Vahdat v Capdel LLC

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Vahdat v Capdel LLC 2019 NY Slip Op 32028(U) July 15, 2019 Supreme Court, New York County Docket Number: 652099/2019 Judge: Jennifer G. Schecter Cases posted with a "30000" identifier, i.e., 2013 NY Slip Op 30001(U), are republished from various New York State and local government sources, including the New York State Unified Court System's eCourts Service. This opinion is uncorrected and not selected for official publication. [*FILED: 1] NEW YORK COUNTY CLERK 07/15/2019 12:50 PM NYSCEF DOC. NO. 29 INDEX NO. 652099/2019 RECEIVED NYSCEF: 07/15/2019 SUPREME COURT OF THE STATE OF NEW YORK COUNTY OF NEW YORK: PART 54 ------------------------------------------------------------)( Index No.: 652099/2019 MOUJANVAHDAT, Plaintiff, DECISION & ORDER -againstCAPDELLLC, Defendant. ----------------------------~---------------------~---------)( JENNIFER G. SCHECTER, J.: Plaintiff Moujan Vahdat claims that defendant Capdel LLC (Capdel) breached an agreement to provide him with a right of first refusal to purchase real property. Capdel moves to dismiss, to vacate the notice of pendency on the property and for sanctions. Because the right of first refusal no longer exists--a party related to plaintiff exercised it but then defaulted--Capdel's motion is granted in its entirety. This frivolous action is dismissed and defendant is awarded "costs in the form of reimbursement for actual expenses reasonably incu~ed and reasonable attorney's fees" (22 NYCRR 130-1.l[a]). Background The relevant facts are undisputed and are drawn from the documentary evidence and the prior court decisions discussed below. Capdel owns real property located at 2108-2110 Second Avenue in Manhattan (the Property). Plaintiff's company, East 1 IQth Street LLC (East l lOth), owns a neighboring property . In a written agreement dated July 21, 2006, the Property's prior owner and East 11 Oth agreed that East 11 oth and "any of its successors and assigns fonned by its managing member Moujan Vahdat" would have a right of first refusal to buy the Property 2 of 6 [*FILED: 2] NEW YORK COUNTY CLERK 07/15/2019 12:50 PM NYSCEF DOC. NO. 29 INDEX NO. 652099/2019 RECEIVED NYSCEF: 07/15/2019 (Dkt. 9 [the Agreement]). In 2017, plaintiff exercised the right of first refusal under the Agreement (Dkt. 18) and Second Avenue Group LLC (SAG), whose managing member was plaintiff, entered into a contract with Capdel for the sale of the Property. Closing was scheduled for October 18, 2017. The parties executed a stipulation extending the closing to November 1, 2017, _time being of the essence. On October 27, 2017, SAG-represented by the same attorney appearing for plaintiff in this case--commenced an action in this court and moved to stay the closing (Second Avenue Group LLC v Capdel LLC, Index No. 656611/2017 [Sup Ct, NY County] [the Prior Action]). The court denied the motion. SAG did not appear at the closing. SAG and Capdel then each cross-moved for a judgment resolving whether SAG defaulted and whether it was entitled to return of its down payment. By order dated June 4, 2018, the court held that SAG defaulted by failing to appear at the closing and that Capdel was entitled to the $190,000 down payment as liquidated damages (see Dkt. 11). On January 3, 2019, the Appellate Division affinned (168 AD3d 415 [1st Dept 2019]). Three months later, on April 10, 2019, plaintiff commenced this action and filed a notice of pendency on the Property (see Dkt. 2). Plaintiff seeks a declaratory judgment that he has a right of first refusal on the Property and to enjoin Capdel from selling the Property in derogation of that purported right. Capdel immediately wrote plaintiffs attorney, demanding that the lawsuit and notice of pendency b~ voluntarily withdrawn "to avoid motion practice" (Dkt. 16 [4/17/19 Letter]). Capdel explained that plaintiff already exercised the right of first refusal and that the failure to close precluded further 2 3 of 6 [*FILED: 3] NEW YORK COUNTY CLERK 07/15/2019 12:50 PM NYSCEF DOC. NO. 29 INDEX NO. 652099/2019 RECEIVED NYSCEF: 07/15/2019 enforcement of the Agreement (id.). Capdel further infonned plaintiff of an imminent 1031 exchange transaction that could be jeopardized .by plaintiffs proceedings and threatened to seek sanctions if the notice of pendency was not lifted and the action was not discontinued. After plaintiff failed to respond to its letter, Capdel made this motion to dismiss on April 30, 2019. Analysis Plaintiff already exercised his right of first refusal on the Property and then breached by failing to close (Dkt. 18; see Dkts. 11-12). Therefore, he can no longer prevent Capdel from selling the Property (Metropolitan Transp. Auth. v Bruken Realty Corp., 67 NY2d 156, 163 [1986]; see F & T Mgmt. & Parking Corp. v Flushing Plumbing Supply Co., 68 AD3d. 920, 923 [2d Dept 2009]; see also Dkt. 6 at 7-8 . [collecting cases]). "If the law were otherwise, then a holder of a right of first refusal ' could tie up the property for years and years. He would just need to keep exercising the· right, default over and over again, and keep repeating that cycle. Meanwhile, the owner of the property would be stuck and have no recourse to sell the property to anyone else" (Dkt. 6 at 8). Significantly, plaintiff has cited no law to the contrary and ·there is no legal support whatsoever for his meritless opposition. Plaintiff contends that he never previously exercised his right of first refusal because it was SAG that did so in 2017 (see Dkt. 24). * The Agreement, however, makes clear that the right belongs to plaintiff and * Plaintiff also frivolously contends that SAG is not a party to the Agreement and actually had no right of first refusal (Dkt. 24 if 1O): That position is contradicted by the record and, in any event, 3 4 of 6 [*FILED: 4] NEW YORK COUNTY CLERK 07/15/2019 12:50 PM NYSCEF DOC. NO. 29 INDEX NO. 652099/2019 RECEIVED NYSCEF: 07/15/2019 any assignee formed by him. · The parties' emails from 2017, moreover, conclusively prove that plaintiff exercised his right of first refusal and chose to contract through SAG (see Dkt. 18). Nor is there any authority for plaintiffs unsupported belief that he or his affiliates can continuously exercise the right after invoking it once and then defaulting. This action--the third case commenced against defendant by plaintiff or his affiliates all of whom were represented by the same counsel (see Dkt. 13)--should not have been instituted. Then, in response to defendant's letter setting forth the reasons that this case lacks merit and the consequences of failing to cancel the notice of pendency (Dkt. 16), plaintiff should have discontinued the action. defendant to incu~ Instead, plaintiff forced fees and the deal that defendant had in place with a third party was lost. To add insult to injury, plaintiff opposed the motion late, costing defendant more time. Plaintiffs arguments that sanctions are inappropriate because SAG is not a successor or assign of East l 101h St. and because he has "long stood ready, willing and able to purchase" the Property and wants nothing more than to do so in accordance with his rights are belied by the record and by the affirmed findings in the Prior Action (Dkt. 24 at ilil 8, 10, 14). His position is untenable. Because this action and plaintiffs opposition to its dismissal are "completely without merit in law and cannot be supported by a reasonable argument for an extension, modification or reversal of existing law," Capdel is entitled to recoyer the reasonable legal fees it incurred. (22 NYCRR § 130l.l[a], [c][l]; see Abe v New York Univ., 169 AD3d 445, 449 [1st Dept 2019]; Pfeiffer v is of no consequence. Once a party affiliated with plaintiff defaulted on purchasing the Property, plaintiff no longer had any rights. 4 5 of 6 [*FILED: 5] NEW YORK COUNTY CLERK 07/15/2019 12:50 PM NYSCEF DOC. NO. 29 INDEX NO. 652099/2019 RECEIVED NYSCEF: 07/15/2019 Imperatore, 158 AD3d 497 [1st Dept 2018]; Eshaghian v Eshaghian, 146 AD3d 529, 529 [I st Dept 2017]). Finally, the notice of pendency is canceled as this action is dismissed. Accordingly, it is ORDERED that Capdel's motion to dismiss the complaint is granted, the Clerk is directed cancel the Notice of Pendency filed at Dkt. 2 and to enter judgment dismissing the complaint with prejudice; Capdel's attorneys' fees motion is hereby severed and shall continue; and it is further ORDERED that Capdel's motion for an award of attorneys' fees against plaintiff is granted; and it is further ORDERED that within one week of the entry of this ·order, Capdel shall file a letter not to exceed five pages in which it attaches its legal bills incurred defending this action and explain why they are reasonable, to which plaintiff may respond, also in a letter not to exceed five pages, within one week thereafter. Dated: July 15, 2019 ENTER: 5 6 of 6

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