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Warner v. Kaplan

December 10, 2009

TRACY ALTMAN WARNER, ET AL., PLAINTIFFS-APPELLANTS,
v.
KENNETH R. KAPLAN, ET AL., DEFENDANTS-RESPONDENTS,
ROSENBLUTH & ROSENBLUTH, ETC., DEFENDANT.



Plaintiffs appeal from an order of the Supreme Court, New York County (Barbara R. Kapnick, J.), entered November 6, 2008, which granted defendants' motion for summary judgment dismissing the complaint.

The opinion of the court was delivered by: Saxe, J.

Published by New York State Law Reporting Bureau pursuant to Judiciary Law § 431.

This opinion is uncorrected and subject to revision before publication in the Official Reports.

Luis A. Gonzalez, P.J., David B. Saxe, James M. McGuire, Rolando T. Acosta Nelson S. Roman, JJ.

102920/06

This appeal concerns which party is entitled to the contract deposit placed in escrow pursuant to a contract of sale for a co-op apartment, when the purchaser dies after the sale is approved by the co-op's board of directors but before closing.

On May 11, 2005, defendants Kenneth F. Kaplan and Diane F. Kaplan, as sellers, and Glen Altman, as purchaser, entered into a contract for the sale of cooperative apartment 2A at 1150 Park Avenue in Manhattan, for the purchase price of $2.3 million in cash; a deposit of $230,000 was placed in escrow. As required by the contract, on July 27, 2005, Altman submitted her application to the co-op's board of directors for approval of the sale. On August 11, 2005, she was interviewed by the board of directors, and the board approved the sale on August 18, 2005.

While plaintiffs assert that Altman did not receive notification of the board's approval before she died, a broker for the co-op's managing agent stated that she informed Altman of the approval, and that on August 22, 2005, at Altman's request, Altman and her stepdaughter went to the subject apartment to consider whether Altman should purchase any of the sellers' personal property. On September 1, 2005, Altman died after suffering a stroke.

In a letter dated September 28, 2005, plaintiffs Tracy Altman Warner and Alan G. Kraut, co-executors of Glen Altman's estate, demanded that the sellers return the contract deposit of $230,000; the sellers took the position that the contract remained binding upon Altman's heirs, and if Altman's estate refused to close, it would be in default.

This action for return of the contract deposit followed, and, at the close of discovery, defendants moved for summary judgment dismissing the complaint. The motion was granted. We affirm that determination.

The crux of this matter lies in contract paragraph 15.2, which expressly makes the contract binding on the parties' "heirs, personal and legal representatives and successors in interest." The inclusion of this provision indicates that the parties explicitly contemplated, and provided for, the possibility of either party's death before closing, by specifying that the death would not terminate the contract, but that the contract would survive, to be performed by the successors or heirs of the deceased party. This provision makes the contract binding on Altman's estate.

While a contract for personal services is terminated by the death of the servant (see Minevitch v Puleo, 9 AD2d 285, 287 [1959]), a contract of sale is not terminated by the death of the purchaser. On the contrary, as a general rule, "[w]here the proposed purchaser dies before the closing of title, his executor or administrator may pay the balance of the purchase price and take the deed in his own name holding it in trust for the heirs at law or devisees. It is the duty of the fiduciary for a deceased vendee to complete payments under a contract entered into by such vendee for the purchase of real property" (4-35 Warren's Weed New York Real Property § 35.24 [2009] [footnote omitted]; see Di Scipio v Sullivan, 30 AD3d 660 [2006]).

We reject plaintiffs' suggestion that paragraph 1.17, the "Proposed Occupants" provision of the form contract, which was left blank in this instance, somehow negates paragraph 15.2. The purpose of the provision is merely to allow the purchaser to indicate which, if any, other individuals will be residing in the apartment with her. Whether filled in or left blank, the provision does not invalidate or limit the provision binding the parties' heirs to their predecessors' contractual obligations. Even if Altman had listed proposed occupants, upon her death, the legal issues presented would remain the same, and their resolution would still depend on whether her heirs were contractually obligated to purchase the apartment, regardless of whether the Board had approved the proposed occupants.

Indeed, paragraph 15.2 would be meaningless if it did not bind the purchaser's estate to her contractual obligation to purchase the apartment, and "a contract should not be interpreted so as to render any clause meaningless" (RM 14 FK Corp. v Bank One Trust Co., N.A., 37 AD3d 272, 274 [2007]). That the provision is a standard clause in a form contract renders it no less enforceable; the clause is clear and unambiguous, and if it inaccurately ...


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