| McCormick v Bechtol |
| 2009 NY Slip Op 09333 [68 AD3d 1376] |
| December 17, 2009 |
| Appellate Division, Third Department |
| Roger McCormick et al., Appellants-Respondents, v DavidBechtol et al., Respondents-Appellants. |
—[*1]
Mercure, J.P. Cross appeals from an order of the Supreme Court (Dawson, J.), enteredAugust 12, 2008, which, among other things, granted defendants' cross motions for summaryjudgment dismissing the complaint.
In 1999, plaintiff Marimac, LLC entered into an agreement to purchase real property,including a marina, from defendant James Carter. Plaintiff Roger McCormick, as a member ofMarimac, signed the agreement on its behalf. Included in the agreement was a right of firstrefusal, in which Carter agreed to notify Marimac of any third-party offers to purchase twoproperties adjoining the parcel purchased by Marimac. The two properties, which are notcontiguous and had separate tax identification numbers, consisted of an approximately 15-acreparcel located north of Marimac's property and a six-acre parcel located to the south ofMarimac's property. Each of the two parcels is also divided into an easterly and westerly portionby a road, with lakefront property located to the east of the road. The right of first refusaladdressed the circumstance under which Carter, after receiving a third-party offer to purchase thewesterly portion of the two parcels together, would either transfer or offer to sell the easterly[*2]lakefront portion of the two parcels to Marimac.[FN1]Notably, the right of first refusal did not address the sale of either of the two parcels separately.
Although the purchase agreement was executed in 1999 and Marimac began operating themarina pursuant to an early occupancy agreement, the closing on the property did not occur until2001. At that time, Carter transferred title to Marimac; the right of first refusal, however, was notreferenced in the deed. Nor was the right of first refusal included in an affidavit executed byCarter at the time of closing that specified which representations in the purchase agreement wereintended to be reaffirmed. McCormick, however, recorded an affidavit that was not signed byCarter, indicating that a right of first refusal attached to the sale of the two parcels.
In 2007, Carter sold the entire six-acre parcel—located on both sides of the dividingroad and to the south of Marimac's property—to defendants David Bechtol and CatherineBechtol without first notifying Marimac. Thereafter, plaintiffs commenced this action against theBechtols—and Carter after he was joined as a party—seeking specific performance,as well as damages arising from Carter's alleged breach of the right of first refusal and theBechtols' alleged tortious interference with the right. Following joinder of issue, the partiescross-moved for summary judgment. Supreme Court concluded that the right of first refusalcontained in the purchase agreement did not comply with the statute of frauds and, thus, deniedplaintiffs' motion and granted defendants' cross motions. Plaintiffs appeal, and we nowaffirm.[FN2]
Plaintiffs argue that Supreme Court erred in concluding that the right of first refusal wasunenforceable under the statute of frauds. We disagree.
A right of first refusal "requires [an] owner, when and if he [or she] decides to sell, to [*3]offer the property first to the party holding the preemptive right sothat he [or she] may meet a third-party offer or buy the property at some other price set by apreviously stipulated method" (Metropolitan Transp. Auth. v Bruken Realty Corp., 67NY2d 156, 163 [1986]; see Cipriano vGlen Cove Lodge #1458, B.P.O.E., 1 NY3d 53, 60-61 [2003]). A right of first refusal issubject to the statute of frauds, which provides that "[a] contract . . . for the sale[ ]of any real property, or an interest therein, is void unless the contract or some note ormemorandum thereof, expressing the consideration, is in writing, subscribed by the party to becharged" (General Obligations Law § 5-703 [2]). Specifically, a writing will not satisfy thestatute of frauds unless it "unequivocally establish[es] all the essential elements of a contractualrelationship . . . such as price, terms, parties and a description of the subject matter"(Syman v Vanderheuval, 249 AD2d 870, 872 [1998] [internal quotation marks andcitation omitted]; see Pfeil vCappiello, 29 AD3d 1187, 1188 [2006]; Wacks v King, 260 AD2d 985,986-987 [1999]).
Here, the agreement set forth a method for calculating the price of the easterly, lakefrontportion of both the north and south parcels together in the event that Carter sold the westerlyportion of both parcels together. That is, the right of first refusal provides a method of pricecalculation only in the event that both the north and south parcels are sold as one. Itprovides no indication of the price that Marimac was to pay if Carter received an offer on onlyone of the two adjoining parcels, or if he sold both the easterly and westerly portions of eitherparcel. Moreover, while it is settled that the grantor of a right of first refusal cannot defeat theright merely by subdividing a parcel into smaller pieces and conveying only partial interests(see Colonie Motors v Heritage Corp. of N.Y., 61 AD2d 1105, 1107 [1978]; Sargentv Halsey, 42 AD2d 375, 379 [1973]), plaintiffs do not dispute that the agreement at issuehere permits the sale of only one of the adjoining parcels. Accordingly, we agree with SupremeCourt that the right of first refusal is missing an essential term of a completeagreement—the price to be paid for the easterly, lakefront portion of one or both parcels ifCarter sold only one of the two adjoining parcels. As such, the agreement is insufficient tosatisfy the statute of frauds (see Pfeil v Cappiello, 29 AD3d at 1188; Bright Beginnings Day Care, Inc. vDriftwood Day Camp, Inc., 16 AD3d 449 [2005]; Syman v Vanderheuval, 249AD2d at 872; see also O'Brien v West, 199 AD2d 369, 371 [1993]; cf. Wacks vKing, 260 AD2d at 987; Jill Real Estate v Smyles, 150 AD2d 640, 641-642 [1989]).
Finally, contrary to their argument, plaintiffs' actions were not sufficient to supportinvocation of the part performance exception to the statute of frauds (see GeneralObligations Law § 5-703 [4]). Under the part performance doctrine, "it is the conduct ofthe entity seeking to enforce the oral agreement, and its detrimental reliance on the agreement,that makes proper the invocation of equitable principles" (Messner Vetere Berger McNameeSchmetterer Euro RSCG v Aegis Group, 93 NY2d 229, 236 [1999]; see Anostario vVicinanzo, 59 NY2d 662, 664 [1983]). Furthermore, "[t]he doctrine of part performancemay be invoked only if plaintiff[s'] actions can be characterized as 'unequivocally referable' tothe agreement alleged" (Anostario v Vicinanzo, 59 NY2d at 664; see Gilligan vRehm, 34 AD2d 711, 712 [1970], lv denied 27 NY2d 485 [1970]). The actions uponwhich plaintiffs rely—Marimac's occupancy and investment in the premises that theyowned—do not resolve the ambiguity created by the absence of a relevant price term and,in any event, cannot form a basis for avoidance of the statute of frauds because they are notunequivocally referable to the agreement (see Anostario v Vicinanzo, 59 NY2d at 664;Venture Mfg. [Singapore] v MatcoGroup, 6 AD3d 850, 851 [2004]).
We have considered plaintiffs' remaining arguments and conclude that they are lacking inmerit.[*4]
Kavanagh, Stein, McCarthy and Garry, JJ., concur.Ordered that the order is affirmed, with one bill of costs to defendants.
Ordered that the cross appeals are dismissed.
Footnote 1: Specifically, if Carter was ableto sell the westerly portion of the two parcels for $350,000 or more, he was to transfer theeasterly, lakefront portion of the two parcels to Marimac without consideration. If Carterreceived an offer of less than $350,000, he was to grant Marimac the option to purchase theeasterly portion of the two parcels for an amount computed by subtracting the price that Carterreceived for the westerly portion of the two parcels from $350,000.
Footnote 2: Defendants cross-appeal on thelimited ground that Supreme Court erred in rejecting their arguments that they were entitled tosummary judgment because Marimac failed to disclose the right of first refusal in its chapter 11bankruptcy proceeding and any right of first refusal is void pursuant to the doctrine of merger inany event. Inasmuch as defendants were not aggrieved by the court's order, their cross appealsare dismissed (see Parochial Bus Sys. v Board of Educ. of City of N.Y., 60 NY2d 539,544-546 [1983]; Matter of Eck vCounty of Delaware, 36 AD3d 1180, 1181 n [2007]). Moreover, although defendants'arguments are properly before us as alternative grounds for affirmance, they are academic inlight of our decision to affirm and we do not reach the merits of those arguments.