Tackney v. WB Imico Lexington Fee, LLC
| Decision Date | 19 September 2014 |
| Docket Number | 10 Civ. 2734 (PGG),10 Civ. 2735 (PGG) |
| Parties | CHRISTOPHER TACKNEY and ANGELA TACKNEY, Plaintiffs and Counter-Defendants, v. WB IMICO LEXINGTON FEE, LLC, Defendant and Counter-Claimant. WILLIAM ABRAMS and SOO WON HWANG, Plaintiffs and Counter-Defendants, 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. Plaintiffs allege that Defendant violated several provisions of the Interstate Land Sales Full Disclosure Act, 15 U.S.C. §§ 1701-20 ("ILSA" or the "Act") in connection with the sale of those units, and that they are therefore entitled to rescind their purchase agreements and recover their deposits pursuant to ILSA. Defendant argues that it complied with ILSA's requirements and asserts counterclaims for breach of contract, alleging that Plaintiffs refused to pay the balance owed forthe units and to close title as required by their purchase agreements. (10 Civ. 2734 Answer (Dkt. No. 22); 10 Civ. 2735 Answer (Dkt. No. 20))
The Complaints in these actions were filed on March 26, 2010. The initial conference was adjourned sine die, pending resolution of motions for summary judgment in five related actions ("the Related Actions")1 that had been brought by other purchasers of units in The Lucida against Defendant. (10 Civ. 2734 Oct. 11, 2011 Order (Dkt. No. 13); 10 Civ. 2735 Oct. 11, 2011 Order (Dkt. No. 11))
On September 27, 2013, this Court issued a decision granting Defendant summary judgment in four of the Related Actions, and awarding summary judgment to plaintiffs in Rai v. WB Imico Lexington Fee, LLC, No. 09 Civ. 9586 (PGG), the last of the Related Actions. See Rai v. WB Imico Lexington Fee, LLC, Nos. 09 Civ. 9586 (PGG), 09 Civ. 9609 (PGG), 09 Civ. 9610 (PGG), 09 Civ. 9611 (PGG), 09 Civ. 9612 (PGG), 2013 WL 5420940, at * 11 (S.D.N.Y. Sept. 27, 2013) (the "September 2013 decision").
On January 13, 2014, Plaintiffs in the instant action filed Amended Complaints. On January 24, 2014, Defendant filed answers and asserted counterclaims for breach of contract. (10 Civ. 2734 Answer (Dkt. No. 22); 10 Civ. 2735 Answer (Dkt. No. 20))
On January 24, 2014, Plaintiffs moved for summary judgment on the first and third claims of their Amended Complaints, which allege that Defendant violated ILSA by failingto adequately describe the purchased units in Plaintiffs' purchase agreements, and by failing to deliver the property report for The Lucida to Plaintiffs before they executed their purchase agreements. (Pltf. Br. (Dkt. No. 43)2) Defendant has moved for summary judgment on all of Plaintiffs' claims and on its breach of contract counterclaims. (Def. Br. (Dkt. No. 42))
For the reasons stated below, Defendant's motions for summary judgment on Plaintiffs' claims and on its breach of contract counterclaim will be granted. Plaintiffs' motions for summary judgment will be denied.
The Lucida is a condominium development located at 151 East 85th Street, New York, New York. (Joint Stip. (Dkt. No. 45) ¶ 2) 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. (Id. ¶¶ 10, 13) The Tackneys executed their agreement on July 26, 2007, and Abrams and Hwang executed their agreement on July 30, 2007. (Id. ¶ 10)
Prior to executing the purchase agreements, each Plaintiff signed a "Purchaser Receipt," acknowledging receipt of the property report for The Lucida. (Id. ¶¶ 8-10 & Exs. B, D) The receipt signed by the Tackneys is dated July 5, 2007, and the receipt signed by Abrams and Hwang is dated July 27, 2007. (Id., Exs. B, D) The Purchaser Receipt states in relevant part:
We must give you a copy of this Property Report and give you an opportunity to read it before you sign any contract or agreement. By signing this receipt, you acknowledge that you have received a copy of our Property Report.
(Id., Exs. B, D)
While all Plaintiffs signed a receipt indicating that they had received a copy of the property report for their condominium before executing the purchase agreement, it is likewise undisputed that Defendant did not give a copy of the property report directly to any of the Plaintiffs. (Id. ¶¶ 8-9)
As to Abrams and Hwang, Defendant sent a copy of the property report to an attorney named Bruce Cohen. (Id. ¶ 8) Abrams and Hwang claim that they were never represented by Cohen and that - despite the signed receipt in which they acknowledge receiving a copy of the property report - they never received a copy of the property report. (Abrams Deck (Dkt. No. 39) ¶¶ 5-7; Hwang Deck (Dkt. No. 41) ¶¶ 5-7) According to Defendant, the "Contract Information Sheet" that was filled out by Defendant's sales agent when Abrams and Hwang expressed interest in purchasing a unit in The Lucida lists Cohen as their attorney. (Feb. 21, 2014 Genack Aff. (Dkt. No. 47) ¶ 3 & Ex. N) Defendant also claims that on July 17, 2007 - after Abrams notified Defendant that he and Hwang had retained attorney Scott Claman to represent them in the transaction - all documents that had previously been sent to Cohen, including the property report, were provided to Claman. (Id. ¶¶ 4-5)
As to the Tackneys, Defendant sent a copy of the property report to their attorney, Danielle Epstein-Day. (Joint Stip. (Dkt. No. 45) ¶ 9) The Tackneys "acknowledge that the Property Report had been delivered to [their] attorney," but do not state whether they received a copy of the report. (See C. Tackney Deck (Dkt. No. 35) ¶¶ 5-6; A. Tackney (Dkt. No. 37) ¶¶ 5-6)
The purchase agreements executed by Plaintiffs incorporate by reference the offering plan for The Lucida (the "Offering Plan"). (See Jan. 24, 2014 Haas Decl. (Dkt. No. 38), Exs. H, I) Tax lot numbers for each individual unit are not provided in the purchase agreements, however, nor are they set forth in the Offering Plan incorporated therein. (Joint Stip. (Dkt. No. 45) ¶¶ 11, 12)
Within two years of executing their respective purchase agreements, Plaintiffs sent notices to Defendant purporting to revoke their purchase agreements due to Defendant's alleged failure to comply with ILSA's disclosure requirements. (See id. ¶ 14) The revocation letter sent by Abrams and Hwang is dated July 27, 2009, and the Tackneys' revocation letter is dated July 24, 2009. (Id.) Plaintiffs likewise demanded the immediate return of their respective deposits. (Id.) Defendant has not returned to Plaintiffs any portion of their deposits, (Id. ¶ 15)
The Related Actions were filed on November 18,2009. See Rai, 2013 WL 5420940, at *2. Plaintiffs in the Related Actions argued that - in connection with their purchase of condominium units in The Lucida - Defendant violated ILSA by (1) failing to list a tax lot number for each unit in plaintiffs' purchase agreements, as 15 U.S.C. § 1703(d)(1) allegedly required; and (2) including damages provisions in plaintiffs' purchase agreements that do not comply with 15 U.S.C. § 1703(d)(3). See Rai, 2013 WL 5420940, at *2. In one of the actions, plaintiffs Aviral Rai and Sangeeta Rai further alleged that Defendant had 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, 2013 WL 5420940, at *2. Defendant alleged that plaintiffs had breached the purchase agreements by failing to pay the remainder ofthe purchase price and by failing to close on the designated closing date. Id. All parties moved for summary judgment. Id. at * 1.
The Complaints in the instant actions were filed on March 26, 2010, and asserted the same two claims raised by the plaintiffs in the Related Actions. Defendant asserted a counterclaim against each Plaintiff for breach of contract, as in the Related Actions. (10 Civ. 2734 Answer (Dkt. No. 10); 10 Civ. 2735 Answer (Dkt. No. 9))
Because Plaintiffs in the instant actions raised the same claims pleaded in the Related Actions, this Court stayed proceedings in the instant actions pending resolution of the cross-motions for summary judgment in the Related Actions. (Dkt. No. 13)
On March 19, 2012, this Court granted plaintiffs' motions for summary judgment and denied Defendant's cross-motions for summary judgment in the Related Actions, holding that Defendant's failure to include tax lot numbers in the purchase agreements executed by plaintiffs constituted a violation of ILSA that permitted plaintiffs to rescind the purchase 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). See Rai, 2013 WL 5420940, at *1.
On September 27, 2013, this Court granted Defendant's motion to vacate the March 2012 decision, concluding that - given the holding and reasoning of Bacolitsas - Defendant had not been required under ILSA to include tax lot numbers in plaintiffs' purchaseagreements. Id. at *3-6. Plaintiffs were therefore not entitled to rescission on that ground. Id. at *6. This Court likewise rejected plaintiffs' arguments that their purchase agreements were...
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