Opinion
Index No. 653674/2015 Motion Seq. Nos. 006 007
01-24-2023
35 WEST REALTY CO., LLC, Plaintiff, v. BOOSTON LLC and FRIEDPHIL REALTY CORP. Defendants.
Unpublished Opinion
MOTION DATE 07/14/2022, 08/08/2022.
DECISION + ORDER ON MOTION
HON. MARGARET A. CHAN, J.S.C.:
The following e-filed documents, listed by NYSCEF document number (Motion 006) 223, 224, 225, 226, 227, 228, 229, 230, 231, 232, 233, 234, 235, 236, 237, 238, 239, 240, 241, 242, 243, 244, 245, 246, 249, 254, 255, 265, 272, 273, 274, 275, 276, 277, 278, 279, 280, 281, 282, 283, 284, 285, 286, 287, 288, 289, 290, 291, 292, 293, 294, 295, 296, 297, 298, 299, 300, 301, 302, 303, 304, 305, 306, 307, 308, 309, 310, 311, 312, 313, 314, 315, 316, 317, 318, 319, 320, 321, 322, 323, 324, 325, 326, 327, 328,329,330,331,332 were read on this motion to/for PARTIAL SUMMARY JUDGMENT
The following e-filed documents, listed by NYSCEF document number (Motion 007) 214, 215, 216, 217, 218, 219, 220, 221, 222, 256, 257, 258, 259, 260, 261, 262, 263, 264, 266, 271 were read on this motion to/for JUDGMENT - SUMMARY
This action involves a dispute over the end-date of a commercial lease for real property located at 35 West 57th Street, New York, NY, owned by plaintiff 35 West Realty Co., LLC; defendant Friedphil Realty Corp. (Friedphil) was the prior owner before it sold the property in 2006 to plaintiff; and defendant Booston LLC (Booston) is the commercial tenant in the Building whose lease began with Friedphil. The dispute arises from Booston's assertion that its lease term had been extended to 2040 by amendment; plaintiff asserts that the lease term ended in 2020.
In motion sequence (MS) 006, plaintiff moves for (i) partial summary judgment pursuant to CPLR 3212 (e) on its first cause of action declaring that the Lease expired on October 31, 2020, that Booston has no further right to use, occupy, or possess the leased premises, and directing Booston to vacate; (ii) dismissing Booston's affirmative defenses and counterclaim; (iii) precluding Booston from offering certain testimony; and (iv) severing and continuing plaintiffs remaining causes of action against Booston and Friedphil. Booston opposes the motion. 1
In MS007, defendant Friedphil seeks an order pursuant to CPLR 3212 granting summary judgment dismissing plaintiffs complaint in its entirety as against Friedphil (NYSCEF# 214). Plaintiff opposes the motion.
BACKGROUND
On October 10, 2000, Friedphil and Booston entered into a commercial lease (the Lease), which included a twenty-year term for the basement, first floor, and parts of the cellar at 35 West 57 Street (the Building) (NYSCEF # 222). Booston operates a restaurant in the leased premises (NYSCEF # 299 - Booston's Response to pltf s Rule 19-a Statement, f 3). There is no dispute that this original Lease had an end-date of 2020.
The dispute lies with a purported amendment dated March 29, 2005, which extended the Lease for twenty-years with an expiration date of October 31, 2040 (NYSCEF # 281 - the Disputed Amendment). The Disputed Amendment was purportedly signed by Fred Hill as President on behalf of Friedphil and expresses Friedphil's desire to sell the Building vacant of tenancies (id., § 1). It provides that in consideration for Booston's surrender of the Lease, Friedphil would pay Booston $2,000,000 (id., § 2). However, if the potential buyer assents to purchasing a tenant-occupied Building, then Booston need not surrender its Lease under a modified formula for rent increases for the remainder of the Lease to 2020. Significant to this action, in the Disputed Amendment, Friedphil grants Booston an extension of the Lease for twenty years with a formula for rent which follows the original Lease (id., § 3; NYSCEF # 275 - Booston's Opp, Terk aff, ¶'s 14-15). Booston adds that simultaneous with the execution of the Disputed Amendment, Fred Hill also executed a commission agreement which required Booston to pay Hill a "broker's fee" of five percent if the $2,000,000 were paid to Booston (NYSCEF # 275 - Terk aff, ¶ 16; # 282 - Commission Agreement).
The dispute arises because Fred Hill is now deceased and plaintiff claims that Disputed Amendment and the Commission Agreement are forgeries. Plaintiff disputes the authenticity of Hill's signature on these documents.
In support of its claim that the Disputed Amendment and the Commission Agreement are forgeries (NYSCEF # 245 - MOL at 2). Plaintiff alleges that when plaintiff entered into a contract of sale for the Building with Friedphil on September 11, 2006, the Disputed Amendment was not included in the closing documents (NYSCEF # 219 - Contract of Sale). However, annexed to the contract of sale was the rent roll of all the tenants in the Building. Notably, the rent roll on Booston showed the Lease expiration as October 31, 2020 (NYSCEF # 231, ¶'s 11-13; # 235 -Rent Roll).
Plaintiffs Chief Financial Officer, Steven Weymouth, avers that the documents relating to Booston's tenancy that Friedphil delivered to plaintiff during the sale and purchase negotiations consisted of the original Lease dated October 10, 2000, and an amendment dated January 22, 2003. The lease term had an end-date of October 31, 2020 (NYSCEF # 231 - Weymouth Aff, ¶ 8-9; # 234 - Lease). The 2 first time anyone disclosed to plaintiff the existence of the Disputed Amendment was on January 29, 2014, when counsel for Booston emailed a copy to plaintiff (NYSCEF 231, ¶'s 31-32).
In addition to the rent roll that was part of the contract of sale showing the expiration date of plaintiffs lease as October 31, 2020, plaintiff points the 2008 lease amendment between plaintiff and Booston, and the Yellowstone action Booston brought in this court in 2012, neither of which referenced the Disputed Amendment (NYSCEF # 245 at 2; # 231, ¶'s 18-19, 22). These two points were the subject of a prior summary judgment motion and cross-motion for summary judgment brought in 2017 by Booston and plaintiff against each other (MS001). Among the arguments raised in the prior summary judgment and cross-motion by Booston and plaintiff, respectively, plaintiff asserted its entitlement to summary judgment on the basis that the sworn statements made by Booston's principal, Mehrdad Kohan, in the 2012 Yellowstone action indicating that the lease would expire on October 31, 2020, were judicial admissions (NYSCEF # 231, ¶'s 24-29).
Booston points out that since the First Department, in modifying the underlying order of the supreme court dated March 27, 2019 (which had denied Booston's motion for summary judgment and granted plaintiffs cross-motion, declaring the Lease to expire October 31, 2020, and the Disputed Amendment to be of no force or effect (NYSCEF # 92 - Order and Judgment of Hon. Charles E. Ramos dated March 27, 2018)), stated that the representations in the verified complaint and Kohan's sworn statement as to the expiration date of the Lease in the Yellowstone action were not judicial admissions triggering estoppel (NYSCEF # 319 - Booston's MOL in Opp at 3). The First Department explained that the doctrine of judicial estoppel does not bar Booston because
Booston did not obtain a favorable ruling or judgment in the Yellowstone action as a result of that position. The Yellowstone court did not rely on Booston's representation as to the expiration date of the lease in deciding that matter. The representations in the verified complaint and affidavit are, at most, informal judicial admissions, which are not conclusive but may be used at trial as some evidence of the facts as represented.(171 A.D.3d 545, 545 [1st Dept 2019]; NYSCEF # 286).
In its prior cross motion, plaintiff had also asserted its entitlement to summary judgment on the basis of a February 14, 2008 amendment to the Lease between plaintiff and Booston that was titled 'First Amendment of Lease', which made no mention of the Disputed Amendment (NYSCEF # 59 at 7). It was so titled because plaintiff had not been apprised of such document. Plaintiff found it telling that Booston, after reviewing the draft, had not asked that the Disputed Amendment be referenced in the 2008 amendment (NYSCEF # 59 at 7). On this issue, the First Department determined that it was "an issue of fact whether the [2008] amendment nullified and voided the purported March 25, 2005 amendment at issue" (171 A.D.3d at 545). The First Department added that "Booston's principal's 3 affidavit showing that he authenticated the [Disputed Amendment] raises an issue of fact whether that amendment was, as plaintiff alleges, a forgery" (id.).
Following the First Department's decision, the parties proceeded with discovery, which included expert witness disclosure relating to the alleged forger and the deposition of Steven Cherniak, the former Chief Operating Officer (COO) at Solow, the entity that controls plaintiff, at the time of the Disputed Amendment (NYSCEF # 221 - Cherniak Tr). With discovery completed, plaintiff now moves for summary judgment raising arguments it had in its prior cross motion for summary judgment but adds its handwriting expert's opinion and a preliminary request for an order in limine under CPLR 4519.
DISCUSSION
CPLR 4519 - The Dead Man's Statute
As an initial matter, plaintiff requests under CPLR 4519 for "an order in limine precluding Booston from offering any testimony by interested witnesses as to the [Disputed Amendment] and the [Commission Agreement] or the circumstances surrounding the supposed execution of said documents at trial." (NYSCEF # 245 at 3). Plaintiff acknowledges that CPLR 4519 applies to trial but posits that it is likewise applicable to a motion for summary judgment since a summary judgment motion is the procedural equivalent of a trial (id.). Absent the precluded testimony under CPLR 4519, and because Fred Hill is now deceased, plaintiff argues that Booston would be unable to authenticate the Disputed Amendment and Commission Agreement. Hence, plaintiff posits that its motion for a partial summary judgment for a declaration that the Lease expired in 2020 should be granted (id.).
Booston responds that CPLR 4519 can never, under any circumstance, bar evidence or testimony in opposition to a summary judgment motion (NYSCEF #319 - Booston's MOL at 14-15). Booston further argues that plaintiff has no standing to raise CPLR 4519 as it is not a successor to Fred Hill and the statute only bars testimony about a transaction or communication with a deceased person when it is offered "against the executor, administrator or survivor of a deceased person ... or a person deriving his title or interest from, through or under a deceased person or person" (id. at 17, quoting CPLR 4519).
Booston adds that even if, for argument's sake, CPLR 4519 were somehow applicable, nonetheless plaintiff has waived any objection to the Booston testimony at issue (id. at 18). Booston explains that in support of the 2017 summary judgment motions in this action, Kohan's affidavits detailed the 2005 interactions he and his partner, Fariborz Roshanfekr, had with Fred Hill, including the execution of the Disputed Amendment in Hill's office. Plaintiff did not object to Booston raising this testimony at that time and so waived the objection and notes that plaintiff itself 4 elicited testimony at Roshanfekr's deposition "about the 2005 transactions and/or communications with Mr. Hill," thus opening the door to any additional testimony that may be offered on the same subject to complete the story (id. at 19).
Plaintiff disputes Booston's description of the limited reach of CPLR 4519, arguing that the statute applies to the present situation to bar the biased and self-serving testimony of Booston's principals, which result plaintiff maintains is also required under general principles of common law (NYSCEF # 331 - Reply at 11; 13). Plaintiff argues that Booston inaptly relies on cases from early in the last century, none of which considered the application of CPLR 4519 and which are distinguishable (id. at 11). Plaintiff rejects that it waived the right to invoke the protections of CPLR 4519 (id. at 12-13).
This statute is entitled "Personal transaction or communication between witness and decedent or mentally ill person" and provides:
Upon the trial of an action or the hearing upon the merits of a special proceeding, or a person from, through or under whom such a party or interested person derives his interest or title by assignment or otherwise, shall not be examined as a witness in his own behalf or interest, or in behalf of the party succeeding to his title or interest against the executor, administrator or survivor of a deceased person. . ., by assignment or otherwise, concerning a personal transaction or communication or a person deriving his title or interest from, through or under a deceased person ... concerning a personal transaction or communication between the witness and the deceased person . . . except where the executor, administrator, survivor, committee or person so deriving title or interest is examined in his own behalf, or the testimony of the . . . deceased person is given in evidence, concerning the same transaction or communication.(CPLR 4519).
The underlying purpose of CPLR 4519 is to protect decedents' estates from perjurious claims (Poslock v Teachers' Ret. Bd. of Teachers' Ret. Sys., 88 N.Y.2d 146, 152 [1996]; Sepulveda v Aviles, 308 A.D.2d 1, 10 [1st Dept 2003]). Essentially, there are three elements in CPLR 4519 that pervades: (1) person 'interested in the event' may not testify in their own behalf against (2) "persons with a specified relationship to a decedent" (3) concerning a transaction or communication between the witness and the deceased person ..." (In re Zalk, 10 N.Y.3d 669, 675-676 [2008]).
In applying CPLR 4519 and examining the underlying purpose of the statute, plaintiffs motion for an order in limine under CPLR 4519 must be denied. The estate to be protected is decedent Phil Hill's estate. The testimony that plaintiff seeks to exclude would speak to the authenticity of the Disputed Amendment and Commission Agreement, to show that these documents are not forged. How this purported testimony of Booston's principals would harm Hill's estate is not clear as plaintiff fails to establish that the purported testimony would involve an examination of a witness "against the executor, administrator or survivor of a deceased person" as required by the statute (CPLR 4519; see In re Zalk, 10 NY3 at 679; 5 1504 Assocs., L.P. v Wescott, 41 Misc.3d 6, 8 [App Term, 1st Dept 2013] [CPLR 4519 "finds no application . . . where [the] challenged testimony was offered not 'against the executor, administrator or survivor of a deceased person' (CPLR 4519), but against the petitioner building owner, clearly a stranger to the deceased tenant's estate"]; cf Herrmann v Sklover Grp., Inc., 2 A.D.3d 307 [2003] [confirming the invocation of CPLR 4519 by corporate defendant to preclude testimony about conversations with a decedent when the decedent owned shares of the subject corporation and those corporate shares were then held by the decedent's estate]).
Plaintiff neither establishes that plaintiff derives its interest in the present matter "from, through or under" Hill (CPLR 4519; see Matter of Lefft, 44 N.Y.2d 915, 917 [1978] [declining to bar testimony under CPLR 4519 where the testimony would not lead to a change "from, through or under" the estate]) nor cites any authority to apply CPLR 4519 to a successor-in-interest via a contract of sale (and not a successor via the decedent's estate). Plaintiff offers no response to Booston's analysis of 1504 Assocs., L.P. or Matter of Lefft, cited above, both of which analyzed CPLR 4519, except claiming that none of the cases upon which Booston relies considered the statute (NYSCEF # 331 at 11).
Plaintiffs argument that the in limine preclusion of the testimony of Booston's principals is also required under common law is unavailing. Plaintiff cites Glatter v Borten, but in that case, the First Department made clear that the principle of precluding interested witnesses has been incorporated into CPLR 4519 (233 A.D.2d 166, 168 [1st Dept 1996]).
Plaintiffs Burden on Summary Judgment
A party moving for summary judgment must make a prima facie showing that it is entitled to judgment as a matter of law (see Alvarez v Prospect Hosp., 68 N.Y.2d 320, 324 [1986]). Once a showing has been made, the burden shifts to the party or parties opposing the motion to produce evidentiary proof, in admissible form, sufficient to establish the existence of material issues of fact which require a trial of the action (see Zuckerman v City of New York, 49 N.Y.2d 557, 562 [1980]). On a motion for summary judgment, facts must be viewed in the light most favorable to the non-moving party (see Vega v Restani Constr. Corp, 18 N.Y.3d 499, 503 [2012]). In the presence of a genuine issue of material fact, a motion for summary judgment must be denied (see Grossman v Amalgamated Haus. Corp, 298 A.D.2d 224, 226 [1st Dept 2002]).
Plaintiff proffers that should this court grant its limine motion precluding Booston from presenting testimony as to the authenticity of the Disputed Amendment, coupled with evidence of plaintiff s forensic handwriting expert, it has presented a prima facie showing warranting summary judgment in its favor (NYSCEF # 245 at 4). Given the above denial of plaintiff s motion to preclude Booston's testimony, plaintiff is mistaken. The court nonetheless considers whether plaintiff has otherwise established its entitlement to partial summary judgment. 6
In support of its prima facie case that the Disputed Amendment is a forgery, plaintiff reiterates certain arguments it made in its prior cross-motion for summary judgment in 2012 Yellowstone action (id. at 2). While plaintiff acknowledges the First Department's prior decision in this action declining to apply the doctrine of judicial estoppel, plaintiff nonetheless asserts that, still, Booston's sworn statements that the lease ended in 2020, essentially an admission, by its principal, Mehrded Kohan, in the prior motion support an award of partial summary judgment now (id. at 11, n l). Plaintiff adds that the fact that the 2008 Amendment between plaintiff and Booston was designated as the Frist Amendment is indicative of the absence of the Disputed Amendment.
In opposition, Booston argues that plaintiffs present arguments are frivolous as they repeat those made in plaintiffs prior cross-motion, which the First Department rejected, thus, the law of the case doctrine applies to give conclusive effect to the First Department's determination (NYSCEF # 319 at 3-6). Booston continues that even if the First Department had not already rejected plaintiffs arguments, they should still be rejected because the statements at issue made by Kohan, in the 2012 Yellowstone action was based on Kohan's understanding as a layperson, and in reliance on then-counsel to Booston (id. at 6-7). Finally, Kohan's statement, even if inconsistent, could not form the basis for estoppel as Booston did not obtain a favorable result in the 2012 Yellowstone action because if was irrelevant in that action (id. at 7).
Booston explains that a Yellowstone injunction is issued based on a tenant's showing that it: holds a commercial lease,' received notice to cure an alleged default; requested injunctive relief prior to expiration of the cure period; and is ready, willing, and able to cure (NYSCEF # 319 at 7-8). Booston thus argues that the term of the tenancy is "wholly irrelevant" to relief in a Yellowstone action.
Booston also rejects the relevancy of the 2008 Amendment being entitled "First Amendment" because not only did plaintiff draft that document, but plaintiff also failed to mention the undisputedly valid and binding 2003 amendment to the Lease (id. at 8). Connectedly, Booston questions plaintiffs truthfulness about the contents of its file because Cherniak, Solow's former CEO until 2008, testified that he denominated the 2008 Amendment as "First Amendment" because there were no prior amendments in the file when he reviewed the file prior to preparing the 2008 Amendment. Notably, Cherniak failed to mention the undisputed 2003 Amendment (id. at 10).
Next, Booston asserts that the court cannot consider plaintiffs averment on when plaintiff received notice of the Disputed Amendment because that averment was made by plaintiffs chief financial officer, Steven Weymouth, hired in 2015, who has no personal knowledge of what was included or omitted from the 2006 Contract of Sale documents (id. at 8). Booston posits that Weymouth's affidavit must therefore be disregarded as inadmissible hearsay and extends this reasoning to every purported fact that were authenticated by Weymouth (id. at 8-11). And, Booston ventures that should plaintiff invoke the business records exception, that 7 doctrine is inapplicable because the documents to be considered for evidentiary support were not created by plaintiff but by third parties. Booston notes that Weymouth failed to assert Weymouth's familiarity with Solow's record-keeping practices (id. at 11-13).
Finally, Booston points out that it is important that the 2006 Contract of Sale and associated transmission of documents was only between plaintiff and Friedphil; that Booston had no involvement in the transaction,' so even if Friedphil omitted the 2005 Amendment, that is a matter between plaintiff and Friedphil (id. at 10).
In reply, plaintiff distinguishes its current motion from prior cross motion in that the First Department's findings on the 2008 Amendment is not now at issue and that the First Department had recognized that prior statements by Kahan, which plaintiff had characterized as admissions may be used at trial as evidence (NYSCEF # 331 - Reply at 2). As to Booston's objections to Weymouth's affidavit, plaintiff argues that Weymouth is competent as a company witness attesting to facts following an inspection of the company's books and records (id. at 8). Plaintiff also asserts that Booston has "effectively negated the objection" by relying on the same documents (id. at 9).
Aside from the above evidence to support its prima facie showing, plaintiff submits an affidavit, biography, and an expert report of its forensic handwriting expert, Beverly East. After her examination of Fred Hill's signatures on a small number of samples including the Lease, the 2003 Amendment, the First Amendment, and the documents at issue - the Disputed Amendment and the Commission Agreement - East unequivocally concluded that the neither the Disputed Amendment nor the Commission Agreement bears an authentic signature of Fred Hill (NYSCEF # 244 - East Report at 5). In so finding, East identified the "inconsistent initial stroke" and "inconsistent pen lifts in the questioned signatures" (NYSCEF # 245 at 9). Plaintiff argues that with East's "unequivocal expert opinion" that Fred Hill's signature is not authentic, the burden to establish the authenticity of the Disputed Amendement shifts to Booston (id. at 3). Plaintiff continues that Booston also assumed this burden to authenticate the Disputed Amendment by Booston's counterclaim.
In opposition, Booston argues that the court may not consider the East Report because East's affidavit is an out-of-state affidavit (signed in Washington D.C.) unaccompanied by a certificate of conformity, in violation of CPLR 2309, and plaintiff fails to state by what standard a court may consider an expert's report (NYSCEF # 319 at 21-22). Booston also asserts that East is not an expert at all as Booston's own experts avers (id. at 22). Booston's experts, Thomas Vastrick and Richard Picciochi, opine that East, who does 90% of her document examination work outside the United States, "has none of the training required and recognized by the forensic handwriting analysis community" and that instead, "East is trained as a graphologist" - graphology is a pseudo-science that has no place in the courtroom (id. at 22-23; NYSCEF # 301 - Vastrick Aff; # 316; and # 319 at 24). 8 Booston offers two cases, one in New York and one Maryland, in which East's opinions were rejected.
Besides devaluating East's credentials, both Vastrick and Picciochi question East's methodology (NYSCEF #s 301 and 316). Picciochi also rebuts East's findings citing, in part, her reliance on only three known signatures for comparison and her failure to examine the available original Amendment (NYSCEF # 317 at 3). From his own examination, Picciochi concludes that it is "highly likely" that Hill's signatures on the Disputed Amendment and Commission Agreement are authentic (id. at 7).
In reply, plaintiff defends East's qualifications as an expert and asserts that courts have declined to impose an objective standard regarding a handwriting expert's credentials and methodology (NYSCEF # 331 at 4-5). As to Booston's claim that East's report should be rejected for failure to include a certificate of conformity, plaintiff claims that Booston waived such defect by failing to promptly assert it within 24 hours of receipt (id. at 8, n 2). Plaintiff notes that it cured the violation in any event by providing an appropriate certificate of conformity in its reply submission (id/, NYSCEF # 328).
Responding to Booston's denigration of East's use of fewer examples of known signatures of Hill compared to Picciochi's use of twenty-three known signatures, plaintiff claims that those signatures that Picciochi used were not disclosed to plaintiff in advance of the rendering of the report (id. at 7). And, because of this failure to disclose, Booston should be precluded from relying on the Picciochi Report as well as Picciochi's rebuttal report (id. at 9).
Finally, plaintiff argues that the Vastrick Affidavit should be rejected (NYSCEF # 320 - Notice of Rejection) because Booston improperly failed to identify Vastrick as a witness in response to plaintiffs CPLR 3101 (d) demand thus depriving plaintiff an opportunity to depose him (id.). Plaintiff maintains its rejection despite Booston's use of Vastrick as a fact witness, not an expert witness, and that Booston argued that it was not precluded from securing an additional expert (NYSCEF #'s 321 - Response to Notice of Rejection, ¶'s 2-4; # 322 - Reply Aff, ¶'s 6; 14).
Plaintiff distinguishes the two cases that Booston raise in which East's opinions were rejected. As to the Maryland case, the court found that East failed to attach a probability to her decision. Given Picciochi's criticism that East was too definite is giving a 96% certainty to her findings, plaintiff argues that that Maryland case actually discredits Booston's expert (NYSCEF # 331 at 7). As to the New York case, plaintiff informs that East's opinion was rejected only because of the mechanics of the submission of East's statement rather than the substance of her findings (id. at 8). 9
Analysis
Plaintiffs motion for partial summary judgment is denied. Plaintiff is correct that its instant motion for summary judgment is not identical to its prior cross motion for the same in that plaintiff now raises CPLR 4519 and offers the East Report in support. However, given the denial of plaintiff s CPLR 4519 in limine motion, the remaining basis for plaintiffs partial summary judgment as a matter of law is the East Report. Plaintiffs motion is denied even if the court were to accept, for argument's sake, (i) that East's Report is admissible notwithstanding the certificate of compliance issue; (ii) that East may be qualified as an expert and her report considered; (iii) that Booston is precluded from relying on the Picciochi Report and rebuttal report,' (iv) that the Vastrick Affidavit must be rejected; and (v) that Weymouth is competent as a witness for plaintiff.
The court need not, and does not, determine these issues on the present motion.
As the First Department has already found, Booston's principal's affidavit showing that he authenticated the Disputed Amendment "raises an issue of fact whether that amendment was, as plaintiff alleges, a forgery" (171 A.D.3d 545; NYSCEF # 276 - Roshanfekr Affidavit, If 3). Viewing the facts in the light most favorable to Booston, the non-moving party, the court finds that there is still a genuine issue of material fact precluding summary judgment (see e.g. All State Flooring Distributors, L.P. v MD Floors, LLC, 131 A.D.3d 834, 836 [1st Dept 2015] [finding an affidavit disputing a signature, and providing exemplars to show differences, to be sufficient to raise an issue of fact]).
Given the finding that plaintiff failed to present a prima facie showing warranting summary judgment, plaintiffs argument that the East Report shifts to Booston the burden to establish authenticity is unavailing. In any event, even if, for argument's sake, plaintiff has established its prima facie case, Booston has sufficiently raised an issue of fact via Booston's principal's affidavit. As for plaintiffs argument that Booston assumed the burden to establish authenticity of the signature by asserting a counterclaim in reliance on that issue, plaintiff fails to show how a counterclaim for declaratory relief on the validity of the Disputed Amendment changes the standard for summary judgment for plaintiffs present motion.
Plaintiffs Motion Dismissing Booston's Affirmative Defenses and Counterclaim
Plaintiff argues that various of Booston's affirmative defenses and its single counterclaim should be stricken and dismissed. Plaintiff argues that Booston's first four affirmative defenses should be stricken based on Justice Andrew Borrok's prior adjudication of Booston's motion to dismiss plaintiffs causes of action (NSYCEF # 245 at 16); and that Booston's fifth through thirteenth affirmative defenses are pleaded in conclusory fashion and must be stricken (id. at 17). Booston is silent as to 10 this branch of plaintiffs motion to dismiss the affirmative defenses, which is now granted.
As for Booston's counterclaim, plaintiff argues that it should be dismissed on the same basis as plaintiffs argument to preclude Booston from authenticating the Disputed Amendment (id. at 17). Given the court's above rejection of plaintiffs preclusion argument under CPLR 4519, plaintiffs motion on this point is denied.
Friedphil's Motion for Summary Judgment (MS007)
Friedphil's motion for summary judgment seeks dismissal of plaintiffs two causes of action against Friedphil, which are for fraud and fraudulent concealment (NYSCEF # 217 - Complaint, ¶ 48-58). Friedphil argues that plaintiff admittedly dispensed with the due diligence undertaken by purchasers of similar real property in New York City (NYSCEF # 216 - Friedphil MOL, ¶ 15). Relying on the deposition of Steven Cherniak, who had assisted plaintiffs principal, Sheldon Solow, with the purchase of the Building (id., \ 19), the purchase was "a very quick process" and that the parties closed title and transferred the deed less than one month after the execution of the Contract of Sale (id., ¶ 20). Cherniak's testimony confirmed that plaintiff cut corners in conducting due diligence in a shortened period of time but that "[t]o the extent we needed to do due diligence, we did it" (NYSCEF # 221 -Cherniak EBT at 113:20-114:2).
Friedphil specifically highlights plaintiffs failure to obtain tenant estoppel certificates, which it posits is the custom and practice in the industry (NYSCEF # 216, ¶ 42). Friedphil notes that the Lease required Booston to execute such a certificate upon Friedphil's request in the event of a sale of the Building, which certificate would certify to the purchaser the status of the Lease (id). The clause Friedphil identifies provides that the certificate would certify that the Lease "is in full force and effect and . . . there are no defenses or offsets thereto" (NYSCEF # 222, § 19 of Rider). Cherniak testified that if plaintiff had prepared the estoppel certificate, it would have had the Lease in it and any amendment (NYSCEF # 221 at 155:4-6). Cherniak also testified that he suspects the estoppel certificate was not obtained, although he lacks personal knowledge, and that "there may not have been a requirement [to get the certificate] in an attempt to close this quickly, because it didn't really matter to the buyer simply because the buyer was buying the property subject to the risks" (id. at 160-162; 163:22-164:2).
Friedphil also argues that there can be no fraud as a matter of law as it asserts that plaintiff has failed to state any claim that there was a material misrepresentation by Friedphil upon which plaintiff relied to its detriment (NYSCEF # 216, 115). Friedphil adds that the Contract of Sale limited the survival of Friedphil's obligations following the closing, which warrants summary judgment in favor of Friedphil as a matter of law (id., ¶ 27). Specifically, Friedphil identifies three paragraphs of the Contract of Sale (id., ¶ 27-30) as follows:
Paragraph 5 of the rider to the Contract of Sale provides: "The acceptance of a deed by [plaintiff] shall be deemed to be a full performance of and discharge of any11
and all agreements and obligations on the part of [Friedphil] to be performed pursuant to the provisions of this agreement, except those, if any, which are herein specifically stated to survive delivery of the deed" (NYSCEF # 219, Rider at 2, § . 5).
Paragraph 18 of the rider provides: "It is agreed and understood that no representation has been made and that no responsibility is assumed by the seller with respect to the continued occupancy of the said premises, or any parts thereof, by any tenant or tenants now in possession" (id., Rider at 5, § 18). Friedphil notes that Cherniak testified that this language "means that the seller takes no responsibility for the tenant's occupancy of the space after the closing, whether they occupy or not" (NYSCEF # 228 at 198:4-11).
And paragraph 30 of the rider provides that "all representations and warranties contained herein or in any certificate or instrument delivered" in connection with the purchase shall not survive the closing. Purchaser's acceptance of the deed constitutes full performance and discharges seller's obligations under the Agreement (NYSCEF # 219 Rider at 8, § 30).
Friedphil asserts that these provisions unambiguously and unequivocally mean that following the closing, no written obligation survives with respect to any tenant or lease (NYSCEF # 216, ¶'s 32-33). Friedphil further argues that an assignment of lease associated with plaintiffs purchase of the Building constitutes a binding release (id., ¶'s 53-54).
It is noted that Friedphil failed to file such assignment of lease with its motion.
In opposition, plaintiff responds that because its claim against Friedphil is contingent on the authenticity of the Disputed Amendment; if the document's signature is found to have been forged, then plaintiffs claim against Friedphil would be moot (NYSCEF # 263 - Opp to MS007 at 3-4). Plaintiff posits that Friedphil's motion is accordingly premature and should be denied on that ground alone (id. at 4).
But plaintiff continues by arguing that the Contract of Sale does not bar a claim of fraud because the alleged fraud relates to facts peculiarly within Friedphil's knowledge as seller and not readily discoverable by plaintiff (id. at 4). Plaintiff asserts that it reasonably relied on the affirmative representations in the Contract of Sale, including Friedphil's representation annexing the rent roll "setting forth all tenants in the premises" and indicating that Booston's Lease was to expire in 2020 (id. at 6, quoting NYSCEF # 219, Rider § 16; NYSCEF # 235).
Setting forth the standard for its claim, plaintiff indicates that a misrepresentation of present facts or an active concealment of a material fact is actionable (NYSCEF # 263 at 8). Seeking to distinguish certain cases relied upon by Friedphil where a provision at hand was unambiguous, plaintiff contends that the Contract of Sale does not explicitly or implicitly preclude claims against fraudulent statements and misrepresentations (id. at 9-10). At the very least, plaintiff suggests 12 there is an issue of fact as to whether the Contract of Sale precludes a claim of fraud based on Friedphil's failure to disclose the Disputed Amendment (id. at 10).
Plaintiff adds that the extent of its due diligence is "irrelevant" - its failure to obtain an estoppel certificate is not a basis for Friedphil to avoid liability - as plaintiff was entitled to rely upon Friedphil's representations (id. at 11-12). Plaintiff continues that fraud claims are typically not capable of being decided on a motion for summary judgment (NYSCEF # 263 at 14).
In reply, Friedphil reiterates that the terms are unambiguous and must be deemed as binding on the parties, which plaintiff fails to address (NYSCEF # 271 -Reply in MS007, ¶'s 3, 10). Friedphil disputes plaintiffs contention that Friedphil's liability is contingent and dependent on whether the Disputed Amendment is authentic (id., ¶ 13). Rather, Friedphil argues that plaintiffs claims "solely" arise from plaintiffs failure to complete proper due diligence (id., ¶'s 15-16), which is contrary to Friedphil's position at the start of this litigation.
Friedphil previously argued in MS001 that "[wlhether or not Mr. Hill's signature is authentic is the very issue on which the entire litigation turns" (NYSCEF # 79 - Friedphil Aff, ¶ 9; NYSCEF # 61 - Friedphil MOL in MS001, ¶'s; 33).
Analysis
"The elements of a cause of action seeking to recover damages for fraud are a representation of material fact, the falsity of that representation, knowledge by the party who made the representation that it was false when made, justifiable reliance by the plaintiff, and resulting injury" (Lunal Realty, LLC v DiSanto Realty, LLC, 88 A.D.3d 661, 663-664 [2d Dept 2011]).
Even disregarding the seeming inconsistency of Friedphil's prior argument that this "entire litigation turns" on the authenticity of Hill's signature versus its present claim that its liability is not contingent on such authenticity, Friedphil's motion is denied.
Friedphil's argument that there was no material misrepresentation by Friedphil upon which plaintiff relied to its detriment is unavailing. The Rent Roll, annexed to the Lease by Section 16 to the Rider to the Contract of Sale, specified an October 2020 termination to Booston's lease, which would be materially incorrect should the Disputed Amendment turn out to be authentic. Whether plaintiffs reliance on the supposed 2020 termination date was justifiable, notwithstanding Cherniak's testimony that plaintiff conducted shortened due diligence, presents a question of fact (Lunal Realty, 88 A.D.3d at 665 [where seller of real property provided rent roll that turned out to misstate applicable rents, the court denied defendant-seller's motion for summary judgment, noting that "whether a party's reliance is reasonable is always nettlesome because it is so fact-intensive"] [quotation marks omitted]).
Citing Centro Empresarial Cempresa S.A. v Am. Movil, S.AB. de C. V., (17 N.Y.3d 269, 272 [2011]), Friedphil argues that the parties' assignment of lease is a 13 binding release. Friedphil, however, fails to include the referenced assignment of lease with its motion papers, thus Friedphil's argument is rejected. Given the absence of further legal arguments to support its motion and a lack of response to plaintiffs arguments or supporting cases such as Danann Realty Corp. v Harris (5 N.Y.2d 317, 320-321 [1959]) and Stambovsky v Ackley (169 A.D.2d 254, 259 [1st Dept 1991] [citing Danaan and noting that even express contractual disclaimers will sometimes not be given effect]; see also, TIAA Glob. Invs., LLC v One Astoria Square LLC, 127 A.D.3d 75, 87 [1st Dept 2015] [indicating circumstances where a fraud claim may be sustained notwithstanding contractual language that may otherwise be preclusive]), Friedphil fails to show its motion is meritorious. Accordingly, Friedphil's motion to dismiss the complaint against Friedphil is denied.
CONCLUSION
In view of the above, it is ORDERED that, as to MS006:
the branch of plaintiff 35 West Realty Co., LLC's motion for an order in limine under CPLR 4519 precluding Booston from offering certain testimony in this motion is denied;
the branch of plaintiffs motion for an order granting partial summary judgment on its first cause of action is denied;
the branch of plaintiffs motion for an order dismissing Booston LLC's first, second, and fourth through thirteenth affirmative defenses is granted;
the branch of plaintiff s motion for an order dismissing Booston's counterclaim is denied; and
the branch of plaintiffs motion seeking to sever and continue plaintiffs remaining causes of action against Booston and Friedphil is denied as moot.' and it is further
ORDERED that, as to MS007, the motion of defendant Friedphil Realty Corp. for a summary judgment order dismissing plaintiffs complaint in its entirety against Friedphil is denied; and it is further
ORDERED that plaintiff is to serve a notice of entry upon defendants in both MS006 and MS007 within 10 days of entry of this order. 14