Opinion
17964/02.
Decided February 14, 2007.
Meryl Wenig, Esq., Brooklyn, NY, Attorney for Plaintiff.
Robert B. Taylor, Esq., New Rochelle, NY, Attorney for Defendant.
This action, in which plaintiff seeks, inter alia, to enforce an option to purchase real property, was tried before the court without a jury.
FACTUAL BACKGROUND
The focus of this lawsuit is a house located at 1438 45th Street in Brooklyn, New York ("the premises"). According to a deed dated February 28, 1962, the house was conveyed to Yetta Borinsky and her three sons-in-law, Morris Kimmel, Daniel Meyer, and Frank Kessel. By deed dated February 4, 1965, Mrs. Borinsky conveyed her share to her daughters Hilda Kimmel and Evelyn Meyer. Thus, assuming that Morris Kimmel had a 25% share, and that Mrs. Borinsky had a 25% share after the 1962 conveyance, and that in 1965 she conveyed her share equally to her daughters Hilda Kimmel and Evelyn Meyer, then Morris and Hilda Kimmel owned 37 ½ % of the premises.
Morris Kimmel died November 21, 1997 at age 84. Hilda Kimmel died September 9, 2000 at age 83. Frank Kessel died April 20, 1983. Daniel Meyer died on April 10, 1988. Evelyn Meyer died March 5, 1995.
In the complaint, plaintiff alleges that she entered into a lease for the subject apartment, five and one-half rooms on the first floor and the basement, in January 1996, with Morris and Hilda Kimmel, listed as landlord. The lease, it is alleged, was for a 25-year period, commencing January 1996 and expiring December 2021. The rent was $800 per month, with no provision for a raise at any time during its 25-year term. Members of plaintiff's family were permitted to occupy the premises, and plaintiff's son and daughter-in-law occupied the apartment since 1996.
The complaint further alleges that in June 1996, plaintiff entered into an option agreement "with the aforesaid Morris and Hilda Kimmel" whereby plaintiff was allegedly granted an option to purchase the entire parcel of real property within the 25-year period of the lease upon written notice to Morris and Hilda Kimmel. The option provided for a purchase price of $325,000 less the rent paid until the option was exercised, but in no event less than $300,000.
The complaint further alleges that on or about March 13, 2002, a holdover proceeding was commenced in Civil Court, by "Estate of Kimmel." On December 12, 2002, plaintiff exercised her option to purchase the real property, but, it is alleged, defendants failed to comply with the obligation in the option agreement to convey the property. Plaintiff, it is alleged, "invested $100,000 in the Real Property by way of numerous improvements thereto in reasonable reliance upon the Option."
The complaint alleges two causes of action: one for specific performance of the option agreement, compelling the defendants to sell plaintiff the subject real property, and one for a permanent injunction preventing the Estate from prosecuting the holdover or otherwise taking any measures to dispossess plaintiff or her "subtenants" from the premises.
The option agreement states it was between Morris Kimmel, Daniel Meyer, Frank Kessel, Hilda Kimmel and Evelyn Meyer, collectively referred to as the Optionor. The blank for Optionee is not filled in. The document states that whereas Optionor owns the premises known as 1438 45th Street, and Optionee is interested in accepting the option, in consideration of $100, an option was granted to acquire the premises upon the terms set forth. Signature lines were provided for Morris Kimmel Daniel Meyer, Frank Kessel, Hilda Kimmel, Evelyn Meyer. Signatures appeared, however, only on the lines for Morris Kimmel and Hilda Kimmel. A notary public's stamp indicates that Morris and Hilda Kimmel signed the agreement on July 3, 1996. Plaintiff signed as Optionee.
Defendants assert several defenses, including that the alleged option agreement was not executed by all parties named as Optionors, violated the Statute of Frauds, lacked consideration, and was unconscionable, and therefore invalid and unenforceable.
FINDINGS OF FACT AND CONCLUSIONS OF LAW
"A contract for the leasing for a longer period than one year, or for the sale, or any real property, or an interest therein, is void unless the contract or some note or memorandum thereof, expressing the consideration, is in writing, subscribed by the party to be charged, or by his lawful agent thereunto authorized by writing" (General Obligations Law § 5-703). An option is an agreement to hold an offer open, and confers upon the optionee the right to purchase at a later date ( Kaplan v Lippman, 75 NY2d 320, 324-325). "Because an option to purchase an interest in real property is in effect a conditional contract for a future conveyance of land, a contract that creates such an option is within the Statute of Frauds" ( Kaplan v Lippman, supra, at 325[Statute of Frauds was satisfied because the option agreement was contained in a written sublease agreement signed by the party to be charged]).
The elements of a cause of action for specific performance of a contract are that the plaintiff substantially performed its contractual obligations and was willing and able to perform its remaining obligations, that defendant was able to convey the real property, and that there was no adequate remedy at law ( see EMF General Contracting Corp. v Bisbee, 6AD3d 45, 51; Piga v Rubin, 300 AD2d 68).
The Lease
Defendants are doubtless correct that a lease for a 25-year term is extremely unusual, especially where, as here, no increases were provided for the entire term. Defendants have also successfully shown that Morris and Hilda Kimmel were elderly, had various ailments, spent most of their time in the house, and that defendant or employees under her control did favors for them. However, there is nothing in the record that shows that Morris or Hilda Kimmel lacked capacity or were otherwise unaware of the terms of the lease or of what they were agreeing to. On the contrary, the testimony of plaintiff, her son and the notary public establish that the Kimmels knew of the unusually lengthy lease term and nevertheless consented to it. While it may be not have been a particularly advantageous bargain from a business point of view, it cannot be said that as a matter of law the lease is void as unconscionable. Although later it became clear that there were other people or entities that had ownership interests in the house, at the time the lease was negotiated and signed, the Kimmels were the only ones living in the house, and they had at least apparent authority to enter into the lease. While the other relatives who may have had an interest in the house may not have known of the terms of the lease, they testified that they were aware that a tenant occupied the apartment and that renovations were being undertaken. Yet nothing was done to terminate the tenancy or stop the renovations, at least until the holdover proceeding in 2002. For all the foregoing reasons, the court concludes that the lease is valid on its face and is enforceable.
The Option Agreement
At the time the option agreement here was drafted, it was clear to all parties that the subject property was not owned solely by the Kimmels, but that there were other interests as well. The option agreement acknowledged this by listing as optionors Daniel Meyer, Frank Kessel, and Evelyn Meyer in addition to the Kimmels. Of course the other optionors could not sign, since they were long since deceased, but no heir, estate, or successor in interest signed either. Plainly, no cause of action for specific performance could possibly be stated against Daniel Meyer, Frank Kessel, Evelyn Meyer or their estates or successors in interest. The only question remaining is whether the option agreement can be enforced to compel the estate or successors in interest of the Kimmels to convey their share of the premises.
The option agreement, drafted by plaintiff, recited that the optionor owned the premises, and provided that "At closing, title to the Premises shall be conveyed free and clear of all liens, claims and encumbrances". Plainly the agreement was for the entire premises, not a portion thereof. Plaintiff so understood by preparing the document listing as optionors all who had an interest and having room for them to sign. The Kimmels also understood that the agreement was an option for the entire premises, in light of the testimony that Mrs. Kimmel told plaintiff she would get the others to sign. Of course that did not happen, but it indicates that the parties understood that this was not a document whereby the Kimmels would convey only their interest in the property. Plaintiff has failed to convincingly demonstrate any reason, and none appears in the record, for this court to exercise its equity jurisdiction to enforce the agreement only to the extent of the Kimmels' partial interest ( cf. Bee Jay Industrial Corp. v Fina, 98 AD2d 738 [partial summary judgment was correctly granted to plaintiff against defendant George Fina, who asserted he was ready, willing and able to convey his one-half interest in the property, albeit for the full purchase price]). To the extent plaintiff is entitled to some recognition in return for engaging in renovations of the demised premises, the 25-year term of the lease without any increases provides ample consideration for their investment.
Accordingly, the court concludes that the option agreement is unenforceable. Plaintiff's first cause of action for specific performance is dismissed. The second cause of action for an injunction preventing defendants from taking any measures to dispossess plaintiff or her "subtenants" from the premises is likewise dismissed. However, if plaintiff or her subtenant fails to comply with the lease, whether by nonpayment or any other breach, defendants may undertake any remedy they see fit, including commencing a landlord-tenant proceeding.
The foregoing constitutes the decision and judgment of this court.