Opinion
7217/05.
Decided October 20, 2005.
Honigman Donner, LLP, Melville, New York, Counsel for Plaintiff.
Westerman, Ball, Ederer, Miller Sharfstein, LLP, Mineola, New York, Counsel for Defendant.
Defendant Wayne Rivardo moves for an order, pursuant to CPLR 3212, granting him summary judgment dismissing the complaint and awarding him costs and disbursements.
Plaintiff Joseph Pezza cross-moves for an order, pursuant to CPLR 3212, granting him summary judgment dismissing Defendant's counterclaims and an order pursuant to CPLR 8303-a awarding him costs and disbursements.
BACKGROUND
In 2001, Sunrise Group Holding, LLC ("Sunrise"), a Mercedes Benz car dealership, was formed by Defendant Wayne Rivardo ("Rivardo") and Peter Terain. Terain died in October, 2002. Pursuant to the parties' operating agreement, Rivardo was required to purchase Terain's interest in the company pursuant to a set formula. A dispute arose regarding the purchase price and litigation ensued. As a result, Rivardo experienced problems with Mercedes-Benz, which threatened the continued viability of Sunrise's of Sunrise Mercedes-Benz dealership. Thus, Rivardo sought a purchaser.
Rivardo's search for a purchaser led to negotiations with Plaintiff Joseph Pezza ("Pezza"). A series of preliminary memoranda were exchanged followed by a series of Term Sheets. The final one was dated May 9, 2003. All of the Term Sheets specifically stated that they were not binding until a formal contract was executed. While draft contracts were exchanged, one was never executed.
At a meeting on August 7, 2003, attended by Pezza, Rivardo and their counsel, Rivardo informed everyone that additional pressure was being brought to bear by Mercedes-Benz and that if the ownership dilemma was not resolved soon, the Mercedes-Benz dealership could be lost.
Sunrise was ultimately sold to Stuart Hayim with Mercedes-Benz's approval. This action ensued.
Pezza alleges in his complaint that Rivardo agreed to pay him $250,000 in exchange for his continued willingness to enter into a contract to purchase an interest in Sunrise "based on terms discussed," if "Rivardo was unable to obtain what he deemed a satisfactory price on the open market."
Rivardo seeks summary judgment dismissing the complaint.
At his examination before trial, when asked what he did for the $250,000 fee allegedly owed to him, Pezza testified that "the deal was still sitting out there." In his opposition to Rivardo's motion for summary judgment, Pezza has essentially stated that he was poised in the background as a "dark horse bidder" and that his mere presence as a potential buyer enabled Rivardo to exact a higher price than he otherwise would have for the business. Pezza also alleges that he maintained $9 million in liquid assets. That was specifically required by the Term Sheets.
DISCUSSION
Summary judgment is a drastic remedy which will be granted only when the movant establishes that there are no triable issues of fact. Andre v. Pomeroy, 35 NY2d 361 (1974). A party seeking summary judgment must make a prima facie showing of entitlement to summary judgment as a matter of law. Alvarez v. Prospect Hosp., 68 NY2d 320 (1986); and Zuckerman v. City of New York, 49 NY2d 557 (1980). Once the movant has met this burden, the party opposing summary judgment must provide proof in evidentiary form which establishes the existence of a triable issue of fact or demonstrate an acceptable excuse for his failure to do so. Weingrad v. New York Univ. Med. Ctr., 64 NY2d 851 (1985); Zuckerman v. City of New York, supra.
When deciding a motion for summary judgment, the court must view the evidence in a light most favorable to the non-moving party and afford it the benefit of all reasonable inferences which can be drawn from the evidence. Negri v. Stop Shop, Inc., 65 NY2d 625 (1985). The court's function is simply to determine whether a triable issue of fact exists. Sillman v. Twentieth Century-Fox Film Corp., 3 NY2d 395 (1957).
"It is well settled that if the parties to an agreement do not intend it to be binding upon them until it is reduced to writing and signed by both of them, they are not bound and may not be held liable until it is written out and signed (quotations omitted)." Rogers v. Mattucci, 230 AD2d 725, 726 (2nd Dept. 1996), lv. app. den., 89 NY2d 816 (1997); and Frankel v. Ford Leasing Development Co., 7 AD3d 757 (2nd Dept. 2004). Nor may recovery be had pursuant to an alleged oral agreement. "In the absence of a writing that could be understood without dependence upon extrinsic evidence and that clearly describes the consideration, a promise derived from past consideration is simply not actionable." Clark v. Bank of New York, 185 AD2d 138 (1st Dept. 1992). See also, Raymond Babtkis Assocs., Inc. v. Tarazi Realty Corp., 36 A.D.2d 694 (1st Dept. 1971).
Rivardo allegedly agreed to pay Pezza $250,000 to "continue" to pose as a bidder; i.e., to allow the deal to continue to "sit out there." Although the Term Sheet was three months old, it had not been terminated by its own terms or by either party's conduct. Thus, in essence, Pezza alleges nothing more than the continuing effort to try and reach an agreement. It was an obligation that already existed. Thus, it is not enforceable in any event. Similarly, unavailing is Pezza's allegation that he agreed to maintain $9 million in liquid assets in exchange for this payment. That obligation already existed via the Term Sheet. Therefore, Pezza's claim must fail. The complaint must be dismissed.
In view of the clear lack of an enforceable agreement, Rivardo's counterclaims by which he alleges a breach of contract cause of action must also fail.
As for the claim for attorney's fees, the Term Sheet provides that "the costs incurred by either party, of any legal dispute arising out of the terms of the buy-in or operating agreement, shall be borne by the losing party." Even if the Term Sheet were enforceable, neither of the party's claims arise out of the terms of a buy-in or operating agreement. Moreover, in view of Pezza's claim, Rivardo's counterclaims are not frivolous so as to justify an award pursuant to CPLR 8303-a. Recovery of legal fees does not lie.
Accordingly, it is,
ORDERED, that Defendant's motion for summary judgment is granted. The complaint herein is dismissed; and it is further,
ORDERED, that Plaintiff's cross-motion for summary judgment is granted. Defendant's counterclaims are hereby dismissed.
This constitutes the decision and Order of the Court.