M & R Ginsburg LLC v. Orange Canyon Dev. Co. LLC

• Decision Date: 05 May 2011
• Docket Number: 510480
• Court: New York Supreme Court — Appellate Division
• Parties: M & R GINSBURG, LLC, Appellant, v. ORANGE CANYON DEVELOPMENT COMPANY, LLC, et al., Respondents.

2011 NY Slip Op 03700

M & R GINSBURG, LLC, Appellant,

v. ORANGE CANYON DEVELOPMENT COMPANY, LLC, et al., Respondents.

510480

Appellate Division of the Supreme Court of the State of New York

Calendar Date: March 23, 2011

Decided and Entered: May 5, 2011

Before: Peters, J.P., Rose, Lahtinen, Malone Jr. and Garry, JJ.

Gleason, Dunn, Walsh & O'Shea, Albany (Mark T. Walsh of counsel), for appellant.

Martin Chioffi, L.L.P., Stamford, Connecticut (Mark S. Gregory of counsel, pro hac vice), for Orange Canyon Development Company, LLC and others, respondents.

Napierski, Vandenburgh, Napierski & O'Connor, L.L.P., Albany (Asa S. Neff of counsel), for Vanguard Fine Retail Store Leasing, LLC and others, respondents.

Law Offices of Newell & Klingebiel, Glens Falls (David C. Klingebiel of counsel), for McDevitt Real Estate Partners, LLC and another, respondents.

Rose, J.

MEMORANDUM AND ORDER

Appeals (1) from an order of the Supreme Court (Ferradino, J.), entered May 11, 2010 in Saratoga County, which, among other things, denied plaintiff's motion for further discovery, and (2) from an order of said court, entered October 7, 2010 in Saratoga County, which, among other things, denied plaintiff's motion for leave to renew.

Plaintiff seeks to rescind a contract to sell a parcel of commercial property to defendant Orange Canyon Development Company, LLC based on, among other things, alleged fraud in the inducement by defendants Point Five Development, LLC and Point Five Development Glens Falls, LLC and Orange Canyon (hereinafter collectively referred to as the developers). The underlying facts are more fully set forth in our previous decision which, among other things, granted defendants' motions for summary judgment dismissing plaintiff's complaint based upon a lack of justifiable reliance and awarded specific performance of the contract to the developers (69 AD3d 1181 [2010]). Briefly stated, the allegation of fraud centers on the developers' failure to disclose their plan to use the parcel for a pharmacy despite their knowledge of plaintiff'sconnection to a nearby parcel leased to a pharmacy with a restrictive covenant precluding the lessor from permitting another pharmacy to locate within a mile of the leased premises. Plaintiff also sought recovery against its own real estate broker, defendants McDevitt Real Estate Partners, LLC and Peter V. McDevitt (hereinafter collectively referred to as the McDevitt defendants) and the developers' real estate broker, defendants Vanguard-Fine Retail Store Leasing, LLC and Gordon T. Heeps (hereinafter collectively referred to as the Vanguard defendants).

After our prior decision, plaintiff filed a series of motions seeking, in relevant part, to reopen discovery and renew its opposition to defendants' motions for summary judgment. Plaintiff based the motions on affidavits from Charles Cefalu, a real estate broker unconnected to the transaction who approached plaintiff's counsel after reading a newspaper account of our prior decision and claimed that the McDevitt defendants knew that the developers planned to develop a pharmacy at the site prior to the execution of the contract and had attempted to procure insurance to protect the developers from potential litigation. Supreme Court denied the motions and plaintiff appeals.

Plaintiff contends that the information in the Cefalu affidavits raises the inference that the developers co-opted the McDevitt defendants and thereby induced a breach of the latter's fiduciary duty to disclose relevant information to plaintiff, thereby providing a basis to deny defendants' motions for summary dismissal and creating an issue of fact as to whether the developers are entitled to specific performance. The developers and the McDevitt defendants argue that plaintiff's motion to renew merely rehashes the prior allegations and that the claim of fraud still fails based on the lack of justifiable reliance. The Vanguard defendants argue that none of the new allegations affect the dismissal of the claim against them.

To be entitled to renewal, plaintiff was required to come forward with newly discovered evidence that would change the earlier determinations, as well as reasonable justification for not providing it earlier (see CPLR 2221 [e] [2]; Tibbits v Verizon N.Y., Inc., 40 AD3d 1300, 1302-1303 [2007]; Heim v Tri-Lakes Ford Mercury, Inc., 25 AD3d 901, 904 [2006], lv dismissed and denied 6 NY3d 886 [2006]). While "we generally decline to disturb the decision to grant or deny a motion to renew," we will do so if there was an abuse of discretion (First Union National Bank v Williams, 45 AD3d 1029, 1030 [2007]). Here, Cefalu's allegations are material, and plaintiff met its burden on renewal of presenting a justifiable excuse for failing to provide them earlier (see Seifts v...