1319 Third Ave. Realty Corp. v. Chateaubrlant Rest. Dev. Co. LLC, 2009 NY Slip Op 32043(U) (N.Y. Sup. Ct. 9/8/2009)
| Decision Date | 08 September 2009 |
| Docket Number | Motion Seq. No. 020,0119585/2002 |
| Citation | 2009 NY Slip Op 32043 |
| Parties | 1319 THIRD AVENUE REALTY CORP., Plaintiff, v. CHATEAUBRIANT RESTAURANT DEVELOPMENT COMPANY LLC, Defendant. |
| Court | New York Supreme Court |
Avrom R. Vann, PC., Avron R. Vann, Esq., New York, NY, For Plaintiff.
Sanders Ortoli Vaughn-Flam Rosenstadt, Eric Vaughn-Flam, Esq., New York, NY, For Defendant.
SPECIAL REFEREE DECISION & JUDGMENT
By decision and order of the Honorable Louis York, dated September 17, 2007 and entered September 25, 2007, the issue of damages and reasonable attorneys' fees to be awarded to the defendant CHATEAUBRIANT RESTAURANT DEVELOPMENT COMPANY LLC ("Chateaubriant") was referred to the Special Referee to hear and determine.
This matter was referred for a hearing to the Special Referee to hear and determine. However, on or about December 15, 2008, the hearing was stayed by the Appellate Division, First Department pending disposition of plaintiff 1319 THIRD AVENUE REALTY CORP.,'s motion ("TARC"). In the interim, on December 18, 2008, the Appellate Division, First Department unanimously modified, on the law, Justice York's Order, entered September 25, 2007, which adjudged plaintiffs in civil contempt and referred the issue of damages to a referee, to the extent of limiting the award to costs, expenses and attorney fees incurred as a result of appellants' disobedience of Justice York's November and December-2006 Order and Judgment, but otherwise affirmed.
Following the appellate decision, the stay of this hearing was vacated and the parties appeared on May 26, 2009. The hearing commenced and completed on such date. Exhibits marked in evidence are noted herein. The transcript of the hearing was not ordered by the parties and does not accompany this decision and judgment. Parties submitted memos of law on July 16, 2009 and the matter was marked submitted for decision and judgment. In brief, defendant maintains it is entitled to an award of fees and expenses totally $285,207.46 with statutory interest of $11,181,70, foratotal award of $296,389.16 (Def., Memo of Law, pp 2, 7). The plaintiff and Ahmed Qasemi maintain defendant has failed to demonstrate any proof and, in the alternative, is only entitled to an award of no more than $20,105.00 (Plf., Memo of Law, pp 1, 10). Neither party has demonstrated their respective damage calculations. Upon review of the record, the evidence, the credible testimony, and consideration of the parties' legal memos of law, I make the following findings and conclusions and based on the same this Decision and Judgment shall be entered.
1. I take judicial notice of the prior orders of the Court, particularly the Decision and Order of Hon., Louis York, dated September 25, 2007. and the Appellate Division Order, dated December 18, 2008.
2. Justice York's September 25, 2007-Order determined the plaintiff TARC and its principal Ahmed Qasemi ("Qasemi") were in civil contempt, stemming from a protracted and ongoing realty dispute. TARC, then the owner and landlord of the subject premises on which defendant's restaurant is located, initiated this action for a declaration that the option to purchase the restaurant for the sum of $2 million was unenforceable against TARC. In turn, defendant cross-moved first for specific performance and at a subsequent time for monetary damages. Justice York eventually granted both requests after approximately four years of litigation.
3. The four years of litigation consisted of, but was not limited to, the October 6, 2004-Order wherein the Court granted summary judgment and directed specific performance, ordering the plaintiff to enter into a contract of sale of the premises (Dx 1 [Exhibit J]). TARC and Qasemi appealed and on June 16, 2005, the Appellate Division affirmed (1319 Third Ave. Realty Corp. v Chateaubriant Restaurant Development Co., 19 AD3d 221 []; Dx 1 [Exhibits K-L]).
4. However, following affirmance, TARC refused to sign a contract of sale, contending the defendant was not ready, willing and able to buy the property and that neither the Court nor the Appellate Division actually granted the defendant specific performance. The defendant moved to hold plaintiff and Qasemi in contempt (Dx 1 [Ex M]). Subsequently, after a finding of contempt by the Court against TARC, the parties agreed to sign a contract of sale (Dx 1 [Ex N]) on September 28 and the contempt proceeding was abandoned. However, on January 27, 2006, TARC sought a stay of the closing on the sale, arguing that defendant was not ready, willing and able to close, and also arguing that specific performance on the closing had not been ordered as well as "pending plaintiffs appeal" to the Appellate Division, First Department for clarification of the June 16, 2005. Appellate Division's affirmance of Justice York's prior order (Dx 1 [Ex Q]; see also, 1319 Third Ave. Realty Corp. v Chateaubriant Restaurant Development Co., 19 AD3d 221).
5. However, defendant sought relief from the Court and being no stay, Justice York ordered the closing for March 15, 2006. On March 5, 2006, TARC filed its motion with the Appellate Division for clarification, "offering again the discredited notion that defendant was not ready, willing and able to close and specific performance was not granted" (see, Dec., & Ord., J. York, 09/17/07, p 21). The Appellate Division denied the motion on clarification on June 7, 2006. Subsequently, Justice York held a four-day trial on damages, whereupon his Honor ordered (Dx 1 [Ex AA]) on or about August 24, 2006, that the closing take place on November 20, 2006. TARC then brought a non-payment proceeding in Housing Court, but that litigation was defeated upon the finding by Justice York that as equitable owner, the defendant did not have to pay rent. Justice York stayed TARC from pursuing the landlord and tenant proceeding.
6. On October 24, 2006, another motion for a stay was brought by TARC on the ground that only the building, but not the land was conveyed. Again, the closing was delayed from November 20, 2006 to November 30, 2006 (Dx 1 [Ex AA]) as a result of the delay caused by that motion (see, Dec., & Ord., J. York 09/17/07, p 3). In the interim, the Appellate Division also denied a stay of the November 20, 2006, closing (Dx1 [Ex BB]).
7. On November 22, 2006, after trial, Justice York issued his findings of facts and conclusions of law which included a decision on the amount of damages to be awarded to the defendant (Dx 1 [Ex CC]). TARC filed an appeal accompanied by an automatic stay under CPLR § 5519 (Dx 1 [Ex DD). An interim stay was granted by the Appellate Division (Dx 1 [Ex EE]). On or about December 6, 2007, Justice York directed TARC to placed a bond in the sum of $1.5 million as an undertaking in order to stay the closing. Such bond was to be place by December 7, 2007 (Dx 1 [Ex HH and Ex II]). Justice York vacated the stay as the bond was not produced by December 7, 2006, and ordered the closing for that date. TARC appealed again and sought to vacate the stay reiterating prior arguments and contentions. It did not appear on December 7, 2006 on the ground that its appeal was pending. The Appellate Division denied both the stay and the appeal and on December 20, 2006, the latest closing date scheduled, TARC once again failed to appear, having obtained the $1.5 million bond and filing the same on December 21, 2006 (Dx 1 [Ex 00]), and claiming the bond purchase triggered the automatic stay.
8. On December 21, 2006, Justice York vacated the automatic stay because the $1.5 million bond was obtained substantially after the date determined by the Court and TARC had failed to appear on the Court-ordered closing date (Dx 1 [Ex PP]). TARC appealed and obtained an interim stay (Dx 1 [Ex QQ]), which was eventually vacated.
9. Meanwhile, during December 2006, defendant moved to have a receiver appointed over the premises in view of the delay of the sale as well as plaintiffs refusal to comply with the prior orders of the Court (Dx 1 [Ex LL and Ex MM]). On December 22, 2006, a receiver was appointed by the Court (Dx 1 [Ex NN]), who obtained the closing and sale of the premises. The receiver's expenses and fee were paid for by defendant (see, Dec., & Ord., J. York 09/17/07, pp 2-3).
10. Following the closing, the defendant moved to hold TARC and principal Qasemi in contempt as well as for an award of sanctions under 22 NYCRR § 130-1.1, contending that it had suffered damages resulting from the delay in the closing occasioned by TARC's "contumacious delay and avoidance of the Court's orders" (see, Dec., & Ord., J. York 09/17/07, p 5).
11. Justice York granted the motion to the extent of finding TARC and its principal Qasemi, in civil contempt. Justice York determined that it "was plaintiffs consistent delay and avoidance of court orders, that required defendant in several instances to adjourn the closing... that the bulk of the delays was the result of the tactics employed by plaintiff (Dec., & Ord., J. York 09/17/07, p 5). The Court determined that the actions of the plaintiff delayed, impaired impeded and prejudiced the rights of the defendant under § 753(A) of the Judiciary Law (id., citing, Clinton Corner HDFC v Lavergne, 279 AD2d 339).
12. Finding that the purpose of civil contempt was to coerce obedience to a court order or to compensate for damages incurred by the injured party resulting from the disobedience of a court order and that actual costs...
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