Mitchell v. Century 21 Rustic Realty, 01-CV-1162(TCP)(WDW).
| Decision Date | 29 April 2002 |
| Docket Number | No. 01-CV-1162(TCP)(WDW).,01-CV-1162(TCP)(WDW). |
| Citation | 233 F.Supp.2d 418 |
| Parties | Clarence MITCHELL and Aischa Mitchell, Plaintiffs, v. CENTURY 21 RUSTIC REALTY, Sheila Shane, Harvey Shane and Matthew Ryan, Defendants. |
| Court | U.S. District Court — Eastern District of New York |
Stephen T. Mitchell, New York City, for Plaintiffs.
Stephen J. Penino, Penino & Moynihan, LLP, White Plains, NY, for Century 21 Rustic Realty.
Neil J. Moritt, Moritt, Hock, Hamroff & Horowitz, Garden City, NY, for Sheila and Harvey Shane.
Thalia Feilen, Goldson/Nolan Associates, LLP, Melville, NY, for Matthew Ryan.
Before the Court are objections by Plaintiffs Clarence and Aischa Mitchell ("Mitchells") to a Report and Recommendation issued by United States Magistrate Judge William D. Wall recommending that this Court deny the Mitchells' Motion for a Preliminary Injunction. For the following reasons, the Court OVERRULES the Mitchells' objections, ADOPTS Magistrate Judge Wall's Report and Recommendation as an order of this Court, DENIES the Mitchells' Motion for a Preliminary Injunction and AFFIRMS Magistrate Judge Wall's denial of their discovery request.
While Magistrate Judge Wall's Report and Recommendation relates the entire factual background of this case, the Court believes it necessary to restate that factual background in order to properly address the Mitchells' objections. Familiarity with Magistrate Judge Wall's Report and Recommendation, however, is presumed.
Plaintiffs Clarence and Aischa Mitchell are an African American couple. (R. at 151:19, 293:03.) Clarence Mitchell is a partner with Andersen Consulting spin-off Accenture. (R. at 151:01-05.) Aischa Mitchell is a fashion model with Wilhelmena Models, Incorporated. (R. at 151:13-14.) The Mitchells reside in New York, New York. (Defs.' Evidentiary Hearing Ex 1.) Marie Ongioni ("Ongioni") is the Mitchells' real estate attorney.
Defendants Sheila and Harvey Shane ("Shanes") are the owners of real property located at 2548 Deerfield Road in Southampton, New York ("Property").1 (R. at 92:01, 07; Defs.' Evidentiary Hearing Ex. 2.) The Shanes currently, and did at all relevant times, reside in Florida. (R. at 94:01-03, 105:13; Defs.' Evidentiary Hearing Ex. 2.) Kara Bak ("Bak") is the Shanes' real estate attorney.
Defendant Century 21 Rustic Realty ("Century 21") is the listing broker for the Property. (R. at 91:21, 92:12-13; Defs.' Evidentiary Hearing Ex. 2.) Defendant Matthew J. Ryan ("Ryan") is employed by Century 21 and is the listing agent for the Property. (R. at 91:21-23; Defs.' Evidentiary Hearing Ex. 2.) Ryan held an open listing on the Property for Century 21 in August of 2000 but eventually became the Shanes' exclusive agent in the Fall of 2001. (R. at 92:12-13, 94:18, 296:12-18.)
Robin Kaplan ("Kaplan") is the selling broker for the Property and was one of the people with whom the Mitchells communicated when they began searching for homes in eastern Long Island.2 Kaplan was employed by Allen M. Schneider Associates, Incorporated ("Schneider Associates"). (Defs.' Evidentiary Hearing Ex. 1; Pl.'s Evidentiary Hearing Ex. W.)
Michael Selleck ("Selleck") successfully bid on the Property and is the contract vendee of the Property. (R. at 7:07-14, 16:11-17.) Selleck has not yet closed on the Property.
On May 4, 2001, the Mitchells communicated with Kaplan at Schneider Associates and requested assistance in finding a home to purchase in eastern Long Island. (R. at 292:23-24.) Two days later, on May 6, 2001, Kaplan met with the Mitchells for the first time. (R. at 293:01.) Several months later, in late November or early December of 2001, Kaplan showed the Mitchells the Property. (R. at 151:21-25.)
Subsequent to viewing the Property for the first time with Kaplan, the Mitchells returned with an architect and discussed whether changes could be made to the Property. (R. at 152:22-24, 153:02-04). In early to mid December of 2001, after learning that their proposed changes could be made, the Mitchells offered the Shanes $655,000.00 through Kaplan for the Property. (R. at 153:02-04, 11-13, 16.) The Mitchells then went on holiday with that offer outstanding. (R. at 153:16-17.)
On December 26, 2001, Kaplan called the Mitchells in San Jose, California. (R. at 154:02-05.) Kaplan notified the Mitchells that another prospective purchaser had offered $672,000.00 for the Property. (R. at 154:02-05.)
In order to demonstrate their resolve and genuine desire to purchase the Property, the Mitchells authorized Kaplan that same day to offer $685,000.00 for the Property. (R. at 154:14-15, 308:12-18.) On December 26, 2001, Kaplan faxed the following to Ryan:
Dear Matthew —
Mr. and Mrs. Clarence Mitchell of 331 West 84th St. NYC. have asked me to proffer an offer of $685,000 to M/M Harvey Shane. This is subject to engineer's report and 80% financing. They are able to close on or about March 1, 2002.
(Defs.' Evidentiary Hearing Ex. 1; R. at 295:09-23, 297:25-298:01-05.)
The Mitchells contend they were unaware that their initial offer contained an 80% mortgage financing contingency. (R. at 184:04-17.) Clarence Mitchell testified that he only authorized Kaplan to offer the Shanes $685,000.00 for the Property with the standard contingencies, but that he did not discuss what those standard contingencies were.3 (R. at 184:23-185:01.)
The Shanes expressed interest in the Mitchells' December 26, 2001 offer. (R. at 112:13-14.) However, the Shanes wanted proof that the Mitchells could consummate the sale before formally accepting their offer. (R. at 154:22-25.)
Accordingly, while still away on holiday, the Mitchells authorized a person in their cooperative in New York City to run a credit check on them. (R. at 155:04-07.) On December 27, 2001, the Mitchells were preapproved by the Manhattan Mortgage Company ("Manhattan Mortgage") for a mortgage of $616,500.00, which represents approximately 90% of the $685,000.00 purchase price agreed to by the Shanes and Mitchells. (R. at 155:08-11, 294:11-16, 295:07-08, 25, 297:18-20.) Manhattan Mortgage's preapproval letter was sent to Kaplan, Ryan and Ryan's manager. (R. at 294:11-12, 25, 295:01-03.) Ryan forwarded a copy of that preapproval letter to the Shanes as well. (R. at 112:17-19.)
The Shanes took immediate issue with the 90% financing contained Manhattan Mortgage's preapproval letter. (R. at 112:24-113:02.) They told Ryan they were concerned that 90% financing would not inject enough equity into the Property and that it would defeat a "smooth[] transition." (R. at 113:01-02.)
Accordingly, Ryan contacted Kaplan and relayed the Shanes' dissatisfaction with the 90% mortgage contingency. (R. at 113:14-17.) Kaplan told Ryan that the Mitchells would obtain 80% mortgage financing. (R. at 113:18-20.) Ryan consequently agreed to issue a memorandum of sale based on the terms of the Mitchells' December 26, 2001 offer which included an 80% mortgage contingency clause. (R. at 113:21-23.)
On December 29, 2001, Ryan prepared that memorandum of sale. (Defs. Evidentiary Hearing Ex. 2.) Ryan's memorandum of sale listed a $685,000.00 purchase price and stated that the sale was subject to both 80% "Bank Financing" and an engineer's report.4 (Defs. Evidentiary Hearing Ex. 2.) Ryan sent copies of his memorandum of sale to Ongioni, Kaplan, Bak and the Shanes. (R. at 113:23-24.)
Kaplan had also previously prepared her own memorandum of sale on December 27, 2001.5 (R. at 312:05-12; Defs. Evidentiary Hearing Ex. 18.) Kaplan's first memorandum of sale indicated that the purchase agreement was "[s]ubject to ... 80% financing." (Defs. Evidentiary Hearing Ex. 18.) It is not clear if Kaplan ever disseminated her first memorandum of sale to anyone.
At the Evidentiary Hearing conducted before Magistrate Judge Wall, Kaplan produced a second memorandum of sale that she appears to have authored on December 29, 2001. (R. at 298:15-24, 299:19-22.) That second memorandum of sale stated that the purchase agreement was subject only to production of a satisfactory engineer's report. (Pl.'s Evidentiary Hearing Ex. W.) It further stated that $615,000.00 preapproved mortgage financing was a term of the deal. (Pl.'s Evidentiary Hearing Ex. W.) Accordingly, the 80% mortgage contingency clause was not contained in Kaplan's second December 29, 2001 memorandum of sale. (R. at 314:18-20.) Kaplan apparently faxed that second memorandum of sale to Bak, Ongioni and Ryan the same day it was authored. (R. at 303:03-09, 310:06-13.)
On January 3, 2002, Bak sent "four duplicate original Contracts of Sale and Riders" for the Property to Ongioni. (Defs.' Evidentiary Hearing Ex. 3.) The cover letter under which those contracts were sent stated that if the contracts were acceptable to the Mitchells, they were to sign and return them with a check for $68,500.00 payable to Bak. (Defs.' Evidentiary Hearing Ex. 3.) That cover letter also stated that "[s]ince this is not to be considered a continuing offer to sell, if the signed contracts are not returned to my office within ten days from your receipt same [sic], then this offer shall be considered terminated without prejudice to either party."6 (Defs.' Evidentiary Hearing Ex. 3.) Finally, Bak's cover letter directed Ongioni to contact Bak before making any changes to the contracts. (Defs.' Evidentiary Hearing Ex. 3.) Ongioni received that cover letter and the four duplicate contracts on January 4, 2002. (R. at 248:18-19, 249:04.)
On January 5, 2002, the Mitchells had an engineer inspect the Property. (R. at 156:01-06.) The engineer uncovered several problems with the Property during the course of his...
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