Opinion
No. 503182/2015.
10-14-2015
Sam GEE, Plaintiff, v. ZEE YING WNG, Delta Property Associates, LLC and Delta Ii Properties LLC, Defendants.
Lawrence R. Gelber, Attorney at Law, Brooklyn, Attorney for Plaintiffs. Michael L. Cirrito, Esq., White, Cirrito & Nally, LLP, Hempstead, Attorney for Defendants.
Lawrence R. Gelber, Attorney at Law, Brooklyn, Attorney for Plaintiffs.
Michael L. Cirrito, Esq., White, Cirrito & Nally, LLP, Hempstead, Attorney for Defendants.
CAROLYN E. DEMAREST, J.
In this action by plaintiff Sam Gee (plaintiff) against defendants Zee Ying Wong (defendant), Delta Property Associates, LLC, and Delta II Properties LLC for specific performance and a declaratory judgment, breach of contract, and legal fees and costs, defendant moves, under motion sequence number one, for an order dismissing plaintiff's verified complaint, pursuant to CPLR 3211(a)(1), based upon the ground that a defense is founded on documentary evidence, and, pursuant to CPLR 3211(a)(7), upon the ground that plaintiff's verified complaint fails to state a cause of action. Plaintiff cross-moves, under motion sequence number two, for an order, pursuant to CPLR 3211(c), treating defendant's motion to dismiss as a motion for summary judgment, and hearing his cross motion for summary judgment, and (2) granting him summary judgment, pursuant to CPLR 3212, on the first and second causes of action asserted in his verified complaint, and denying defendant's pre-answer motion to dismiss.
By a stipulation dated April 23, 2015, the parties agreed that Delta Property Associates, LLC and Delta II Properties LLC, which are owned in equal shares by plaintiff and defendant, were named solely as nominal defendants, and that they would not be required to appear, answer, or move as to the verified complaint, that no default judgment would be taken against them, that they would be bound by any decision, directive, or order of the court, and that such decision, directive, or order would be enforceable against them.
BACKGROUND
Beginning in 1983, plaintiff owned and operated a refrigeration and air conditioning company called Dun–Rite Commercial Refrigeration Corp. (Dun–Rite), which operated in New York City, including the boroughs of Queens and Brooklyn. Defendant has, for decades, owned and operated a seafood business in New York City. In the late 1980s or 1990, plaintiff met defendant when he installed refrigeration at one of defendant's seafood stores. According to plaintiff, approximately 25 years ago, he was approached by a real estate broker who asked him if he knew anyone who would be interested in purchasing a building on Norman Avenue in Brooklyn that had formerly housed a seafood business with refrigeration equipment. He then approached defendant and asked her if she was interested in purchasing the building and she proposed that they purchase the building together as partners.
Plaintiff and defendant agreed to purchase the building together, and, on December 20, 1993, they formed Delta Property Associates, a New York general partnership, in which they were 50–50 partners. Plaintiff and defendant also held equal membership interests in Delta II Properties LLC, a limited liability company, and Delta II Properties, LLC, another limited liability company. Through the years, plaintiff and defendant purchased properties until they, through these business entities of which they were the principals, owned four properties, two of which are located in Queens and two of which are located in Brooklyn.
These properties consist of: (1) 260 Norman Avenue, in Brooklyn, New York (the Norman property), (2) 187 Kent Avenue, in Brooklyn, New York (the Kent property), (3) 1301 Sanford Avenue, in Queens, New York (the Sanford property), and (4) three condominium units: ground floor, Unit 3D, Unit 5D, and parking space 6 in a building at 27–16 41st Avenue in Long Island City, New York (the LIC Units). Title to the Norman property was held by Delta Property Associates, and title to the LIC Units was held by Delta II Properties, LLC. Title to the Kent property was held by Delta II Properties LLC by a deed dated December 17, 2001 and recorded on June 18, 2001. Plaintiff asserts that he leased and managed the buildings and would take care of the exterior of the properties, while defendant would manage the business side, such as phone calls, the collection of rents, and the receipt of mail.
In 2002, plaintiff wanted to retire and sold Dun–Rite to his brother. He states that, at that time, he told defendant that he wished to split up the businesses and divide the properties, but she told him that she could not do it. He asserts that he continued to wait to split up the properties while defendant continually told him that she could not do it, but after nine years of waiting, he insisted that the properties be divided between them. Since the properties had increased considerably in value from the time that plaintiff and defendant purchased them, defendant's daughter, Lina Wong (Lina), obtained appraised values for the properties. The appraised values obtained were: (1) $3,200,000 for the Norman property, with an appraisal date of November 5, 2011, (2) $6,000,000 for the Kent property, with an appraisal date of September 14, 2011, (3) $6,350,000 for the Sanford property, with an appraisal date of October 12, 2011, and (4) $1,810,000 for the LIC Units, with an appraisal date of December 16, 2011. Plaintiff agreed to use these appraised values in dividing the properties between himself and defendant. Since the properties did not appraise at the same values, plaintiff and defendant agreed that one of them would pay cash to the other, using the appraised values to determine the amount of cash that would be paid.
Plaintiff submitted his affidavit in support of his cross-motion for summary judgment. Defendant has submitted only the affidavits of her two children, Lina and Steven, and her attorney's affirmations. The plaintiff's recitation of the facts is therefore substantially undisputed and his version of the facts is accepted by the Court.
In early 2012, plaintiff met with defendant and her accountant, Muriel Cheng (Cheng), and defendant proposed a written plan, prepared by Cheng, in which defendant would end up with the two large properties, i.e., the Kent property and the Sanford property, and plaintiff would end up with the two small properties, i.e., the Norman property and the LIC Units. Plaintiff did not agree to this, asserting that he and defendant should each take one large property and one small property. In October 2012, plaintiff retained Lydia Mann, Esq. (Mann) as his attorney in connection with the property transfers, to whom he had been referred by his accountant, Louis Miu (Miu).
On December 20, 2012, plaintiff and defendant met to finalize their plan to split up the properties. Present at this meeting were defendant, Lina, and defendant's attorney, Glenn Lau–Kee, Esq. (Lau–Kee), along with plaintiff and his attorney, Mann. The meeting lasted approximately three hours. According to plaintiff, he and defendant each chose a large property and a small property, and he allowed defendant to choose which large property she wanted first. Defendant chose the Sanford property, and plaintiff was to receive the Kent property. Plaintiff then chose the Norman property and defendant was to receive the LIC Units. Lau–Kee drafted and handwrote a contract, which was executed by both plaintiff and defendant (the agreement).
The agreement stated that it was made as of December 20, 2012 between plaintiff and defendant who were principals of Delta Properties Associates, which was to be converted into a limited liability company, and also the principals of Delta II Properties, LLC and Delta III Properties, LLC. Together the three entities were designated as the Companies. The agreement set forth that the Companies owned the four properties, and that “[t]he parties have agreed to divide and allocate their respective interests in the [p]roperties between themselves as provided [t]herein.” The agreement provided that for good and valuable consideration, the receipt and adequacy of which was thereby acknowledged, the parties had agreed to the terms that followed.
The agreement stated, in paragraph 1 and paragraph 2, respectively, that plaintiff shall be allocated the interests associated with the ownership of the Sanford property and the LIC Units, and defendant shall be allocated the interests associated with the ownership of the Kent property and the Norman property. In paragraph 3 of the agreement, the parties acknowledged the appraised values of each of the properties (which were the appraised values discussed above), and each property, its value, and its appraisal date were listed in the agreement. Paragraph 3 of the agreement further set forth that it was acknowledged that “for purposes of the agreement only, the parties have agreed to increase the appraised value by 20% (the agreed value).” Paragraph 4 of the agreement stated that the parties shall use the agreed values in determining the amount that plaintiff was to pay to defendant upon the transfer of the properties, subject to certain listed adjustments.
Paragraph 5 of the agreement provided that upon the transfers of the interests of the properties between the parties, each party shall be independent of the other's obligations, rights, and liabilities with respect to the allocated properties. Paragraph 6 of the agreement set forth that each party would pay his or her own attorney's fees, but agreed to share equally the accountant fees of Cheng and her firm that were charged for the sole purpose of the separation of interests of the properties under this agreement, including all prior work in connection therewith. Paragraph 7 of the agreement stated that “[t]he parties shall use their best efforts to consummate the transactions contemplated herein as soon as advised by both parties' CPAs.”
Plaintiff and defendant did not set a closing date in the agreement. Plaintiff asserts that, pursuant to paragraph 7 of the agreement, they agreed to close as soon as their accountants advised them to close. Plaintiff states that Miu believed that they could close in 2014, but Cheng believed that they should wait until 2015. Plaintiff asserts that he agreed to wait until 2015 because defendant would only agree to close earlier than 2015 if he agreed to pay any taxes that she incurred by closing in 2014.
The first step (phase I) taken to effectuate the transfers was the conversion of Delta Property Associates into a limited liability company (as had been set forth in the agreement), which was carried out by a Conversion Agreement and a Certificate of Conversion. Miu attests that Cheng insisted that the individual transfers of the properties, i.e., phase 2, had to wait until 2015 and that if plaintiff wanted to move forward sooner, he would have to indemnify defendant for any tax exposure.
Pursuant to the Conversion Agreement dated December 20, 2012 (the same date as the agreement), Delta Property Associates, which held title to the Norman property, was converted into Delta Property Associates, LLC pursuant to Limited Liability Company Law § 1006, and each of the parties' 50% partnership interest in Delta Property Associates was converted to a 50% membership interest in Delta Property Associates, LLC. A Certificate of Conversion of Delta Property Associates to Delta Property Associates, LLC was filed with the New York State Department of State on December 21, 2012. In contemplation of the transfer of the properties, the Norman property was then transferred from Delta Property Associates to Delta Property Associates, LLC by a deed dated December 21, 2012 and recorded on June 12, 2013.
An e-mail from Wing Yu (Yu), an associate attorney of defendant's attorney, Lau–Kee, to Cheng, dated December 27, 2012, which was copied to Lau–Kee, Mann, and Lina, advised them that Delta Property Associates had been converted to Delta Property Associates LLC and attached the filing receipt from the New York State Department of State. In that December 27, 2012 e-mail, Yu inquired as to Cheng's projected time frame for the split of properties between plaintiff and defendant. Cheng responded by e-mail the same date, that “[o]ur goal is to merge Delta into Delta II in 2012 in order to minimize the tax impact to the members,” and that the “IRS usually takes a two year approach with regard to step transaction.” She explained that “[t]herefore, we usually advise our client[s] to take a two year approach to be on the safe side.” There were further e-mails in January, May, June, and July 2013 between Lau–Kee, Mann, and Yu, which discussed the tax code and avoiding the risk of tax liability regarding the transfers.
Defendant's attorney, Lau–Kee, in a July 2, 2013 e-mail to Mann, advised that he had had several conversations with Cheng, and that Cheng had had conversations with plaintiff's accountant, Miu, and that the accountants were “clear on the tax code analysis of the problem.” He further conveyed to Mann that when he spoke to Cheng, “she said that she maintain[ed] her position that to eliminate the risk of an adverse tax consequence, the transaction should not take place before calendar year 2015.” He explained that in Cheng's “judgment, any closing before then would entail a risk of substantial tax liability to the principals.” In a July 8, 2013 e-mail from Lau–Kee to Mann, in response to Mann's e-mail request to “provide a timeline in which everything can be transferred,” Lau–Kee stated that it was his “understanding ... that any time after January 1, 2015 the transfer of properties can take place,” and that they could “use this as a[n] earliest date' for the transaction.” Lau–Kee's July 8, 2013 e-mail was forwarded to Cheng and Lina and, in an e-mail in response the same day, Cheng stated “thank you for the update,” and did not dispute the accuracy of Lau–Kee's statement.
An October 29, 2014 e-mail from Mann to Lau–Kee advised him that plaintiff would like to start the process of consummating the transfers so that they could close by early January 2015. When “Mann did not receive a response from Lau–Kee, she telephoned him in November 2014, at which time, Lau–Kee said that he would consult with defendant. A December 29, 2014 e-mail from Lau–Kee to Mann advised that defendant was waiting for the results of one appraisal, and that he understood that the others had been completed. According to Mann, she had no idea why defendant was waiting for the results from an appraisal since the parties had already expressly agreed to use the appraisals set forth in the agreement.
Plaintiff asserts that, on or about March 9, 2015, defendant, through her son, Steven Wong (Steven), advised him that defendant did not intend to abide by the agreement and close on the property transfers. According to Steven, he had lunch with plaintiff in January or February 2015, at which time, he told plaintiff that the appraisals set forth in the agreement were obsolete and far too low.
On March 19, 2015, plaintiff filed this action against defendant, as well as against Delta Property Associates, LLC and Delta II Properties LLC, as nominal defendants, and simultaneously filed notices of pendency against the Norman property and the Kent property. Plaintiff's first cause of action for specific performance and a declaratory judgment alleges that he has performed in accordance with the agreement and remains ready, willing, and able to perform his contractual obligations, and that defendant has attempted to cancel the agreement and has refused to consummate the transfers of title as set forth in the agreement. Plaintiff seeks specific performance of the agreement requiring defendant (and Delta Property Associates, LLC and Delta II Properties LLC who hold title to the properties) to transfer the Norman property and the Kent property to him upon his (and Delta Property Associates, LLC and Delta II Properties LLC's) transfer to defendant of the Sanford property and the LIC Units, and a declaratory judgment stating his right to complete the sale. Plaintiff's second cause of action for breach of contract alleges that he has fulfilled all of his obligations under the agreement, and is ready, willing, and able to make the exchange of the properties and to pay the balance of any adjustments for the properties upon defendant's tender of full performance in accordance with the terms of the agreement, but that defendant has wrongfully refused to consummate the transaction. Plaintiff seeks to recover general and consequential damages, the expenses incurred in preparing to enter and take possession of the properties and for due diligence compliance, and the difference between the agreed price and the value of the properties at the time of the breach. Plaintiff's third cause of action seeks legal fees in excess of $50,000 incurred in prosecuting this action based upon defendant's alleged willful breach of the agreement. On May 21, 2015, defendant filed her instant motion, and, on June 18, 2015, plaintiff filed his motion.
DISCUSSION
Defendant argues that the agreement is unenforceable because paragraph 7 of the agreement, stating “[t]he parties shall use their best efforts to consummate the transactions contemplated herein as soon as advised by both parties' CPAs,” stated a condition precedent, which was never met. Specifically, defendant claims that in order for the agreement to become binding and enforceable, both parties' CPAs had to advise them to consummate the transactions.
Defendant contends that Cheng never advised her to consummate the contemplated transactions as required under paragraph 7 of the agreement. In support of this contention, defendant relies upon an e-mail which Cheng sent on May 5, 2015 (after this action was commenced) to Lina, in response to an e-mail from Lina, also sent on May 5, 2015, in which Lina stated that her attorney “just want[ed] to make sure that [she] ha[d] not advised [defendant] on making [sic] any actions to consummate the agreement in [an] e-mail or telephone at all.” Cheng responded that she “did not advi[s]e her to consummate the deal with [plaintiff].”
Defendant, in claiming that the terms of paragraph 7 of the agreement constituted a condition precedent to her performance under the agreement, asserts that the phrase “as soon as” is devoid of any time components and set no time for the performance of the transfer of the properties. Defendant argues, based upon Cheng's May 5, 2015 e-mail, that the condition of paragraph 7 of the agreement was never met, nor was it excused, and that she had no duty to perform unless and until Cheng advised her to consummate the contemplated transaction. She contends that since the condition was never met, the agreement is rendered unenforceable.
Plaintiff, in opposition, asserts that paragraph 7 of the agreement was not a condition precedent, but, rather, was nothing more than a “place-holder” for the closing date, which was to be determined by the accountants based on tax considerations. He contends that the phrase “as soon as” simply meant that the parties had agreed to close at the earliest time possible as determined by the accountants, which, as defendant's transactional attorney, Lau–Kee, stated, in his July 8, 2013 e-mail, was January 1, 2015.
It is well established that “[a] condition precedent is an act or event, other than a lapse of time, which, unless the condition is excused, must occur before a duty to perform a promise in the agreement arises' “ (Oppenheimer & Co. v. Oppenheim, Appel, Dixon & Co., 86 N.Y.2d 685, 690 [1995], citing Calamari and Perillo, Contracts § 11–2, at 438 [3d ed]; see also Ashkenazi v. Kent S. Assoc., LLC, 51 AD3d 611, 611 [2d Dept 2008] ; Klewin Bldg. Co., Inc. v. Heritage Plumbing & Heating, Inc., 42 AD3d 559, 560 [2d Dept 2007] ; Preferred Mtge. Brokers v. Byfield, 282 A.D.2d 589, 590 [2d Dept 2001] ). “[I]t is for the court to decide, as a matter of law, whether an express condition precedent to performance exists under the terms of a contract” (Rooney v. Slomowitz, 11 AD3d 864, 865 [3d Dept 2004] ; see also Two Guys from Harrison–N.Y. v. S .F.R. Realty Assoc., 63 N.Y.2d 396, 403 [1984] ).
“As a general rule, it must clearly appear from the agreement itself that the parties intended a provision to operate as a condition precedent” (Kass v. Kass, 235 A.D.2d 150, 159 [2d Dept 1997], aff'd 91 N.Y.2d 554 [1998] ). “If the language is in any way ambiguous, the law does not favor a construction which creates a condition precedent” (Ashkenazi, 51 AD3d at 611 ; see also Kass, 235 A.D.2d at 159 ; Manning v. Michaels, 149 A.D.2d 897, 898 [3d Dept 1989] ). “A contractual duty will not be construed as a condition precedent absent clear language showing that the parties intended to make it a condition” (Ashkenazi, 51 AD3d at 611–612 ; see also Unigard Sec. Ins. Co. v. North Riv. Ins. Co., 79 N.Y.2d 576, 581 [1992] ; Roan/Meyers Assoc., L.P. v. CT Holdings, Inc., 26 AD3d 295, 296 [1st Dept 2006] ; Rooney, 11 AD3d at 865 ).
Here, there is no clear language in the agreement itself that the parties intended paragraph 7 to operate as a condition precedent. Paragraph 7 of the agreement fails to establish an unambiguous intent to condition the contract's formation or performance on the advice of the accountants (see Restaurant Creative Concepts Mgt., LLC v. Northeast Rest. Dev., LLC, 83 AD3d 1189, 1191 [3d Dept 2011] ; Su Mei, Inc. v. Kudo, 302 A.D.2d 740, 741 [3d Dept 2003] ). Conspicuously absent from paragraph 7 of the agreement is “unmistakable language of condition' ... such as if,' unless and until' and/or and void' (Su Mei, Inc., 302 A.D.2d at 741, quoting Oppenheimer & Co., 86 N.Y.2d at 691 ), or the use of conditional language, such as “on the condition that,” “provided that,” “subject to,” or “in the event that” (Israel v. Chabra, 537 F3d 86, 93 [2d Cir2008], certified question accepted on other grounds 11 NY3d 744 [2008], and certified question answered on other grounds 12 NY3d 158 [2009] ; Ellan Corp., Inc. v. Dongkwang Intern. Co., Ltd., 2011 WL 4343844, *2 [SD N.Y.2011] ), which would establish the parties' clear intent to expressly condition the formation and performance of the agreement upon advice from both parties' CPAs.
“When interpreting a contract, the construction arrived at should give fair meaning to all of the language employed by the parties, to reach a practical interpretation of the parties' expressions so that their reasonable expectations will be realized” (Fernandez v. Price, 63 AD3d 672, 675 [2d Dept 2009] ; see also W.W.W. Assoc. v. Giancontieri, 77 N.Y.2d 157, 162 [1990] ; McCabe v.. Witteveen, 34 AD3d 652, 654 [2d Dept 2006] ). Here, it appears from the language used that paragraph 7 of the agreement was simply a timing mechanism to determine the date of transfer of the properties in accordance with the agreed-upon terms, rather than a condition precedent to performance.
The parties' conduct also does not support treating paragraph 7 as setting forth a condition precedent. Subsequent to the agreement, the parties began performance by converting Delta Properties Associates to a limited liability company, Delta Property Associates, LLC, in contemplation of the property transfer and then transferred the Norman property to Delta Property Associates, LLC. In addition, as evidenced by their e-mails, only the issue of the timing of the transfer remained to be established.
Defendant argues, however, that it is necessary to construe paragraph 7 of the agreement as a condition precedent to performance in order to effectuate the parties' intent to share the properties equally. She contends that this intent was expressed by paragraph 4 of the agreement, which called for plaintiff to remit cash to her to balance out the valuation differences in the 2011 appraisals. She notes that paragraph 6 of the agreement further reflected an equal division between the parties by requiring them to share equally the accountant fees charged by Cheng. She criticizes the appraisals used in the agreement and asserts that the changes in the values of the properties over the past two and a half years have operated to defeat this intent.
Defendant notes that under the agreement, the combined 2011 appraised value of the Sanford property and the LIC Units, which were allocated to her, was $8,160,000, and the combined 2011 appraised value of the Kent property and the Norman property, which were allocated to plaintiff, was $9,200,000. She further points out that the agreement increased the appraisals by 20%, deeming the Sanford property and LIC Units to be worth $9,172,000 and the Kent property and the Norman property to be worth $11,040,000. These deemed values then provided the basis to determine the amount that plaintiff would owe defendant upon the transfer to achieve a 50–50 split.
Defendant claims that the appraisals, which were recited in the agreement and upon which the agreed values were based, were procured for “inconsistent purposes.” Specifically, defendant points out that with respect to the Kent property, the September 28, 2011 letter from Ray Brower Associates Real Estate Appraisers and Consultants stated that “[i]n accordance with your request, we have inspected the [Kent] property for the purpose of estimating the As Is' market value of the leased fee interest, as of September 14, 2011, and that “[t]he intended use of this appraisal report is for loan underwriting purposes.” She points to the fact that with respect to the Norman property, the November 14, 2011 letter from Real Property Consultants stated that it had prepared a condensed appraisal of “the as is' market value of the fee simple interest in the [Norman property]” as of November 5, 2011. She asserts that with respect to the Sanford property, the appraisal prepared by RCI Appraisal Corporation, dated October 28, 2011, stated that the purpose of this assignment was “to estimate the fair market value of the Fee Estate of the [Sanford] property as of October 14, 2011 for Delta II Properties LLC” and that, with respect to the LIC Units, the appraisal by RCI Appraisal Corp., dated December 29, 2011, states “the intended use of this appraisal report is for the lender/client to evaluate the property that is the subject of this appraisal or a mortgage finance transaction.” She contends that these appraisals were, therefore, problematic because they did not take a uniform approach or evaluate “best use” of the properties, thereby defeating the parties' intent to share 50–50.
While defendant now criticizes the appraisals used, it is undisputed that it was Lina who had the appraisals used in the agreement prepared on behalf of defendant, and defendant expressly agreed, in the agreement, to use them. Moreover, in the agreement, the parties acknowledged the appraised values of each of the properties, as set forth in the appraisals, and expressly agreed, in the written agreement, that these appraisals were to be used as the basis for the valuation of the properties for purposes of the allocation and transfer of the properties under the agreement.
Defendant further contends, however, that by the time that plaintiff decided he was ready, in 2015, to use his “best efforts” to consummate the terms of the agreement, the appraisals were obsolete because they were performed in 2011. Defendant's son, Steven, states in his affidavit that he advised plaintiff, at a meeting in late January/early February 2015, that he was aware that the numbers in the 2011 appraisals were over three years old at that time and were obsolete and far too low. He further states that he also informed plaintiff that he had offers from real estate brokers of upwards of $45 million and that the properties were now worth in excess of $50 million. He asserts that he “surmised” that the reason his mother's accountant did not advise his mother to consummate the transaction was that “the appraisals were faulty and the increased value of the propert[ies] made the proposed splits grossly uneven.” He annexes an unsigned appraisal for the Kent property, dated March 2015, prepared by Kalmon Dolgin Affiliates Inc. at his request, which, on page 55, states that it is Neil A. Dolgin's opinion that the owner of the Kent property would not receive less than $50,000,000 and could obtain as much as $60,000,000 for it. This hearsay document has no bearing on the issues before the Court in light of the unequivocal terms of the agreement.
Plaintiff has submitted Mann's affidavit, in which she sets forth that she represented plaintiff in the negotiation and execution of the agreement and continued to represent him thereafter in seeking to close on the agreed property transfers. Mann asserts that the parties had agreed that the appraisals used were appropriate for the purposes of the agreement, and expressly acknowledged the appraised values of the properties in the agreement. She explains that the parties did not set a closing date in the agreement at the December 20,2012 meeting because their accountants were still working to resolve the issue of minimizing the tax liabilities engendered by the transfers. While both parties agreed to the transfer of the properties, they agreed to wait to close until such time as the tax liabilities would be minimized.
The e-mails demonstrate, and defendant does not dispute, that the parties delayed the transfer in order to avoid tax consequences, at defendant's insistence. While the value of the properties may have appreciated in value due to the delay in closing, this was a risk assumed by defendant and does not render the terms of the agreement non-binding or provide a basis for her to avoid her contractual obligations to plaintiff. Furthermore, although defendant has provided an e-mail from Cheng stating, without any explanation, that she did not tell her to close, Cheng's failure to direct a closing does not release defendant from her contractual obligations. Notably, “all contracts imply a covenant of good faith and fair dealing in the course of performance” (511 W. 232nd Owners Corp. v. Jennifer Realty Co., 98 N.Y.2d 144, 153 [2002] ; see also Fairway Prime Estate Mgt., LLC v. First Am. Intl. Bank, 99 AD3d 554, 558 [1st Dept 2012] ). It is noted that even if paragraph 7 of the agreement were construed as a condition, “[a] party to a contract cannot rely on the failure of another to perform a condition precedent where he [or she] has frustrated or prevented the occurrence of the condition” (ADC Orange, Inc. v. Coyote Acres, Inc., 7 NY3d 484, 490 [2006] ; see also Fairway Prime Estate Mgt., LLC, 99 AD3d at 557 ). Significantly, no affidavit has been submitted by Cheng or defendant, and Cheng's May 5, 2015 e-mail, which was sent after this action was commenced, contradicts the numerous e-mails, described above, which were sent prior to the commencement of this action.
Although defendant argues that the claimed change in the value of the properties due to the delay in closing will result in the properties not being equally divided, “[a] court may not write into a contract conditions the parties did not insert by adding or excising terms under the guise of construction, nor may it construe the language in such a way as would distort the contract's apparent meaning' “ (Matter of Bokor v. Markel, 104 AD3d 683, 683 [2d Dept 2013], quoting Matter of Tillim v. Fuks, 221 A.D.2d 642, 643 [2d Dept 1995] ). The court, under the guise of construction, cannot read an express condition into an agreement which is otherwise not present (see Camaiore v. Farance, 50 AD3d 471, 471–472 [1st Dept 2008] ). Since there is no clear language that the parties intended to create a condition precedent to the mutual obligations of the agreement to transfer the properties as set forth therein, the court will not construe paragraph 7 of the agreement as a condition precedent (see Ashkenazi, 51 AD3d at 611 ).
Defendant additionally argues that the creation of a property interest was dependent on an event that might never happen. The timing of the property transfers, however, was not illusory, but, as evidenced by the e-mails, was intended to take place when the parties' tax exposure from the transfers could be limited, which, according to the July 8, 2013 e-mail, was as of January 1, 2015. Where no closing date is specified and the time for the transfer of property is indefinite, a reasonable time is implied and the contract is enforceable (see Simpson v. 1147 Dean, LLC, 116 AD3d 835, 836 [2d Dept 2014] ; Kaiser–Haidri v. Battery Place Green, LLC, 85 AD3d 730, 733 [2d Dept 2011] ; Omar v. Rozen, 55 AD3d 705, 705 [2d Dept 2008] ; Kirk Assoc. v. McDonald Equities, 155 A.D.2d 281, 282 [1st Dept 1989], appeal denied 75 N.Y.2d 706 [1990] ).
While the two and a half year delay is lengthy, the chain of e-mails reflects that it was agreed upon by the parties, their attorneys, and their accountants in order to avoid adverse tax consequences. The e-mails reflect that it was upon the advice of defendant's accountant, Cheng, that this delay took place. Moreover, a repeated and prolonged attempt to frustrate the closing of a real estate transaction, to which the parties had agreed, in an attempt to deprive plaintiff of the benefit of his bargain, will not deprive him of specific performance (see Piga v. Rubin, 300 A.D.2d 68, 69 [1st Dept 2002], lv dismissed in part, denied in part 99 N.Y.2d 646 [2003] ).
The advice of the parties' accountants did not go to the root of the contract since it was not necessary to the terms of the agreement, but only as to the time for performance. Notably, paragraph 7 of the agreement expressly required the parties to “use their best efforts to consummate the transactions.” Thus, defendant may not thwart the agreement by having her accountant claim, for no good faith reason, that she did not formally advise her to consummate the transaction, particularly in view of the prior e-mails evidencing that defendant had instigated the delay of such consummation to avoid adverse tax consequences and, through her accountant and her attorney, had actually specified a January 1, 2015, closing date.
Defendant further contends that the specified contingency, i.e., that plaintiff and defendant each receive the advice of their respective CPAs, contained no limitation in duration, and, therefore, the agreement violated the rule of perpetuities pursuant to EPTL 9–1.1(a)(2), rendering it void. Defendant asserts that the agreement granted her and plaintiff an option to acquire title to the properties from the limited liabilities companies. She maintains that since the time for the exercise of the option was of unlimited duration, the possibility existed that the occurrence of the specified contingency, namely, that plaintiff and defendant each receive the advice of their respective CPAs, might never happen during the lifetime of anyone in existence plus 21 years, in violation of the rule of perpetuities. This argument is without merit.
The common-law rule against perpetuities provides that “[n]o interest is good unless it must vest, if at all, not later than [21] years after some life in being at the creation of the interest' “ (Symphony Space v. Pergola Props., 88 N.Y.2d 466, 475 [1996], quoting Gray, The Rule Against Perpetuities § 201, at 191 [4th ed 1942] ). This common-law rule against perpetuities has been codified as EPTL 9–1.1. EPTL 9–1.1(a) “sets forth the suspension of alienation rule and deems void any estate in which the conveying instrument suspends the absolute power of alienation for longer than lives in being at the creation of the estate plus 21 years” (Symphony Space, 88 N.Y.2d at 476 ). EPTL 9–1.1(a)(2) provides, in pertinent part, that “[e]very present or future estate shall be void in its creation which shall suspend the absolute power of alienation by any limitation or condition for a longer period than lives in being at the creation of the estate and a term of not more than twenty-one years.” EPTL 9–1.1(b) is the codification of the common-law prohibition of remoteness-of-vesting rule. The violation of the rule of perpetuities under this section occurs if the interest may vest too remotely. EPTL 9–1.1(b) provides that “[n]o estate in property shall be valid unless it must vest, if at all, not later than twenty-one years after one or more lives in being at the creation of the estate and any period of gestation involved.”
“The Rule against Perpetuities evolved from judicial efforts during the 17th century to limit control of title to real property by the dead hand of landowners reaching into future generations” (Symphony Space, 88 N.Y.2d at 475 ). Underlying the rule against perpetuities was the principle that “it is socially undesirable for property to be inalienable for an unreasonable period of time” (Symphony Space, 88 N.Y.2d at 475 ; see also Kaiser–Haidri, 85 AD3d at 732 ).
Here, there was no intention that the parties' rights under the agreement would last indefinitely since, even though a closing date was left open-ended and was not specified, a reasonable time is implied (see Omar, 55 AD3d at 705 ; Carroll v. Eno, 237 A.D.2d 102, 103 [1st Dept 1997] ). Moreover, the agreement does not evince any intention that the parties' rights under the agreement would or could last indefinitely. The agreement does not include any language that binds and inures to the benefit of the successors and assigns of plaintiff or defendant, but, rather, only applied to them, as the parties to the agreement (compare Dimon v. Starr, 299 A.D.2d 313, 313 [2d Dept 2002], lv denied 100 N.Y.2d 501 [2003]. The agreement also provided that the closing of title would occur after the accountants advised them to proceed with the contemplated transaction, and the accountants to which it referred were certain individuals presently living. The agreement does not violate the rule against perpetuities because it is the parties who are to be advised by their CPAs and the allocation of the properties was to be made to the parties within their lifetimes. Thus, the transfers and the vesting of the parties' interests must necessarily occur within the “measuring lives” of the parties themselves (see Morrison v. Piper, 77 N.Y.2d 165, 173 [1990] ; Reynolds v. Gagen, 292 A.D.2d 310, 311 [1st Dept 2002] ; Carroll, 237 A.D.2d at 103 ).
Consequently, defendant has failed to establish a defense based upon documentary evidence and plaintiff's complaint states a viable claim. The Court finds the agreement to be valid and presently enforceable. Defendant's motion to dismiss plaintiff's complaint must be denied.
Plaintiff, in his cross motion, seeks an order, pursuant to CPLR 3211(c), converting defendant's motion to dismiss under CPLR 3211(a)(1) and (7) to one for summary judgment, and granting summary judgment in his favor on his first and second causes of action. CPLR 3211(c) provides that upon the hearing of a motion to dismiss under CPLR 3211(a), “either party may submit any evidence that could properly be considered on a motion for summary judgment,” and “[w]hether or not issue has been joined, the court, after adequate notice to the parties, may treat the motion as a motion for summary judgment.” While the court has not formally given such notice to the parties, the court can nevertheless grant summary judgment under certain circumstances even though issue has not been joined (see Brown v. Decaudin, 129 AD3d 875, 876 [2d Dept 2015] ; Hendrickson v. Philbor Motors, Inc., 101 AD3d 251, 258 [2d Dept 2012]; Four Seasons Hotels v. Vinnik, 127 A.D.2d 310, 320–321 [1st Dept 1987] ). These circumstances include where all parties have requested summary judgment treatment (see Four Seasons Hotels, 127 AD3d at 320), or where the subject dispute does not involve questions of fact, but involves solely issues of law argued by all parties (see O'Hara v. Del Bello, 47 N.Y.2d 363, 367–368 [1979], rearg. denied 48 N.Y.2d 656 [1979] ; Brown, 129 AD3d at 876 ; F & T Mgt. & Parking Corp. v. Flushing Plumbing Supply Co., Inc., 68 AD3d 920, 923 [2d Dept 2009], lv denied 15 NY3d 702 [2010] ; Frydman v. Fidelity Natl. Tit. Ins. Co., 68 AD3d 622, 623–624 [1st Dept 2009] ; Backer v. Bouza Falco Co., 28 AD3d 503, 504 [2d Dept 2006], lv denied 7 NY3d 707 [2006] ). This second circumstance includes the situation where the issue involves the construction, interpretation, and application of an unambiguous contractual provision (see F & T Mgt. & Parking Corp., 68 AD3d at 923 ; Backer, 28 AD3d at 504–505 ). Further, the court may grant summary judgment, despite the lack of joinder of issue, “when the respective submissions of both parties demonstrate that they are laying bare their proof and deliberately charting a summary judgment course” (Hendrickson, 101 AD3d at 258–259; see also Sokol v. Leader, 74 AD3d 1180, 1183 [2d Dept 2010] ; Hopper v. McCollum, 65 AD3d 669, 670 [2d Dept 2009] ; Mancuso v. Rubin, 52 AD3d 580, 582 [2d Dept 2008] ; Tendler v. Bais Knesses of New Hempstead, Inc., 52 AD3d 500, 502 [2d Dept 2008] ; Methal v. City of New York, 50 AD3d 654, 656 [2d Dept 2008] ; Harris v. Hallberg, 36 AD3d 857, 858 [2d Dept 2007] ; Myers v. BMR Bldg. Inspections, Inc., 29 AD3d 546, 546 [2d Dept 2006] ; Jamison v. Jamison, 18 AD3d 710, 711 [2d Dept 2005] ; New York State Higher Educ. Servs. Corp. v. Barry, 267 A.D.2d 567, 567–568 [3d Dept 1999] ; O'Dette v. Guzzardi, 204 A.D.2d 291, 292 [2d Dept 1994] ).
Defendant, in her reply memorandum of law, concedes that “there are, in fact, no triable issues,” and while she has not asked the court to convert her CPLR 3211 motion into a CPLR 3212 motion, she states that she believes the failure of the condition precedent is dispositive of this action. She also states that if summary judgment is to be granted, it should be granted in her favor. Accordingly, it is undisputed that the issues determinative of this action are solely issues of law, namely, the interpretation of paragraph 7 of the agreement and whether it was a condition precedent to defendant's obligation to perform under the agreement. Both parties have laid bare their proof and deliberately charted a summary judgment course. Plaintiff has submitted affidavits and extensive documentary evidence, and defendant has also submitted two affidavits by Lina and one affidavit by Steven in support of her motion and in opposition to plaintiff's cross motion, along with numerous exhibits as documentary evidence. Thus, the court will treat defendant's motion to dismiss as one for summary judgment and address plaintiff's cross motion for summary judgment despite the lack of joinder of issue (see Brown, 129 AD3d at 876 ).
Plaintiff's first cause of action for specific performance and a declaratory judgment seeks a judgment ordering defendant and Delta Property Associates, LLC and Delta II Properties LLC to transfer the Norman property and the Kent property to him simultaneously upon the transfer to defendant of the Sanford property and the LIC Units in accordance with the terms of the agreement.
“The elements of a cause of action for specific performance of a contract are that the plaintiff substantially performed [his or her] contractual obligations and was willing and able to perform [his or her] remaining obligations, that defendant was able to convey the property, and that there was no adequate remedy at law” (EMF Gen. Contr. Corp. v. Bisbee, 6 AD3d 45, 51 [1st Dept 2004], lv dismissed 3 NY3d 656 [2004], lv denied 3 NY3d 607 [2004] ). Plaintiff has made a prima facie showing of his entitlement to judgment as a matter of law on his first cause of action seeking to compel specific performance of the agreement by submitting proof of the validity of the agreement, his performance thereunder, and that he is ready, willing, and able to proceed to closing (see Lot 57 Acquisition Corp. v. Yat Yar Equities Corp., 63 AD3d 1109, 1111 [2d Dept 2009] ; Backer v. Bouza Falco Co., 28 AD3d 503, 505 [2d Dept 2006], lv denied 7 NY3d 707 [2006] ; Cheemanlall v. Toolsee, 17 AD3d 392, 393 [2d Dept 2005] ; EMF Gen. Contr. Corp., 6 AD3d at 51 ; Piga v. Rubin, 300 A.D.2d 68, 69 [1st Dept 2002], lv dismissed in part, denied in part 99 N.Y.2d 646 [2003] ). In opposition, plaintiff has failed to raise any triable issue of fact (see Alvarez v. Prospect Hosp., 68 N.Y.2d 320, 324 [1986] ). Thus, plaintiff is entitled to summary judgment in his favor on his first cause of action for specific performance, requiring conveyance of the Norman property and the Kent property to him in accordance with the terms of the agreement (see CPLR 3212[b] ).
Plaintiff also seeks summary judgment in his favor on his second cause of action for breach of contract, which seeks general and consequential damages and other expenses. “The essential elements of a cause of action to recover damages for breach of contract are the existence of a contract, the plaintiff's performance pursuant to the contract, the defendant's breach of [his or her] contractual obligations, and damages resulting from the breach” (El–Nahal v. FA Mgt., Inc., 126 AD3d 667, 668 [2d Dept 2015] ; see also Dee v. Rakower, 112 AD3d 204, 208–209 [2d Dept 2013] ). Here, plaintiff has not indicated the amount, if any, of financial loss or damages that he has sustained (see Bogdan & Faist v. CAI Wireless Sys., 295 A.D.2d 849, 853 [3d Dept 2002] ). Moreover, there is no indication in the agreement, or by statute, that plaintiff is entitled to recover his costs of litigation, nor does the agreement suggest that consequential damages were contemplated. Indeed such suggestion by plaintiff is inconsistent with this Court's understanding of the agreement. Relief in the form of specific performance is available and has been granted. Thus, plaintiff is not entitled to summary judgment on his breach of contract cause of action.
CONCLUSION
Accordingly, defendant's motion to dismiss is denied, and plaintiff's cross motion, insofar as it seeks summary judgment on his first cause of action, is granted. It is declared that the agreement is a valid and enforceable contract, and defendant, Delta Property Associates, LLC, and Delta II Properties LLC are directed to transfer the Norman property and the Kent property to plaintiff simultaneously upon the transfer to defendant of the Sanford property and the LIC Units, in accordance with the terms of the agreement, within 45 days after service upon them of a copy of this decision and order with notice of entry, or at such other time to which the parties shall agree in writing.
This constitutes the decision, order, and judgment of the court.