Opinion
013407/07.
Decided June 11, 2008.
Alexander J. Crudo, Esq., Attorney for Plaintiff, Brooklyn, NY.
Philip M. Bernstein, Esq., PM Bernstein P.C., Attorney for Defendant, Garden City, NY.
This Decision and Order constitutes a determination of defendant's renewed application on Sequence No. 001, as permitted by the Court.
This motion originated as defendant's motion to dismiss pursuant to CPLR § 3211(a)1 and 7, however, the Court elected to treat the motion as a motion for summary judgment (CPLR § 3211[c]) and by stipulation of the parties, all of the papers submitted on the original motion plus the complaint were resubmitted as a motion for summary judgment.
Plaintiffs (Buyer) and defendant (Seller) entered into a contract for the defendant to sell to the plaintiffs a residence located at Ash Place, Massapequa, New York. At the closing, an issue arose as to whether or not proper governmental approvals had been obtained for the enclosure of a patio connecting the main residence building to the garage and an agreement signed by the lender providing mortgage funds to plaintiffs, plaintiffs and defendant was executed (Compliance Agreement). The Compliance Agreement provides in part as follows:
"The undersigned for and in consideration of the sum of ONE AND 00/100 ($1.00) DOLLAR, receipt of which is hereby acknowledged and to induce LENDER, to consummate its loan commitment herein, hereby irrevocably binds itself and guarantees to perform all work and to take all action necessary to obtain, to the satisfaction of the Lender, CERTIFICATE OF OCCUPANCY FOR ADDITION and hereby acknowledges receipt of the sum of EIGHT THOUSAND DOLLARS ($8,000.00) from the Depositor, to be deposited in a non-interest bearing custodial account, subject to all the terms and conditions hereinafter set forth, to which the undersigned hereby agrees."
The term "Depositor" in the above paragraph is not defined, however, all three plaintiffs and defendants signed the Compliance Agreement.
If the conditions are fulfilled to the satisfaction of the lender, the amount on deposit is to be returned to the Depositor and although such term is not defined, the parties seem to agree that the deposit would be paid to the defendant seller.
The contract of sale provides that "14. Seller represents that the premises is a legal one (1) family dwelling and garage. Seller shall provide certificate of Occupancy and/or Certificate of Completion for all improvements".
Prior to the closing, defendant provided plaintiffs with a survey dated 1984 which showed a roofed patio between the house and the garage. At the time of the sale, this area was now a room of the house and no certificate of occupancy was presented by defendant. A 1989 survey was also presented at the closing in an attempt to show that the addition preceded defendant's purchase but this new item did not resolve the issue.
The work has not been performed and in this action, plaintiffs claim that the Compliance Agreement and/or the Contract of Sale require that the work to obtain governmental approval must be performed by the defendant seller without limit as to cost, which plaintiffs contend will be approximately $26,000.00 to $37,000.00. Defendant seller contends that she has no obligation to the plaintiff because the contract of sale merged into the deed and that her sole liability for nonperformance is forfeiture of the $8,000.00 deposit which would be applied to reduce the plaintiffs mortgage debt.
It is well settled that summary judgment is a drastic remedy which should not be granted where there is any doubt about the existence of a triable issue of fact. Sillman v Twentieth Century-Fox Film Corp., 3 NY2d 395 (1957); Bhatti v. Roche, 140 AD2d 660 (2d Dept. 1988). It is nevertheless an appropriate tool to weed out meritless claims. Lewis v. Desmond, 187 AD2d 797 (3d Dept. 1992); Gray v. Bankers Trust Co. of Albany, N. A., 82 AD2d 168 (3d Dept. 1981). Even where there are some issues in dispute in the case which have not been resolved, the existence of such issues will not defeat a summary judgment motion if, when the facts are construed in the nonmoving party's favor, the moving party would still be entitled to relief. Brooks v. Blue Cross of Northeastern New York, Inc., 190 AD2d 894 (3d Dept.1993).
Generally speaking, to obtain summary judgment it is necessary that the movant establish its claim or defense by the tender of evidentiary proof in admissible form sufficient to warrant the court, as a matter of law, in directing judgment in its favor (CPLR 3212 [b]), which may include deposition transcripts and other proof annexed to an attorney's affirmation. Olan v Farrell Lines, 64 NY2d 1092 (1985). Absent a sufficient showing, the court should deny the motion, irrespective of the strength of the opposing papers. Winegrad v New York Univ. Med. Ctr., 64 NY2d 851 (1985).
If a sufficient prima facie showing is made, however, the burden then shifts to the non-moving party. To defeat the motion for summary judgment the opposing party must come forward with evidence to demonstrate the existence of a material issue of fact requiring a trial. CPLR 3212 (b); see also GTF Marketing, Inc. v. Colonial Aluminum Sales, Inc., 66 NY2d 965 (1985); Zuckerman v. City of New York, 49 NY2d 557 (1980). The non-moving party must lay bare all of the facts at its disposal regarding the issues raised in the motion. Mgrditchian v. Donato, 141 AD2d 513 (2d Dept. 1988). Conclusory allegations are insufficient ( Zuckerman v. City of New York, supra), and the defending party must do more than merely parrot the language of the complaint or bill of particulars. There must be evidentiary proof in support of the allegations. Fleet Credit Corp. v. Harvey Hutter Co., Inc., 207 AD2d 380 (2d Dept. 1994); Toth v. Carver Street Associates, 191 AD2d 631 (2d Dept. 1993). If a party defends a motion by resort to CPLR 3212(f), that is, the party has a defense sufficient defense to defeat the motion but that the facts cannot yet be stated, that party must be able to make some showing that such facts do in fact exist; mere hope that discovery may reveal those facts is insufficient. Companion Life Ins. Co. v All State Abstract Co. , 35 AD3d 519 (2d Dept. 2006). Nor can mere speculation serve to defeat the motion. Pluhar v Town of Southhampton , 29 AD3d 975 (2d Dept. 2006); Ciccone v Bedford Cent. School Dist. , 21 AD3d 437 (2d Dept. 2005).
However, the court must draw all reasonable inferences in favor of the nonmoving party. Nicklas v Tedlen Realty Corp., 305 AD2d 385 (2d Dept. 2003); Rizzo v. Lincoln Diner Corp., 215 AD2d 546 (2d Dept. 1995). The role of the court in deciding a motion for summary judgment is not to resolve issues of fact or to determine matters of credibility, but simply to determine whether such issues of fact requiring a trial exist. Dyckman v. Barrett, 187 AD2d 553 (2d Dept. 1992); Barr v County of Albany, 50 NY2d 247, 254 (1980); James v. Albank, 307 AD2d 1024 (2d Dept. 2003); Heller v. Hicks Nurseries, Inc., 198 AD2d 330 (2d Dept. 1993).
The Court need not, however, ignore the fact that an allegation is patently false or that an issue sought to be raised is merely feigned. See Village Bank v Wild Oaks Holding, Inc., 196 AD2d 812 (2d Dept. 1993); Barclays Bank of NY v Sokol, 128 AD2d 492 (2d Dept. 1987), such as when the affidavit in opposition clearly contradicts earlier deposition testimony. Central Irrigation Supply v Putnam Country Club Assocs., LLC , 27 AD3d 684 (2d Dept. 2006).
The Court has considered defendant's submission as a motion for summary judgment and that motion is denied in part and granted in part. The Court has also considered whether summary judgment should be granted in favor of plaintiff (CPLR § 3212(b) despite the absence of a cross motion and that motion is denied in all respects. Defendant's moving papers shall be deemed an answer served as of the date of this decision. Pleading amendments shall be governed by CPLR § 3025.
Summary judgment in favor of defendant and against plaintiff is granted as to plaintiff's claim for punitive damages, which is made in plaintiff's prayer for relief.
Punitive damages are available to vindicate a public right only where the action of the alleged tortfeasor constitute either gross recklessness or intentional, wanton or malicious conduct armed at the public generally or were activated by evil or reprehensible motives. Buckholz v. Maple Gardens Apartments LLC, 38 AD3d 584 (2d Dept. 2007); Pier 59 Studios L.P. v. Chelsea Piers L.P. , 27 AD3d 217 (1st Dept. 2006); Boykin v. Mora, 274 AD2d 441 (2d Dept. 2000).
The claims raised by plaintiffs do not rise to the level of conduct that would be required to support an award for punitive damages and that claim is thus dismissed.
Summary judgment dismissing the First and Second Causes of Action for specific performance, is also granted in favor of defendant. An essential element of an action for specific performance is the lack of an adequate remedy at law, such as the failure or refusal of a vendor to convey real property. EMF General Contracting Corp., v. Bisbee, 6 AD3d 45 (1st Dept. 2004).Plaintiffs have an adequate remedy at law in the form of money damages and are in possession of the realty. It is hardly realistic to expect defendant, who has conveyed the premises to plaintiffs and surrendered title, to be in a position to conduct a construction project on plaintiff's premises of the magnitude described by plaintiffs. Plaintiffs have an adequate remedy at law to recover money damages in an as yet undetermined amount and pursuant to a standard not in issue here.
Remaining are the Third and Fourth Causes of Action for breach of contract and fraud respectively.
A cause of action to recover damages for fraud does not lie when, as here, the only fraud charged relates to breach of contract and there is no evidence that the defendant violated any duty extraneous to the contract. New York University v. Continental Insurance Company, 87 NY2d 308, 316 (1995); Individual Securities, Ltd v. American Intern. Group, 34 AD3d 643; Alexander v. Geico Insurance Company, 35 AD3d 989 (3d Dept. 2006).
The conduct complained of by the plaintiffs is entirely referable to the original contract between the parties and the Compliance Agreement. The well known elements to support a cause of action for fraud are (1) misrepresentation of a material fact, (2) scienter, (3) justifiable reliance and (4) injury or damages. Plaintiffs' refusal to complete the closing without a Certificate of Occupancy for the new construction and entry into the Compliance Agreement undermines their contention that in closing the sales transaction they had justifiably relied on the representations in the underlying contract of sale or the 1989 survey update that defendant produced for the first time at the closing. Berger-Vespa v. Rondack Building Inspectors, 293 AD2d 838 (3rd Dept. 2002). Plaintiffs' have produced no evidence to demonstrate that defendant committed a separate and independent tort of fraud, and even if fraud did occur there is no evidence to show the elements of scienter, reliance or damages occurring as a result thereof.
Summary judgment dismissing plaintiffs' cause of action for breach of contract is denied.
When the terms of a written contract are clear and unambiguous, the intent of the parties must be found within the four corners of the contract, giving practical interpretation to the language employed and the reasonable expectations of the parties. Costello v. Casale, 281 AD2d 581 (2d Dept. 2001). A practical interpretation of Paragraph 14 of the contract rider is that seller defendant was required to provide a Certificate of Occupancy and/or Certificate of Completion for all improvements. Correnti v. Allstate Properties, LLC , 38 AD3d 588 (2d Dept. 2007). Contract language which is clear and unambiguous must be enforced according to its terms.
Although defendant failed to comply with her obligation with regard to the Certificate of Occupancy, the matter is not thereby concluded because the parties entered into the Compliance Agreement, which in effect modified the obligations of the defendant. Where there is a written agreement which purports to express the entire agreement of the parties, extrinsic evidence that contradicts, varies or explains the agreement is generally barred by the parol evidence rule. Similarly, extrinsic or parol evidence is not admissible to create an ambiguity in a written agreement which is otherwise clear and unambiguous. Del Vecchio v. Cohen, 288 AD2d 426 (2d Dept. 2001). Whether or not a writing is ambiguous is a question of law to be resolved by the courts. W.W.W. Associates, Inc., v. Giancontieri, 77 NY2d 157, 162 (1990). The test for determining whether contract language is ambiguous is whether the agreement on its face is reasonably susceptible of more than one interpretation. McCabe v. Witteveen , 34 AD3d 652 (2d Dept. 2006).
Once it is determined that the meaning of a contract is ambiguous and the intent of the parties becomes a matter of inquiry a question of fact is presented which cannot be resolved on a motion for summary judgment. Ruttenberg v. Davidge Daata Systems Corp., 215 AD2d 191 (1st Dept. 1995). Siegal v. Golub, 286 AD2d 489 (2d Dept. 2001). Thus, when a writing is incomplete recourse must be had to surrounding circumstances. Weinstein v. Barrett, 219 AD2d 77 (1st Dept. 1996)and parol evidence may be offered to clarify ambiguities. Cole v. Macklowe , 40 AD3d 396 (1st Dept. 2007).
In this case it cannot be determined, as a matter of law what the true intent of the parties was from a reading of the Compliance Agreement. Siegel v. Golub, supra.
All parties, plaintiff buyers, defendant seller and lender executed the Compliance Agreement, for the purpose of resolving the dispute at the closing over the absence of a Certificate of Occupancy for the additional construction. The Compliance Agreement appears to be a preprinted form adapted for the purposes of the parties. In attempting to determine intent, the Court is mindful that the closing and the Compliance Agreement took place against the deadline of an expiring mortgage commitment. The 1989 survey update was only then presented and there was limited time for thoughtful reflection in the drafting.
The intent of the parties, should there be failure to comply, is unclear from the writing. Although all parties signed and the obligation of defendant to perform is unconditional, it is only the lender that is given a remedy. No provision is made with regard to the cost of compliance and it is not stated that the $8,000.00 held by the lender would constitute liquidated damages of defendant's financial obligation as defendant would have it. This latter interpretation would conflict with defendant's irrevocable guarantee to perform all work and to take all action necessary to the satisfaction of the lender. Moreover, only the lender was granted the right to enter the premises. It is unclear from the submission what the position of the lender is in this dispute. (Although the indications are that the lender has offered to apply the deposit to reduce the debt owed by plaintiff to the lender).
Notably absent from the Compliance Agreement is any reference to the rights of plaintiffs in the event of nonperformance. Also at issue is whether the intent of the Compliance Agreement was to reflect a continuance of the defendant's contract obligation to provide a certificate "for all improvements". Not reconcilable is the language which states that the purpose of the Compliance Agreement is to induce the lender to consummate the loan with the contract obligation of the seller to the plaintiffs. There is no evidence that plaintiffs intended by the Compliance Agreement to waive the defendant's contractual obligation above $8,000.00 and given the circumstances, the mere act of completing the closing does not, as a matter of law, constitute a merger of that obligation. See Novelty Crystal Corp., v. PSA Institutional Partners L.P. , 49 AD3d 113 (2d Dept. 2008); cf., Hunt v. Kojac, 245 AD2d 858 (3rd Dept. 1997); Del Vecchio v. Cohen, supra.
Defendant's contention that she is absolved from responsibility because the plaintiffs obtained a $500.00 credit pursuant to RPL § 465(1) is lacking in merit. The credit is the penalty for not delivering the disclosure statement required by RPL § 462 and is not in effect an agreement to liquidate damages for other breaches at merely $500.00. Bishop v. Graziano, 10 Misc 3rd 342 (Dist.Ct. Suffolk Cty. 2005).
In any event, to adopt defendant's contentions that the $500.00 RPL credit or the alleged lateness of the plaintiffs in submitting their objections to title would require the Court to completely dismiss any consideration that the Compliance Agreement granted new or restated existing rights to the plaintiffs.
Based on the foregoing, summary judgment is denied as to the Third Cause of Action for breach of contract and is granted in favor of defendant as to all other causes of action and the demand for punitive damages.
All parties shall appear at a Preliminary Conference at the Supreme Courthouse, 100 Supreme Court Drive, Mineola, NY, lower level, on July 31, 2008, at 9:30 a.m. No adjournments of this conference will be permitted absent the permission of or Order of this Court. All parties are forewarned that failure to attend the conference may result in Judgment by Default, the dismissal of pleadings (see 22 NYCRR 202.27) or monetary sanctions ( 22 NYCRR 130-2.1 et seq.).
This shall constitute the Decision and Order of this Court.