Questions of Fact Remained About Whether the Seller Was “Ready, Willing and Able to Close” and Whether the Seller Had Breached the Implied Covenant of Good Faith and Fair Dealing—Supreme Court Should Not Have Granted Summary Judgment to Seller
The First Department, in a full-fledged opinion by Justice Acosta, determined that summary judgment, entitling the seller of shares of a cooperative allocated to a penthouse to keep the plaintiff-buyer’s $2.75 million deposit, should not have been granted. During the course of purchase negotiations a dispute arose about whether a terrace was exclusively for the use of the occupants of the penthouse or whether it was a common area which could be used by other residents. Supreme Court held the issue had been resolved in the plaintiff-buyer’s favor. But the First Department held that the proof did not demonstrate the issue had been fully resolved such that the plaintiff could be sure of an exclusive right to the use of the terrace. Because the proof did not demonstrate the issue had been fully resolved, there were questions of fact whether the seller was “ready, willing and able to close” on the time-of-the-essence closing date and whether the plaintiff had a good reason not to attend the closing. The First Department also found there were questions of fact about whether the seller had breached the implied covenant of good faith and fair dealing by trying the force the closing irrespective of whether the cooperative might later take steps to interfere with the plaintiff’s exclusive use of the terrace:
Without the [cooperative’s] Board’s affirmative and unequivocal acknowledgment that the shareholders have no right to traverse the terrace, and that it would not take future action to revoke plaintiff’s exclusive right to use that space, plaintiff lacked adequate assurances that his right of exclusivity (and the market value of the apartment) would remain undisturbed if he consummated the sale … .
The [seller] has not shown that plaintiff was given these assurances and, consequently, it failed to demonstrate its ability to close … . Moreover, absent a showing that plaintiff received unequivocal assurances that the Coop would not interfere with his right of exclusivity going forward, the [seller] cannot show that plaintiff lacked a lawful excuse to abstain from attending the closing … . Pastor v DeGaetano, 2015 NY Slip Op 03307, 1st Dept 4-21-15