Opinion
No. 08–45555.
2009-09-25
George G. SEMERJIAN and The Terry Townhouses, LLC, Plaintiffs, v. Marta BYER–WHITE, Martin White, Village Latch, Inc., and Southampton Village Latch Inn, Inc., Defendants.
Esseks, Hefter & Angel, LLP, Riverhead, for Plaintiffs. Kenneth T. Wasserman, Esq., New York, for Defendants.
Esseks, Hefter & Angel, LLP, Riverhead, for Plaintiffs. Kenneth T. Wasserman, Esq., New York, for Defendants.
ARTHUR G. PITTS, J.
ORDERED that these motions are consolidated for the purpose of this determination; and it is further
ORDERED that the motion by the plaintiffs (# 001) for an order pursuant to CPLR 3212 granting summary judgment in their favor is denied; and it is further
ORDERED that the motion by the defendants (# 002) for an order pursuant to CPLR 3212 granting summary judgment dismissing the complaint and cancelling the notice of pendency filed or, alternatively, cancelling the notice of pendency upon the posting of an equivalent undertaking, is granted to the extent that the complaint is dismissed and the notice of pendency is vacated, and is otherwise denied.
This is an action to recover a down payment in the amount of $2,000,000.00 based upon the defendants' alleged default under the terms of the parties' contract for the sale of real property.
On August 14, 2007, the plaintiffs, as purchasers, and the defendants, as sellers, entered into a “Contract of Sale” with respect to a certain real property located in Southampton, New York.
“Schedule C” of the rider provided that the $27,000,000 .00 purchase price would be paid by a $2,000,000.00 down payment and the balance at the closing of title.
The property, consisting of two separate lots, was operated as a single business consisting of various motel, hotel, and cottage units, a swimming pool, a tennis court, and out buildings.
The Supplemental Rider (SR) provided that, although the sellers agreed to cooperate with any applications the purchasers might make relative to re-zoning of the property, the closing of title was not contingent upon the outcome of such applications (SR.17). It also provided for a closing date of September 16, 2008 or the date on which the sellers fully vacate, but no sooner than May 1, 2008 (SR.16). The contract provided that, in the event that the purchasers defaulted, the sellers sole remedy would be retention of the down payment as liquidated damages (paragraph § 13. 04). The initial “due diligence” period of 60 days was extended, pursuant to which the purchasers averred that he had inspected the premises and chose not to cancel the contract (paragraphs 39 and 40 of the rider, and paragraph 7 of the financial agreement dated December 11, 2007).
On December 11, 2007, this financial arrangement was reiterated in an agreement resulting from the defalcation of the down payment by the sellers' original attorney and escrow agent, Ira A. Berman, Esq., and his subsequent suspension from the practice of law.
Paragraph 5.01 of the contract provided, in relevant part, that the purchasers had inspected the premises, were familiar with its physical condition, and accepted the premises “as is,” subject to reasonable use, wear and tear.
Section 13 of the contract, entitled “Objections to Title, Failure of Seller or Purchaser to Perform and Vendee's Lien,” provides at Paragraph 13.01, in relevant part, that the purchasers shall promptly order an examination of title and shall cause a copy of the title report to be forwarded to the sellers attorney, and that the sellers shall be entitled to a reasonable adjournment of the closing date to remove any defects in or objections to title noted in such title report or any other defect or objection which may be disclosed on or prior to the closing date.
The rider provided, in relevant part:
30.In addition to the Permitted Exceptions, The Premises are also sold and shall also be conveyed subject to (a) any state of facts an accurate survey of the Premises will reveal, provided same do not render title unmarketable; * * * (c) variations, if any, between fences, retaining walls, brick walls, party walls, sheds, shrub lines, and the like, with the lines of record title, as shown on the Survey and any additional variations, between fences, retaining walls, brick walls, party walls, shrub lines and the like, with the lines of record title, provided that said variations will not prohibit the structures on the Premises as they presently exist from remaining standing.
The supplemental rider provided, in relevant part:
SR. 8. Supplementing and modifying the provisions of Paragraph 30 of the first rider hereto, the parties agree to take title subject to the agreements of record specified in * * * subparagraph (c) * * * provided such variations are limited to less than 1 foot and further provided that Purchaser's title company does [not]
raise any “out of possession”, “rights of others”, or similar exceptions with respect thereto.
Although the original document omitted the word “not,” it would appear from the context of the sentence that, if the title company found a variation in the property line of less than one foot which would affect the rights of others, that such variation would be unacceptable.
Among the correspondence exchanged by the parties is:
• Letter dated November 13, 2007 from the purchasers' title company to purchasers' attorney regarding “Schedule B Exceptions to Title” which states, in pertinent part, that “Company will NOT insure that the wood deck that encroaches onto adjoining premises West may remain as presently situated.”
Sellers' attorney, Kenneth Wasserman, argues that he was not provided with a copy of this November 2007 exception to title until December 2008, although it appears that it was sent to the sellers' former attorney, Ira Berman, and that he first learned of the deck encroachment in the November 17, 2008 letter from Steven Angel, Esq.
• Facsimile of letter dated October 20, 2008 from the sellers' attorney, Kenneth T. Wasserman, Esq., confirming an agreement with purchasers' attorney, Gilbert G. Flanagan, Esq., that the closing would take place on November 20th (2008).
• Letter dated November 13, 2008 from the sellers' attorney to plaintiffs confirming that the purchasers' attorney was unable to provide a time (date) and place of closing, that the purchasers and the sellers had planned upon a meeting, and that they had, in fact, met the month before.
• Letter dated November 17, 2008 from Steven R. Angel, Esq., the attorney for the purchasers and their attorney, Mr. Flanagan, advising the sellers' attorney of an objection to title pursuant to a survey which showed that a portion of the wood deck on one cottage extended 2.1 feet over the property line, that such encroachment was not a permitted exception under Schedule B, or paragraph 30 of the Rider as modified by paragraph SR 8, and that it, therefore, constituted an objection to title.
• Letter dated December 8, 2008 from the sellers' attorney to the purchasers' attorney, Mr. Flanagan, reiterating the past correspondence and meetings, stated that the deck has been removed and that TIME IS OF THE ESSENCE, and setting a closing date of December 23, 2008.
The parties do not dispute that the deck in dispute was modified on December 9, 2008 by removing the 2.1 feet which extended over the property line, that a survey performed for the purchasers on December 11, 2008 confirmed that the subject deck was fully within the sellers' property line, and that the purchasers were aware that the deck encroachment had been remedied prior to the scheduled closing. However, the purchasers directed their title company not to attend the closing and, at the closing on December 23, 2008, the purchasers refused to deliver the purchase price because “the property is not as defined in the contract.”
The gravamen of the plaintiffs' motion is that they are entitled to return of the down payment because the sellers' unilateral alteration and reduction of the contractually defined premises, by reducing the size of one of the structures, represented a default under the contract. The plaintiff's argue that Schedule B, paragraph 7(b) of the contract, permitted exceptions included “encroachments of stoops, areas, cellar steps, trim cornices, lintels, window sills, awnings, canopies, ledges, fences, hedges, coping and retaining walls projecting from the Premises over any street or highway or over any adjoining property,” and that such permitted encroachments did not include decks. However, the “permitted exceptions” provided at subsection (d) includes “any statement of fact that an accurate survey would disclose, provided that such facts do not render title unmarketable.” The title report at issue does not render title unmarketable; rather, it states that the company would not insure that the wood deck encroachment “may remain as presently situated.” Moreover, the main thrust of the plaintiffs' argument is that the sellers were obligated to tender title to the premises in the “as is” condition specified in paragraph 5.01 of the contract, subject to normal wear and tear, and that removal of more than two feet from the subject deck, days before the closing, violated both riders to the contract at paragraph 30 and SR 8.
However, it is well settled that where 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 parties' reasonable expectations ( see, W.W.W. Assoc. v. Giancontieri, 77 N.Y.2d 157, 565 N.Y.S.2d 440 [1990];Costello v. Casale, 281 A.D.2d 581, 723 N.Y.S.2d 44,lv denied97 N.Y.2d 604, 737 N.Y.S.2d 52 [2001];see also, Manzi Homes v. Mooney, 29 A.D.3d 748, 816 N.Y.S.2d 130 [2006] ). Therefore, when the sellers remedied the encroachment of 2.1 feet of the subject deck by removing enough of the deck to ensure that it was completely within the property boundary line, they were complying with paragraph 13.01 of the contract which provides that the sellers shall be entitled to remove any defects or objections to title prior to closing, or an adjournment of closing to remove any objection to title, disclosed on or before the closing date. While the purchasers seek to construe the contract, which obligates them to accept the premises in its “as is” condition, as thereby precluding the sellers from remedying the encroachment, such a reading of the contract would render the remedy provided by paragraph 13.01 meaningless ( see, Zullo v. Variey, 57 A.D.3d 536, 868 N.Y.S.2d 290 [2008] [where the sellers revegetated a portion of the property in response to a notice that it had been overcleared, in violation of the Town Code, and the Court rejected the purchasers' argument that because they were obligated to accept the property “as is,” such remediation violated their contract] ). Here, the purchasers have not established that the sellers were not entitled to remedy the encroachment by altering the deck prior to the closing date. Such alteration permitted the deck, and the cottage to which it was attached, to remain “standing” (paragraph 30).
Therefore, the sellers established their prima facie entitlement to judgment as a matter of law by showing that they were ready, willing, and able to perform on the law day, while the purchasers failed to proceed with the closing ( see, Pinhas v. Comperchio, 50 A.D.3d 1117, 857 N.Y.S.2d 616 [2008];Engelhardt v. McGinnis, 2 A.D.3d 572, 769 N.Y.S.2d 297 [2003] ). In response to this showing, the purchasers failed to raise a triable issue of fact as to whether they tendered performance or whether the sellers were in default ( see, Cohen v. Kranz, 12 N.Y.2d 242, 238 N.Y.S.2d 928 [1963];Hegner v. Reed, 2 A.D.3d 683, 770 N.Y.S.2d 87,lv denied2 N.Y.3d 705, 780 N.Y.S.2d 310 [2004];R.C.P.S. Assoc. v. Karam Devs., 258 A.D.2d 510, 685 N.Y.S.2d 261 [1999] ). Pursuant to the contract of sale, the sellers are entitled to retain the amount of the down payment as liquidated damages (Regal Realty Servs. v. 2590 Frisby, 62 A.D.3d 498, 878 N.Y.S.2d 363 [2009];Verolla v. Beechwood Carmen Bldg. Corp., 43 A.D.3d 913, 841 N.Y.S.2d 610 [2007];see also, Maxton Bldrs. v. Lo Galbo, 68 N.Y.2d 373, 509 N.Y.S.2d 1986] ). Accordingly, the defendants' motion for summary judgment dismissing the complaint and vacating the subject notice of pendency is granted and the plaintiffs' motion for summary judgment is correspondingly denied.
Submit judgment.