The following e-filed papers read herein: NYSCEF Doc Nos. MS 1 31-41; 64-65 MS 2 45-62; 66-67 Decision and Order Defendant’s motion pursuant to CPLR 3212 and/or CPLR 6514 granting it summary judgment and plaintiff’s cross-motion seeking summary judgment on its complaint and dismissing defendant’s counterclaims are decided as follows: Defendant TBD Five Management, Inc. (“TBD”), as seller, and TH22-Carroll LLC, as purchaser, entered into a Contract of Sale dated June 5, 2022 (“Contract”), for the property known as 442-450 Carroll Street in Kings County, tax block 453, Lot 26 (“Property”) for the purchase price of $14,000,000. By assignment dated May 2, 2023, and as permitted by the Contract, purchaser’s interest was assigned from TH22-Carroll LLC, to plaintiff, an affiliated company. The date for closing of the Contract was extended three times by written agreement of the parties, to a most recent time of the essence date of August 2, 2023 (“Closing Date”). According to TBD, the extensions were necessitated to permit plaintiff more time to secure funding, and that the third and final 90-day extension was conditioned upon plaintiff’s payment of $425,000 to TBD, which would be retained as liquidated damages if plaintiff failed to close by the Closing Date. The closing did not go forward on August 2, 2023. TBD argues that plaintiff failed to close due to its inability to timely secure investors and/or obtain funding. TBD submits it is therefore entitled to deem the Contract terminated and retain the deposit pursuant to the parties’ third extension agreement. TBD argues that plaintiff’s complaint alleging a “title clearance” issue is manufactured as well as meritless based on the Contract’s clear terms under §2.1, which provides that the closing documents would be tendered, as is standard and customary, at closing, and not beforehand. TBD further argues that the documents provided by plaintiff, a title report and email correspondence between the title agent and defendant’s transactional counsel, proves that TBD did everything necessary to clear up the ministerial act of getting the property description information it needed to file the confirmatory deed, which would be signed if and when plaintiff scheduled a closing. As it is undisputed that plaintiff never scheduled a closing, TBD asserts that it is entitled to summary judgment dismissing plaintiff’s complaint, costs under CPLR 6514, and a vacatur of the notice of pendency. In opposition to TBD’s motion and in support of its own motion for summary judgment, plaintiff contends that TBD failed to comply with its contractual obligation to deliver in escrow a confirmatory deed and an affidavit of title, both of which were required by Royal Abstract, the agent of the title insurance company, to close and issue insurable title. It is plaintiff’s position that because TBD failed to deposit with Royal Abstract the correction deed and owner’s title affidavit, TBD cannot declare plaintiff to be in default. Further, that plaintiff, by notice dated December 12, 2023, set a January 3, 2024, time of the essence closing, but that TBD rejected such closing on the faulty theory that plaintiff had defaulted on August 2, 2023. Plaintiff asserts that it had ample funds to close on January 3, 2024, as shown by the compilation and supporting documents transmitted to TBD in November 2023. Plaintiff contends that it is entitled to summary judgment directing TBD to transfer good title to plaintiff in return for the payment of $14,500,000, less plaintiff’s legal fees. As for TBD’s assertion that it is entitled to legal fees, plaintiff argues that the Contract does not permit TBD legal fees under the circumstances since, under article 20, seller is permitted to keep buyer’s deposit as liquidated damages if buyer defaults. Additionally, that TBD cannot claim attorneys’ fees under CPLR 6514 because the instant action was prosecuted in good faith. In opposition to plaintiff’s cross-motion for summary judgment, TBD contends that plaintiff has only produced a single document from the time between when the Contract was executed and the Closing Date, namely, a draft commercial mortgage term sheet from January 2023 (filed under seal). TBD contends that a draft term sheet from January 2023 has no bearing on the purported “title issues” alleged by plaintiff and is, in any event, a red herring since the document only demonstrates that plaintiff applied for a commercial mortgage with Maxim eight months before the final closing deadline. TBD points out that plaintiff fails to provide any supporting affirmation from either its own transactional counsel or title counsel attesting that there was ever any dispute that TBD cleared title. Finally, TBD asserts that it is entitled to attorneys’ fees and costs under CPLR 6514 regardless of whether plaintiff’s claim is brought in good faith or not. Discussion It is well established that summary judgment is granted when “the proponent makes a prima facie showing of entitlement to judgment as a matter of law, tendering sufficient evidence to demonstrate the absence of any material issues of fact, and the opponent fails to rebut that showing” (Brandy B. v. Eden Cent. School Dist., 15 NY3d 297, 302 [2010] [quoting Alvarez v. Prospect Hosp., 68 NY2d 320, 324 [1986]). Once the proponent has made a prima facie showing, the burden then shifts to the motion’s opponent to present evidentiary facts in admissible form sufficient to raise a genuine, triable issue of fact (Zuckerman v. City of New York, 49 NY2d 557, 562 [1980]). Here, TBD established that plaintiff defaulted under the Contract and last extension agreement dated May 4, 2023 by failing to close by the Closing Date and that it is therefore entitled to terminate the Contract and retain the deposit pursuant to such agreements. In opposition, plaintiff failed to raise a triable issue of fact. Both the Contract and the emails dated June 29, 2023 between TBD’s transaction counsel and Royal Abstract, which are relied upon by plaintiff, indicate that execution of a confirmatory deed and affidavit of title was a closing task. Plaintiff fails to otherwise demonstrate any impediment to TBD delivering clear title at closing, had plaintiff been ready and willing to close by the Closing Date. As such, TBD established its entitlement to summary judgment dismissing plaintiff’s complaint, judgment on its first counterclaim, and an order vacating the lis pendens on the Property. As for attorneys’ fees and costs under CPLR 6514, “CPLR 6514 (c) authorizes the court, in the exercise of its broad discretion, to award costs and expenses to the aggrieved party when a notice of pendency is cancelled under CPLR 6514 (a) or (b)” (Lake Valhalla Civic Ass’n v. Bmr Funding, 194 AD3d 803, 805 [2d Dept 2021] [citation omitted]). Here, TBD’s submission fails to demonstrate that the subject notice of pendency was canceled pursuant to either CPLR 6514(a) or (b). Under CPLR 6514(b), which concerns whether a plaintiff has commenced or prosecuted the action in good faith, the court notes that plaintiff’s likelihood of success on the merits is irrelevant to determining plaintiff’s good faith (see 551 W. Chelsea Partners LLC v. 556 Holding LLC, 40 AD3d 546, 548 [1st Dept 2007]). TBD fails to show that plaintiff has not commenced this action in good faith. Based on the foregoing, defendant’s motion pursuant to CPLR 3212 seeking summary judgment dismissing the complaint is granted to the extent herein and the complaint is hereby dismissed. Defendant is also granted summary judgment on its first counterclaim. The clerk is directed to cancel the notice of pendency on the subject Property. Plaintiff’s cross-motion seeking summary judgment is denied. Dated: April 11, 2024
