Opinion
Index No. 521722/2020 MS 3 4 5
10-07-2022
BRYAN YUDKIN, Plaintiff, v. EVERGREEN TERRACE 888 CORP., VINCENT LONGOBARDI, EDWARD DORAN, DERRICK GIBBS, WITNICK 888 FLUSHING AVE LLC, and 888 OSCAR & AUGUST LLC, Defendants.
Unpublished Opinion
DECISION AND ORDER
HON. CAROLYN E. WADE, J.S.C.
Recitation, as required by CPLR §2219(a), of the papers considered in the review of Defendants' Motions and Plaintiffs Cross-Motion:
Papers NYSCEF #'s
Order to Show Cause/Notice of Motion and Affidavits/Affirmations Annexed........................................ 29,30,31,40
Cross-Motion and Affidavits/Affirmations.......................... 57, 58
Answering Affidavits/Affirmations...................................... 64
Reply Affidavits/Affirmations.............................................. 73, 74
Defendant's Memorandum of Law.......................................
Upon the foregoing cited papers, and after virtual oral argument, Defendant Edward Doran ("Doran") moves this Court, pursuant to CPLR § 3211 (a)(5) and CPLR § 3211(a)(8) (Mot. Seq. 3), for an order dismissing the amended complaint on the grounds that he was not properly served; and that the fraud and breach of contract claims are time barred.
Defendant, 888 Oscar & August LLC ("O&A") moves to dismiss the amended complaint pursuant to CPLR §§3211 (a)(5) and (7) (Mot. Seq. 4), on the grounds that the breach of contract and fraud claims are time barred, and failure to state a cause of action.
Plaintiff, Bryan Yudkin ("Yudkin" or "Plaintiff') cross-moves for an order, pursuant to CPLR §306 (b), granting him an extension of time to serve, nunc pro tunc on defendant, Doran (Mot. Seq. 5).
The underlying action arises out of a contract of sale between defendant, Evergreen Terrace 888 Corp. ("Evergreen"), the sponsor of the condominium conversion at 888 Flushing Avenue, Brooklyn, New York ("subject building"), and the Plaintiff, for the purchase of a condominium unit ("Unit 1L").
On November 16, 2007, Evergreen submitted an Offering Plan for the subject building to the New York State Office of the Attorney General ("OAG") for condominium ownership as required by law. After the Plan was accepted by the OAG on December 1, 2010, Evergreen began to market the condominium units for sale.
On January 2,2012, Plaintiff entered into a contract of sale with Evergreen to purchase Unit 1L in the building for $320,250.
The OAG declared the plan effective on March 15, 2013. According to the contract of sale, this would have triggered the scheduling of a closing date for Unit 1L. On April 15,2013, Evergreen's broker, Christopher Polisano, informed the Plaintiff that "the building was remaining a rental and that Plaintiff should get [his] contract deposit back ASAP." On April 22,2013, Defendant Doran reiterated this message in an email to Plaintiff stating that Evergreen had "decided just to keep it as a rental building." Doran explained to Plaintiff that this was due to issues that the OAG had with the subject building. These issues were vaguely described as "sign off and appraisal issues." On or about July of 2013, Evergreen's principal, Doran, once again informed the Plaintiff that the Offering Plan would be abandoned, and that the contract of sale was effectively terminated.
Under the subject contract of sale, the Offering Plan could be abandoned at any time prior to it being declared effective. However, once the Offering Plan is declared effective, 13 NYCRR § 20.1 and tye Offering Plan governs condominium offerings, and the limited circumstances under which it can be abandoned. For example, under 13 NYCRR § 20.1, the Offering Plan may be abandoned if there is a defect in title, substantial damage, or destruction of the building, or the taking of property by condemnation or eminent domain.
On or about June 18, 2014, Evergreen had closed on a deal to sell the subject building to defendants Witnick 888 Flushing Ave, LLC ("Witnick"), as 10% interest holder, and O&A as a 90% interest holder. The Offering Plan was still in effect at the time of this sale. Plaintiff alleges that defendants, Witnick and O&A, as the new owners of the subject building, assumed the role of successor sponsor and were bound by all of Evergreen's obligations. This included commitment to sell the units, and more specifically, its obligations under the contract and the Offering Plan. Within two months, on August 11,2014, the Offering Plan was formally abandoned.
Plaintiff alleges that defendants, Witnick and O&A, worked with defendants, Evergreen, Doran, and Vincent Longobardi ("Longobardi") to ensure that the Offering Plan was formally abandoned. On November 4,2020, Plaintiff commenced the instant action.
Defendants' CPLR § 3211 (aV5) Motions to Dismiss (Mot Seqs. 3 and 4)
Defendants, Doran and O&A (collectively "Movants-Defendants"), each move to dismiss on the grounds that Plaintiffs fraud and breach of contract claims are time barred (Mot. Seq. 3 and 4). In support of their respective motions, Movants-Defendants argue that the breach of contract and fraud claims accrued in April of 2013, when Evergreen's broker advised the Plaintiff that they were no longer moving forward with the Offering Plan and would not proceed with the contract of sale. Movants-Defendants contend that at this point Plaintiff knew Evergreen was not going to proceed with the sale of the unit. To support this proposition, Movants-Defendants argue that within two months, Yudkin had entered into a contract of sale on July 18, 2013 for a different property located at 18-34 26th Ave, Queens, New York.
In opposition, Plaintiff argues that both claims are not time barred. Plaintiff asserts that the fraud and breach of contract causes of action could only have accrued on either, June 18,2014, the date the subject building was sold to Witnick; or August 11, 2014, the date the Offering Plan was formally abandoned.
Plaintiff maintains'that the breach of contract action accrued on August 11, 2014, when the Offering Plan was abandoned. According to Plaintiff, he could not have brought a breach of contract claim prior to August 11, 2014, because the Offering Plan was not formally abandoned and, thus, the contract of sale was still valid and in effect, As for the fraud claim, Plaintiff argues that it too did not accrue until the Offering Plan was abandoned, since that is when the injury element was satisfied at that point. Plaintiff alleges that beginning in March of 2013, Evergreen and Doran misrepresented the issues that arose with the OAG. Other, alleged misrepresentations included issues with the subject building's certificate of occupancy, plumbing and electrical work. According to Plaintiff, Evergreen did not respond to requests for certain documents and failed to cooperate with the OAG office to correct issues that arose in the Offering Plan. Plaintiff believes that Evergreen and Doran's representations regarding the Offering Plan and the subject building were fraudulent as they were motivated by Evergreen's desire to compel him to cancel the contract of sale and sell the subject building at a higher profit.
Alternatively, Plaintiff contends that even if the Court was to find that the fraud claim accrued prior to June 2014, the continuous wrong doctrine applies. Under this theory, the statute of limitations did not begin to run until the last "wrong act." Plaintiff maintains that the last wrong act occurred on August 11, 2014, when the Offering Plan was formally abandoned. Thus, his fraud claim should be deemed timely.
In rebuttal, Movants-Defendants reiterate their contentions that Plaintiffs fraud and breach of contract claims are time barred; and that the Plaintiff was notified in April 2013 of Evergreen's intent not to proceed with the contract.
"On a motion to dismiss a complaint pursuant to CPLR § 3211 (a)(5) on a statute of limitations grounds, the moving defendant must establish, prima facie, that the time in which to commence the action has expired" (Doukas v Ballard, 135 A.D.3d 896, 897 [2d Dept 2016]).
An action to recover damages for breach of contract is governed by a six-year statute of limitations period (see CPLR § 213 [2]). The statute of limitations begins to run when the cause of action accrues (see CPLR § 203 [a]). "A breach of contract cause of action accrues at the time of the breach, even though the injured party may not know of the existence of the wrong or injury" (Sternberg v Continuum Health Partners, Inc., 186 A.D.3d 1554,1557 [2d Dept 2020]).
Here, the statute of limitations on Plaintiffs breach of contract claim began to accrue no later than April 22, 2013, when Defendant Doran informed the Plaintiff that that they decided to keep the building as a rental. "An anticipatory breach of contract by a promisor is a repudiation of [a] contractual duty before the time fixed in the contract for [...] performance has arrived" (Princes Point LLC v Muss Dev. L.L.C., 30 N.Y.3d 127, 133, 65 N.Y.S.3d 89, 87 NE3d 121 [2017] [internal quotation marks omitted]). "For an anticipatory repudiation to be deemed to have occurred, the expression of intent not to perform by the repudiator must be 'positive and unequivocal'" (Lafnarche Food Prods, Corp. v 438 Union, LLC, 178 A.D.3d 910, 912 [2d Dept 2019]). Doran's statement to the Plaintiff constitutes an unequivocal repudiation of the contract of sale. At this point, Plaintiff should have known that Evergreen was not proceeding with the contract of sale and the Offering Plan. In fact, nearly three months after Plaintiff became aware of Evergreen's plan, he entered into a new contract of sale on July 18,2013, to purchase a different property. Accordingly, Plaintiffs breach of contract claim began to run no later than April 22,2013, and expired on April 22,2019.
"A cause of action based upon fraud must be commenced within six years from the time of the fraud, or within two years from the time the fraud was discovered, or with reasonable diligence could have been discovered, whichever is longer" (Davis v Farrell Fritz, P. C., 201 A.D.3d 869, 872 [2d Dept 2022]).
Similarly, Plaintiffs fraud claim is also time-barred. Beginning in March 2013, Plaintiff by his own account grew weary of defendants, Evergreen and Doran's alleged misrepresentations regarding issues the OAG had with the Offering Plan. Doran informed Plaintiff on April 22, 2013, that the building was remaining a rental. Yudkin attests that on May 13, 2013, he received an e-mail from Doran which indicated that issues arose with respect to the certificate of occupancy, as well as plumbing and electrical sign offs. (Plaintiffs Affidavit in Opposition and in Support of Cross Motion, NYSECF Doc. No. 48). Plaintiffs request for further information from defendants, Evergreen and Doran, was met with delay and silence. Any viable fraud claim would have begun to accrue no later than May 13, 2013, ;at which point, Plaintiff possessed enough knowledge of facts to have discovered any fraud with reasonable diligence. Instead, Plaintiff took no further action because he was "unwilling to walk away from an increasingly valuable investment for no reason." Since Plaintiff did not commence this action until November 4, 2020. the fraud claim is deemed untimely.
Moreover, Plaintiffs argument that the continuous wrong doctrine saves his fraud claim is unfounded. That doctrine "may only be predicated on continuing unlawful acts and not on the continuing effects of earlier unlawful conduct" (Blaize v NY City Dept. of Educ., 205 A.D.3d 871, 874-875 [2d Dept 2022] [internal citations and quotations omitted]). "The distinction is between a single wrong that has continuing effects and a series of independent, distinct wrongs." Id. (Blaize v NY City Dept. of Educ, 205 A.D.3d 871, 874-875 [2d Dept 2022] [internal citations and quotations omitted]).
Here, the abandonment of the Plan on August 11,2014, does not constitute the "last wrong act." It was the continuing effects of the alleged earlier misrepresentations made to Plaintiff regarding the subject building. Plaintiff, by his own admission, was aware in May 2013 that Evergreen was not moving forward with the Plan. The fact that it was formally abandoned over a year later, does not constitute a distinct wrong. Therefore, the latest Plaintiffs fraud claim would have accrued was May 2013, which would have provided him until May 2019 to bring his fraud claim.
Plaintiffs Cross-Motion for Nun Pro Tunc Service (Mot. Sea. 5)
Plaintiffs cross-moves for an order, pursuant to CPLR § 306 (b), granting him an extension of time to serve, nunc pro tunc on defendant, Doran (Mot. Seq. 5). However, based upon the above rulings Plaintiffs cross-motion is DENIED as moot.
Accordingly, Defendant Doran's motion to dismiss (Mot. Seq. 3) the amended complaint pursuant to CPLR § 3211 (a)(5) is GRANTED.
Accordingly, Defendant O&A's motion to dismiss (Mot. Seq. 4) the amended complaint pursuant to CPLR § 3211 (a) (5) is GRANTED.
Accordingly, Plaintiffs cross-motion for a nun pro tunc service Order (Mot. Seq. 5) is DENIED as moot.
This constitutes the Decision and Order of the Court.