Nemon Corp. v 45-51 Avenue B, LLC

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Nemon Corp. v 45-51 Avenue B, LLC 2012 NY Slip Op 31542(U) June 4, 2012 Sup Ct, New York County Docket Number: 114058/2011 Judge: Eileen A. Rakower 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. SCANNED ON 611212012 [* 1] SUPREME COURT OF THE STATE OF NEW YORK NEW YORK COUNTY Index Number : 114058/2011 NEMON CORP. INDEX NO. V6 MOTION DATE 45-51 AVENUE B, LLC MOTION SEP. NO. Sequence Number : 001 - SUMMARY JUDGMENT , were read on thls m o t h tolfor The followlng papers, numbered Ito Notlce of MotlonlOrder to Show Cause Answsrlng Affidavits - Affidavits - Exhlblts 1No(8). - Exhlblts (No(s). \ 21 3 Replylng Affldavib Upon the foregolng papetq It Is ordered that this motion Is Dated: LL!L 1. CHECK ONE: ..................................................................... 2. CHECK AS APPROPRIATE: 3. CHECK IF APPROPRIATE: ........................... M~TION IS: ................................................ P 0 NON-FINAL DISPOSITION CASE DISPOSED E GRANTED I 0SETTLE ORDER DO NOT POST DENIED E GRANTED tN PART I nOTHER 0SUBMIT ORDER uFIDUCIARY APPOINTMENT REFERENCE [* 2] 45-5 1 AVENUE B, LLC, Mot. Seq., Defendant. k I L E D JUN 12 2012 HON. EILEEN A. RAKOWER NEW YORK This action arises out of a contract of sale dated April 1 4 , 2 0 f f % & ~ ~ ~ l C E by two riders (the Contract ) pursuant to which plaintiff Nemon Corp. ( plaintiff ), as buyer, agreed to purchase property located at 54-51 Avenue B, New York, New York(the Property ),owned by defendant 45-5 1 Avenue B, LLC ( defendant ) for the purchase price of $6,825,000. The Property was comprised of three commercial units and eight residential units. Plaintiff commenced this action on December 14, 201 1 seeking, among other relief, specific performance of the Contract and the return of its $150,000 deposit. Presently before the Court is defendant s motion for an Order (1) granting summary judgment to defendant pursuant to CPLR $3212; ( 2 ) dismissing the Complaint; (2) discharging and cancelling the Notice of Pendency; (3) awarding defendant judgment on its counterclaim; (4) directing payment of the $150,000 deposit held in escrow; (5) directing a hearing to determine the money damages allegedly suffered by defendant; ( 6 ) awarding defendant costs, disbursements and attorneys fees; and (7) imposing sanctions against plaintiff and/or plaintiffs counsel. Defendant alternatively requests an Order directing plaintiff to post a reasonable bond. In support of its motion, defendant submits an affirmation and reply affirmation of its counsel, Eric M. Zim, Esq., and an affidavit of Sameh Jacob, member ofthe defendant. Annexed to Zirn s affirmation, among other exhibits, is a copy ofthe pleadings, Notice of Pendency, Contract, October 11, 201 1 letter from Zirn to plaintiffs counsel 1 [* 3] establishing Time of the Essence as to transaction closing on November 1 1,20 11, and plaintiffs October 26, 20 1 1 response. Plaintiff opposes and cross moves for an Order granting summary judgment in its favor. Plaintiff alternatively requests an Order disqualifying Zim, defendardseller s counsel. In support of its cross motion, plaintiff submits an affirmation and reply affirmation of its counsel Steven R. Uffner, Esq., and an affidavit of Steven Cromoan, plaintiffs Vice President and principal. Pursuant to Section 3 of the Contract, the date the transaction was scheduled to close was on or about August 3 1, 20 1 1. Section 19, Remedies, provides: In the event Purchaser fails or refuses to close title, as required hereunder, Seller s sole remedy shall be retain the Deposit as liquidated damages, the parties hereby agreeing that Seller s actual damages shall be impossible to accurately calculate. Section 20, Litigation, provides: In the event any party commences litigation to enforce such party s rights hereunder, either party shall be responsible for their own costs and expenses, including all legal fees. By letter dated October 11, 201 1 to plaintiffs counsel, defendant s counsel notified plaintiff that the Seller was presently willing and able to close title to the Premises and has complied with all of the other contractual commitments provided for in the Contract of Sale. The letter stated, Pursuant to applicable caselaw this notice is intended to contain a clear distinct and unequivocal establishment of Time Being of the Essence as to this matter closing on November 11,201 1 at 1 1:00 a.m. [at defendant s counsel s offices]. The letter also stated that [n]o adjournment beyond this date will be granted and that should plaintiff fail to close this matter on November 1 1,201 1, they will be considered in willful default of the Contract of Sale. Plaintiffs counsel responded by letter dated October 26, 201 1, which purported to reject defendant s letter on the basis that plaintiff had not complied with its contractual obligations. Plaintiffs letter did not specify any terms and/or conditions that the defendant had failed to comply with. The proponent of a motion for summary judgment must make a prima facie showing of entitlement to judgment as a matter of law. That party must produce sufficient evidence in admissible form to eliminate any material issue of fact from the case. Where the proponent makes such a showing, the burden shifts to the party opposing the motion to demonstrate by admissible evidence that a factual issue 2 [* 4] remains requiring the trier offact to determine the issue. The affirmation of counsel alone is not sufficient to satisfy this requirement. (Zuckerman v. C t o New York, 49 iy f N.Y.2d 557 [ 19801). In addition, bald, conclusory allegations, even if believable, are not enough. (Ehrlich v. American Moninger Greenhouse Mfg. Corp., 26 N.Y.2d 255 [ 19701). (EdisonStone Corp. v. 42ndStreet Development Corp.,145A.D.2d 249,25 152 [ 1st Dept. 19891). [when parties set down their agreements in a clear, complete document, their writing should. . . be enforced according to its terms. Vermont Teddy Bear, Inc. v. 538 Madison Realty Co. 1 N.Y. 3d 470,475 (2004) (citations omitted). The Court of Appeals has emphasized this rule s special import in the context of real property transactions, where commercial certainty is a paramount concern, and where . . . the instrument was negotiated between sophisticated, counseled business people negotiating at arm s length. Id. When the seller is ready, willing and able to perform at the time of essence closing and the buyer defaults by failing to proceed to closing, the seller has establish a prima facie entitlement to summary judgment and may retain any funds deposited. Diplomat Properties, L.P. v. Komar Five Associates, LLC, 72 A.D. 3d 596, 600 (1 Dept 201 0) ( As plaintiff established that it was ready, willing and able to close on the closing date, and defendant failed to demonstrate a lawful excuse for its failure to close, plaintiff was entitled to retain the contract deposit. ); Friedman v. 0 Brien,287 A.D. 2d 3 11 (1 Dept 2001); Capece v. Robbins, 46 A.D.3d 589,590 (2d Dept. 2007); Zahl v. Greenfield, 162 A.D. 2d 449,450 (26 Dept. 1990), lv. denied 76 N.Y.2d 709 (1990)). The terms of the parties contract govern their respective obligations at the time of closing. Id. Here, the Contract did not contain a time of the essence clause. However, It is well settled that a vendor of real property may convert an agreement in which time is not of the essence to one in which time is of the essence by giving clear and unequivocal notice to the vendee that a specified reasonable time to perform for the completion of his obligation will be deemed of the essence. Levine v. Surballo, 112 A.D. 2d 197, u r d 767 N.Y. 2d 780. Defendant s October 1 1,201 1 letter to plaintiff was such a clear and unequivocal notification of defendant s intent to make time of the essence as to the November 11, 201 1 closing date. 3 [* 5] Plaintiff does not dispute that it did not appear at the closing but disputes that defendant was ready, willing and able to perform at the closing. Plaintiff alleges certain contractual obligations were unsatisfied. As noted earlier, none of these alleged contractual obligations were described or set forth in plaintiffs October 26, 201 1 correspondence, which purported to reject defendant s Time of the Essence letter. Specifically, Plaintiff alleges that defendant did not provide or deliver certain documents including a deed, ACRIS transfer forms, tenant estoppel letter, a frontage reconciliation from DEP. Plaintiff also alleges that defendant did not use best efforts to arrange for an assignment of the existing mortgage, evidence satisfaction of an emergency repair lien, or remove any exceptions or objections to title or remedy title defects, Based on the Contract itself, affidavits, and other documentary evidence, defendant was prepared to either satisfy these requirements at the closing day or were not affirmatively obligated to do so based on the parties agreement. As for plaintiffs allegation that defendant failed to provide the deed and ACFUS transfer documents, section 10 of the Contract provided that defendant was to provide the same at or prior to the Closing. Attached to Zim s reply affirmation are e-mail communications in September 20 1 1 evidencing that defendant had forwarded Harry Erreich, a title officer at plaintiffs title company Royal Abstract NY LLC, a revised Correction Deed pursuant to Erreich s instructions which Errich approved. These emails also reflect that Zim s office notified Errich that defendant would execute all documents, including the ACRIS transfer documents at the closing, and that Zim s office completed the ACRIS Tax Preparation Form so that Royal Abstract could prepare the necessary ACRIS forms to accompany the correction deed. As for plaintiffs allegation that defendant had not cleared title exceptions or remedy title defects, Zim states that the seller was prepared to clear the referenced exceptions to title. As stated in Marcus Jacob s affidavit, the defendant was prepared to have plaintiffs title company collect andor escrow an appropriate amount to satisfy the emergency repair lien and to execute an affidavit indicating whether the City performed any work at the subject premises, or that the City made a demand for work that could result in charges. Several of these contractual obligations were not affirmative contractual obligations of the defendant based on the terms ofthe Contract. For example, plaintiff contends that defendant failed to use best efforts to arrange for an assignment of the existing mortgage. The relevant provision, Section 22.1.1 of the Contract, provides, The parties acknowledge that this Contract and Purchaser s obligation to purchase 4 [* 6] - .. .. .- * the Premises is not contingent upon the Purchaser obtaining any third-party financing. Seller shall, although no obligation to, use its best efforts to effectuate an assignment of its existing mortgages. Nevertheless, Zim s affirmation and the annexed exhibits set forth defendant s good faith efforts to arrange for the assignment of the existing mortgage to plaintiffs lenders and delay on plaintiffs lender s part to respond to those efforts. As for plaintiffs allegation that defendant failed to procure and provide the appropriate Tenant Estoppel letters prior to closing, defendant was only obligated to provide Tenant Estoppel letters to the extent [same] is available pursuant to paragraph 9(e) of the Second Rider to the Contract. Nonetheless, Zim s affirmation demonstrates that defendant made efforts to procure and provide the appropriate Tenant Estoppel letters prior to the closing. As for plaintiffs allegation that defendant did not provide a frontage reconciliation from the DEP and certain contract deliverables that were enumerated under paragraph 9 of the Second Rider to the Contract, as per the terms of the Contract, defendant was obligated only to produce the same at closing to the extent [same were] available. See paragraphs 9(i) of the Second Rider and paragraph 9. As for plaintiffs allegation with respect to defendant s failure to provide the final certificate of occupancy for Lot 5 , defendant was not contractually obligated to provide the same to plaintiff. Pursuant to paragraph 5.1.1 of the Contract, plaintiff accepted the subject premises AS IS. As for plaintiffs allegation with respect to the contract deliverables that were enumerated in Section 10 of the Contract, the Contract provided that these documents were to be produced at or prior to closing. Zim s reply affirmation states that defendant was prepared to produce them at the closing. The Court finds that defendant met its prima facie burden to establish entitlement of summary judgment dismissing plaintiffs Complaint. Based on affidavits, the Contract, and other documentary evidence submitted in support of its motion, defendant has shown that it was ready, willing, and able to close on the Property and that plaintiff breached the Contract by failing to appear at the closing and consummate the transaction on November 1 1, 20 1 1, In light of plaintiffs default, defendant is entitled to retain the deposit as liquidated damages in accordance with the 5 [* 7] Contract paragraph 19. The Court finds that plaintiff fails to raise a triable issue of fact in opposition and that plaintiffs CFOSS motion for summary judgment lacks merit. Defendant asserts that the instant action was commenced by the plaintiff with malice, alleges that the commencement of this action and the filing of the notice of pendency has caused injury to the defendant, requests summary judgment on its malicious prosecution claim, and requests that the Court direct a hearing on this issue of damages. Defendant also seeks an Order directing plaintiff to pay costs, disbursements, and attorneys fees, and imposing sanctions against plaintiff and/or plaintiffs counsel. Pursuant to the Contract, defendant s sole remedy is the retention of the deposit and the parties are responsible for their respective legal fees. See paragraphs 3 and 20 of the Contract. See Hooper Assoc. v. AGS Computers, 74 N.Y. 2d 487,49 1 (1989) ( [A]ttorney s fees are incidents of litigation and aprevailing party may not collect them from the loser unless an award is authorized by agreement between the parties, statute or court rule ). As such, defendant s request for an Order directing a hearing to determine the money damages allegedly suffered by defendant, as well as its request for costs, disbursements, and attorneys fees is denied. Based on the above, it is hereby. ORDERED that defendant s motion is granted to the extent that summary judgment dismissing plaintiffs Complaint herein is granted; and it is further ORDERED that plaintiffs complaint shall be dismissed in its entirety; and it is further ORDERED that the Notice of Pendency filed by plaintiff in this matter shall be discharged and cancelled; and it is further ORDERED that defendant is entitled to retain the $1 50,002leposit made by the Complaint under the parties contract; and it is further ORDERED that Honvitz & Zim Law Group, P.C., as Ecrowee, is directed to pay the $150,000 deposit held in escrow to defendant, and its if further ORDERED that plaintiffs cross-motion is denied; and it is hrther 6 [* 8] ORDERED that the Clerk enter judgment accordingly, This constitutes the Decision and Order of the Court. All other relief requested is denied. Dated: b\..(\I Q x m qL m mKCnjf&awn, N 9 Check one: X FINAL DISPOSITION Check if appropriate: u DO NOT POST NON-FINAL DISPOSITION 0 REFERENCE FILED NEW YORK COUNTY CLERK'S OFFICE 7

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