Opinion
Index No. 523826/2021
01-13-2023
Chazak Equities LLC, Plaintiff, v. Joseph Hamilton and DOREATHEA P. HAMILTON, Defendants.
Unpublished Opinion
FRANCOIS A. RIVERA, J.
By order to show cause filed on May 3, 2022, under motion sequence three, the defendants Joseph Hamilton and Doreathea P. Hamilton (hereinafter the Hamiltons) moved pursuant to CPLR 3211(a)(1) for an order: (1) dismissing the complaint; (2) vacating the notice of pendency filed against the property, 27 Monaco Place, Brooklyn, New York, Block No. 1570, Lot No. 4 (hereinafter the subject property) and (3) declaring that the contract of sale for the subject property was canceled.
By order issued on June 21, 2022, the Hamiltons' order to show cause, under motion sequence three, was converted to a motion for summary judgment under CPLR 3212 with a briefing schedule. Both parties complied with the briefing schedule.
By decision and order issued on September 21, 2022, on motion sequence number three, the Hamiltons were directed to file a statement of material facts in accordance with 22 NYCRR 202.8-g on or before October 12, 2022. The plaintiff Chazak Equities LLC was directed to file a counter statement of material facts on or before October 17, 2022. Both sides complied.
The Court reviewed document numbers 36 through and including 71 filed under the NYSCEF system in determining the instant motion.
BACKGROUND
On September 20, 2021, plaintiff Chazak Equities LLC, commenced the instant action for a declaratory judgment by electronically filing a summons, verified complaint and notice of pendency with the Kings County Clerk's office. On October 20, 2021, the Hamiltons (hereinafter the defendants) joined issue by jointly filing an answer with the KCCO.
The verified complaint alleges the following salient facts. The defendants own the subject property. In February of 2021, the plaintiff entered into an agreement with the defendants to purchase the subject property for the sum of $425,000.00 and to pay the same as follows: the sum of $1,000.00 to be deposited with defendants' attorney, on the execution of the aforesaid contract, and the balance being $424,000.00 within sixty days of executed contract of sale. Upon the execution of the purchase agreement, the plaintiff paid the defendants' attorney the required deposit. The plaintiff alleges that it performed all conditions set forth in the contract and has been at all times ready, willing and able to deliver the balance of the purchase price to defendants. After signing the contract and delivering of the down payment, the plaintiff was informed that defendants were not ready to deliver the subject property vacant as required by the contract of sale. The plaintiff granted the defendants additional time to have the tenants removed from the subject property. Shortly thereafter, the defendants, without basis, notified the plaintiff that they would not deliver the deed and would not proceed to a closing. The plaintiff alleges that the defendants have failed and refused to take the actions necessary to comply with the contract and close title. Furthermore, the defendants indicated that the contract of sale was no longer in effect. The plaintiff seeks a declaratory judgment that the contract of sale between plaintiff and the defendants is still valid and that the defendants are directed to comply with the terms thereunder.
LAW AND APPLICATION
The plaintiff's complaint seeks a declaratory judgment that the contract of sale between plaintiff and defendant is still valid and in effect and an order directing defendants to comply with the terms thereunder. The defendants have moved for an order pursuant to CPLR 3212 dismissing the complaint; vacating the notice of pendency on the subject property; and declaring that the contract of sale for the subject property is canceled.
Defendants' Motion to Dismiss the Complaint
It is well established that summary judgment may be granted only when it is clear that no triable issue of fact exists (Alvarez v Prospect Hospital, 68 N.Y.2d 320 [1986]). The burden is upon the moving party to make a prima facie showing that he or she is entitled to summary judgment as a matter of law by presenting evidence in admissible form demonstrating the absence of material facts (Guiffirda v Citibank, 100 N.Y.2d 72 [2003]).
A failure to make that showing requires the denial of the summary judgment motion, regardless of the adequacy of the opposing papers (Ayotte v Gervasio, 81 N.Y.2d 1062 [1993]). If a prima facie showing has been made, the burden shifts to the opposing party to produce evidentiary proof sufficient to establish the existence of material issues of fact (Alvarez, 68 N.Y.2d at 324).
Pursuant to CPLR 3212 (b) a court will grant a motion for summary judgment upon a determination that 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 (People ex rel. Spitzer v Grasso, 50 A.D.3d 535, 544 [1st Dept 2008]). Further, all of the evidence must be viewed in the light most favorable to the opponent of the motion (Marine Midland Bank v Dino & Artie's Automatic Transmission Co., 168 A.D.2d 610 [2nd Dept 1990]).
The following facts are undisputed. In or about February 2021, the plaintiff and the defendants entered into a written agreement in which the plaintiff agreed to purchase, and the defendants agreed to sell the subject property for $425,000.00. The purchase price was to be paid as follows: a $1,000.00 down payment at the time of contract and the balance of $424,000.00 at the time of the closing, which was to be held within sixty days of executing the contract of sale or upon reasonable notice by purchaser. The plaintiff deposited the down payment with defendants' attorney. The rider to the contract of sale specifically provided at paragraph VI that defendants would deliver the subject property vacant. Furthermore, it provided that the plaintiff would agree to extend the date of closing at least sixty days to permit the defendants to have the opportunity to deliver the subject property vacant in the event seller was unable to do so. This same provision further provided that if the defendants were still unable to do so after the initial sixty (60) day extension, then the plaintiff may extend the time of closing, or the defendants could terminate the contract and return the down payment.
The following is the verbatim language of Paragraph VI of the rider of the agreement: "In the event that Sellers are unable to deliver the Premises vacant after a 60-day extension, Purchaser may extend the time of closing or seller shall terminate this contract and return the deposit to purchaser. The parties shall have no further relationship with each other."
On December 13, 2021, defendants set a Time of the Essence closing date for January 18, 2022. On January 14, 2022, the plaintiff, upon learning the subject property would not be delivered vacant, advised the defendants that the plaintiff had extended defendants' time to close to March 18, 2022, as provided for in paragraph VI of the contract. On January 21, 2022, the defendants served the tenants of the subject property with 90-day vacate notices pursuant to Real Property Law § 226-c.
On or about March 14th, 2022, the defendants' counsel sent a letter to the plaintiff's counsel advising, inter alia, that the tenants have been residing at the subject property for longer than 24 months. The defendants' counsel further advised the plaintiff that the tenants were to be afforded a 90-day notice to vacate pursuant to NY Real Prop. Law § 226-c, which would exceed the 60-day contract extension. Counsel further advised that if the parties did not close by the end of the business day of March 18th the defendants would terminate the contract pursuant to Paragraph VI of the rider.
On March 18, 2022, defendants' counsel e-mailed the plaintiff's attorney that the defendants were willing to convey the subject property with the tenants prior to closing. On March 18, 2022, the plaintiff and the defendants attended the closing at the office of Kenneth Golden, Esq. The plaintiff unequivocally rejected the conveyance of the subject property with tenants at the closing table. On March 18, 2022, after the closing, the defendants notified the plaintiff's counsel that they were exercising their contractual right to cancel the contract due to the plaintiff's refusal to close with the tenants.
The defendants contend that the unambiguous language of Paragraph VI of the rider of the agreement gave them as sellers the right to cancel the contract under the circumstances of this case.
A contract is to be construed in accordance with the parties' intent, which is generally discerned from the four corners of the document itself. Consequently, a written agreement that is complete, clear and unambiguous on its face must be enforced according to the plain meaning of its terms (Falanga v Hillabrant, 208 A.D.3d 1308, 1310-11, [2nd Dept 2022]). A contract is unambiguous if the language it uses has a definite and precise meaning, unattended by danger of misconception and concerning which there is no reasonable basis for a difference of opinion (see Greenfield v Philles Records, Inc., 98 N.Y.2d 562, 569 [2002]; Breed v Insurance Co. of N. Am., 46 N.Y.2d 351, 355 [1978]). Ambiguity in a contract arises when the contract, read as a whole, fails to disclose its purpose and the parties' intent, or when specific language is susceptible of two reasonable interpretations (Legum v Russo, 133 A.D.3d 638, 639 [2nd Dept 2005], quoting Ellington v EMI Music, Inc., 24 N.Y.3d 239, 244 [2014]). Whether or not a contract provision is ambiguous is a question of law to be resolved by a court (Falanga v Hillabrant, 208 A.D.3d 1308, 1311 [2nd Dept 2022], citing Garcia v. American Gen. Life Ins. Co. of NY, 264 A.D.2d 808, 809 [2nd Dept 1999]).
The text of Paragraph VI of the rider of the agreement is unambiguous. First, it provides for an initial 60-day extension of the contract closing date if the seller cannot deliver the subject premise vacant within the 60 day extension. That is precisely what happened here. On December 13, 2021, defendants set a Time of the Essence closing date for January 18, 2022. On January 14, 2022, plaintiff, upon learning the subject property would not be delivered vacant, advised the defendants that plaintiff extended defendants' time to close to March 18, 2022. On or about March 14th, 2022, defendants' counsel sent a letter to the plaintiff's counsel advising, inter alia, that the tenants had been residing at the subject property for longer than 24 months. Defendants' counsel further advised the that the tenants were to be afforded a 90-day notice to vacate pursuant to NY Real Prop. Law § 226-c, which would exceed the 60-day contract extension. Counsel further advised that if the parties did not close by the end of the business day of March 18th the defendants would terminate the contract pursuant to Paragraph VI of the rider.
On March 18, 2002, the defendants were unable to deliver the subject property vacant. On March 18, 2022, defendants' counsel e-mailed the plaintiff's attorney that the defendants were willing to convey the subject property with the tenants prior to closing, an offer which the plaintiff unequivocally rejected.
The remaining text of Paragraph VI of the rider of the agreement provides that "in the event that Sellers are unable to deliver the Premises vacant after a 60-day extension, Purchaser may extend the time of closing or seller shall terminate this contract and return the deposit to purchaser."
The plaintiff contends that this language "may extend the time of closing" gives the plaintiff the right to keep the contract alive by simply advising the defendants that they were being given an additional sixty days to remove the tenants and deliver the subject premise vacant. However, the text states that purchaser may extent the time of closing or the seller shall terminate this contract and return the deposit. It does not state that the closing must be extended at the request of the purchaser rather it states that it may be extended. The word "may" means "to be allowed to" or "to be permitted to". In the context of its use here, the permission sought by the plaintiff is necessarily subject to the assent of the party to who the request is made, namely, the defendants.
The text is not expressed as something conditional, that is, it does not state that the seller may terminate the contract if the purchaser does not grant an extension of the closing date. Rather, it expresses two possible mutually exclusive outcomes if the seller cannot deliver the subject property vacant after the first 60-day extension. One possible outcome is that the purchaser may seek an extension which the seller may agree to. The other possible outcome is that the seller may simply chooses to terminate the agreement.
Here the defendants did not agree to an additional extension and therefore, they were well within their contractual right to terminate the contract and return the deposit to the plaintiff. Accordingly, the defendants have met their prima facie burden to demonstrate entitlement to dismissal of the complaint. The plaintiff's opposition papers do not raise a triable issue of fact.
Defendants' motion to vacate the notice of pendency
A notice of pendency is authorized to be filed in an action seeking a judgment that would affect the title to, or possession, use, or enjoyment of, real property (see CPLR 6501; Nastasi v Nastasi, 26 A.D.3d 32, 35 [2nd Dept 2005]).
CPLR 6514(a) provides in pertinent part as follows:
"Mandatory cancellation. 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 5519."
The plain meaning of the word "abated," as used in CPLR § 6514(a) is the ending of an action. "Abatement" is defined as "the act of eliminating or nullifying." (Black's Law Dictionary 3 [7th ed. 1999]). 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 (Nastasi, 26 A.D.3d at 40, citing Carmody-Wait 2d § 11.1).
Inasmuch as the defendants properly terminated the contract in accordance with Paragraph VI of the rider of the agreement, and the complaint is hereby dismissed, the plaintiff no longer has a possessory interest in the subject property. Thus, the dismissal of the instant complaint must result in the mandatory cancellation of the plaintiff notice of pendency against the subject property.
Defendants Motion for a Declaratory Judgment
CPLR 3001 provides that the Supreme Court may render a declaratory judgment having the effect of a final judgment as to the rights and other legal relations of the parties to a justiciable controversy whether or not further relief is or could be claimed (see Peters v Smolian, 154 A.D.3d 980, 983 [2nd Dept 2017], citing CPLR 3001). To constitute a justiciable controversy, there must be a real dispute between adverse parties, involving substantial legal interests for which a declaration of rights will have some practical effect (see Cong. Machon Chana v Machon Chana Women's Inst., Inc., 162 A.D.3d 635 [2nd Dept 2018], quoting Chanos v MADAC, LLC, 74 A.D.3d 1007, 1008 [2nd Dept 2010]).
Based on the dismissal of the complaint and cancelation of the notice of pendency, the defendants have demonstrated their prima facie entitlement to a judgment in their favor declaring that the agreement between the parties to sell the subject property is canceled.
CONCLUSION
The motion by defendants Joseph Hamilton and Doreathea P. Hamilton for an order pursuant to CPLR 3212 dismissing the complaint is granted.
The motion by defendants, Joseph Hamilton and Doreathea P. Hamilton for an order pursuant to CPLR 6514(a) vacating the notice of pendency filed against the subject property is granted.
The motion by defendants Joseph Hamilton and Doreathea P. Hamilton for an order pursuant to CPLR 3212 declaring that the contract of sale between the defendants and Chazak Equities LLC for the subject property is canceled is granted. The defendants are directed to return the $1,000.00 down payment to the plaintiff within thirty days of entry of the instant decision, order, and judgment.
The foregoing constitutes the decision, order, and judgment of this Court.