| Ulysses I & Co., Inc. v Feldstein |
| 2010 NY Slip Op 06213 [75 AD3d 990] |
| July 22, 2010 |
| Appellate Division, Third Department |
| Ulysses I & Company, Inc., Respondent, v Gary Feldstein,Defendant, and Peter Morton, Individually and as Trustee for the Peter Morton Lifetime Trust,Defendant and Third-Party Plaintiff-Appellant. Sheldon Solow et al., Third-PartyDefendants-Respondents. |
—[*1] Rosenberg & Estis, P.C., New York City (Jeffrey Turkel of counsel), forrespondent.
Spain, J.P. Appeals (transferred to this Court by order of the Appellate Division, SecondDepartment) (1) from a judgment of the Supreme Court (Sise, J.), entered May 15, 2008 inSuffolk County, upon a decision of the court in favor of plaintiff and third-party defendants, and(2) from an order of said court, entered January 2, 2009 in Suffolk County, which denieddefendant Peter Morton's motion to vacate the judgment.[*2]
In October 1992, Jack Rounick began leasing his thenresidence in the Town of East Hampton, Suffolk County to defendant Gary Feldstein. Feldsteinexpressed interest in purchasing the property and, in May 1993, agreed to do so for $7 million.Their original contract of sale contemplated closing on or before October 1, 1997 and set forth adetailed schedule of periodic payments due in the interim. Subsequent amendments to thatagreement, purportedly made at Feldstein's request, revised the payment schedule and extendedthe closing date to October 1, 1998. Despite the fact that Feldstein made all of the requiredpayments, Rounick nonetheless became concerned about Feldstein's ability to close. Accordingto Rounick, he was approached in June 1998 by third-party defendant Sheldon Solow, whosuggested that Feldstein lacked the financial resources to fulfill the contract. Solow, in turn,introduced Rounick to third-party defendant Stuart Schlesinger, plaintiff's president, who metwith Rounick in August 1998 and offered to purchase the property.
On August 10, 1998, Feldstein assigned his contractual right to purchase the property todefendant Peter Morton. Pursuant to the assignment agreement, Feldstein was not obligated toconvey the premises to Morton but, rather, to use reasonable efforts to cause Rounick to conveytitle to Morton at the closing.[FN1]Rounick, however, was convinced that Feldstein would be unable to close on their contract ofsale and, on August 13, 1998, contracted to sell the property to plaintiff.[FN2]In executing that agreement, plaintiff acknowledged, among other things, that the contemplatedconveyance was subject to Feldstein's then occupancy of the premises, as well as whatever rightsFeldstein possessed pursuant to his contract with Rounick and the amendments thereto, andagreed to indemnify Rounick for any damages resulting from a breach of his contract withFeldstein.
By letter dated August 20, 1998, Feldstein's counsel advised Rounick of the assignmentagreement with Morton and scheduled the closing for August 28, 1998. In the interim, however,Rounick conveyed the property to plaintiff, prompting Feldstein to commence an action forspecific performance against Rounick and plaintiff. By judgment entered February 2, 2000,Supreme Court (D'Emilio, J.), among other things, granted Feldstein's cross motion for summaryjudgment and directed plaintiff to transfer the property to Feldstein. Plaintiff's subsequentappeals proved unsuccessful (see Feldstein v Rounick, 276 AD2d 523 [2000], appealdismissed 95 NY2d 955 [2000], lv denied 96 NY2d 707 [2001]), as did thenumerous actions and proceedings it thereafter commenced in various state and federal courtsseeking to retain title to the property. Title finally was conveyed to Morton on October 10,2001.[FN3][*3]
Plaintiff thereafter commenced this action againstFeldstein and Morton seeking, among other things, a declaration that the conveyance of theproperty to Morton was null and void. Morton counterclaimed against plaintiff and commenced athird-party action against Solow and Schlesinger alleging, insofar as is relevant here, tortiousinterference with contract and malicious prosecution and seeking an award of punitivedamages.[FN4]Supreme Court (Jones Jr., J.), among other things, granted Feldstein's and Morton's respectivemotions to dismiss the amended complaint and denied Morton's cross motion for partialsummary judgment on his counterclaims against plaintiff and his third-party claims againstSolow and Schlesinger. Following a nonjury trial, Supreme Court (Sise, J.) dismissed Morton'sclaim for tortious interference with contract and denied his request for compensatory andpunitive damages. These appeals ensued.
We affirm. To sustain a claim for tortious interference with contract, Morton needed toestablish that he had a valid contract with Feldstein, that plaintiff, Solow and Schlesinger wereaware of that contract and intentionally induced or procured an actual breach thereof and that hesuffered damages as a result (seeSchmidt & Schmidt, Inc. v Town of Charlton, 68 AD3d 1314, 1316 [2009]; Pink v Half Moon Coop. Apts., S.,Inc., 68 AD3d 739, 740 [2009]; Clearmont Prop., LLC v Eisner, 58 AD3d 1052,1055 [2009]). Here, there is no question that there was a valid assignment agreement betweenFeldstein and Morton and that plaintiff, Solow and Schlesinger were well aware of theagreement's existence. However, even accepting that plaintiff, Solow and Schlesingersystematically charted a course designed to deprive Feldstein and/or Morton of the property, thefact remains that there was no breach of the Feldstein/Morton contract.
The assignment agreement between Feldstein and Morton did not require Feldstein toconvey title to Morton; it simply required Feldstein to use reasonable efforts to persuadeRounick to do so. As Morton obtained title to the property in 2001 and was residing on thepremises prior to that, there was no breach of the Feldstein/Morton contract and, hence, no causeof action for tortious interference with contract. To the extent that Morton contends that thesubstantial delay in obtaining title is tantamount to a breach, we need note only that the Court ofAppeals has consistently held that an actual breach is required to sustain a cause of action fortortious interference with contract (see Lama Holding Co. v Smith Barney, 88 NY2d413, 424 [1996]; NBT Bancorp v Fleet/Norstar Fin. Group, 87 NY2d 614, 620-621[1996]; Jack L. Inselman & Co. v FNB Fin. Co., 41 NY2d 1078, 1080 [1977]). Morton'sclaim that the delay here "otherwise render[ed] performance [of the Feldstein/Morton contract]impossible" (Kronos, Inc. v AVX Corp., 81 NY2d 90, 94 [1993]) is equallyunpersuasive. Accordingly, Supreme Court properly dismissed this cause of action.
Morton next contends that he is entitled to damages on his malicious prosecutionclaim,[FN5]which essentially seeks to recover legal fees and other expenses paid in connection with hisdefense of separate actions commenced by plaintiff in the United States District Courts for the[*4]Eastern and Southern Districts of New York. Supreme Courtdenied relief as to the Eastern District action due to Morton's failure to prove "special injury"and, as to the Southern District action, found that Morton failed to identify the legal fees incurredin the defense thereof. Our review of the record supports Supreme Court's findings. As to theEastern District action, because the notice of pendency was filed after that action wasdismissed, it was void ab initio (see CPLR 6511 [a]) and, hence, could not form the basisfor a finding of any special injury (see generally Dudick v Gulyas, 277 AD2d 686, 688[2000]). We reach a similar conclusion regarding Morton's asserted damages arising fromplaintiff's alleged misconduct during the course of the various lawsuits brought in connectionwith the property. As to the Southern District action, we agree with Supreme Court that Mortoncould not justify certain claimed costs incurred and failed to identify, through eitherdocumentary or testimonial evidence, the legal expenses incurred in that particular action.Although the record indeed contains a large number of canceled checks bearing the notation"legal fees," there are no corresponding invoices and neither Morton nor counsel testified as tothe nature of the fees incurred, the services rendered or the reasonablenessthereof—despite having ample opportunity to do so. Under these circumstances, wecannot say the Supreme Court erred in denying Morton's request for compensatory damages.
Finally, as Morton "failed to prove the damages that he allegedly sustained, he was notentitled to recover compensatory or punitive damages" (Wenger v Alidad, 265 AD2d322, 323 [1999], lv denied 94 NY2d 758 [2000]; see Hubbell v Trans World Life Ins.Co. of N.Y., 50 NY2d 899, 901 [1980]) and, there being no basis upon which to awarddamages against plaintiff, Morton's claims against Solow and Schlesinger must also fail.
Morton's remaining contentions, including his assertion that Supreme Court erred in denyinghis motion to vacate, have been examined and found to be lacking in merit.
Lahtinen, Stein, McCarthy and Garry, JJ., concur. Ordered that the judgment and order areaffirmed, without costs.
Footnote 1: In the event that Feldstein wasunable to fulfill that obligation, Morton could either accept such title as could be delivered orterminate the assignment agreement and get his deposit back.
Footnote 2: Solow apparently providedplaintiff with the money to fund this purchase.
Footnote 3: Although Morton could haveterminated the assignment agreement with Feldstein once title passed to plaintiff, Morton electedinstead to subsequently amend the assignment agreement on four separate occasions extendingtheir closing date. It appears that Morton began residing on the premises shortly after Rounickconveyed the property to plaintiff.
Footnote 4: Although Morton purported to"counterclaim" against Solow and Schlesinger as well, they were not named defendants in theunderlying action. Hence, we will treat Morton's counterclaim in this regard as a third-partycomplaint.
Footnote 5: Morton does not challenge inhis brief Supreme Court's denial of damages on his abuse of process claim.