Beinstein v. Navani

131 A.D.3d 401, 14 N.Y.S.3d 362
CourtAppellate Division of the Supreme Court of the State of New York
DecidedAugust 4, 2015
Docket14781 153575/13
StatusPublished
Cited by9 cases

This text of 131 A.D.3d 401 (Beinstein v. Navani) is published on Counsel Stack Legal Research, covering Appellate Division of the Supreme Court of the State of New York primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Beinstein v. Navani, 131 A.D.3d 401, 14 N.Y.S.3d 362 (N.Y. Ct. App. 2015).

Opinions

Order and judgment (one paper), Supreme Court, New York County (Saliann Scarpulla, J.), entered February 28, 2014, declaring that plaintiffs are entitled to receive defendants Navani and Sahi’s down payment for the subject condominium unit in the amount of $365,000 and that after payment of the down payment amount to plaintiffs the contract is null and void, and dismissing defendants’ counterclaim for specific performance, affirmed, without costs.

Plaintiffs are the sellers, and defendants Navani and Sahi the purchasers, under a purchase and sale agreement relating to a condominium apartment. Plaintiffs seek a declaratory judgment that defendants breached the agreement by failing to close despite plaintiffs’ full performance. Defendants seek specific performance on the basis that their refusal to schedule a closing was justified by plaintiffs’ failure to satisfy a condition precedent to closing. The dispute relates to the apparently uncontested facts that, before the parties executed the contract, the board of managers had determined that the firestopping throughout the building, including in all of the individual apartments, was inadequate and that, at the time the contract was executed, the board was still in the midst of a significant project to complete the firestopping.

Defendants claim that they did not learn of the firestopping [402]*402situation until July 27, 2012, more than a month after they signed the contract. On August 12, 2012, defendants’ lawyer sent a letter to plaintiffs’ counsel stating that “based on the life-safety and other issues surrounding 416 Washington Street and the fact that such substantive issues were never properly disclosed to them beforehand, my clients . . . have made the decision not to go forward with their prospective purchase of Unit 5E.” The letter also demanded the return of defendants’ contract deposit. Over the next two months, the parties apparently had some discussions about resolving the impasse, while the escrow agent continued to hold the deposit. Finally, by letter dated October 17, 2012, plaintiffs’ counsel advised defendants’ counsel that “ [i] t is clear from our conversations and your clients’ actions that the above referred to Purchaser is no longer interested in proceeding to closing and purchasing the Unit. If the Purchasers are prepared to close please contact me immediately and we can proceed accordingly.” By letter dated October 26, 2012, defendants’ counsel responded, stating: “This letter will serve to confirm that my clients . . . are prepared to purchase the above reference [sic] unit from your clients.

“We are ready to set a closing date as soon as: 1) we receive the information set forth in my e-mail (attached) to the Managing Agent; 2) we complete a re-inspection of the Unit (at my clients’ expense, of course, and after authorization from your client; [sic] and 3) after the updated title search has been received and reviewed.” The email referenced in the letter and attached thereto included a request for, inter alia, “confirmation and evidence that the firestopping work has been completed on Unit 5E . . . including permits, paid invoices, and municipal sign off (if any).” Plaintiffs’ counsel responded to the letter the very same day, stating: “Although you have indicated that your clients . . . are prepared to purchase the above Unit, this is to confirm that I have advised you that I do not know under what agreement you are prepared to close, as your clients breached the Contract of Sale dated June 18, 2012. While our clients are amenable to negotiate a new Contract of Sale for the premises, at the present time no agreement has been reached for the sale of the premises in question. Your indication that my partner’s October 17, 2012 correspondence somehow undoes your clients’ breach of Contract, it is rejected [sic]. My partner’s correspondence indicates that our client would be willing to close this matter but certainly not under the terms of the conditions [sic] of the Contract of Sale dated June 18, 2012.

[403]*403“If your clients wish to negotiate the terms of a new Contract of Sale, as my partner’s October 17, 2012 letter indicates, our clients will be willing to entertain same.”

Defendants’ counsel responded by insisting that plaintiffs breached the contract by failing to ensure that the unit was adequately protected from fire. However, he acknowledged that his clients had since been told that the firestopping had been completed, and reiterated their willingness to set a closing date upon receipt of the information and documentation demanded in the email appended to the October 26, 2012 letter. Plaintiffs’ counsel replied in a letter in which he rejected the notion that completion of the firestopping project was a condition precedent to plaintiffs’ performance.

After plaintiffs formally demanded that the escrow agent release the contract deposit to them, and upon defendants’ counter-demand that he continue to hold the deposit in escrow, plaintiffs commenced this declaratory judgment action. Defendants filed a lis pendens and asserted a counterclaim for breach of contract and specific performance. The counterclaim was based on the lack of firestopping in the unit, which, as alleged by defendants, violated the New York City Building Code and rendered the unit unsuitable for legal occupancy. Defendants did not identify any particular provision of the contract that plaintiffs had breached.

Before any discovery had been conducted, plaintiffs moved for summary judgment. They argued that the contract explicitly provided that the unit was being sold as is, that it contained no representations as to the unit’s condition other than what was expressly set forth therein, and that it expressly provided that they had no obligation to restore, alter or repair the premises. Plaintiffs contended that, even after they offered to close despite the purported cancellation in August 2012, defendants’ insistence on confirmation that the firestopping had been completed constituted an effort to impose a new condition on the purchase that was not contained in the contract that had been executed by the parties.

In opposition, defendants invoked, for the first time, paragraph 6 (c) (ii) of the contract, and asserted that plaintiffs had breached the contract by not complying with it. That paragraph provided: “It is a condition of Purchaser’s obligation to close title hereunder that. . . [a]ny written notice to Seller from the Condominium (or its duly authorized representative) that the Unit is in violation of the Declaration, By-Laws or rules and regulations of the Condominium shall have been cured. If the cost of compliance . . . exceeds an aggregate of $50,000.00, [404]*404Seller may cancel the contract unless Purchaser chooses to accept a credit of $50,000.00 and close subject to the violations.”

Defendants argued that plaintiffs breached the clause because the condominium’s bylaws and rules and regulations required that “all valid laws, zoning ordinances and regulations of all governmental bodies having jurisdiction thereof shall be observed,” and 1968 Building Code of City of New York (Administrative Code of City of NY) § 27-345 expressly required the unit to be properly firestopped.

The IAS court granted plaintiffs’ motion and declared that plaintiffs were entitled to payment of the contract deposit. The court held that defendants repudiated the contract in August 2012 when they informed plaintiffs that they did not intend to perform under the contract because of the firestopping issue.

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Cite This Page — Counsel Stack

Bluebook (online)
131 A.D.3d 401, 14 N.Y.S.3d 362, Counsel Stack Legal Research, https://law.counselstack.com/opinion/beinstein-v-navani-nyappdiv-2015.