| Venetoklis Family L.P. v Kora Devs., LLC |
| 2010 NY Slip Op 05387 [74 AD3d 1057] |
| June 15, 2010 |
| Appellate Division, Second Department |
| Venetoklis Family Limited Partnership, Appellant, v KoraDevelopers, LLC, Respondent. |
—[*1] Alston & Bird, LLP, New York, N.Y. (Betty Weinberg Ellerin, Karl Geercken, and ChristinaSpiller of counsel), for respondent.
In an action to retain a down payment as liquidated damages for breach of a contract for thesale of real property, the plaintiff appeals from an order of the Supreme Court, Kings County(Bunyan, J.), dated September 30, 2009, which denied its motion for summary judgment on thecomplaint.
Ordered that the order is reversed, on the law, with costs, and the plaintiff's motion forsummary judgment on the complaint is granted.
The plaintiff (hereinafter the seller) contracted with the defendant (hereinafter the purchaser)to convey real property known as 1821 Emmons Avenue in Brooklyn (hereinafter the property)for a purchase price of $21 million. Prior to signing the contract of sale (hereinafter the contract),the seller provided the purchaser with a title report, and the purchaser obtained its own titlereport with a survey, all of which revealed a permanent easement for sewer pipes. The purchaseralso obtained a certificate of title insurance which excepted from coverage any loss or damagedue to the sewer easement.
Under the terms of the parties' contract, the seller agreed to convey both insurable andmarketable title, subject to certain exceptions which are not at issue here. The purchaser wasrequired to notify the seller of its objections to defects in title within 10 days of receipt of anytitle report, and any objection to title not so noticed was deemed waived. The written noticetriggered a 30-day period for the seller to cure the defect, and in the event of the seller's inabilityto cure, the purchaser could elect either to terminate the contract and recover the down paymentor accept title subject to the defect.
The purchaser supplied the seller with a written notice of its objections to certain title defectswhich were excepted from coverage by the purchaser's title insurance company, but did notinclude in the written notice any mention of the exception for the sewer easement. Nearly 10months after the purchaser had received the report and survey from its title company, whileplanning the design of a proposed multi-use building on the property, the purchaser's architectdiscovered the permanent easement and informed the purchaser that designing the project toallow access to the easement area would add [*2]significantlyand prohibitively to construction costs. The purchaser informed the seller that it deemed theeasement to be an incurable defect which rendered title unmarketable. Thereafter, the sellersucceeded in removing the easement as an exception to the purchaser's title insurance, but thepurchaser was not satisfied that title to the property was marketable and refused to close.
The seller commenced this action to retain the $2.1 million down payment deposited inescrow as liquidated damages for the purchaser's breach. The seller moved for summaryjudgment on the complaint, and the Supreme Court denied the motion, rejecting the seller'scontention that the purchaser had effectively waived its objections to the title defect and findinga triable issue of fact as to whether the seller could provide marketable title to the property. Wereverse.
Generally, parties to a contract for the sale of real property, like signatories of anyagreement, are free to tailor their contract to meet their particular needs and to include or excludethose provisions which they choose. Absent some indicia of fraud or other circumstanceswarranting equitable intervention, it is the duty of a court to enforce rather than reform thebargain struck (see Grace v Nappa, 46 NY2d 560, 565 [1979]). Here, the parties agreedthat any title defect for which the purchaser failed to give written notice of objection within thetime required by the contract would be deemed waived. It is undisputed that the purchaser wasaware of the subject easement prior to signing the contract and failed to give written notice of itsobjection to the defect in title within the time specified in the contract, and that the only writtennotice of objections given by the purchaser failed to raise an objection to the easement.Accordingly, the purchaser waived its right to object to the title defect (see Weintraub v Stankovic, 43 AD3d543 [2007]; Beil v Certilman, Balin, Adler & Hyman, 182 AD2d 737 [1992]; cf. Anderson v Meador, 56 AD3d1030 [2008]).
The seller made a prima facie showing of entitlement to judgment as a matter of law withevidence that, given the purchaser's waiver of any objection to the easement, it tenderedmarketable and insurable title subject to that waived exception, and the purchaser breached thecontract by refusing to close (see StendaRealty, LLC v Kornman, 67 AD3d 996, 999 [2009]). In opposition, the purchaser failedto raise a triable issue as to whether it had so breached the contract. Accordingly, the seller wasentitled to retain the down payment as liquidated damages under the terms of the contract.
The seller's remaining contentions need not be reached in light of our determination.Santucci, J.P., Angiolillo, Dickerson and Austin, JJ., concur.