| Madison Hudson Assoc. LLC v Neumann |
| 2007 NY Slip Op 07874 [44 AD3d 473] |
| October 18, 2007 |
| Appellate Division, First Department |
| Madison Hudson Associates LLC et al.,Appellants, v Joseph Neumann et al., Respondents. |
—[*1] Stroock & Stroock & Lavan LLP, New York City (Brian M. Cogan of counsel), for JosephNeumann, Charles Herzka and David Weldler, respondents. Westerman Ball Ederer Miller & Sharfstein, LLP, Mineola (Richard Gabriele of counsel), forWilliam Achenbaum, Achenbaum Family Partnership, L.P. and Gansevoort Hotel, LLC,respondents.
Order, Supreme Court, New York County (Charles E. Ramos, J.), entered July 8, 2006,which (1) granted the motion of defendants-respondents Joseph Neumann, Charles Herzka andDavid Weldler (collectively, the Neumann defendants) for summary judgment to the extent ofdismissing the first, second, third, fourth, fifth (except to the extent it seeks an accountingrelating to the operations of the parking lot prior to the sale of the leasehold), eighth (except tothe extent it seeks to recover the reasonable value of certain services performed by RobertGladstone) and tenth causes of action against those defendants, and (2) granted the motion ofdefendants-respondents William Achenbaum, Achenbaum Family Partnership, L.P. andGansevoort Hotel LLC (collectively, the Achenbaum defendants) for summary judgmentdismissing the amended complaint as against those defendants, unanimously modified, on thelaw, to the extent of permitting plaintiff Madison Hudson Associates, LLC (Madison Hudson), toseek recovery under the portion of the fifth cause of action for an accounting for its 15% share ofany profits from the sale of the subject property, and otherwise affirmed, without costs.
This action involves a dispute between members of Hudson Green, LLC (Hudson), an entitythat was formed in connection with the development of a then-undeveloped parcel of land inManhattan located at Ninth Avenue and West 13th Street (the property). Hudson's sole asset,which it acquired in April of 1999, was a 99-year leasehold interest in the property. In addition tothe Neumann defendants, which owned an 85% interest in Hudson, the other member of Hudson,owning a 15% interest, was plaintiff-appellant Madison Hudson, an entity formed in April of1999 by plaintiff-appellant Madison Equities, LLC (Madison Equities). When their efforts todevelop the property into a hotel were unavailing, Madison Hudson and the Neumann defendantsentered into discussions in 2000 relating to the potential purchase of the Neumann defendants'interest in Hudson (and thus in the development of the property). Three letter [*2]agreements resulted from these negotiations.
Pursuant to the first of these agreements, dated June 2, 2000, Madison Hudson was givenuntil July 18, 2000 to notify the Neumann defendants of its intent to purchase the interests of theNeumann defendants for $5 million, with a closing to occur by no later than August 22, 2000. IfMadison Hudson did not so notify the Neumann defendants by July 18 and make a specificdeposit on the purchase price, paragraph 5 of the agreement provided that the Neumanndefendants were "free to sell to anybody any time." Paragraph 5 is ambiguous with respect towhether the Neumann defendants were free to sell to anyone merely their interest in Hudson orHudson's entire interest in the leasehold. Paragraph 7 of the agreement suggests the latter wasintended, but we need not resolve the issue.
The transaction contemplated by the June 2 agreement did not occur. However, the sameparties entered into a second letter agreement on October 20, 2000. This agreement recited thatMadison Hudson owned 15% of Hudson, that the Neumann defendants owned the balance, andthat the parties were engaged in negotiations over the terms of an acquisition by Madison Hudsonof all or part of the interest of the Neumann defendants in Hudson. Although a closing was tooccur on November 6, 2000 if a written agreement was reached, neither party was obligated toconsummate the transaction. Rather, each party had the right to cease negotiations "for any or noreason." However, Madison Hudson was obligated to make, on behalf of Hudson, a payment of$500,000 that was due under the lease on October 22, 2000 to the owner of the property. Thispayment was to be deemed a capital contribution by Madison Hudson. Without specifying whencapital contributions were to be distributed, paragraph 3 of the agreement provided for thedistribution of all capital contributions "on a pari passu basis" to the owners of thecompany. No reference was made in the October 20 agreement to the Neumann defendants' rightto sell "to anybody any time" under the contingencies specified in the June 2 agreement.
Although Madison Hudson made the $500,000 payment required by the October 20agreement, the contemplated acquisition of all or part of the Neumann defendants' interest didnot occur. On November 13, 2000, however, the parties entered into their third and final letteragreement. This appeal turns on the terms of that agreement, and particularly paragraph 4 thereof.After specifying that Madison Hudson owned a 15% interest in Hudson and that the Neumanndefendants, collectively referred to as "Broadway" in light of their positions as principals ofBroadway Management Co., Inc., owned the remaining 85% interest, paragraph 2 of theagreement obligated Madison Hudson to make an immediate, additional capital contribution of$500,000 that was to be distributed immediately to Broadway. Paragraph 5 of the agreementprovided that upon the making of the additional contribution and its distribution to Broadway,the aggregate capital contribution of Broadway would be approximately $900,000 and theaggregate capital contribution of Madison Hudson would be $1 million. Paragraph 3 noted thatthe parties, along with Times Square Partners LLC (TSP), were negotiating the terms of anacquisition, denominated as the "Transaction," by TSP and Madison Hudson of all or part ofBroadway's interest in Hudson.
Paragraph 4 reads in full as follows: "4. In the event the closing of the Transaction does notoccur by November 22, 2000, Broadway, at its option, shall be free to cease negotiations withTSP and Madison [Hudson] regarding the Transaction, and thereafter, neither Broadway nor TSPor Madison [Hudson] shall have any obligations to the other to consummate the Transaction andBroadway shall have the right, at its option, to [*3]market and sellthe property (the 'Property') owned by [Hudson] to any third-party. Notwithstanding theforegoing, if the closing of the Transaction shall fail to occur by November 22, 2000, Broadwayshall undertake, prior to February 22, 2001, to cause the Property to be marketed for sale in abona fide arms-length transaction to any unrelated third-party. If Broadway shall not have causedthe Property to be so marketed on or before February 22, 2001, Broadway shall cause [Hudson],within . . . two (2) business days after February 22, 2001 or if Broadway has socaused the Property to be marketed, . . . two business days after the cessation of saidmarketing effort, whichever is later[,] to distribute, by wire transfer of immediately availablefunds, to Madison [Hudson] the outstanding amount of Madison[ ] [Hudson's] capitalcontributions to [Hudson]. Notwithstanding the foregoing, it is understood Broadway shall havethe right, at any time, to cause [Hudson] to distribute, by wire transfer of immediately availablefunds, to Madison [Hudson] the outstanding amount of Madison[ ] [Hudson's] capitalcontributions, in which event, Broadway shall have no further obligations to cause the Propertyto be marketed for sale. Madison [Hudson] and Broadway agree that (i) notwithstanding theprovisions of Paragraph 2 hereof and the provisions of the [October 20 letter agreement], neitherMadison [Hudson], any principal or affiliate of Madison [Hudson] nor any other person acting onbehalf of Madison [Hudson] (collectively, the 'Madison Parties') shall have any obligations withrespect to any costs incurred by [Hudson], including, without limitation, costs relating to thelease or the ownership of the Property, provided, however, notwithstanding the foregoingprovisions of this clause, neither Broadway, nor any principal or affiliate of Broadway or anyperson acting on behalf of Broadway shall be obligated for any costs or expenses which wereincurred by Madison [Hudson] and/or any of the Madison Parties on behalf of [Hudson] orotherwise relating to, or affecting the Property, prior to or after the date hereof, if such costs orexpenses were incurred without the knowledge or consent of Broadway and (ii) Madison[Hudson] shall continue to own a fifteen (15%) percent interest in [Hudson]."
In relevant part, paragraph 6 provided that "all distributions made by [Hudson] shall be paidto Broadway and Madison [Hudson] in reduction of their respective aggregate capitalcontributions on a pari passu basis, based on the relative amounts of their respectiveaggregate capital contributions to [Hudson]." After distributions equaling the amount of allcapital contributions had been made, paragraph 6 further provided that "all subsequentdistributions shall be made Eight-five (85%) percent to Broadway and Fifteen (15%) percent toMadison [Hudson]."
The transaction, however, did not take place, either before or after November 22, 2000. Inlate December of 2000 or early January of 2001, the Neumann defendants began discussing withthe Achenbaum defendants a sale of Hudson's leasehold interest in the property. The Neumanndefendants also engaged a real estate broker, Grubb & Ellis, to market the property. Eventually,the Neumann defendants entered into a contract, dated April 17, 2002, to sell the leasehold to theAchenbaum defendants for $2.77 million. Thereafter, the contract closed, with the leaseholdinterest being owned by a company known as Hotel Gansevoort Group LLC (HG [*4]Group), a company comprised of one entity affiliated with theAchenbaum defendants and another entity unrelated to the Neumann defendants.
Meanwhile, in August of 2001, Madison Hudson and Madison Equities (collectively,Madison) brought this action. As amended in June of 2002, Madison's complaint alleges that: theNeumann defendants had no authority to sell Hudson's leasehold interest (first cause of action);the Neumann defendants breached an oral joint venture agreement between the parties, anagreement that allegedly gave Madison Equities the exclusive right to serve as the developer ofthe hotel and precluded the dilution of Madison Hudson's ownership interest in the propertywithout its consent (second cause of action); the Neumann defendants breached their fiduciaryduties to Madison Hudson (third cause of action); Madison was entitled to specific performanceof the joint venture agreement and injunctive relief (fourth cause of action); Madison Hudsonwas entitled to an accounting and the imposition of a constructive trust (fifth cause of action); theAchenbaum defendants tortiously interfered with the joint venture agreement (sixth cause ofaction); the Neumann defendants breached the November 13 letter agreement by failing to causeHudson to distribute to Madison Hudson its $1 million capital contribution (seventh cause ofaction); all the defendants had been unjustly enriched (eighth cause of action); the sale ofHudson's leasehold interest was a fraudulent conveyance (ninth cause of action); and theNeumann defendants had breached the fiduciary duties they owed to Hudson (tenth cause ofaction).
Thereafter, but prior to the taking of depositions, the Neumann defendants and theAchenbaum defendants separately moved for summary judgment dismissing the amendedcomplaint; Madison cross-moved for partial summary judgment on the seventh cause of actionalleging that in violation of the November 13 letter agreement the Neumann defendants failed tocause Hudson to distribute to Madison Hudson its $1 million capital contribution. The IAS courtdenied defendants' motions for summary judgment, concluding that each motion was prematurein that discovery was warranted on crucial issues. With respect to the cross motion, the courtnoted that the Neumann defendants did not challenge Madison Hudson's entitlement to the returnof its $1 million capital contribution but only claimed that they were entitled to retain thecontribution as security against any judgment the Neumann defendants might obtain on one ofthe counterclaims they had brought against Madison Hudson, Madison Equities and RobertGladstone, a principal of Madison Hudson. Concluding that the Neumann defendants had nolegal basis to retain the capital contribution, the court granted Madison's motion for partialsummary judgment on the seventh cause of action in the amount of $1 million, plus interest,severed that cause of action and directed that judgment be entered accordingly. The Neumanndefendants and the Achenbaum defendants appealed the denial of their motions for summaryjudgment, and this Court affirmed (4 AD3d 257 [2004]).
Following extensive discovery, the Neumann defendants and the Achenbaum defendantsagain made separate motions for summary judgment. As indicated above, the IAS court grantedthe Achenbaum defendants' motion and dismissed the complaint as against them. It also grantedthe Neumann defendants' motion to the extent of dismissing all the remaining causes of action,except certain claims for an accounting set forth in the fifth cause of action and certain unjustenrichment claims set forth in the eighth cause of action.
With respect to the Neumann defendants, Madison makes two principal arguments on thisappeal. First, Madison argues that the IAS court erroneously disregarded issues of fact bearing onthe question of whether the Neumann defendants engaged in "bona fide" marketing efforts. [*5]According to Madison, the Neumann defendants did not engage in"bona fide" efforts to market the lease because: (i) Grubb & Ellis was instructed by the Neumanndefendants to market both the leasehold and the fee interest, the latter of which Hudson did notown, at an excessive price that "remained rigidly fixed at $20 million"; (ii) the Neumanndefendants withheld basic and critical information about the lease from Grubb & Ellis; (iii) theNeumann defendants offered the leasehold interest, as opposed to the leasehold and the feeinterest, to only one party, the Achenbaum defendants, and thus "never tested in the marketplace"the price offered by the Achenbaum defendants for the leasehold and "effectively made itimpossible for anyone to outbid the Achenbaum defendants"; and (iv) the Neumann defendantsdid not begin to market the leasehold interest within the time period required by the November13 letter agreement, and then precipitously directed Grubb & Ellis to cease all marketing effortsas soon as the Achenbaum defendants "purportedly agreed to purchase the Leasehold interest," afull year before they in fact purchased the leasehold.
This argument is premised at least in part on the contention that the second sentence ofparagraph 4 of the November 13 letter agreement imposed an unqualified obligation on theNeumann defendants "prior to February 22, 2001, to cause the Property to be marketed for sale ina bona fide arms-length transaction to any unrelated third-party." Indeed, in advancing thisargument, Madison repeatedly refers to failures of the Neumann defendants to comply with sucha marketing obligation under the November 13 letter agreement.[FN1]However, throughout its brief, Madison ignores the first sentence of paragraph 4, which grantedto the Neumann defendants the right to market and sell the property to "any third-party" but didnot itself obligate the Neumann defendants to market or sell the property.
We conclude that the November 13 letter agreement did not impose on the Neumanndefendants an unqualified obligation to market and sell the property, let alone an absoluteobligation to market and sell the property by a particular date "in a bona fide arms-lengthtransaction to an[ ] unrelated third-party." The crucial principle of law in this regard is thatcontracts must be read as a whole and all terms of a contract must be harmonized wheneverreasonably possible (Matter of Westmoreland Coal Co. v Entech, Inc., 100 NY2d 352,[*6]358 [2003]).
The first sentence of paragraph 4 unequivocally provides that in the event the transaction didnot close by November 22, 2000, the Neumann defendants were to have the right to market andsell the property to any third party but were under no obligation to do so. At first blush, thesecond sentence of paragraph 4 appears both to curtail that right significantly and to impose anunqualified obligation to market and sell the property in a particular manner. In the event of thesame contingency, after all, the second sentence specifies that the Neumann defendants,"[n]otwithstanding" the first sentence, "shall undertake, prior to February 22, 2001, tocause the Property to be marketed for sale in a bona fide arms-length transaction to any unrelatedthird-party" (emphasis added). The third sentence, however, defines the consequences for theNeumann defendants if they did not undertake to do what the second sentence states they "shall"undertake to do: they promptly must cause Hudson to distribute to Madison Hudson theoutstanding amount of the latter's capital contributions. The fourth sentence makes clear that themarketing obligation of the second sentence is one that the Neumann defendants have the "right"to terminate "at any time" by causing Madison Hudson to receive its capital contributions. Inconferring that broad right, the fourth sentence also makes clear that if the Neumann defendantsdid not undertake to market and sell the property in accordance with the second sentence, theirsole liability would be to cause Hudson to distribute to Madison Hudson its capital contributionsto Hudson.[FN2]
Thus, the first sentence of paragraph 4 granted the Neumann defendants a broad right tomarket and sell the property "to any third-party" but did not obligate them to do so. That broadright and freedom not to market and sell the property were qualified only by the other provisionsof paragraph 4 that required the Neumann defendants either to market and sell theproperty prior to February 22, 2001, "in a bona fide arms-length transaction to any unrelatedthird-party" or to [*7]pay in effect an agreed-upon price,i.e., cause the accelerated return of Madison Hudson's capital contributions. To the limited extentthe Neumann defendants were obligated to market and sell the property, a breach of thatobligation would support nothing more than a claim by Madison Hudson for the return of itscapital contributions. In short, the IAS court correctly ruled that the only damages Madison couldrecover for a breach of this obligation was the return of Madison Hudson's capital contributions.Madison's reliance on Terminal Cent. v Modell & Co. (212 AD2d 213 [1995]) ismisplaced precisely because this limitation on the Neumann defendants' liability is "clearly,explicitly and unambiguously expressed in [the] contract" (id. at 218).[FN3]
Madison's second argument with respect to the Neumann defendants is that the IAS courterroneously concluded that the mere entry into the November 13 letter agreement by theNeumann defendants was sufficient to terminate both the joint venture between the parties andthe fiduciary duties the Neumann defendants owed to Madison pursuant to the joint venture. TheIAS court, however, concluded somewhat more narrowly that the joint venture ended when theNeumann defendants "exercised [their] option to market and sell the Lease pursuant to theNovember 13 Agreement" and that their fiduciary duties "necessarily ceased with the terminationof the joint venture by the Neumann [defendants'] withdrawal therefrom."
In any event, the scope of this argument by Madison is unclear. In its amended complaint,Madison claims that in selling the property the Neumann defendants wrongfully deprivedMadison Equities of its alleged right under the joint venture agreement to earn developer's feesand wrongfully deprived Madison Hudson of its alleged right under the joint venture agreementnot to have its ownership interest in the property diluted without its consent. To the extentMadison is renewing this claim, we reject it for the same reason the IAS court rejected it: it iswithout any support in the record. To the contrary, as a matter of law the Neumann defendantshad the right to sell the property pursuant to the first and second sentences of paragraph 4 of theNovember 13 letter agreement when the acquisition of the Neumann defendants' interest in theproperty by Madison and TSP did not close by November 22, 2000. As the IAS court correctlydetermined, once the property was sold Madison Hudson could not continue to have an interestin it, let alone one that was not subject to dilution, and Madison Equities' role as a developernecessarily would cease. Indeed, Robert Gladstone, Madison Hudson's principal, acknowledgedboth of these realities during his deposition, as is clear from the excerpts of his testimony quotedby the IAS court in its written decision.
Madison is persuasive, however, to the extent it contends that the Neumann defendants [*8]owed fiduciary duties to Madison Hudson until the propertyactually was sold. The Neumann defendants do not dispute either that they had been in a jointventure with Madison Hudson or that for this reason they owed fiduciary duties to MadisonHudson. Rather, the Neumann defendants assert that in entering into the November 13 letteragreement, the parties "were replacing their prior joint venture relationship with a contractualwinding-up arrangement." Even if they do not contend that the joint venture was terminated uponexecution of the November 13 letter agreement, the Neumann defendants maintain that it wasterminated once they acquired the right to market and sell the property when the transaction, thecontemplated acquisition of their interest in the property by Madison Hudson and TSP, did notclose by November 22, 2000. According to the Neumann defendants, "since the joint venture hadno further purpose at that point it was terminated."
The termination of the joint venture, however, was simply one possible consequence of theNovember 13 letter agreement. The execution of the agreement did not guarantee either that thetransaction would occur or that, if it did not, the Neumann defendants would elect to pursue theirright to market and sell the property. If the transaction did not take place, another possibleoutcome was that the parties would remain joint venturers, either because the Neumanndefendants elected not to pursue their right to market and sell the property or a purchaser willingto pay an acceptable price could not be found. To be sure, the Neumann defendants did exercisetheir option to market the property. But that effort, of course, was not bound to succeed.Accordingly, the joint venture did not become "pointless" or impossible to accomplish merelybecause the Neumann defendants undertook to market the property.
The controlling issue of law, moreover, is whether the Neumann defendants ceased beingfiduciaries of Madison Hudson before the interests in the property of both parties wereextinguished with the closing of the sale to the Achenbaum defendants. The answer is that theNeumann defendants were "fiduciaries . . . until the moment the buy-out transactionclosed" (Blue Chip Emerald v Allied Partners, 299 AD2d 278, 279 [2002]). As Madisoncorrectly argues, the Neumann defendants' position entails the proposition that they could havesold the property for any price without breaching any fiduciary duty to Madison. That propositioncannot be reconciled with the 15% ownership interest in the property that, as the final clause ofparagraph 4 of the November 13 letter agreement takes care to state, Madison Hudson continuedto have.[FN4][*9]
Nonetheless, no triable issue of fact exists with respect toMadison's cause of action against the Neumann defendants for breach of fiduciary duty in thesale of the property to the Achenbaum defendants. In particular, Madison's expert never opined inhis affidavit that the property was sold at a below-market price. Nor did the affidavit otherwiseset forth facts sufficient to raise a triable issue of fact as to whether the property was sold at abelow-market price. Because the property was not sold to the Achenbaum defendants as a resultof the efforts to market the property through Grubb & Ellis, the expert's criticisms of those effortsare beside the point. In the absence of any factual showing of injury, i.e., that the price paid bythe Achenbaum defendants was a below-market price, Madison's breach of fiduciary duty claimwas properly dismissed (see generallyKurtzman v Bergstol, 40 AD3d 588 [2007]).
For the same reason, we reject Madison's argument in support of the unpleaded claim that theAchenbaum defendants aided and abetted the alleged breach of fiduciary duty by the Neumanndefendants. Madison's other arguments with respect to the Achenbaum defendants are unavailing.As Madison failed to show any breach of the November 13 letter agreement in the sale of theproperty to the Achenbaum defendants, the unpleaded claim that the Achenbaum defendantstortiously interfered with that agreement was properly rejected (see Goldfeld v MattoonCommunications Corp., 99 AD2d 711 [1984], appeal dismissed 62 NY2d 802[1984]). Although Madison's sixth cause of action alleges that the Achenbaum defendantstortiously interfered with the joint venture agreement, Madison offers virtually no argument in itsbriefs in support of this cause of action and does not cite any provision of the joint ventureagreement that was breached. Accordingly, we deem Madison to have abandoned any claim oferror in the dismissal of this cause of action (see Farley v Town of Hamburg, 34 AD3d 1294 [2006]).
Thus, we modify only to the extent of permitting Madison Hudson to seek recovery under theportion of the fifth cause of action for an accounting of its 15% share of any profits from the saleof the property. Concur—Sullivan, J.P., Nardelli, Williams, Sweeny and McGuire, JJ.
Footnote 1: In its seventh cause of action,the only cause of action asserting a breach of the November 13 letter agreement, Madison allegedonly that the Neumann respondents failed to comply with their obligation to cause Hudson todistribute to Madison Hudson its $1 million capital contribution. Of course, the failure to plead aclaim does not necessarily preclude its assertion in opposition to a motion for summary judgment(see Alvord & Swift v Muller Constr. Co., 46 NY2d 276, 280-281 [1978]). In this case,however, Madison has already been awarded judgment on its seventh cause of action and thatcause of action was severed. Whether Madison could amend its complaint to assert the claimedviolations of marketing obligations under the November 13 letter agreement is an issue that is notbefore us and we need not address, as we conclude that the Neumann defendants did not have anunqualified obligation under the November 13 letter agreement to market and sell the property bya particular date "in a bona fide arms-length transaction to any unrelated third-party."
Footnote 2: By contrast, if the Neumanndefendants did market and sell the property in accordance with the second sentence to an"unrelated third-party," the Neumann defendants would not have been required by the thirdsentence promptly so to cause Hudson to return to Madison Hudson its capital contributions.Rather, the provisions of paragraph 6 would have controlled and the capital contributions ofMadison Hudson and the Neumann defendants would have been paid on a pari passu basis. If thesale proceeds, net of transaction expenses, were less than the aggregate of all capitalcontributions, the parties would have shared proportionately in the loss. But if the Neumanndefendants sold the property to a party other than an "unrelated third-party" and the net saleproceeds were less than the aggregate of all capital contributions, the parties might have shareddisproportionately in the loss. After all, such a sale would have triggered the obligation of theNeumann defendants under the third sentence to cause Hudson to distribute to Madison Hudsonits capital contributions. On this reading of the November 13 letter agreement, it provided theNeumann defendants with an incentive rather than an obligation to market and sell the property"in a bona fide arms-length transaction to any unrelated third-party."
Footnote 3: A related argument of Madison'sis of no legal moment for the same reason. That is, Madison contends that the November 13letter agreement required the Neumann defendants to sell to "any unrelated third-party" and thatthe IAS court erroneously ignored evidence tending to show that the Achenbaum defendants arenot "unrelated" third parties. Even assuming, however, that the Achenbaum defendants are not"unrelated" (the agreement does not define the term) third parties, the agreement does not requirethe sale of the property to an "unrelated" party. Rather, the agreement permits the property to besold to "any third-party" and simply specifies that the Neumann defendants promptly must causethe return of Madison Hudson's capital contributions if the purchaser is not "unrelated."
Footnote 4: Although the Neumanndefendants urge that "in a worst case scenario from [Madison Hudson's] perspective, the onlything [it] had a right to receive" under the November 13 letter agreement was a return of itscapital contributions, whether they contend that the execution of that agreement extinguishedMadison Hudson's minority ownership interest is not clear. To the extent they do, and evenputting aside the final clause of paragraph 4, that contention is meritless. It makes no sense toconclude that Madison Hudson agreed to make an additional capital contribution of $500,000,granted rights to the Neumann defendants to sell the property and surrendered its 15% ownershipinterest, all in exchange for a qualified right to have the Neumann defendants cause Hudson toreturn its $1 million capital contribution (see Metropolitan Life Ins. Co. v Noble LowndesIntl., 84 NY2d 430, 438 [1994] ["It is highly unlikely that two sophisticated business entities,each represented by counsel, would have agreed to such a harshly uneven allocation of economicpower under the Agreement"]). Moreover, in a submission in support of the Neumanndefendants' motion for summary judgment, defendant Weldler stated that the Neumanndefendants were holding in escrow not only Madison Hudson's capital contribution of $1 millionbut its "15% interest in the profit," estimated to be some $350,000, from the sale of the property.