Opinion
Index No. 34177/2020E
02-08-2022
Hector CRUZ, Plaintiff, v. Tabatha WILLIAMS, Defendant.
Counsel for plaintiff: Edward A. Vincent, Esq., 19-02 Whitestone Expwy, Ste. 902, Whitestone, N.Y. 11357 Counsel for defendant: Terry A. Brostowin, Esq., 111 John Street, Suite 800, New York, N.Y. 10338
Counsel for plaintiff: Edward A. Vincent, Esq., 19-02 Whitestone Expwy, Ste. 902, Whitestone, N.Y. 11357
Counsel for defendant: Terry A. Brostowin, Esq., 111 John Street, Suite 800, New York, N.Y. 10338
Mary Ann Brigantti, J.
The following papers numbered 17 to 60 were read on these motions (Seq. No. 1) for SUMMARY JUDGMENT noticed on September 20, 2021 and duly submitted as Nos. on the Motion Calendar of September 20, 2021 Sequence No. NYSCEF Doc. Nos.
Notice of Motion — Exhibits and Affidavits Annexed 17-34
Cross Motion — Exhibits and Affidavits Annexed
Answering Affidavit and Exhibits, Memorandum of Law 35-58
Reply Affidavit 59-60
This motion is decided in accordance with the accompanying memorandum decision.
Upon the foregoing papers, the plaintiff Hector Cruz ("Plaintiff") moves for an order (1) pursuant to CPLR 3212, granting summary judgment in his favor, dismissing the defendant's answer and counterclaims, and declaring the defendant to be in breach of contract, and that Plaintiff is entitled to the down payment of $28,000, or alternatively (2), pursuant to CPLR 3212, granting partial summary judgment to Plaintiff, dismissing the defendant's second and third counterclaims, affirmative defenses, and demands for recovery of legal fees and consequential and punitive damages, and (3) for such other and further relief as this Court deems just and proper. The defendant Tabitha Williams ("Defendant") opposes the motion.
I. Background
Plaintiff, seller of a cooperative apartment unit, alleges that Defendant, the purported buyer of the unit, anticipatorily breached the contract to purchase the unit (the "Contract") by refusing to proceed with Defendant's own "time of the essence" closing.
On July 12, 2019, Plaintiff and Defendant executed a contract for Defendant's purchase of Plaintiff's cooperative apartment in exchange for $280,000.00. The contract required Defendant to make a down payment of $28,000. Defendant remitted the payment by check, and it is currently being held in escrow by Plaintiff's counsel for the transaction, Ryan J. Walsh (hereinafter "Walsh").
The Contract required Defendant to apply for a mortgage loan of $224,000 for a term of 30 years or less within five (5) busines days of July 12, 2019 and called for a closing date to be scheduled on or about 60 days from July 12, 2019 — or September 10, 2019. Plaintiff states that on August 2, 2019, Defendant obtained a mortgage commitment for a loan amount of $224,000.00, with an expiration date of October 31, 2019.
As of September 10, 2019, Defendant had not yet received approval to purchase the apartment from the cooperative's board. On September 21, 2019, the board approved the sale of the apartment to Defendant. On October 8, 2019, Defendant served a notice on Plaintiff scheduling a closing date of October 28, 2019, at 1:00PM. The notice indicated that "time is of the essence" and stated that Defendant was "ready, willing and able to close."
On October 28, 2019, Plaintiff received approval from the cooperative's board to close, and, in an affidavit submitted in support of this motion, Plaintiff alleges he was "ready, willing, and able to close and sell the [a]partment shares to [Defendant] on October 28, 2019." Plaintiff states that he was then notified that Defendant and her attorneys refused to proceed with the October 28, 2019 closing. Walsh states that he informed by Defendant's attorney Elena Makau, Esq. ("Makau") that Defendant's mortgage commitment would be deemed stale as of October 22, 2019. Walsh states this statement is "not true" and "directly contradicted" by the prior notice and mortgage commitment letter, stating that the commitment did not expire until October 31, 2019.
Walsh states that on October 28, 2019, they received approval from the cooperative board to close, and Walsh "attempted to schedule the closing," but Makau and Defendant refused to close. Walsh states that his firm was never served with a notice of cancellation, as required by Paragraphs 17.3 and 18.3.2 of the contract. Plaintiff was ready, willing, and able to close on October 28, 2019.
Walsh states that on October 31, 2019, his firm received an email from Makau producing a loan estimate from Quicken Loans and demanding that Plaintiff pay $5,600 for Defendant's mortgage extension fees. An email from Defendant's mortgage broker, however, confirmed that only $1,400 of that amount was for commitment extension fees. The remaining fees were for Defendant's rate lock extension and imposed due to Defendant's reduced credit score.
In an affidavit, Plaintiff states that despite these refusals, he hoped to sell to Defendant, and in good faith he agreed to pay for Defendant's mortgage commitment extension fee of $1,400. However, Walsh alleges that Makau continued the improper demand of $5,600.00.
On November 13, 2019, Makau advised that Defendant's mortgage financing had expired and they demanded a refund of the down payment. Makau threatened legal action if the down payment was not returned by November 18, 2019. Despite Defendant's breach, Plaintiff still sought to honor the contract and reschedule the closing.
On November 19, 2019, Walsh served on Defendant a notice scheduling the closing for December 6, 2019, stating "time is of the essence." Defendant and Makau, however, refused to close, threatening litigation if the down payment was not returned.
Plaintiff and Walsh allege that they were ready, willing, and able to close on December 6, 2019. Defendant and her attorney refused to proceed. Walsh states that on December 13, 2019, his firm served a notice on Makau declaring Defendant to be in breach of the contract and declaring the down payment as forfeited. This action commenced after the parties could not agree on a resolution.
Plaintiff alleges that he is entitled to summary judgment because Defendant anticipatorily breached the contract by refusing to go forward on the closing date of October 28, 2019. Plaintiff alleges that the Contract unambiguously stated that Defendant became obligated to purchase and close on the Contract upon obtaining a mortgage commitment (Par. 18.3.1 & 18.3.7). Defendant set a "time of the essence" closing date, which mandated that both parties close on October 28, 2019. Defendant demanded a closing date of October 22, 2019 due to the mortgage commitment expiring, but this was false as the mortgage did not expire until October 31, 2019. Plaintiff claims that Defendant unilaterally refused to close with no reasonable justification. Plaintiff is thus entitled to keep the down payment.
Plaintiff also argues that Defendant breached the contract by failing to attend the second closing date of December 6, 2019. Plaintiff asserts that it was not responsible for payment Defendant's mortgage commitment "extension fees" that were improperly demanded.
Plaintiff further alleges that Defendant contractually waived the right to terminate the Contract by failing to serve a notice of cancellation upon Defendant prior to the scheduled closing date.
As alternative relief, Plaintiff argues that Defendant's claims for unjust enrichment and conversion are precluded by the existence of the contract and therefore they must be dismissed. Plaintiff also argues that Defendant has no legal basis for the recovery of legal fees and therefore those claims must be dismissed. Plaintiff further argues that Defendant's demand for recovery of consequential and punitive damages is without merit. Finally, Plaintiff contends that Defendant's boilerplate affirmative defenses should be dismissed with prejudice.
In opposition to the motion, Defendant submits an affirmation from her current counsel, and affirmation from Makau, and multiple email exhibits. Defendant's counsel states that Plaintiff, not defendant, refused to close on October 28, 2019. On September 21, 2019, Defendant's attorney Makau sent an email to Walsh stating that Defendant had been approved by the co-op and was cleared to close, and inquiring about a closing date. On October 3, 2019, Makau sent another email to Walsh, stating that the afternoon of October 17 was available. An email that same day from the real estate broker indicated that the closing apparently needed "to be coordinated with the seller's next purchase."
On October 9, 2019, Plaintiff's office sent an email stating that Plaintiff was "NOT" ready to close yet, and that Plaintiff "is purchasing another unit in the same building." Makau thereafter sent an email stating that there was no indication that the closing was contingent upon the seller's purchase. On October 11, 2019, Defendant herself sent an email informing that her loan commitment expired "today" and she was still waiting on a closing date from the seller. That same date, the real estate broker stated that the seller has not agreed to cover the buyer's extension costs, and on October 15, 2019, the lender sent an email stating that the rate would expire on "10/28." On October 16, 2019, Makau sent an email stating that Defendant "MUST close by 10/28/19, or her financing will be ended." This email also noted that the Contract was not contingent upon the seller's purchase of a different property. It further stated that the seller had not responded to any request to set a closing date.
On October 17, 2019, Makau sent another email to Plaintiff's attorney confirming that Defendant was ready, willing, and able to close. This email also indicated that if the transaction did not close by 10/22/2019, the mortgage application would be deemed stale and there would no longer be a mortgage commitment. This email now stated that the closing was to occur by October 22, 2019, or the transaction would be deemed canceled. The email proposed closing dates of October 18, 21, or 22. The next day, Makau sent another email to Plaintiff's counsel, noting that she received no response to her prior email. The email reiterated the October 22, 2019 closing deadline and stated "[i]f there is no closing by 10/22/19, this transaction will be cancelled."
On November 5, 2019, Makau sent another email to Plaintiff's attorney informing that Defendant incurred additional processing fees due to Plaintiff's refusal to timely close. The lack of response from Plaintiff required Defendant to purchase multiple extensions. Makau indicated that if Plaintiff were willing to pay those fees, totaling $5,600.00, then Defendant could restart her mortgage financing application. More emails were exchanged and on November 22 and 23, 2019, Makau sent an email noting that her mortgage financing had expired and will not be renewed without the payment of mortgage commitment extension costs, and Defendant was unable to pay the costs ($6,000.00+), and Plaintiff had refused to absorb them.
On December 3, 2019, Makau sent an email to Plaintiff's counsel rejecting his "time of the essence" letter, since Defendant was without mortgage and unable to purchase the unit. This letter requested immediate return of Defendant's down payment. Plaintiff's counsel sent an email stating the Plaintiff had "offered $3,000 to help offset your client's expenses" and "the contract cannot be cancelled due to the buyer paying extension fees and the loan is still active." In response, Makau stated that the loan was not active and there was no financing. The cancellation of the loan was confirmed in follow-up emails.
Defendant argues that Plaintiff's motion is procedurally defective for failing to include a complete set of the pleadings. Moreover, Defendant contends that "there are material facts in dispute that should defeat [P]laintiff's application" and discovery has not yet begun. Defendant further alleges "[t]here is no dispute that the Plaintiff added a condition precedent to closing that was not contained in the contract of sale."
In reply, Plaintiff notes that Defendant did not oppose Plaintiff's motion for alternate relief seeking partial summary judgment on Defendant's second and third counterclaims, demand for recovery of legal fees, consequential, and punitive damages, and the "boilerplate" affirmative defenses. Plaintiff further contends that Defendant's modification of the October 28, 2019 closing date to October 22, 2019, and threat to cancel the contract, constituted an anticipatory breach of contract which negated Plaintiff's further obligations to perform under the contract. Plaintiff further argues that Defendant refused to accept subsequent offers to pay a portion of her mortgage extension fees, and Defendant's subsequent emails refusing to close on December 6, 2019 constituted premature terminations of the contract and anticipatory breach thereof. Plaintiff thus argues that he is entitled to keep Defendant's down payment as of either October 28 or December 6, 2019.
II. Standard of Review
To be entitled to the "drastic" remedy of summary judgment, the moving party "must make a prima facie showing of entitlement to judgment as a matter of law, tendering sufficient evidence to demonstrate the absence of any material issues of fact from the case." ( Winegrad v. New York University Medical Center , 64 NY2d 851 [1985] ; Sillman v. Twentieth Century—Fox Film Corp. , 3 NY2d 395 [1957] ). The failure to make such prima facie showing requires denial of the motion, regardless of the sufficiency of any opposing papers. (id. , see also Alvarez v. Prospect Hosp. , 68 NY2d 320, 324 [1986] ). Facts must be viewed in the light most favorable to the non-moving party ( Sosa v. 46th Street Development LLC. , 101 AD3d 490 [1st Dept. 2012] ). Once a movant meets his initial burden, the burden shifts to the opponent, who must then produce sufficient evidence, also in admissible form, to establish the existence of a triable issue of fact ( Zuckerman v. City of New York , 49 NY2d 557 [1980] ). When deciding a summary judgment motion the role of the Court is to make determinations as to the existence of bonafide issues of fact and not to delve into or resolve issues of credibility ( Vega v. Restani Constr. Corp. , 18 NY3d 499 [2012] ).
III. Applicable Law and Analysis
At the outset, Defendant's contention that the motion is procedurally defective for failing to append a complete set of the pleadings ( CPLR 3212[b] ) is unavailing. This is an electronically-filed case where the pleadings "e-filed" and available for all parties and the Court (see Studio A. Showroom LLC v. Yoon , 99 AD3d 632 [1st Dept. 2012] ). This motion was filed before the newly-enacted Uniform Rules for the Supreme Court and the County Court which, as of February 1, 2021, require copies of all pleadings regardless of whether the matter is electronically filed ( 22 NYCRR § 202.8-a ). The motion is therefore decided on its merits.
"When a contract does not specify that time is of the essence, one party may subsequently give notice to that effect provided that such notice is clear, distinct and unequivocal and fixes a reasonable time within which to perform" ( Stefanelli v. Vitale , 223 AD2d 361, 362 [1st Dept. 1996] ). "Such notice may be effected by a letter from one of the party's attorneys" (id. ). What constitutes a "reasonable time" to perform depends on the circumstances of the particular cases, including "the previous conduct of the parties, the presence or absence of good faith, the experience of the parties and the possibility of prejudice or hardship to either one, as well as the specific number of days provided for performance" ( Zev v. Merman , 73 NY2d 781, 783 [1988] ). Once it has been declared that time is of the essence, "it is of the essence for both parties, and defendants are as entitled to enforce the provision as plaintiffs" ( Stefanelli , 223 AD2d at 362 ). "However, even after time has been made of the essence, a party's right to timely performance may still be waived" (id. , citing 76 N. Assoc. v. Theil Mgt. Corp. , 114 AD2d 948, 949 [2d Dept. 1985], lv. denied , 70 NY2d 612 [1987] ). "[W]here a seller seeks to hold a purchaser in breach of contract, the seller must establish that [he or she] was ready, willing, and able to perform on the time-of-the-essence closing date, and that the purchaser failed to demonstrate a lawful excuse for its failure to close" ( Donerail Corp. N.V. v. 405 Park LLC , 100 AD3d 131, 138 [1st Dept. 2012] ).
In this case, Plaintiff submits evidence that he received a notice from Defendant scheduling a time-of-essence closing date of October 28, 2019. Plaintiff alleges that he was ready, willing, and able to go forward on that date, but Defendant refused to go forward. However, the moving papers and Defendant's opposition contain email exchanges indicating that on October 17, 2019, Defendant's counsel set a new "time-of-essence" closing date of on or before October 22, 2019, alleging that the if the transaction did not go forward by that date, the mortgage application would be deemed stale and there would no longer be a mortgage commitment. This notice further stated that the transaction would be deemed cancelled if the closing did not occur on October 22, 2019. While Plaintiff contends on this motion that the reason for moving up the closing date was unfounded—as the mortgage commitment would not actually expire on October 22, 2019—Plaintiff did not voice any objection to the advanced closing date. Instead, Plaintiff's counsel chose to remain silent and simply did not respond to any of Defendant's counsel's emails concerning the new October 22, 2019 date. Under the circumstances it may be deemed that, "[r]egardless of whether the notice to [Plaintiff] was reasonable," Plaintiff "acquiesced, as a matter of law, in the reasonableness of the closing date" ( Westreich v. Bosler , 106 AD3d 569, 568 [1st Dept. 2013], citing Zev v. Merman , 134 AD2d 555, 558 [2d Dept. 1987], aff'd , 73 NY2d 781 [1988] ), and Plaintiff waived his right to performance on the later, October 28 date (see Stefanelli , 223 AD2d at 362 ; see, e.g., Tarlo v. Robinson , 118 AD2d 561, 565 [2d Dept. 1986] ). On this record, there are issues of fact as to whether the Defendant's notice moving the closing date to on or before October 22, 2019 was reasonable under the circumstances ( Jobin Organization, Inc. v. Bemar Realty, LLC , 165 AD3d 904 [2d Dept. 2018] ). There are also issues of fact as to whether Defendant subsequently waived Plaintiff's default and elected to continue to perform under the contract, by seeking to come to an arrangement for Plaintiff to pay Defendant's mortgage commitment extension costs (see, e.g., Gaston v. Estrada , 40 AD3d 580 [2d Dept. 2007] ; Kistela v. Ahlers , 22 AD3d 641, 643 [2d Dept. 2005] ).
If Plaintiff was indeed in default by failing to perform on October 22, Defendant had no further duty to entertain Plaintiff's later closing date of December 5, 2019 (see Champion v. Blue Water Advisors, Inc. , 82 AD3d 568, 568 [1st Dept. 2011], citing Grace v. Nappa , 46 NY2d 560, 566 [1979], and 115-117 Nassau St., LLC v. Nassau Beekman, LLC , 74 AD3d 537 [1st Dept. 2010] ), thus Defendant's alleged failure to comply with notice of cancellation provisions prior to that December 2019 subsequent closing date would be irrelevant (see, e.g., 115-117 Nassau St., LLC , 74 AD3d at 537-38 [breaching party's default entitled the non-breaching party to declare the agreement terminated and retain down payment]). The above issues of fact preclude entry of summary judgment in Plaintiff's favor on his breach of contract claim against Defendant.
Plaintiff's motion for summary judgment with respect to Defendant's second and third counterclaims is granted without opposition. Plaintiff has established that Defendant's counterclaim for unjust enrichment is untenable because there is a valid contract governing the subject matter in dispute (see G & G Invs. v. Revlon Consumer Prods. Corp. , 283 AD2d 253 [1st Dept. 2001] ). Defendant's counterclaim for conversion likewise fails, because the claim is predicated on the alleged breach of contract, and Defendant sets forth no independent facts giving rise to such tort liability ( Kopel v. Bandwidth Tech Corp. , 56 AD3d 320 [1st Dept. 2008] ; Yeterian v. Heather Mills N.V. Inc. , 183 AD2d 493, 494 [1st Dept. 1992] ).
Plaintiff's motion to dismiss Defendant's fourteen affirmative defenses is also granted without opposition. Defendant's affirmative defenses: (1) lack of subject matter jurisdiction; (2) lack of personal jurisdiction; (3) contributory negligence; (4) lack of causation; (5) failure to state a cause of action; (6) statute of limitations; (7) lack of standing; (8) abuse of process; (9) waiver, equitable estoppel, laches, and unclean hands; (10) failure to mitigate damages; (11) defective notice; (12) lack of consideration; (13) harassment), and (14) intent to add additional defenses, are not pleaded with sufficient supporting factual allegations and therefore they must be dismissed, with leave to replead if so advised (see Moran Enters., Inc. v. Hurst , 96 AD3d 914, 917 [2d Dept. 2012] ).
Plaintiff seeks dismissal of Defendant's demand for punitive damages, that branch of the motion is moot, as the answer with counterclaims does not contain a demand for punitive damages. Plaintiff's motion to dismiss Defendant's demand for legal fees is granted, as he alleges without opposition that there is no agreement here that would permit Defendant to recover legal fees in this action (see generally Hooper Assoc. v. AGS Computers , 74 NY2d 487, 490 [1987] ). Since Defendant did not advance specific arguments in opposition to Plaintiff's motion to dismiss Defendant's claim for consequential damages, those claims are dismissed as abandoned (see, e.g., Saidin v. Negron , 136 AD3d 458, 459 [1st Dept. 2016] ).
IV. Conclusion
Accordingly, it is hereby
ORDERED, that Plaintiff's motion for summary judgment is granted to the extent of dismissing Defendant's second and third counterclaims, and those counterclaims are dismissed, and it is further,
ORDERED, that Plaintiff's motion for summary judgment is granted to the extent of dismissing Defendant's claims for recovery of legal fees and consequential damages is granted, and those claims are dismissed, and it is further,
ORDERED, that Plaintiff's motion for summary judgment dismissing Defendant's claim of punitive damages is denied as moot as no such damages are sought, and it is further,
ORDERED, that Plaintiff's motion to dismiss Defendant's fourteen (14) affirmative defenses listed above is granted, and those affirmative defenses are dismissed, with leave to replead if so advised, and it is further,
ORDERED, that Plaintiff's motion for summary judgment is otherwise denied.
This constitutes the Decision and Order of this Court.