-December 1, 2017
Kravet & Vogel, P.C. (Mischel & Horn, P.C., New York,
NY [Scott T. Horn], of counsel), for appellant.
Tauber Spievack & Wagner, P.C., New York, NY (Kenneth J.
Rubinstein of counsel), for respondent Metroeb Realty 1, LLC.
& Associates PLLC, New York, NY (Jonathan D. Lupkin of
counsel), for respondent RedSky Capital, LLC.
WILLIAM F. MASTRO, J.P. RUTH C. BALKIN FRANCESCA E. CONNOLLY
LINDA CHRISTOPHER, JJ.
DECISION & ORDER
action to recover damages for breach of contract, for
specific performance of a contract for the sale of real
property, and for declaratory relief, the plaintiff appeals,
as limited by its brief, from so much of a judgment of the
Supreme Court, Kings County (Lawrence Knipel, J.), dated June
6, 2014, as, upon a decision of the same court (Ann T. Pfau,
J.), dated May 6, 2014, made after a nonjury trial, dismissed
the complaint and declared that a contract executed on May 4,
2012, between the plaintiff and the defendant Metroeb Realty
1, LLC, for the sale of the subject real property is not
valid and enforceable.
that the judgment is reversed insofar as appealed from, on
the law, on the facts, and in the exercise of discretion,
with one bill of costs, the complaint is reinstated, and the
matter is remitted to the Supreme Court, Kings County, for
further proceedings to determine what remedy is available to
the plaintiff, and thereafter, for the entry of an amended
judgment, inter alia, declaring that the contract executed on
May 4, 2012, between the plaintiff and the defendant Metroeb
Realty 1, LLC, for the sale of the subject real property is
valid and enforceable.
October 22, 2012, the plaintiff commenced this action against
the defendant Metroeb Realty 1, LLC (hereinafter Metroeb).
The plaintiff sought to recover damages for breach of
contract, specific performance of a contract for the sale of
real property, and declaratory relief. The plaintiff alleged
that on May 4, 2012, the parties entered into a contract in
which Metroeb agreed to sell the subject property to the
plaintiff for the sum of $30 million, but that Metroeb
thereafter entered into a contract to sell the property to a
different purchaser. Metroeb counterclaimed for a declaration
that the purported contract was not valid and enforceable.
RedSky Capital, LLC (hereinafter RedSky), which entered into
the subsequent contract to purchase the property, intervened
in the action as a defendant, asserting, inter alia, a
counterclaim against the plaintiff for a declaration that the
plaintiffs purported contract with Metroeb is not valid and
enforceable. The action proceeded to a nonjury trial.
evidence at trial established that on May 3, 2012, following
various negotiations regarding the sale of the property, Sam
Sprei, acting as agent of the plaintiff, presented a contract
of sale for the purchase of the property to Metroeb's
principal, Aaron Berger. The contract bore the indicia of a
formal contract for the sale of real property in that it was,
inter alia, 22 pages long and annexed numerous schedules,
including the metes and bounds description for the property,
an agreement for the assignment of leases and security
deposits for existing tenants, and a survey of the property.
Additionally, the contract was signed by the plaintiffs
principal, Isaac Jacobowitz, on behalf of the plaintiff.
Sprei also gave Berger two down payment checks from the
plaintiff totaling $3 million, the required down payment
under the terms of the contract. Berger retained the checks,
but never presented them for payment. On May 4, 2012, Sprei
and Berger met at Berger's office and negotiated and made
numerous handwritten changes to the contract. Each change was
initialed by Berger and Sprei. Further, each page of the
contract was initialed at the bottom by Berger and Sprei, and
Berger signed the contract on the signature line as president
contract provided that the closing would take place on July
9, 2013, with time being of the essence. Berger testified
that it was his understanding that the contract would be sent
to an attorney to be put in ''proper form, ''
and then signed. On May 7, 2012, a copy of a $3 million
certified check intended to replace the two prior checks was
emailed to Berger. However, this check was never delivered to
Berger and was later redeposited by Jacobowitz into his
account. After the signing of the contract, Jacobowitz and
Berger continued to negotiate aspects of the sale, but the
parties never agreed to the changes or signed a new contract.
8, 2012, four days after signing the contract to sell the
property to the plaintiff, Berger received an offer from
RedSky to purchase the property for $32 million. On July 20,
2012, Metroeb and RedSky entered into a contract of sale for
the property with a purchase price of $32.5 million. Notably,
after the contract with RedSky was signed, Berger continued
to negotiate and meet with Jacobowitz, to whom he sent copies
of leases and plans for the building on May 17, 2012. During
this period of time, the plaintiff arranged for $20 million
in financing through a lender. Jacobowitz testified that the
balance of the purchase price would be funded through the
plaintiffs cash holdings.
August 20, 2012, Berger tendered to the plaintiff a proposed
agreement for the "Termination of Contract of Sale,
" dated July 26, 2012, which the plaintiff did not sign.
On August 20, 2012, Berger contacted Chase Bank and was
informed that the plaintiff s down payment checks were
"not good at present.'' By letter dated August
21, 2012, Metroeb informed the plaintiff that it was
cancelling the contract because the account on which the
checks were drawn did not contain sufficient funds.
Jacobowitz testified that the funds had been moved from that
checking account to an interest-bearing account, and that
sufficient funds would be transferred to the account to cover
the checks when they were presented for payment. Jacobowitz
testified that as of "the intended closing date under
the contract, ' the plaintiff had the funds to close and
was ready, willing, and able to perform.
decision after trial dated May 6, 2014, the Supreme Court
determined that the plaintiff and Metroeb had not come to a
meeting of the minds on May 4, 2012, which the court found
was evidenced by Berger and Jacobowitz's continuing
negotiations after that date. Accordingly, by judgment dated
June 6, 2014, the Supreme Court, inter alia, dismissed the
complaint and declared that the May 4, 2012, contract between
the plaintiff and Metroeb was not valid and enforceable.
Further, the judgment directed that Metroeb shall convey the