:i. Let's move forward with this. Tr. 199:2.4-200:6. The p.a.rties doubtJi;::iss had rE!asons of their ov1n not to commit any of these agreements to writing, except for v1rhat diplomats refer to as''frank exchanges of views' in their emails. The Court dismisses any notion that defendant Ciaramella was an innocent -38- [* 39] I ILL.U l'IUV IV £..VI I UIUllA VVUlllJ \Jlvll'\ iamb led astray by his lack of a college.education and implicit trust in his attorney. Both parties chose to conduct business in this manner; and the plaintiff, who adrnitteq that his civil practice was Urnired during the time he was an atto~ney, seem~ to have_ beli:ev.ed that he could protect his investm~nt by filing mechanics liens, a ffiisapprehension that was di~pelled by Justice Suarez; in his earlier order. What resulted was a text book demonstration of "vhy the Statute 0f Frauc:ls has end.tlred. As prev!.ously noted, the. defendant Yolanda Selvaggi has. nothing to do with this case aside from being the legal holder of title for 1430 Shore Road. Lee requested that the Court retain jurisdiction over her to ccimpel her to delfver an easement to a portion of 1430 Shore Road for the b(;ncfit of 1428 Shore Road and to eruure acce~~ to riparian and beach front usage, and to the extent there is a deficiency owed by Ciaramclla to Lee, to compel a sale of .1430 Shore RClad to satisfy that deficiency., As this Court ~ees no grounds for granting any relief pursuant to those daLms made by plaintiff Lee, the_ complaint ia dismissed in lt$ entirdy af:I d.gainst defendant Yolanda Selvaggi. The Court .finds that the plaintiff has established that the defendant was unjustly enriched in the sum of$27,500, which the plaintiff demonstrated through evident:laryproof that he paid to the defr:ndant or on his behal.£, together \Vilh the further sum of $413,110.00, which defendant utilized as proof of the actual costs of construction and which is binoing : upon rum on principlei:; of estoppel, for a total of $440,610.00. 11w other claims of the -39- [* 40] I ILLL..I l'IUV IV LU I I UIUILI\ V\JUllLJ VICHI'\ F'. '42 plaintiff and the counterclaims o'f the defendant are dismissed for failure to support same with evidentiary proci. The Clerk of the Courtis directed to enterjudgmP-ntinfavor of plaintiff Thomas Lee and against Defendant Anthony CHiramella on his cause of action for unjust enrichment in the sum of $440,610.00. together with statutory interest; beyond fr1il' the complaint and all counterclaims ·are di.9mi~sed. This will constitute the decision and order of this Court. :Jated: Octobe~;.;2"'{ . 2011 Bronx, New York Ho~ard H. Sl"'.t:r:inan ·40·
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