GEDULA LLC v. LIGHTSTONE ACQUISITIONS III LLC (2025)

Judgment, Supreme Court, New York County (Joel M. Cohen, J.), entered December 4, 2024, dismissing plaintiffs’ first and second causes of action for breach of contract and repudiation, and bringing up for review an order, same court and Justice, entered June 13, 2024, which, after a bench trial, and to the extent appealed from, dismissed the first and second causes of action, unanimously affirmed, without costs.  Appeal from aforesaid order, unanimously dismissed, with costs, as subsumed in the appeal from the judgment.

This Court previously affirmed Supreme Court's denial of the parties’ respective motions for summary judgment (see Gedula 26, LLC v. Lightstone Acquisitions III LLC, 213 A.D.3d 409, 409, 184 N.Y.S.3d 4 [1st Dept. 2023]), because there remained questions of fact as to whether defendants intended for the terms of an internal November 18, 2014 email—referred to by the parties as the Landau email—to constitute a binding offer for plaintiffs’ purchase of a 25% equity interest in defendants’ hotel business on the terms set forth in the email, which, plaintiffs assert, they accepted.  However, after a five-day bench trial, the record supports Supreme Court's finding that no agreement was reached because defendants’ position was always that any partnership terms could not be finalized until after the closing, and after defendants’ capital stack was finalized.

The weight of the evidence was not overcome by plaintiffs’ member's assertion that he was handed a copy of the Landau email, and he accepted those terms.  No contract was objectively formed where, as here, the terms are insufficiently definite and left open for future agreement (see Luxor Capital Group, L.P. v. Seaport Group LLC, 148 A.D.3d 590, 590, 50 N.Y.S.3d 70 [1st Dept. 2017], lv denied 30 N.Y.3d 905, 2017 WL 5615854 [2017];  cf.  Stonehill Capital Mgt. LLC v. Bank of the W., 28 N.Y.3d 439, 449, 45 N.Y.S.3d 864, 68 N.E.3d 683 [2016]).

Defendants’ characterization of the Landau email as “talking points” for discussion rather than a definite offer is supported by the Landau email itself.  It is an internal email with no indication that it was intended to be disseminated or used as the basis for a firm offer.  Plaintiffs’ member testified that he was never asked to sign anything and did not follow up in writing.  As defendants’ in-house counsel testified, the parties never established what plaintiffs’ equity contribution for the partnership would be, nor did plaintiffs’ member offer to pay anything.  The Landau email itself left “other rights and obligations” to be determined by the parties.

Additionally, nothing in the record would have enabled plaintiffs’ member to calculate what he would pay based on the Landau email.  The relevant term permitting a special purpose entity controlled by plaintiffs’ member to acquire “25% of the equity ownership interest in the Property Owner that is retained by” defendants was not sufficiently definite because, as the term goes on to state, it was premised on defendants’ future ability and election “to finalize the organizational structure of the property owner.”

The court properly determined that a preponderance of the evidence did not support plaintiffs’ claims for breach of contract and repudiation because plaintiffs did not meet their burden to establish a firm offer and a mutual intent to be bound (see Wu v. Uber Tech., Inc., 43 N.Y.3d 288, 298–299, 234 N.Y.S.3d 111, 260 N.E.3d 1060 [2024]).  Although generally speaking, “[a] price term may be sufficiently definite if the amount can be determined objectively without the need for new expressions by the parties” (Borden LP v. TPG Sixth St. Partners, 191 A.D.3d 554, 555, 143 N.Y.S.3d 8 [1st Dept. 2021]), that was not the case here.  Rather, the Landau email's reference to future entities to be formed and organized at a future date undermines plaintiffs’ contention that the internal email was intended to be a firm offer.

The Court need not reach the issue of whether the motion court improvidently credited the testimony of defendants’ witnesses or whether certain testimony was hearsay.  Even if the challenged testimony were precluded, the record would remain devoid of sufficient evidence to show that defendants intended the Landau email to constitute a binding offer.

Based on the foregoing, we need not reach plaintiffs’ arguments relating to purported damages or the repudiation of the agreement, as an agreement was never formed.