Eskenazi v. Schapiro

• Decision Date: 21 March 2006
• Docket Number: 6734.
• Citation: 2006 NY Slip Op 02133,27 A.D.3d 312,812 N.Y.S.2d 474
• Parties: HAROLD R. ESKENAZI, Respondent, v. JULES W. SCHAPIRO, Appellant.
• Court: New York Supreme Court — Appellate Division

27 A.D.3d 312

812 N.Y.S.2d 474

2006 NY Slip Op 02133

HAROLD R. ESKENAZI, Respondent, v. JULES W. SCHAPIRO, Appellant.

6734.

Appellate Division of the Supreme Court of the State of New York, First Department.

March 21, 2006.

Order, Supreme Court, New York County (Karla Moskowitz, J.), entered January 11, 2005, which, to the extent appealed from, denied defendant's motion, brought pursuant to CPLR 3211 (a) (7), to dismiss plaintiff's first cause of action asserting breach of contract, unanimously reversed, on the law, without costs, the motion granted and the complaint dismissed. The Clerk is directed to enter judgment accordingly.

Plaintiff Harold R. Eskenazi, defendant Jules W. Schapiro, and six other individuals entered into a joint venture, pursuant to an agreement dated July 1980, in order to "purchase, own and sell the apartments designated . . . in the premises known as 135 East 83rd Street, New York, New York." The building was, at that time, rent stabilized and the cooperative conversion sponsor had to sell the subject apartments to complete the conversion. The joint venture contemplated that each of the members would own one or more units in their own names, and it was anticipated that the rental income would exceed the carrying costs and at some later juncture, the units would be sold and the profits distributed. Defendant, pursuant to the agreement, was to maintain the books and records of the joint venture and to make them available to any of the members "upon reasonable notice." Plaintiff became the owner of apartment 3-D.

Defendant, by letter dated June 6, 1995, informed plaintiff that as of that date, four apartments still remained unsold, that the joint venture was operating at a substantial deficit due, inter alia, to mounting expenses in maintaining the apartments, and that he was personally owed $78,208.02 as the result of personal contributions made to keep the joint venture solvent.

The sponsor, which had been advancing maintenance payments to the cooperative corporation on behalf of the joint venture, and which was also owed considerable sums, subsequently offered to release the members of the joint venture from liability in exchange for surrendering their interests in the remaining units. Defendant maintains that the sponsor emphasized that any member who did not agree to its terms would be subject to foreclosure pursuant to the security agreements each individual member had signed. Defendant, by letter dated September 25, 1997, apprised plaintiff of the joint venture's precarious financial situation, and stated: "the sponsor who sold us the 8 apartments insists upon being made whole for the monies that are due to him since inception. I have previously sent you copies of expenses allegedly due to the Sponsor which showed that even if we sold the remaining 4 apartments at market value, there would be a shortfall.

"Rather than waiting for the Co-op to start a proceeding for the arrears in maintenance, it is my feeling that we should assign our interest to the Sponsor who will pay all of the arrears and hold us individually harmless and deliver a General Release. We will have no further obligation in connection with the 4 remaining apartments.

"Please call me regarding the above since the Sponsor wishes this matter to be concluded by October 1, 1997."^*

The remaining unit owners, with the exception of plaintiff, agreed to surrender their apartments effective December 1997, pursuant to releases of liability executed in favor of the sponsor. Plaintiff, in addition to refusing to surrender his unit, also refused to contribute toward the accumulated maintenance costs and unpaid interest. The sponsor, by letter dated April 14, 1998, advised plaintiff that it was assigning the shares and proprietary lease appurtenant to the apartment back to the sponsor due to plaintiff's default, which it claimed was in excess of $100,000.

Plaintiff eventually commenced the within action by the...