Bogoni v. Friedlander
| Decision Date | 21 April 1994 |
| Citation | 610 N.Y.S.2d 511,197 A.D.2d 281 |
| Parties | Paul BOGONI, Plaintiff-Respondent-Appellant, v. Claire FRIEDLANDER, Defendant-Appellant-Respondent, Maidad Rabina, etc., et al., Defendants-Respondents-Appellants, and Odette Realty Company, Defendant. |
| Court | New York Supreme Court — Appellate Division |
Maurice A. Reichman and Aury Bennett Stollow, P.C., New York City, for defendants-respondents-appellants.
Before SULLIVAN, J.P., and ROSS, RUBIN and NARDELLI, JJ.
This appeal arises out of the breach of a joint venture agreement, the objective of which was to convert the subject premises, located at 251 West 92nd Street in Manhattan, to cooperative ownership. Summary judgment was granted to plaintiff Paul Bogoni against his co-venturer, defendant Claire Friedlander, and affirmed by this Court on appeal (Odette Realty Co. v. DiBianco, 170 A.D.2d 299, 565 N.Y.S.2d 815). Bogoni and Friedlander have stipulated to a settlement resolving their dispute, and so much of the judgment as awards damages to plaintiff against Friedlander for breach of the joint venture agreement, directs that she account to plaintiff for rents and proceeds received in connection with the operation of the premises and directs dissolution of Odette Realty Co. is not subject to this appeal.
At issue is the sufficiency of the proof adduced at trial to support an award of $825,000 against defendants Maidad Rabina, Rabina Realty and 251 West 92nd Corp., a corporation formed by Rabina to take title to the premises (collectively "the Rabina defendants"), on the ground that Maidad Rabina induced Friedlander to breach the joint venture agreement with plaintiff. Also at issue is the propriety of an order directing defendant 251 West 92nd Corp. to convey title to the premises to the joint venturers as tenants in common. Defendant Friedlander appeals from so much of the judgment as directs her to pay $891,980 in closing costs and $1,104,476 in mortgage payments in connection with the voided transfer of title to the Rabina defendants on their cross claim against her for indemnity.
This Court concludes that the record is insufficient to sustain the finding that defendant Maidad Rabina induced a breach of the joint venture agreement with Claire Friedlander. As to the validity of the sale of the subject premises to 251 West 92nd Corp. by Odette Realty Co., the record discloses that Friedlander possessed actual authority to effect the transfer of title. Moreover, she had apparent authority, as a partner in Odette, to convey the premises on its behalf. In any event, plaintiff is also equitably estopped, by his own representations, to deny that Friedlander had authority to convey good title on behalf of Odette.
The facts of this matter are reasonably straightforward, if somewhat unusual. Plaintiff Bogoni purchased the interests of all the partners of defendant Odette Realty Company except that of Claire Friedlander, who held 45% of the partnership. Pursuant to the terms of a financing agreement dated January 4, 1985 with TCF National Properties, Inc., TCF extended a loan in the amount of $4.12 million to enable plaintiff to acquire the interests of the other partners. The loan was secured by the acquired interests and conditioned upon the signing of an agreement to convert the premises to cooperative ownership within 60 days. Accordingly, plaintiff and Friedlander executed a joint venture agreement on February 21, 1985, reciting that they own the subject premises "as tenants in common (Friedlander owns 45%, Bogoni owns 55%)" and that they will "use their best efforts in co-operating with each other to expedite the conversion of the premises to co-op ownership."
In connection with his acquisition of the assets of the partnership, plaintiff prepared an amended business certificate for Odette Realty Co., purporting to substitute himself as a partner. Significantly, the certificate was neither signed by Claire Friedlander nor filed with the County Clerk. Plaintiff further purported to convey title to the subject premises from the partnership to himself and Friedlander, as tenants in common. The quitclaim deed dated December 16, 1985 likewise bears only plaintiff's signature.
The recording of the deed came to the attention of Friedlander's attorney, who protested that it was "fraudulent and illegal". Counsel's letter dated January 23, 1986 states that the absence of his client's signature on the amended business certificate renders it null and void pursuant to General Business Law § 130(1-a)(b), (3). The letter, addressed to Bogoni's attorney, also cites the Partnership Law § 40(7), which provides, "No person can become a member of a partnership without the consent of all the partners" and demands that title to the premises be restored to Odette Realty Company. To this end, Bogoni and Friedlander executed a deed dated February 11, 1986, conveying the property back to Odette.
In March 1986, a non-eviction plan to convert the premises to cooperative ownership was filed with the New York State Attorney General's Office. The plan was rejected on September 11, 1986. In the interim, in May, plaintiff commenced an action against Friedlander seeking to compel her to convey title to the premises to the joint venture.
The relationship between the joint venturers apparently deteriorated further and, on April 18, 1988, Friedlander executed a contract on behalf of Odette Realty Company to sell the premises to Maidad Rabina. This contract was not in recordable form. On May 24, 1988, a "formal contract" was signed and the sale closed. The deed, however, was not recorded until June 14. The record does not reflect the reason for the unusual procedures employed in the transaction, but the contract was presumably recorded to protect the purchaser between closing and the recording of the deed.
Plaintiff thereafter amended his complaint to add a cause of action against Rabina for tortious interference with contractual relations. The case was tried before a jury, which returned a special verdict consisting of 9 interrogatories, including an advisory verdict on the question of whether or not plaintiff acquired status as a partner in Odette.
It is apparent from a review of the transcript that, at the time the court instructed the jury prior to the commencement of deliberations, no determination had been made, as a matter of law, whether the date of contract or the date of closing would be dispositive as to Mr. Rabina's knowledge of the February 21, 1985 joint venture agreement. The jurors were therefore asked to assess the state of Mr. Rabina's awareness on both occasions. In answer to questions 4 and 5 on the special verdict sheet, the jury found that on April 18, 1988, the date on which the contract of sale was executed, Mr. Rabina had no knowledge of the joint venture agreement between Paul Bogoni and Claire Friedlander or of their lawsuit disputing the nature of the ownership of the premises. However, the jury also found that by May 24, 1988, the date title closed, Mr. Rabina had become aware of both the joint venture agreement and the resultant lawsuit. Finally, the jury answered in the affirmative interrogatory number nine, which asked, "Do you find that the Rabina defendants induced Miss Friedlander to breach or conspired with her to breach the February 21, 1985 agreement?"
On appeal, the Rabina defendants advance the same argument utilized in their oral motions to dismiss this cause of action at the close of plaintiff's case and, again, after the verdict was returned, both of which were denied by Supreme Court. They contend that the question of whether they induced Friedlander's breach must be determined with respect to the earlier date, when the contract of sale was first signed. Therefore, they argue, because the jury determined that Rabina had no knowledge of the joint venture agreement on this date, an essential element of the tort is lacking. Plaintiff, in opposition, argues only that the Rabina defendants did not object to the court's instructions to the jury.
The elements of the tort of intentional interference with contractual relations are 1) the existence of a contract, enforceable by the plaintiff, 2) the defendant's knowledge of the existence of that contract, 3) the intentional procurement by the defendant of the breach of the contract, and 4) resultant damages to the plaintiff (Israel v. Wood Dolson Co., 1 N.Y.2d 116, 120, 151 N.Y.S.2d 1, 134 N.E.2d 97). Where procurement of the breach by defendant is established, the burden In denying the Rabina defendants' post-trial motion to dismiss the action against them, Supreme Court noted that the jury was instructed that
shifts to the defendant to plead and prove justification for inducing the breach (Fallon v. Wall St. Clearing Co., 182 A.D.2d 245, 250, 586 N.Y.S.2d 953; State Enters. v. Southridge Coop. Section 1, 18 A.D.2d 226, 227-228, 238 N.Y.S.2d 724). Later cases pose this issue in terms of whether the defendant "intentionally and improperly interferes with the performance of a contract", as stated in Restatement 2d, Torts § 766, rather than whether interference with the contract is "without justification" (e.g., Guard-Life Corp. v. Parker Hardware Mfg. Corp., 50 N.Y.2d 183, 189-190, 428 N.Y.S.2d 628, 406 N.E.2d 445). In any event, where the plaintiff cannot demonstrate the deliberate procurement of the...To continue reading
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