Vill. of Spring Valley v. Post Office Square, LLC

• Decision Date: 14 December 2022
• Docket Number: 2019–10838,Index No. 32220/18
• Citation: 211 A.D.3d 885,181 N.Y.S.3d 272
• Parties: VILLAGE OF SPRING VALLEY, respondent, v. POST OFFICE SQUARE, LLC, et al., appellants.
• Court: New York Supreme Court — Appellate Division

211 A.D.3d 885

181 N.Y.S.3d 272

VILLAGE OF SPRING VALLEY, respondent,

v.POST OFFICE SQUARE, LLC, et al., appellants.

2019–10838

Index No. 32220/18

Supreme Court, Appellate Division, Second Department, New York.

Argued—September 30, 2022

December 14, 2022

Kevin Conway, New City, NY, for appellants.

Harris Beach PLLC, White Plains, NY (Brian D. Ginsberg of counsel), for respondent.

COLLEEN D. DUFFY, J.P., LINDA CHRISTOPHER, DEBORAH A. DOWLING, BARRY E. WARHIT, JJ.

DECISION & ORDER

In an action, inter alia, pursuant to RPAPL article 15 for a judgment declaring that the plaintiff is the sole fee owner of certain real property and that the defendants have no interest in the property, the defendants appeal from an order of the Supreme Court, Rockland County(Paul I. Marx, J.), dated August 12, 2019.The order, insofar as appealed from, granted the plaintiff's motion for summary judgment on the complaint and directed the defendantPost Office Square, LLC, to reconvey the subject property to the plaintiff pursuant to the terms of a development agreement between the parties.

ORDERED that the order is reversed insofar as appealed from, on the law, with costs, and the plaintiff's motion for summary judgment on the complaint is denied.

In November 2009, the plaintiff, Village of Spring Valley, in furtherance of an urban renewal plan, entered into a development agreement (hereinafter the agreement) with the defendantPost Office Square, LLC(hereinafter Post Office Square), whereby, inter alia, the Village agreed to convey a certain parcel of real property to Post Office Square for the purpose of constructing a three-story mixed-use building on the site.Article II, § 2.01 of the agreement, entitled "Development Activities," provided, in pertinent part, that Post Office Square was obligated "to commence planning and design for the Project immediately upon the signing of th[e] agreement and commence construction immediately after conveyance of the parcel."Section 2.01 further provided that if Post Office Square did not "commence construction as required," then Post Office Square"shall re-convey to the Village by bargain and sale deed in its ‘as is’ condition any property conveyed hereby."Pursuant to the terms of the agreement, construction was to be completed "with[in] two (2) years of the issuance of a Building Permit, unless extraordinary and unanticipated weather circumstances prevent same."Article VIII, § 8.01 of the agreement permitted either party, among other things, to terminate the agreement and to exercise "all other rights or remedies available to it at law or in equity" in the event of certain specified defaults, including the "failure of [Post Office Square] to substantially complete construction."

In January 2013, more than three years after the execution of the agreement, the Village conveyed the property to Post Office Square.In June 2013, Post Office Square applied for a building permit for the project, which was issued on June 10, 2013.The record is not clear as to when construction commenced.On December 13, 2017, a Village deputy building inspector issued Post Office Square a new building permit for the project, which contained an expiration date of December 13, 2018.In March 2018, the Village sent counsel for Post Office Square a letter declaring Post Office Square to be in default of the agreement for, among other things, commencing construction without a valid permit, failing to commence construction as required, and failing to complete construction within two years of the issuance of a building permit.In April 2018, the Village commenced this action against Post Office Square and its principal, the defendantLarry Weinstein, inter alia, pursuant to RPAPL article 15 for a judgment declaring that the Village is the sole fee owner of the subject property and that the defendants have no interest in the property.The Village alleged that the defendants failed to complete development of the property pursuant to the terms of the agreement, and that, "by virtue of this Verified Complaint," the Village was exercising the " ‘reverter’ clause (Article II, § 2.01)" in the agreement.

The Village subsequently moved for summary judgment on the complaint, contending that the subject property should be returned to the Village pursuant to Article II, § 2.01 of the agreement because, despite the passage of almost nine years since the execution of the agreement, the property still had not been substantially developed and there were approximately $200,000 in mechanics liens filed against the property.The defendants opposed the motion and cross-moved for summary judgment dismissing the complaint insofar as asserted against Weinstein.The defendants contended, among other things, that § 2.01 was only triggered in the event Post Office Square did not commence construction and there was no allegation by the Village that construction had not commenced.Additionally, the defendants argued that, prior to the commencement of this action, Post Office Square had spent approximately $2.5 million on the project and that, on December 13, 2017, the Village deputy building inspector issued Post Office Square a building permit to finish construction of the building, which listed the estimated cost to complete construction as only $350,000.The defendants further contended that between December 13, 2017, and April 17, 2018, Post Office Square continued to improve the property pursuant to the December 2017 building permit, and that Post Office Square had vested rights in the property.In its reply in further support of its motion and in opposition to the defendants’ cross motion, the Village argued, inter alia, that the defendants had failed to commence construction "as required" because the defendants did not apply for a building permit until June 2013 and, thus, construction was not started until almost six months after title was conveyed from the Village to Post Office Square.

In the order appealed from, the Supreme Court granted the Village's motion for summary judgment on the complaint, denied the defendants’ cross motion for summary judgment dismissing the complaint insofar as asserted against Weinstein, and directed Post Office Square to reconvey the property to the Village pursuant to the terms provided in the agreement.The court determined, among other things, that Post Office Square's "six-month delay in obtaining a building permit after the property was conveyed to it was not immediate commencement of construction," and, therefore, Post Office Square had failed to comply with § 2.01 of the agreement.The defendants appeal from so much of the order as granted the Village's motion for summary judgment and directed Post Office Square to reconvey the property to the Village pursuant to the terms provided in the...