223 Sam, LLC v. 223 15th St., LLC

210 A.D.3d 733

178 N.Y.S.3d 133

223 SAM, LLC, et al., appellants,

v.223 15TH STREET, LLC, et al., respondents.

2019–13907

Index No. 602838/16

Supreme Court, Appellate Division, Second Department, New York.

Argued—September 13, 2022

November 9, 2022

Jules A. Epstein, P.C., Jericho, NY, for appellants.

Gallet Dreyer & Berkey, LLP, New York, NY (Morrell I. Berkowitz of counsel), for respondents.

COLLEEN D. DUFFY, J.P., JOSEPH J. MALTESE, LINDA CHRISTOPHER, JANICE A. TAYLOR, JJ.

DECISION & ORDER

In an action, inter alia, to recover damages for breach of contract, the plaintiffs appeal from an order of the Supreme Court, Nassau County (Jerome C. Murphy, J.), entered November 25, 2019. The order, insofar as appealed from, granted those branches of the defendants’ motion which were for summary judgment dismissing the causes of action alleging breach of contract, breach of fiduciary duty, and promissory estoppel, and for specific performance, and, in effect, for summary judgment declaring that the plaintiff 223 SAM, LLC, was not a 50% owner of the defendant 223 15th St, LLC, and that the plaintiffs were not the managers of a parcel of property.

ORDERED that the order is reversed insofar as appealed from, on the law, with costs, and those branches of the defendants’ motion which were for summary judgment dismissing the causes of action alleging breach of contract, breach of fiduciary duty, and promissory estoppel, and for specific performance, and, in effect, for summary judgment declaring that the plaintiff 223 SAM, LLC, was not a 50% owner of the defendant 223 15th St, LLC, and that the plaintiffs were not the managers of a parcel of property are denied.

The defendant 223 15th St, LLC (hereinafter 223 15th St), was the fee owner of a parcel of property located on 15th Street in Brooklyn. The defendant MAG 2011 Trust (hereinafter the trust) was the sole member and 100% owner of 223 15th St at the time the property was purchased. The defendants Manuel Goldschmidt and Viviana Goldschmidt are trustees of the trust. 223 15th St had an operating agreement dated January 24, 2013. In 2014, the parties entered into negotiations to amend the operating agreement (hereinafter the agreement) to add the plaintiff 223 SAM, LLC (hereinafter 223 SAM), as a 50% owner of 223 15th St and to have the plaintiff Aaron Wexler and 223 SAM manage the property. The amendment to the agreement was drafted, but never signed.

The plaintiffs commenced this action, inter alia, to recover damages for breach of contract, alleging that in furtherance of the agreement, they undertook the management responsibilities for the property and expended money. The plaintiffs asserted that the defendants interfered with the plaintiffs’ management, denied 223 SAM's status as a 50% member of 223 15th St, and denied the plaintiffs’ status as sole managers of the property. The defendants moved, among other things, for summary judgment dismissing the complaint, arguing that the agreement was not binding. The Supreme Court granted those branches of the defendants’ motion which were for summary judgment dismissing the causes of action alleging breach of contract, breach of fiduciary duty, and promissory estoppel, and for specific performance, and, in effect, for summary judgment declaring that 223 SAM was not a 50% owner of 223 15th St and that the plaintiffs were not the managers of the property. The plaintiffs appeal.

The essential elements of a cause of action to recover damages for breach of contract are the existence of a contract, the plaintiff's performance pursuant to the contract, the defendant's breach of its contractual...