Opinion
114/04.
Decided November 16, 2006.
Domenick Napoletano for Plaintiff.
Stephen N. Erlitz, for Defendant.
Upon the foregoing papers, defendant Anastasios Perlegis moves for an order: (1) pursuant to CPLR 3126, striking plaintiff's complaint for failure to comply with court-ordered discovery; or (2) pursuant to CPLR 3126, precluding plaintiff from introducing any evidence at trial which has not been previously provided during discovery; or (3) pursuant to CPLR 3212, granting summary judgment dismissing plaintiff's complaint.
Background
On or around February 1, 1998, plaintiff Best Way Realty Corp., as the tenant, and defendant Anastasios Perlegis, as the landlord, entered into a written lease agreement for commercial space located at 1306 Avenue U in Brooklyn, New York. That agreement contained a rider giving plaintiff, the tenant, the option to purchase the premises at the end of the lease.
According to plaintiff's complaint, plaintiff attempted to exercise its purchase option by letter on January 19, 2002. In a letter dated January 31, 2002, defendant refused to complete the option. On or around January 2, 2004, plaintiff filed a summons and complaint against defendant seeking specific performance of the purchase option or, in the alternative, damages based on its loss of the bargain. In his answer, defendant raised a number of affirmative defenses, including the allegation that the purchase option is unenforceable, and a counterclaim for unpaid rent and other damages. Discovery ensued.
On or around April 1, 2004, defendant served a number of discovery requests, including interrogatories, which plaintiff was required to respond to by May 2004. According to defendant, plaintiff failed to serve any response to the April 1, 2004 requests, and therefore, on November 17, 2004, defendant moved to strike plaintiff's complaint for failure to comply with discovery demands. On July 8, 2005, this court issued an order stating, in relevant part, that "Defendant's motion to strike complaint . . . or for preclusion is denied provided that Plaintiff respond to Defendant's discovery demands dated April 1, 2004 . . . on or before August 15, 2005." That order also directed that plaintiff's deposition be taken within 30 days of its service of documents and interrogatory responses.
On January 3, 2006, defendant initially filed the instant motion to strike plaintiff's complaint and/or for preclusion based on discovery failure, and/or for summary judgment. When plaintiff did not appear for oral argument on May 5, 2006, the return date of the application, this court granted defendant's motion on default. After that decision, the court was made aware that plaintiff's default may have been caused by some confusion arising from the court's prior rescheduling of the matter. Accordingly, on August 17, 2006, this court vacated its May 5, 2006 order. Having vacated the default order, the court will now consider defendant's motion on the merits.
Motion to Strike/Discovery Requests
According to defendant, "[i]t is undisputed that Plaintiff has failed to serve any responses [to defendant's April 1, 2004 discovery requests] to date." Defendant thus argues that, pursuant to CPLR 3126, plaintiff's complaint should be stricken. Moreover, defendant argues that dismissal of plaintiff's complaint is also required based on this court's July 8, 2005 order stating that defendant's motion was denied "provided that" plaintiff responded to defendant's discovery requests.
Plaintiff's attorney alleges that he did serve defendant with discovery responses on August 26, 2005, and plaintiff attaches its interrogatory responses and supporting documents, and an affidavit of service stating that said discovery responses were mailed by first class mail to defendant's attorney on August 26, 2005. Plaintiff's attorney admits that his service of the responses was eleven days after the court's deadline, but states that the delay was due to plaintiff's tardiness in retrieving documents from its prior counsel's office. Moreover, plaintiff's attorney notes that defendant's counsel had granted plaintiff's request for a ten-day extension of the court ordered deadline.
In reply, defendant argues that plaintiff's claim that it served these responses is "suspect," and that, in any case, the responses were late and are in improper form and not signed by the plaintiff.
Pursuant to CPLR 3126 (3), a court may issue "an order striking out pleadings or parts thereof" as a sanction against "a party [who] refuses to obey an order for disclosure or wilfully fails to disclose information which the court finds ought to have been disclosed." It is well established, however, that actions should be resolved on the merits wherever possible ( see e.g. Cruzatti v. St. Mary's Hosp., 193 AD2d 579, 580). Accordingly, the "harsh remedy of the striking of a pleading should not be employed without a showing of a deliberate or willful refusal to disclose" ( id.).
Despite defendant's allegation that he did not receive plaintiff's responses, plaintiff's affirmation of service raises a presumption that a proper mailing occurred, and defendant's denial of receipt, standing alone, is insufficient to overcome that presumption ( see e.g. Kihl v. Pfeffer, 94 NY2d 118, 122). Thus, in this case, it appears that plaintiff has "substantially, albeit tardily, complied" with defendant's discovery demands and with this court's discovery order ( Mawson v. Historic Props., LLC, 30 AD3d 480, 481). As there is no evidence that plaintiff's conduct was willful or contumacious, that part of defendant's motion seeking to strike plaintiff's complaint is denied ( see e.g. Mawson, 30 AD3d at 481; Cruzatti, 193 AD2d at 580). That branch of defendant's motion seeking to preclude plaintiff from presenting evidence at trial is also denied as defendant is now in possession of such discovery and no prejudice resulting from a delay in providing such discovery has been shown.
Purchase Option
Defendant also argues that the court should grant summary judgment dismissing plaintiff's complaint on the ground that the purchase option in the February 1, 1998 contract is vague, indefinite and unenforceable. The purchase option in question provides that:
"Upon the expiration of the lease, Tenant shall have the option to purchase the leased premises for a consideration to be agreed upon with Landlord. If the parties fail to agree upon the purchase price, the price shall be the market price as determined by a real estate office located in the area where the demised premises is situated. The Tenant is to notify the Landlord in writing of its election to purchase at least three (3) months prior to the expiration of the lease."
Defendant argues that, because the option states that the price is "to be agreed upon," the option is merely "an agreement to agree" and thus unenforceable. Defendant also contends that "an option which omits an essential term such as price" is too vague and indefinite to be enforceable, and that this option "fails to provide a clear method of computing the price." Finally, defendant asserts that the option is vague and unenforceable because it fails to define "real estate office."
Defendant is correct in noting that a contract must be reasonably definite in its material terms to be enforceable and that a mere "agreement to agree" is not enforceable ( see e.g. Martin Delicatessen v. Schumacher, 52 NY2d 105, 109). However, "if the doctrine is applied with a heavy hand it may defeat the reasonable expectations of the parties in entering into the contract" ( Cobble Hill Nursing Home, Inc. v. Henry and Warren Corp., 74 NY2d 475, 483). Therefore, "[s]triking down a contract as indefinite and in essence meaningless is at best a last resort" ( Matter of 166 Mamaroneck Ave. Corp. v. 151 E. Post Rd. Corp., 78 NY2d 88, 91 [internal quotation marks and citation omitted]; see also e.g. Cobble Hill, 74 NY2d at 483). In this case, the court finds that the purchase option in question is not unenforceably vague or a mere agreement to agree.
The option in this case provides that the parties will try to find an agreed upon price. However, it then specifies that, in case the parties do not agree, the price will be the market value and specifies a procedure for ascertaining that value. By specifying a procedure to be used if the parties do not agree, the option evinces the parties' intent to be bound by the option even if they do not later agree on price. Therefore, this was not a mere "agreement to agree" ( see e.g. Matter of 166 Mamaroneck Ave., 78 NY2d at 92).
The option sets the purchase price for the property, in the event the parties cannot agree on a price, as the market value of the property. Defendant contends that the option is void because it "fails to provide a clear method of computing the price to be paid." As defendant argues, purchase price is a material term of a real estate contract ( see e.g. Marder's Nurseries, Inc. v. Hopping, 171 AD2d 63, 70, lv denied 79 NY2d 757). However, "a price term is not necessarily indefinite because the agreement fails to specify a dollar figure, or leaves fixing the amount for the future, or contains no computational formula" ( Cobble Hill, 74 NY2d at 483). Moreover, the fact that a contract "does not spell out the precise manner in which the [purchase amount] is to be calculated" does not render it unenforceable ( Matter of 166 Mamaroneck Ave., 78 NY2d at 92). Similarly, a contract term is not indefinite even if its meaning cannot be found within the contract itself, but rather relies on an "objective extrinsic event, condition or standard" ( Martin Delicatessen, 52 NY2d at 110). Here, the option's use of fair market value as a purchase price is a permissible reference to an external objective standard and is sufficiently definite to be enforceable ( see e.g. Marder's Nurseries, 171 AD2d at 72). Therefore, the court finds that the purchase price in this option is not vague or indefinite.
Finally, the court finds that the use of the phrase "real estate office" is not so vague that the "last resort" of striking the option as unenforceable should be employed here. Here, the generic "real estate office" language is simply used to identify the party who is to determine market price, and "[t]he problematic nature of the method designed by the parties for arriving at fair market value' . . . should not require cancellation of the contract" ( Marder's Nurseries, 171 AD2d at 73). Indeed, courts have held that where a contract's procedure for determining fair market value fails, the court itself has "the authority to make the finding of fair market value in order to carry out the intention of the parties" ( Tonkery v. Martina, 167 AD2d 860, 861, affd 78 NY2d 893; see also e.g. Marder's Nurseries, 171 AD2d at 72).
In sum, the court finds that "[f]ar from being a necessary last resort,' to declare this defendant's promise legally meaningless [would] . . . defeat the reasonable expectations of the parties in entering into the contract and [would be] a misuse of the definiteness doctrine" ( Cobble Hill, 74 NY2d at 485). Therefore, defendant's motion for summary judgment dismissing plaintiff's complaint on the ground that the purchase option is unenforceable is denied.
Conclusion
Accordingly, defendant's motion is denied in its entirety.
This constitutes the decision and order of the court.