Mills v. Chauvin

• Decision Date: 28 February 2013
• Citation: 103 A.D.3d 1041,962 N.Y.S.2d 412,2013 N.Y. Slip Op. 01300
• Court: New York Supreme Court — Appellate Division
• Parties: Gregory S. MILLS, Respondent–Appellant, v. Robert J. CHAUVIN, Appellant–Respondent.

103 A.D.3d 1041

962 N.Y.S.2d 412

2013 N.Y. Slip Op. 01300

Gregory S. MILLS, Respondent–Appellant,

v.Robert J. CHAUVIN, Appellant–Respondent.

Supreme Court, Appellate Division, Third Department, New York.

Feb. 28, 2013.

Pennock Law Firm, PLLC, Clifton Park (Michael J. Hutter of Powers & Santola, LLP, Albany, of counsel), for appellant–respondent.

McNamee, Lochner, Titus & Williams, PC, Albany (G. Kimball Williams of counsel), for respondent–appellant.

Before: ROSE, J.P., SPAIN, STEIN and McCARTHY, JJ.

PER CURIAM.

Appeals (1) from an order of the Supreme Court (Hoye, J.), entered May 17, 2011 in Saratoga County, which, among other things, partially granted plaintiff's cross motion for summary judgment, (2) from the judgment entered thereon, and (3) cross appeals from a judgment of said court, entered December 6, 2011 in Saratoga County, upon a decision of the court partially in favor of plaintiff.

Plaintiff, Gregory Mills, and defendant, Robert Chauvin, are two experienced attorneys who shared both a friendship and a professional/business relationship. Those longstanding relationships deteriorated and gave rise to this action involving three distinct matters—the sale of a parcel of real property in the Town of Clifton Park, Saratoga County (hereinafter the Crescent Road property), a fee-sharing agreement in a personal injury case (hereinafter the contingency fee) and an investment in a real estate development project in Virginia (hereinafter the Amelia Village project).

The Crescent Road Property

In 1998, the parties formed a partnership and took ownership of a commercial office building located on Crescent Road in the Town of Clifton Park, Saratoga County.¹ Mills leased office space in the building for his law practice and paid rent and expenses pursuant to such lease. In March 2008, after Chauvin decided, for a variety of reasons, that he no longer wished to maintain his ownership of the Crescent Road property, the parties agreed that Mills would purchase Chauvin's one-half interest in such property and they executed a purchase and sale agreement establishing a purchase price of $261,176.67 and a closing date of April 15, 2008. The closing was delayed and, in a July 2, 2008 correspondence to Mills, Chauvin declared that time was of the essence and that the closing had to occur on or before July 15, 2008. Mills was unable to make financial arrangements to purchase the property by that date and Chauvin ultimately declared Mills to be in breach of the parties' agreement and, as a result, that such agreement was null and void.

The Contingency Fee

In connection with his law practice, Chauvin was retained by an injured party to represent him in a personal injury action. After Chauvin succeeded in establishing the defendants' liability in such action, he and Mills agreed that Mills would act as the attorney in the damages phase of the action. Mills thereafter tried the case to a verdict and, ultimately, a settlement was procured in excess of $2 million, from which Chauvin was entitled to a contingency fee. Mills and Chauvin did not have a written agreement with respect to how the contingency fee would be allocated between them and a dispute arose with regard thereto.

The Amelia Village Project

Chauvin was an investor in the Amelia Village project. Over a course of time, Mills made multiple monetary payments to Chauvin—totaling $395,750—which Chauvin claims were investments in the project and Mills claims were loans. Ultimately, Mills requested that Chauvin return the payments he had advanced. In connection therewith, Chauvin executed a promissory note in April 2008 that obligated him to pay Mills $395,750. However, Chauvin later challenged the validity of the promissory note and claimed that Mills was not entitled to a return of his investments.

With the foregoing as background, we now turn to the litigation that followed. Based upon Chauvin's refusal to close on the sale of the Crescent Road property, Mills commenced this action for specific performance of the parties' purchase and sale agreement. Chauvin filed an answer to the complaint with various counterclaims, including a claim based on Mills' alleged breach of an agreement between the parties with respect to the Amelia Village project. Chauvin also sought a determination that the purchase and sale agreement relating to the Crescent Road property was null and void due to Mills' failure to tender performance on the closing date established by Chauvin in his time of the essence demand, and requested that he be granted the equitable remedy of a partition of that property. Finally, Chauvin sought an accounting of their partnership and, more specifically, an examination of the rents collected and expenses paid in connection with the Crescent Road property.

Mills subsequently filed an amended complaint adding three causes of action—the first for recovery of a one-third share of the contingency fee that Chauvin collected in connection with the personal injury action, and the second and third to recover the payments Mills had made with respect to the Amelia Village project, based upon claims of breach of contract and unjust enrichment, respectively. In response, Chauvin added a counterclaim seeking a declaration that Mills' share of the contingency fee should be determined based upon quantum meruit.

After substantial discovery, Chauvin moved for an order pursuant to Judiciary Law § 474 declaring that Mills' portion of the contingency fee should be determined on a quantum meruit basis. Mills cross-moved for summary judgment on his claims for specific performance of the parties' agreement for the sale of the Crescent Road property, for recovery of his one-third share of the contingency fee and for enforcement of the Amelia Village project promissory note. In an order entered May 17, 2011, Supreme Court denied Chauvin's motion and partially granted Mills' cross motion to the extent that it granted summary judgment to Mills on his claims for specific performance of the Crescent Road agreement and for one third of the contingency fee. Chauvin appeals from that order and from the judgment entered thereupon.

The action proceeded to a nonjury trial with respect to the parties' remaining claims and counterclaims. At the conclusion thereof, Supreme Court found that Chauvin had not met his burden of proof on his counterclaims, that the promissory note was valid and enforceable and that Mills was entitled to recover pursuant to its terms. Chauvin now appeals from the judgment entered upon that decision.² For the reasons that follow, we affirm Supreme Court's order and judgments in their entirety.

We turn first to Supreme Court's order granting Mills' cross motion for summary judgment on his claim for specific performance with respect to his purchase of the Crescent Road property. As the movant, Mills had the burden of establishing, as a matter of law, that he was ready, willing and able to perform under the parties' purchase and sale agreement and that Chauvin was unwilling to convey the property ( see Huntington Min. Holdings v. Cottontail Plaza, 60 N.Y.2d 997, 998, 471 N.Y.S.2d 267, 459 N.E.2d 492 [1983];Nehmadi v. Davis, 95 A.D.3d 1181, 1185, 945 N.Y.S.2d 122 [2012];Bayly v. Broomfield, 93 A.D.3d 909, 911, 939 N.Y.S.2d 634 [2012] ). It is well established that, where a contract for the sale of real property does not specify that time is of the essence, “the seller may unilaterally convert the contract into one making time of the essence by giving the buyer ‘clear, unequivocal notice’ and a reasonable time to perform” ( Highbridge Dev. BR, LLC v. Diamond Dev., LLC, 67 A.D.3d 1112, 1114, 888 N.Y.S.2d 654 [2009], quoting ADC Orange, Inc. v. Coyote Acres, Inc., 7 N.Y.3d 484, 490, 824 N.Y.S.2d 192, 857 N.E.2d 513 [2006];see Whitney v. Perry, 208 A.D.2d 1025, 1026, 617 N.Y.S.2d 395 [1994] ). “ ‘What constitutes a reasonable time for performance depends upon the facts and circumstances of the particular case’ ” ( Malley v. Malley, 52 A.D.3d 988, 990, 861 N.Y.S.2d 149 [2008], quoting Ben Zev v. Merman, 73 N.Y.2d 781, 783, 536 N.Y.S.2d 739, 533 N.E.2d 669 [1988] ), but the relevant factors include, among others, “the presence or absence of good faith, the experience of the parties and the possibility of prejudice or hardship to either one, as well as the specific number of days provided for performance” ( Ben Zev v. Merman, 73 N.Y.2d at 783, 536 N.Y.S.2d 739, 533 N.E.2d 669). Although the question of reasonableness is generally one of fact ( see Bossert v. Fratalone, 28 A.D.3d 852, 853, 813 N.Y.S.2d 791 [2006] ), “where the facts are undisputed, what is a reasonable time becomes a question of law, and the case is appropriate for summary judgment” ( Hegeman v. Bedford, 5 A.D.3d 632, 632, 774 N.Y.S.2d 769 [2004];see Spagna v. Licht, 87 A.D.2d 626, 627, 448 N.Y.S.2d 236 [1982] ).

In support of his cross motion, Mills submitted, among other things, a copy of the parties' March 2008 real estate contract, the parties' deposition testimony, his own affidavit and various items of correspondence. The real estate contract indicated that the closing would be “on or before April 15, 2008,” but did not include any language indicating that time was of the essence. However, in a July 2, 2008 correspondence, Chauvin declared time to be of the essence and stated that a closing would have to occur “on or before July 15, 2008.” Mills acknowledged receipt of Chauvin's letter by email on July 8,³ and indicated that he would be unable to refinance the mortgage by that date, but would attempt to secure financing to complete the sale by then. In various communications between July 9 and July 15, the parties continued to argue about other terms of the sale and aspects of their partnership. On July 15, Mills sent a fax to Chauvin, informing him that there was an unexpected delay in obtaining the funds for payment, but assured him that the funds would be available on July 18. On July 17,...