US v. 0.35 OF AN ACRE OF LAND, WESTCHESTER CTY.

• Decision Date: 17 October 1988
• Docket Number: No. 86 Civ. 8891 (PKL).,86 Civ. 8891 (PKL).
• Citation: 706 F. Supp. 1064
• Parties: UNITED STATES of America, Plaintiff, v. 0.35 OF AN ACRE OF LAND, MORE OR LESS, SITUATED IN WESTCHESTER COUNTY, STATE OF NEW YORK; First Lawrence Partnership; Vangar Realty Corp.; Kathleen G. Cook; Mary Ann Hagelin; James A. Garrity; Matthew H. Garrity, in their capacity as General Partners of Vangar Realty Corp. and in their individual capacity; County of Westchester Finance Department; Tax Receiver; Town of Greenburgh; Village Treasurer; Village of Tarrytown; Tarrytown School District and Unknown Owners, Defendants and Defendant-in-Rem.
• Court: U.S. District Court — Southern District of New York

706 F. Supp. 1064

UNITED STATES of America, Plaintiff, v. 0.35 OF AN ACRE OF LAND, MORE OR LESS, SITUATED IN WESTCHESTER COUNTY, STATE OF NEW YORK; First Lawrence Partnership; Vangar Realty Corp.; Kathleen G. Cook; Mary Ann Hagelin; James A. Garrity; Matthew H. Garrity, in their capacity as General Partners of Vangar Realty Corp. and in their individual capacity; County of Westchester Finance Department; Tax Receiver; Town of Greenburgh; Village Treasurer; Village of Tarrytown; Tarrytown School District and Unknown Owners, Defendants and Defendant-in-Rem.

No. 86 Civ. 8891 (PKL).

United States District Court, S.D. New York.

October 17, 1988.

Rudolph W. Guiliani, U.S. Atty., S.D. N.Y., New York City (Bernard W. Bell, Gerald J. Robinson, of counsel), for plaintiff.

Schneider, Harris & Harris, Woodmere, N.Y. (Steven P. Kuhn, of counsel), for defendants.

OPINION & ORDER

LEISURE, District Judge:

This is a condemnation action in which plaintiff, the United States of America seeks to enforce the terms of an Offer to Sell Real Property (Exh. B to Requests for Admissions dated May 15, 1987; hereinafter "Offer to Sell") given to the United States by defendant Vangar Realty Co. ("Vangar Realty") on December 31, 1984. Plaintiff commenced this action with the filing of a complaint on November 20, 1985. In the first cause of action, the United States alleged that it was acquiring the Tarrytown Post Office by eminent domain, and asserted that the amount of "just compensation" for the property was set forth in the Offer to Sell. The second cause of action stated a claim for damages against Vangar Realty "for their wrongful and wilfull breach of their contract to sell the premises to the United States Postal Service." Complaint ¶ 11. The third cause of action was for a declaratory judgment providing that First Lawrence was bound by the terms of the Offer to Sell. First Lawrence answered the complaint on January 9, 1987 asserting a number of affirmative defenses.

The United States now moves for summary judgment declaring that it is entitled to the Tarrytown Post Office for the price set forth in the Offer to Sell. Defendants have cross-moved for summary judgment seeking to dismiss plaintiff's complaint and ordering plaintiff to pay the fair market value of the condemned property.

FACTUAL BACKGROUND

Plaintiff, the United States, through its instrumentality, the United States Postal Service ("Postal Service"), has leased the premises at 50 North Broadway, Tarrytown, New York, and operated it as the primary post office for the Village of Tarrytown, New York, since 1952. Declaration of Stephen A. Marcinek, executed on December 1, 1987 ("Marcinek Decl." ¶ 3). Recently, the premises have been owned by Vangar Realty, a partnership comprised of the survivors of the former owner. Transcript of the Deposition of Richard E. Burns on December 21, 1987 at 4, 6-7 ("Burns Dep."). The partnership was represented by Richard E. Burns, Esq., and its sole asset was the Tarrytown Post Office. Id. at 4. On December 31, 1984, an irrevocable Offer to Sell was entered into between Vangar Realty, and the Postal Service. It provided that Vangar Realty would sell the real estate located at 50 North Broadway, Tarrytown, New York to the Postal Service for $395,000.00. The Offer to Sell was drawn on a pre-printed form provided by the Postal Service and was to remain open for 360 days, expiring on December 26, 1985.

The following are the salient terms of the Offer to Sell. With respect to acceptance of the Offer, Vangar Realty, referred to in the Offer to Sell as "the Vendor", agreed that the offer may be "accepted by the United States Postal Service through any duly authorized representative, by delivering, mailing or telegraphing a notice of acceptance to the Vendor at the address" set forth at the end of the agreement, which was "Richard E. Burns, c/o Burns, Hammer, Burns, 220 East 42nd Street, New York, New York XXXXX-XXXX." The Offer to Sell provided that the terms and conditions of the Offer "are to apply to and bind the heirs, executors, administrators, successors and assigns of the Vendor." It further provided that "the Postal Service may acquire title to said land by condemnation or other judicial proceedings, in which event the Vendor ... agrees that the consideration hereinabove stated shall be the full amount of the award of just compensation, inclusive of interest, for the taking of said land...." Finally, the Offer to Sell provided that: "If for any reason whatsoever, the Postal Service cannot acquire the contiguous property by voluntary purchase and sale at a simultaneous closing with the Vendor herein, the Postal Service shall have the right to terminate and cancel this agreement by giving written notice to the Vendor, without any further cost or liability of any nature whatsoever by the Postal Service to the Vendor." The Postal Service needed the property adjoining the Tarrytown Post Office as the property at 50 North Broadway lacked sufficient parking and maneuvering area for Postal Service trucks. No oral or written modification of the Offer to Sell was ever proposed or agreed to by the parties.

In 1985, First Lawrence Partnership ("First Lawrence"),¹ through its General Manager, and partner, Dr. Joshua Feibusch, became interested in purchasing the real estate located at 50 North Broadway, Tarrytown, New York. Feibusch Dep. at 8. First Lawrence Partnership purchased this property on July 1, 1985 from Vangar Realty. The purchase price was $410,000.000. Agreement of Purchase of Sale ¶ 3. "First Lawrence partnership purchased the property subject to and with full knowledge of the existing option contract between Vangar Realty Co. and The United States Postal Service." Defendants' Memorandum of Law in Support of Cross-Motion for Summary Judgment and in Opposition to Plaintiff's Motion for Summary Judgment ("Defendants' Memorandum in Support") at 4.

At the time of the closing between Vangar Realty and First Lawrence, First Lawrence decided not to notify the Postal Service of the transfer of title. Defendants' Memorandum in Support at 4. First Lawrence asked Burns to continue to accept checks in payment of rent from the Postal Service and, upon receipt, transfer those checks to Robert Harris, Esq., attorney for First Lawrence. Transcript of deposition of Robert H. Harris on August 18, 1987 ("Harris Dep.") at 30; Feibusch Dep. at 37. First Lawrence also expressly asked Burns to receive the executed Offer to Sell if it were sent to him, and to forward it to Harris. Burns Dep. at 26-27; Harris Dep. at 32-37. Burns agreed to both of these arrangements. Id. Burns believed this obligation was to last indefinitely, Burns Dep. at 27-29, while Harris testified that he assumed the obligation lasted only until First Lawrence provided the Postal Service with a deed evidencing ownership of the Tarrytown Post Office.² Harris Dep. at 36. In any event, Harris did not expressly limit the period of Burns' obligation to accept and forward the executed Offer to Sell. Id. After the closing, Vangar Realty forwarded the rent payments received from the United States Postal Service to First Lawrence. Id. at 4.

On October 3, 1985, Dr. Feibusch sent to the United States Postal Service a tax bill covering the Tarrytown Post Office and requested payment of the real estate taxes. Feibusch Dep., Exh. 3 and 3A. The Postal Service received the tax bill on or about October 7, 1985. Declaration of Frances El-Shahat executed on December 1, 1987 at ¶ 4 ("El-Shahat Decl."). At about or around the same time a conversation ensued between El-Shahat and Feibusch's secretary concerning the tax bill. El-Shahat alleges that she advised Feibusch's secretary to send a recorded deed so that the Postal Service could indicate a change of ownership in its records. Id. at ¶ 7. On or about November 25, 1985, El-Shahat received a letter from Robert H. Harris, enclosing a recorded deed and advising the Postal Service where to send future rent payments. El-Shahat Decl. at ¶ 4. The Postal Service's records were updated to reflect the change of ownership. Id. at ¶ 7.

On October 15, 1985, a duly authorized representative of the Postal Service sent to Burns by certified mail, at the address set forth in the Offer to Sell, a notice of acceptance of the offer. Marcinek Decl. ¶ 15; Burns Dep. at 43. Burns received the notice of acceptance on October 17, 1985. Requests for Admissions Exh. C. Burns believed, based on his arrangement with Harris and First Lawrence at the closing, that he was under an obligation to receive the Offer to Sell and send it to Harris. Burns Dep. at 43. By letter dated October 17, 1985, Burns forwarded to First Lawrence's attorney, Harris, the communication received from the Postal Service. Burns Dep. at 50-51; Feibusch Dep. Exh. 5. Harris received the Offer to Sell shortly thereafter. Harris Dep. at 71-72.

On October 29, 1985, David S. Kelson, Senior Assistant Regional Counsel for the Postal Service, Ronald A. Kern, a realty specialist with the Postal Service whose responsibility included the Tarrytown Post Office, and Marcinek, called Burns. There was a discussion concerning why no arrangements had been made for conveyance of the property to the Postal Service. The substance of this conversation is in dispute. Kelson, Kern and Marcinek subsequently called Harris. Robert Harris stated that Vangar Realty no longer owned the Tarrytown Post Office and reiterated that First Lawrence was the owner. Defendants' Memorandum in Support at 5.

Shortly thereafter the Regional Counsel of the Postal Service was asked to bring an action for specific performance of the executed Offer to Sell. Marcinek Decl. ¶ 20 and Exh. E. By letter dated November 20, 1985, Kelson asked Burns to "advise the undersigned promptly whether your client is ready, willing and able to transfer title to the Postal Service as set forth in the Offer to Sell." Feibusch Dep., Exh. 8 at 54. Kelson further...