17 W. 127th St. Partners LLC v Baruch Realty, LLC 2016 NY Slip Op 31566(U) August 17, 2016 Supreme Court, New York County Docket Number: /12

Transcription

1 17 W. 127th St. Partners LLC v Baruch Realty, LLC 2016 NY Slp Op 31566(U) August 17, 2016 Supreme Court, New York County Docket Number: /12 Judge: Cyntha S. Kern Cases posted wth a "30000" dentfer,.e., 2013 NY Slp Op 30001(U), are republshed from varous state and local government webstes. These nclude the New York State Unfed Court Systems E-Courts Servce, and the Bronx County Clerks offce. Ths opnon s uncorrected and not selected for offcal publcaton.

2 [* 1] SUPREME COURT OF THE STATE OF NEW YORK COUNTY OF NEW YORK: Part x 17 WEST 127h STREET PARTNERS LLC, -aganst- Plantff, ndex No /12 DECSON/ORDER BARUCH REAL TY, LLC, MOSHE NR, 17 W 127n 1 STREET, LLC, ADAM DRESSLER, ESQ., DRESSLER LAW, LLP, DUSTN BOWMAN, ESQ., A.M. TTLE NC. and SANDRA M. SALMON PNK, Defendants x HON. CYNTHA S. KERN, J.S.C. Rectaton, as requred by CPLR 22 9(a), of the papers consdered n the revew of ths moton for Papers Numbered Notce of Moton and Affdavts Annexed Notce of Cross-Moton and Affdavts Annexed... 4 Affdavts n Opposton Affdavts n Reply Exhbts... Ths acton arses out of a contract for the sale of property entered nto between defendant Baruch Realty, LLC ("Baruch") and plantff 17 West 27h Street Partners LLC:. Plantff now moves for an Order pursuant to CPLR 3212 grantng t summary judgment o~ ts frst cause of acton asserted n the Second Amended Complant for breach of contract, awardng plantff specfc performance of ts contract to purchase the property located at 17 West 127h Street, New York, New York (the "subject property") from defendant Baruch and vacatng the deed purportng to convey ttle to the subject property from Baruch to defendant 17 W 127<h Street, LLC (herenafter referred to as the "Second Purchaser"). Defendants Baruch and Moshe Nr ("Nr") (herenafter 2 of 19 rn11prtw"lv rpfprrprl tn ::1.::;: "R::r11rh") cro.::;:.::;:-movf for ::n Orrlf"r m1r.::;:1rnnt tn fpt R S 1212 Prantno

3 [* 2] them summary judgment dsmssng plantffs frst cause of acton for breach of contract and specfc performance. Defendant Second Purchaser separately moves for an Order grantng t summary judgment dsmssng plantffs frst cause of acton for breach of contract and specfc performance and vacatng the notce ofpendency plantff fled aganst the subject property. Defendant Second Purchaser also separately moves for an Order grantng t summary judgment on ts cross-clams aganst Baruch and Nr and declarng that n the event plantff were to preval aganst t on the frst or sxth cause of acton asserted n the Second Amended Complant, then Baruch and Nr are lable to Second Purchaser for all damages sustaned by t. The motons are consoldated for dsposton and are resolved as set forth below. The relevant facts are as follows. n or around August 2012, plantff entered nto a wrtten contract wth defendant Baruch for the purchase of the subject property (the "Contract"). The Contract provdes for a $842,500 purchase prce whch was to be pad as follows: () a down payment of $84,250; () a $450,000 purchase money mortgage to be negotated and ssued by Baruch to plantff at the closng; and () the balance of $308,250 to be pad wth a certfed check at the closng. Further, Paragraph 15 of the Contract provdes that the closng wll take place "on October 2, 2012" and a Rder to the Contract provdes that "[]t s understood and agreed that on or about as referred to n paragraph #15 of the prnted form contract s to mean no more than 30 days past sad contract date set for closng." Paragraph 15 of the Contract also provdes that that the closng shall take place at Dressler Law LLP n New York County "or, upon reasonable notce by Purchaser, at the offce of Purchasers Attorney" n Queens. Paragraph 23 of the Rder to the Contract provdes that "Purchaser agree[ s J to close n New York County." Further, Paragraph 19 of the Rder to the Contract provdes that the Rder controls "[]n the event ofa conflct wth the provsons of the pre-prnted porton of ths contract." 3 of 19 2

4 [* 3] Closng on the subject property dd not occur on October 2, n an e-mal dated October 8, 2012, Adam Dressler, Esq., counsel for Baruch, notfed Chrstopher OMalley, Esq., counsel for plantff, that he was schedulng the closng for November 8, 2012 and that Baruch asked hm to declare tme of the essence. Specfcally, the October 8, 2012 e-mal stated as follows: Ths s my thrd emal to you n an attempt to schedule closng. would apprecate a response. My clent has asked me to deem tme of the essence and schedule closng for 30 days from today.!fl do not hear from you, a closng wll be held on that day and your clents wll be n default f they dont appear. d lke to remnd you that my clent gave a prce reducton over a month ago to facltate a fast closng. Please advse your clents ntentons. Mr. OMalley responded that same day and told Mr. Dressler that he would call hm to schedule a frm date but that "[t]hrty days sounds about rght." However, rather than stckng to the November 8, 2012 date allegedly declared the "essence date" by Baruch, by e-mal dated October 19, 2012, Mr. Dressler proposed that the partes close ttle to the subject property on November 15, Fve days later, Mr. Dressler followed up by e-mal that he was "plannng on movng forward wth the closng for November 15, Please confrm, am workng on gettng all the docs to the ttle company." On or about November, 2012, Mr. Dressler agan postponed the closng date n an e-mal n whch he advsed Mr. OMalley that Baruch had "planned to close on the 15 1 h but t seems lke [Superstorm Sandy] may h.ave delayed us a few days. Lets make t frm for November 22. Please confrm... On November 13, 2012, Mr. OMalley notfed Mr. Dressler that November 22nct was Thanksgvng Day and proposed that the partes close on November 28, Mr. Dressler responded that he needed to speak to Baruch. 3 4 of 19

5 [* 4] By letter dated November 28, 2012, the date Mr. OMalley had proposed for the closng, Mr. Dressler sent plantffs counsel a letter notfyng plantff that Baruch was cancellng the Contract and returned plantffs down payment along wth a check n the amount of$1, representng fees pad n furtherance of the transacton. The letter specfed that Baruch was cancelng the Contract because "the contract called for an October 2, 2012 closng wth the understandng that sad date may not be extended beyond 30 days." On November 29, 2012, Mr. OMalley wrote to Mr. Dressler rejectng Baruchs cancellaton of the Contract, schedulng the closng for December 10, 2012 and declarng tme of the essence. However, Baruch dd not appear at the closng on December 10, Plantff later found out that on November 29, 2012, Baruch sold and transferred the subject property to defendant Second Purchaser for a hgher prce. On a moton for summary judgment, the movant bears the burden of presentng suffcent evdence to demonstrate the absence of any materal ssues of fact. See Alvarez v. Prospect Hosp.. 68 N.Y.2d 320, 324 (1986). Summary judgment should not be granted where there s any doubt as to the exstence ofa materal ssue of fact. See Zuckerman v. Cty of New York. 49 N.Y.2d 557, 562 (1980). Once the movant establshes a prmaface rght to judgment as a matter of law, the burden shfts to the party opposng the moton to "produce evdentary proof n admssble form suffcent to requre a tral of materal questons of fact on whch he rests hs clam." d. As an ntal matter, defendant Second Purchasers asserton that plantffs moton for summary judgment must be dened on the ground that plantff faled to attach Second Purchasers answer to ts moton s wthout mert. Pursuant to CPLR 3212(b), "[a] moton for summary judgment shall be supported by affdavt, by a copy ofthe pleadngs, and by other 4 5 of 19

6 [* 5] avalable proof, such as depostons and wrtten admssons" (emphass added). However, "[a]lthough CPLR 3212(b) requres that a moton for summary judgment be supported by copes of the pleadngs, the court has dscreton to overlook the procedural defect of mssng pleadngs when the record s suffcently complete." Washngton Realty Owners. LLC v. 260 Washngton Street. LLC, 105 A.D.3d 675 ( st Dept 2013). "The record s suffcently complete when, although the movant has not attached all of the pleadngs to the moton, a complete set of the papers s avalable from the materals submtted." d. The pleadngs wll be consdered avalable for the courts consderaton f they are fled electroncally, see Studo A Showroom. LLC v. Yoon, 99 A.D.3d 632 (" Dept 2012), f they are attached to the reply papers, see Pandan v. New York Health and Hosptals Corp., 54 A.D.3d 590 {1 51 Dept 2008) or f they are attached to a summary judgment moton made by one of the other partes, see Welch v. Hauck, 18 A.D.3d 1096 (3d Dept 2005). Here, the court fnds that plantffs error n falng to attach Second Purchasers answer to ts moton for summary judgment may be overlooked as the record s suffcently complete. ndeed, t s undsputed that Second Purchasers answer was fled electroncally, that t was attached to plantffs reply papers and that t was attached to the summary judgment motons made by both Second Purchaser and by Baruch ~d Nr and thus, t s avalable for the courts consderaton. Addtonally, Baruch, Nr and Second Purchasers asserton that plantffs moton for summary judgment should be dened on the ground that the Contract attached to plantffs moton papers s not legble s wthout mert. Although the copy of the Contract attached to plantffs moton papers and the copy of the Contract provded wth plantffs sur-reply are not completely legble, the partes do not dspute that plantff and Baruch entereq nto sad Contract nor do they dspute the Contracts authentcty or ts materal terms. ndeed, defendants freely 5 6 of 19

7 [* 6] quote the Contract throughout ther papers and have no trouble decpher~g the terms of the Contract. n the nst~nt acton, the court fnds that plantff s enttled to smttmacy judgment on ts frst cause of acton for breach of the Contract as t has establshed that Barucp was not enttled,1 to cancel the Contract based on the falure to close ttle to the subject proper!~ on October 2, 2012 or wthn thrty days thereafter because tme was not of the essence wt~ respect to that date and that Baruch breached the Contract by falng to close ttle to the subject p~operty on December 10, 2012 because tme was of the essence wth respect to that date. As an ntal matter, plantff has establshed that Baruch was not enttled to cancel the Contract based on the partes falure to Close on October 2, 2012, the date specfed n the Contract; or wthn thrty days thereafter be~ause tme was not of the essence wth respect to that ct.ate. : "[!Jn contracts [for the sale ofland], tme of performance s not normally of the essence unless t~e contract so states or one of the partes has unequvocally declared t upon proper notce." 1AD<; Orange. nc. v. Coyote Acres. nc., 7 N.Y.3d 484, 486 (2006). See also Whtney v. Perry, 2q8 A.D.2d 1025, 1026 (3d Dept 1994)("tme s never of the essence n real estate contracts, ev~n f a closng date s stated, unless the contract specfcally so provdes, or f specal crcumstances surroundng ts executon so requre.") Even n stuatons where a contn\ct states that p~rformance must occur "n no event later than" a specfc date, such "language alone does not make tjme of the essence. As we have long held, the mere desgnaton of a partcular date upon whch a thng s to be done 1, does not result n makng that date the essence of the contract." ADC Oran1e nc., 7 N.Y.3d at 489, quotng Balle,n v. Potter, 251 N.Y. 224, 228 (1929). See also Whtney, l08 A.D.2d 1025(holdng that the phrase "n no event later than" s not suffcent to make tme of the essence n connecton wt~, a closng date). See also Lghtle v. Becker, 18 A.D.3 ~ 449, 450 (2d Dept 6 7 of 19

8 [* 7] 2005)("[t]he contract for the sale of [the property] provdng for a closng to take place on or about July 10, 2003, but not later than 8/10/03, dd not make tme of the essence.") Here, plantff has establshed that the falure of the partes to close ttle to the subject property on October 2, 2012, the date specfed n the Contract as the closng date, or wthn thrty days thereafter, dd not enttle Baruch to cancel the Contract because tme was not of the essence wth respect to that date. t s undsputed that the Contract dd not contan a tme-ofthe-essence provson. To the contrary, Paragraph 15 of the Contract provded that the "Closng shall take place" "on October 2, 2012" and the Rder to the Contract further p~ovded that "[]t s understood and agreed that on or about as referred to n paragraph #15 of the prnted form contract s to mean no more than 30 days past sad contract date set for closng." To the extent Baruch argues that even f t was not enttled to cancel the Contract for falng to close on October 2, 2012 or wthn thrty days thereafter, t was enttled to cancel the Contract for falng to close on November 8, 2015, the date whch Baruch asserts was desgnated as the "essence" date n ts October 8, 2012 e-mal, such argument s unavalng as plantff has establshed that tme was not of the essence wth respect to November 8, The Court of Appeals has held that t s possble for a party to a contract for the sale of land "to convert a non tme-of-the-essence contract nto one makng tme of the essence by gvng the [other party] clear, unequvocal notce and a reasonable tme to perform." ADC Orange. nc., 7 N.Y.3d at 490, ctng Levne v. Sar hello, 67 N. Y.2d 780 (1986). See also Whtney, 208 A.D.2d at 1026("where tme s not stated to be of the essence n the agreement, a party may gve notce makng tme of the essence provded the notce s clear, dstnct and unequvocal, fxes a reasonable tme wthn whch to perform and nform(s) the other party that f he does not 8 of 19 perform by that date, he wll be consdered n default.") "Such notce mav he effected hv a

9 [* 8] letter from one of the partys attorneys." St~fanel/ v. Vtale, 223 A.D.2d 361, 362 ( st Dept 1996). Here. plantff has establshed that Baruch was not enttled to cancel the Contract for falng to close ttle to the subject property on November 8, 2012, the date specfed n Mr. Dresslers October 8, 2012 e-mal, because Baruch never properly declared tme of the essence wth respect to November 8, The October 8, 2012 e-mal dd not properly declare tme of the essence wth respect to November 8, 2012 as t dd not consttute a "clear and unequvocal" notce to declare tme of the essence because t faled to nclude a tme or place for the closng. Further, the e-mal was not sent to plantff as requred by the Contract, specfcally, by overnght mal va Federal Express. Moreover. even f Mr. Dresslers October 8, 2012 e-mal was suffcent to provde plantff wth notce that Baruch was declarng tme of the essence wth respect to the November 8, 2012 closng date, Baruch waved any tme of the essence declaraton whe1,1 Baruch postponed the November 8, 2012 closng date two separate tmes. t s well-settled that where tme of the essence s found n an agreement or where a party declares tme to be of the essence, "a mutual... agreement to extend the tme may ndcate a waver of such declaraton. Greto v. Barker 33 Assocates, 161A.D.2d109, 110 (P Dept 1990). ndeed, "f the date so fxed [as tme of the essence] s subsequently waved, the party causng the waver cannot later clam a default on account of such delay..." Brum Realty. nc. v. Takeda, 205 A.D.2d 365, 374 (1st Dept 1994). Here, plantff has establshed that Baruchs conduct after sendng the October 8, 2012 e-mal waved any declaraton that tme was of the essence wth respect to the November 8, 2012 closng date. n an e-mal sent on October 18, 2012, Mr. Dressler, counsel for Baruch, 9 of 19 proposed a November closng date. whch was fve davs after the alleged "e"enre

10 [* 9] date" of November 8, 2012, and plantff agreed to adjourn the closng to that date. Subsequently, n an e-mal sent on November 1, 2012, Mr. Dressler proposed yet another closng date of November 22, 2012, whch happened to be Thanksgvng Day. Baruchs conduct demonstrates that t never ntended tme to be of the essence wth respect to tj;e November 8, 2012 closng date and thus, any tme of the essence declaraton wth respect to that date was waved. Further, plantff has establshed that Baruch materally breached the Contract by falng to close on December 10, 2012 because plantff properly declared tme of the essence wth respect to that date. Specfcally, one day after Baruch notfed plantff that t was cancelng the Contract, Mr. OMalley sent a letter to Mr. Dressler rejectng Baruchs cancelaton of the Contract and statng as follows: Please let ths letter serve as further notce that we are hereby settng a "Tme Of The Essence" closng date of Monday, December JO, 2012 at 10:00 AM at my offce located at Metropoltan Avenue, Forest Hlls, New York, 11375, Tel: f your clent fals or refuses to close n accordance wth the terms of the contract of sale on sad date and tme, your clent wll be held n default of the contract of sale, and my clent wll seek all remedes and damages avalable to hm, ncludng but not lmted to the opton of specfc performance of the contract of sale. The court fnds that ths letter properly declared tme of the essence wth respect to December 10, 2012 as t notfed Baruch of the closng date, tme and the address at whch the closng would occur; t explctly stated that tme was of the essence; and t notfed Baruch that ts falure to appear at the closng would be consdered a default under the Contract. Addtonally, the notce was proper as t was sent to Baruch by overnght mal va Federal Express n satsfacton of the Contracts requrements of 19

11 [* 10] To the extent Baruch argues that plantff faled to properly declare tme of the essence wth respect to the December 0, 2012 closng date because that date was unrbasonable as t dd not gve Baruch enough tme to perform, such asserton s wthout mert.. Ths court fnds that the December 10, 2012 closng date was reasonable as a matter of law based on the fact that Baruch dd close ttle to the subject property wth defendant Second Purchaser on November 29, 2012 so there can be no argument that Baruch would not have been ready to close on December 10, To the extent Baruch asserts that plantff faled to properly declare tme of the essence wth respect to the December 0, 2012 closng date because Mr. OMalley, pfantffs counsel, desgnated the closng to occur n Queens County, n contraventon of the Rder to the Contract, such asserton s wthout mert. Paragraph 15 of the Contract provdes that the closng shall take place at Dressler Law LLP n New York County "or, upon reasonable notce ~y Purchaser, at the offce of Purchasers Attorney" n Queens County. Paragraph 23 of the Rder to the Contract provdes that plantff"agree[d] to close n New York County." Readng both of these provsons together, the court fnds that the Contract allows for the closng to occur n Queens County. The argument by Baruch that Paragraph 23 of the Rder overrdes Paragraph 15 of the Contract and only allows for the closng to take place n New York County based on Paragraph 19 of the Rder to the Contract whch states that the Rder controls "[]n the e~ent of a conflct between the provsons of the pre-prnted porton of ths contract" s wthout bass as Paragraph 19 s napplcable because there s no evdence that Paragraph 15 s a pre-prnted contractual provson. However, even f Paragraph 19 s applcable, t was stll proper for Mr. OMalley to desgnate Queens County for the closng as Paragraph 15 and Paragraph 23 are not n conflct of 19

12 [* 11] wth each other. To the extent Baruch asserts that plantffs moton for summary jµdgrpent must be,, dened on the ground that there are ssues of fact as to whether plantffs Prn~pal, Jeffrey,,, Berger, assgned the Contract to hs busness partner, James Parrella, n vola~fon of the terms of the Contract, such asserton s wthout mert as there s no evdence that the C~:mtract was ever assgned to Mr. Parrella or that Mr. Berger planned to assgn the Contract to Mr. Parrella. Further, ths court fnds that plantff has establshed ts rght to specfc performance of the Contract as sought n ts frst cause of acton. To obtan specfc performance of a contract for the sale of land, the party seekng specfc performance must establsh that t "was ready, wllng and able to perform pursuant to the contract, and that [t] had taken all the necessary steps 1 to close, ncludng retanng counsel, securng fnancng, and orderng ttle n~urance." Sanchez v. Hay, 122 A.D.3d 533, 534 ( st Dept 2014). Here, the court fnds that plantff s enttled to specfc perform~ce of the Contract as t has establshed that t was ready, wllng and able to perform pursuant to the ontract and that t had taken all the n~cessary steps to close by the closng date of December 0, t s undsputed that plantff retaned Mr. OMalley to represent t n connecton «-th ts purchase of the subject property and had ordered ttle nsurance pror to the closng date. Addtonally, plantff has affrmed that Mr. Berger and Mr. OMalley attended the Deceml:!er 10, 2012 closng! at Mr. OMalleys offce at 10:00 a.m. wth all of the funds requred to close. j ndeed, t s undsputed that plantff pad the down payment n August Further, t s clear from the record that the partes had negotated a $450,000 note and purchase money mprtgage that Baruch was requred to gve plantff under the Contract and Mr. Berger has affrmedfthat he was prepared to execute sad note and purchase money mortgage on behalf of plaptff n sad amount 12 of 19

13 [* 12] 1~ at the closng. Addtonally, Mr. Berger affrms that at the closng on D~ce~ber 0, 2012, he presented a certfed check made payable to Baruch n the amount of$308,250, as requred by the Contract. Mr. Berger has also affrmed that at the December 0, 2012 closng, he had n hs possesson checks for the remanng mones due and owng, ncludng a check made payable to Landmark Land Servces for the ttle bll and a check made payable to Baruch n the amount of $ as payment of the balance of net adjustments due to the seller. However, n order for plantff to be awarded specfc performance of the Contract, ths court must frst determne whether t can vacate the deed transferrng ttle to the subject property to defendant Second Purchaser. "The New York Recordng Act (Real Property Law 290 et seq.) protects a good fath purchaser for value from a pror unrecorded nterest n real property provded, nter ala, that the subsequent purchasers nterest s the frst to be duly recorded." Trans/and Assets. nc. v. Davs, 29 A.D.3d 679 (2d Dept 2006). "The status of good fath purchaser for value cannot be mantaned by a purchaser wth ether notce or knowledge of a pror nterest or equty n the property, or one wth knowledge of facts that would lead a reasonably prudent purchaser to make nqures concernng such." Yen-Ye Hsueh Chen v. Geranum Dev. Corp., 243 A.D.2d 708, 709 (2d Dept 1997). Specfcally, n Yen-Te Hsueh Chen, the court found th:tt the second purchasers of certan property were not.bona fde purchasers for value based on the followng: Here, the [second purchasers] do not dspute that they had actual knowledge of the pror contracts between [the seller] and the [frst purchaser] for the sale of the subject parcels. ndeed, the (second purchasers] contract of sale wth [the seller] was expressly condtoned upon the cancellaton of such contracts. However, despte ths knowledge, the [second purchasers J merely accepted, wthout any proof or nqury, ndependent or otherwse, a bare representaton pror to ther closng that the contracts had been cancelled. d. 13 of 19

14 [* 13] 1 Here, the court fnds that the deed transferrng ttle to the subject property to defendant Second Purchaser must be vacated on the ground that Second Purchaser s not a bona fde purchaser for value of the subject property because as n Yen-Te Hsueh Chen,/Second Purchaser knew about the Contract between plantff and Baruch and despte ths knowl~dge, t faled to suffcently nqure about whether the Contract had actually been cancell~d btlt rather merely reled on the bare representaton of Baruch that the Contract had been cancelled before purchasng the subject property. t s clear from the record before the court tpat Second 1 Purchaser had knowledge of plantffs Contract to purchase the subject prop~rty. On or about ( November 8, 2012, Mr. Dressler sent an ntal draft of ther contract of sale t? Dustn Bowman, Esq., counsel for Second Purchaser, whch contaned the followng provson:: t s further understood that, ths contract and rder s a "rderve contract". The terms and valdty of ths contract are subject to the sellers ablty to successfully cancel a pror/pendng contract. Nothng heren shall requre the seller to sale [sc] n the event that the prevously exstng contract s unable to be cancelled., 1! Addtonally, Mr. Bowman has admtted that he receved the draft contract ard had knowledge of another purchaser, specfcally testfyng that he had "conversatons wth, [counsel for Baruch] about there beng some other potental purchaser" and that he "[knew] that there was some other prospectve purchaser." Further, when Mr. Bowman asked Mr. Dressl~r w~y the ntal draft contract dd not provde for specfc performance, Mr. Dressler responded that he "cannot allow that remedy wth the other contract pendng." Regardng any nqury made Jy ether Mr. Bowman or Second Purchaser, Mr. Bowman testfed that t was not hs ~job~ to nqure regardng the pror contract and that he "ddnt do any dlgence at all other t~an look at ACRS" and search through the chan of ttle for the subject property. nstead ofnqurng nto the 14 of 19 11

15 [* 14] pror/pendng contract, Baruch and Second Purchaser entered nto a sde agre~ment whch was desgned to protect Baruch n the event plantff sued to enforce the Cont~act. Specfcally, pursuant to the sd~ agreement, the purchase prce of the subject property was ncreased by $15,000.00, whch Baruch would pay back to Second Purchaser "[]n the evetlt that no lawsut/acton s fled aganst Baruch Realty LLC." Through ths sde agreerent and the $15,000 ncrease ~ the purchase prce of the subject property, Second Purchaser was effectvely,, provdng partal ndemnfcaton to Baruch by provdng ltgaton costs n an~cpaton of a clam brought by ~lantff. However, the court fnds that the nqury made b~ Mr. Bowman and,, Second Purchaser s nsuffcent under the crcumstances. Mr. Bowman, andtherefore Second, Purchaser, had enough knowledge and awareness of facts that would lead a rersonably prudent purchaser to make nqures about a pror pendng contract to further nqure about ts effect on the purchase of the subject property yet t merely accepted Baruchs bare repr~sentaton that the,, Contract had been cancelled. Thus, based on the foregong, Second Purchas~r s not a bona fde purchaser for value of the subject property and the deed transferrng ttle to th~ subject property to defendant Second Purchaser must be vacated. Second Purchasers relance on Berger v, Poltzzotto, 148 AD.2d 651 ~2d Dept 1989) for., the proposton that t had no duty to make any further nqury nto whether the Contract had actually been cancelled s wthout mert as Berger s dstngushable. Second.Purchaser ponts 1 to the porton of Berger n whch the court held that the second purchase; 15 of 19 s "~now ledge of a! pror deal that broke up was nsuffcent to mpose upon hm a duty to nake ja further nqury. <, 148 A.D.2d at 652. However, the Second Department made such a fndng bycause "no evdence was presented establshng that [the second purchaser] had notce of~he plantffs pror contract, or of ther rghts thereunder." d. n the present case, there s ampl;e evdence that 14

16 [* 15] Second Purchaser had notce of the Contract and thus, Berger s napplcable. Second Purchasers asserton that plantff s precluded from obtanng specfc performance because t dd not record the Contract as requred by the New York Recordng Act s also wthout mert. Real Property Law 294(3) provdes as follows: Every executory contract for the sale, purchase or exchange of real property not recorded as provded n ths secton shall be vod as aganst any person who subsequently purchases or acqures... the same real property... n good fath and for valuable consderaton, from the same vendor or assgnor..., and whose conveyance, contract or assgnment s frst duly recorded... Under the New York Recordng Act, "an unrecorded contract of sale s deemed vod as aganst a subsequent purchaser as long as the subsequent purchaser s a bona fde purchaser for value." 141 Sunnysde LLC v. Zoarez. nc., 41Msc.3d1224 (Sup. Ct. Kngs County 2013). However, the Recordng Act does not apply here as the court has already determned that Second Purchaser was not a bona fde purchaser for value of the subject property. Thus, the fact that plantff dd not record the Contract pror to Second Purchasers purchase of the subject property s mmateral. Ths court next turns to defendants Baruch, Nr and Second Purchasers motons for summary judgment. As an ntal matter, Second Purchasers moton for summary judgment dsmssng plantffs frst cause of acton and vacatng the notce ofpendency plantff fled aganst the subject property and Baruch and Nrs cross-moton for summary j1:1dgment dsmssng plantffs frst cause of acton are dened based on ths courts decson grantng plantff summary judgment on ts frst cause of acton allegng breach of contract and awardng plantff specfc performance of the Contract. The court wll now address Second Purchasers moton for summary judgment on ts of 19

17 [* 16] cross-clams aganst Baruch and Nr and for an Order declarng that f plantff prevals aganst Second Purchaser on plantffs frst or ffth causes of acton, Baruch and Nr are lable to Second Purchaser for all damages t sustaned. ntally, to the extent plantff asserts that such moton s untmely because t was not fled wthn sxty days of when plantff fled the Note of ssue, as requred by the Prelmnary Conference Order ssued n ths case, such asserton s wthout mert. t s undsputed that plantff fled the Note oflssue on December 18, 2015 and that Second Purchaser dd not fle the moton at ssue untl Aprl 17, 2016, two months after ts tme to do so had already expred. However, such moton wll be consdered by the court on the ground that there was a moton to strke the Note oflssue pendng from January 7, 2016, when the moton was fled, untl March 15, 2016, when a decson was ssued by ths court notng that the moton had been wthdrawn. ndeed, twenty days after the Note oflssue was fled, defendants Baruch and Nr moved to strke the Note oflssue on the ground that dscovery was outstandng, whch tolled the tme to fle for summary judgment and meant that the partes would have forty days after the moton was resolved to fle ther summary judgment motons. As th7 moton was resolved on March 15, 2016 and Second Purchaser fled the moton at ssue thrty-three days later, the moton s tmely. n the nstant acton, the court fnds that Second Purchaser has establshed ts rght to summary judgment on ts cross-clams for ndemnfcaton asserted aganst Baruch and Nr. A clam for "ndemnty nvolves an attempt to shft the entre loss from one who s compelled to pay for a loss, wthout regard to hs own fault, to another party who should more properly bear responsblty for the loss because t was the actual wrongdoer." Trustees of Columba Unversty v. Mtchell/Gurgo/a Assocates, 109 A.D.2d 449 ( st Dept 1985). The rght to ndemnfcaton can be created by an express contract or may be mpled by la~. d. "mpled of 19

18 [* 17] ndemnty s a resttuton concept whch permts shftng the loss because to fal to do so would result n the unjust enrchment of one party at the expense of the other. Mas v. Two Brdges Assoc.. 75 N.Y.2d 680, 690 (1990). ndeed, the Court of Appeals has held as follows: Mas. 75 N.Y.2d at 690. The purpose of all contrbuton and ndemnty rules s the equtable dstrbuton of the loss occasoned by multple defendants. n furtherance of that purpose the courts have granted relef n a varety of cases n favor of the party who, n farness, ought not bear the loss. allowng t to recover from the party actually at fault. They have found ndemnty approprate because of a separate duty owed the ndemntee by the ndemntor (thus the ndemntee may recover for the wrong to t), [or] because there s "a great dfference" n the gravty of the fault of the two tort-feasors.. Here. Second Purchaser has establshed ts rght to summary judgment on ts cross-clams for ndemnfcaton aganst Baruch and Nr as t has establshed that they should more properly bear responsblty for Second Purchasers loss. Based on ths courts fndng that Second Purchaser was not a bona fde purchaser for value of the subject property, Second Purchasers deed to the subject property has been vacated and Second Purchaser has thus been damaged n the amount t pad to Baruch to purchase the subject property. Further, as ths court has granted plantffs request for specfc performance of the Contract, Baruch wll receve the purchase prce of the subject property from plantff pursuant to the Contract. However. allowng Baruch to keep both the funds pad by plantff and the funds pad by Second Purchaser would gve Baruch a wndfall to whch t s not enttled. Thus, ths court fnds that Second Purchaser s enttled to judgment aganst Baruch n the amount of the funds pad by Second Purchaser to purchase the subject property n addton to nterest from November 29, 2012, the date the Second Purchaser purchased the subject property as that s what equty requres. To the extent Second Purchaser moves for summary judgment on ts cross-clams for 18 of 19,.,

19 [* 18] contrbuton aganst Baruch, such moton s dened as Second Purchaser has faled to provde any H analyss as to ts rght to such relef. Accordngly, plantffs moton for summary judgment on ts frst cau~e of acton asserted n the Second Amended Complant s granted; defendants Baruch and Nrs cross-moton for summary judgment s dened; defendant Second Purchasers moton for ~umjary judgment dsmssng plantffs frst cause of acton and for an Order vacatng the notc~ of pendency plantff fled aganst the subject property s dened; and defendant Second PJrchasers moton, for summary judgment on ts cross-clams aganst Baruch and Nr for and ndemnfcaton and for an Order declarng that f plantff prevals aganst t on plantffs frst or ffth causes of acton, Baruch and Nr are lable to Second Purchaser for all damages t sustaned s granted. t s hereby ORDERED that plantff s awarded specfc performance of the Contract to purchase the subject property from defendant Baruch; and t s further ORDERED that the deed conveyng ttle to the subject property from ;Baruch to ~: defendant Second Purchaser s vacated; and t s further ORDERED that the Clerk s drected to enter judgment n favor of Se?ond Purchaser and aganst Baruch and Nr n the amount of$982,000 plus nterest at the statuto~ rate from November 29, Ths consttutes the decson and order of the court. Dated: Enter: t f::.- ~~~~~~J-.~S-.C-.~~~~~~ HON. CYNTHA!S. KERN J.S.C. 19 of 19 1 ~