Opinion
38901/06.
Decided January 6, 2009.
Tratner Molloy Goodstein LLP, Jason Y Goodstein, Esq., NY NY, Plaintiff.
Herrick Feinstein LLP, Patricia M Graham, Esq., NY NY, Defendant.
This action deals with a real estate transaction that never closed. Plaintiff 447 CLINTON AVENUE, LLC [447 CLINTON] commenced the instant action for: specific performance of a real estate contract; money damages for breach of contract; and, the return to plaintiff of the $200,000.00 down payment held in escrow by defendant HINDY ASSOCIATES, P.C., as Escrowee [HINDY]. Defendant CLINTON RISING, LLC [CLINTON RISING] moves for summary judgment, pursuant to CPLR Rule 3212, to: dismiss the entire complaint; discharge and cancel the notice of pendency placed by plaintiff on the property; and, award CLINTON RISING judgment on its counterclaims, with the Court declaring that defendant CLINTON RISING is entitled to retain the $200,000 deposit made by the plaintiff under the contract, directing that HINDY, as Escrowee, pay the $200,000.00 held in escrow, with any interest accrued, to defendant CLINTON RISING, and, awarding CLINTON RISING its costs in this action. Plaintiff opposes, alleging that there are triable issues of fact precluding summary judgment for defendant CLINTON RISING.
The Court grants summary judgment to defendant CLINTON RISING on that branch of its motion to dismiss plaintiff 447 CLINTON's complaint. The notice of pendency for the subject premises is cancelled. Defendant HINDY, as Escrowee, is directed to pay the $200,000.00 down payment it now holds in escrow, without interest, to defendant CLINTON RISING. Further, summary judgment is granted to defendant CLINTON RISING on the first two causes of action in its counterclaim. Defendant CLINTON RISING will receive the $200,000.00 down payment of plaintiff 447 CLINTON as liquidated damages and the Kings County Clerk is directed to cancel the notice of pendency for the subject premises. Partial summary judgment on liability is granted to defendant CLINTON RISING on its third counterclaim cause of action for money damages it suffered as a result of plaintiff 447 CLINTON's failure to perform its contractual obligations. A trial will be held to determine CLINTON RISING's money damages.
Background
Plaintiff 447 CLINTON, on April 24, 2006, entered into a contract with defendant CLINTON RISING for the purchase of real property known as 447 Clinton Avenue, Brooklyn, New York for $4,000,000.00 [exhibit A of motion]. The premises contain a turn-of-the-century mansion and carriage house, which plaintiff 447 CLINTON planned to convert into residential apartments. Upon the execution of the contract, plaintiff 447 CLINTON delivered a down payment check of $200,00.00 to defendant CLINTON RISING's counsel, HINDY, as Escrowee, pursuant to ¶ 42 of the first rider to the contract, which states that this money "shall be held in a non-interest bearing IOLA account in escrow . . . by Seller's attorney, Hindy Associates, P.C. (Escrow Agent)."
¶ 34 of the first rider to the contract states that "[i]f the Purchaser defaults in the performance of the material terms of this Contract, then, and in such event, all sums of money paid or deposited on account of the purchase price shall be retained by the Seller as liquidated damages." The mortgage contingency clause, in the third rider of the contract, states that:
This Contract is conditioned upon Purchaser securing a Conventional Mortgage Loan in the amount of $2,000,000.00 for a period of 20/25 years with interest . . . at the prevailing rate at the time of closing to obtain a portion of proceeds necessary to purchase the subject premises. In the event a commitment for such loan is not secured from a lending institution within forty-five (45) days from the date of this Contract . . . either party may cancel this agreement upon written notice to the other, whereupon this Contract shall be null and void . . . Purchaser is obligated to notify seller of Purchaser having obtained a written mortgage commitment no later than the expiration of the time period set for obtaining the written mortgage commitment. " [ Emphasis added ]
Thus, June 8, 2006, forty-five days subsequent to the execution of the contract was the deadline for plaintiff to secure a mortgage commitment, according to the plain language of the mortgage contingency clause, or plaintiff could lose the down payment as liquidated damages.
Isaac Broyn, plaintiff 447 CLINTON's managing member, prior to executing the contract of sale with CLINTON RISING, received an April 11, 2006-letter of intent from Doral Bank [exhibit I of motion] for financing the purchase and renovation of 447 Clinton Avenue. Doral Bank 's letter of intent clearly states, on page 4, that "this letter is not a letter of commitment, nor is it intended to be a letter of commitment and the Bank is not bound to any of the terms and conditions herein outlined."
Mr. Broyn, at his September 20, 2007 examination before trial [exhibit W of motion], provided sworn testimony testified about the Doral Bank letter of intent, at p. 49, line 11 — p. 50, line 16:
Q. You mentioned earlier that you had a bank lined up to provide financing to close the transaction with Mr. Freeman [managing member of CLINTONRISING]; is that correct?
A. Correct.
Q. Is this what you were referring to?
A. Yes.
Q. Was this a firm commitment to loan monies?
A. This is a —
Q. Do you know what a commitment letter is, Mr. Broyn?
A. Yes.
Q. Was this a commitment letter?
A. I'm checking. I believe so.
Q. Do you see the first line? It says, "I am pleased to inform you that Doral Bank is willing to consider your request for acquisition and construction financing."
A. Yes.
Q. Did Doral Bank actually commit to fund these monies?
A. They gave us this letter of intent.
Q. Letter of intent, but not a fully firm commitment: isn't that correct, Mr. Broyn?
A. Yes.
Then, Mr. Broyn, testified as follows, in his deposition, at p. 72, line 4 — p. 73, line 14:
Q. Do you see a mortgage contingency clause on that same page, Mr. Broyn?
A. Yes.
Q. I'm reading in the middle of it. It says, "In the event a commitment for such loan is not secured from a lending institution within forty-five (45) days from the date of this Contract or such longer period as hereinafter provided, then in such an event either party may cancel this agreement upon written notice to the other —" and it continues.
Do you see that provision? Do you recall that mortgage contingency clause?
A. Yes.
Q. Did you ever cancel this contract because you didn't have sufficient funds?
A. No.
Q. Okay. It says — — there's a little asterisk you'll see there and after the asterisk it says. "Purchaser is obligated to notify seller of Purchaser having obtained a written mortgage commitment no later than the expiration of the time period set for obtaining the written mortgage commitment." Do you see that?
A. Yes.
Q. Did you ever notify Mr. Freeman that you obtained a mortgage commitment?
A. No.
Further, at p. 76, lines 8-10, Mr. Broyn testified:
Q. You never provided any commitment; isn't that correct, Mr. Broyn?
A. Yes.
The contract also had a contingency clause, ¶ 35 of the first rider to the contract of sale, by which defendant CLINTON RISING was required to obtain approval from the New York City Landmarks Preservation Commission [LPC] for the use of an additional 3,300 square feet for residential use by an extension of the carriage house. ¶ 2 of the third rider to the contract set the Closing Date as 60 days "from the date the approvals referred to in Rider Paragraph 35 have been received" from the LPC and the New York City Department of Building [DOB]. Then, handwritten in the printed contract, it states, "[i]f same is not obtained by 11/30/06 purchaser may cancel this contract receive back its deposit. If verbal approval is obtained, purchaser's right to cancel is waived." Mr. Broyn, at p. 70 of his examination before trial, testified that the above clause was handwritten by his attorney. With respect to the Closing Date, neither the contract of sale nor any of the riders has a "time of the essence" clause.
The LPC approved the extension to the carriage house at its November 21, 2006 public hearing [exhibit B of motion] and Mr. Freeman received written notice of this approval in letter from the LPC, dated December 5, 2006 [exhibit C of motion]. Mr. Freeman alleges, in ¶ 17 of his affidavit in support of the motion, that CLINTON RISING incurred expenses in excess of $80,000.00 to obtain the LPC and DOB approvals, to pay for attorneys, architects, testing at the site, and an expediter. The DOB approved the "perforated" plans on November 22, 2006 [exhibit D of motion].
In a fax [exhibit E of motion], dated November 27, 2006, CLINTON RISING's counsel, George Hindy, Esq., advised plaintiff's counsel, Aaron Stein, Esq., that the approvals had been obtained and sought, pursuant to the contract, to schedule a closing date. Mr. Stein, in a letter dated December 1, 2006 [exhibit F of motion] wrote to Mr. Hindy to claim that 447 CLINTON "elects to cancel" the contact because CLINTON RISING did not provide LPC approval of the extension, as provided in ¶ 35 of the first rider to the contract. Mr. Stein attached an example of a "Certificate of Appropriateness," for another building, which he claimed was a "Landmark Approval."
Defendant CLINTON RISING attached to its motion an affidavit in support by Mitchell A. Korbey Esq., counsel to Herrick, Feinstein, LLP, attorneys for CLINTON RISING, made upon Mr. Korbey's personal knowledge and review of the documents in the instant action. Mr. Korbey is an expert in land use and zoning in New York City. Prior to becoming a member of the New York Bar, Mr. Korbey earned a Master's degree in City and Regional Planning from Cornell University, held various positions with the New York City Planning Department, including Director of the Brooklyn Borough Office, and served for six years as a Commissioner of the New York City Board of Standards and Appeals. He has extensive experience with the LPC and DOB. Mr. Korbey states that there is a difference between an LPC "approval" and a "Certificate of Appropriateness." He says, in ¶ 12 of his affidavit, that "[a]s understood in the industry, in matters of this type an approval' is granted by the LPC the Commission itself after a vote at a public hearing . . . Approval was obtained with the LPC's vote on November 21, 2006." In discussing ¶ 2 of the third rider to the contract, he notes, in ¶ 14 of his affidavit, that a "verbal approval" "appears to refer to something less formal that an approval." Then, he states, in ¶ 15 of his affidavit, that:
The record here establishes that Clinton Rising obtained LPC approval with the LPC's vote at the hearing and public meeting on November 21, 2006, over a week before the November 30, 2006 date set in the parties' Contract. And, neither the Contract nor any other documents made that date time of the essence. Therefore, as a matter of New York law, Clinton Rising was in any event entitled to a reasonable adjournment of the November 30, 2006 date.
Mr. Korbey continues, in ¶ 17, that "[t]he approved perforated plans issued by the DOB on November 22, 2006 evidence DOB 's approval on that date and demonstrate that all substantive review by the DOB of the project's compliance with the building code and Zoning Resolution was completed."
In early December 2006 counsel for both 447 CLINTON and CLINTON RISING exchanged letters by which plaintiff purported to cancel the contract of sale and defendant CLINTON RISING rejected plaintiff's demand for the return of the $200,000.00 down payment held in escrow [exhibits G, H, J, K and L of motion].
On December 21, 2006, counsel for CLINTON RISING sent a letter to plaintiff's counsel [exhibit M of motion], to make another good faith attempt to schedule a closing in accordance with the contract of sale. The letter formally demanded that plaintiff appear at the Manhattan office of Herrick, Feinstein, LLP on February 21, 2007 and deliver the $3,800,000.00 balance of the purchase price, for which CLINTON RISING would then convey title to the premises. Further, CLINTON RISING demanded that "Purchaser immediately provide proof to Seller that Purchaser is ready, willing and able to close, and that Purchaser has, in place now, adequate funds to pay the balance of the purchase price." Plaintiff never provided that evidence.
In a January 24, 2007-letter [exhibit N of motion], CLINTON RISING's counsel notified 447 CLINTON's counsel that the perforated plans were at its office and available for review. Neither plaintiff nor its counsel reviewed these plans.
Plaintiff commenced the instant action against defendants for specific performance of the April 24, 2006-contract of sale, money damages for breach of contract, and the return of the $200,000.00 down payment held in escrow by its complaint, dated December 18, 2006. The summons, complaint and a notice of pendency for the premises at 447 Clinton Avenue were all filed with the office of the Kings County Clerk on December 19, 2006. Defendant CLINTON RISING answered and counterclaimed on February 16, 2007.
Plaintiff's counsel, in a February 15, 2007-letter [exhibit P of motion], informed CLINTON RISING's counsel that "[a]s you have accepted service of process in the above matter on behalf your client, you are undoubtedly aware that this matter is now is litigation. Accordingly your confirmation of a closing date is hereby rejected."
Mr. Freeman, CLINTON RISING's managing member, appeared on February 21, 2007 at the offices of Herrick, Feinstein, LLP, for the closing. He states, in ¶ 38 of his affidavit in support of the motion, that on that date "Clinton Rising was fully ready, willing and able to deliver a deed conveying title to the Property in accordance with the Contract," but, he continues, in ¶ 39, that plaintiff failed to appear.
CLINTON RISING made one last attempt to close the transaction and in a letter to 447 CLINTON's counsel [exhibit R of motion], dated February 22, 2007, CLINTON RISING's counsel deemed "Purchaser's failure to appear at the closing as a request for an adjournment." The closing was adjourned for thirty days to March 23, 2007 with " TIME OF THE ESSENCE as to Purchaser's obligations to close on that date." Plaintiff's counsel again rejected the new closing date, in a letter dated March 5, 2007 [exhibit T of motion].
Mr. Freeman, in ¶ 42 of his affidavit in support, states that he appeared on March 23, 2007 "on behalf of Clinton Rising at the closing, ready, willing and able to close the transaction in accordance with the Contract, with all the required approvals as well as the Certificate of Appropriateness issued for the Property. Nevertheless, Plaintiff again failed and refused to appear."
Finally, CLINTON RISING gave plaintiff 447 CLINTON formal notice, in a letter dated March 27, 2007 [exhibit U of motion], that it had defaulted under the contract of sale, that the contract was cancelled, and HINDY, as Escrowee, was directed to release the $200,000.00 down payment held in escrow and deliver it to CLINTON RISING.
Discussion
The proponent of a summary judgment motion must make a prima facie showing of entitlement to judgment as a matter of law, tendering sufficient evidence to eliminate any material issues of fact from the case. ( See Alvarez v Prospect Hospital, 68 NY2d 320, 324; Zuckerman v City of New York, 49 NY2d 557, 562; Sillman v Twentieth Century-Fox Film Corp., 3 NY2d 395, 404). Failure to make such a showing requires denial of the motion, regardless of the sufficiency of the opposing papers. ( Winegrad v New York University Medical Center, 64 NY2d 851 Qlisanr, LLC v Hollis Park Manor Nursing Home, Inc. , 51 AD3d 651 , 652 [2d Dept 2008]; Greenberg v Manlon Realty, 43 AD2d 968, 969 [2nd Dept 1974]).
CPLR 3212 (b) requires that for a court to grant summary judgment the court must determine if the movant's papers justify holding as a matter of law "that there is no defense to the cause of action or that the cause of action or defense has no merit." The evidence submitted in support of the movant must be viewed in the light most favorable to the non-movant. ( Marine Midland Bank, N.A. v Dino Artie's Automatic Transmission Co., 168 AD2d 610 [2d Dept 1990]). Summary judgment shall be granted only when there are no issues of material fact and the evidence requires the court to direct judgment in favor of the movant as a matter of law. ( Friends of Animals, Inc., v Associated Fur Mfrs., 46 NY2d 1065).
Defendant CLINTON RISING has met its CPLR Rule 3212 burden with a prima facie showing to the Court that as a matter of law "the cause of action [of plaintiff 447 CLINTON] . . . has no merit," and that after viewing the evidence in support of CLINTON RISING in the light most favorable to 447 CLINTON there are no issues of material fact that would bar the Court from directing judgment in CLINTON RISING's favor. Plaintiff, in its opposition papers, fails to show that there are triable issues of fact.
In the instant action, plaintiff claims that defendant CLINTON RISING breached the contract because it did not obtain a "Certificate of Appropriateness" by November 30, 2006. This is specious. The express language of the contract, in ¶ 2 of the third rider to the contract, clearly set the Closing Date as 60 days "from the date the approvals referred to in Rider Paragraph 35 have been received" from the LPC and the DOB. Then, handwritten in the printed contract by plaintiff's counsel, it states, "[i]f same is not obtained by 11/30/06 purchaser may cancel this contract receive back its deposit. If verbal approval is obtained, purchaser's right to cancel is waived [ emphasis added ]." The express contractual language never required CLINTON RISING to obtain a Certificate of Appropriateness. The undisputed documentary evidence demonstrates the CLINTON RISING obtained all the requisite approvals from the LPC and the DOB prior to November 30, 2006. Thus, 447 CLINTON 's "right to cancel is waived." "A fundamental tenet of contract law is that agreements are construed in accordance with the intent of the parties and the best evidence of the parties' intent is what they express in their written contract ( see e.g. Innophos, Inc. v Rhodia, S. A., 10 NY3d 25, 29)." ( Goldman v White Plains Center for Nursing Care , 11 NY3d 173 , 176). The Court of Appeals instructed in White v Continental Cas. Co. ( 9 NY2d 264, 267), that:
It is well settled that "[a] contract is unambiguous if the language it uses has a definite and precise meaning, unattended by danger of misconception in the purport of the [agreement] itself, and concerning which there is no reasonable basis for a difference of opinion'" ( Greenfield v Philles Records, 98 NY2d 562, 569 [2002] [brackets in original], quoting Breed v Insurance Co. of N. Am., 46 NY2d 351, 355 [1978], rearg denied 46 NY2d 940 [1979]). "Thus, if the agreement on its face is reasonably susceptible of only one meaning, a court is not free to alter the contract to reflect its personal notions of fairness and equity" ( Greenfield, 98 NY2d at 569-570 [citations omitted]).
( See Vigilant Ins. Co. v Bear Stearns Companies, Inc. , 10 NY3d 170 , 177; Antoine v City of New York , 56 AD3d 583 [2d Dept 2008]; Vuono v Interpharm Holdings, Inc., 55 NY3d 825 [2d Dept 2008]).
Further, as Mr. Korbey attested to, in New York City real estate transactions the terms "approval," "verbal approval," "building permit," and "Certificate of Appropriateness" have particular and different meanings. Counsel for plaintiff 447 CLINTON is the one who chose to modify ¶ 2 of the third rider to the contract with the handwritten "[i]f same [approvals by the LPC and the DOB] is not obtained by 11/30/06 purchaser may cancel this contract receive back its deposit. If verbal approval is obtained, purchaser's right to cancel is waived." Therefore, if contract language is ambiguous if must be construed against the drafter. "Any ambiguity in contact language must be construed against the party that drafted the contact, which in this instance was the plaintiff ( see Matter of Cowen Co. v Anderson, 76 NY2d 318." ( Computer Assoc. Intern. Inc. v U.S. Balloon Mfg., Inc. , 10 AD3d 699 , 700 [2d Dept 2004]). "In cases of doubt or ambiguity, a contract must be construed most strongly against the party who prepared it and favorably to a party who had no voice in the selection of its language (4 Williston, Contracts, § 621; 10 NY Jur, Contracts, § 223)." ( 67 Wall St. Co. v Franklin Nat. Bank, 37 NY2d 245, 249). ( See Shaw v Manufacturers Hanover Trust Co., 66 NY2d 172, 176; Jacobson v Sassower, 66 NY2d 991, 993; Croman v Wacholder , 2 AD3d 140 , 143 [1d Dept 2003]; Bear Mountain Books, Inc. v Woodbury Common Partners, 232 AD3d 595 [2d Dept 1996]).
Also, plaintiff's counsel's handwritten addition to ¶ 2 of the third rider to the contract, "[I]f verbal approval is obtained, purchaser's right to cancel is waived," takes precedence over typewritten terms in the event of any conflict. "It is a fundamental principle of contract interpretation that when a handwritten or typewritten provision conflicts with the language of a preprinted form document, the former will control, as it is presumed to express the latest intention of the parties' ( Kratzenstein v Western Assur. Co., 116 NY 54, 57)." ( Home Fed. Sav. Bank v Sayegh, 250 AD2d 646 [2d Dept 1998]). ( See Poel v Brunswick-Balke-Collender Co. of New York, 216 NY 310, 322; Dazzo v Kilcullen , 56 AD3d 415 [2d Dept 2008]). It is clear that pursuant to ¶ 35 of the first rider to the contract and ¶ 2 of the third rider to the contract that plaintiff's limited right to cancel the contract was waived on November 22, 2006 with the verbal approval of the LPC and the approval of the DOB. ( See Thompson v Barry Berman Realty Associates, 300 AD2d 390 [2d Dept 2002]).
Next, defendant CLINTON RISING demonstrated that plaintiff 447 CLINTON defaulted by not receiving a mortgage commitment within 45 days of the contract date and by refusing to close. Thus, CLINTON RISING is entitled to retain the $200,000.00 down payment held by HINDY, as Escrowee. "It has been well settled in this State that a vendee who defaults on a real estate contact without lawful excuse, cannot recover the down payment." ( Maxton Builders v Lo Galbo, 68 NY2d 373, 378). In Di Blanda v ADC Pinebrook, PC ( 44 AD3d 702 [2d Dept 2007]), plaintiff similarly "failed to obtain a mortgage commitment within 45 days of her attorney's receipt of the contract, and failed to provide reasonable timely notice of her purported inability to secure a commitment . . . Under these circumstances, the plaintiff had no authority to cancel the contract, and the defendants were entitled to retain the down payment." ( See Gillette v Meyers, 42 AD3d 654 [2d Dept 2007]; New Colony Homes, Inc. v Long Island Property Group, LLC , 21 AD3d 1072 [2d Dept 2005]; Diaz v Rodriguez , 11 AD3d 258 [1d Dept 2004]; Orea v D'Auria, 160 AD2d 694 [2d Dept 1990]; Levine v Trattner, 130 AD2d 462 [2d Dept 1987]).
Even if CLINTON RISING overlooked plaintiff's failure to secure a mortgage commitment, plaintiff's failure to close "constituted a willful default, and sellers were therefore entitled to retain the down payment." ( Zahl v Greenfield, 162 AD2d 449 [2d Dept 1990]). Defendant CLINTON RISING, pursuant to ¶ 34 of the first rider to the contract, has the right to retain the down-payment as a result of plaintiff 447 CLINTON 's failure to close, because "[i]f the Purchaser defaults in the performance of the material terms of this Contract, then, and in such event, all sums of money paid or deposited on account of the purchase price shall be retained by the Seller as liquidated damages." ( See Capece v Robbins , 46 AD3d 589 [2d Dept 2007]; Armas v Yuska , 2 AD3d 660 [2d Dept 2003]; Eichenstein v Glassman, 302 AD2d 421 [2d Dept 2003]).
Also, plaintiff's claim that CLINTON RISING did not timely obtain approvals by November 30, 2006 fails as a matter of law because the contract performance date was never made time of the essence. There is no language in either the instant real estate contact or any of the riders that makes the closing date "time of the essence." "The mere designation of a particular date upon which a thing is to be done does not result in making that date the essence of the contract." ( Ballen v Potter, 251 NY 224, 228). However, when CLINTON RISING's counsel informed 447 CLINTON's counsel in its February 22, 2007 letter that the closing was adjourned for thirty days to March 23, 2007 with " TIME OF THE ESSENCE as to Purchaser's obligations to close on that date," March 23, 2007 became the time of the essence date. The Court of Appeals in ADC Orange, Inc. v Coyote Acres, Inc. ( 7 NY3d 484 , 489-490), instructed that:
Although the most effective way for a party to make time of the essence is to say so in the contract, we recognize that there may be circumstances in which a party would be justified in making time of the essence even though it was not articulated in the agreement. In Levine v Sarbello, 67 NY2d 790 [1986], affg 112 NY2d 197 [2d Dept 1985], we acknowledged that it is possible for the seller to convert a non-time-of-the-essence contract into one making time of the essence by giving the buyer "clear, unequivocal notice" and a reasonable time to perform.
( See Bowery Boys Realty, Inc. v H.S.N. Realty Corp ., 55 AD3d 766 [2d Dept 2008]; Smith v Lynch , 50 AD3d 881 [2d Dept 2008]).
Plaintiff's opposition papers to defendant CLINTON RISING's motion vainly attempt to create issues of fact where they do not exist. Further, plaintiff's opposition papers do not dispute key facts that mandate summary judgment for CLINTON RISING. Plaintiff does not dispute that it never obtained a mortgage commitment as required by the contract of sale. Isaac Broyn, in his affidavit in opposition to the motion, is silent about his deposition admission that he failed to secure a mortgage commitment. Further, plaintiff's counsel, Aaron Stein, Esq., in his affidavit in opposition to the motion, never addresses his client's failure to secure mortgage financing. This material breach of the contract of sale is enough to grant summary judgment to CLINTON RISING and award the $200,000.00 down payment held in escrow to CLINTON RISING.
Additionally, plaintiff failed to offer any expert or other testimony to dispute the testimony of CLINTON RISING's expert, Mitchell Korbey, Esq., a former Commissioner of the New York City Board of Standards and Appeals. Thus, there is no dispute as to what constitutes LPC "approval" given on November 21, 2006 and DOB "approval" given on November 22, 2006.
Next, plaintiff does not dispute that the contract requirement for CLINTON RISING to obtain the LPC and the DOB approvals was never made time of the essence, and when time is not of the essence the party charged with performance is entitled to a reasonable adjournment of the time to perform. Thus, even if the approvals had not been obtained by the November 30, 2006-contract date, and they were obtained by November 22, 2006, CLINTON RISING would be entitled to a reasonable adjournment as a matter of law. Therefore, plaintiff's purported contract termination letters in early December 2006 are invalid.
Summary judgment is granted to CLINTON RISING on its motion to dismiss 447 CLINTON's complaint, and to CLINTON RISING on its first two counterclaims, for a declaration of contractual default by 447 CLINTON and the cancellation of the notice of pendency for the subject premises. Partial summary judgment on liability is granted to CLINTON RISING on its third counterclaim for money damages it suffered. A trial will be conducted to determine CLINTON RISING's money damages.
CPLR § 6501 provides that the filing of a notice of pendency against a property is to give constructive notice to any purchaser of real property or encumbrancer against real property of an action that "would affect the title to, or the possession, use or enjoyment of real property, except in a summary proceeding brought to recover the possession of real property." The Court of Appeals, in 5308 Realty Corp. v O Y Equity Corp. ( 64 NY2d 313, 319), commented that "[t]he purpose of the doctrine was to assure that a court retained its ability to effect justice by preserving its power over the property, regardless of whether a purchaser had any notice of the pending suit," and, at 320, that "the statutory scheme permits a party to effectively retard the alienability of real property without any prior judicial review."
CPLR § 6514 (a) provides for the mandatory cancellation of a notice of pendency by:
The Court , upon motion of any person aggrieved and upon such notice as it may require, shall direct any county clerk to cancel a notice of pendency , if service of a summons has not been completed within the time limited by section 6512; or if the action has been settled, discontinued or abated ; or if the time to appeal from a final judgment against the plaintiff has expired; or if enforcement of a final judgment against the plaintiff has not been stayed pursuant to section 551. [ emphasis added ]
The plain meaning of the word "abated," as used in CPLR § 6514 (a) is the ending of an action. "Abatement" is defined (Black's Law Dictionary 3 [7th ed 1999]) as "the act of eliminating or nullifying." "An action which has been abated is dead, and any further enforcement of the cause of action requires the bringing of a new action, provided that a cause of action remains (2A Carmody-Wait 2d § 11.1)." ( Nastasi v Natassi, 26 AD3d 32, 40 [2d Dept 2005]). Further, Nastasi at 36, held that "[c]ancellation of a notice of pendency can be granted in the exercise of the inherent power of the court where its filing fails to comply with CPLR § 6501 ( see 5303 Realty Corp. v O Y Equity Corp., supra at 320-321; Rose v Montt Assets, 250 AD2d 451, 451-452 [1d Dept 1998]; Siegel, NY Prac § 336 [4th ed])." Thus, the dismissal of the instant complaint must result in the mandatory cancellation of 447 CLINTON's notice of pendency against the property "in the exercise of the inherent power of the Court."
Conclusion
Accordingly, it is
ORDERED, that the motion of defendant CLINTON RISING, LLC, pursuant to CPLR Rule 3212, for summary judgment, is granted to the extent that: the complaint of plaintiff 447 CLINTON AVENUE, LLC is dismissed; the notice of pendency placed by plaintiff 447 CLINTON AVENUE, LLC for the premises located at 447 Clinton Avenue, Brooklyn, New York, County of Kings (Block 1961, Lot 8) is discharged; the Kings County Clerk is directed to cancel the notice of pendency for the premises located at 447 Clinton Avenue, Brooklyn, New York, County of Kings (Block 1961, Lot 8); defendant HINDY ASSOCIATES, P.C., as Escrowee, is directed to pay to defendant CLINTON RISING, LLC, $200,000.00, without interest, that it holds in escrow, as liquidated damages for plaintiff 447 CLINTON AVENUE, LLC's failure to perform its contractual obligations, pursuant to the April 24, 2006-contract of sale for the purchase of 447 Clinton Avenue, Brooklyn, New York; summary judgment is granted to defendant CLINTON RISING, LLC on its first two counterclaims for a declaration of contractual default by plaintiff 447 CLINTON AVENUE, LLC and the cancellation of the notice of pendency for the premises at 447 Clinton Avenue, Brooklyn, New York, County of Kings (Block 1961, Lot 8); and, partial summary judgment on liability is granted to defendant CLINTON RISING, LLC on its third counterclaim for money damages it suffered as a result of plaintiff 447 CLINTON AVENUE, LLC's failure to perform its contractualobligations; and it is further
ORDERED, that a damages trial shall be conducted to determine the moneydamages suffered by defendant CLINTON RISING, LLC due to plaintiff 447 CLINTON AVENUE, LLC's failure to perform its obligations pursuant to the April 26, 2006-contract of sale between 447 CLINTON AVENUE, LLC and CLINTON RISING, LLC.
This constitutes the Decision and Order of the Court.