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February 2, 1983


The opinion of the court was delivered by: MOTLEY



 This is a diversity action brought by plaintiffs Robin and Nusi Mauala, citizens of Western Samoa, against defendants, H & P 29th Street Associates (Associates), Milford Management Corp. (Milford), and J.I. Sopher, Inc. (Sopher). Defendants are, respectively, the owner, managing agent, and brokerage agent for a building located at 155 East 29th Street in New York City known as the Biltmore Plaza. Plaintiff Robin Mauala is the First Secretary of the Samoa Mission to the United Nations.

 The complaint alleges that plaintiffs were wrongfully evicted from their apartment in the Biltmore Plaza in violation of a valid lease agreement, giving rise to claims of: (1) wrongful eviction; (2) breach of an agreement to enter into a lease; (3) intentional infliction of emotional distress; and (4) related attorney's fees. Plaintiffs seek both compensatory and punitive damages on their first two claims. Both parties agree that New York law is to be applied here.

 Defendants have moved for summary judgment pursuant to Rule 56 of the Federal Rules of Civil Procedure and for an order dismissing plaintiffs' claims for failure to state a claim upon which relief can be granted pursuant to Fed. R. Civ. P. 12 (b) (6). Plaintiffs have cross-moved for partial summary judgment on the issue of defendants' liability. For the reasons set forth below, these motions are granted in part and denied in part.


 The following facts, except where indicated, are not in dispute. In late September, 1980, Nusi Mauala was shown an apartment in the Biltmore Plaza by a representative of Sopher. In October, 1980, plaintiffs negotiated with defendants, Associates and Milford, to rent apartment 12A at the Biltmore Plaza. Plaintiffs then delivered 3 checks to Sopher, each in the amount of $1,720, each representing one month's rent; plaintiffs also gave Sopher a security deposit and a brokerage fee. At the same time that these checks were delivered, plaintiffs signed and delivered to defendants a copy of a lease for apartment 12A. Defendants never signed or returned a copy of this lease to plaintiffs. Plaintiffs, however, claim that defendants orally agreed to return a signed and fully executed copy of the lease to them.

 Defendants subsequently requested that plaintiffs post a letter of credit for over $40,000 as additional security based on their diplomatic status. Following plaintiffs' objections, the parties agreed that plaintiffs' would deliver a check for $5,160, which defendants acknowledge having received in December, 1980.

 Under the terms of the lease executed by plaintiffs, the lease was to take effect on January 1, 1981. Plaintiffs, however, were permitted to take occupancy on December 23, 1980. Due to construction work remaining to be finished, the Biltmore Plaza did not open as originally planned on December 23. In the interim, Milford arranged for free housing for plaintiffs and other prospective tenants at the Milford Plaza Hotel. On December 23, 1980, plaintiffs were given keys to apartment 12A in the Biltmore and were permitted to store their belongings there. Defendants also painted apartment 12A in accordance with plaintiffs' color specifications. Plaintiffs ordered custom made rugs and furniture and arranged for electricity to be transferred over to their name in preparation for the move to the apartment. *fn1"

 In mid-January, 1981, written notice was sent to plaintiffs and the other prospective tenants instructing them to arrange move-in times with Milford. On January 24, plaintiffs' move-in date, defendants informed plaintiffs that because of plaintiffs' irresponsible behavior in the Milford Plaza Hotel, they would not be allowed to move in apartment 12A in the Biltmore Plaza. Immediately thereafter, plaintiffs were asked to relinquish their keys to apartment 12A. The instant action followed.


 Breach of an Agreement for a Lease

 Plaintiffs claim that defendants breached an agreement to them in which the parties agreed that plaintiffs would rent apartment 12A at the Biltmore Plaza for a three year term. Defendants contend that plaintiffs have not alleged facts sufficient to show the existence of an agreement to enter into a lease and, even, if they have, the agreement is invalid under the relevant provision of the New York Statute of Frauds, N.Y. General Obligations Law § 5-703 (McKinney 1963).

 N.Y. General Obligations Law § 5-703(2) requires that a contract for the lease or sale of any real property be evidenced by a written note or memorandum signed by the party to be charged. Here, it is undisputed that the agreement to enter into the lease was not in writing and the lease was not signed by the party to be ...

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