Summary
holding that, when neither party had written authorization to enter into an agreement for the sale of land, "the letter of intent [did] not satisfy the statute of frauds"
Summary of this case from In re CohenOpinion
2001-07011
Submitted May 28, 2002.
August 26, 2002.
In an action, inter alia, for specific performance of an agreement to form a joint venture and to convey real property, the defendant Sitaram L. Patel appeals, as limited by his brief, from so much of an order of the Supreme Court, Nassau County (DeMaro, J.), entered June 5, 2001, as denied that branch of the defendants' motion which was for summary judgment dismissing the complaint insofar as asserted against him, the defendants Rajaram, LLC, a/k/a Rajaram, Inc., Anil Lala, and Kiran Patel also appeal from the same order, and the plaintiff cross-appeals from stated portions of the same order.
Robinson Brog Leinwand Greene Genovese Gluck, P.C., New York, N.Y. (Philip T. Simpson of counsel), for appellant-respondent Sitaram L. Patel.
Ryan Brennan, LLP, Floral Park, N.Y. (John M. Donnelly of counsel), for respondent-appellant.
Before: DAVID S. RITTER, J.P., MYRIAM J. ALTMAN, NANCY E. SMITH, GLORIA GOLDSTEIN, JJ.
ORDERED that the appeal by the defendants Rajaram, LLC, a/k/a Rajaram, Inc., Anil Lala, and Kiran Patel and the cross appeal by the plaintiff are dismissed as abandoned (see 22 NYCRR 670.8[c], [e]); and it is further,
ORDERED that the order is reversed insofar as appealed from by the defendant Sitaram L. Patel, on the law, that branch of the motion which was for summary judgment dismissing the complaint insofar as asserted against the defendant Sitaram Patel is granted, the complaint is dismissed insofar as asserted against that defendant; and it is further,
ORDERED that one bill of costs is awarded to the defendant Sitaram Patel.
On February 25, 1998, the plaintiff and Andrew Levenbaum, a nonparty, allegedly acting on behalf of Sitaram L. Patel (hereinafter the appellant), signed a letter of intent to enter into a joint venture agreement to construct and operate a hotel. Pursuant to the letter of intent, the property for the hotel was to be transferred to the joint venture in exchange for a payment to the appellant in the sum of $1,650,000. The plaintiff was to receive a development fee and management fees, as well as a 50% share of the profits of the joint venture. The appellant, however, was not the owner of the property. He had previously conveyed the property to the defendant Rajaram, LLC, a company formed by the defendants Anil Lala and Kiran Patel. On September 18, 1998, counsel for the owner informed the plaintiff that the transaction would not proceed.
The plaintiff subsequently commenced this action against the appellant, Rajaram, LLC, Anil Lala, and Kiran Patel. In his first cause of action he sought specific performance of the agreement to transfer the property to the joint venture. The second cause of action sought damages for breach of the agreement. After discovery was completed, the defendants moved for summary judgment dismissing the complaint on the ground that enforcement of the letter of intent was barred by the statute of frauds (see General Obligations Law § 5-703). Specifically, they contended that the letter of intent did not contain the material terms necessary to satisfy the statute of frauds and that it was not signed by an individual with the requisite written authorization from Rajaram, LLC. In the order appealed from, the Supreme Court denied the motion, concluding that the letter of intent contained all the essential elements of a contract and that there was a question of fact as to whether Levenbaum had the actual or apparent authority to execute the letter of intent. A subsequent order dismissed the complaint insofar as asserted against Rajaram, LLC, Anil Lala, and Kiran Patel.
To satisfy the statute of frauds, a writing must identify the parties, describe the subject matter, state all the essential terms of an agreement, and be signed by the party to be charged (see 160 Chambers St. Realty Corp. v. Register of City of N.Y., 226 A.D.2d 606) or, with respect to contracts for the sale of real property, "by his lawful agent thereunto authorized by writing" (General Obligations Law § 5-703). Unwritten apparent authority is insufficient to satisfy the statute of frauds (see Diocese of Buffalo v. McCarthy, 91 A.D.2d 213, 218).
Even assuming that the letter of intent contained all the essential terms of an agreement, it was not signed by the party to be charged or by an agent with written authorization. Levenbaum had no written authorization from the appellant and neither the appellant nor Levenbaum had written authorization from Rajaram, LLC, the owner of the property, to enter into an agreement for its sale. Consequently, the letter of intent does not satisfy the statute of frauds (see Shui Ching Chan v. Bay Ridge Park Hill Realty Co., 213 A.D.2d 467; DeMartin v. Farina, 205 A.D.2d 659).
Contrary to the plaintiff's contention, the letter of intent is not removed from operation of the statute of frauds by virtue of the appellant's alleged part performance. An agreement which violates the statute of frauds may be enforceable where there has been part performance "unequivocally referable" to the contract by the party seeking to enforce the agreement (Messner Vetere Berger McNamee Schmetterer Euro RSCG v. Aegis Group, 93 N.Y.2d 229, 235, 237; see General Obligations Law § 5-703). Any part performance by the appellant, the party relying on the statute of frauds, is insufficient to defeat the defense (see Messner Vetere Berger McNamee Schmetterer Euro RSCG v. Aegis Group, supra at 237; Vesta Indus. v. Auto Am. of N.J., 280 A.D.2d 666, 667).
Consequently, the Supreme Court should have granted summary judgment dismissing the complaint insofar as asserted against the appellant. We note that the plaintiff's first cause of action for specific performance would have to be dismissed in any event. Concededly, the appellant does not own the property. The action against Rajaram, LLC, the owner, has been dismissed. Therefore, specific performance could not be granted.
RITTER, J.P., ALTMAN, SMITH and GOLDSTEIN, JJ., concur.