Fallica v. Manzolillo

210 A.D.2d 660, 619 N.Y.S.2d 409, 1994 N.Y. App. Div. LEXIS 12431
CourtAppellate Division of the Supreme Court of the State of New York
DecidedDecember 8, 1994
StatusPublished
Cited by4 cases

This text of 210 A.D.2d 660 (Fallica v. Manzolillo) 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
Fallica v. Manzolillo, 210 A.D.2d 660, 619 N.Y.S.2d 409, 1994 N.Y. App. Div. LEXIS 12431 (N.Y. Ct. App. 1994).

Opinion

Yesawich Jr., J.

Appeals (1) from an order of the Supreme Court (Williams, J.), entered September 14, 1993 in Sullivan County, upon a decision of the court in favor of plaintiff, and (2) from the judgment entered thereon.

In June 1988, plaintiff entered into an agreement with defendants James Manzolillo and Memory Lane of Cochecton, Inc. (hereinafter Memory Lane) whereby she agreed to manage a bar and restaurant owned by Memory Lane, situated on real property owned by defendant Jawil Acres, Inc., for compensation of $300 per week and the use of an apartment on the premises. At the time, Manzolillo, along with his associate, William Ingrassia, owned all of the shares of both Memory Lane and Jawil, and it was anticipated that Manzolillo would buy out Ingrassia’s interest in both corporations and that plaintiff would eventually purchase the business from Manzolillo. In August 1988, plaintiff and Manzolillo entered into an agreement for the sale of the bar building and four acres of the surrounding land, along with all of the shares of Memory Lane. Consummation of the sale was contingent upon plaintiff obtaining a mortgage loan in the amount of $100,000, and also on her diligent pursuit of a liquor license. Upon signing the contract of sale, plaintiff gave Manzolillo a deposit of $9,000 against the purchase price, which he then used to purchase Ingrassia’s interest in Memory Lane and Jawil.

For over a year, while she attempted to obtain the required financing, plaintiff continued to manage the business and took steps to increase its profitability. Despite these efforts, the bar [661]*661and restaurant did not generate sufficient income to pay plaintiff the $300 weekly salary called for in the management agreement, nor to meet its other expenses, and plaintiff found it necessary to invest over $50,000 of her own funds in the business to keep it afloat. Defendants attempted to schedule a closing on October 2, 1989, but when they were informed that plaintiff had not yet obtained financing, they responded by advising that if no agreement was reached by October 30, 1989, the sale contract would be voided and plaintiff’s down payment returned. Plaintiff agreed and, in addition, indicated her willingness to terminate the management agreement, upon return of the amount she had contributed to the business. At this point, however, defendants apparently had a change of heart, and on November 3, 1989 they notified plaintiff that if the closing was not scheduled within 30 days, the down payment would be forfeited and the liquor license removed from the premises. Negotiations broke down, and on November 16, 1989 Manzolillo removed the liquor license and turned off the electric and telephone service to the bar and restaurant, rendering continued operation of the business impossible.

Defendants’ steadfast refusal to return to plaintiff any of the funds she had advanced prompted her to bring this action, in which she seeks, inter alia, to have an equitable lien imposed upon the real property in the amount of $55,000. While the suit was pending, Manzolillo apparently dissolved both corporations, sold the bar and restaurant as well as 12 acres of the surrounding real property to a third party, and entered into a contract of sale for the rest of the land formerly owned by Jawil.

A bench trial was held. Defendants appeal from the resulting order and judgment entered thereon, which awarded plaintiff an equitable lien in the amount of $50,066.63 against the premises, a vendee’s lien of $9,000 and a money judgment against defendants for the same amounts.

An equitable lien may be granted in favor of a person who, due to the nature of his or her relationship with a property owner, has relied upon that owner’s unfulfilled promise to convey the property, and as a result has expended funds to preserve or improve it in anticipation of the conveyance (see, Johnston v Martin, 183 AD2d 1019, 1020; see also, 75 NY Jur 2d, Liens, § 20, at 69-70). Here, the record does not support an award of this type, for there is simply no evidence that plaintiff and Manzolillo were close friends or, in fact, anything more than mere acquaintances (see, Prado v De Latorre, 194 [662]*662AD2d 656, 657, lv denied 82 NY2d 661; Bontecou v Goldman, 103 AD2d 732, 733; compare, Sharp v Kosmalski, 40 NY2d 119, 120-121; Johnston v Martin, supra; Hornett v Leather, 145 AD2d 814, lv denied 74 NY2d 603).

Furthermore, plaintiff has neither alleged nor proven that Manzolillo promised to transfer the premises to her other than in accordance with the terms of the sales contract, which was expressly conditioned on plaintiff obtaining a financing commitment. Given that she was unable to secure financing, and Manzolillo had the right, in that event, to unilaterally terminate the contract, plaintiff had no reasonable expectation of future ownership that might form the basis for an equitable lien (see, Lester v Zimmer, 197 AD2d 783, 784; Scivoletti v Marsala, 97 AD2d 401, 402-403, affd 61 NY2d 806).

Nevertheless, Supreme Court found, and we agree, that plaintiff made a good-faith attempt to acquire financing. Further, we are not favorably disposed to defendants’ contention that her failure to apply for a liquor license constitutes a default and precludes imposition of a vendee’s lien in her favor, for defendants, by acquiescing in plaintiff’s delay, waived their right to demand strict compliance with that condition. In view of the foregoing and the fact that the sales contract expressly provides that "[a]ll money paid on account of [the] contract” is to constitute a lien on the premises, plaintiff is entitled to such a lien, to the extent that she has advanced a portion of the consideration that was to be paid under the contract.

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Cite This Page — Counsel Stack

Bluebook (online)
210 A.D.2d 660, 619 N.Y.S.2d 409, 1994 N.Y. App. Div. LEXIS 12431, Counsel Stack Legal Research, https://law.counselstack.com/opinion/fallica-v-manzolillo-nyappdiv-1994.