Summary
denying specific performance where "the memorandum made no mention of a closing date, the quality of title to be conveyed, adjustments for real estate and/or sales taxes paid by the sellers, or the risk of loss during the sale period."
Summary of this case from Bellen v. WeiserOpinion
December 20, 1993
Appeal from the Supreme Court, Suffolk County (Underwood, J.).
Ordered that the order and judgment is affirmed, without costs or disbursements.
The law is settled that a binder agreement such as the memorandum at bar may satisfy the Statute of Frauds and thus be subject to specific performance where it identifies the parties, describes the subject property, recites all essential terms of a complete agreement, and is signed by the party to be charged (see, Engle v Lipcross, Inc., 153 A.D.2d 603, 605; Ramos v Lido Home Sales Corp., 148 A.D.2d 598; Tamir v Greenberg, 119 A.D.2d 665). Moreover, the essential terms which must be set forth for the binder to be enforceable include those terms customarily encountered in transactions of this nature (see, Taibi v American Banknote Co., 135 A.D.2d 810, 811). One can only find a true meeting of the minds where a binder constitutes a complete agreement reciting all essential terms and satisfying the other previously mentioned conditions (see, La Barca v Altenkirch, 193 A.D.2d 586; Monaco v Nelson, 121 A.D.2d 371).
To satisfy the Statute of Frauds, the writing must set forth the entire contract with reasonable certainty so that the substance thereof appears from the writing alone (see, Aceste v Wiebusch, 74 A.D.2d 810). If the contract is incomplete and it is necessary to resort to parol evidence to ascertain what was agreed to, the remedy of specific performance is not available (see, Wright v Weeks, 25 N.Y. 153). Parol evidence may not be received to supplement an insufficient writing so as to bring it into compliance with the requirements of the Statute of Frauds (see, Mandel v Guardian Holding Co., 200 App. Div. 767, affd 234 N.Y. 564). Notably, only reasonable certainty, not absolute certainty, as to the terms of the agreement is required (see, Marder's Nurseries v Hopping, 171 A.D.2d 63). Nevertheless, application of the foregoing principles to the facts of the instant case leads to the conclusion that the agreement is deficient in several respects.
Although the memorandum recited the purchase price agreed to by the parties, was signed by the parties, and set forth basic payment terms, it omitted several other essential terms. The description of the property was insufficient, especially as to "all adjacent and remote parcels" (see, Tetz v Dexter, 133 A.D.2d 79; Barber v Stewart, 275 App. Div. 429; cf., Maccioni v Guzman, 145 A.D.2d 415). Furthermore, the memorandum agreement was subject to further negotiations, as evidenced by the buyer's obligation to pay $9,900 being subject to his "acceptance of contract". Thus, the writing itself indicates that it was not intended to be a complete contract (see, Tamir v Greenberg, 119 A.D.2d 665, supra). Moreover, to the extent that this provision of the agreement is ambiguous, it should be construed against its drafter — the plaintiff buyer (see, Jacobson v Sassower, 66 N.Y.2d 991; Rieter v Tavella, 157 A.D.2d 894).
Significantly, this $450,000 commercial transaction was to be paid for, in part, by a promissory note for $300,000, payable in monthly installments of $2,700 over 10 years. However, the rate of interest to be paid on the note had not been agreed to and the memorandum made no reference to the mortgage that was to secure the debt. Where a mortgage is intended to be part of the contract and mention thereof is omitted from the writing, the omission of a material element that was obviously not agreed upon in the writing renders the writing insufficient for Statute of Frauds purposes (see, Willmott v Giarraputo, 5 N.Y.2d 250; Jaffer v Miles, 134 A.D.2d 572; Blakey v McMurray, 110 A.D.2d 998; Read v Henzel, 67 A.D.2d 186; Osta v Jarrett, 27 A.D.2d 882, 883). Clearly, the omission of the mortgage terms was a material omission indicating that there had been no meeting of the minds on this term which, along with all others, was subject to acceptance by the buyer (see, Bhutta Realty Corp. v Sangetti, 165 A.D.2d 852). Since the binder provided that the obligation to pay $9,900 was subject to the "acceptance of contract" by the buyers, the fact that no formal contract was drafted thereafter further indicates that there was no meeting of the minds as to all essential terms (see, Danton Constr. Corp. v Bonner, 173 A.D.2d 759). Furthermore, the memorandum made no mention of a closing date, the quality of title to be conveyed, adjustments for real estate and/or sales taxes paid by the sellers, or the risk of loss during the sale period. While the omission of any of these terms, standing alone, may not have constituted a fatal omission (see, Dahm v Miele, 136 A.D.2d 586 [closing within a reasonable time implied by law]), and the quality of title to be passed may be presumed to be marketable (see, Vought v Williams, 120 N.Y. 253), the omission of so many material terms from the instant agreement underscores the conclusion that it was not intended to be a complete contract containing all essential terms (see, Jaffer v Miles, 134 A.D.2d 572, supra; see also, Coniglio v Old Brookville Assocs., 162 A.D.2d 432). Therefore, specific performance was correctly denied. Thompson, J.P., Balletta, Miller and Joy, JJ., concur.