Notice of Cross Motion... 2 Affirmation in Opposition and Memorandum of Law Upon the foregoing papers the motion by plaintiffs, Dahlia

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SHORT FORM ORDER SUPREME COURT - STATE OF NEW YORK Present: HON. JOSEPH COVELLO Justice DAHLIA FARAGO and TZV SAPERSTEIN, TRIALKIAS, PART 24 NASSAU COUNTY -against- Plaintiffs, INDEX NO.: 014603/03 MOTION DATE: 11/25/03 MOTION SEQ.#: Old& 02 MICHELLE TEPPER and DROR TEPPER, Defendant. The following papers read on this motion: Notice of Motion / Order to Show Cause... 1 Notice of Cross Motion..... 2 Affirmation in Opposition and Memorandum of Law... 3 Reply... 4 Upon the foregoing papers the motion by plaintiffs, Dahlia Farago and Tzv Saperstein, brought by Order to Show Cause for an Order pursuant to CPLR 56301, enjoining and restraining the defendants, Michelle Tepper and Dror Tepper, from taking any steps to sell liquidate,or dispose in any way the defendants 450 shares of a Cooperative Apartment in Lawrence, New York, and Defendants cross motion for an Order pursuant to CPLR $3212 for summary judgment dismissing the plaintiffs complaint, granting summary judgment on defendants first counterclaim, setting this matter down for a hearing pursuant to CPLR $63 15, vacating the temporary restraining order, or in the alternative requiring plaintiffs to post an undertaking and sanctions, are determined as set forth herein.

Plaintiffs, Dahlia Forago and Tzv Saperstein, commenced this action for breach of contract action and specific performance asserting that defendants, Michelle and Dror Tepper, breached the contract of sale the parties entered into regarding the sale of defendants cooperative apartment, known as Lawrence 261 Apartments Corp, at 261 Lawrence Avenue, Lawrence, New York, unit F-2. The sale was for the 450 cooperative shares and a proprietary lease. The purchase price was $130,000.00 and plaintiffs made a down payment of $13,000.00. In the defendant s answer they asserted two counterclaims. The first counterclaim was for damages due to plaintiffs breach of the contract. The second counterclaim was for damages they incurred due to the issuance of the temporary restraining order. Plaintiffs assert that injunctive relief is needed as the defendants are attempting to sell the subject premises for a higher price, and that they have been advised that the defendants were advertising the apartment in July 2003 even before they were notified of the alleged default. To obtain a preliminary injunction, the movant must establish a likelihood of success on the merits, irreparable injury in the absence of an injunction, and a balancing of equities in the movant s favor. (see, Aetna Insurance Company v Capasso, 75 NY2d 860; Doe v Axelrod, 73 NY2d 748; Grant Co. v Srogi, 52 NY2d 496.) The propriety of granting a preliminary injunction lies in the court s discretion, which is 2

exercised on the basis of the factual proof submitted. (see, Nelson, L.P. v Jannace, 248 AD2d 448.) The determination of such relief depends not only on the right of the party seeking it, but also on the appropriateness of its issuance in the circumstances in which it is sought. (see, Matter of Gerges v Koch, 62 NY2d 84,94-95.) The movant bears the burden of establishing the right to such relief. (see, Carman v Congregation DeMita of New York, Inc., 269 AD2d 416; Shannon Stables Holding Company, Ltd. v Bacon, 135 AD2d 804,805.) Pursuant to the terms of the contract the plaintiffs were required to submit an application to the Cooperative Corporation (Coop. Corp.), or it managing agent for approval of the sale within three business days of delivery of the executed contract to them, and they were to provide the mortgage commitment letter to the Coop. Corp., within three business days of receiving it. Defendants assert that the executed contract was delivered to plaintiffs attorney on February 27,2003. Accordingly, the plaintiffs were to file their application with the Coop. Corp., by March 2,2003. Defendants assert that plaintiffs failure to make a timely good faith application to the Coop. Corp., was a breach of the contract. In support of their assertion that the plaintiffs did not timely file their application the defendants annex a letter from the managing agent for the Coop. Corp., dated June 2, 2003. However, that letter indicates that the Coop. Corp., had received the plaintiffs 3

application and was seeking additional documents and information. However, the letter does not indicate that the application was being sent to the plaintiffs for the first time as the defendants assert. Defendants also assert that the plaintiffs breached the portion of the contract regarding financing, as they only obtained a mortgage commitment for $97,500.00. However, the contract provided that they get mortgage financing for at least $104,000.00 or 80% of the $130,000.00 purchase price. Defendants assert that due to plaintiffs breach of the contract their lawyer faxed to plaintiffs attorney a notice of default dated May 27,2003 and several follow up notices dated June 2,2003 and June lo,2003 and a final notice of default dated August 4,2003, was mailed to plaintiffs attorney. Plaintiffs do not deny that they did not file their application with the Coop. Corp., as provided in the contract. However, they assert that they thought the defendants agent had delivered a copy of the executed contract to the Coop. Corp., as he had agreed to do. As such, they were waiting for a representative of the Coop. Corp., to contact them and send them the application to complete. Plaintiffs also asserts that the provision in the contract providing that they obtain a mortgage for at least 80% of the contract price was for their benefit and not the defendants. In addition, plaintiffs and their attorney on the contract Mr. Benjamin Rosenberg Esq., assert that they did not receive the purportedly faxed notices of default dated May 27,2003, June 2,2003 or June 10,2003. They assert the first notice of default that was 4

received was the August 4,2003, a letter that defendants attorney mailed to plaintiffs attorney stating that the contract was in default and that the $13,000.00 down payment was being released to the defendants. Mr. Rosenberg sets forth that the purported notices of default of May and June 2003, do not have his fax number on them and that he never authorized service of any documents on him by fax with regards to this transaction. Specifically, the contract allows service upon the attorneys at the addresses and fax numbers listed at the end of the contract however, no fax number was listed on the contract for him. Plaintiffs also assert that the defendants waived any alleged default prior to and even after the letter of August 4, 2003, as the defendants continued to assist the plaintiffs in obtaining the Coop. Corps., approval of the sale, including attending the Coop Board meeting on August 14,2003 during the blackout. Defendants deny that they did anything to assist the plaintiff after declaring them in default and deny being at the Board meeting with them. Plaintiffs set forth that they were informed by the Cooperative Board on August 20,2003, that their application to become members of the Coop. Corp., and purchase the coop., had been approved. A review of the contract reveals that it does not contain a Time is of the Essence clause. The contract at paragraph 1.11 provides that the closing shall take place on or about May 17,2003. In addition, defendants never declared that time is of the essence or sent a notice to that effect. Moreover, a final closing date was not scheduled where the plaintiffs defaulted in tendering performance after the defendants appeared and 5

tendered performance. Accordingly, the passage of the closing date does not amount to an incurable default of the contract. See, Dwyer v Villanova, 129 Ad2d 763. For one party to convert a non-time is of the essence contract into a time is of the essence contract that party is required to give clear and distinct notification setting forth a reasonable time to close and that failure to close on that date will result in a default. See, Woodwork Display Corp. v Plagakis, 137 AD2d 809; see also, Levine v. Sarbello, 112 AD2d 197. Failure to declare time of the essence notification results in an indefinite adjournment see, Tarlo v Robinson, 118 Ad2d 561. Based upon the record before this Court, the defendants conduct appears to have constituted an anticipatory breach of the contract where they declared plaintiffs in default without first declaring that Time is of the Essence and setting a firm closing date (law day) where the defendants tendered performance. Moreover, issues of fact exist as to whether the defendants May and June 2003 notices of default were properly sent to plaintiffs, as it does not appear that those notices were sent to plaintiffs attorney in accordance with the contract. For the aforenoted on the merits. They have reasons the plaintiffs have established a likelihood of success also established that based upon the uniquness of the apartment, location and cost that irreparable injury would occur in the absence of an injunction, and a balancing of equities is in their favor. Accordingly, the preliminary injunction is granted to the extent provided below. With regards to the defendants cross-motion, the rule in motions for summary 6

judgment has been succinctly re-stated by the Appellate Division, Second Dept., in Stewart Title Insurance Company, Inc., v Equitable Land Service, Inc., 202 AD2d 880: It is well established that a party moving for summary judgment must make a prima facie showing of entitlement as a matter of law, offering sufficient evidence to demonstrate the absence of any material issues of fact (Winegrad v, New York Univ. Med. Center, 64N.Y.2d851,853,487N.Y.S.2d316,476 N.E.2d 642; Zuckerman v. City of New York, 49 N.Y.2d 557, 562, 427 N.Y.S.2d 595,404 N.E.2d 7 18). Of course, summary judgment is a drastic remendy and should not be granted where there is any doubt as to the existence of a triable issue (State Bank of Albany v. McAuliffe 97 A.D.2d 607,467 N.Y.S.2d 944), but once a prima facie showing has been made, the burden shifts to the party opposing the motion for summary judgment to produce evidentiary proof in admissible form sufficient to establish material issues of fact which require a trial of the action (Alvarez v. Prospect Hosp., 68 N.Y.2d 320,324,508 N.Y.S.2d 923,501N.E.2d 572; Zuckerman v. City ofnew York, supra, 49 N.Y.2d at 562,427 N.Y.S.2d 595,404 N.E.2d 718). Defendants have failed to make out aprima facia entitlement to summary judgment. As such they have not established that the plaintiffs action is frivolous or that the temporary restraining order was not appropriate. Therefore, it is hereby ORDERED, that the defendants cross-motion is denied in its entirety. It is further ORDERED, that the plaintiffs motion for a preliminary injunction is granted to the extent that the defendants are granted a limited and conditional preliminary injunction in that the defendants, their agents and anyone acting on their behalf are 7

, Farago v Tepper restrained and prohibited from taking any steps to sell, liquidate, or dispose of the shares of the subject cooperative apartment to anyone other than to the plaintiffs, until further Order of this Court. It is further ORDERED, that counsel for the parties are to appear in IAS Part 24, on March 3,2004 at 9:30 am.. At the conference the plaintiffs are to provide a current mortgage commitment, proof of approval of the sale by the Cooperative Corporation s Board, proof of the necessary funds to close together with any and all other necessary documentation to exhibit that plaintiffs are fully ready, willing and able to close. It is further ORDERED, that this Court does not have jurisdiction over the Harry Zubil, Esq., the escrowee, as he is not a party to this action. However, this Court does have jurisdiction over the parties to the contract. Accordingly, the parties, their agents and or anyone acting on their behalf are restrained and prohibited from requesting, accepting, or permitting the transfer, liquidation or disposition of the down payment funds from the escrowee, to themselves or anyone or anywhere until further Order of this Court. This constitutes the decision and Order of the Court. Dated, February 4,2004