Ironwoods Troy, LLC v. OptiGolf Troy, LLC

204 A.D.3d 1130

166 N.Y.S.3d 730

IRONWOODS TROY, LLC, et al., Appellants,

v.OPTIGOLF TROY, LLC, et al., Respondents.

532949

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

Calendar Date: February 8, 2022

Decided and Entered: April 7, 2022

Gleason, Dunn, Walsh & O'Shea, Albany (Richard C. Reilly of counsel), for appellants.

Maynard, O'Connor, Smith & Catalinotto, LLP, Albany (Bridget M. Schultz of counsel), for respondents.

Before: Garry, P.J., Egan Jr., Pritzker, Colangelo and Ceresia, JJ.

MEMORANDUM AND ORDER

Colangelo, J. Appeal from an order of the Supreme Court (McNally Jr., J.), entered January 25, 2021 in Rensselaer County, which, among other things, granted defendants’ motion for summary judgment dismissing the complaint.

In September 2015, defendant Mark Wekara, the owner of defendant OptiGolf Troy, LLC, entered into an asset purchase agreement (hereinafter APA) with plaintiffs for plaintiffs to purchase OptiGolf's seven golf simulators and other assets for $290,000.¹ The APA provided that plaintiffs would make monthly interest payments and turnover payments for the last three months of 2015, with the final balance to be paid in full by the closing date of January 29, 2016. In connection with the APA, plaintiffs Jeffrey Buell and Joshua Buell tendered a nonrefundable deposit of $30,000 and executed a personal guarantee for the purchase price. In December 2015, the Buells demanded recission of the APA and personal guarantee based upon purported misrepresentations made by Wekara during negotiations as to the operation of the business, including issues regarding a liquor license. Further, the Buells allegedly encountered technical difficulties with the simulators that resulted in plaintiff Ironwoods Troy, LLC generating less revenue than anticipated. Ironwoods Troy subsequently closed in March 2016, and no payments were made by plaintiffs after the deposit.

Plaintiffs commenced this action for fraud, rescission, breach of contract and unjust enrichment and sought a declaration finding the personal guarantee unenforceable. Defendants joined issue and counterclaimed for breach of contract and for declaratory relief on the personal guarantee. Following discovery, defendants moved for summary judgment dismissing the complaint and in favor of their counterclaims. Plaintiffs opposed and cross-moved for summary judgment on their causes of action. Supreme Court, among other things, granted defendants’ motion for summary judgment dismissing the complaint, and for summary judgment on their counterclaim for breach of contract and for a declaration that the personal guarantee constitutes an enforceable contract. Plaintiffs appeal, and we affirm.

"[T]o recover for a breach of contract, a party must establish the existence of a contract, the party's own performance under the contract, the other party's breach of its contractual obligations, and damages resulting from the breach" ( Collyer v. LaVigne, 202 A.D.3d 1335, 1339–1340, ––– N.Y.S.3d –––– [2022] [internal quotation marks, brackets and citations omitted]; accord Adirondack Classic Design, Inc. v. Farrell, 182 A.D.3d 809, 811, 122 N.Y.S.3d 790 [2020] ). In support of their motion, defendants tendered, as relevant here, the affidavit of Wekara, deposition testimony of the Buells, the executed APA and personal guarantee,² and the delivery and acceptance statement with respect to the assets signed by Joshua Buell.³ These submissions established the agreement between the parties, evidence of defendants’ performance under the APA, evidence of the amount due and owing for the assets purchased and evidence of plaintiffs’ failure to pay. Based upon the foregoing, Supreme Court correctly concluded that defendants satisfied their moving burden on their counterclaim for breach of contract and for declaratory relief (see Alvarez v. Prospect Hosp., 68 N.Y.2d 320, 324–325, 508 N.Y.S.2d 923, 501 N.E.2d 572 [1986] ; Stonehill Capital Mgt. LLC v. Bank of the W., 28 N.Y.3d 439, 453–454, 45 N.Y.S.3d 864, 68 N.E.3d 683 [2016] ; George S. May Intl. Co. v. Thirsty Moose, Inc., 19 A.D.3d 721, 722, 796 N.Y.S.2d 196 [2005] ). In opposition, plaintiffs failed to raise a triable issue of fact.

Addressing the allegations which formed the basis of plaintiffs’ complaint for fraud, plaintiffs set forth that Wekara made several misrepresentations to them regarding, among other things, OptiGolf's value and potential earnings as an indoor golf simulator business and the condition of the simulators.

"In an action to recover damages for fraud, the plaintiff must prove a misrepresentation or a material omission of fact which was false and known to be false by [the] defendant, made for the purpose of inducing [the plaintiff] to rely upon it, justifiable reliance of [the plaintiff] on the misrepresentation or material omission, and injury" ( Lama Holding Co. v. Smith Barney Inc., 88 N.Y.2d 413, 421, 646 N.Y.S.2d 76, 668 N.E.2d 1370 [1996] [citations omitted]; accord Piller v. Princeton Realty Assoc. LLC, 173 A.D.3d 1298, 1302, 104 N.Y.S.3d 344 [2019] ; see Gruber v. Donaldsons, Inc., 201 A.D.3d 887, 888, 162 N.Y.S.3d 393 [2022] ). However, "[a] party cannot claim reliance on a misrepresentation when he or she could have discovered the truth with due diligence" ( Avery v. WJM Dev. Corp., 197 A.D.3d 1141, 1144, 153 N.Y.S.3d 511 [2021] [internal quotation marks and citation omitted]). Moreover, alleged misrepresentations are not actionable as fraud when they consist of "mere puffery, opinions of value or future expectations, rather than false statements of value" Northern Group Inc. v. Merrill Lynch, Pierce, Fenner & Smith Inc., 135 A.D.3d 414, 414, 22 N.Y.S.3d 421 [2016] [internal citations omitted]).

Plaintiffs’ conclusory assertion that Wekara was to provide technical repairs is belied by Joshua Buell's deposition testimony that Wekara offered to provide assistance if something went wrong with the simulators, but that Wekara was never asked to come to Ironwoods Troy to make such repairs. With respect to the simulators, Jeffrey Buell testified that when Ironwoods Troy commenced operations, the simulators malfunctioned, and plaintiffs dispute Wekara's assertions that the simulators were in "new" condition and "had the latest technology installed on them." Jeffrey Buell testified at his deposition that it was his understanding that the simulators were new to the location and had been installed and in use for a number of months. Yet, in opposing defendants’ motion, the Buells contend that they were informed by others that the simulators had previously been installed and used at another location, as proof that Wekara misled them as to the condition of the simulators. This claim, however, was supported only by hearsay and properly disregarded by the court. "[W]here the moving party has demonstrated its entitlement to summary judgment, the party opposing the motion must demonstrate by admissible evidence the existence of a factual issue," and hearsay "alone does not satisfy this requirement" ( Zuckerman v. City of New York, 49 N.Y.2d 557, 562, 427 N.Y.S.2d 595, 404 N.E.2d 718 [1980] ). Moreover, prior to the sale, Joshua Bell inspected the location of OptiGolf at least twice and turned each...