Lifshitz v. Wilhelm

Lifshitz v Wilhelm 2024 NY Slip Op 32565(U) July 25, 2024 Supreme Court, Kings County Docket Number: Index No. 120/2022 Judge: Leon Ruchelsman Cases posted with a "30000" identifier, i.e., 2013 NY Slip Op 30001(U), are republished from various New York State and local government sources, including the New York State Unified Court System's eCourts Service.

This opinion is uncorrected and not selected for official publication.

FILED: KINGS COUNTY CLERK 07/25/2024 01:48 PM INDEX NO. 120/2022 NYSCEF DOC. NO. 177 RECEIVED NYSCEF: 07/25/2024

SUPREME COURT OF THE :STATE OF NEW YORK COUNTY OF KINGS : CIVIL TERM: COMMERCIAL 8 ----------- ----------------- --------- --x BENJAMIN LIFSHITZ and REBECCA KASHANIAN, Plaintiff, Decision and order - against - Ihdex No. 120/2022 LEVI WILHELM, MORDECHAI GURARY a/k/a MOTTY GURARY, ZALMAN WILHELM, BNOS MENACHEM, INC, , JOHN DOES 1-10 and ABC CORPORATIONS l"-10, Defendants, July 25, 2024 - · - - - - - . - : - - - - - - . - ... -.--·. - - - . - - - - - - . - · - - - . - - . X PRESENT: HON. LEON RUCHELSMAN Motion seq. #8 & #9

The plaintiffs haye moved pursuant to CPLR §3212 seeking partial surrimary j udgeni.en t vacating the deed to def endaht Bno s Menachem Inc. , and compelling the defendant to sell the propert:y to plaintiffs. The defendants have cross-moved seeking summary judgement dismissing the first eight causes of action of the complaint. The motions have been opposed respectively and papers were submitted by the parties and arguments held. After reviewing all the arguments this court now makes the following determination.

As recorde:d in prior orders, on or about June 29, 2016, Levi Wilhelm, the owner of property located at 729 East New York Avenue in Kings County entered into a contract to sell the property to the plaintiff Benjamiri Lifshitz. The purchase price was $600,000 and the contract re.qui,red a closing within sixty days; In October 2017; the pa,rties entered into a rider wherein the closing wa.$ set for February 15, 2018. On that date, there were encumbrances wl1:ich made closing impossible and the closing rie,ver occi.itted. Following that date no party took an:y action conc:erning the. property .until

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February 25, 2022 wl1en the defendant cancelled the contract and sold the property to defendant Bnos Menachem. The parties engaged in discovery and now these summary judgement motions have been filed. The plaintiffs argue they are entitled to summary judgement since defendant Wilhelm had no authority to unilaterally cancel the contract and moreover they were ready, -willing and able to purcha.se the property on the scheduled closing date. Thus, the court should grant summary judgement and require the contract. to be effectuated granting thern the property. The defendants have cross--:moved arguing there are no questions of fact the plaintiffs were not ready and willihg to close on the closing date arid therefore the defendant Wilhelm had the right to cance.l the contract.

Consequently, the court should dismiss the first eight causes of action of the complaint which would effectively confirm the transfer of the deed to Bnos Men:achem.

conclusions of Law Where the rnateri,3.l facts at issue in a case are in dispute summary judgment cannot be granted (Zuckerman v. City of New York, 49 NYS2d 557, 427 NYS2d 595 [1980]). Generally, it is for the jury, the trier of fact to determine the legal cciuse of any injury, .however, whe,re only one conclµ.sion may be drawri from the facts the.n the question o·f legal cause may be decided by the trial court as. a matter of la.w (Marino v. Jamison, 189 AD3d 1021;

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136 NYS3d 324 [2d Dept., 2021) .

It is well settled that to succeed on a claim seeking specific performance the plaintiff must demonstrate that the plaintiff has substantially performed all of its contractual obligati6-ns and was willing and able tc:i perform its remaining obligations and that the defendant was Eible to convey the prqperty, and that there was no other adequate remedy at law (see, E & D Group LLC v. Vialet, 134 AD3d 981, 21 NYSJd 691 [2d Dept., 2015]). The plaintiff must, therefore,. estahlish, ainong the other requirements, that he had the fiha.nc1al ability to purchase the property (Singh v. Gopaul, 26 AD3d 370, 809 NYS2d 549 [2d Dept., 2006]).

To adequ.ately oppose summary judgement the defendants must demonstrate the plaintiff cannot prove one or more of these elements (Chester Green Estates LLC v. Arlington Chester LLC, 161 AD3d 1036, 78 NYS3d 352 [2d Dept., 2018]). Thus, the buyer's claim for specific performance is entirely unrelated to the seller's ability; which will be addressed, to cancel the contract. Whether the seller had the ability to cancel the contract does not ih any way support the buyer's requirements sufficient to demonstrate specific performance. Those requirements must be borne by the plaintitf' s own eviden.ce (.§.§.§., Dair.o v. Rockaway Boulevard Properties LLC, 44 A.D3d 602, 843 NYS2d 642 [2d Dept., 2007]) . As the court held .in Centro v .

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White, 176 AD2d 1052, 574 NYS2d 982 [3 rd Dept., 1991] "even accepting plaintiff's contention that his agreement to give defendant an indefinite extension of time to perfect title relieved him of his obligation to tender performance, he was nevertheless required to establish that he was ready, willing and able to purchase the property;' (id) .

In support of the motion seeking summary judgement, the.

plaintiff has introduced a mortgage commitment letter and certain bank statements which they argue demonstrates the plaintiff maintained sufficient funds to close and was thus ready willing and able to close. However, the mortgage commitment letter is surely insufficient to eliminate all questions of fact whether the plaintiff was in fact ready willing and able to close. The commitment letter states that "the Commitment Expiration Date shown above is the date by which your loan must close and fund" (see, Mortgage Loan Commitment Letter, Page 1 [NYSCEF Doc. No. 115]). However, the letter does not contain a commitment expiration date. More significantly, the letter states that ".all conditions in this Commitment Letter must be satisfied in fl.ill (at Lertde:t's sole discretion) prior to cTosihg ahd funding of the loan" (id). Thus, the commitment letter is not valid unless all the conditions ate satisfied. The lette.r lists seventeen .conditions th.at were required to be sµbmitted to the lender five days prior :tp closing.. These conditions include, among .others,

--······--·"··"'"""-'""'"""''"'""'""""-··------- 4 of 9 [* 4] FILED: KINGS COUNTY CLERK 07/25/2024 01:48 PM INDEX NO. 120/2022 NYSCEF DOC. NO. 177 RECEIVED NYSCEF: 07/25/2024 ah appraisal of the property, title commitment, homeowner's arid flood insurance and certain tax documents, The plaintiff has not submitted any information satisfying any o.f these necessary conditions. Tn Eves v. Bureau, 13 AD3d 1004, 788 NYS2d 21 [3rd Dept., 2004] the court held that a commitment letter which is facially incomplete is not a commitment letter sufficient tn demonstrate specific performance. Indeed, the failure to satisfy all the conditions of the commitment letter necessarily means the plaintiff has failed to obtain a commitment letter sufficient to demonstrate the financial ability to close (see, Dairo, supra).

In addition, the plaintiff never demanded a closing take place. The plaintiff admits that a closing date was extended to afford the defendant an opportunity to cure liens upon the property but elides the scheduling. of any closing {..§.§.§., Dacatur (2004) Realty LLC v. Cruz, 30 AD3d 367, 815 NYS2d 485 [2d Dept., 2006]). Specifically, there is no evidence presented that an actual closing was demanded by the plaintiff. Tt is true that the second rider fixed the closing date Of February 15, 2018 (~, Second Rider [NYSCEF Doc. No. 61]). However, there is rib evidence a closing: was scheduled, there is no evidence a title report w:a:s issued and there is no evidence that any of the usual and customary preparations necessary fdr a closin.g eve.r o.ccurred.

Moreoverr since. that elate there hc3.s b. ee:n no evidence presented the plaintiff took a:hy action at all to .schedule a closing.

5.

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Thus, an. incomplete and preliminary mortgage commitment letter dated six months prior to the closing date without any activity at all actually attempting to conduct a closing raises significant questions of fact whether the plaintiff demonstrated the elements necessary for specific performance.

Therefore, based on the foregoing the plaintiff's motion seeking sununary judgement is denied.

Turning to the defendant's motion seeking summary judgement on the grounds the defendant validly cancelled the contract an examination of the contract and the. first rider is necessary.

Article 21(b) (i) of the contract essentially states that if the seller is unable to transfer title or if the purchaser has other reasons for refusing to close then the seller may can:cel the contract. The reasons the purchaser may not wish to close include the existence of liens or encumb;rances ''or other objections to title or otherwisel/ (see, Residential Contract of Sale, '][21 (b) (i) [NYSCEF Doc. No. 59]}. Notwithstanding, the purchaser may not refuse to close if there are def.ects for which the purchaser is obligated tiJ accept title; for defects which the purchaser waived or for defects the seller expressly agreed to remove. The article concludes that if the purchaser does not wish to waive the existence of defects which would permit•the purchaser to refuse to close without. art abate.ment of th.e purchase :price thE;m the $eller, at his sole discretion, can either remedy

[* 6] .. ·············-·······--·----------------------------- of 9 FILED: KINGS COUNTY CLERK 07/25/2024 01:48 PM INDEX NO. 120/2022 NYSCEF DOC. NO. 177 RECEIVED NYSCEF: 07/25/2024 the d.efects. or _cp._ncel the c-oritract fid.) • Tb.E?:· Rider to the contract states that "unpaid liens for taxes, water charges a_nd assessments shall not be objections to title·, but the amount thereof, plus int_eres_t .and pemalti.es thereof, .shall be deducted from the cash consideratio n to be paid hereunder and allowed to the putchas·ei:', :subject to the· provision·s for appor:i::iorunen t of taxes. and water· charges. contained herein" (s:ee,, Rider to· Contra.ct of Sale, 'JI4 [NYSCEF Doc_. No. 59]). Thus, the. rider amends .Article 21 (b) (i). to extent it- remo.ves the ability o.f th.e purchaser to re::e'use to close. based upon the existen,ce o.f:. the defect.s enumerated and requires th·e plairttif•f to accept an abatement ·of· the. purchase p·tice instead. Notably·,. the .:r:-.i-c;:ler does not alter, at all, the defendant' .s ability tq cancel the contract in its· sole discretion. The .plaintiff: asserts the -rider- demohstrat.e.s the contr&t:t is still ~nfo:rceable and could not be cancelled by the. defehqant. First, as noted, the rider only a.f fee ts the rights 0£ the pu.r.chas·e_r not the s.e1ler. Mo:re importantly, apy _right_s that flow from the rider were surely waiv-ed by the purchaser. The rider permits the purchaser to -recei-ve a -ded.uction o.f the va.1ue o·f an·y encumbrances and fo-rcres the closing. However, the plaint:iff has repeatedly ins.isted the closing was e_x.teno.e.d andr although the gai? of four years has not been sa:tisfat:tci:ti ly expla,i.ned, confirmed he. wa,S waiting for the _qefendant to remove the _e_ncumbrances . The· plaintiff has not

7 of 9 [* 7] FILED: KINGS COUNTY CLERK 07/25/2024 01:48 PM INDEX NO. 120/2022 NYSCEF DOC. NO. 177 RECEIVED NYSCEF: 07/25/2024 explained why he did not insist upon a closing, accept a reduced price and forego the removal of. any encumbrances. Thus, the "impossible paradox" raised by the defendants could have easily been resolved in plaintiff's favor by Simply a:cceptihg the property at a very reduced rate (see, Memorandum of· Law, page 3 TNYSCEF Doc. 169] ) . In fact, if the defendant is correct, that the liens cost more than the purchase price, the plaintiff could have obtained the property, essentially for free. Of course, that would require an examination of the covered liens included within the Rider's language concerning "unpaid liens for taxes, water charges a:nd assessments# (id). However, by expressly admitting the defendant extended the closing indefinitely, the plaintiff waived any rights or obligations based upon the rider.

In any event, as noted, the rider to. does alter the rights and obligations of the defendant Wilhelm.

The court previously held that Article 2l(b) provides two paths whereby the seller can cancel the contract, one where the .defendant endeavors to remedy any defects which is governed by Article 21 (b) (ii) and one where the defendant does not cure any defects and that is governed by Article 21 (b) (il. Even if Article 21 (b) (ii) applies the defendant has fully satisfied all .of the conditions. Pursuant to Article 21(h) (ii) if tl1e seller took action to remove encumbrances and could not do so "for any reason whatsoever" and the purchaser refused to accept an

8 of 9 [* 8] FILED: KINGS COUNTY CLERK 07/25/2024 01:48 PM INDEX NO. 120/2022 NYSCEF DOC. NO. 177 RECEIVED NYSCEF: 07/25/2024 abatement then either party cou ld cancel the contract. First , the clause implies the seller's activities and efforts were done in good faith (see , Sevilla v. Valiotis, 29 AD3d 775, 815 NYS2d 229 [2d Dept 2006]). Second, as noted, the plaintiff waived any ability to accept an abatement and insisted upon property free of any encumbran ces. The defendant was not obligated to inform the plaintiff of his inability to cure the encumbrances. Thus, the defendant had the absolute right to cancel the contract and in fact did cancel the contract pursuant to its terms .

Therefore, the de fendant 's motion seeking summary judgement dismissing the first eight causes of action of the complaint is granted .

So ordered.

ENTER:

DATED: July 25 , 2024 Brooklyn N.Y. Hon. Leon Ruchelsman JSC

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