LEON PETROLEUM LLC v. TARTAN CORP (2004)

In an action, inter alia, to recover damages for breach of contract, the defendants Tartan Corp., Tartan Corp. Liquidating Trust, and Stanley Kleinberg, Robert Topper, and Marc Holliday, as Trustees, appeal (1) from an order of the Supreme Court, Nassau County (Warshawsky, J.), dated January 3, 2003, which, inter alia, granted the plaintiff's motion for summary judgment, and (2) so much of an order of the same court dated May 9, 2003, as, upon reargument, adhered to its prior determination.

ORDERED that the appeal from the order dated January 3, 2003, is dismissed, as that order was superseded by the order dated May 9, 2003, made upon reargument;  and it is further,

ORDERED that the order dated May 9, 2003, is reversed insofar as appealed from, on the law, and upon reargument, the order dated January 3, 2003, is vacated and the plaintiff's motion for summary judgment is denied;  and it is further,

ORDERED that one bill of costs is awarded to the appellants.

The plaintiff commenced the instant action to recover certain condemnation awards paid to the defendant Tartan Corp. (hereinafter Tartan) by the State of New York on three properties the plaintiff purchased from Tartan.   The plaintiff contends that it was entitled to the awards pursuant to the express provisions of the contract of sale for substantially all of Tartan's assets.   Specifically, the plaintiff maintained that under section 1.01 of the contract, Tartan agreed, inter alia, to transfer to the plaintiff the right to receive “any unpaid award for any taking by condemnation” under the State's power of eminent domain with respect to the three properties sold pursuant to the contract of sale.   The State had partially taken these three properties by eminent domain before the time the parties entered into the contract of sale.   At the time of closing on the contract of sale, only partial compensation had been paid to Tartan.   The Supreme Court, inter alia, granted summary judgment to the plaintiff, finding that the plaintiff was entitled to the condemnation awards under the plain meaning of the contract, and, upon reargument, adhered to its original determination.

A party moving for summary judgment must make a prima facie showing of entitlement to judgment as a matter of law, offering sufficient evidence to demonstrate the absence of any material issue of fact (see Alvarez v. Prospect Hosp., 68 N.Y.2d 320, 508 N.Y.S.2d 923, 501 N.E.2d 572;  Zuckerman v. City of New York, 49 N.Y.2d 557, 427 N.Y.S.2d 595, 404 N.E.2d 718).  Contrary to the Supreme Court's determination, the plaintiff failed to establish its prima facie entitlement to the condemnation awards since the terms of the contract were ambiguous and raised an issue of fact (see generally Mawardi v. New York Prop. Ins. Underwriting Assn., 183 A.D.2d 756, 585 N.Y.S.2d 215;  Leon v. Lukash, 121 A.D.2d 693, 504 N.Y.S.2d 455).

The Supreme Court, upon reargument, erred in adhering to its original determination granting summary judgment to the plaintiff since the plaintiff failed to establish its prima facie entitlement to judgment as a matter of law (see generally Alvarez v. Prospect Hosp., supra;  Zuckerman v. City of New York, supra ).