Opinion
No. 12413/13.
07-08-2016
Irina GALANOVA, Plaintiff(s), v. TKR PROPERTY SERVICES, INC., Howard Mandel and Daniel Isakov, individually, 40–50 Brighton First Rd. Apartments Corp., and Finder, Novick and Kerrigan, LLP, Defendant(s).
Laura B. Juffa, Esq., Kaufman Borgeest & Ryan, LLP, New York, for Defendants. Marshall Bellovin, Esq., Ballon Stoll Bader & Nadler, P.C., New York, for Plaintiff.
Laura B. Juffa, Esq., Kaufman Borgeest & Ryan, LLP, New York, for Defendants.
Marshall Bellovin, Esq., Ballon Stoll Bader & Nadler, P.C., New York, for Plaintiff.
FRANCOIS A. RIVERA, J.
Recitation in accordance with CPLR 2219(a) of the papers considered on the joint motion of defendants Daniel Isakov (hereinafter Isakov) and 40–50 Brighton First Rd. Apartment Corp., (hereinafter Brighton Apartments) (hereinafter jointly the movants); filed on January 7, 2016, under motion sequence number five, for an order granting summary judgment and dismissing the complaint pursuant to CPLR 3212.
Notice of motion
Affirmation of Laura B. Juffa in support of the motion
Exhibit A–L
Affirmation in support of Thomas P. Kerrigan
Exhibits 1–11
Affidavit of Daniel Isakov
Memorandum of Law
Affirmation in opposition
Exhibit A–D
Memorandum in Law in Opposition
Reply Memorandum of Law
BACKGROUND
On July 9, 2013, Irina Galanova (hereinafter Galanova or plaintiff) commenced the instant action for damages by filing a verified summons and complaint with the Kings County Clerk's office. By answer dated September 18, 2013, Isakov joined issue. By answer dated September 18, 2013, Brighton Apartments joined issue. On November 2, 2015, a note of issue was filed.
The complaint alleges seventy-one allegations of fact in support of seven causes of action. The third cause of action is against the non-movants and accordingly will not be discussed. The first cause of action seeks a declaration that the defendants breached certain contracts with parties other than the plaintiff. The second cause of action sounds in negligence. The fourth cause of action is a breach of implied covenant of good faith and fair dealing. The fifth cause of action alleges tortious interference with contract. The sixth cause of action alleges tortious interference with business relations. The seventh cause of action alleges inducing breach of contract of purchase of co-op apartment in Brighton Towers. By two separate orders both dated January 17, 2014, the causes of action against Finder, Novick and Kerrigan, LLP and TKR Property Services, Inc. were dismissed for failure to state a cause of action as against those parties.
The verified complaint and bill of particulars alleges the following salient facts: plaintiff is a shareholder and board member of Brighton Apartments. Isakov is the property manager of the Brighton Apartments. The gravamen of plaintiff's action is that Isakov failed to cooperate with Wells Fargo, a prospective lender in connection with plaintiff's purchase of unit 15K at Brighton Apartments. Specifically, plaintiff alleges that she had a loan commitment from Wells Fargo. However, Isakov failed to provide Wells Fargo with certain documentation relating to the financials of Brighton Apartments with the knowledge that by refusing, plaintiff would not obtain the financing. She further alleges that this failure to provide financial information caused Wells Fargo to cancel her loan. As a result of the cancellation of the loan she was required to breach the purchase contract for apartment 15K.
LAW AND APPLICATION
Isakov and Brighton Apartments move for summary judgment to dismiss the causes of action asserted against them and 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 any material facts (Giuffrida v. Citibank, 100 N.Y.2d 72 [2003] ).
A failure to make that showing requires the denial of that summary judgment motion, regardless of the adequacy of the opposing papers (Ayotte v. Gervasio, 81 N.Y.2d 923 [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 v. Prospect Hospital, 68 N.Y.2d 320 at 324 [1986] ).
A party opposing a motion for summary judgment is obligated “to lay bear his proofs” to sufficiently demonstrate, with admissible evidence, that a triable issue of fact will exist (Friends of Animals, Inc. v. Associated for Manufacturers, Inc., 46 N.Y.2d 1065 [1979] ). A genuine issue of fact may not be demonstrated by using mere conclusions, expressions of hope or unsubstantiated allegations or assertions (Amatulli v. Delhi Constr. Corp., 77 N.Y.2d 525 [1991] ).
“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.” Further, all of the evidence must be viewed in the light most favorable to the opponent of the motion (People ex rel. Spitzer v. Grasso, 50 AD3d 535, 544 [1st Dept 2008] ; citing Marine Midland Bank v. Dino & Artie's Automatic Transmission Co., 168 A.D.2d 610 [2nd Dept 1990] ). The movant's burden is to establish that there are no triable issues of fact as to each cause of action. Accordingly, each cause of action will be outlined herein. It is noted that the complaint itself is many times garbled, conclusory and replete with grammatical errors. However, while pooly drafted its actual meaning was understood by the movants and by the court.
Declaratory Judgment
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” (CPLR 3001 ). However, New York courts do not issue advisory opinions (Enlarged City Sch. Dist. of Middletown v. City of Middletown, 96 AD3d 840, 841–42 [2nd Dept 2012] [internal citations omitted]. Thus, a declaratory judgment should only be granted when it will have a direct and immediate effect upon the rights of the parties (Id. ).
In order to be amenable to declaratory relief, [t]he dispute must be real, definite, substantial, and sufficiently matured so as to be ripe for judicial determination (Enlarged City Sch. Dist. of Middletown, 96 AD3d 840 [2nd Dept 2012]citing Waterways Dev. Corp. v. Lavalle, 28 AD3d 539, 540 [2nd Dept 2006] ; see Ashley Bldrs. Corp. v. Town of Brookhaven, 39 AD3d 442 [2nd Dept 2007; Bauer v. Roman Catholic Diocese of Albany, 91 A.D.2d 730 [3rd Dept 1982). Consequently, the request for a declaratory judgment is premature if the future event is beyond the control of the parties and may never occur (Enlarged City Sch. Dist. of Middletown, 96 AD3d 840, 841–42 [2nd Dept 2012] [internal citations omitted] ). The threat of a hypothetical, contingent, or remote prejudice to a party does not represent a justiciable controversy (Id. ).
The first cause of action against Brighton Apartments is for a declaration that it breached a 2008 mortgage by discharging a prior management company without the Bank's prior written permission and by not maintaining the reserve fund with the minimum amount of $200,000.00. In support of the motion the movants allege that the mortgage that was allegedly breached does not exist anymore as it was refinanced. Further, there is no dispute that the plaintiff is not a party to that mortgage. The movants have established that this cause of action has no merit. As the movant's 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 v. Prospect Hospital, 68 N.Y.2d 320 [1986] ). The plaintiff has failed to raise a triable issue of fact or otherwise establish that this cause of action has merit.
Negligence
Generally, the elements of a negligence claim are the existence of a duty, a breach of that duty, and damages proximately caused by the breach of duty (see Lapides v. State, 37 A.D.2d 755 [2nd Dept 2008] ). The allegations in the complaint allege the following: Isakov is a manager of the Brighton Apartments, Isakov negligently failed to provide certain requested documentation to the plaintiff's prospective lender. The complaint fails to allege any duty that Isakov had to Galanova to provide the requested documentation.
Furthermore, in support of the motion the movants have annexed the proprietary lease between Galanov and the Brighton Apartments. The proprietary lease governs the agreement between Galanova and Brighton Apartments in relation to the shares that she already owns and is not binding on Brighton Apartments or Galanova in regards to shares not specified in the proprietary lease. The lease provides that as an owner of shares, Galanova was entitled to certain financial documentation. It is undisputed that Galanova was in possession of the documentation requried by the proprietary lease.
Accordingly, Galanova's cause of action alleging negligence lacks any merit as Isakov owed her no duty to provide any other documentation. As the movant's 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 v. Prospect Hospital, 68 N.Y.2d 320 [1986] ). The plaintiff has failed to raise a triable issue of fact or otherwise establish that this cause of action has merit.
THE CONTRACT CLAIMS
The remaining causes of action each arise from an alleged breach of contract. Plaintiff alleges breach of implied covenant of good faith and fair dealing, tortious interference with contract, tortious interference with business relations, and inducing breach of the purchase contract. The contracts that plaintiff is alleging were breached are the contract between herself and the seller of apartment 15K and the contract between herself and Wells Fargo Bank. There is no allegation that the movants breached the proprietary lease or any other contract that the plaintiff was a party to. The business relationship that movants allegedly interfered with is the potential financing by Wells Fargo.
Breach of Implied Covenant of Good Faith and Fair Dealing
Within every contract is an implied covenant of good faith and fair dealing (Aventine Inv. Mgmt., Inc. v. Canadian Imperial Bank of Commerce, 265 A.D.2d 513, 513–14 [2nd Dept 1999] [internal citations omitted] ). This covenant is breached when a party to a contract acts in a anner that, although not expressly forbidden by any contractual provision, would deprive the other party of the right to receive the benefits under their agreement (Id. ). For a complaint to state a cause of action alleging breach of an implied covenant of good faith and fair dealing, the plaintiff must allege facts which tend to show that the defendant sought to prevent performance of the contract or to withhold its benefits from the plaintiff (Id. ).
In support of the motion the defendants submit, in addition to other documents, the affirmation of Isakov, the property manager, an affidavit of Thomas P. Kerrigan (hereinafter Kerrigan), the attorney for Brighton Apartments, and the proprietary lease between Brighton Apartments and Galanova. It appears that movants submitted the proprietary lease in an abundance of causation to establish that they were in compliance with the terms by providing Galanova with certain financial documentation.
Kerrigan is a lawyer at the law firm of Finder, Novick and Kerrigan, LP. By order dated January 17, 2014, the action was dismissed as to Finder, Novik, and Kerrigan.
The movants cannot be held liable for any breach of implied covenant of good faith and fair dealing when there is no contract between plaintiff and movants. Accordingly, this cause of action lacks merit. As the movant's 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 v. Prospect Hospital, 68 N.Y.2d 320 [1986] ). The plaintiff has failed to raise a triable issue of fact or otherwise establish that this cause of action has merit.
Tortious Interference with Contract, Tortious Interference with Business Relations and Inducing Breach of Contract
Plaintiff's complaint relies upon the same allegations of fact to support the causes of action for tortious interference with contract, tortious interference with business relations and inducing breach of contract.
Tortious interference with contract requires the existence of a valid contract between the plaintiff and a third party, defendant's knowledge of that contract, defendant's intentional procurement of the third-party's breach of the contract without justification, actual breach of the contract, and damages resulting therefrom (Lama Holding Co. v. Smith Barney Inc., 88 N.Y.2d 413, 424 (1996)citing Israel v. Wood Dolson Co., 1 N.Y.2d 116,120 ; see also, NBT Bancorp v. Fleet/Norstar Fin. Group, 87 N.Y.2d 614 ).
Thus, where there is an existing, enforceable contract and a defendant's deliberate interference results in a breach of that contract, a plaintiff may recover damages for tortious interference with contractual relations even if the defendant was engaged in lawful behavior (see Israel, 1 N.Y.2d at 119 ). Where there has been no breach of an existing contract, but only interference with prospective contract rights, however, plaintiff must show more culpable conduct on the part of the defendant (NBT Bancorp Inc. v. Fleet/Norstar Fin. Grp., Inc., 87 N.Y.2d 614 [1996] ).
Tortious interference, however, can take many forms ( NBT Bancorp Inc. v. Fleet/Norstar Fin. Grp., Inc., 87 N.Y.2d 614, 621 (1996)citing Prosser, Torts § 129 [4th ed.] ). Generally, tortious interference with business relations arises when a competitor interferes with a contract. The degree of protection available to a plaintiff for a competitor's tortious interference with contract is defined by the nature of the plaintiff's enforceable legal rights (NBT Bancorp Inc. v. Fleet/Norstar Fin. Grp., Inc., 87 N.Y.2d 614, 621 ). Thus, where there is an existing, enforceable contract and a defendant's deliberate interference results in a breach of that contract, a plaintiff may recover damages for tortious interference with contractual relations even if the defendant was engaged in lawful behavior (Id. citing Israel, 1 N.Y.2d at 119 ).
Conduct constituting tortious interference with business relations is, by definition, conduct directed not at the plaintiff itself, but at the party with which the plaintiff has or seeks to have a relationship. Under New York law, in order for a party to make out a claim for tortious interference with prospective economic advantage, the defendant must direct some activities towards the third party (Carvel Corp. v. Noonan, 818 N.E.2d 1100 [2004] [internal citations omitted] ).
The tort of inducement of breach of contract, now more broadly known as interference with contractual relations, consists of four elements: (1) the existence of a contract between plaintiff and a third party; (2) defendant's knowledge of the contract; (3) defendant's intentional inducement of the third party to breach or otherwise render performance impossible; and (4) damages to plaintiff (Kronos, Inc. v. AVX Corp., 81 N.Y.2d 90, 94 (1993)citing Israel, 1 N.Y.2d 116 ). Since damage is an essential element of the tort, the claim is not enforceable until damages are sustained (Id. ).
As discussed above, the movants established that they owed no duty to Galanova to provide the documentation to Wells Fargo. Even if Wells Fargo canceled the financing due to Isakov's failure to provide the documents there was no deliberate interference with the contract. Accordingly, these causes of action lacks merit. The movants did not induce Wells Fargo to cancel plaitniff's loan commitment. As the movant's 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 v. Prospect Hospital, 68 N.Y.2d 320 [1986] ). The plaintiff has failed to raise a triable issue of fact or otherwise establish that the contract causes of action have merit.
CONCLUSION
The joint motion of defendants Daniel Isakov and 40–50 Brighton First Rd. Apartment Corp. for an order granting summary judgment and dismissing the complaint pursuant to CPLR 3212 is granted.
The foregoing constitutes the decision and order of this Court.