135 S. 1 LLC. v. Lopez

2020 NY Slip Op 31756(U)

135 SOUTH 1 LLC., Plaintiff, v. ALEJANDRO LOPEZ AND MERY LOPEZ, Defendants.

INDEX NO. 515935/2017

New York Supreme Court

RECEIVED: June 5, 2020

May 19, 2020

NYSCEF DOC. NO. 89

At an IAS Term, Part 81, of the Supreme Court of the State of New York, held in and for the County of Kings, at the Courthouse, at Civic Center, Brooklyn, New York, on the 19^th day of May, 2020.

PRESENT: HON. CARL J. LANDICINO, Justice.

DECISION AND ORDER

Motion Seq. Nos. 2, 3 & 4

Recitation, as required by CPLR 2219(a), of the papers considered in review of this motion:

The following e-filed papers read herein:

NYSCEF Doc. Nos.1

Notice of Motion/Cross Motion, Affidavits

(Affirmations) and Exhibits Annexed

41-58, 61-62, 64-74, 79-80

Opposing Affidavit/Affirmations)

62-74, 84

Reply Affirmations

82, 85

Upon the foregoing papers in this action for specific performance, Defendants, Alejandro Lopez and Mery Lopez (hereinafter the "Defendants" or "Sellers"), move (Motion Sequence # 2) for an order, pursuant to CPLR 3212, granting them summary judgment and dismissal of the complaint of Plaintiff, 135 South 1 LLC (hereinafter the"Plaintiff" or "Purchaser"), together with an award of the down payment on the subject contract. The Plaintiff opposes and cross-moves (Motion Sequence # 3) for an order, pursuant to CPLR 3025 (b), to file an amended complaint. Defendants oppose and cross-move (Motion Sequence # 4) for an order, pursuant to CPLR 6515, canceling the notice of pendency filed herein. Plaintiff opposes the cancellation.

Defendants purportedly own the property known as 135 South 1st Street, Brooklyn, New York (the "Property") and contracted to sell it to non-party Ranco Capital, LLC (hereinafter "Ranco"), as nominee for a new LLC to be formed upon closing of title. A two-million five-hundred thousand ($2,500,000.00) dollar purchase price was negotiated and Ranco deposited a one-hundred fifty-thousand ($150,000.00) dollar down payment in escrow pending the closing. The sale contract, dated March 17, 2017 (the "Contract"), specified that the closing would occur "on or about ninety (90) days from date of a fully signed contract of sale." The Contract did not make "time of the essence" regarding the closing date.

Ranco's purchase obligation, pursuant to the Contract, was subject to and conditioned upon Seller delivering the Property in broom clean condition, vacant and free of all leases or tenancies. The Sellers were required to provide Ranco access to the Premises in order to conduct inspections as it deemed appropriate, and the Sellers' sole specified remedy, upon Ranco's default, was retaining the down payment as liquidated damages. Ranco, on the other hand, was entitled to all remedies at law or in equity, including specific performance, upon the default of the Sellers.

Ranco assigned its contractual interest to Plaintiff, 135 South 1 LLC on or about July 12, 2017 (see NYSCEF Doc. Nos. 32 and 68), and the parties confirmed a mutually agreed July 25, 2017 closing date by a July 6, 2017 email (see NYSCEF Doc. No. 44, December 31, 2018 affirmation of Defendants' counsel at 3, ¶ 11, annexed to Defendants' Mot. Seq. # 2 papers). However, the Sellers' attorney received an email on July 24, 2017 from the Purchaser's attorney stating that: "It seems that our client is not ready to close tomorrow. We will have to adjourn. We apologize for any inconvenience and will be in touch with you as soon as possible to reschedule" (see NYSCEF Doc. No. 10, February 27, 2018 affirmation of Defendants' counsel 3, at ¶ 12 and NYSCEF Doc. No. 18, July 24, 2017 email @ 12:44 p.m., annexed as part of Exh H to Defendants' Mot. Seq. # 1 papers). That same day, July 24, 2017, the Sellers' attorney, by letter, set a law day² of August 2, 2017 at 2 p.m. and location for the transaction (his office) as the deadline and place for closing. The letter (NYCEF Doc. No. 19, annexed as Exh I to Defendants' Mot. Seq. #1 papers) stated:

Purchaser must be present at the above time and place and be prepared to tender all sums as set forth in the Contract of Sale.

PLEASE TAKE FURTHER NOTICE that unless the purchasers close title on the LAW DATE, the seller shall tender the deed and related transfer documents on the LAW DATE and shall declare the purchaser in default. Upon which occurrence your client's contract deposit shall be forfeited and your clients shall be held liable for any and all damages sustained as a result of your client's breach of his contractual obligations.

Purchaser's attorney responded by a July 28, 2017 letter (NYSCEF Doc. No. 20, annexed as Exh J to Defendants' Mot. Seq. # 1 papers) stating: "We find your attempt to schedule a 'Time of the Essence' closing on nine (9) days' notice to be unreasonable, unfair and contrary to law and equity. Accordingly, we reject your notice." The Sellers appeared at their attorney's office on August 2, 2017 for the closing and signed the deed and related transfer documents necessary to tender the Property. The Purchaser did not appear and on August 16, 2017, filed the instant action for specific performance of the contract as well as a notice of pendency against the Property. Sellers, in turn, filed their verified answer with affirmative defenses and counterclaims on October 17, 2017.

Thereafter, Defendants filed their first motion, Mot. Seq. # 1, seeking an order, pursuant to CPLR 3212, granting them summary judgment dismissing the complaint and declaring their right to retain the down payment. They also sought, pursuant to CPLR 6514 (a) and (b), the cancellation of the notice of pendency. Plaintiff opposed that motion by claiming that Defendant failed to demonstrate a breach of contract. A September 20, 2018 decision and order by this court (see NYSCEF Doc. No. 40) denied that motion on the ground that sellers had acted prematurely in declaring "time of the essence" regarding the closing date and failed to afford purchaser a reasonable time to reschedule or perform.

The Sellers' attorney, by an October 5, 2018 letter (see NYSCEF Doc. No. 53, annexed as Exh. I to Defendants' Mot. Seq. # 2 papers) subsequently set a second lawdate of November, 15, 2018 at 11 a.m. (and location, his office) as the deadline for closing the transaction. That letter stated:

Purchaser must be present at the above time and place and be prepared to tender all sums as set forth in the Contract of Sale.

PLEASE TAKE FURTHER NOTICE that unless the purchasers close title on the LAW DATE, the seller shall tender the deed and related transfer documents on the LAW DATE and shall declare the purchaser in default. Upon which occurrence your client's contract deposit shall be forfeited and your clients shall be held liable for any and all damages sustained as a result of your client's breach of his contractual obligations.

Plaintiff did not respond.

Defendants appeared at their attorney's office on November 15, 2018 for the closing and signed the deed and related transfer documents needed to tender the Property. Plaintiff did not appear, and its attorney, in a November 16, 2018 letter (see NYSCEF Doc. No. 55, annexed as Exh. K to Defendants' mot. seq. two papers), stated:

Please be advised the Property was occupied when inspected on the closing date in preparation for the closing on November 15, 2018. The Contract of Sale dated March 11, 2017 at paragraph 16(b), and in the Rider at paragraph 12 provide that the Property is to be delivered vacant at closing. As the Property was occupied at closing, the Sellers are in breach of the contract.

Please be advise[d] that the Sellers are in breach of the Contract on the closing date they set as "Time of the Essence." Accordingly, Purchaser is electing the remedy of contract cancelation and return of the deposit of $150,000.00.

Defendants' attorney responded, in a November 20, 2018 letter (see NYSCEF Doc. No. 56, annexed as Exh. L to Defendants' Mot. Seq. # 2 papers) as follows:

Due to your client's failure to appear on the law Date of November 15, 2018 the sellers tendered the deed and related transfer documents on November 15, 2018 and held your client in default of the terms and conditions of the contract of sale between the parties. Your office made no attempt to contact my office prior to the Law Date. Moreover, I telephone[d] your office on the Law Date and despite being told by your receptionist that you were in your office, you refused to speak to me. As you know there was no prior inspection of the Property in preparation for the closing on November 15, 2018 and your allegations are false and a ploy to recover your client's down payment, which pursuant to the terms and conditions of the contract of sale they have forfeited.

The Purchaser's attorney responded by a November 21, 2018 letter (NYSCEF Doc. No. 57, annexed as Exh M to Defendants' Mot. Seq. # 2 papers) which stated:

Irrespective of your claim that your clients tendered a deed at your office, your clients are in default of the Contract of Sale dated March 11, 2017 ("the Contract"), because the Property was occupied when inspected on the closing date. Your self-serving claim that the Property was not inspected is factually false. The Property was inspected prior to closing and was found to be occupied.

As you are well aware, the Contract provides at paragraph 16(b), and in the Rider at paragraph 12, that the Property is to be delivered vacant at closing. As the Property was occupied at closing, the Sellers are in breach of the Contract.

As stated in my letter dated November 16, 2018, the Purchasers declared the Sellers to be in breach of the Contract, and the Purchaser elected the remedy of contract cancelation and requested the return of the deposit in the amount of $150,000.00.

Defendants have made this second summary judgment motion, (Mot. Seq. # 2) seeking an order dismissing the complaint and awarding them the down payment. They have provided affidavits (NYSCEF Doc. Nos. 42 and 43) and their attorney has presented an affirmation (NYSCEF...