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The Uniqueness of Real Property in a Contract Action

New York

,

United States of America

Issue

Does the fact that a home is directly next to a close family member’s home make the home unique for the purpose of assessing whether to award specific performance?

Conclusion

No decisions were identified that discussed whether a home is considered "unique" so as to award specific performance for breach of contract where that home was being purchased by an adult child because it was directly next to her mother's home and would allow her to easily care for her mother. However, a discussion of how courts have interpreted the uniqueness of real property for causes of action in specific performance may be instructive.

In determining whether a plaintiff purchaser of real property has a cause of action for specific performance, the courts look to whether the plaintiff had substantially performed under the contract, whether the plaintiff was willing and able to perform any remaining obligations, whether the defendant was able to convey the property, and whether there was no adequate remedy at law. (Piga v. Rubin, Lezell v. Forde, Alba v. Kaufmann, Revital Realty Grp., LLC v. Ulano Corp., Heung C. Rha v. Blangiardo, E&D Grp., LLC v. Vialet, EMF General Contracting Corp. v. Bisbee)

For specific performance of a contract action involving real property, the general rule is that each parcel of real estate is unique. Therefore, the requirement for specific performance that there be no adequate remedy at law is presumed to have been satisfied when real property is the subject of the contract. (EMF General Contracting Corp. v. Bisbee, Lezell v. Forde, Alba v. Kaufmann)

In Alba v. Kaufmann, the plaintiff moved for summary judgment for specific performance of a real estate contract. In opposition, the defendant claimed that there were many other comparable properties in the county, thereby raising a question as to the uniqueness of the property. The lower court agreed with the defendant and denied the plaintiff's motion for specific performance. However, the Appellate Division, Third Department, reversed and granted the plaintiff's motion for specific performance. It did so by relying on caselaw holding that each parcel of real estate is unique.

Law

No decisions were identified that discussed whether a home is considered "unique" so as to award specific performance for breach of contract where that home was being purchased by an adult child because it was directly next to their parent's home and would allow them to easily care for their parent. However, a discussion of how courts have interpreted the uniqueness of real property for causes of action in specific performance may be instructive.

In Piga v. Rubin, 300 AD2d 68, 751 N.Y.S.2d 195 (N.Y. App. Div. 2002), leave denied, Piga v. Rubin, 99 N.Y.2d 646 (N.Y. 2003), the Appellate Division, First Department, affirmed the lower court's decision granting specific performance of the contract to the plaintiff purchasers of real property. The Court set forth the standard upon which the party to a real estate contract is entitled to specific performance. One factor supporting specific performance to the plaintiffs of a real estate contract is whether there is "no adequate remedy at law" (at 69):

Summary judgment was properly granted to plaintiff purchasers upon their cause of action for specific performance of the parties' contract for the sale of real property. Plaintiffs made out a prima facie entitlement to specific performance by demonstrating that they had substantially performed under the contract and were willing and able to perform their remaining obligations, that defendant was able to convey the property, and that there was no adequate remedy at law (see Niagara Mohawk Power Corp. v Graver Tank & Mfg. Co., 470 F Supp 1308, 1324). Defendant seller did not, in opposing summary judgment, meet her consequent burden to demonstrate the existence of a triable issue respecting plaintiffs' entitlement to specific performance. Indeed, the record discloses that, for five years, defendant, in a prolonged attempt to deprive plaintiffs of their bargain, repeatedly frustrated the closing of the real estate transaction to which the parties had agreed.

In EMF General Contracting Corp. v. Bisbee, 6 AD3d 45, 774 NYS2d 39, 2004 NY Slip Op 2288 (N.Y. App. Div. 2004), leave denied, EMF General Contracting Corp. v. Bisbee, 3 N.Y.3d 607, 818 N.E.2d 667 (N.Y. 2004), the plaintiff sought the equitable remedy of specific performance of a contract to purchase real estate. The defendant asserted that denial of specific performance was warranted because there had been a two-year delay between the signing of the contract and the plaintiff's attempt to enforce it, along with a steep increase in the market value of the property by the time of trial. The trial court agreed, denying the plaintiff's motion for specific performance by concluding that, as a court of equity, the relief of specific performance would provide a windfall to the plaintiff given the enormous increase in the value of the property. The Appellate Division, First Department, reversed, finding that there was no equitable consideration warranting the denial of specific performance. As to the issue of the "uniqueness" of a property in analyzing whether there should be specific performance of the contract, the Court held that in contract actions involving real property, the general rule is that each parcel of real estate is unique. In granting the plaintiff's application for specific performance of the real property contract, the Court stated (at 52):

Generally, the equitable remedy of specific performance is routinely awarded in contract actions involving real property, on the premise that each parcel of real property is unique (see 3 Dobbs, Remedies § 12.11 [3], at 299 [Practitioner's 2d ed]). The court has discretion to deny such relief "as equity and justice seem to demand in the light of the circumstances of each case" (91 NY Jur 2d, Real Property Sales and Exchanges § 204), and the available equitable defenses include serious unfairness, undue hardship, and laches, or unreasonable prejudicial delay (see 3 Dobbs, Remedies, supra at 302). But, "the court's discretion to grant or deny specific performance of a contract for the sale of realty is not unlimited; unless the court finds that granting a decree of specific performance would be a drastic or harsh remedy, or work injustice, the court must direct specific performance" (91 NY Jur 2d § 204, supra).

In Lezell v. Forde, 26 Misc.3d 435 (N.Y. Misc. 2009), the Supreme Court, Kings County, made clear that when the subject of a contract is real property, it is presumed that there has been satisfaction of the "no adequate remedy at law" requirement for an award of specific performance (at 442):

Specific performance is an equitable remedy (see Yu Han Young v Chiu, 49 AD3d 535, 536 [2d Dept 2008]), and so the requirement is that there be no adequate remedy at law for it to be ordered. Satisfaction of the requirement is, in effect, presumed when real property is the subject of the contract. "The pleading itself is sufficient to show that the plaintiff has no adequate remedy, or not one, at least, which may be full, adequate and perfect." (Wasserman v Manson, 225 App Div 342, 342-343 [1st Dept 1929].) [...]

In Alba v. Kaufmann, 27 AD3d 816, 810 N.Y.S.2d 539, 2006 NY Slip Op 1438 (N.Y. App. Div. 2006), the plaintiffs moved for summary judgment for specific performance of a real estate contract. The defendant argued that it had raised a question of fact as to the uniqueness of the property by claiming that there were many similar properties in Rensselear County. The lower court agreed with the defendant and denied the plaintiffs' motion on the ground that the defendant raised a question of fact as to whether plaintiffs had an adequate remedy at law. However, the Appellate Division, Third Department, disagreed. In reversing the lower court's denial of plaintiffs' motion for summary judgment, the Court noted that each parcel of real estate is presumed to be unique. It also held that defendant's conclusory and self-serving assertion that there were many other comparable properties in the county did not raise a question as to the uniqueness of the property. In finding that defendant did not raise a question of fact as to whether plaintiffs had an adequate remedy at law, the Court held (at 817-819):

When defendant refused to close, plaintiffs commenced this action seeking specific performance of the underlying real estate contract. Defendant answered and raised various affirmative defenses, including, insofar as is relevant to this appeal, that plaintiffs had an adequate remedy at law and that specific performance would lead to an inequitable result. Plaintiffs thereafter moved for summary judgment, but Supreme Court denied the motion, finding questions of fact regarding whether specific performance is plaintiffs' only remedy and whether performance of the contract would result in an unreasonable hardship. This appeal by plaintiffs ensued.

[27 A.D.3d 818]

There must be a reversal. In order to establish their entitlement to summary judgment, plaintiffs were required to demonstrate that they substantially performed their contractual obligations and were ready, willing and able to fulfill their remaining obligations, that defendant was able but unwilling to convey the property and that there is no adequate remedy at law (see EMF Gen. Contr. Corp. v Bisbee, 6 AD3d 45, 51 [2004], lv dismissed 3 NY3d 656 [2004], lv denied 3 NY3d 607 [2004]; Morgan v Eitt, 111 AD2d 586, 587 [1985]). Plaintiffs plainly discharged that burden here. After executing the underlying contract, plaintiffs paid a deposit, obtained a mortgage commitment, demonstrated that they had the financial wherewithal to purchase what was to be for them a vacation home, obtained a satisfactory home inspection and procured title insurance. In short, the record demonstrates that plaintiffs were ready, willing and able to close on July 15, 2004 and, but for defendant's admitted refusal to do so, would have consummated the transaction.

As to the remedy plaintiffs seek, the case law reveals that "the equitable remedy of specific performance is routinely awarded in contract actions involving real property, on the premise that each parcel of real property is unique" (EMF Gen. Contr. Corp. v Bisbee, supra at 52). Although certain defenses do exist including, insofar as is relevant here, unreasonable hardship, "`the court's discretion to grant or deny specific performance of a contract for the sale of realty is not unlimited; unless the court finds that granting a decree of specific performance would be a drastic or harsh remedy, or work injustice, the court must direct specific performance'" (id., quoting 91 NY Jur 2d, Real Property Sales and Exchanges § 204). Moreover, "[v]olitional unwillingness, as distinguished from good faith inability, to meet contractual obligations furnishes neither a ground for cancellation of the contract nor a defense against its specific performance" (Meisels v 1295 Union Equities Corp., 306 AD2d 144, 145 [2003]).

Here, defendant argues and Supreme Court found that summary judgment was inappropriate because defendant raised a question of fact as to the uniqueness of the property and, hence, whether plaintiffs had an adequate remedy at law, and further, whether ordering specific performance would work an undue hardship. We disagree. As noted previously, each parcel of real property is presumed to be unique (see EMF Gen. Contr. Corp. v Bisbee, supra at 52), and defendant's conclusory and self-serving assertion — unaccompanied by any evidence of comparable listings or sales — that there are many similar properties for sale in

[27 A.D.3d 819]

and around Rensselaer County is insufficient to raise a question of fact as to the uniqueness of the property. Hence, in our view, Supreme Court erred in finding that defendant tendered sufficient admissible proof to raise a question of fact as to whether plaintiffs had an adequate remedy at law.

In Revital Realty Grp., LLC v. Ulano Corp., 2013 NY Slip Op 32981 (N.Y. Sup. Ct. 2013), the Kings County Supreme Court noted that where the contract is for the sale of real property, the requirement that there is no adequate remedy at law is presumed on the ground that each parcel of real property is unique (at 5):

"The elements of a cause of action for specific performance of a contract are that the plaintiff substantially performed its contractual obligations and was willing and able to perform its remaining obligations, that defendant was able to convey the property, and that there was no adequate remedy at law" (EMF Gen. Contr. Corp. v Bisbee, 6 AD3d 45, 51 [1st Dept 2004]). Where the contract is for the sale of real property, the requirement that there be no adequate remedy at law is presumed, "on the premise that each parcel of real property is unique" (id. at 52; see Lezell v Forde, 26 Misc 3d 432, 442 (Sup Ct, Kings County 2009]). In the instant case, it is not disputed that defendant was, on March 29, 2012, and remains, able to convey the Property to plaintiff. However, defendant argues that plaintiff was not ready and able to perform its remaining obligations on the proposed adjourned closing date of April 25, 2012.

In Heung C. Rha v. Blangiardo, 189 A.D.3d 1098, 133 N.Y.S.3d 913(Mem) (N.Y. App. Div. 2020), the plaintiffs, as purchasers, and the defendant, as the seller, entered into a contract for the sale of real estate. The defendant seller defaulted and breached the contract. The plaintiff moved, among other things, for specific performance of the contract. Although the lower court awarded the plaintiffs' judgment on their cause of action to recover damages for breach of contract and awarded them the return of their downpayment, it effectively dismissed the cause of action for specific performance of the contract. The Appellate Division, Second Department, reversed, finding that the plaintiffs substantially performed their contractual obligations, that the plaintiffs were ready, willing, and able to perform their remaining obligations, that the defendant was able to convey the property, that there was no adequate remedy at law, and that granting specific performance to the plaintiffs would not be a drastic or harsh remedy or work injustice against the defendant. By its finding, the Court decided that the lower court improvidently exercised its discretion when it denied the specific performance to the plaintiffs (at 914-915):

The elements of a cause of action for specific performance of a contract for the sale of real property are that the plaintiff substantially performed its contractual obligations and was ready, willing, and able to perform its remaining obligations, that the defendant was able to convey the property, and that there was no adequate remedy at law (see Finkelstein v. Lynda, 166 A.D.3d 948, 949, 88 N.Y.S.3d 225; McCabe v. Witteveen, 34 A.D.3d 652, 653, 825 N.Y.S.2d 499). Moreover, the buyer must demonstrate that the seller was in default (see Iannucci v. 70 Washington Partners, LLC, 51 A.D.3d 869, 871–872, 858 N.Y.S.2d 322 ). However, "specific performance will not be ordered where money damages ‘would be adequate to protect the expectation interest of the injured party’ " (Sokoloff v. Harriman Estates Dev. Corp., 96 N.Y.2d 409, 415, 729 N.Y.S.2d 425, 754 N.E.2d 184, quoting Restatement [Second] of Contracts § 359 [1] ). The decision whether to grant or deny the remedy of specific performance lies within the discretion of the court and should not be granted "where it would cause unreasonable hardship or injustice" (McGinnis v. Cowhey, 24 A.D.3d 629, 629, 808 N.Y.S.2d 397 [internal quotation marks omitted]; see Roland v. Benson, 30 A.D.3d 398, 399, 816 N.Y.S.2d 190 ). Nonetheless, the court's discretion to grant or deny specific performance of a contract for the sale of real property is not unlimited; unless the court finds that granting a decree of specific performance would be a drastic or harsh remedy, or work injustice, the court must direct specific performance (see Alba v. Kaufmann, 27 A.D.3d 816, 810 N.Y.S.2d 539; EMF Gen. Contr. Corp. v. Bisbee, 6 A.D.3d 45, 52, 774 N.Y.S.2d 39 ).

Here, we agree with the plaintiffs that the trial evidence sufficiently demonstrated their entitlement to specific performance of the subject contract for the sale of real property and that the Supreme Court improvidently exercised its discretion when it effectively denied them this relief. The evidence at trial demonstrated that the plaintiffs substantially performed their contractual obligations and were ready, willing, and able to perform their remaining obligations, that Blangiardo was able to convey the property, that there was no adequate remedy at law, and that granting specific performance to the plaintiffs would not be a drastic or harsh remedy, or work injustice against Blangiardo (see Herbst v. 1514 Eastern Parkway, Ltd., 46 A.D.3d 751, 848 N.Y.S.2d 343; Goldstein v. Held, 37 A.D.3d 657, 830 N.Y.S.2d 348 ). Accordingly, the court improvidently exercised its

[133 N.Y.S.3d 915]

discretion when it effectively denied the plaintiffs the relief of specific performance of the contract.

In E&D Grp., LLC v. Vialet, 134 A.D.3d 981 (N.Y. App. Div. 2015), the lower court granted the defendant's motion to dismiss the cause of action for specific performance for the sale of real property. The Appellate Division, First Department, reversed, stating that the elements for a cause of action for specific performance are that the plaintiff substantially performed its contractual obligations and was willing and able to perform its remaining ones, that the defendant was able to convey the property, and that there was no adequate remedy at law. In finding that the complaint stated a cause of action for specific performance, the Court noted that the plaintiff alleged, among other things, that the property was "unique in character, and the Plaintiff has no remedy at law" (at 982-983):

Contrary to the defendant's contention, the complaint adequately alleged a cause of action for specific performance of a contract for the sale of real property. "The elements of a cause of action for specific performance of a contract are that *983 the plaintiff substantially performed its contractual obligations and was willing and able to perform its remaining obligations, that defendant was able to convey the property, and that there was no adequate remedy at law" (EMF Gen. Contr. Corp. v Bisbee, 6 AD3d 45, 51 [2004]; see Piga v Rubin, 300 AD2d 68, 69 [2002]; see also Lot 57 Acquisition Corp. v Yat Yar Equities Corp., 63 AD3d 1109, 1111 [2009]).

Here, the complaint alleged that the parties entered into a contract of sale for the subject property, and that the plaintiff tendered a down payment, which was accepted by the defendant. The complaint further alleged that the plaintiff "duly performed all of the conditions on its part under the Contract," and that it had been, and continued to be, ready, willing, and able to perform its remaining obligations. The complaint alleged that there were "no outstanding title issues" that would prevent the defendant from transferring title to the premises, and that the subject property was "unique in character, and the Plaintiff has no remedy at law." In sum, the complaint stated a cause of action for specific performance of a contract for the sale of real property (see Simpson v 1147 Dean, LLC, 116 AD3d 835, 836 [2014]; Jannetti v Whelan, 97 AD3d 797, 797 [2012]). [...]

Alexsei publishing date:
2021-12-20 23:19:50.353453
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