Opinion
10 Cv. 6359 (MHD)
05-08-2013
PARKER HANNIFIN CORPORATION, Plaintiff, v. NORTH SOUND PROPERTIES, Defendant.
MEMORANDUM & ORDER :
This case, which arose following a failed real-estate sale, involves a dispute over the disposition of $250,000.00 in escrow funds. The funds were deposited into escrow by defendant North Sound Properties as consideration for plaintiff Parker Hannifin Corporation's entry into an Amended Purchase Agreement for the sale of its property at 200 Ram Ridge Road, Chestnut Ridge, New York ("the property").
The parties have cross-moved for summary judgment, each alleging that the other breached the terms of the Amended Purchase Agreement, thereby entitling it to the escrow funds. In addition, plaintiff has moved belatedly to add defendant's principal, Mr. Jacob Breuer, as an individual defendant. Defendant has opposed this motion. We address each of the motions here.
THE RELEVANT FACTS
Defendant North Sound is a small, closely-held company that was formed by a British couple, Jacob Breuer and Ethel Friedman, for purposes of expanding their lighting supply business into New York. (See Churgin Decl. in Supp. of Def. Mot. ("Churgin Decl.") (docket no. 35) Ex. E; Barnes Aff. in Supp. of Pl. Mot. (docket no. 26) Ex. 6 at 16; Breuer Decl. in Opp'n to Mot. to Am. (docket no. 60) ¶ 2). Defendant was apparently interested in acquiring plaintiff's property for purposes of establishing its New York store location. (Churgin Decl. Ex. N at PH0000192).
On December 13, 2006, defendant offered to purchase the property from plaintiff for $2.9 million (id. at Ex. E pp. 2-3), an offer that plaintiff accepted in principle. (Id. at Ex. F). Over the next few months, the parties negotiated the terms of a purchase agreement for the property. (Pl.'s R. 56.1 Opp'n Statement (docket no. 42) ¶ 1; Def.'s R. 56.1 Statement in Supp. of Mot. (docket no. 34) ¶ 4).
In the interim, on February 7, 2007, a pipe burst, causing water damage inside the property. (Churgin Decl. Ex. I). An employee of plaintiff described the initial damage as follows:
There was about 2-3 inches of water from the front of the building to the first large area (melt room) and lab. Water did not make it into the main warehouse floor or to the basement... There was very significant damage to the front office areas due to water. Also, all of the ceiling panels in the front managers['] office are destroyed and on the floor and most of the panels in the front office are hanging but are water damaged.(Id.). Plaintiff did not disclose to defendant the occurrence of the flood or the nature of the resultant damage. (Cannata Decl. ¶ 5).
On March 5, 2007, the parties signed a Purchase Agreement (Pl.'s R. 56.1 Opp'n Statement ¶ 1) and, in accordance with the terms of that agreement (Churgin Decl. Ex. L ¶ 5(a)), defendant made an "Initial Earnest Deposit" of $100,000.00 into escrow. (Def.'s R. 56.1 Statement in Supp. of Mot. ¶ 15). Pursuant to the Purchase Agreement, escrow funds were to become "nonrefundable upon the expiration of the Due Diligence Period," forty-five days from the date of signing. (Churgin Decl. Ex. L at ¶¶ 1, 5(a)).
It was not until March 15, 2007, when Mr. Breuer was visiting the property, that defendant learned of the flood damage. (Churgin Decl. Ex. N pp. PH0000191-92). Following this discovery, defendant sought to renegotiate the terms of the Purchase Agreement, but on April 30, 2007, because the parties were unable to reach a resolution prior to the end of the due diligence period, defendant exercised its right to terminate the Purchase Agreement. (Id. at Ex. O; Def.'s R. 56.1 Statement in Supp. of Mot. ¶ 19).
It is unclear from the record what happened to defendant's escrow deposit following termination of the Purchase Agreement; however, we infer from the absence of any dispute over the funds that they were returned to defendant.
The parties nonetheless continued their negotiations, and each side obtained several independent assessments of the cost for remediating the flood damage to the property. (See, e.g., Barnes Decl. (docket no. 43) Ex 1 p. 85, Ex. 7; Churgin Decl. Exs. R & S).
On June 29, 2007, the parties executed an Amended Purchase Agreement for the reduced sale price of $2,827,640.00 -- $72,360.00 less than the price under the original Purchase Agreement. (Pl.'s R. 56.1 Opp'n Statement ¶ 21; Def.'s R. 56.1 Statement in Supp. of Mot. ¶ 24). The Amended Purchase Agreement stated that "Buyer acknowledges and agrees that Buyer's due diligence is complete and Buyer's examination of property is complete and such due diligence right of Buyer is terminated. Consequently, Buyer is purchasing said property in its 'as is' condition." (Cannata Decl. (docket no. 44) Ex. 2 ¶ 5). Pursuant to the Amended Purchase Agreement, defendant was required to make an initial escrow deposit of $100,000.00. (Id. at ¶ 3). The agreement provided that this initial deposit was "fully refundable in the event that Buyer fails to obtain mortgage financing within 30 days from Seller's written notification that the amendment is approved and signed, but no later than July 28, 2007." (Id.). Defendant was required to make a second deposit of $50,000.00 within one day of defendant's attorney receiving notice that plaintiff had signed and approved the agreement, as well as a third deposit of $100,000.00 within one day of obtaining mortgage financing, but no later than July 28, 2007. (Id.). The agreement deemed these last two escrow deposits non-refundable. (Id .). In the event that defendant was not able to obtain a mortgage commitment by July 30, 2007, the Amended Purchase Agreement provided that the agreement "shall be deemed null and void at the option of either Party... communicated to the other Party, or to the other Party's attorney in writing via the United States Postal System." (Id. at ¶ 8). In such event, the contract required plaintiff to return only defendant's initial $100,000.00 escrow deposit. (Id.). The amended agreement stipulated that "[u]nder no circumstances shall [closing be] later than... September 30, 2007." (Id. at ¶ 6).
The Amended Purchase Agreement also incorporated the terms of the original Purchase Agreement, except as otherwise provided. (Id. at p. EI000042). Thus, the Amended Agreement incorporated a provision stipulating "Time is of the essence of each and every term, condition, obligation, and provision." (Churgin Decl. Ex. L ¶ 19.6). It also incorporated a term providing that "No waiver by a party of any Default by the other party under this [Amended] Agreement shall be implied from any omission or delay by the nondefaulting party to take action on account of the Default if the Default persists or is repeated. Any waiver of any covenant, term, or condition contained in this Agreement must be in writing... Any such express waiver shall be operative only for the time and to the extent stated in the waiver." (Id. at ¶ 19.11). In addition, the contract provided that defendant "agrees that Seller shall not have any liability, obligation or responsibility of any kind with regard to (a) the content or accuracy of the appraisal... of any other Person with respect to the Property." (Id. at ¶ 15.3). Lastly, it incorporated a clause that stipulated "[t]his Agreement contains the entire agreement between the parties concerning the subject matter of the agreement and supersedes any prior agreement, understandings, or negotiations. No addition or modification of any term or provision shall be effective unless set forth in writing and signed by both Seller and Buyer." (Id. at ¶ 19.5).
At or about the time of signing, defendant deposited its first escrow payment of $100,000.00. (See id. at Ex. A pp. 162-65). On June 29, 2007, defendant made its second escrow payment of $50,000.00. (Def.'s R. 56.1 Statement in Supp. of Mot. ¶ 25). Then, on July 31, 2007, defendant received a mortgage commitment letter from Corporate Funding (Churgin Decl. Ex. V), and, pursuant to the Amended Purchase Agreement, defendant made its final escrow deposit, in the amount of $100,000.00. (Id. at Ex. W).
On September 26, 2007, defendant requested an extension of the closing date to on or before October 17, 2007. (Id. at Ex. X). Plaintiff's Corporate Real Estate Manager, Ken Cannata, replied:
Seller will agree to an extension to no later than October 17, 2007 without any requirements of Buyer. If an extension is requested beyond October 17, 2007, the following will be required of Buyer:
1. Maximum extension would be to October 26, 2007
2. An additional non-refundable deposit of $200,000.00(Id.).
3. Removal of price discount or broker fee discount.
On October 16, 2007, defendant allegedly received notice from Corporate Funding, its mortgagee, indicating that an additional $400,000.00 would need to be placed in escrow as an added condition of the mortgage "to insure that all work related to mold repair would be completed within 90 days of closing." (Id. at Ex. Y). Because defendant allegedly did not have the funds available to satisfy its mortgagee's $400,000.00 requirement prior to October 17, 2007, the closing did not go forward by that deadline. (Def.'s R. 56.1 Statement in Supp. of Mot. ¶ 30).
Plaintiff now disputes the veracity of Corporate Funding's purported letter of October 16, 2007, stating that it has "become clear that the 'Amendment to Commitment Letter' was a sham designed to buy time to permit North Sound to obtain financing," noting that "[n]o one has seen the 'mold report' referenced in the letter" and "Corporate Funding... identified... Joseph Treff as the 'private lender'" for defendant's purported mortgage, but "Mr. Treff did not represent a private lender in this transaction." (Pl.'s R. 56.1 Opp'n Statement ¶ 27).
According to plaintiff, between late September and early October 2007 it tried unsuccessfully to schedule a date and time for closing. (Cannata Decl. ¶ 19; see also Churgin Decl. Ex. AA). On October 19, 2007, plaintiff's Assistant General Counsel James Donchess sent a letter to defendant stating:
Parker is prepared to close this transaction and was prepared to close the transaction on October 17, 2007 and demands that Buyer proceed to closing. In the event that Buyer does not proceed to closing, the entire amount of the earnest money deposited is nonrefundable, because in Parker's view, Buyer failed to close the transaction on October 17, 2007, as required by the contract. Consequently, Parker demands that Buyer consent to the immediate release of the earnest money funds to Parker... Parker reserves all of its rights and remedies under the contract and at law with equity with respect to this matter...(Churgin Decl. Ex. Z).
Defendant's attorney, Eric Israel, responded in a letter dated October 29, 2007:
Please be advised that I never received prior written notice, pursuant to the Purchase Agreement ("PA"), scheduling the closing date for October 17, 2007. Further, there was never any time or location scheduled. Moreover, I was in contact via phone and email with Mr. Ken Cannata, of your office, discussing a "tentative closing date."
As I have discussed with Mr. Cannata, North Sound has not received a commitment to financing. Please be reminded that the PA does contain a financing contingency, in the event that North Sound fails to obtain financing. Therefore, North Sound rejects Seller's statement that the entire amount of the
earnest money deposited is non-refundable, since North Sound has not failed to close the transaction pursuant to the PA.(Id. at Ex. AA). Mr. Israel's letter further indicated that defendant had relied on plaintiff's estimate of approximately $32,000.00 in remediation costs. He noted that defendant was nonetheless still "anxious to close on the premises" but needed additional time to satisfy its lender's $400,000.00 mortgage contingency requirement, estimating that it would take an additional three weeks to finalize arrangements. (Id.). Finally, Mr. Israel indicated that, even if defendant had defaulted on the agreement, the Amended Purchase Agreement provided a window in which to cure the default. (Id.).
Additionally, North Sound does not consent to the release of any earnest money deposit to Seller.
We note that plaintiff contends that to the extent that Churgin Decl. Ex. AA is offered as evidence of purported communications that Mr. Israel may have had with plaintiff's representatives, it is inadmissible hearsay. (Pl.'s R. 56.1 Opp'n Statement p. 3).
Mr. Israel's October 29, 2007 letter stated that the Purchase Agreement provided a thirty-day window in which to clear default, but, in fact, ¶ 17.21 of the Purchase Agreement -- which was incorporated into the Amended Purchase Agreement -- provided that a defaulting party has only ten days after written notice of default in which to cure the default. (Churgin Decl. Ex. AA; Cannata Decl. Ex. L ¶ 17.2).
On November 1, 2007, in a reply to defendant's request for access to view the property again, Ken Cannata wrote to Eric Israel, "I would strongly suggest Mr. Breuer submit a formal proposal for Parker to consider as we are no longer under contract." (Cannata Decl. Ex. 7). Mr. Israel replied on November 8, 2007, writing, "The buyer is anxious to get this matter to close. Clearly there are significant open issues... Based on the PA [purchase agreement], we are still in contract. I believe that we can get this to close, based upon the terms under the PA..." (Churgin Decl. Ex. CC).
On November 16, 2007, plaintiff's Assistant General Counsel James Donchess wrote to Mr. Israel expressing hope that defendant would provide an "offer on how to get to closing on this deal today." (Donchess Decl. (docket no. 46) Ex. 2). He continued,
[W]e feel that your client does not have the wherewithal to purchase this property. In the absence of such an offer, what follows is Parker's position on this transaction. North Sound must make Parker an offer to revive the contract whereby the closing date is fixed at November 30, 2007 and all other contingencies are waived or satisfied; that is, there are no other conditions precedent to closing the sale. I did another review of the contract documents today and it is clear that your client has defaulted... and the deposit is due Parker."(Id.). Defendant's counsel never replied to this email. (Barnes Decl. Ex. 4 at 232).
Two months later, on January 16, 2008, Mr. Israel sent an email to Mr. Donchess and Mr. Cannata advising that defendant wished to schedule a closing for April 14, 2008. (Id. at Ex. EE). In response, Mr. Donchess sent a letter to defendant, with copies to the escrow agent, stating "[s]ince Buyer has not performed under the terms of the Sale Contract of March 5, 2007, the entire amount of the earnest money deposited is nonrefundable." The letter further requested that the escrow agent release the escrow funds "as soon as possible." (Id. at Ex. FF).
Mr. Israel responded by letter dated February 6, 2008, rejecting plaintiff's statement that the entire amount of the earnest money was non-refundable, and reiterating his request for a closing on April 14, 2008. (Id. at Ex. GG). Plaintiff apparently did not reply to this letter, and on March 4, 2008 defendant's counsel again sent a letter to plaintiff's counsel seeking to confirm the proposed closing date. (Id. at Ex. HH). Plaintiff did not respond and did not appear for a closing on April 14, 2008. (See id. at Ex. E p. 141, Ex. JJ).
On January 20, 2009, Parker sold the property to another party for $2.9 million. (Id. at Ex. MM).
PROCEDURAL HISTORY
Plaintiff filed its lawsuit in this court on August 25, 2010 (Compl.), and on November 17, 2010 both parties consented to jurisdiction by a magistrate judge. (Consent Form (docket no. 7)). On December 8, 2010, the parties' escrow agent deposited the $250,000.00 disputed amount with the court.
The court issued its initial case management plan on November 17, 2010, setting the deadline for amendments to the pleadings and for joinder of additional parties as December 31, 2010. (Case Management Plan, dated Nov. 17, 2010 (docket no. 8)). Following several extensions of the discovery deadline, discovery closed on June 20, 2011. (Order, dated May 2, 2011 (docket no. 18)). The deadline for filing dispositive motions was set as July 20, 2011. (Order, dated July 12, 2011 (docket no. 21)).
Both parties filed motions for summary judgment on July 20, 2011. On August 5, 2011 -- two days after filing its opposition to defendant's summary-judgment motion -- plaintiff filed a motion for leave to amend the complaint, seeking to add Mr. Breuer as a defendant and to add a claim to pierce defendant's corporate veil.
ANALYSIS
A. The Parties' Motions for Summary Judgment
1. Standard of Review
The court may enter summary judgment only if it concludes that there is no genuine dispute as to the material facts and that, based on the undisputed facts, the moving party is entitled to judgment as a matter of law. Fed. R. Civ. P. 56(c); see, e.g., Celotex Corp. v. Catrett, 477 U.S. 317, 322-23 (1986); Feingold v. New York, 366 F.3d 138, 148 (2d Cir. 2004). "An issue of fact is 'material' for these purposes if it 'might affect the outcome of the suit under the governing law' [while] [a]n issue of fact is 'genuine' if 'the evidence is such that a reasonable jury could return a verdict for the nonmoving party.'" Shade v. Hous. Auth., 251 F.3d 307, 314 (2d Cir. 2001) (quoting Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986)). It is axiomatic that the responsibility of the court in deciding a summary-judgment motion "is not to resolve disputed issues of fact but to assess whether there are any factual issues to be tried, while resolving ambiguities and drawing reasonable inferences against the moving party." Knight v. U.S. Fire Ins. Co., 804 F.2d 9, 11 (2d Cir. 1986); see, e.g., Anderson, 477 U.S. at 255; Howley v. Town of Stratford, 217 F.3d 141, 150-51 (2d Cir. 2000).
"When cross motions for summary judgment are made, the standard is the same as that for individual motions. The court must consider each motion independently of the other and, when evaluating each, the court must consider the facts in the light most favorable to the non-moving party." United Indus. Corp. v. IFTE PLC, 293 F. Supp. 2d 296, 299 (S.D.N.Y. 2003) (internal citations omitted).
2. Assessment of the Parties' Cross-Motions
In its motion for summary judgment, plaintiff argues that, in light of the time-is-of-the-essence provision in the Amended Purchase Agreement, defendant defaulted on the agreement by failing to close on or before the designated closing date. (Pl. Mem. in Supp. of Mot. for Summ. J. ("Pl. Mem. in Supp.") 12). Specifically, plaintiff argues that when defendant requested a second extension of the closing date on October 16, 2007, "Parker was willing to provide another short extension under certain terms, but North Sound did not agree to those terms" (id.), and, accordingly, defendant's failure to close on or before the October 17, 2007 deadline constituted default. (Id. at 13).
In contrast, defendant argues in its motion papers that plaintiff waived the time-is-of-the-essence provision and anticipatorily breached the agreement by failing to set a new closing date and by then failing to appear at the April 14, 2008 closing that defendant had scheduled. (Def. Mem. in Supp. of Mot. for Summ. J. ("Def. Mem. in Supp.") 12-19). Defendant argues that plaintiff breached the implied covenant of good faith and fair dealing by "preventing North Sound from closing, including by failing to provide necessary documents and calculations and by not attending North Sound's scheduled closing, showing the Property to other parties, selling the Property to another party and then claiming that Parker was entitled to keep the escrow deposits." (Id. at 22).
In New York, "the general rule of law is that the stipulated time of performance in executory contracts is of the essence unless a contrary intent appears," whereas "the rule of equity is that time of performance will not be considered of the essence of the contract unless it affirmatively appears that the parties regarded it as a material consideration." Lusker v. Tannen, 90 A.D.2d 118, 124, 456 N.Y.S.2d 354, 357 (1st Dep't 1982) (emphasis added); see Gurino v. Gabrielli, 133 A.D.2d 136, 137, 518 N.Y.S.2d 671, 673 (2d Dep't 1987); GDJS Corp. v. 917 Props., Inc., 99 A.D.2d 998, 473 N.Y.S.2d 453, 455 (1st Dep't 1984). Thus, "in an action at law to recover the down payment or for damages upon breach of an agreement, it is generally held that the time for performance stipulated in the contract is of the essence unless a contrary intent appears, either from the agreement or the conduct of the parties." GDJS Corp, 99 A.D.2d at 999, 473 N.Y.S.2d at 455.
"While the formal distinctions between an action at law and a suit in equity have long since been abolished in New York," Bank of Am. N.A. v. Lucido, 2013 WL 1292732, at *6 (Sup. Ct. Suffolk Cnty. 2012) (citing, inter alia, CPLR § 103), the underlying substantive principles of each continue to echo throughout New York's jurisprudence. See, e.g., id.; Cox v. City of New York, 265 N.Y. 411, 413, 193 N.E. 251, 252 (1934); Schenectady Holding Co. v. Ashton, 197 N.Y.S. 476, 478 (Sup. Ct. Schenectady Cnty. 1922), aff'd as modified, 204 A.D. 348, 197 N.Y.S. 737 (3d Dep't 1923).
Even in an action seeking equitable relief, a seller of real property may rely upon a stipulation in the contract, or in a subsequent communication, that time is of the essence, provided that the language is clear and unequivocal, and that it provides reasonable time for the buyer to perform. ADC Orange, Inc. v . Coyote Acres, Inc., 7 N.Y.3d 484, 490, 857 N.E.2d 513, 516 (2006); see In re Southold Dev. Corp., 134 B.R. 705, 708 (E.D.N.Y. 1991).
"When there is a declaration that time is of the essence... each party must tender performance on [the specified] day unless the time for performance is extended by mutual agreement." Grace v. Nappa, 46 N.Y.2d 560, 565, 415 N.Y.S.2d 793, 796 (1979). New York caselaw "clearly provides that a failure to abide by a time of the essence closing deadline in a sales contract is a material breach of the contract." In re New Breed Realty Enterprises, Inc., 278 B.R. 314, 325 (Bankr. E.D.N.Y. 2002); see Liba Estates, Inc. v. Edryn Corp., 178 A.D.2d 152, 153, 577 N.Y.S.2d 19, 20 (1st Dep't 1991).
A time-is-of-the-essence provision may be waived where the parties, by their conduct, "evince an intent that time not be of the essence." GDJS Corp., 99 A.D.2d at 999, 473 N.Y.S.2d at 455. A valid waiver requires "proof that there was a voluntary and intentional relinquishment of a known and otherwise enforceable right." Golfo v. Kycia Assocs., Inc., 45 A.D.3d 531, 533, 845 N.Y.S.2d 122, 124 (2d Dep't 2007). While such "waiver may be express or implied, the intent to waive 'must be clearly established and cannot be inferred from doubtful or equivocal acts or language, and the burden of proof is on the person claiming the waiver of the right.'" 200 E. 87th St. Assocs. v. MTS, Inc., 793 F. Supp. 1237, 1251 (S.D.N.Y. 1992), aff'd, 978 F.2d 706 (2d Cir. 1992) (quoting East 56th Plaza, Inc. v. Abrams, 91 A.D.2d 1129, 1130, 458 N.Y.S.2d 953, 955 (3d Dep't 1983)). In addition, any modification of a time-is-of-the-essence provision must be made in accordance with the contract's terms. See No. 1 Funding Ctr., Inc. v. H & G Operating Corp., 48 A.D.3d 908, 910, 853 N.Y.S.2d 178, 181 (3d Dep't 2008) (because contractual provision proscribed oral modification of the parties' written agreement, oral modification was barred by the statute of frauds) (citing, inter alia, N.Y. General Obligations Law § 15-301).
Once a time-is-of-the-essence provision has been waived, "the refusal to grant a reasonable adjournment may amount to a repudiation of the agreement." GDJS Corp., 99 A.D.2d at 999, 473 N.Y.S.2d at 4 55; see Oleg Cassini, Inc. v. Couture Coordinates, Inc., 297 F. Supp. 821, 831 (S.D.N.Y. 1969).
In this case, there is no dispute that the parties' Amended Purchase Agreement expressly provided that time was of the essence and set an initial deadline to close by September 30, 2007. (See Pl. Mem. in Supp. 8; Def. Mem. in Supp. 13; Cannata Decl. Ex. 2 ¶ 6); see also In re Southold Dev. Corp., 134 B.R. at 708. There is also no dispute that the parties mutually agreed to extend the closing deadline to October 17, 2007, yet did not actually close on that day. (See, e.g., Pl. Mem. in Supp. 5; Def. Mem. in Supp. 7).
In light of the time-is-of-the-essence provision in the Amended Purchase Agreement, defendant's failure to close on October 17, 2007 would appear, on its face, to constitute default. However, defendant argues that it did not default on the agreement because plaintiff waived the time-is-of-the-essence provision. We do not agree.
It is well-established that "[t]he fundamental, neutral precept of contract interpretation is that agreements are construed in accord with the parties' intent" and "a written agreement that is complete, clear and unambiguous on its face must be enforced according to the plain meaning of its terms." Greenfield v. Philles Records, Inc., 98 N.Y.2d 562, 569, 750 N.Y.S.2d 565, 569 (2002).
Applying the clear, unambiguous terms of the parties' Amended Purchase Agreement to the facts in this case, it is apparent that plaintiff did not waive the time-is-of-the-essence provision. We note that the agreement incorporated a provision stating that the Amended Purchase Agreement represented "the entire agreement between the parties" and that "[n]o addition or modification of any term or provision shall be effective unless set forth in writing and signed by both Seller and Buyer." (Churgin Decl. Ex. L at ¶ 19.5). Defendant does not argue, nor is there any evidence from which to infer, that the parties reached a mutual agreement to modify the Amended Purchase Agreement after October 17, 2007, or that, if any such agreement was reached, it was ever reduced to writing and signed by both parties. In light of the clear contractual proscription against modifications except where set forth in writing and signed by both parties, it is apparent that any purported waiver on the part of plaintiff, in the absence of such a signed writing, would be of no legal effect. See No. 1 Funding Ctr., Inc., 48 A.D.3d at 910, 853 N.Y.S.2d at 181.
Defendant cites Stefanelli v. Vitale in support of its argument that plaintiff's October 19, 2007 written demand that defendant proceed to closing, despite the passage of the contract's closing deadline, amounted to a waiver of the time-is-of-the-essence provision. (Def. Mem. in Supp. 14 (quoting 223 A.D.2d 361, 362, 636 N.Y.S.2d 50, 52 (1st Dep't 1996) (lawyer's letter "unequivocally stated a present willingness to proceed with closing... in spite of the passage of the date which had previously been made of the essence."))). However, that case is distinguishable from the one before us in that the parties' agreement in Stefanelli apparently did not require that any modification to the contract be signed by both parties. See Stefanelli, 223 A.D.2d at 361, 636 N.Y.S.2d at 51 (defendant unilaterally modified contract to provide that time was of the essence). Contrast No. 1 Funding Ctr., Inc., 48 A.D.3d at 910, 853 N.Y.S.2d at 181 (where contract required any modification to be signed by both parties, an indication of potential willingness to waive the time-of-the-essence provision was not effective in the absence of a writing signed by both parties).
We agree with plaintiff that the other cases cited by defendant in support of its waiver argument are inapplicable in this case. (See Pl. Opp'n Mem. to Def. Summ. J. Mot. (docket no. 41) 15-16).
Moreover, even if there had not been a contractual provision requiring a signed writing for any modification, we do not believe that the factual evidence proffered by defendant would have sufficed to establish beyond dispute that plaintiff intended to waive the time-is-of-the-essence provision. See 200 E. 87th St. Assocs., 793 F. Supp. at 1251. This would, at the very least, preclude summary judgment in defendant's favor. However, given the parties' clear agreement that modifications -- including any waiver -- must be signed by both parties, we conclude that there is no factual dispute as to whether plaintiff waived the time-is-of-the-essence provision. It plainly did not.
Thus, "[a]lthough conduct of the parties may create a waiver of a time of the essence provision, such was not the case herein. Rather, when the parties failed to close on the specified date, 'the contract was at an end.'" In re Southold Dev. Corp., 134 B.R. at 709 (quoting Rhodes v. Astro-Pac, Inc., 51 A.D.2d 656, 378 N.Y.S.2d 195, 197 (4th Dep't 1976), aff'd, 41 N.Y.2d 919, 394 N.Y.S.2d 623 (1977)).
The post-October 17 communications from plaintiff's representatives do not change this result. Once the October 17, 2007 "closing was aborted... it was not necessary for plaintiff to entertain further proposals from defendant, for if defendant had failed to satisfy a material element of the contract [by failing to close on time], [it] was already in default." Grace, 46 N.Y.2d at 566, 415 N.Y.S.2d at 796. To whatever extent plaintiff may have subsequently expressed a willingness to continue negotiations with defendant after the October 17, 2007 deadline, such conduct clearly did not amount to a waiver of plaintiff's rights under the contract. (See Churgin Decl. Ex. L at ¶ 19.11 ("[n]o waiver by a party of any Default by the other party under this Agreement shall be implied from any omission or delay by the nondefaulting party to take action on account of the Default if the Default persists or is repeated."), Ex. Z (Donchess wrote on October 19, 2007 "Parker reserves all of its rights and remedies under the contract and at law with equity with respect to this matter.")); see also S. D. Hicks & Son Co. v. J. T. Baker Chem. Co., 307 F.2d 750, 752 (2d Cir. 1962) ("there is no warrant for the position that a party to a contract waives his rights under the contract by failing to insist upon performance at the due date and by urging and encouraging the other party to perform thereafter.").
Because there was no contract between the parties after October 17, 2007, defendant's argument that plaintiff anticipatorily breached the agreement by failing to set a new closing date and by failing to appear for the purported closing in April 2008 is clearly inapposite.
In its motion papers, defendant does not address the potential applicability of the mortgage contingency provision incorporated in the Amended Purchase Agreement. According to that provision, if North Sound had been unable, after the exercise of good faith, to obtain a mortgage commitment before July 30, 2007, "the Agreement shall be deemed null and void at the option of either Party to this Agreement, communicated to the other Party, or to the other Party's attorney in writing via the United States Postal Service and Seller's sole liability thereunder shall be the return of the Initial Earnest Money Deposit." (Cannata Decl. Ex. 2 ¶ 8). Defendant does not dispute that it originally obtained a mortgage commitment within the contractual contingency period, although it asserts that the lender later added conditions that effectively withdrew that commitment. Typically, "when [a mortgage] lender revokes the mortgage commitment after the contingency period has elapsed, the contractual provision relating to failure to obtain an initial commitment is inoperable," and, if there is no contractual provision dealing with the subsequent revocation or amendment of the mortgage commitment, "the question becomes whether the lender's revocation was attributable to any bad faith on the part of the purchaser." Blair v. O'Donnell, 85 A.D.3d 954, 955, 925 N.Y.S.2d 639, 641 (2d Dep't 2011) (internal cites omitted). Thus, we imagine that an argument could be fashioned that, because of Corporate Funding's amendment to defendant's mortgage terms, defendant should have been excused from performance and is at least entitled to the return of its initial $100,000.00 escrow deposit. However, defendant has not made any such argument. In addition, its failure to notify plaintiff in a mailed writing that it had opted to trigger the mortgage contingency provision, as well as its ongoing efforts to pursue closing with plaintiff, suggest that it may have waived the application of the mortgage contingency provision. In addition, plaintiff's suggestion that Corporate Funding's amendment to the mortgage commitment was a "sham" intended to buy defendant more time (see supra, p. 8 n. 2) at least draws into question whether defendant would be able to satisfy the good-faith standard under Blair. In any event, we need not delve into these issues, as defendant has not raised them in its papers.
We also reject defendant's argument that plaintiff breached the implied covenant of good faith and fair dealing by "preventing North Sound from closing, including by failing to provide necessary documents and calculations and by not attending North Sound's scheduled closing, showing the Property to other parties, selling the Property to another party and then claiming that Parker was entitled to keep the escrow deposits." (Def. Mem. in Supp. 22; see also Churgin Decl. Exs. KK, LL, MM; Def.'s R. 56.1 Statement in Supp. of Mot. ¶¶ 51-61).
Under New York law, the "covenant of good faith cannot be used to create independent obligations beyond the contract." Wolff v . Rare Medium, Inc., 210 F. Supp. 2d 490, 497 (S.D.N.Y. 2002) aff'd, 65 F. App'x 736 (2d Cir. 2003). Defendant suggests that plaintiff "frustrate[d]" defendant's efforts to get to closing (Def. Mem. in Supp. 22) by failing to provide defendant with all of the estimates on the cost of remediation following the flood on the property, focusing in particular on an undisclosed appraisal that estimated total repair costs of $173,257.00. (Def. Mem. in Supp. at 6; Churgin Decl. Ex. S). However, the Amended Purchase Agreement did not require plaintiff to provide such documentation. Indeed, although defendant alleges that it "accepted Parker's offer to sell the Property for a $72,360 reduction in price 'contingent upon buyer's receipt, review and approval of the cost estimates that seller has obtained [as of May 2007], to repair the premises'" (Def. Mem. in Supp. at 6), the agreement did not include any such language and explicitly provided that it "supersedes any prior agreement, understandings, or negotiations." (Churgin Decl. Ex. L at ¶ 19.5). The new contract also specifically provided that defendant "agrees that Seller shall not have any liability, obligation or responsibility of any kind with regard to (a) the content or accuracy of the appraisal... of any other Person with respect to the Property." (Id. at ¶ 15.3). Since plaintiff did not have any contractual obligation to provide defendant with all of the remediation appraisals in its possession, and since plaintiff's withholding of a particular $173,257.00 appraisal did not deprive defendant of the benefit of the bargain, we reject defendant's claim that plaintiff breached the covenant of good faith by failing to provide that appraisal. See Aventine Inv. Mgmt., Inc. v. Canadian Imperial Bank of Commerce, 265 A.D.2d 513, 514, 697 N.Y.S.2d 128, 130 (2d Dep't 1999). Indeed, defendant has failed to demonstrate how the fact that plaintiff withheld such information could have interfered with its ability to close on October 17, 2007, since defendant concedes that the cause of its delay was a purported eleventh-hour change in its mortgage lender's prerequisites to the loan. (Def.'s R. 56.1 Statement in Supp. of Mot. ¶¶ 30-31).
We also note that there was no term in the Amended Purchase Agreement that prohibited plaintiff from showing the property to other parties. Moreover, plaintiff was clearly free to sell the property to another entity after the attempted sale to defendant had fallen through. Thus, we reject defendant's argument that plaintiff breached the implied covenant of good faith and fair dealing.
In sum, defendant's failure to close by the deadline of October 17, 2007, which was of the essence of the contract, constituted default. See In re New Breed Realty Enterprises, Inc., 278 B.R. at 325; Liba Estates, Inc., 178 A.D.2d at 153, 577 N.Y.S.2d at 20. James Donchess's letter of October 19, 2007 -- which stated "Buyer failed to close the transaction on October 17, 2007, as required by the contract" -- provided defendant with written notice of this default. (See Churgin Decl. Ex. L at ¶ 17.21, Ex. Z). Accordingly, pursuant to the terms of the Amended Purchase Agreement, defendant had ten days -- that is, until October 29, 2007 -- to cure its default and close on the property. (Id. at Ex. L ¶ 17.21). Its failure to do so entitles plaintiff to retain the full $250,000.00 escrow deposit as liquidated damages "based upon an understanding between the parties... that Seller will have suffered damages due to the withdrawal of the Premises from sale to the general public... [and] that the amount retained by the Seller is not a penalty, but rather a mutually beneficial estimate of damages suffered by the Seller." (Id.).
We also note that the Amended Purchase Agreement provided that, "[i]n the event of the bringing of an action or suit by either party against the other party by reason of any breach... the party in whose favor final judgment shall be entered" shall be awarded reasonable costs and expenses, including attorney's fees. (Churgin Decl. Ex. L ¶ 19.1; Cannata Decl. Ex. 2 p. EI000042). Thus, plaintiff is entitled to an award of reasonable costs and expenses accrued during the litigation of this case.
B. Plaintiff's Motion to Amend the Complaint
Following the close of discovery, plaintiff moved to amend the complaint to add claims against defendant's principal, Jacob Breuer, in his individual capacity, alleging that "[i]njustice will result if the corporate veil is not pierced to make Mr. Breuer liable for North Sound's breach of contract." (Pl. Notice of Mot. to Am. Ex. A ¶ 99). Plaintiff acknowledges that its effort to add Mr. Breuer to the action is primarily intended to ensure recovery on its claims for attorney's fees. (Pl. Reply in Supp. of Mot. to Am. 10).
Because of a suggestion in the proposed amended complaint that North Sound had not been properly incorporated, the court ordered the parties to submit supplemental briefing on plaintiff's motion to amend, addressing whether the corporate veil standard was indeed applicable in this case. In its supplemental submission, plaintiff clarified that paragraph 48 of the proposed amended complaint was intended "only to allege that North Sound was organized as a limited liability company as opposed to incorporated as a corporation" and conceded that the piercing standard for LLCs should be applied in the court's analysis of the motion. (Pl. Suppl. Br. (docket no. 73) 1).
1. Standard of Review
Rule 15(a)(2) of the Federal Rules of Civil Procedure specifies that federal courts should "freely give" leave to amend "when justice so requires." As explained by the Supreme Court, such leave is to be liberally granted:
If the underlying facts or circumstances relied upon by a plaintiff may be a proper subject of relief, he ought to be afforded an opportunity to test his claim on the merits. In the absence of any apparent or declared reason -- such as undue delay, bad faith or dilatory motive on the part of the movant, repeated failure to cure deficiencies by amendment previously allowed, undue prejudice to the opposing party by virtue of allowance of the amendment, futility of amendment, etc. -- the leave sought should, as the rules require, "be freely given."Foman v. Davis, 371 U.S. 178, 182 (1962); United States ex rel. Mar. Admin, v. Cont'l Ill. Nat'l Bank & Trust Co. of Chi., 889 F.2d 1248, 1254 (2d Cir. 1989) (quoting Foman, 371 U.S. at 182); accord, e.g., Jin v. Metro. Life Ins. Co., 310 F.3d 84, 101 (2d Cir. 2002). Nonetheless, where, as here, the trial court has set a schedule that includes a deadline for seeking leave to amend, the court may choose, irrespective of the liberality embodied in Rule 15(a), to deny an untimely requested amendment absent a showing by the movant, under Rule 16(b), of good cause for altering the court-ordered deadline. See, e.g., Grochowski v. Phoenix Constr., 318 F.3d 80, 86 (2d Cir. 2003); Parker v. Columbia Pictures Indus., 204 F.3d 326, 340 (2d Cir. 2000). In assessing good cause, the court looks to the degree of diligence of the moving party under the circumstances. E.g., Grochowski, 318 F.3d at 86.
The futility of an amendment generally turns on whether the proposed amended pleading states a viable claim. Thus, if the proposed new pleading could survive a Rule 12(b)(6) dismissal motion, it will generally not be deemed futile. Penn Grp., LLC v. Slater, 2007 WL 2020099, at *4 (S.D.N.Y. June 13, 2007) (citing cases). On such a motion, "[t]he issue is not whether a plaintiff will ultimately prevail but whether the claimant is entitled to offer evidence to support the claims." Scheuer v. Rhodes, 416 U.S. 232, 236 (1974), abrogated on other grounds by Harlow v. Fitzgerald, 457 U.S. 800 (1982); accord, e.g., Triestman v. Fed. Bureau of Prisons, 470 F.3d 471, 476 (2d Cir. 2006) (per curiam).
In assessing whether a proposed amendment would survive a potential motion to dismiss, the court must assume the truth of the well-pleaded factual allegations of the complaint and draw all reasonable inferences against the movant. See, e.g., Achtman v. Kirby, McInerney & Squire, LLP, 464 F.3d 328, 337 (2d Cir. 2006); Still v . DeBuono, 101 F.3d 888, 891 (2d Cir. 1996). It must also be "plausible" on its face, assuming all of its factual allegations to be true. See Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009); Bell Atl. Corp. v. Twombly, 550 U.S. 544, 560-70 (2007).
"Though the standard for futility has been formulated based on a motion to dismiss, where the motion to amend is made after discovery, courts have looked to the record in assessing whether the proposed amendment is futile. The Court is thus not limited to the pleadings in its assessment." Felmine v. City of New York, 2011 WL 4543268, at *25 n.8 (E.D.N.Y. Sept. 29, 2011) (internal cites omitted), recons. denied, 2012 WL 1999863 (E.D.N.Y. June 4, 2012).
2. Assessment of the Motion
In its proposed amended complaint, plaintiff asserts that Mr. Breuer was the sole owner and principal of North Sound, an LLC registered in Delaware. (Pl. Notice of Mot. to Am. Ex. A ¶¶ 46-49; Pl. Suppl. Br. 1). Plaintiff further alleges that "North Sound never had any assets, other than the minimum balance of $20.00 that Mr. Breuer deposited into its checking account," and that another entity made the $100,000.00 down payment on the property for North Sound. (Pl. Notice of Mot. to Am. Ex. A ¶¶ 51-52). In addition, plaintiff alleges that North Sound never observed corporate formalities and had no operating agreement, shareholder agreement, or articles of incorporation. (Id. at ¶¶ 53-55). According to plaintiff, Mr. Breuer "exercised complete domination and control over North Sound." (Id. at ¶56).
Defendant contends that, in addition to being untimely and prejudicial, plaintiff's proposed amendment is futile because plaintiff has failed to satisfy the legal standard for piercing the corporate veil. We agree.
Under New York law, "to pierce the corporate veil, the parent corporation [or shareholder] must at the time of the transaction complained of: (1) have exercised such control that the subsidiary 'has become a mere instrumentality' of the parent, which is the real actor; (2) such control has been used to commit [a] fraud or other wrong; and (3) the fraud or wrong results in an unjust loss or injury to plaintiff." Wm. Passalacqua Builders, Inc. v. Resnick Developers S., Inc., 933 F.2d 131, 138 (2d Cir. 1991) (quoting Lowendahl v. Baltimore & Ohio R.R. Co., 247 A.D. 144, 157, 287 N.Y.S. 62, 75 (1st Dep't 1936), aff'd, 272 N.Y. 360, 6 N.E.2d 56 (1936)).
Although North Sound was organized as an LLC under the laws of Delaware, both parties have relied on New York law in their motion briefs. Accordingly, we apply the law of New York in our analysis. Am. Fuel Corp. v. Utah Energy Dev. Co., Inc., 122 F.3d 130, 134 (2d Cir. 1997) ("where the parties have agreed to the application of the forum law, their consent concludes the choice of law inquiry").
As the Second Circuit has observed, the standard for piercing the veil of corporate entities is similar to that applied when piercing the veil of limited liability entities. See NetJets Aviation, Inc. v. LHC Commc'ns, LLC, 537 F.3d 168, 176 (2d Cir. 2008) (applying Delaware law); accord Retropolis, Inc. v . 14th St. Dev. LLC, 17 A.D.3d 209, 210, 797 N.Y.S.2d 1, 2 (1st Dep't 2005) (applying New York law). "Nevertheless, in the LLC context, 'somewhat less emphasis is placed on whether the LLC observed internal formalities because fewer such formalities are legally required.'" In re BH S & B Holdings LLC, 420 B.R. 112, 138 (Bankr. S.D.N.Y. 2009), aff'd as modified, 807 F. Supp. 2d 199 (S.D.N.Y. 2011) (quoting NetJets Aviation, 537 F.3d at 178).
Whether the factors in a given case "justify ignoring the corporate form and imposing liability on affiliated corporations or shareholders... is [highly] fact specific." Wm. Passalacqua Builders, Inc., 933 F.2d at 137. Nonetheless, piercing the corporate veil is appropriate only in "extraordinary circumstances." Murray v. Miner, 74 F.3d 402, 404 (2d Cir. 1996); accord Dole Food Co. v. Patrickson, 538 U.S. 468, 475 (2003).
Generally, factors that tend to show that a defendant corporation was controlled by a corporate parent or by shareholders to such an extent as to justify piercing the corporate veil include: "(1) the absence of the formalities and paraphernalia that are part and parcel of the corporate existence, i.e., issuance of stock, election of directors, keeping of corporate records and the like, (2) inadequate capitalization, (3) whether funds are put in and taken out of the corporation for personal rather than corporate purposes, (4) overlap in ownership, officers, directors, and personnel, (5) common office space, address and telephone numbers of corporate entities, (6) the amount of business discretion displayed by the allegedly dominated corporation, (7) whether the related corporations deal with the dominated corporation at arms length, (8) whether the corporations are treated as independent profit centers, (9) the payment or guarantee of debts of the dominated corporation by other corporations in the group, and (10) whether the corporation in question had property that was used by other of the corporations as if it were its own." Murray, 74 F.3d at 139. However, "in cases involving small privately-held corporations, preoccupation with strict corporate formality as followed in 'sophisticated corporate life' is inappropriate," Directors Guild of Am., Inc. v. Garrison Prods., Inc., 733 F. Supp. 755, 760 (S.D.N.Y. 1990), since "preoccupation with questions of structure, financial and accounting sophistication or dividend policy or history would inevitably beckon the end of limited liability for small business owners, many, if not most, of whom have chosen the corporate form to shield themselves from unlimited liability and potential financial ruin." William Wrigley Jr. Co. v. Waters, 890 F.2d 594, 601 (2d Cir. 1989).
Common characteristics that have been present in most of the cases where courts have deemed it appropriate, in the interest of equity, to disregard the corporate form have included the "on-going fraudulent activities of a principal, or a pronounced and intimate commingling of identities of the corporation and its principal or principals." Id.; accord A/S Domino Mobler v. Braverman, 669 F. Supp. 592, 594 (S.D.N.Y. 1987) ("The essential inquiry on a claim to pierce the corporate veil is whether the corporate form has been abused; i.e., whether the shareholder used his control of the corporation to further his own, rather than the corporation's, business or whether the shareholder used the corporate vehicle to achieve a fraud.").
For purposes of assessing the motion to amend, we accept plaintiff's allegations that Mr. Breuer "exercised complete domination and control over North Sound." Nonetheless, plaintiff's proposed amended complaint fails to allege facts that demonstrate either that Mr. Breuer abused the privilege of doing business in the LLC form to further his personal ends or for the purpose of perpetrating some wrong on plaintiff. Nor is there any allegation that would suggest that Mr. Breuer's use of the LLC form was the proximate cause of any actual injury to plaintiff.
Plaintiff alleges that North Sound had no assets other than the minimum balance of $20.00 in its checking account and that North Sound did not observe corporate formalities, had no operating agreement, no shareholder agreement, and no articles of incorporation. (Pl. Notice of Mot. to Am. Ex. A ¶¶ 51-55). However, we observe that the Delaware Limited Liability Company Act does not require registered LLCs to carry out any such corporate formalities, see In re BH S & B Holdings LLC, 420 B.R. at 138 ("the Delaware Limited Liability Company Act (DLLCA) requires little more than that an LLC execute a proper certificate of formation, maintain a registered office in Delaware, have a registered agent for service of process in Delaware, and maintain certain records for membership and tax purposes."). Thus, it is difficult to see how North Sound's failure to observe such formalities could in any way be regarded as an abuse of the LLC form, particularly given its small size. In addition, we note that "undercapitalization would be insufficient to pierce the corporate veil... because otherwise every insolvent subsidiary would have its veil pierced." Id. at 137; accord Gartner v. Snyder, 607 F.2d 582, 588 (2d Cir. 1979) (although corporation "was thinly capitalized, that alone is not a sufficient ground for disregarding the corporate form. We know of no New York authority that disregards corporate form solely because of inadequate capitalization.").
Based on the evidence in the record, there is nothing to suggest that Mr. Breuer comingled personal assets with those of North Sound, misappropriated assets from the company, or otherwise operated North Sound for his personal benefit, rather than, as he asserts (see Breuer Decl. in Opp'n to Mot. to Am. ¶ 3), to do business at the property that North Sound attempted to purchase from plaintiff. See, e.g., Mike Bldg. & Contracting, Inc. v . Just Homes, LLC, 27 Misc.3d 833, 849, 901 N.Y.S.2d 458, 472 (Sup. Ct. Kings Cnty. 2010). In addition, even had such improper use of the LLC form occurred, there is nothing to suggest that Mr. Breuer operated North Sound in any manner with the purpose of wronging plaintiff, or that North Sound's business operations did, in fact, harm plaintiff. See, e.g., Freeman v. Complex Computing Co., Inc., 119 F.3d 1044, 1053 (2d Cir. 1997); Sound Commc'ns, Inc. v. Rack & Roll, Inc., 88 A.D.3d 523, 524, 930 N.Y.S.2d 577, 579 (1st Dep't 2011). Indeed, the record shows that North Sound dutifully paid each of its escrow payments on time, in accordance with the terms of the parties' Purchase Agreement and Amended Purchase Agreement. That it may have ultimately breached the terms of the Amended Purchase Agreement by failing to close on time as we have concluded, above, that it did certainly does not constitute the type of wrongful conduct that justifies piercing the corporate veil. See, e.g., Tycoons Worldwide Grp. (Thailand) Pub. Co., Ltd. v. JBL Supply Inc., 721 F. Supp. 2d 194, 206-07 (S.D.N.Y. 2010); Millennium Const., LLC v. Loupolover, 44 A.D.3d 1016, 845 N.Y.S.2d 110, 111 (2d Dep't 2007). Moreover, the fact that plaintiff may be anxious about defendant's potential ability to pay attorney's fees is certainly of no moment for purposes of disregarding the LLC form in the absence of any suggestion that the form was abused. We therefore conclude that plaintiff's claim for piercing the corporate veil is futile.
Obviously, had plaintiff chosen, it could have insisted on requiring a guarantee by Mr. Breuer of the contractual performance of defendant, but it did not do so. --------
In addition, we note that plaintiff's belated motion to amend the complaint was filed seven months after the deadline for amendments had passed. (See Case Management Plan, dated Nov. 17, 2010). Plaintiff alleges that the factual predicate for its proposed amendment came to light during Mr. Breuer's deposition on June 28 and 29, 2011 (Barnes Decl. in Supp. of Pl.'s Reply in Mot. to Am.); however, plaintiff did not file its motion to amend until approximately six weeks later, nor did it notify the court before that time of a potential need to modify the deadline for amendments. Given plaintiff's apparent lack of diligence in this regard, we conclude that there is no good cause under Rule 16(b) for modifying the deadline for amendments.
Because the claim that plaintiff seeks to add in its proposed amended complaint is futile and, furthermore, untimely, plaintiff's motion to amend is denied.
CONCLUSION
For the reasons stated, plaintiff's motion for summary judgment is hereby granted and defendant's motion for summary judgment is denied. In addition, plaintiff's motion to amend the complaint is denied.
The $250,000.00 amount that was deposited by the escrow agent with the court shall be paid to plaintiff, along with the accrued interest on that amount.
Plaintiff is directed to file an affidavit, with contemporaneous time records, within seven days, in support of its request for attorney's fees, and is further directed to submit a proposed judgment to the court forthwith, upon notice to defendant. Dated: New York, New York
May 8, 2013
/s/ _________
MICHAEL H. DOLINGER
UNITED STATES MAGISTRATE JUDGE Copies of the foregoing Order have been sent today to: Richard A. De Palma, Esq.
Gabrielle Vázquez, Esq.
Thompson Hine LLP
335 Madison Avenue, 12th Floor
New York, New York 10017
Fax: (212) 344-6101 Nancy M. Barnes, Esq.
Thompson Hine LLP
3900 Key Center
127 Public Square
Cleveland, OH 44114-1291
Fax: (216) 566-5800 Joseph A. Churgin, Esq.
Savad, Churgin
55 Old Turnpike Rd.
Ste. 209
Nanuet, NY 10954
Fax: (845) 624-3821