Frank v. Katz

• Decision Date: 30 December 1988
• Parties: Henry FRANK, et al., Respondents, v. Irwin KATZ, et al., Appellants.
• Court: New York Supreme Court — Appellate Division

Page 135

536 N.Y.S.2d 135

145 A.D.2d 597

Henry FRANK, et al., Respondents, v. Irwin KATZ, et al., Appellants.

Supreme Court, Appellate Division,

Second Department.

Dec. 30, 1988.

Howard I. Schuldenfrei, New York City, for appellants.

Corbally, Gartland & Rappleyea, Poughkeepsie (Jon Holden Adams, of counsel), for respondents.

Before KUNZEMAN, J.P., and WEINSTEIN, RUBIN and KOOPER, JJ.

MEMORANDUM BY THE COURT.

In an action, inter alia, for a judgment declaring the rights and duties of the parties with respect to an option to purchase real property, the defendants appeal from so much of an order of the Supreme Court, Dutchess County (Benson, J.), entered December 19, 1986, as granted the plaintiffs' motion for summary judgment.

ORDERED that the order is reversed insofar as appealed from, on the law, with costs, and the motion for summary judgment is denied.

The four plaintiffs are cousins, doing business as "Frank Realty Company", who own approximately 250 acres of land on Vervalin Mountain near Poughkeepsie, New York. The defendant Irwin Katz is an officer, director and shareholder of the defendant Dutchess Communications Corporation, which was formed to own and operate a new radio station in Poughkeepsie. On February 9, 1981, Katz and the plaintiff Henry Frank, who was purportedly acting on behalf of Frank Realty Company, entered into an option agreement whereby Frank Realty Company agreed to sell a five-acre parcel of the Vervalin Mountain property to the defendants for use as the site for the antenna, transmitter and studios for the proposed radio station. The agreement provided that it would be subject to approval of the proposed radio station by the Federal Communications Commission. The defendants obtained approval to operate the station from the Federal Communications Commission in June 1985 and attempted to exercise the option by letter dated August 16, 1985. The plaintiffs, who had entered into a contract dated August 2, 1985, to sell the entire 250-acre Vervalin Mountain property, then commenced this action for a declaration of the parties' rights with respect to the option agreement.

In granting the plaintiffs' motion for summary judgment, the Supreme Court erroneously relied on Partnership Law § 21(5), which requires that all partners execute a conveyance in order to pass title to property held in their names. Since the issue presented at bar is whether the plaintiff Henry Frank bound the remaining plaintiffs to the option agreement, questions of fact are raised as to whether the plaintiffs were conducting their business as a partnership, whether Henry Frank's grant of the option was a business purpose of the partnership (see, Partnership Law § 20), whether consideration was tendered for the option, and whether it was exercised within a reasonable time under all the circumstances herein. Moreover, the description of the five-acre Vervalin Mountain parcel in the option agreement and in subsequent memoranda clearly referable to the option agreement, describes the property with such definiteness and exactness as will permit it to be identified with reasonable certainty, in satisfaction of the Statute of Frauds (see, Boyajian v. Casey, 52 A.D.2d 1014, 383 N.Y.S.2d 714; General Obligations Law § 5-703). Once this test is met, parol evidence is admissible to enable the court to identify precisely the property to which the contract relates (Boyajian v. Casey, supra; Malin v. Ward, 21 A.D.2d 926, 250 N.Y.S.2d 1009, lv. denied, 15 N.Y.2d 482, 255 N.Y.S.2d 1025, 203 N.E.2d 800).

RUBIN, Justice, dissents and votes to affirm the order granting the plaintiffs' motion for summary judgment on the ground that the option is invalid as violative of the Statute of Frauds (General Obligations Law § 5-703), with the following memorandum:

An irrevocable option to sell real property is a unilateral contract (see, 3A Warren's Weed, New York Real Property, Options § 1.01 ), which must comply with the Statute of Frauds (see, Hoaglund v. Daniels, 50 A.D.2d 923, 377 N.Y.S.2d 618; Elias v....