De Paola v. City of New York

• Decision Date: 13 April 1977
• Citation: 394 N.Y.S.2d 525,90 Misc.2d 379
• Parties: Julian DE PAOLA, Plaintiff, v. The CITY OF NEW YORK, Defendant.
• Court: New York Supreme Court

Page 525

394 N.Y.S.2d 525

90 Misc.2d 379

Julian DE PAOLA, Plaintiff, v. The CITY OF NEW YORK, Defendant.

Supreme Court, Trial Term, Bronx County, Part III.

April 13, 1977.

Edward Papantonio, Bronxville, for plaintiff.

W. Bernard Richland, Corporation Counsel, City of New York, New York City, for defendant; Edwin Selig, New York City, of counsel.

ISRAEL RUBIN, Justice:

This action has been submitted for decision upon an agreed statement of facts pursuant to CPLR 3222, the plaintiff seeking specific performance.

At a public auction conducted on March 25, 1975, the defendant offered for sale, at a minimum or upset price of $1,450.00, a parcel of real property situate on the south side of East 220th Street, 197 feet east of Bronxwood Avenue, Bronx, New York. This particular parcel was identified as parcel number 212 on page 73 of a brochure published by the Department of Real Estate of the City of New York, setting forth certain surplus City-owned real estate being offered for sale at auction. Any improved property was indicated as such by an asterisk in front of the parcel number. An asterisk did not appear in front of parcel number 212, thus indicating that the parcel was unimproved.

Plaintiff was the successful bidder at the auction, having bid the sum of $6,500.00 for the purchase of said parcel.

Plaintiff's bid was accepted, the sum of $1,300. was paid to the defendant on account of the purchase price and a memorandum of sale and receipt for payment of deposit issued to the plaintiff.

The memorandum of sale provided that the balance of the purchase price was to be paid on or before May 27, 1975.

Some time prior to the date set for closing, the City discovered that an error had been made in that the property was actually "improved," containing thereon a two-family house. On April 29, 1975, the defendant advised the plaintiff, in writing, that it was cancelling the sale of the property pursuant to paragraph 23 of the terms and conditions of sale which are a part of the brochure of sale and which is set forth as follows:

"The City, at its option, may cancel the sale at any time before the actual delivery of the deed. In such event $ $ $, the City's sole liability $ $ $ shall be limited to the return to the successful bidder of all payments made to the City on account of the purchase $ $ and that thereupon the parties shall be mutually released from all obligations as a result of such purchase."

A formal resolution was prepared by the Department of Real Estate for the Board of Estimate which was adopted on July 17, 1975, cancelling the sale of the property.

The brochure in addition to containing the "Standard Terms and Conditions of Sale", sets forth a copy of a letter addressed to the "Purchasing Public" which urges prospective purchasers to carefully examine the terms and conditions of sale contained therein and in addition, in order to minimize confusion and possible mistake, states that purchasers should also investigate properties they are interested in prior to the date of sale as to exact location, improvements, physical condition, legal use, assessed valuations and annual real estate taxes.

Plaintiff states that he was and is ready, willing and able to fulfill the agreement of sale and pay the balance due on the purchase price. He contends that a binding contract is in effect and that the City cannot rescind this contract due to its negligence in placing the property for sale.

The City contends that the listing was a mistake and, in any event, paragraph 23 as set forth in the brochure, gives the municipality the right to cancel the sale.

What is presented to this court, therefore, is the question of whether a mistake on the part of the defendant, under the facts contained herein, is sufficient cause for a cancellation of the sale.

A contract may be rescinded for a unilateral mistake without a finding of fraud or inequitable conduct by the other party (37 N.Y.Jur., Mistake, Accident or Surprise § 7; Benz v. State of N. Y., 25 A.D.2d 482, 266 N.Y.S.2d 684; Moses v. Carver, 254 App.Div. 402, 5 N.Y.S.2d 783; Batto v. Westmoreland Realty Co., 231 App.Div. 103, 246 N.Y.S. 498; Abner M. Harper, Inc. v. Newburgh, 159...