Marder's Nurseries, Inc. v. Hopping

• Decision Date: 09 September 1991
• Citation: 171 A.D.2d 63,573 N.Y.S.2d 990
• Parties: MARDER'S NURSERIES, INC., Respondent, v. James B. HOPPING, Jr., Appellant.
• Court: New York Supreme Court — Appellate Division

Page 990

573 N.Y.S.2d 990

171 A.D.2d 63

MARDER'S NURSERIES, INC., Respondent, v. James B. HOPPING, Jr., Appellant.

Supreme Court, Appellate Division Second Department.

Sept. 9, 1991.

Esseks, Hefter & Angel, Riverhead (Stephen R. Angel and John M. Wagner, of counsel), for appellant.

Lazer & Aptheker, Melville (David Lazer and Myra Rochelson, of counsel), for respondent.

Before BRACKEN, J.P., and KOOPER, HARWOOD and BALLETTA, JJ.

BRACKEN, Justice Presiding.

The Court of Appeals recently reasserted the rule that "[i]f an agreement is not reasonably certain in its material terms, there can be no legally enforceable contract" (Cobble Hill Nursing Home v. Henry & Warren Corp., 74 N.Y.2d 475, 482, 548 N.Y.S.2d 920, 548 N.E.2d 203, citing Martin Delicatessen v. Schumacher, 52 N.Y.2d 105, 109, 436 N.Y.S.2d 247, 417 N.E.2d 541; Restatement [Second] of Contracts § 33 [1981]; see also, Matter of 166 Mamaroneck Ave. Corp. v. 151 East Post Rd. Corp., 78 N.Y.2d 88, 571 N.Y.S.2d 686, 575 N.E.2d 104). The defendant in the present action for specific performance has appealed from a judgment in favor of the plaintiff, arguing that application of this rule should result in a declaration that the parties have no valid contract. Because we conclude that the parties' contract is "reasonably" definite with respect to its material terms, we disagree with this argument, and affirm the judgment appealed from.

I

In 1982, Marder's Bridgehampton Nursery, Inc., the predecessor of the plaintiff Marder's Nurseries, Inc., as tenant, entered into a lease with the defendant James B. Hopping, Jr., as landlord. The dimensions of the demised premises, designated as "Area A", were defined on a map referred to in the lease. This lease also included a provision which allowed for the expansion of the demised premises so as to include additional land, designated as "B (farmland)", and in 1986, the demised premises were, in fact, expanded to include this area. Also, as reflected in a letter dated January 24, 1986, initialed by the defendant, the size of the demised premises was expanded so as to cover additional property, defined as "Adjunct to Farmland B". The lease between the parties included a provision granting the plaintiff an option to purchase the demised premises. The plaintiff exercised this option and, on October 30, 1986, the parties entered into a contract of sale. Four provisions of the contract are relevant to this appeal.

First, the contract contains a description of the demised premises which refers to a "sketch marked Schedule A annexed, being the nursery center marked Area 'A', the Farmland marked Area 'B', and the area marked 'Adjunct to Farmland "B" ' ". The contract further specifies that, prior to closing, the area of the demised premises would be "adjusted" so as to allow for a "transition area" between the property to be conveyed to the plaintiff and certain other property (not the subject of the leases noted above) to be retained by the defendant.

Second, the contract includes a provision that "Paragraph 31 of [the] lease" (which provides both tenant and landlord with a certain right of way) would "survive delivery of deed subject to mutually satisfactory agreement covering access to Ocean Avenue".

Third, the purchase price was to be set by two appraisers, one appointed by each party, who were then to "diligently proceed to agree on the fair market value". In the event of a disagreement between the two appraisers originally designated, they (the appraisers, not the parties) were to select a third appraiser. The purchase price would then be fixed in accordance with "the decision of any two of such appraisers". A down payment of 10% of the purchase price was to be made within five days after the fixing of the purchase price. The closing was scheduled to take place within 30 days after the purchase price had been fixed.

Fourth, the contract required the plaintiff to pay the purchase price by way of certified check payable to the defendant. However, the defendant was granted the option to "give a purchase money mortgage for two-thirds * * * of the purchase price payable over ten (10) years self-amortizing at a rate of interest not to exceed the then prevailing commercial bank interest rates in the Town of Southampton, which rate shall be fixed by mutual agreement 24 hours prior to closing, as more fully set forth in a mortgage and bond annexed hereto". No mortgage or bond was annexed.

The present action was commenced in 1988. According to the complaint, both parties had had appraisals conducted in accordance with the contract. The plaintiff alleged that these appraisals had resulted in different evaluations, and that the defendant "refused to instruct the appraiser of his choosing to, along with [the plaintiff's] appraiser, select a third appraiser as contemplated by paragraph 1 of the Rider to the contract." The plaintiff further alleged that the defendant had repudiated the contract, and that the defendant had failed to apply for subdivision approval in accordance with the contract. The defendant served an answer in which he asserted three counterclaims, demanding, among other things, $350,000 in damages, rescission of all leases between the parties, and rescission of "any contractual obligations that may have existed between the parties pursuant to the contract of sale dated October 30, 1986".

On or about July 22, 1988, the plaintiff moved for summary judgment in its favor (CPLR 3212) on the complaint, and to dismiss the counterclaims pursuant to CPLR 3211(a)(1) and 3211(a)(7). In his affidavit in support of this motion, Charles Marder, the plaintiff's president, stated that "[t]he only issue to be decided, it is submitted, is the legal one whether the Contract is in fact binding upon both sides". He averred that the plaintiff had "performed all of the acts and covenants required under the Contract" and that the defendant was therefore obligated to perform his obligations.

By affidavit dated September 20, 1988, the defendant, in opposition argued that "the alleged contract * * * is not enforceable [because it] is lacking agreement on several essential and material terms [and because] it contains express language indicating that the parties * * * contemplated further negotiations". In support of this assertion, the defendant referred specifically to the four provisions of the contract above noted. The defendant averred that, in light of the ambiguities contained in these provisions, no valid and enforceable contract ever came into existence. The defendant also served an amended answer, also dated September 20, 1988, supposedly as of right, which included an affirmative defense based on the Statute of Frauds (General Obligations Law § 5-703).

In the order appealed from dated December 30, 1988, the court (1) dismissed the defendant's three affirmative defenses, including the defense based on the Statute of Frauds, (2) dismissed the defendant's three counterclaims "without prejudice" and (3) directed the plaintiff to settle a judgment directing specific performance of the contract.

The plaintiff submitted a proposed judgment which contained several specific directives, including, for example, a provision directing a meeting between the two appraisers in order to have them select a third appraiser, and a provision that the court would select a third appraiser in the event that the original two appraisers cannot agree. The defendant's attorney submitted his own proposed judgment, arguing that "the judgment should simply direct specific performance * * * without any mention of details". The plaintiff's attorney argued that the court "should direct, with some degree of specificity, the course to be followed by the parties".

The judgment signed by the court, entered April 13, 1988, directs specific performance, incorporates the contract into the judgment "by reference", and provides that either party may seek further equitable relief "at the foot of this Judgment * * * in order to effectuate the parties' contract and the Court's written decision".

II

On appeal, the defendant makes two closely related arguments. First, he argues that the contract in question is unenforceable because it fails to set forth, in writing and with sufficient certainty, all of its material terms. Second, he argues that certain material terms of the contract were expressly left open for future negotiations, so that it constitutes, at most, an "agreement to agree" rather than a binding contract.

The essential argument advanced by the defendant, then, is that the parties did not make a valid contract. The defendant does not argue that, assuming that a valid contract does exist, the Supreme Court erred in its determination as to the appropriate relief to be granted in order to enforce it. Thus, in the context of this appeal, we need not decide whether the court properly directed the incorporation of the parties' contract, at least some of the provisions of which are ambiguous, into its judgment, or whether the court erred in expressly authorizing future proceedings in order to enforce the parties' contract. The issues on the present appeal are, in other words, limited to whether a valid contract exists.

The defendant-appellant's two related arguments are both based on the general rule that "[i]f an agreement is not reasonably certain in its material terms, there can be no legally enforceable contract" (Cobble Hill Nursing Home v. Henry & Warren Corp., 74 N.Y.2d 475, 482, 548 N.Y.S.2d 920, 548 N.E.2d 203, citing Martin Delicatessen v. Schumacher, 52 N.Y.2d 105, 109, 436 N.Y.S.2d 247, 417 N.E.2d 541, supra; Restatement [Second] of Contracts § 33[2][1981]. However, this doctrine has never been applied "with a heavy hand" (Cobble Hill Nursing Home v. Henry & Warren Corp., supra, 74 N.Y.2d at 483, 548 N.Y.S.2d 920, 548 N.E.2d 203; see, Matter of 166 Mamaroneck Ave. Rd. Corp. v. 151 East Post Corp., supra ). Absolute certainty has never...