Summary
The Appellate Division, Second Department reversed a judgment dismissing the plaintiff's action for specific performance, breach of contract, and declaratory relief concerning the sale of real property. The court held that the defendants failed to establish that the contract was unenforceable for lack of board approval or that the plaintiff breached the down-payment provisions, and remitted the matter for determination of the plaintiff's cross motion on the merits.
Topics
Practice areas
Questions Presented
- Whether the defendants established prima facie that the real-estate sale contract was unenforceable because the Church's board of trustees had not approved the sale as required by law.
- Whether the defendants established prima facie that Ballys breached the contract by failing to make a timely additional down-payment deposit.
- Whether the August 7, 2017 termination notice constituted an anticipatory breach that relieved Ballys of its obligation to perform.
- Whether the appeal from the February 14, 2019 order was procedurally proper after entry of judgment.
- Whether the Appellate Division should remit the matter for determination of Ballys's cross-motion for summary judgment on the merits.
Holdings
- The defendants failed to meet their prima facie burden of demonstrating that the contract was unenforceable because the Church's board of trustees had not approved the sale in accordance with Religious Corporations Law § 12(1) and N-PCL 511 and 511-a.
- The defendants failed to establish prima facie that Ballys breached the contract by failing to make timely down-payment deposits because they did not submit evidence showing when the lis pendens was removed, an event triggering the additional deposit obligation.
- Because Ballys's next down-payment deposit was not due until at least after August 31, 2017, the Church's August 7, 2017 notice terminating the contract based on Ballys's purported failure to make the deposit constituted an anticipatory breach and relieved Ballys of its obligation to perform.
- The direct appeal from the February 14, 2019 order had to be dismissed because the right to appeal from that order terminated upon entry of the judgment, but the issues raised by that order were reviewable on the appeal from the judgment.
- The defendants' motion for summary judgment dismissing the complaint and seeking related declaratory and notice-of-pendency relief should have been denied because the defendants failed to meet their prima facie burden.
Key quotations
“Given that the plaintiff's next down payment deposit was not due until, at least, after August 31, 2017, the Church's notice of termination constituted an anticipatory breach of the contract and relieved the plaintiff of the obligation to perform” (*2)
“Since the defendants failed to meet their prima facie burden, the Supreme Court should have denied their motion for summary judgment dismissing the complaint and, in effect, with respect to the causes of action for declaratory relief, and to cancel the notice of pendency, without regard to the sufficiency of the plaintiff's opposition papers” (*2)
Factual background
On October 1, 2014, Ballys, as prospective purchaser, and First Korean Church of New York, as prospective seller, executed a contract for the sale of Queens real property. The contract was executed for the Church by its president, Richard Sei Oung Yoon, and represented that the Church was authorized to sell the property. The defendants later asserted that the Church's board had not approved the sale and that Ballys had failed to make a required additional down-payment deposit. The Church sent Ballys a termination notice on or about August 7, 2017, although the additional deposit was not due until at least after August 31, 2017, when a prior contract concerning the property was declared unenforceable.
Procedural history
The Supreme Court, Queens County, granted the defendants' motion for summary judgment, dismissed the complaint, effectively denied the plaintiff's cross-motion for summary judgment as academic, and canceled the notice of pendency. The Appellate Division dismissed the appeal from the February 14, 2019 order because the right to direct appeal terminated upon entry of judgment, but reviewed that order on the appeal from the judgment. It reversed the judgment, denied the defendants' summary-judgment motion, reinstated the complaint, and remitted the matter for consideration of the plaintiff's cross-motion on the merits. It dismissed the reargument appeal because no appeal lies from an order denying reargument and dismissed the renewal and CPLR 5015(a)(3) appeals as academic.
Remand instructions
The matter was remitted to the Supreme Court, Queens County, for a determination on the merits of the plaintiff's cross-motion for summary judgment on the fourth, tenth, and eleventh causes of action.