Olden Grp., LLC v. 2890 Review Equity, LLC

• Decision Date: 12 October 2022
• Docket Number: 2019–03645, 2019–03647,Index No. 705889/18
• Citation: Olden Grp., LLC v. 2890 Review Equity, LLC, 209 A.D.3d 748, 177 N.Y.S.3d 60 (N.Y. App. Div. 2022)
• Parties: OLDEN GROUP, LLC, appellant, v. 2890 REVIEW EQUITY, LLC, et al., respondents.
• Court: New York Supreme Court — Appellate Division

209 A.D.3d 748

177 N.Y.S.3d 60

OLDEN GROUP, LLC, appellant,

v.2890 REVIEW EQUITY, LLC, et al., respondents.

2019–03645, 2019–03647

Index No. 705889/18

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

Argued—June 7, 2022

October 12, 2022

Lonuzzi & Woodland, LLP, Brooklyn, NY (John Lonuzzi and Mischel & Horn, P.C. [Scott T. Horn ], of counsel), for appellant.

DelBello Donnellan Weingarten Wise & Wiederkehr, LLP, White Plains, NY (Nelida Lara and Peter S. Dawson of counsel), respondent pro se and for respondents 2890 Review Equity, LLC, and 2890 Review TIC Owner, LLC.

MARK C. DILLON, J.P., FRANCESCA E. CONNOLLY, SHERI S. ROMAN, JOSEPH J. MALTESE, JJ.

DECISION & ORDER

In an action, inter alia, to recover damages for breach of contract, the plaintiff appeals from two orders of the Supreme Court, Queens County (Marguerite A. Grays, J.), both dated March 29, 2019. The first order, insofar as appealed from, granted that branch of the defendants’ motion which was pursuant to CPLR 3211(a) to dismiss the complaint. The second order granted the defendants’ motion pursuant to CPLR 6512 and 6514(a) to cancel a notice of pendency filed by the plaintiff against the subject real property.

ORDERED that the first order is modified, on the law, by deleting the provision thereof granting that branch of the defendants’ motion which was pursuant to CPLR 3211(a) to dismiss the cause of action for a judgment declaring that the defendant DelBello Donnellan Weingarten Wise & Wiederkehr, LLP, is required to release from escrow to the plaintiff an alleged option agreement to purchase certain real property and that the plaintiff is entitled to specific performance of the alleged option agreement, and adding thereto a provision deeming that branch of the defendants’ motion to be for a judgment declaring that the defendant DelBello Donnellan Weingarten Wise & Wiederkehr, LLP, is not required to release from escrow to the plaintiff the alleged option agreement to purchase certain real property and that the plaintiff is not entitled to specific performance of the alleged option agreement, and thereupon granting that branch of the motion; as so modified, the first order is affirmed insofar as appealed from, and the matter is remitted to Supreme Court, Queens County, for the entry of a judgment, inter alia, declaring that the defendant DelBello Donnellan Weingarten Wise & Wiederkehr, LLP, is not required to release from escrow to the plaintiff the alleged option agreement to purchase certain real property and that the plaintiff is not entitled to specific performance of the alleged option agreement; and it is further,

ORDERED that the second order is affirmed; and it is further,

ORDERED that one bill of costs is awarded to the defendants.

In April 2018, the plaintiff commenced this action against the defendants 2890 Review Equity, LLC, and 2890 Review TIC Owner, LLC (hereinafter together the 2890 Review defendants), which owned certain real property in Long Island City (hereinafter the property), and the defendant DelBello Donnellan Weingarten Wise & Wiederkehr, LLP (hereinafter DelBello), the law firm representing the 2890 Review defendants, alleging causes of action for breach of contract, fraud, constructive trust, declaratory judgment, and a permanent injunction. The complaint alleged that in August 2016, the plaintiff and the 2890 Review defendants entered into an option agreement which purportedly granted the plaintiff an option to purchase the property, that on February 19, 2018, the plaintiff notified the 2890 Review defendants that it was exercising its option to purchase the property, and that the 2890 Review defendants breached the option agreement by failing to deliver the property to the plaintiff. The complaint further alleged that the plaintiff entered into an agreement with DelBello to hold the option agreement in escrow and that DelBello breached its agreement with the plaintiff by failing to preserve the option agreement and/or denying its existence. As exhibits to the complaint, the plaintiff attached, inter alia, an unsigned draft of the option agreement and a copy of the notice, dated February 19, 2018, which the plaintiff sent to the 2890 Review defendants, purportedly exercising its option under the alleged option agreement.

The defendants subsequently moved, inter alia, pursuant to CPLR 3211(a)(5) and (7) to dismiss the complaint as barred by the statute of frauds and for failure to state a cause of action. Among other things, the defendants contended that the 2890 Review defendants never entered into an option agreement with the plaintiff, that no such option agreement was ever executed by the parties, and that DelBello had neither knowledge nor possession of the alleged option agreement. The defendants separately moved pursuant to CPLR 6512 and 6514(a) to cancel the notice of pendency filed by the plaintiff against the property.

By order dated March 29, 2019, the Supreme Court, inter alia, granted that branch of the defendants’ motion which was pursuant to CPLR 3211(a)(5) to dismiss the complaint as barred by the statute of frauds, as the record was devoid of an executed option agreement. In a second order, also dated March 29, 2019, the court granted the defendants’ separate motion pursuant to CPLR 6512 and 6514(a) to cancel the notice of pendency filed by the plaintiff against the property. The plaintiff appeals.

An option agreement for the sale of real property must comply with the requirements of the statute of frauds and, therefore, is unenforceable unless it is in writing and subscribed by the party to be charged (see General Obligations Law § 5–703 ; Makris v. Boylan, 175 A.D.3d 1400, 1401, 109 N.Y.S.3d 134 ; Keiser v. Todd, 290 A.D.2d 492, 736 N.Y.S.2d 255 ; Delfino v. Estate of Parkinson, 159 A.D.2d 476, 477, 552 N.Y.S.2d 348 ). On a motion to dismiss a complaint pursuant to CPLR 3211(a)(5) based on the statute of frauds, the court is required to accept the facts as alleged in the complaint as true and accord the plaintiff the benefit of every possible favorable inference (see Faison v. Lewis, 25 N.Y.3d 220, 224, 10 N.Y.S.3d 185, 32 N.E.3d 400 ; Makris v. Boylan, 175 A.D.3d at 1401, 109 N.Y.S.3d 134 ). Applying this standard to the plaintiff's allegations in the complaint and given the factual dispute between the parties as to the existence of the option agreement, the Supreme Court should not have granted that branch of the defendants’ motion which was pursuant to CPLR 3211(a)(5) to dismiss the complaint as barred by the statute of frauds (see Makris v. Boylan, 175 A.D.3d at 1401–1402, 109 N.Y.S.3d 134 ; Luckel v. Kolinsky, 160 A.D.2d 1172, 1173, 554 N.Y.S.2d 374 ).

Although the Supreme Court did not reach that branch of the defendants’ motion which was pursuant to CPLR 3211(a)(7) to dismiss the complaint for failure to state a cause of action, we reach that branch of the motion as an alternative ground for affirmance (see Parochial Bus Sys., Inc. v. Board of Educ. of City of N.Y., 60 N.Y.2d 539, 470 N.Y.S.2d 564, 458 N.E.2d 1241 ; Park Slope Auto Ctr., Inc. v. Papa, 190 A.D.3d 754, 139 N.Y.S.3d 641 ; Matter of Agoglia v. Benepe, 84 A.D.3d 1072, 1075, 924 N.Y.S.2d 428 ). "On a motion pursuant to CPLR 3211(a)(7) to dismiss for failure to state a cause of action, the court must afford the pleading a liberal construction, accept all facts as alleged in the pleading to be true, accord the plaintiff the benefit of every possible favorable inference, and determine only whether the facts as alleged fit within any cognizable legal theory" ( Murphy v. Department of Educ. of the City of N.Y., 155 A.D.3d 637, 638, 64 N.Y.S.3d 237 [internal quotation marks omitted]; see Leon v. Martinez, 84 N.Y.2d 83, 87–88, 614 N.Y.S.2d 972, 638 N.E.2d 511 ; Phillips v. Taco Bell Corp., 152 A.D.3d 806, 807, 60 N.Y.S.3d 67 ).

"The essential elements of a cause of action to recover damages for breach of contract are the existence of a contract, the plaintiff's performance pursuant to the contract, the defendant's breach of its contractual obligations, and damages resulting from the breach" ( East Ramapo Cent. Sch. Dist. v. New York Schs. Ins. Reciprocal, 199 A.D.3d 881, 886, 158 N.Y.S.3d 173 [internal quotation marks omitted]; see WMC Realty Corp. v. City of Yonkers, 193 A.D.3d 1018, 1021–1022, 148 N.Y.S.3d 161 ; Lewis & Murphy Realty, Inc. v. Colletti, 187 A.D.3d 731, 732–733, 130 N.Y.S.3d 350 ). "It is well settled that one attempting to validly exercise an option to purchase real property must strictly adhere to the terms and conditions of the option agreement" ( Raanan v. Tom's Triangle, Inc., 303 A.D.2d 668, 669, 758 N.Y.S.2d 343 ; see D.A.D. Rest. v. Anthony Operating Corp., 139 A.D.2d 485, 486, 526 N.Y.S.2d 590 ). Here, according to the express terms of the unsigned copy of the option agreement, the plaintiff's option to purchase the property expired on August 23, 2017, and, according to the allegations in the complaint, the plaintiff did not attempt to exercise its option until February 19, 2018, after its time to do so had expired (see Richmond v. Miele, 30 A.D.3d 575, 576, 817 N.Y.S.2d 157 ; DeCicco v. Staehle, 11 A.D.3d 425, 783 N.Y.S.2d 380 ; Galapo v. Feinberg, 266 A.D.2d 150, 151, 699 N.Y.S.2d 344 ). Contrary to the plaintiff's contention, a January 10, 2017, email chain, which the plaintiff submitted in opposition to the defendants’ motion, did not provide notice to the 2890 Review defendants in accordance with the terms of the alleged option agreement, and thus, was of no effect (see DeCicco v. Staehle, 11 A.D.3d at 425, 783 N.Y.S.2d 380 ; D.A.D. Rest. v. Anthony Operating Corp., 139 A.D.2d at 486, 526 N.Y.S.2d 590 ; see also Pfeifer v. Groisman, 123 A.D.3d 684, 685, 997 N.Y.S.2d 706 ). Further, as the plaintiff failed to exercise its option prior to the expiration date in the alleged option agreement, the plaintiff did not suffer any damages from DelBello's alleged failure to hold the alleged option agreement in...