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OFFICERS AND EMPLOYEES OF DEFENDANT CORPORATION, ALTHOUGH NON-SIGNATORIES, CAN ENFORCE THE ARBITRATION PROVISION OF THE CONTRACT BETWEEN PLAINTIFF AND THE CORPORATION 2ND DEPT.

The Second Department, reversing Supreme Court, determined individual defendants, who were officers and/or employees of defendant corporation McGowan Builders, Inc, could enforce the agreement to arbitrate made between plaintiff and the corporation:

Here, the alleged misconduct attributed to the individual defendants in the complaint related to their behavior as employees and officers of McGowan Builders. Since “a corporation can only act through its officers and employees” … , any breach of the agreement would necessarily have to occur as a result of some action or inaction attributable to an officer or employee of McGowan Builders. As the Court of Appeals has recognized under similar circumstances, a rule allowing corporate officers and employees to enforce arbitration agreements entered into by their corporation “is necessary not only to prevent circumvention of arbitration agreements but also to effectuate the intent of the signatory parties to protect individuals acting on behalf of the principal in furtherance of the agreement” … . Under the circumstances of this case, the individual defendants were entitled to enforce the arbitration provision contained in the subcontract agreement between McGowan Builders and the plaintiff … . Accordingly, the Supreme Court should have granted that branch of the motion of the moving defendants, including the individual defendants, which was to compel arbitration of the causes of action alleging conversion, unfair competition, and tortious interference insofar as asserted against them. Degraw Constr. Group, Inc. v McGowan Bldrs., Inc., 2017 NY Slip Op 05580, 2nd Dept 7-12-17

ARBITRATION (OFFICERS AND EMPLOYEES OF DEFENDANT CORPORATION, ALTHOUGH NON-SIGNATORIES, CAN ENFORCE THE ARBITRATION PROVISION OF THE CONTRACT BETWEEN PLAINTIFF AND THE CORPORATION 2ND DEPT)/CONTRACT LAW (ARBITRATION, OFFICERS AND EMPLOYEES OF DEFENDANT CORPORATION, ALTHOUGH NON-SIGNATORIES, CAN ENFORCE THE ARBITRATION PROVISION OF THE CONTRACT BETWEEN PLAINTIFF AND THE CORPORATION 2ND DEPT)/CORPORATION LAW (ARBITRATION, OFFICERS AND EMPLOYEES OF DEFENDANT CORPORATION, ALTHOUGH NON-SIGNATORIES, CAN ENFORCE THE ARBITRATION PROVISION OF THE CONTRACT BETWEEN PLAINTIFF AND THE CORPORATION 2ND DEPT)

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CONDOMINIUM BOARD STATED BREACH OF CONTRACT CAUSES OF ACTION AGAINST THE FIRM WHICH INSPECTED THE CONDOMINIUMS DURING CONSTRUCTION 2ND DEPT.

The Second Department determined plaintiff, suing on behalf of condominium owners, had stated breach of contract causes of action against the defendant (KEPC) which had inspected the condominiums during construction on behalf of the developer (SDS). The complaint sufficiently alleged plaintiff was a third-party beneficiary of the oral contract between KEPC and SDS and was a successor-in-interest to the contract between KEPC and SDS:

A nonparty to a contract may maintain a cause of action alleging breach of contract only if it is an intended, and not a mere incidental, beneficiary of the contract … . However, “the identity of a third-party beneficiary need not be set forth in the contract or, for that matter, even be known as of the time of its execution” … . A party asserting rights as a third-party beneficiary must allege: (1) the existence of a valid and binding contract between other parties, (2) that the contract was intended for its benefit, and (3) that the benefit to it is sufficiently immediate, rather than incidental, to indicate the assumption by the contracting parties of a duty to compensate it if the benefit is lost … . “In determining third-party beneficiary status, it is permissible for the court to look at the surrounding circumstances as well as the agreement” … .

Here, taking the allegations in the complaint as true and affording the plaintiff every favorable inference, the plaintiff sufficiently pleaded a cause of action against KEPC to recover damages for breach of contract on a third-party beneficiary theory… . Moreover, KEPC failed to come forward with competent documentary evidence that refuted, as a matter of law, the plaintiff’s allegation that it was a third-party beneficiary of its contract with SDS … .

Condominium unit owners may also be considered successors-in-interest to the condominium sponsor’s construction contracts under certain circumstances … . Whether a party is a successor-in-interest to the performance of a particular contract is generally a question of fact that depends on the circumstances of the case … . Board of Mgrs. of 100 Congress Condominium v SDS Congress, LLC, 2017 NY Slip Op 05414, 2nd Dept 7-5-17

 

CONTRACT LAW (CONDOMINIUM BOARD STATED BREACH OF CONTRACT CAUSES OF ACTION AGAINST THE FIRM WHICH INSPECTED THE CONDOMINIUMS DURING CONSTRUCTION 2ND DEPT)/THIRD-PARTY BENEFICIARY (CONTRACT LAW, CONDOMINIUM BOARD STATED BREACH OF CONTRACT CAUSES OF ACTION AGAINST THE FIRM WHICH INSPECTED THE CONDOMINIUMS DURING CONSTRUCTION 2ND DEPT)/SUCCESSOR-IN-INTEREST (CONTRACT LAW, CONDOMINIUM BOARD STATED BREACH OF CONTRACT CAUSES OF ACTION AGAINST THE FIRM WHICH INSPECTED THE CONDOMINIUMS DURING CONSTRUCTION 2ND DEPT)/CONDOMINIUMS (CONTRACT LAW, CONDOMINIUM BOARD STATED BREACH OF CONTRACT CAUSES OF ACTION AGAINST THE FIRM WHICH INSPECTED THE CONDOMINIUMS DURING CONSTRUCTION 2ND DEPT)

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DEFENDANT DEMONSTRATED NO PARTNERSHIP HAD BEEN FORMED, SUMMARY JUDGMENT IN THIS ACTION ALLEGING BREACH OF A PARTNERSHIP AGREEMENT PROPERLY GRANTED. ​

The Fourth Department, over a dissent, determined summary judgment was properly granted to defendant in this breach of a partnership agreement action. Defendant demonstrated no partnership had been formed:

“A partnership is an association of two or more persons to carry on as co-owners a business for profit” (Partnership Law § 10 [1]). Where, as here, there is no written partnership agreement between the parties, a court looks to the parties’ conduct, intent, and relationship to determine whether a partnership existed in fact … . The relevant factors are (1) the parties’ intent, whether express or implied; (2) whether there was joint control and management of the business; (3) whether the parties shared both profits and losses; and (4) whether the parties combined their property, skill, or knowledge … . No single factor is determinative; a court considers the parties’ relationship as a whole … .

… [W}e must consider whether the parties expressly or implicitly intended to become partners … . Evidence concerning the parties’ preliminary negotiations bears directly on their intent …  In support of his motion, defendant submitted, inter alia, the deposition testimony of plaintiff, the affidavit of defendant, invoices, a lease, and the parties’ correspondence documenting their contract negotiations. That evidence establishes that the parties never shared the intent to become partners. In June 2004, defendant wrote an email to plaintiff suggesting that they discuss “how [they] might be able to work together.” Plaintiff responded that a partnership “might work” and expressed hope that the parties could come to a “workable agreement.” Thereafter, the parties met in person and plaintiff explained that he wanted a 50% share in a partnership. Plaintiff later testified at his deposition that, upon hearing that proposal, defendant had “a look on his face like maybe he wasn’t expecting that,” and did not respond.

Although plaintiff testified that he interpreted defendant’s silence as an agreement to an equal partnership, the documentary evidence undermines any such assumption. * * * … [T]he evidence demonstrates that the parties never shared the intent to enter into a partnership, although they initially had explored the possibility of one. Hammond v Smith, 2017 NY Slip Op 05337, 4th Dept 6-30-17

 

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INSURER’S DISCLAIMER OF COVERAGE IN THIS SLIP AND FALL CASE IS NOT SUFFICIENT PROOF THE TENANT FAILED TO PROCURE THE INSURANCE REQUIRED BY THE LEASE, SUMMARY JUDGMENT ON THE BREACH OF CONTRACT CAUSE OF ACTION SHOULD NOT HAVE BEEN GRANTED.

The Fourth Department, reversing Supreme Court, determined summary judgment on the breach of contract cause of action should not have been granted. The property owner (the church) in this parking lot slip and fall case alleged that the lessee (Stepping Stones) failed to procure the insurance required by the lease. That allegation was based on the insurer’s disclaimer of coverage. The Fourth Department noted that the disclaimer could be erroneous and was therefore not proof of a breach of the lease:

In denying Stepping Stones’s motion in part and sua sponte granting summary judgment to the Church defendants on the breach of contract claims, the court reasoned that the Church defendants were entitled to judgment on the ground that, “[i]f the insurance carrier provided by Stepping Stones fails to cover the broad coverage demanded by the Lease, then Stepping Stones has breached the Lease agreement.”

On appeal, Stepping Stones addresses only the court’s determination with respect to the breach of contract claims. We agree with Stepping Stones that the court erred in granting summary judgment to the Church defendants on those claims, and we therefore modify the order accordingly. The mere fact that the insurance carrier disclaimed coverage for the accident does not establish as a matter of law that Stepping Stones failed to obtain the necessary coverage. It is possible that the insurance carrier’s disclaimer was improper, and that possibility may be explored by way of a declaratory judgment action … . Strong v St. Thomas Church of Irondequoit, 2017 NY Slip Op 05333, 4th Dept 6-30-17

 

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THE DOCTRINE OF PROMISSORY ESTOPPEL CAN BE APPLIED TO BYPASS THE STATUTE OF FRAUDS IF THE RESULT OF ENFORCING THE STATUTE WOULD BE UNCONSCIONABLE, THE RESULT HERE WAS NOT UNCONSCIONABLE. ​

The Court of Appeals, in a full-fledged opinion by Judge Fahey, over a dissent (raising a different issue), agreeing with the Third Department, held that the doctrine of promissory estoppel can be applied to bypass the Statute of Frauds if enforcing the Statute of Frauds would lead to an unconscionable result. Here, however, disagreeing with the Third Department, the Court of Appeals found that enforcement of the Statute of Frauds would not lead to an unconscionable result. The case involved devised property with a mortgage on it. The decedent, in an earlier will, provided that the mortgage should be paid off with estate funds. However, that provisions was not included in a subsequent will. The petitioners sought to enforce an oral agreement to pay off the mortgage. Because the value of the property was about three times the amount of the mortgage, the Court of Appeals reasoned the result was not unconscionable and the Statute of Frauds should be enforced:

“The Statute of Frauds was designed to guard against the peril of perjury; to prevent the enforcement of unfounded fraudulent claims. But, as Professor Williston observed: ‘The Statute of Frauds was not enacted to afford persons a means of evading just obligations; nor was it intended to supply a cloak of immunity to hedging litigants lacking integrity; nor was it adopted to enable defendants to interpose the Statute as a bar to a contract fairly, and admittedly, made'” … ,

In other words, equity “will not permit the statute of frauds to be used as an instrument of fraud” … .

We hold that where the elements of promissory estoppel are established, and the injury to the party who acted in reliance on the oral promise is so great that enforcement of the statute of frauds would be unconscionable, the promisor should be estopped from reliance on the statute of frauds. * * *

The standard for unconscionability where one party is seeking to avoid the statute of frauds must be equally demanding, lest the statute of frauds be rendered a nullity. …

“The strongly held public policy reflected in New York’s Statute of Frauds would be severely undermined if a party could be estopped from asserting it every time a court found that some unfairness would otherwise result. For this reason, the doctrine of promissory estoppel is properly reserved for that limited class of cases where the circumstances are such as to render it unconscionable to deny the promise upon which the plaintiff has relied” … . Matter of Hennel, 2017 NY Slip Op 05266, CtApp 6-29-17

 

RELEASE DID NOT ENCOMPASS A BREACH OF THE SETTLEMENT AGREEMENT ITSELF.

The Fourth Department, over an extensive dissent, determined a release from liability for flooding on plaintiff’s land did not encompass a breach of contract action concerning the failure of a drainage system. As part of the settlement agreement in the prior action stemming from the flooding, defendant agreed to construct a drainage system which, plaintiff alleges, did not alleviate the flooding:

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It is well settled that settlement agreements and general releases are “governed by principles of contract law”… . Viewing the facts as alleged in the first and second causes of action, for breach of contract, in the light most favorable to plaintiff and affording plaintiff all favorable inferences … ,we conclude that the release does not “evince an intention to encompass the distinct contractual obligations defendant undertook upon which plaintiff’s breach of contract causes of action are premised” … , i.e., the breach of the settlement agreement itself. Marinaccio v Town of Clarence, 2017 NY Slip Op 04962, 4th Dept 6-16-17

CONTRACT LAW (RELEASE DID NOT ENCOMPASS A BREACH OF THE SETTLEMENT AGREEMENT ITSELF)/RELEASE (CONTRACT LAW, RELEASE DID NOT ENCOMPASS A BREACH OF THE SETTLEMENT AGREEMENT ITSELF)

THIRD-PARTY BENEFICIARY OF A CONTRACT DEMONSTRATED BREACH OF CONTRACT, CRITERIA EXPLAINED, A HEARING WAS REQUIRED TO ASSESS DAMAGES, CONVERSION CAUSE OF ACTION CANNOT BE BASED UPON BREACH OF CONTRACT ALONE.

The Second Department determined that El Equity, which financed a line of credit, was a third-party beneficiary of a contract which required El Equity’s approval before funds could be deposited in any accounts other than those designated in the contract between SDS and GBL. El

Equity demonstrated the breach of contract, but was not entitled to summary judgment because the amount of damages was not proven. The Second Department further determined that the failure to deposit funds in violation of the contract will not also support a cause of action for conversion:

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The evidence in admissible form submitted by El Equity demonstrated, prima facie, that it was an intended third-party beneficiary of the SDS Agreement, and that SDS breached that agreement. ” A non-party [to a contract] may sue for breach of contract only if it is an intended, and not a mere incidental, beneficiary'” …  However, ” the identity of a third-party beneficiary need not be set forth in the contract or, for that matter, even be known as of the time of its execution'”… . “A party asserting rights as a third-party beneficiary must establish (1) the existence of a valid and binding contract between other parties, (2) that the contract was intended for [its] benefit and (3) that the benefit to [it] is sufficiently immediate, rather than incidental, to indicate the assumption by the contracting parties of a duty to compensate [it] if the benefit is lost”…  ” In determining third-party beneficiary status it is permissible for the court to look at the surrounding circumstances as well as the agreement,'” and ” the obligation to perform to the third party beneficiary need not be expressly stated in the contract'” … .

Here, El Equity was not a party to the SDS Agreement. However, El Equity established, prima facie, that the SDS Agreement was a valid and binding contract between GBL and SDS, and that El Equity was an intended third-party beneficiary of the SDS Agreement… . * * *

El Equity also demonstrated, prima facie, that SDS breached the SDS Agreement. The SDS Agreement required SDS to “pick up all” MMIS checks “and deposit them into the Escrow Account,” and SDS admittedly did not deposit four MMIS checks into the Escrow Account, but gave those checks directly to GBL. Contrary to SDS’s contention, El Equity established, prima facie, that, to the extent that it sustained any damages, those damages were caused, at least in part, by SDS’s breach of the SDS Agreement … . Greater Bright Light Home Care Servs., Inc. v Jeffries-El, 2017 NY Slip Op 04821, 2nd Dept 6-14-17

 

CONTRACT LAW (THIRD-PARTY BENEFICIARY OF A CONTRACT DEMONSTRATED BREACH OF CONTRACT, CRITERIA EXPLAINED, A HEARING WAS REQUIRED TO ASSESS DAMAGES)/THIRD-PARTY BENEFICIARY (CONTRACT LAW, THIRD-PARTY BENEFICIARY OF A CONTRACT DEMONSTRATED BREACH OF CONTRACT, CRITERIA EXPLAINED, A HEARING WAS REQUIRED TO ASSESS DAMAGES)/CONVERSION (CONTRACT LAW, CONVERSION CAUSE OF ACTION CAN NOT BE BASED UPON BREACH OF CONTRACT ALONE)

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QUESTIONS OF FACT ABOUT WHETHER DECEDENT’S WIFE IS A BORROWER WITHIN THE MEANING OF THE REVERSE MORTGAGE DOCUMENTS PRECLUDES SUMMARY JUDGMENT, IF DECEDENT’S WIFE IS A BORROWER SHE MAY REMAIN IN THE MORTGAGED PREMISES, IF NOT, FORECLOSURE CAN PROCEED.

The Third Department, over a two justice dissent, determined questions of fact about whether decedent’s wife (defendant) is a “borrower” within the meaning of the reverse mortgage documents precluded summary judgment. If decedent’s wife is a borrower, foreclosure on the mortgage cannot proceed while she resides in the home. If she is not a borrower, foreclosure can proceed upon her husband’s death. The dissent argued that the documents drafted by plaintiff mortgage company were internally inconsistent and the company should therefore be precluded from claiming decedent’s is not a borrower:

Undoubtedly, where there is no extrinsic evidence relevant to an ambiguity in an agreement, “the issue is to be determined as a question of law for the court” … . In contrast, however, “[i]f there is ambiguity in the terminology used . . . and determination of the intent of the parties depends on the credibility of extrinsic evidence or on a choice among reasonable inferences to be drawn from extrinsic evidence, then such determination is to be made by the jury”… . This precedent establishes that the rule “that any ambiguity in a document is resolved against its drafter[] is a rule of construction that should be employed only as a last resort”… .

Here, the extrinsic evidence is relevant to the parties’ intentions as to whether defendant is a “[b]orrower” and is also conflicting on that point. Viewing this evidence in the light most favorable to the nonmoving party in regard to the respective motions for summary judgment, the determination of the parties’ intentions depends on the credibility of extrinsic evidence — including the credibility of defendant’s claim that the parties to the note and mortgage intended for her to be able to remain in the home in the event of her husband’s death — and the choices between the reasonable inferences that can be drawn from the extrinsic evidence. Nationstar Mtge. LLC v Goeke, 2017 NY Slip Op 04521, 3rd Dept 6-8-17

 

FORECLOSURE (REVERSE MORTGAGE, QUESTIONS OF FACT ABOUT WHETHER DECEDENT’S WIFE IS A BORROWER WITHIN THE MEANING OF THE REVERSE MORTGAGE DOCUMENTS PRECLUDES SUMMARY JUDGMENT, IF DEFENDANT IS A BORROWER SHE MAY REMAIN IN THE MORTGAGED PREMISES, IF NOT, FORECLOSURE CAN PROCEED)/CONTRACT LAW (REVERSE MORTGAGE, QUESTIONS OF FACT ABOUT WHETHER DECEDENT’S WIFE IS A BORROWER WITHIN THE MEANING OF THE REVERSE MORTGAGE DOCUMENTS PRECLUDES SUMMARY JUDGMENT, IF DEFENDANT IS A BORROWER SHE MAY REMAIN IN THE MORTGAGED PREMISES, IF NOT, FORECLOSURE CAN PROCEED)/REVERSE MORTGAGE (FORECLOSURE, QUESTIONS OF FACT ABOUT WHETHER DECEDENT’S WIFE IS A BORROWER WITHIN THE MEANING OF THE REVERSE MORTGAGE DOCUMENTS PRECLUDES SUMMARY JUDGMENT, IF DEFENDANT IS A BORROWER SHE MAY REMAIN IN THE MORTGAGED PREMISES, IF NOT, FORECLOSURE CAN PROCEED)

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CRITERIA FOR REFORMATION, DOCTRINES OF MUTUAL MISTAKE AND NOVATION, AND THE RIGHTS OF ASSIGNEES EXPLAINED IN THIS BREACH OF CONTRACT ACTION CONCERNING THE ISSUANCE OF WARRANTS TO PURCHASE SHARES IN DEFENDANT GEOSOURCE.

The First Department, reversing Supreme Court, determined questions of fact precluded summary judgment in this breach of contract action concerning the issuance of warrants to purchase shares in defendant GeoResources. The facts of the dispute are too complex to summarize here. The First Department explained the requirements for reformation of a contract, the doctrines of mutual mistake and novation, and the liabilities of assignees:

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A claim for reformation of a written agreement must be grounded upon either mutual mistake or fraudulently induced unilateral mistake,'” and to succeed, the party seeking relief “must establish by clear, positive and convincing evidence’ that the agreement does not accurately express the parties’ intentions” … . “Reformation based upon a scrivener’s error requires proof of a prior agreement between [the] parties, which when subsequently reduced to writing fails to accurately reflect the prior agreement”… . The parties’ course of performance under the contract, or their practical interpretation of a contract for any considerable period of time, is the most persuasive evidence of the agreed intention of the parties … .

Given the need for “clear, positive and convincing evidence” of mutual mistake … , we find that issues of fact are present that should have prevented summary judgment … . …

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Based on the plain language of the purchase agreements … , any reformation claim that the original purchasers held was assigned … since it qualifies as one of the “rights and benefits incident to the ownership” of the warrants. …

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The elements of a novation are a previously valid obligation, agreement of the parties to the new obligation, extinguishment of the old contract, and a valid new contract … . “A novation will not discharge obligations created under a prior agreement unless it was so intended, and this question may be determined from the writings and conduct of the parties or, in certain cases, from the documents exclusively” … . The party claiming a novation has the burden of proof of establishing that it was the intent of the parties to effect a novation … .

We find that defendant presented no evidence that it and its counterparties intended to effectuate a novation before issuing [the] warrants … .Warberg Opportunistic Trading Fund L.P. v GeoResources, Inc., 2017 NY Slip Op 04537, 1st Dept 6-8-17

 

CONTRACT LAW (CRITERIA FOR REFORMATION, DOCTRINES OF MUTUAL MISTAKE AND NOVATION, AND THE RIGHTS OF ASSIGNEES EXPLAINED IN THIS BREACH OF CONTRACT ACTION CONCERNING THE ISSUANCE OF WARRANTS TO PURCHASE SHARES IN DEFENDANT GEOSOURCE)/REFORMATION (CONTRACT LAW, CRITERIA FOR REFORMATION, DOCTRINES OF MUTUAL MISTAKE AND NOVATION, AND THE RIGHTS OF ASSIGNEES EXPLAINED IN THIS BREACH OF CONTRACT ACTION CONCERNING THE ISSUANCE OF WARRANTS TO PURCHASE SHARES IN DEFENDANT GEOSOURCE)/MUTUAL MISTAKE (CONTRACT LAW, CRITERIA FOR REFORMATION, DOCTRINES OF MUTUAL MISTAKE AND NOVATION, AND THE RIGHTS OF ASSIGNEES EXPLAINED IN THIS BREACH OF CONTRACT ACTION CONCERNING THE ISSUANCE OF WARRANTS TO PURCHASE SHARES IN DEFENDANT GEOSOURCE)/NOVATION (CONTRACT LAW, CRITERIA FOR REFORMATION, DOCTRINES OF MUTUAL MISTAKE AND NOVATION, AND THE RIGHTS OF ASSIGNEES EXPLAINED IN THIS BREACH OF CONTRACT ACTION CONCERNING THE ISSUANCE OF WARRANTS TO PURCHASE SHARES IN DEFENDANT GEOSOURCE)/ASSIGNEES (CONTRACT LAW, CRITERIA FOR REFORMATION, DOCTRINES OF MUTUAL MISTAKE AND NOVATION, AND THE RIGHTS OF ASSIGNEES EXPLAINED IN THIS BREACH OF CONTRACT ACTION CONCERNING THE ISSUANCE OF WARRANTS TO PURCHASE SHARES IN DEFENDANT GEOSOURCE)/SECURITES  (CONTRACT LAW, CRITERIA FOR REFORMATION, DOCTRINES OF MUTUAL MISTAKE AND NOVATION, AND THE RIGHTS OF ASSIGNEES EXPLAINED IN THIS BREACH OF CONTRACT ACTION CONCERNING THE ISSUANCE OF WARRANTS TO PURCHASE SHARES IN DEFENDANT GEOSOURCE)/WARRANTS (SECURITIES, CONTRACT LAW, CRITERIA FOR REFORMATION, DOCTRINES OF MUTUAL MISTAKE AND NOVATION, AND THE RIGHTS OF ASSIGNEES EXPLAINED IN THIS BREACH OF CONTRACT ACTION CONCERNING THE ISSUANCE OF WARRANTS TO PURCHASE SHARES IN DEFENDANT GEOSOURCE)

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THE EMAIL EXCHANGE IN WHICH THE PURCHASE PRICE WAS AGREED TO DID NOT SATISFY THE STATUTE OF FRAUDS, SELLER WAS FREE TO BACK OUT AND SEEK A HIGHER PRICE.

The Second Department, reversing (modifying) Supreme Court, determined the exchange of emails concerning the sale of defendant’s property did not satisfy the statute of frauds. Plaintiff’s complaint seeking specific performance should have been dismissed. After defendant agreed via email on a purchase price he learned he could get substantially more for the property and he put the brakes on the sale to plaintiff:

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… [T]he defendant was informed by a real estate broker that the property could be sold for a significantly higher amount; accordingly, the defendant asked the plaintiff to “wait” on moving forward with the execution of a formal contract. The plaintiff insisted that the parties were already bound by their emails, commenced this action for specific performance of the alleged agreement, and filed a notice of pendency on the property. The defendant moved (1) to dismiss the complaint pursuant to CPLR 3211(a)(1), (5), and (7), on the ground that the emails failed to satisfy the statute of frauds, (2) to cancel the notice of pendency pursuant to CPLR 6514(a), (3) for an award of costs and expenses pursuant to CPLR 6514(c), and (4) for an award of sanctions and attorney’s fees pursuant to 22 NYCRR 130-1.1. The Supreme Court denied that branch of the defendant’s motion which was to dismiss the complaint, and, in effect, denied the remainder of the relief sought. We modify.

The emails relied upon by the plaintiff to establish the alleged agreement among the parties for the purchase of the defendant’s apartment were insufficient to satisfy the statute of frauds, as they left for future negotiations essential terms of the contemplated contract, such as a down payment, the closing date, the quality of title to be conveyed, the risk of loss during the sale period, and adjustments for taxes and utilities, and were subject to the execution of a more formal contract of sale… . Contrary to the plaintiff’s contention, in the emails exchanged by and between the parties and the defendant’s attorney, the parties expressly anticipated the execution of a formal contract … . Saul v Vidokle, 2017 NY Slip Op 04485, 2nd Dept 6-7-17

 

REAL ESTATE (CONTRACT LAW, STATUTE OF FRAUDS, THE EMAIL EXCHANGE IN WHICH THE PURCHASE PRICE WAS AGREED TO DID NOT SATISFY THE STATUTE OF FRAUDS, SELLER WAS FREE TO BACK OUT AND SEEK A HIGHER PRICE)/STATUTE OF FRAUDS (REAL ESTATE, HE EMAIL EXCHANGE IN WHICH THE PURCHASE PRICE WAS AGREED TO DID NOT SATISFY THE STATUTE OF FRAUDS, SELLER WAS FREE TO BACK OUT AND SEEK A HIGHER PRICE)/CONTRACT LAW (REAL ESTATE, STATUTE OF FRAUDS, THE EMAIL EXCHANGE IN WHICH THE PURCHASE PRICE WAS AGREED TO DID NOT SATISFY THE STATUTE OF FRAUDS, SELLER WAS FREE TO BACK OUT AND SEEK A HIGHER PRICE)

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