| Union St. Tower, LLC v Richmond |
| 2011 NY Slip Op 03834 [84 AD3d 784] |
| May 3, 2011 |
| Appellate Division, Second Department |
| Union Street Tower, LLC, Appellant, v Eric Richmond etal., Respondents. |
—[*1] Michael T. Sucher, Brooklyn, N.Y. (Andrew M. Shabasson of counsel), forrespondents.
In an action for specific performance of a contract for the sale of certain rights to thedevelopment of real property, the plaintiff appeals from an order of the Supreme Court, KingsCounty (Schack, J.), dated April 9, 2010, which denied its motion for summary judgmentdismissing the defendants' first and second counterclaims.
Ordered that the order is reversed, on the law, with costs, and the plaintiff's motion forsummary judgment dismissing the defendants' first and second counterclaims is granted.
Prior to March 2003, the defendant Eric Richmond owned certain real property that wasdivided into two parcels, lot 1 and lot 4. The property was encumbered by two mortgages. InMarch 2003 Richmond entered into an agreement with, among others, the plaintiff, Union StreetTower, LLC (hereinafter Union Street), whereby Richmond would deliver to Union Street a dulyexecuted deed to lot 4 and transfer certain development rights from lot 1 to lot 4, and UnionStreet's managing member, Jean G. Miele, would take over the first mortgage and forgive thesecond mortgage insofar as the mortgages affected lot 1, leaving lot 1 free and clear of bothmortgages. The agreement also gave Richmond the option to repurchase lot 4 within one year ofthe execution of the agreement. Pursuant to the agreement, Richmond delivered a deed to lot 4 toUnion Street.
Within one year of the execution of the agreement, Richmond attempted to exercise therepurchase option. However, the parties could not agree on a purchase price, and Richmondultimately failed to appear at the scheduled closing. Thereafter, Union Street notified Richmondthat the repurchase option had expired. In March 2004 Richmond commenced an action against,among others, Miele and Union Street, seeking, inter alia, to compel specific performance of therepurchase option provision in the agreement. Miele and Union Street moved to dismiss thecomplaint for failure to state a cause of action. The Supreme Court granted the motion anddismissed the complaint, holding that Richmond was not entitled to the relief requested in thecomplaint because he had not come to court with clean hands. Richmond appealed, and thisCourt affirmed the order, but on the ground that Richmond had defaulted under the contract (see Richmond v Miele, 30 AD3d575 [2006]).
In January 2009 Union Street commenced this action against Richmond and the defendant[*2]231 Fourth Avenue Lyceum, LLC (hereinafter together thedefendants), of which Richmond was the sole member. Union Street seeks specific performanceof that part of the March 2003 agreement providing for Richmond to transfer certaindevelopment rights from lot 1 to lot 4. The defendants' first counterclaim alleged that, pursuant toReal Property Law § 320, the March 2003 deed should be considered a mortgage. Thedefendants' second counterclaim alleged that they had the right to redeem lot 4 in an amount tobe determined by the Supreme Court. Union Street moved for summary judgment dismissing thefirst and second counterclaims based on, inter alia, res judicata. The Supreme Court deniedUnion Street's motion, holding that the case presented a "different factual grouping" than theprior case. Union Street appeals from the order, and we reverse.
The doctrine of res judicata " 'operates to preclude the renewal of issues actually litigated andresolved in a prior proceeding as well as claims for different relief which arise out of the samefactual grouping or transaction and which should have or could have been resolved in the priorproceeding' " (Luscher v Arrua, 21AD3d 1005, 1006-1007 [2005], quoting Koether v Generalow, 213 AD2d 379, 380[1995]). To determine what "factual grouping" constitutes a "transaction," the court mustconsider how " 'the facts are related in time, space, origin, or motivation, whether they form aconvenient trial unit, and whether . . . their treatment as a unit conforms to theparties' expectations or business understanding or usage' " (Smith v Russell Sage Coll.,54 NY2d 185, 192-193 [1981], quoting Restatement [Second] of Judgments [Tent Draft No. 1]§ 61; see Braunstein v Braunstein, 114 AD2d 46, 53 [1985]). Under New York'stransactional approach to the doctrine of res judicata, "once a claim is brought to a finalconclusion, all other claims arising out of the same transaction or series of transactions arebarred, even if based upon different theories or if seeking a different remedy" (O'Brien v Cityof Syracuse, 54 NY2d 353, 357 [1981]).
The first and second counterclaims in this action are barred by res judicata because thoseclaims could have been resolved in the March 2004 action (see Jennings v City of Glens Falls Indus. Dev. Agency, 9 AD3d773, 774 [2004]). These counterclaims, when compared with the causes of action in theMarch 2004 action "are related in time, space, origin, [and] motivation" (Smith v RussellSage Coll., 54 NY2d at 192-193). They (1) originate from the identical agreement, (2) spanthe same period of time, (3) involve the same chief participants, and (4) involve the samemotivation of Richmond to reclaim an ownership interest in lot 4. "Under these circumstances, itis almost impossible to resist the conclusion that the over-all transaction here formed aconvenient trial unit and that this view conforms to reasonable expectations" (Smith v RussellSage Coll., 54 NY2d at 193 [internal quotation marks omitted]).
The parties' remaining contentions are without merit. Rivera, J.P., Dickerson, Lott andCohen, JJ., concur.