ACP HOUSING ASSOCIATES v. ABJ MILANO LLC (2024)

Order, Supreme New York County (Joel M. Cohen, J.), entered on or about October 5, 2023, which granted defendant buyer's motion for summary judgment dismissing seller's complaint sounding in reformation and unjust enrichment, unanimously affirmed, with costs.

Buyer made a prima facie showing that it was entitled to judgment as a matter of law on seller's claim for reformation of the parties’ real estate purchase and sale agreement based on a theory of either mutual mistake or a scrivener's error.  “Reformation based upon a scrivener's error requires proof of a prior agreement between [the] parties, which when subsequently reduced to writing fails to accurately reflect the prior agreement” (Warberg Opportunistic Trading Fund L.P. v. GeoResources, Inc. 151 A.D.3d 465, 470–471 [1st Dept. 2017] [internal quotation marks omitted]).  Here, there is no evidence of a prior oral agreement inconsistent with the written documents.  Indeed, seller's representative testified that there was no oral agreement.  Moreover, the real estate transfer documents, as well as the contract, all of which were prepared by seller's counsel, repeatedly and consistently included the description, by address, metes and bounds, and block and lot number, of the vacant lot that is the subject of the reformation action.  This is inconsistent with a claim that the inclusion of the vacant lot was an inadvertent or isolated scrivener's error (see id.).

A claim for reformation based on mutual mistake must be supported by clear and convincing evidence that the agreement did not accurately express the parties’ intention (see Warberg, 151 A.D.3d at 470, 58 N.Y.S.3d 1).  A mutual mistake must “ ‘exist at the time the agreement is signed’ ” (Gulf Ins. Co. v. Transatlantic Reins. Co., 69 A.D.3d 71, 85, 886 N.Y.S.2d 133 [1st Dept. 2009]).  The evidence offered by seller — that a year before the closing, the parties did not intend to include the vacant lot in the transaction — substantially predated the parties’ final agreements.  Both buyer and its counsel affirmed that, by the time of the closing, the vacant lot was included in the sale.  Their understanding was supported by, among other things, the deed, which included the vacant lot, other closing documents drafted by the seller, and the fact that the vacant lot and the two adjoining properties included in the purchase were all subject to the same regulatory agreement with the City of New York. Furthermore, after the closing, buyer, not seller, paid all the carrying costs of the property, including taxes.  In addition, seller waited three years to seek reformation, which is persuasive evidence of the agreed intention of the parties (see Warberg at 471, 58 N.Y.S.3d 1).

In opposition, seller failed to raise a triable issue of fact.

Because the sale of the subject properties is governed by a written contract, seller's claim for unjust enrichment was properly rejected (see Clark–Fitzpatrick, Inc. v. Long Is. R.R. Co., 70 N.Y.2d 382, 389, 521 N.Y.S.2d 653, 516 N.E.2d 190 [1987]).