Rai v. WB Imico Lexington Fee, LLC, 09 Civ. 9586 (PGG)
| Decision Date | 27 September 2013 |
| Docket Number | 09 Civ. 9609 (PGG),09 Civ. 9612 (PGG),09 Civ. 9610 (PGG),09 Civ. 9586 (PGG),09 Civ. 9611 (PGG) |
| Parties | AVIRAL RAI and SANGEETA RAI, Plaintiffs and Counter-Defendants, v. WB IMICO LEXINGTON FEE, LLC and GARY BARNETT, Defendants and Counter-Claimants. HASKELL LIMITED INC., Plaintiff and Counter-Defendant, v. WB IMICO LEXINGTON FEE, LLC, Defendant and Counter-Claimant. JESSICA BENHAMOU, Plaintiff and Counter-Defendant, v. WB IMICO LEXINGTON FEE, LLC, Defendant and Counter-Claimant. GARRETT BAUER, Plaintiff and Counter-Defendant, v. WB IMICO LEXINGTON FEE, LLC, Defendant and Counter-Claimant. MARILYN H. EZZES, Plaintiff and Counter-Defendant, v. WB IMICO LEXINGTON FEE, LLC, Defendant and Counter-Claimant. |
| Court | U.S. District Court — Southern District of New York |
Plaintiffs are purchasers of condominium units in "The Lucida," a condominium development in Manhattan sponsored and developed by Defendant WB Imico Lexington Fee, LLC.1 On March 19, 2012, this Court granted Plaintiffs' motions for summary judgment and denied Defendant's cross-motions for summary judgment, holding that Defendant's failure to include tax lot numbers in the purchase agreements executed by Plaintiffs constituted a violation of the Interstate Land Sales Full Disclosure Act, 15 U.S.C. §§ 1701-20 (2009) ("ILSA" or the "Act") that permits Plaintiffs to rescind the agreements and recover their deposits. Rai v. WB Imico Lexington Fee, LLC, 851 F. Supp. 2d 615, 626-28 (S.D.N.Y. 2012).
On February 8, 2013, Defendant moved for this Court to vacate its March 19, 2012 Memorandum Opinion and Order (the "March 2012 decision"), and to grant summary judgment in Defendant's favor, in light of the Second Circuit's intervening decision in Bacolitsas v. 86th & 3rd Owner, LLC, 702 F.3d 673 (2d Cir. 2012). (Rai Dkt. No. 63; Haskell Dkt. No. 76; Benhamou Dkt. No. 73; Bauer Dkt. No. 75; Ezzes Dkt. No. 75)
For the reasons stated below, Defendant's motion to vacate will be granted to the extent that this Court's March 2012 decision holds that the purchase agreements at issue violate15 U.S.C. § 1703(d)(1), and that Plaintiffs Haskell Limited Inc., Jessica Benhamou, Garrett Bauer, and Marilyn Ezzes are entitled to summary judgment. This Court nonetheless holds that Plaintiffs Aviral Rai and Sangeeta Rai are entitled to summary judgment, because they were not provided with a copy of the property report for the condominium, in violation of 15 U.S.C. § 1703(a)(1)(B). Defendant's motion for summary judgment on its counterclaims will be denied as to the Rai Plaintiffs, but granted as to Plaintiffs Haskell Limited Inc., Jessica Benhamou, Garrett Bauer, and Marilyn Ezzes.
The Lucida is a condominium development located at 151 East 85th Street, New York, New York. )3 Between June 25, 2007 and February 27, 2008,each Plaintiff executed a substantially similar purchase agreement for a condominium unit in The Lucida, and each paid Defendant a deposit pursuant to those agreements. Rai, 851 F. Supp. 2d at 619 n.3. Each purchase agreement specifies the number of the condominium unit purchased. (Agreements ¶ 3)4
The purchase agreements incorporate by reference the offering plan for The Lucida (the "Offering Plan"). The Offering Plan sets forth tax lot numbers for The Lucida as a whole, describes its location in relation to streets and avenues in Manhattan, describes the surrounding neighborhood and the condition of the land on which the building is constructed, specifies the number of stories and basement levels in the building, and provides extensive details about the building's construction. (Offering Plan 1, 34-36, 250-68) The Offering Plan also lists the total number of units in the building, describes the units and their construction materials in detail, and contains a chart that provides the number of bedrooms and bathrooms in each unit, the approximate square footage of each unit and its associated storage areas, and the percentage of the condominium's common elements associated with ownership of each unit.5 (Offering Plan 1, 22-26, 39-48, 264-66) The Offering Plan lists those common elements, as well as services and facilities available to the unit owners. (Offering Plan 26-33) Finally, the Offering Plan includes floor plans that show the layout of the units and the units' locations within the building.
Tax lot numbers for each individual unit are not provided in the purchase agreements, nor are they set forth in the Offering Plan incorporated therein.
Between June 23, 2009 and November 9, 2009 - within two years of executing their respective purchase agreements - each Plaintiff sent a notice to WB Imico purporting to revoke their purchase agreement due to WB Imico's alleged failure to comply with ILSA's disclosure requirements. ( Plaintiffs likewise demanded the immediate return of their respective deposits. ( WB Imico has not returned to Plaintiffs any portion of their deposits. )
On November 18, 2009, Plaintiffs Haskell, Benhamou, Bauer, and Ezzes filed complaints claiming that Defendant violated ILSA by (1) failing to list a tax lot number for each unit in each Plaintiff's purchase agreement, as 15 U.S.C. § 1703(d)(1) allegedly requires; and (2) including damages provisions in each Plaintiff's purchase agreement that are not in accordance with 15 U.S.C. § 1703(d)(3). (Haskell Dkt. No. 1; Benhamou Dkt. No. 1; Bauer Dkt. No. 1; Ezzes Dkt. No. 1). That same day, the Rais filed a complaint alleging that Defendant violated 15 U.S.C. § 1703(a)(1)(B) by failing to furnish a copy of the property report for the condominium to them before they executed their purchase agreement. (Rai Dkt. No. 1) On January 28, 2010, the Rais amended their Complaint to add claims under Sections 1703(d)(1) and (3) as alleged by the other Plaintiffs. (Rai Dkt. No. 7) All Plaintiffs seek revocation of their purchase agreements, return of their deposits, and attorneys' fees and costs.
On or about December 28, 2009, each Plaintiff received a notice from WB Imico setting a closing date of February 1, 2010.6 WB Imico asserts that none of the Plaintiffs closed on the designated closing date, and that the time for Plaintiffs to exercise their rights to close under their respective purchase agreements has expired.7 (Def. R. 56.1 Stmt. ¶¶ 2-3) In April 2011, Defendant filed a counterclaim for breach of contract against each Plaintiff. (Rai Dkt. No. 37; Haskell Dkt. No. 39; Benhamou Dkt. No. 38; Bauer Dkt. No. 37; Ezzes Dkt. No. 40) Defendant seeks a declaration that it may retain Plaintiffs' deposits, and an award of attorneys' fees and costs.
Federal Rule of Civil Procedure 60 provides that "[o]n motion and just terms, the court may relieve a party or its legal representative from a final judgment, order, or proceeding for . . . any . . . reason that justifies relief." Fed. R. Civ. P. 60(b)(6). "Under Local Rule 6.3, a motion for reconsideration may be granted . . . when there has been 'an intervening change in controlling law.'" Kirkland v. Cablevision Sys., No. 09 Civ. 10235 (LAP) (KNF), 2013 WL 4509644, at *1 (S.D.N.Y. Aug. 23, 2013) (quoting Henderson v. Metro. Bank & Trust Co., 502 F. Supp. 2d. 372, 376 (S.D.N.Y. 2007); see also Virgin Atl. Airways Ltd. v. Nat'l Mediation Bd., 956 F.2d 1245, 1255 (2d Cir. 1992) . "Because the law is constantly evolving, a new decision clarifying the applicable substantive law may justify reexamining a denial of summary judgment." Kirkland, 2013 WL 4509644, at *1 (quoting Caribbean Wholesales & Serv. v. U.S. JVC Corp., 101 F. Supp. 2d 236, 240 (S.D.N.Y. 2000)).
Summary judgment is warranted when the moving party shows that "there is no genuine dispute as to any material fact" and that it "is entitled to judgment as a matter of law." Fed. R. Civ. P. 56(a). "A dispute about a 'genuine issue' exists for summary judgment purposes where the evidence is such that a reasonable jury could decide in the non-movant's favor." Beyer v. Cnty. of Nassau, 524 F.3d 160, 163 (2d Cir. 2008) (citing Guilbert v. Gardner, 480 F.3d 140, 145 (2d Cir. 2007)). "The same standard applies where, as here, the parties filed cross-motions for summary judgment. . . ." Morales v. Quintel Entm't, Inc., 249 F.3d 115, 121 (2d Cir. 2001) (citing Terwilliger v. Terwilliger, 206 F.3d 240, 244 (2d Cir. 2000)).
15 U.S.C. § 1703(d)(1) (emphasis added). Under New York law, the conveyance of a condominium cannot be recorded unless accompanied by a report that includes the tax lot information for the unit. Rai, 851 F. Supp. 2d at 626 (citing N.Y. Real Prop. L. § 333(1-e)(ii)...
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