CSN REALTY CORP v. 2252 THIRD AVENUE LLC (2024)

Judgment, Supreme Court, New York County (Joel M. Cohen, J.), entered August 28, 2023, awarding plaintiff damages, and bringing up for review an order, same court and Justice, entered on or about July 21, 2023, which granted plaintiff's motion for summary judgment on its breach of contract claim, unanimously modified, on the law, to reduce the principal amount of the judgment by $600,000, and otherwise affirmed, without costs.  Appeal from aforesaid order, unanimously dismissed, without costs, as subsumed in the appeal from the judgment.

Defendant's failure to tender performance at the time-of-the-essence closing constituted a default, and defendant failed to raise an issue of fact in opposition to plaintiff's prima facie showing that it was ready, willing, and able to perform on the time-of-the-essence closing date (see Donerail Corp. N.V. v. 405 Park LLC, 100 A.D.3d 131, 137–138, 952 N.Y.S.2d 137 [1st Dept. 2012]).  Plaintiff's failure to secure a payoff letter concerning an existing mortgage on the property prior to closing does not create an issue of fact as to plaintiff's readiness to close, as “Existing Mortgage(s)” were “Permitted Exceptions” under the contract, and the sale proceeds were sufficient to cover the mortgage amount.  Defendant otherwise raises minor issues which could have been resolved at the closing had defendant appeared.  Because defendant failed to raise an issue of fact, or provide a lawful excuse for its failure to close, plaintiff was entitled to retain the contract deposit of $600,000 (see Diplomat Props., L.P. v. Komar Five Assoc., LLC, 72 A.D.3d 596, 600, 899 N.Y.S.2d 237 [1st Dept. 2010], lv denied 15 N.Y.3d 706, 2010 WL 3547599 [2010]).

The judgment properly included payment amounts promised by defendant in the second amendment to the contract.  The second amendment provided for additional payments by defendant in exchange for an extension of the closing date set forth in the contract, and that those payments were “in addition to any other remedies that [plaintiff] may have under the Contract.”  Defendant's reading of the contract's “sole remedy” provision as overriding the express subsequent agreement of the parties is inconsistent with contract interpretation principles, which dictate that “a contract must be construed in a manner which gives effect to each and every part, so as not to render any provision meaningless or without force or effect” (Matter of 195 B Owner LLC v. Anthropologie, Inc., 228 A.D.3d 418, 419, 213 N.Y.S.3d 30 [1st Dept. 2024] [internal quotation marks omitted]).

The judgment on appeal incorrectly includes in the principal amount the $600,000 deposit already paid to plaintiff.  Following defendant's appeal, Supreme Court granted plaintiff's motion to amend the judgment to reduce the principal by that amount.  Accordingly, the judgment should be modified to reduce the principal amount by $600,000.