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LLC v. Park Avenue Building & Roofing Supplies, LLC

Supreme Court of New York, Second Department

December 20, 2017

533 Park Avenue Realty, LLC, appellant,
v.
Park Avenue Building & Roofing Supplies, LLC, et al., respondents. Index No. 8313/14

          Argued - October 23, 2017

         D54175 G/hu

          Ernest E. Wilson, Brooklyn, NY (Frank R. Seddio of counsel), for appellant.

          Pryor Cashman LLP, New York, NY (Eric D. Sherman and Benjamin S. Akley of counsel), for respondents.

          MARK C. DILLON, J.P. JOHN M. LEVENTHAL HECTOR D. LASALLE FRANCESCA E. CONNOLLY, JJ.

          DECISION & ORDER

         Appeal from an order of the Supreme Court, Kings County (David B. Vaughan, J.), dated July 29, 2015. The order, insofar as appealed from, granted those branches of the defendants' motion which were to dismiss the amended complaint pursuant to CPLR 3211(a)(1) and (7) and cancel the notices of pendency.

         ORDERED that the order is reversed insofar as appealed from, on the law, with costs, and those branches of the defendants' motion which were to dismiss the amended complaint pursuant to CPLR 3211(a)(1) and (7) and cancel the notices of pendency are denied.

         The defendants, as sellers, and the plaintiffs assignor, as purchaser, entered into a contract dated March 31, 2014, for the sale of three contiguous parcels of property in Brooklyn. The purchase price was in excess of $4 million, and the purchaser made a down payment in the sum of $575, 489, with $3, 800, 211 payable at the closing. The contract provided that the closing was to occur on or before April 30, 2014, time being of the essence. On April 23, 2014, the plaintiffs attorney asked for an adjournment of the closing until May 2014, because the plaintiff had received a mortgage commitment and the lender still had to schedule an appraisal. The defendants' attorney did not respond to the request. Thereafter, on April 29, 2014, the parties communicated with each other with respect to the release of escrow funds, and no mention was made of the request for an adjournment.

         On April 30, 2014, the defendants' attorney, in the presence of a stenographer and notary public, noted that he had in his possession deeds to the subject properties, real estate transfer tax returns, and nonforeign status certifications, signed by the defendants, and further noted that the plaintiff had not appeared for a closing. The defendants thereafter terminated the contract due to the plaintiff's failure to appear at the time-of-the-essence closing, and retained the down payment.

         The plaintiff commenced this action seeking specific performance of the contract or, in the alternative, a return of the down payment, and filed notices of pendency with respect to the subject properties. The amended complaint alleged that on April 23, 2014, the plaintiff requested an adjournment of the time-of-the-essence closing date of April 30, 2014, and received no response. The amended complaint further alleged that the defendants did not communicate with the plaintiff about securing the documents necessary for them to close. The plaintiff alleged that, consistent with the parties' prior dealings, which included multiple adjournments of the closing dates, the plaintiff had a good faith belief that the defendants "would not proceed with the closing on April 30th .”

         The plaintiff further alleged that title reports for the subject properties revealed outstanding mortgages in the sums of $11, 265, 000, which far exceeded the $3, 800, 211 payable at the closing, and the defendants were "required at a closing to produce a pay-off letter for these mortgages and either a satisfaction, discharge or release from the holder, or good funds payable at the closing, to a title company in escrow to pay off these mortgages, " but failed to determine the payoff amount prior to the scheduled closing or engage in any other communications to comply with those provisions. The plaintiff sought specific performance of the contract or, in the alternative, return of the $575, 489 down payment.

         The defendants made a pre-answer motion, inter alia, to dismiss the amended complaint pursuant to CPLR 3211(a)(1) and (7). On a pre-answer motion to dismiss pursuant to CPLR 3211(a)(1) and (7), the allegations in the amended complaint must be accepted as true, and those allegations, ''supplemented by a plaintiffs additional submissions, if any, must be given their most favorable intendment" (Arrington v New York Times Co., 55 N.Y.2d 433, 442; see Mihlovan v Grozavu, 72 N.Y.2d 506). "Where evidentiary material is submitted and considered on a motion to dismiss a complaint pursuant to CPLR 3211(a)(7), and the motion is not converted into one for summary judgment, the question becomes whether the plaintiff has a cause of action, not whether the plaintiff has stated one and, unless it has been shown that a material fact as claimed by the plaintiff to be one is not a fact at all and unless it can be said that no significant dispute exists regarding it, dismissal should not eventuate" (Agai v Liberty Mut. Agency Corp., 118 A.D.3d 830, 832, citing Guggenheimer v Ginzburg, 43 N.Y.2d 268, 274-275). Relief pursuant CPLR 3211(a)(1) requires documentary evidence which utterly refutes the plaintiffs factual allegations, conclusively establishing a defense as a matter of law (see Goshen v Mutual Life Ins. Co. of N. Y., 98 N.Y.2d 314, 326; Endless Ocean, LLC v Twomey, Latham, Shea, Kelley, Dubin & Quartararo, 113 A.D.3d 587, 588).

         The Supreme Court granted those branches of the defendants' motion, concluding that (1) the plaintiff did not appear, and did not have funds to close, on April 30, 2014, the time-of-the-essence closing date, (2) the plaintiffs argument that the defendants were not ready to close on the law day is without merit, because the plaintiff was required, pursuant to paragraph 6(a)(i) of the contract, to raise any title objections prior to the closing, which it did not do. The court further found that the plaintiff, as purchaser, was required to tender performance and demand good title before it could complain that the defendants were not ready or could not convey good title. The court found that ''[i]n light of the documentary evidence that plaintiff was not ready, willing and able to close, that it failed to appear at the closing, and that it therefore defaulted under the Purchase Agreement, plaintiff is not entitled to either specific performance or the return of its deposit.'' The plaintiff appeals.

         In order to retain the down payment, the defendants were required to prove that they were ready, willing, and able to perform on the law day (see Imperatore v 329 Menahan St., LLC,130 A.D.3d 784, 785; Matter of Hicks, 72 A.D.3d 1085; Pinhas v Comperchio,50 A.D.3d 1117). There are exceptions to this rule, such as where the purchaser seeks to cancel the contract without giving the seller an opportunity to cure any defects (see Martocci v Schneider,119 A.D.3d 746, 747), but that was not the case here. In order to obtain a return of the down payment, the purchaser is not ...


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