| Beagle Devs., LLC v Long Is. Beagle Club No. II, Inc. |
| 2009 NY Slip Op 05258 [63 AD3d 607] |
| June 25, 2009 |
| Appellate Division, First Department |
| Beagle Developers, LLC, Appellant, v Long Island BeagleClub No. II, Inc., et al., Respondents. |
—[*1] Meyer, Suozzi, English & Klein, P.C., Garden City (Abraham B. Krieger of counsel), forLong Island Beagle Club No. II, Inc. and Long Island Beagle Club, Inc., respondents. Catalano, Gallardo & Petropoulos, LLP, Jericho (Matthew K. Flanagan of counsel), forTwomey, Latham, Shea, Kelley, Dubin & Quartararo LLP, respondent.
Appeal from order, Supreme Court, New York County (Herman Cahn, J.), enteredSeptember 4, 2008, which, in an action to recover a down payment on a real estate transaction,denied plaintiff buyer's motion for summary judgment and granted the motions by defendantsLong Island Beagle Club, Inc. and Long Island Beagle Club No. II, Inc. (seller) and Twomey,Latham, Shea, Kelley, Dubin & Quartararo LLP (escrow agent) for summary judgmentdismissing the complaint, deemed an appeal from the judgment, same court and Justice, enteredNovember 25, 2008 (CPLR 5501 [c]), dismissing the complaint, and, so considered, thejudgment unanimously affirmed, with costs.
Under section 1.02 (c) of the contract, plaintiff had 60 days (extended to 75) to perform duediligence, i.e., undertake environmental, engineering, zoning and abstract studies, and cancel thecontract, and have its down payment returned, if it determined that the property was not suitablefor its intended use. Under section 1.02 (d), if plaintiff did not cancel within this 75-day periodand deposited $250,000 in addition to the $750,000 down payment it had already made oncontract signing, its right to cancel under section 1.02 (c) would be deemed waived, and theentire down payment would become nonrefundable except for defendant's willful default inclosing.
Assuming, as plaintiff argues, that its failure to cancel within the 75 days and its deposit ofthe additional $250,000 did not result in its waiver of defendant's obligation to providemarketable title, section 2.01 (c) unambiguously states that defendant was not obligated to makeany effort or expend any amount to dispose of "Title Objections." Such objections includedplaintiff's objection to title arising out of the prior merger between Beagle Club, Inc. and BeagleClub No. II, Inc. If defendant failed to cure any such title objections, plaintiff could terminate thecontract or accept such title as defendant could deliver. Once defendant declared atime-of-the-essence closing and plaintiff made its own declaration for a time-of-the-essenceclosing for the same date, plaintiff unequivocally declared its intention to go forward, therebywaiving any title [*2]objections and agreeing to accept such titleas defendant could convey.
Additionally, assuming plaintiff elected at the closing to terminate the contract based ondefendant's failure to cure plaintiff's title objection based on the merger, that failure was not adefault by defendant, much less a willful default, since defendant was under no obligation tomake any effort to cure plaintiff's title objection. Consequently, the down payment remainednonrefundable and constituted liquidated damages pursuant to section 5.03 of the contract.
Nor were the contract's unambiguous terms modified by defendant's attempt to accommodateplaintiff's requests for documents relating to the merger. The contract clearly states that a waiverof any right at one time does not waive any right at any other time, and further states that thecontract may only be modified in writing. Plaintiff cannot negate these unambiguous terms byparol evidence (see Namad v Salomon Inc., 74 NY2d 751, 753 [1989]; Rose v SpaRealty Assoc., 42 NY2d 338, 343 [1977]). Defendant did not, by its actions, modify theagreement so as to become obligated to cure the purported title objections.
Plaintiff's interpretation of section 2.01 (c), which views "Title Objections" as referring tothe title issues contained in section 2.01 (a), and "title objections," lower case, as referring toplaintiff's objections contained in its title report, changes the plain meaning of defendant'sobligations and is not a reasonable interpretation of the contract (see AIU Ins. Co. v RobertPlan Corp., 44 AD3d 355, 356 [2007]). Section 2.01 (a) expressly defines the title issuescontained therein as "Permitted Encumbrances," not "Title Objections," and the plain meaning oftitle objections does not change, without further explanation, merely because the lower case isused.
Finally, the escrow agent's release of the down payment prior to closing without obtainingother security from defendant was not a material breach as plaintiff retained an equitable lien onthe property (see Sloan v Pinafore Homes, 38 AD2d 718 [1972]; Polish Natl.Alliance of Brooklyn v White Eagle Hall Co., 98 AD2d 400, 405 [1983]), which wasunencumbered and worth far in excess of the down payment. In any event, since plaintiff is notentitled to return of the down payment, it suffered no damages as a result of the escrow agent'srelease of the down payment. Concur—Tom, J.P., Friedman, Nardelli, Buckley andAbdus-Salaam, JJ. [See 21 Misc 3d 1110(A), 2008 NY Slip Op 52032(U).]