Story v. Wood

• Decision Date: 09 May 1991
• Citation: 166 A.D.2d 124,569 N.Y.S.2d 487
• Parties: Robert STORY, Appellant-Respondent, v. Clinton WOOD et al., Defendants and Third-Party Plaintiffs-Respondents-Appellants; Manish Patel et al., Third-Party Defendants-Respondents.
• Court: New York Supreme Court — Appellate Division

Page 487

569 N.Y.S.2d 487

166 A.D.2d 124

Robert STORY, Appellant-Respondent, v. Clinton WOOD et al., Defendants and Third-Party Plaintiffs-Respondents-Appellants Manish Patel et al., Third-Party Defendants-Respondents.

Supreme Court, Appellate Division Third Department.

May 9, 1991.

Stanton M. Drazen, Catherine E. Stuckart, Binghamton, for appellant-respondent.

Levene, Gouldin & Thompson (Albert B. Kukol, and David F. McCarthy, of counsel), Binghamton, for defendants and third-party plaintiffs-respondents-appellants.

Coughlin & Gerhart (Robert J. Smith, of counsel), Binghamton, for third-party defendants-respondents.

Before MAHONEY, P.J., and CASEY, WEISS, LEVINE and MERCURE, JJ.

LEVINE, Justice.

Plaintiff's tavern in the Town of Kirkwood, Broome County, adjoins an undeveloped lot owned by defendant Gary Wood. When plaintiff purchased the tavern property in 1983 from defendants Clinton Wood and Ralph Wood, he entered into an agreement with defendants giving plaintiff the right to use the adjoining lot for parking by tavern patrons, terminable by defendants on 60 days' notice for "a legitimate business purpose". The parking agreement also gave plaintiff a "right of first refusal" to purchase the parking lot upon notice of any "bona fide offer" and gave him 30 days "upon which to match said bona fide offer in terms of price and terms".

In July 1986, notice of a proposed sale of the parking lot for $105,000 was sent by defendants' attorney to plaintiff's attorney. Accompanying the notice was the contract of sale for the lot with the prospective purchaser's name deleted, containing a contingency for zoning approval of use of the property for a restaurant. Plaintiff's attorney responded by asserting that plaintiff was not contractually bound to match such a conditional purchase offer and that plaintiff continued to have the right of first refusal for any future unconditional offer. Apparently, this transaction fell through for, in July 1987, defendants' attorney sent another notice regarding a prospective sale for $95,000 and enclosed the sales contract, again with the buyer's name deleted, setting forth the terms of payment in cash and a purchase money mortgage. That agreement, which defendants' attorney represented had been fully executed, had three contingencies relating to approval and financing for the construction and operation of a franchise restaurant. However, the agreement set time limits upon the buyer's obtaining such approval and financing, subject to such "further extension as may be reasonable under the circumstances". Third-party defendants Manish Patel and Jitendra Patel were subsequently identified as the prospective purchasers under that agreement.

Plaintiff's attorney responded to this notice by again contending that plaintiff was not contractually obliged to match a conditional purchase offer. Plaintiff made a counteroffer to buy the parking lot unconditionally for $50,000. After the 30-day period specified in the right of refusal provision of the parking agreement expired, a written notice was sent advising plaintiff that, by reason of his failure to timely meet the July 1987 offer, his right of first refusal had terminated. Subsequently, defendants also sent a notice of termination of the parking agreement because of the impending third-party sale.

Presumably because of the Patels' delay in satisfying the contingencies under their purchase contract with defendants, discussions and exchanges of correspondence took place regarding the purchase of the parking lot by plaintiff. Defendants' attorney wrote in response to an inquiry from plaintiff's attorney stating, however, that the Patel contract had not yet been terminated but that it might be "if we receive a reasonable offer from your client[ ]". That same day notice was sent to the Patels by defendants setting a deadline for the satisfaction of all the contingencies. Before the final expiration of that deadline, there were further discussions in late March 1988 between defendants and plaintiff, with conflicting versions of what was said. Plaintiff maintained that an oral agreement was made for his purchase of the property for $95,000, upon sending in a $10,000 deposit to defendants' attorney. Defendants testified that plaintiff was only told that an offer would be considered if plaintiff delivered the deposit and a proposed contract for their attorney's review.

Apparently as a result of the foregoing discussions, on March 30, 1988 plaintiff's attorney sent defendants' attorney a $10,000 bank check with a letter advising that plaintiff was exercising his right of first refusal to purchase the parking lot property for $95,000, according to the payment terms of the July 1987 notice. The letter further stated that, because plaintiff had already commenced adding gravel to improve the lot, an early closing was requested. The next day plaintiff's attorney sent a second letter repeating his position that the purchase was pursuant to the exercise of plaintiff's right of first refusal rather than direct negotiations and informing defendants of plaintiff's further improvements to the parking lot.

Approximately 10 days later, defendants' attorney confirmed by letter his verbal notification to plaintiff's attorney that plaintiff's right of first refusal had expired by the previous 30-day notice of the proposed Patel purchase agreement and that the Patel agreement was still in effect. Plaintiff's deposit was returned with the letter. The Patels then informed defendants that they were waiving their contingencies in the purchase agreement and were prepared to close on the property once defendants disposed of plaintiff's claim.

Plaintiff then brought this suit setting forth two causes of action. The first claim sought specific...