William P. Pahl Equipment Corp. v. Kassis

• Decision Date: 13 August 1992
• Parties: WILLIAM P. PAHL EQUIPMENT CORP. and 232 W. 58th Street Associates, Plaintiffs-Respondents, v. Henry KASSIS and 232 West Associates, Defendants-Appellants, Joseph M. Sperazi, Grace Sperazi and The United States of America, Defendants.
• Court: New York Supreme Court — Appellate Division

Page 8

588 N.Y.S.2d 8

182 A.D.2d 22

WILLIAM P. PAHL EQUIPMENT CORP. and 232 W. 58th Street

Associates, Plaintiffs-Respondents, v. Henry KASSIS and 232 West Associates, Defendants-Appellants, Joseph M. Sperazi, Grace Sperazi and The United States of

America, Defendants.

Supreme Court, Appellate Division,

First Department.

Aug. 13, 1992.

Philip M. Halpern, New York City, of counsel (Mark C. Durkin, with him on the brief, Collier, Cohen, Shields & Bock, attorneys) for defendants-appellants.

David L. Deitz, New York City, of counsel (Leonard Holland, with him on the brief, Wohl Loewe Stettner Fabricant & Deitz, attorneys) for plaintiffs-respondents.

Before SULLIVAN, J.P., and CARRO, WALLACH and SMITH, JJ.

SULLIVAN, Justice.

This action arises out of two commercial transactions entered into in September 1989, in the first of which 232 W. 58th Street Associates (Associates), a New York partnership, agreed, by written contract of sale dated September 12, 1989, to sell to Henry Kassis, a defendant herein, the premises located at 232 West 58th Street, in New York City, for $950,000, $200,000 of which was to be paid in cash, with the $750,000 balance, payable over time, secured by a purchase money mortgage. It is undisputed that Kassis and his designee, 232 West Associates, also a defendant herein, made all the payments due under the contract of sale as well as all payments called for under the terms of the mortgage and note.

Although Kassis apparently was interested only in the purchase of the building, he also entered into a second transaction involving the sale by William P. Pahl Equipment Corp. (Pahl) to him, pursuant to a written September 12, 1989 memorandum of agreement, of certain assets--the name and customer list--of a retail and wholesale cosmetics business located at the subject premises for $350,000, $100,000 of which was paid on account. The entire transaction was structured as two separate sales, so that Associates could avoid certain adverse tax consequences. Title to the premises was conveyed on November 21, 1989, and Kassis took possession on or about December 19, 1989. After Kassis refused to make the final $250,000 payment due on the sale of Pahl's cosmetics business, Pahl and Associates, plaintiffs herein, thereafter commenced this action, seeking, in a first cause of action, to foreclose the purchase money mortgage based upon defendants' default in "concluding the sale of the business, and paying their final installment of the purchase price thereof." A second cause of action sought $250,000 by virtue of defendants' having "defaulted under the purchase money note, mortgage and memorandum of agreement." The third cause of action sought, on the grounds of mutual mistake, fraud or unilateral mistake, reformation of all the written instruments executed in connection with both transactions so as to make the default under the terms of the memorandum of agreement a corresponding default under the contract of sale and purchase money note and mortgage.

Defendants moved to dismiss the complaint pursuant to CPLR 3211(a)(5) and (7) on the grounds that, absent a default under the mortgage note, no right of foreclosure existed and no default was alleged; that the contract of sale and memorandum of agreement were two separate, wholly independent and integrated documents, and a breach of one was not a breach of the other and that plaintiffs failed to state legally cognizable causes of action for either damages or reformation. The motion was granted, the IAS court (Kenneth L. Shorter, J.) finding that the two transactions were separate and independent, that the seller's remedy for the buyer's default in the purchase of the business was limited, in accordance with the terms of the memorandum of agreement, to the amount of monies actually paid and that a cause of action in fraud sufficient to warrant reformation had not been pleaded. Leave to replead within 30 days was granted. Reargument was ultimately denied.

Plaintiffs served an amended complaint which set forth the same three causes of action, albeit in a different order, and realleged, verbatim, thirty of the forty paragraphs of the original complaint. It added a few allegations to the fraud and reformation cause of action, as well as the prayer for relief. After withdrawing their notice of appeal from the dismissal of their first and second causes of action only, plaintiffs served a second amended complaint asserting identical causes of action, separating the original complaint's third cause of action seeking reformation into three separate causes of action.

Defendants moved to dismiss the second amended complaint in its entirety, asserting, inter alia, legal insufficiency and the law of the case doctrine. The IAS court, on its last day before retirement, granted the motion and dismissed the complaint in its entirety. The appeal from that determination was dismissed for lack of prosecution pursuant to a February 4, 1992 order of this court.

In the interim, plaintiffs moved pursuant to CPLR 2221 for leave to renew and reargue the motion to dismiss the second amended complaint on the grounds of newly discovered evidence and the court's overlooking of applicable law and misapprehending the facts. Defendants opposed the motion and cross-moved for the imposition of financial sanctions pursuant to 22 NYCRR § 130, et seq. By virtue of the original IAS court's retirement, these motions were heard by a new court (Herman Cahn, J.), which, by order of October 9, 1991, granted reargument as to all but the previously dismissed fraud and deceit causes of action, upon reargument, the court reinstated three of the five causes of action of the second amended complaint granted plaintiffs leave to replead another and denied the cross-motion for sanctions. Defendants appeal. We reverse.

A motion for leave to reargue pursuant to CPLR 2221 is addressed to the sound discretion of the court and may be granted only upon a showing "that the court overlooked or misapprehended the facts or the law or for some reason mistakenly arrived at its earlier decision." (Schneider v. Solowey, 141 A.D.2d 813, 529 N.Y.S.2d 1017.) Reargument is not designed to afford the unsuccessful party successive opportunities to reargue issues previously decided (Pro Brokerage, Inc. v. Home Insurance Co., 99 A.D.2d 971, 472 N.Y.S.2d 661) or to present arguments different from those originally asserted (Foley v. Roche, 68 A.D.2d 558, 418 N.Y.S.2d 588.) A motion to renew under CPLR 2221, on the other hand, is intended to draw the court's attention to new or additional facts which, although in existence at the time of the original motion, were unknown to the party seeking renewal and therefore not brought to the court's attention. (Beiny v. Wynward, 132 A.D.2d 190, 522 N.Y.S.2d 511, appeal dismissed, 71 N.Y.2d 994, 529 N.Y.S.2d 277, 524 N.E.2d 879.) Judged by these standards, it is clear that plaintiffs failed to meet their burden of proof in demonstrating new or additional facts warranting renewal or that the original IAS court overlooked or misapprehended the facts or law so as to warrant reargument.

The renewal aspect of the motion under review was based on a claim of newly discovered evidence, namely, a series of documents obtained by plaintiffs in response to their discovery requests in a separate lawsuit, and primarily consisting of the personal notes of the real estate broker supposedly encompassing the substance of conversations between the principals of Pahl and Associates and Kassis during the negotiations of the sale of the subject premises and cosmetics business. The contents of these documents, however, constitute neither new nor additional facts not known to plaintiffs at the time of the motion to dismiss the second amended complaint since they represented conversations and negotiations in which their principals had taken part and had to be aware of since September 1989. Similarly, these so-called new facts were, as even the court hearing the reargument/renewal motion conceded, the same facts plaintiffs had asserted in their opposition to the motions to dismiss the second amended complaint and even the original complaint. Thus, renewal was properly denied.

The reargument phase of plaintiffs' motion is equally devoid of merit. Aside from asserting a facile and completely unsupported misapplication of the law argument, they claimed, in passing, that the court overlooked the authorities they cited relating to its interpretation of the memorandum of agreement's liquidated damage clause. The clause should be read, plaintiffs argued, "in light of the contract for the sale of the [p]remises" and interpreted to apply only to events prior to November 21, 1989, the date of the closing of title thereto. This same argument as to the validity and effectiveness of the liquidated damage clause was made in opposition to the motion to dismiss the original complaint, on the reargument thereof and, finally, in opposition to the motion to dismiss the second amended complaint. Having heard the same argument repeated three times, the court, understandably, did not feel obliged to articulate the claim any further or expound on the reasons why the authorities advanced did not overcome the second amended complaint's defects. Nor was the court required to do so. Plaintiffs, as the renewal/reargument court recognized, failed to meet their burden of proof in providing the court with a basis upon which to grant the motion and to reinstate the previously dismissed causes of action. Once the court found that plaintiffs had failed to set forth any grounds upon which to grant renewal or reargument, it should have concluded its analysis and denied the motion. (See, Duque v. Ortiz, 154 A.D.2d 333, 334, 545 N.Y.S.2d 810; see, also, Klein v. Mount Sinai Hosp., 121 A.D.2d 164, 502 N.Y.S.2d 1018.)

In any event, on the merits, each of the four reinstated causes of action is legally insufficient in that it either...