WHITE v. TITAN CAPITAL ID LLC (2026)

DECISION & ORDER

In an action, inter alia, to recover damages for breach of contract, (1) the plaintiffs appeal from an order of the Supreme Court, Suffolk County (Kathy G. Bergmann, J.), dated December 31, 2024, and (2) the plaintiffs appeal, and the defendants cross-appeal, from an order of the same court dated March 5, 2025.  The order dated December 31, 2024, granted the defendants' motion to strike the plaintiffs' jury demand.  The order dated March 5, 2025, insofar as appealed from, granted that branch of the defendants' motion which was for summary judgment dismissing the complaint.  The order dated March 5, 2025, insofar as cross-appealed from, denied that branch of the defendants' motion which was for an award of attorneys' fees and costs.

ORDERED that the order dated December 31, 2024, is affirmed;  and it is further,

ORDERED that the order dated March 5, 2025, is affirmed insofar as appealed from;  and it is further,

ORDERED that the order dated March 5, 2025, is reversed insofar as cross-appealed from, on the law, that branch of the defendants' motion which was for an award of attorneys' fees and costs is granted, and the matter is remitted to the Supreme Court, Suffolk County, for further proceedings consistent herewith;  and it is further,

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

The plaintiffs, Emanon South Corp. and its principal Michael C. White, entered into three loan agreements with the defendant Titan Capital ID, LLC (hereinafter Titan).  The loans were secured by mortgages on four properties located in Southampton.  Two of the loans originally had a maturity date of July 26, 2019, which was later extended to January 26, 2020.  The final loan had a maturity date of October 18, 2020.  The plaintiffs did not repay the loans that matured on January 26, 2020, by the maturity date.

On August 18, 2020, Titan commenced an action against the plaintiffs, among others, to foreclose the mortgages on the four properties securing the loans.  In October 2020, Titan sold its rights, title, and interest in the loans to a third party.

Thereafter, the plaintiffs commenced this action against Titan and the defendant David Saferstein, one of Titan's principals, to recover damages for breach of contract and fraudulent inducement against Titan and tortious interference with contract against Saferstein.

Subsequently, the plaintiffs filed a note of issue in which they demanded a jury trial.  The defendants moved to strike the plaintiffs' demand for a jury trial on the ground that the plaintiffs had waived their right to a jury trial pursuant to the terms of the loan agreements.  In an order dated December 31, 2024, the Supreme Court granted the defendants' motion.

The defendants moved for summary judgment dismissing the complaint and for an award of attorneys' fees and costs.  In an order dated March 5, 2025, the Supreme Court granted that branch of the motion which was for summary judgment dismissing the complaint and denied that branch of the motion which was for an award of attorneys' fees and costs.  The plaintiffs appeal from the orders dated December 31, 2024, and March 5, 2025, and the defendants cross-appeal from the order dated March 5, 2025.

“The essential elements of a cause of action to recover damages for breach of contract are (1) the existence of a contract, (2) the plaintiff's performance pursuant to the contract, (3) the defendant's breach of its contractual obligations, and (4) damages resulting from the breach” (Arnell Constr.  Corp. v New York City Sch. Constr.  Auth., 144 AD3d 714, 715).  “[A] contract is to be construed in accordance with the parties' intent, which is generally discerned from the four corners of the document itself.  Consequently, a written agreement that is complete, clear and unambiguous on its face must be enforced according to the plain meaning of its terms” (IDT Corp. v. Tyco Group S.A.R.L., 13 NY3d 209, 214 [internal quotation marks omitted];  see MHR Capital Partners LP v. Presstek, Inc., 12 NY3d 640, 645).  “A written agreement or other written instrument which contains a provision to the effect that it cannot be changed orally, cannot be changed by an executory agreement unless such executory agreement is in writing and signed by the party against whom enforcement of the change is sought or by his [or her] agent” (General Obligations Law § 15–301[1] ).  Notwithstanding the foregoing, “an alleged oral modification is enforceable if there is part performance that is unequivocally referable to the oral modification” (2261 Realty, LLC v. Cai Ping Wang, 242 AD3d 682, 685 [internal quotation marks omitted] ).  “In order to be unequivocally referable, conduct must be inconsistent with any other explanation” (Vogel v. Vogel, 128 AD3d 681, 684 [alteration and internal quotation marks omitted] ).

Here, in support of their motion, inter alia, for summary judgment, the defendants established their prima facie entitlement to judgment as a matter of law dismissing the cause of action alleging breach of contract against Titan by submitting, among other things, the loan agreements and related documentation, transcripts of the deposition testimony of White and Saferstein, and an affidavit from a co-owner of Titan.  Such evidence established, prima facie, that there had been no breach by Titan and that the plaintiffs were in default under the terms of the agreements by failing to repay the loans that matured in January 2020 (cf.  Arnell Constr.  Corp. v New York City Sch. Constr.  Auth., 144 AD3d at 715).  In opposition, the plaintiffs failed to raise a triable issue of fact.  Contrary to the plaintiffs' contention, the evidence did not raise a triable issue of fact as to whether Titan's acceptance of payments in June and July 2020 reflected a new oral contract (cf.  223 Sam, LLC v. 223 15th St., LLC, 161 AD3d 716, 718).

“To prevail on a claim of fraudulent inducement, it must be shown that there was ‘a knowing misrepresentation of material present fact, which [was] intended to deceive another party and induce that party to act on it, resulting in injury’ ” (Piccoli v. Cerra, Inc., 216 AD3d 1188, 1189–1190, quoting Tsinias Enters.  Ltd. v. Taza Grocery, Inc., 172 AD3d 1271, 1273).  “ ‘The plaintiff must also establish that he or she reasonably relied upon the alleged misrepresentation’ ” (Israel v. Progressive Cas. Ins. Co., 222 AD3d 733, 734, quoting 651 Bay St., LLC v. Discenza, 189 AD3d 952, 954).  In that regard, “the ‘plaintiff is expected to exercise ordinary diligence and may not claim to have reasonably relied on a defendant's representations ․ where he [or she] has means available to him [or her] of knowing, by the exercise of ordinary intelligence, the truth or the real quality of the subject of the representation’ ” (Feldman v. Byrne, 210 AD3d 646, 649, quoting Benjamin v. Yeroushalmi, 178 AD3d 650, 654).

Here, the defendants' submissions established, prima facie, that there had been no misrepresentation by Titan or justifiable reliance by the plaintiffs (cf.  Piccoli v. Cerra, Inc., 216 AD3d at 1190).  The defendants' submissions included, inter alia, email correspondence stating that the “loan matured on January 26, 2020 and this does not represent a loan renewal,” and evidence that the payments made by the plaintiffs were partial payments for outstanding interest due on the defaulted loans.  In opposition, the plaintiffs failed to raise a triable issue of fact.

“The elements of tortious interference with a contract are:  ‘(1) the existence of a contract between plaintiff and a third party;  (2) defendant's knowledge of the contract;  (3) defendant's intentional inducement of the third party to breach or otherwise render performance impossible;  and (4) damages to plaintiff’ ” (Looks Great Servs., Inc. v. Roosevelt, 239 AD3d 627, 629, quoting Kronos, Inc. v. AVX Corp., 81 N.Y.2d 90, 94).  “ ‘[T]he plaintiff must specifically allege that the contract would not have been breached but for the defendant's conduct’ ” (id., quoting Barry's Auto Body of NY, LLC v Allstate Fire & Cas. Ins. Co., 190 AD3d 807, 810).

Here, the defendants established their prima facie entitlement to judgment as a matter of law dismissing the cause of action alleging tortious interference with contract against Saferstein by demonstrating that his conduct was permitted under the terms of the loan agreements and that there was no procurement of any breach of a contract (see Alavian v. Zane, 101 AD3d 475, 475–476, citing Ulysses I & Co. v. Feldstein, 75 AD3d 990, 992).  Accordingly, since there was no actual breach of a contract, the plaintiffs may not maintain a cause of action alleging tortious interference with contract (see NBT Bancorp v. Fleet/Norstar Fin. Group, 87 N.Y.2d 614, 620–621;  Alavian v. Zane, 101 AD3d at 476).  In opposition, the plaintiffs failed to raise a triable issue of fact.

Accordingly, the Supreme Court properly granted that branch of the defendants' motion which was for summary judgment dismissing the complaint.

However, the Supreme Court erred in denying that branch of the defendants' motion which was for an award of attorneys' fees and costs.  “Under the American rule, attorney's fees are incidents of litigation and a prevailing party may not collect them from the loser unless an award is authorized by agreement between the parties, statute or court rule” (Lang v. Zlotnick, 236 AD3d 635, 636 [internal quotation marks omitted] ).  Where parties to a contract include a promise to pay the other's attorneys' fees, “[t]he promise should not be found unless it can be clearly implied from the language and purpose of the entire agreement and the surrounding facts and circumstances” (Hooper Assoc. v. AGS Computers, 74 N.Y.2d 487, 491–492).  “Inasmuch as a promise by one party to a contract to indemnify the other for attorneys' fees incurred in litigation between them is contrary to the well-understood rule that parties are responsible for their own attorneys' fees, the court should not infer a party's intention to waive the benefit of the rule unless the intention to do so is unmistakably clear from the language of the promise” (id. at 492).

Here, it is unmistakably clear from the language of the loan agreements and the surrounding facts and circumstances that the plaintiffs agreed to indemnify the defendants for their reasonable attorneys' fees and costs in this action.  Accordingly, we remit the matter to the Supreme Court, Suffolk County, for a determination of the amount of reasonable attorneys' fees and costs to be awarded to the defendants.

In light of our determination, we need not reach the plaintiffs' remaining contention.

LASALLE, P.J., CHRISTOPHER, LANDICINO and MCCORMACK, JJ., concur.