ADDITIONAL CASES Alan Kaypour, Plaintiff v. National Carpet Contracting Corp, and Diamond Dove LLC., Defendants; 602229/2021 DECISION AND ORDER UPON DUE DELIBERATION AND CONSIDERATION BY THE COURT of the foregoing papers, including e-filed documents/exhibits numbered 18 through and including 53, this motion is decided as follows Alan Kaypour, as the Plaintiff in the Second Action (“Kaypour”) moves the Court pursuant to CPLR §3212 for an Order which seeks, inter alia, summary judgment against Defendants National Carpet Contracting Corp and Diamond Dove LLC (“National Carpet” and “Diamond Dove,” respectively), and in favor of Kaypour (mot seq 01). In motion sequence 002, National Carpet moves the Court by cross-motion for summary judgment dismissing the Complaint in action #2 in its entirety. Diamond Dove and National Carpet are parties to a lease for 836-838 Willis Avenue Albertson, NY (“Premises”). On or about August 17, 2012, the Complaint in action 1 provides that National Carpet entered into a lease with Frank Ferrante and Carmela Ferrante, the previous owners of the Premises. On August 17, 2012, Carmela Ferrante acquired a one hundred (100 percent) percent interest in the fee title of the Premises, and subsequently conveyed the Premises to Diamond Dove through a Bargain and Sale Deed dated May 17, 2018. Kaypour contends that on September 21, 2020, he entered into a contract of sale related to the Premises with Diamond Dove after National Carpet refused to exercise its option to purchase the Premises. In contrast, National Carpet’s Complaint provides that on or about September 23, 2020, National Carpet through its attorney, was advised of a third party offer to purchase the Premises for a price of $420,000.00, a 10 percent deposit, no financing, and a closing date of November 23, 2020. Also on September 23, 2020, National Carpet, through its counsel, notified Diamond Dove that it was “exercising its right of first option to purchase the premises on the same terms” as those presented to Kaypour. Although disagreeing on the ultimate legal significance of the events, the parties agree that on or about September 23, 2020, Diamond Dove offered the Premises to National Carpet at the contract price and granted National Carpet five days to respond or allow Diamond Dove to sell the premises to a third-party purchaser. On October 1, 2020, National Carpet sent Diamond Dove two copies of the proposed contract, executed by National Carpet, along with a bank check in the amount of $42,000.00 representing 10 percent of the purchase price as a deposit. Diamond Dove r advised National Carpet that it was proceeding to contract with Kaypour and returned National Carpet’s bank check. On October 26, 2020, National Carpet filed a Summons and Complaint with the Court against Diamond Dove (action 1), along with a Notice of Pendency. National Carpet’s Complaint contained causes of action for declaratory judgment alleging that despite its “proper and timely exercise of its option” Diamond Dove elected to proceed with sale to third party purchaser, and accordingly National Carpet seeks a declaration that it properly and timely exercised its right of first option to purchase premises, and for specific performance, in that National Carpet contends it performed all of the conditions required in order to exercise its right of first option to purchase premises, and notwithstanding same, Diamond Dove has refused to execute the contract to sell the Premises to National Carpet. National Carpet further contends in its complaint that specific performance is a necessary remedy as “there is no adequate remedy at law.” Diamond Dove’s Verified Answer to action 1 contains two affirmative defenses: the first is that on or about August 19 2020, Plaintiff waived its right to purchase the premises when it failed to respond to a notice that served by mail from Counsel to Defendant a Notice pursuant to Paragraph 30 of the Lease, and second, Plaintiff unilaterally reduced its rent payments by Fifty Percent (50 percent) from May 2020 through October 2020 without reaching an agreement with the Defendant on modification of the lease. In response to the filing of Action 1 and Notice of Pendency by National Carpet, Kaypour filed its action against National Carpet and Diamond Dove under Index No. 6002229/2021, along with a Notice of Pendency as well. Kaypour’s first cause of action is for tortious interference with contract, and alleges that “plaintiff has been damaged in a sum to be determined by this court, but in no event less than $500,000.” In the second cause of action, Kaypour contends that Diamond Dove complied with the provisions of lease requiring it to offer premises to National Carpet, but that National Carpet “failed to exercise its right to purchase the premises for the required minimum sum of $675,000.” National Carpet’s Answer to action 2 provides three affirmative defenses, is 1) that Kaypour is not a party to the lease agreement and lacks standing to seek a declaration of rights and obligations between parties to the lease; 2) Kaypour fails to state any claims upon which relief can be granted, and 3) National Carpet accepted an offer made by Diamond Dove to purchase premises, and “in order to protect National Carpet’s rights. In its Revised Answer to action 2, Diamond Dove issued a general denial in that it did not breach its contract with Kaypour, and requests an Order from the Court declaring that either Kaypour or National Carpet is the party which it is required to sell the Premises to. After issue was joined with respect to both matters, the Court granted National Carpet’s motion for consolidation for discovery and trial purposes as such involved a “common nucleus of operative facts.” (National Carpet Contracting Corp. v. Diamond Dove, LLC, August 16, 2021, Sup Ct., Nassau County, Rademaker, J., “Decision and Order,” Index No. 611806/2020; see also National Carpet Contracting Corp. v. Diamond Dove, LLC, May 2, 2022, Sup. Ct., Nassau County, Index No. 611806/2020, “Consolidation Order.”) Subsequently, the Court issued an Order of Reference to the Commercial Division ADR Program through its Order dated October 17, 2022, which directed the parties to appear for a status conference if the matter did not settle. The matter was not resolved through the mediation process, and the matter was certified ready for trial through the Court’s Order dated February 9, 2023 (“Certification Order”). The Certification Order provides that motions for summary judgment must be filed within ninety days of the filing of the note of issue, which was filed with the Court on May 8, 2023. Kaypour’s motion for summary judgment and National Carpet’s cross-motion for summary judgment were both filed timely within the parameters established by the Court through its Certification Order. It is well settled that in a motion for summary judgment the moving party bears the burden of making a prima facie showing that he or she is entitled to summary judgment as a matter of law, submitting sufficient evidence to demonstrate the absence of a material issue of fact (see Sillman v. Twentieth Century Fox Film Corp., 3 NY2d 395 [1957]; Friends of Animals, Inc. v. Associates Fur Mfrs., 46 NY2d 1065 [1979]; Zuckerman v. City of New York, 49 NY2d 5557 [1980]; Alvarez v. Prospect Hospital, 68 NY2d 320 [1986]). The failure to make such a showing requires denial of the motion, regardless of the sufficiency of the opposing papers (see Winegard v. New York University Medical Center, 64 NY2d 851 [1985]). Once this showing has been made, however, the burden shifts to the party opposing the motion for summary judgment to produce evidentiary proof in admissible form sufficient to establish the existence of material issues of fact which require a trial of the action (see Zuckerman v. City of New York, 49 NY2d 5557 [1980]). The primary purpose of a summary judgment motion is issue finding not issue determination (Garcia v. J.C. Duggan, Inc., 180 AD2d 570 [1st Dept. 1992]), and it should only be granted when there are no triable issues of fact (see also Andre v. Pomeroy, 35 N2d 361 [1974]). The dispute herein ultimately hinges upon the interpretation Article 30 of Diamond Dove’s lease with National Carpet entitled Option to Purchase, which provides that: In the event Landlord desires to sell the Building of which the Premises form a part, provided the Tenant is not in default under this Lease and is up-to date on all fixed rent and additional rent and all other charges owed to landlord, the Tenant shall have the first option to purchase the Building from the Landlord at the same price, and under the same terms and conditions (including, without limitation, if an all cash deal, or if a mortgage is to be obtained) as an offer to Landlord that Landlord seeks to accept. Tenant shall have five (5) days from the receipt of notice from Landlord of Landlord’s desire to sell the Building, and from notice of the terms of the proposed sale by Landlord, to notify Landlord of Tenant’s agreement to purchase the Building. Under no circumstances will Landlord be required to sell the Building to Tenant for a purchase price of less than $675,000.00. It is Plaintiff’s position that the operative language in the lease was not a right of first refusal and that Diamond Dove had no authority to offer National Carpet a chance to purchase the Premises. National Carpet was in default and failed to exercise the option granted it in the lease. In contrast, National Carpet contends that it properly exercised its right of first refusal when it tendered an offer to purchase the Premises at a price which matched Kaypour’s offer. The interpretation of written contracts ordinarily presents a question of law for the Court. (Nucci v. Warshaw Constr. Corp., 12 NY2d 16, 20 [1962]). Where there is no ambiguity in the contract language used in a clause, it must be construed on its face as a matter of law. (Cohen v. Daughters of Sarah Nursing Home, 79 AD2d 1042 [3rd Dept 1981]) In construing a contract, the document must be read as a whole to determine the parties’ purpose and intent, giving a practical interpretation to the language employed so that the parties’ reasonable expectations are realized. Further, a court should not adopt an interpretation which would leave any provision without force and effect (Sunrise Mall Assoc. v. Import Alley, 211 AD2d 711, 711 [2d Dept 1995]). A court may not write into a contract conditions the parties did not insert by adding or excising terms under the guise of construction, nor may it construe the language in such a way as would distort the contract’s apparent meaning (Cleva v. Cleva, 139 AD3d 785, 785 [2d Dept 2016]). The express language of the lease describes National Carpet’s rights as an “option” and not a “right of first refusal.” However, the use of the word “option” in a commercial real estate lease does not necessarily determine the interpretation of such provision, and ultimately, courts have interpreted language presented in leases such as the one at bar as conferring upon the tenant a right of first refusal, which has been described as “a dormant right that is triggered when an owner decides to sell the property to a third party at an agreed-upon price.” (Tuminno v. Waite, 110 AD3d 1456, 1457 [4th Dept 2013] citing to Markan Corp v. Plane Cayuga Vineyard, Inc. 28 AD3d 1264 [4th Dept 2005]) A right of first refusal…does not give its holder the power to compel an unwilling owner to sell; it merely requires the owner, when and if he [or she] decides to sell, to offer the property first to the party holding the preemptive right so that he [or she] may meet a third-party offer or buy the property at some other price set by a previously stipulated method. (Finlay v. Huber, 47 AD3d 883, 883 [2d Dept 2008]). When the owner has conveyed such a bona fide offer to the holder, the right of first refusal will be extinguished only if the holder declines to purchase the property or fails to match the terms of the offer (Postler v. Piedilato, 2018 NY Slip Op 33469[U], *4 [Sup Ct, Richmond County 2018]). A right of first refusal is “an agreement that should the owner receive a bona fide offer to purchase the property during the term of the option, he [or she] will not accept the offer without giving the [holder of the right of refusal] the right to buy it on the same terms. (Clifton Land Co. LLC v. Magic Car Wash, LLC, 165 AD3d 1455, 1456 [3d Dept 2018]) The matter at bar ultimately calls for the interpretation of the contract between Diamond Dove and National Carpet, and given the applicable case law, National Carpet possessed a right of first refusal which was dormant and was only actualized after Diamond Dove informed National Carpet of the proposed sale of the Premises by Diamond Dove to Kaypour. National Carpet matched Kaypour’s purchase price for the Premises and tendered a banker’s check representing the down payment on the sales price within a reasonable time after a bona fide offer to purchase the Premises was conveyed to National Carpet by Diamond Dove. With respect to Kaypour’s claim in action 2, the elements of tortious interference with contractual relations are 1) the existence of a contract between the plaintiff and a third party, (2) the defendant’s knowledge of the contract, (3) the defendant’s intentional inducement of the third party to breach or otherwise render performance impossible, and (4) damages to the plaintiff. (Anesthesia Assoc. of Mount Kisco, LLP v. N. Westchester Hosp. Ctr., 59 AD3d 473, 476 [2d Dept 2009]) To set forth a cause of action sounding in tortious interference with business relations, a plaintiff is required to plead “that the defendant interfered with the plaintiff’s business relationships either with the sole purpose of harming the plaintiff or by means that were unlawful or improper.” (Tri-Star Light. Corp. v. Goldstein, 151 AD3d 1102, 1106 [2d Dept 2017]). Based upon the foregoing, it is clear that National Carpet took appropriate and lawful actions to preserve its right of first refusal with respect to the purchase of the Premise, and therefore cannot be considered to have acted with tortious intent. Upon a careful review of the papers submitted in support and in opposition to the instant motions, along with the respective annexed exhibits, and in reliance upon precedent, motion sequence 001 is DENIED in its entirety, and with respect to motion sequence 002, National Carpet’s cross-motion for summary judgment in its favor is GRANTED, and it is ORDERED, that Action 2 under Index No. 602229/2021 is DISMISSED in its entirety and with prejudice, and it is further ORDERED, that the Notices of Pendency filed by Kaypour against National Carpet and Diamond Dove and recorded with the Nassau County Clerk on February 25, 2021 with respect to Section 9 Block 112, Lots 115 & 122, in the County of Nassau, which is also known by the street address 836-838 Willis Avenue, Albertson, NY, with respect to action 2 under Index No. 602229/2021, are hereby VACATED, and it is further ORDERED, that upon a search of the record, the Court exercises its discretion under CPLR 3212[b], and determines that National Carpet is entitled to summary judgment and dismissal of Diamond Dove’s first affirmative defense in action 1, as National Carpet’s right of refusal remained dormant until approximately September 23, 2020, when Diamond Dove informed National Carpet of Kaypour’s bona fide offer to purchase the Premises, and further it is ORDERED, National Carpet validly exercised its option to purchase the Premises, and to the extent that National Carpet remains ready, willing, and able to perform under the terms of their agreement, Diamond Dove is directed to sell the Premises to National Carpet as soon as practicable, with Diamond Dove to receive credit for any unpaid rent, to the extent that any such unpaid rent remain outstanding, and it is further ORDERED, that with the direction that National Carpet is to satisfy any outstanding unpaid rent, Diamond Dove’s second affirmative defense in action 1 is hereby DISMISSED as MOOT, and it is ORDERED, that all other requested relief, not specifically addressed herein, is hereby DENIED. This constitutes the Decision and Order of the Court. Dated: August 21, 2023
