28th Highline Associates, L.L.C. v. Roache

Filing 63

OPINION AND ORDER: re: 21 MOTION for Judgment on the Pleadings filed by 28th Highline Associates, L.L.C.; 30 CROSS MOTION for Judgment on the Pleadings filed by Iain Roache. Based on the conclusions set forth above, judgment for Plaintiff on th e pleadings is granted and the Defendant's cross-motion is denied. For the reasons set forth, Defendant's second counterclaim, for declaratory judgment that he is entitled to the return of the Deposit, is dismissed. In view of the Opinion i n this action entered this date, the discovery motions are moot and dismissed. Enter judgment on notice. IT IS SO ORDERED. (Signed by Judge Robert W. Sweet on 2/22/2019) (ama) Transmission to Orders and Judgments Clerk for processing. Modified on 2/25/2019 (ama).

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK
------------------------------------x

28TH HIGHLINE ASSOCIATES, L.L.C.,

18 Civ. 1468

Plaintiff,

OPINION

-againstIAIN ROACHE,

·,

Defendant.
-------------------------------------x

APPEARANCES:
Attorneys for Plaintiff
CLARICK GUERON REISBAUM LLP
220 Fifth Avenue, 14 th Floor
New York, NY 10001
By:
Emily Reisbaum, Esq.
Nicole Gueron, Esq.
Ashleigh Hunt, Esq.

/

Attorneys for Defendant
SMITH, GAMBRELL & RUSSELL, LLP
1301 Avenue of the Americas, 21 st Floor
New York, NY 10019
By: Michael P. Regan, Esq.

Sweet, D.J.

Plaintiff 28 th Highline Associates, L.L.C.

("Plaintiff"

or "Highline") has moved for judgment on the pleadings pursuant
to Fed. Rule Civ. P. 12(c) and for fees and costs pursuant to
the parties' agreement.

Plaintiff seeks the release of a deposit on a luxury
apartment pursuant to a written agreement between the property
seller and purchaser after the Defendant failed to close on the
purchase. Under the agreement dated December 2015

(the

"Agreement"), Defendant agreed to purchase from Plaintiff a
condominium apartment, a storage unit, and a parking space in a
building then under construction in Manhattan. As required,
Defendant placed a 20 percent deposit on the property, in the
amount of $2,113,000.00, to be held in escrow until the closing
of title and Defendant's transfer to Plaintiff (the
sponsor/seller) of the remainder of the purchase price.

When construction completed in July 2017, Plaintiff
notified Defendant of the scheduled closing date, but Defendant
did not close on the sale within the time prescribed by the
Agreement. Pursuant to the Agreement, Plaintiff issued a notice
1

of default on November 9, 2017, giving Defendant 30 days to cure
and close. Defendant failed to close within the prescribed cure
period.

After fruitless discussions between the parties, on
January 19, 2018, Plaintiff wrote Defendant that it was planning
to terminate the Agreement pursuant to its explicit termination
provisions. In response, Defendant issued a notice to the escrow
agent claiming that he was fraudulently induced into the
Agreement through alleged oral misrepresentations, and
instructed the escrow agent to hold the deposit. On January 24,
2018, Plaintiff terminated the Agreement and demanded that the
escrow agent release the deposit. However, under the Agreement,
the escrow agent may not release the deposit until either:

(1)

the parties jointly execute a statement in writing directing
that it be released; or (2) a final, non-appealable order or
judgment of a court is entered. This action therefore ensued
seeking release of the deposit. The Defendant filed
counterclaims alleging fraudulent inducement and repudiation.
Based upon the conclusions set forth below, the motion of the
Plaintiff is granted, and the cross-motion of the Defendant is
denied.

2

I. Prior Proceedings and Allegations

In 2014, construction began on 520 West 28th
Condominium (the "Condominium"), located at 520 West 28th
Street, New York, NY 10001 (the "Building").
Emily Reisbaum, dated May 25, 2018

(Declaration of

("Reisbaum Deel.") Ex. 1

("Compl."), 11 2, 15, 17). The Building was designed by the
Pritzker Prize-winning architect Zaha Hadid and is located
immediately adjacent to the High Line.

(Id. 1 16). Plaintiff,

the sponsor under the offering plan of the Condominium, began
listing planned apartments for sale while construction of the
Building took place.

(Id. 11 15, 17). One planned apartment was

Unit 33 (the "Apartment"), a three-bedroom apartment located on
the 17th floor of the Building.

(Id. 1 1 7) .

Defendant is a non-citizen who resides in Gibraltar.
(Reisbaum Deel. Ex. 2 ("Roache Deel."), 1 1). He is the Chairman
of Domain Venture Partners, where he manages a structured
investment fund for experienced investors.

(Id. 11 11-12). In

December 2015, with the advice of two lawyers (his in-house
counsel and a specialized New York City real estate attorney),
Defendant agreed to buy the Apartment and related property.
Reisbaum Deel. Ex. 3, Plaintiff's Reply to Counterclaims
("Reply"), 1 8; Ex. M). The purchase was documented in an
3

(See

agreement and related riders, dated and executed on December 22,
2015

(altogether the "Agreement").

(Compl. Ex. A). The Agreement

explicitly incorporated by reference the Condominium's offering
plan (the "Offering Plan"), which provided additional details
regarding the Building and the Apartment.

(Id. at i

11.2).

Defendant received a copy of the Offering Plan, and all
amendments.
("Answer")

(Id. at i 11.1; see also Reisbaum Deel. Ex. 4,

i 20).

Defendant agreed to purchase the Apartment for
$9,795,000.00.

(Compl. Ex. A. i i 2, 3.1). He also agreed to

purchase licenses for the right to a storage unit
Vault") and parking space (the "Parking Space")

(the "Storage

(the Apartment,

Storage Vault License, and Parking Space License altogether, the
"Property"), in the Building for $250,000 and $520,000
respectively, for a total of $10,565,000.00
Price.")
License i

(the "Purchase

(Compl. Ex. A. Rider to Agreement Re: Storage Vault
1.A; Rider to Agreement Re: Parking Space License i

l.A.).

Defendant agreed that he would place a 20% deposit on
the Property, in the amount of $2,113,000.00

(the "Deposit"), at

the date of signing, to be held in escrow by Levitt & Boccio,
LLP (the "Escrow Agent"), until the close of title on the
4

_,,,

Apartment ( the "Closing") .

( Comp 1. Ex. A.

Agreement Re: Storage Vault License
Re: Parking Space License

':l[

':l[

':l[':l[

3. 1, 4. 1; Rider to

l.B; Rider to Agreement

l.B.; Escrow Rider

10). Plaintiff

':l[

would designate the date of the Closing on 30 days' notice,
subject to Defendant's right to "one (1) adjournment of the
closing for a period not to exceed thirty (30) calendar days[.]"
(Compl. Ex. A.

':l[

5.1, see also Rider to Purchase Agreement

':l[

A).

At the Closing, Defendant would pay the balance of the Purchase
Price, $8,452,000.00, to Plaintiff, the Escrow Agent would
release the Deposit to Plaintiff, and Defendant would receive
the deed to the Apartment.

(Id.

':l[

3.l(b); Escrow Rider

':l[

l0(a))

The Agreement defined certain events that would
constitute Defendant's default under the contract (an "Event of
Default"), and the consequences stemming therefrom.

(Id.

':l[

12).

Defendant's failure to pay the Balance on the closing date
designated by Plaintiff, after the expiration of all adjournment
rights granted to Defendant, constituted an Event of Default.
(Id.

':l[

12; see also Rider to Purchase Agreement

':l[

A, B) .2 After

Plaintiff had given Defendant notice of the same, the Agreement
provided Defendant an additional 30 days to cure, during which
time was "of the essence." (Compl. Ex. A.

':l[

12 (b)). If Defendant

failed timely to cure, Plaintiff had "sole discretion" to cancel
the Agreement, and as its sole remedy, the right to retain as
5

/

liquidated damages the Deposit and any interest earned thereon.
(Id.). The Agreement also gave Plaintiff sole discretion not to
strictly enforce the cure period without waiving any of its
Default rights,

such that Plaintiff could subsequently invoke

the default provisions for Defendant's failure timely to close.
(Id. at~ 30.)

The Parties explicitly agreed that neither would
challenge the validity of the Agreement with respect to the
liquidated damages, nor Plaintiff's right to retain the Deposit
in the event of Defendant's default.

(Id.

~

12(d) .) This damages

provision was agreed to "VOLUNTARILY, AFTER NEGOTIATION, WITHOUT
DURESS OR COERCION BY ANY PARTY UPON ANY OTHER PARTY," and with
each party having been, or having the full and adequate
opportunity to be, represented and advised by "COUNSEL,
ACCOUNTANTS, BROKERS, APPRAISERS AND OTHER EXPERTS AND ADVISORS
OF ITS OWN CHOOSING."

(Id.)

Defendant was in fact represented by

counsel, Jesse Gordon of Costello & Gordon LLP, during the
Agreement's negotiation, as well as his in-house counsel.
(Reply,

~

8; Ex. M.)

In addition to the representations in the Agreement
and Offering Plan, Defendant agreed that he had not relied on
any other representations, warranties, architect's plans,
6

✓

statements, or estimates, written or oral, in deciding to enter
into the Agreement, and that this provision would survive
closing of title or termination of the Agreement.
~

(Compl. Ex. A.

20). The parties also agreed that the Agreement could not be

orally modified.

(Id.

~

42). Instead, any changes were required

to be set forth in a separate written agreement signed by the
parties and referring to the Agreement.
agreement exists.

(Id.) No such separate

(Answer, Counterclaims~ 16 (~the parties

never agreed to terms on any of these subjects"); see also Reply
~

16 (substantially same)).

Finally, the Agreement contained a one-way feeshifting clause, which provided that if Defendant defaulted, he
would be obligated to reimburse the Plaintiff, among others, for
any legal fees and disbursements it incurred in enforcing its
rights thereunder.

(Compl. Ex. A.

~

35) . This provision also

survives the termination of the Agreement.

(Id.).

The Agreement, and its associated Riders, was executed
on December 22, 2015.

(Compl. Ex. A). On or about December 21,

2015, Defendant, through his attorneys, paid the Deposit.
(Answer~ 33). The Deposit was then transferred into an
individual escrow sub-account in Defendant's name, within the
Escrow Agent's master escrow account.
7

(Compl.

~

33).

With construction complete, on June 21, Plaintiff
notified Defendant that the Closing was scheduled to occur on
July 2 4, 201 7.

( Comp 1. Ex. C) . Pursuant to the Agreement, on

July 18, 2017, Defendant elected to exercise his right to
adjourn the closing date by 30 days, further requesting that the
closing occur at a "mutually agreeable date and time no later
than August 23, 2017 at 2:00 P.M." (Compl. Ex. D; see also
Answer

10).

<JI

Defendant did not close title on or before August 23,
201 7, or any time thereafter.

(Compl.

<JI

37; see also Answer

<JI

37

(averring "that no closing occurred on or before August 23,
2017");

<JI

40 (denying that Defendant "improperly" failed to

close)).

On September 8, 2017, Gregory Gushee ("Gushee"), the
development head of the Condominium, emailed Defendant and
stated, "[b]efore our lawyer sends a default notice, I wanted to
reach out to you to find out what your intentions are."

(Reply

Ex. A.) Defendant replied the next day, "[m]y intention is to
close." (Id.)

Plaintiff's counsel sent Defendant's counsel,

Jesse Gordon, a proposed amendment to the Agreement on October
12, 2017, which proposed an extension of the Closing Date to
8

I

January 5, 2018.

(Reply. Ex. N.). However, on October 26, 2017,

Gushee wrote Defendant, "[w]e have not heard from you on the
amendment to extend closing date. Please let us know how you
would like to proceed as cannot [sic] extend without an
amendment. If we do not hear back from you, we will have to send
a default notice."

(Reply Ex. C. at 2). Defendant wrote back the

same day, "[w]e will be closing in the New Year but we will have
some proposed changes to the amendment .... Jesse [Gordon,
Defendant's counsel] will loop back to you early next week."
(Id. at 1). On October 31, 2017, Gushee replied: "do you have
comments to the agreement? ... we need to do the amendment now.
Thank you." (Id.) Once again, Defendant stated that he would
discuss with his attorney and "loop back within 24 hours."

(Id.)

On November 9, 2017, Plaintiff sent Defendant a Notice
of Default (the "Notice"), pursuant to Paragraph 12(b) of the
Agreement.

(Compl. Ex. E). The Notice alerted Defendant that his

failure to close title constituted an Event of Default, as
defined by the Agreement, and that "[a]ll periods of adjournment
to which [Defendant] was entitled under the Complete Agreement
have also been exhausted." (Id.). It stated that Defendant's
failure to cure within 30 days would result in Plaintiff
exercising its remedies under the Agreement, including retention

9

of the Deposit, all interest earned thereon, and cancellation of
the Agreement.

(Id. ) .

On November 16, 2017, Defendant wrote Gushee, "[w]e
are obviously disappointed to have received a default notice.
However, we would like to confirm the following:

I still want to

close. I am working with HSBC and they have advised that they
can close the loan by end of February .... I would like the close
date in a revised adjournment agreement to reflect this new
date" (Reply Ex. D). Gushee wrote back, "[g]lad you still want
to move forward. Can you close before end of January?" (Id.)
Defendant replied on November 22, 2017, "[w]e will start to look
for an alternate lender so that we can close by end January."
(Reply Ex. E. at 2).

On December 4, 2017, Plaintiff's counsel sent
Defendant and his counsel a revised draft of the proposed
amendment, setting a new Closing Date of February 28, 2018 and
stating, "[a]s the cure period under the Notice of Default will
expire shortly, your prompt attention is appreciated." (Reply
Ex. E.) On December 11, 2017, Gushee wrote again: "[f]ollowing
up on the lease amendment. Any comments? We need to finalize."
(Reply Ex. F). The same day, Defendant's counsel wrote back,

10

,
"[u]nderstood. I will be discussing with [Defendant] and getting
back to you and Jeff [Levitt, counsel to Sponsor] ASAP."

(Id.)

On December 20, 2017, Gushee wrote Defendant informing
him that Plaintiff had negotiated an extension of the deadline
to close with their own lender, which meant that Defendant could
close at the end of February, as he had requested.

(Reply Ex.

G). That day, Jeff Levitt, counsel to Sponsor ("Levitt")

sent a

revised draft of the proposed amendment, setting a new Closing
Date as February 28, 2018, and stating, "[a]s the cure period
for your default has now expired,

[Mr. Gushee] has asked me to

advise you that if we do not receive the signed amendment and
funds by 5:00PM on Friday, December 22, 2017,

[Plaintiff] will

be terminating the contract and we will release the deposit to
[Plaintiff] in accordance with the Escrow Agreement." (Reply Ex.
H.) Defendant's counsel responded, "[r]eceived-thank you!"
(Reply Ex. I.)

Defendant never signed the amendment nor

transmitted the funds. Plaintiff and Defendant never agreed to
these terms or a new Closing Date.

(Answer

<JI

16; Reply

<JI

16.)

On January 8, 2018, Gushee wrote Defendant stating,
"[w]e have not heard from you regarding the contract amendment
or closing. The deadline was before the holidays ... now we must do
something.

[I]f you need another day to execute the amendment
11

and send wire then ok. Otherwise, unfortunately we have no
choice but to terminate the contract. Please let me know how you
are planning to proceed." (Reply Ex. J). Eleven days later, on
January 19, 2018, Gushee wrote again, stating: "Iain-[s]ince you
are not responding we have no choice but to terminate the
contract. We will do so on Monday. If you want to reach me over
the weekend please do." (Id.) An hour later, Michael Regan
("Reagan"), Defendant's counsel, emailed a letter to Levitt
rejecting Plaintiff's right to the Deposit and instructing it
not be released to Plaintiff, unless and until directed
otherwise by a court of law.

(Compl. Ex. F; see also Reply Ex.

K.)

On January 24, 2018, Plaintiff sent Defendant a Notice
of Termination of the Agreement (the "Termination")

(Reply Ex.

L). The Termination stated that "[a]ll periods for [Defendant]
to cure the Event of Default, and a reasonable time thereafter,
have since tolled and expired," and that Plaintiff was electing
to cancel the Agreement pursuant to Paragraph 12.

(Id.). The

Termination also relayed that, under the Agreement, Plaintiff
was entitled to the Deposit as its liquidated damages, and
demanded that the Escrow Agent release the Deposit.

(Id.).

Plaintiff also issued a separate letter to the Escrow Agent
making the same demand.

(Complaint Ex. G).
12

The Escrow Agent notified Defendant of its receipt of
Plaintiff's demand for the Deposit.

(Id.). The Escrow Agent,

however, is not permitted to release the Deposit unless so
directed either by a writing signed by both parties, or a final,
non-appealable order or judgment of a court.

(Compl. Ex. A.

Escrow Rider~ 10).

Plaintiff filed this action on February 19, 2018,
alleging breach of contract and seeking, in the alternative,
declaratory judgment that the Escrow Agent release the Deposit
to Plaintiff.

(See Compl.). On May 4, 2018, Defendant filed his

Answer, Affirmative Defenses, and Counterclaims alleging
repudiation and fraud in the inducement.
2018, Plaintiff filed its Reply.

(Answer.) On May 25,

(Reply.)

The instant motion and cross-motion were heard and
marked fully submitted on July 18, 2018.

II.

The Applicable Law and Standard

The parties are citizens of diverse states: Plaintiff
is a Delaware corporation with its principal place of business
in New York; Defendant is an individual who resides in
13

Gibraltar.

( Compl. 'll 10; Answer 'll 11.) As a result, this Court

has jurisdiction pursuant to 28 U.S.C. § 1332; New York law
governs the Agreement.

(Compl. Ex. A 'll 32.)

Federal Rule of Civil Procedure 12(c) provides that
"[a]fter the pleadings are closed ... a party may move for
judgment on the pleadings." Fed. R. Civ. P. 12(c). "On a 12(c)
motion, the court considers the complaint, the answer [and] any
written documents attached to them.
Old Navy, LLC,
Ins.
2015)

647 F.3d 419, 422

Co. v. Wells Fargo Bank,

" L- 7 Designs, Inc. v.

(2d Cir. 2011) cited by Lexon

619 Fed.Appx. 27, 28

(2d Cir.

(affirming 12(c) dismissal where court considered

documents attached to defendant's answer); Neopham Ltd. v.
WyethAyerst Int'l LLC, 170 F.Supp.3d 612,

614-15 (S.D.N.Y. 2016)

(granting 12(c) motion, considering written documents attached
to the answer, and noting that "[j]udgment on the pleadings is
particularly appropriate in a dispute regarding a breach of
contract where the primary issue is determining the parties'
legal rights and obligations") citing VoiceAge Corp. v.
RealNetworks, Inc.,

926 F.Supp.2d 524, 529 (S.D.N.Y. 2013). The

Court can also consider "documents that are in the []
possession" of the party opposing the motion. PPI Enterprises
(U.S.), Inc., v. Del Monte Foods Co., 2000 WL 1425093, at* 1,
(S.D.N.Y. Sept. 26, 2000).
14

A motion pursuant to Rule 12(c) may be granted "where
[the] material facts are undisputed and where judgment on the
merits is possible merely by considering the contents of the
pleadings." Sellers v. M.C. Floor Crofters, Inc.,
642

(2d Cir. 1988)

842 F.2d 639,

(citations omitted). Like a motion pursuant

to Rule 12(b) (6), judgment shall be granted where "the moving
party 'is entitled to judgment as a matter of law.'" Smickle v.
City of New York, 2018 WL 1578381, at* 3 (S.D.N.Y. March 29,

2018) quoting Richards v. Select Ins. Co., 40 F. Supp. 2d 163,
165 (S.D.N.Y. 1999). To survive such a motion, Defendant's
answer and counterclaims "must contain sufficient factual
matter, accepted as true, to 'state a claim to relief that is
plausible on its face." Ashcroft v. Iqbal, 556 U.S. 622,
(2009)

(quoting Bell Atl. Corp. v. Twombly,

678

550 U.S. 544, 570

(2007)) .

III. The Motion of Plaintiff for Declaratory Judgment is
Granted

The pleadings reveal no dispute about the terms
governing the parties' conduct: the Agreement conclusively
determines the parties' rights and responsibilities. Plaintiff
was prepared to deliver the Property and thus demanded that
15

Defendant close; Defendant failed to close by the Agreement's
deadlines; the parties discussed closing even after all the
deadlines had passed; but the parties at no time modified the
Agreement, which entitles Plaintiff to terminate and obtain the
Deposit, and the costs and fees incurred by this action. See,
e.g., Stokes v. Lusker, No. 08 CIV. 3667
at *2

(S.D.N.Y. Mar. 4, 2009)

(CM), 2009 WL 612336,

(dismissing purchaser's various

claims for co-op deposit on 12(b) (6) and 12(c) motions where
"the liquidated damages clause[] provide[d] that the [seller]
could keep the $250,000 deposit if the plaintiff failed to
close... [h] e did not close. The reason is irrelevant.") , affd,
425 F. App'x 18

(2d Cir. 2011).

There is no dispute that the Agreement exclusively and
conclusively controls the parties' rights and responsibilities.
Defendant admitted as much. In response to each paragraph of the
Complaint in which Plaintiff described the Agreement, Defendant
referred the Court to the terms of the Agreement itself.
Ans we r

<[ <[

(See

2 , 4 - 5 , 7 , 18 - 3 2 , 3 4 - 3 6 , 3 8 , 4 4 - 4 5 , 5 0 , 5 6 , 6 0 - 6 2 ,

66.) The parties denounced reliance on any written or oral
communications conveyed prior to or simultaneously with the
execution of the Agreement

(Compl. Ex. A.

<[

38), and looking

forward, agreed to be bound only by additional writings signed

16

by the parties.

(Id.

~

other writing exists.

42). Apart from the Agreement, no such
(Answer

~

16) .

In a breach of contract claim, contractual
interpretation is a question of law, and "[a] written agreement
that is complete, clear and unambiguous on its face must be
enforced according to the plain meaning of its terms." VoiceAge
Corp., 926 F. Supp. 2d at 529-30 (granting motion for judgment
based on contract's unambiguous terms), quoting Greenfield v.
Philles Records, 98 N.Y.2d 562, 569 (2002).

A contract is unambiguous "if the language it uses has
a definite and precise meaning, as to which there is no
reasonable basis for a difference of opinion." Neopharm Ltd.,
170 F. Supp. 3d 615 (S.D.N.Y. 2016)

(granting plaintiff's motion

for judgment on the pleadings and to dismiss counterclaim),
quoting Lockheed Martin Corp. v. Retail Holdings, N.V.,

639 F.3d

63, 69 (2d Cir. 2011).

Here, unambiguously, the Agreement provides:

1.

Defendant to pay a total deposit of $2,113,000.00

to be held in escrow (Complaint Ex. A.

~~

3.1, 4.1;

Rider to Agreement Re: Storage Vault License~ 1.B;
17

Rider to Agreement Re: Parking Space License~ l.B.;
Escrow Rider~ 10);

2.

Plaintiff has the right to set the closing date

and time, allowing Defendant one adjournment of not
more than 30-days (Complaint Ex. A.

~

5.1, see also

Rider to Purchase Agreement~ A);

3.

Defendant's failure to pay the balance of the

purchase price and costs upon closing or to perform
any of his obligations constitute an Event of Default
(Complaint Ex. A.
•

~

6.1; 12);
in such case, if Defendant fails

to cure within 30 days,

Plaintiff shall have the

right to cancel and retain the deposit as
liquidated damages
•

(Id.

~

12(b)); and

Defendant agrees not to challenge

Plaintiff's right to retain the deposit as
liquidated damages

4.

(Id.

~

12(d));

Defendant is responsible for all costs incurred

by Plaintiff to enforce its rights under the Agreement
(Id.

~

35);

18

5.

The written contract documents represent the

entire agreement between the parties relating to the
purchase of the Property (Id.

6.

~

38);

Defendant specifically agrees that he relied on

no representations

•

Defendant specifically agrees

that he relied on no representations or warranties
except those specifically contained in the Agreement
(Id.

7.

~

20); and

The Agreement could not be orally modified, but

rather only by a writing signed by the parties and
referring to the Agreement (Id.

~

42).

With the parameters of the Agreement established, the
Court's "primary objective is to give effect to the intent of
the parties as revealed by the language" in the Agreement. UMB
Bank, Nat'l Ass'n v. Airplanes Ltd., 260 F. Supp. 3d 384, 393

(S.D.N.Y. 2017)

(granting plaintiff's 12(c) motion for

judgment), quoting Bolt Elec., Inc. v. City of New York,

223

F.3d 146, 150 (2d Cir. 2000).

If the contract is unambiguous, the Court may award
judgment on the pleadings, assuming no "material" facts are in
19

dispute. Neopharm Ltd., 170 F. Supp. 3d 615. No material facts
concerning the conduct of the parties are disputed here: after
Plaintiff set the closing date, Defendant was permitted and
requested one 30-day extension, and then failed to purchase the
Apartment. Under the Agreement, Defendant has forfeited his
right to the Deposit.

Since 1881, New York law on this issue has been clear:
"a vendee who defaults on a real estate contract without lawful
excuse, cannot recover the down payment." Maxton Bldrs. v. Lo
Galbo, 68 N.Y.2d 373, 378

(1986) citing Lawrence v. Miller,

86

N. Y. 131, 139-40 (1881).

To allow a recovery of this money would be to
sustain an action by a party on his own breach of
his own contract, which the law does not allow.
When we once declare in this case that the vendor
has done all that the law asks of him, we also
declare that the vendee has not so done on his
part. And then to maintain this action would be
to declare that a party may violate his
agreement, and make an infraction of it by
himself a cause of action. That would be ill
doctrine.

Lawrence, 86 N.Y. at 140.

As New York courts have noted, if real estate buyers
are "dissatisfied with [such terms], the time to say so is at
20

,

✓

the bargaining table." Maxton Bldrs., 68 N.Y.2d at 382. As the
Agreement shows, Defendant accepted this rule.
~

(Compl. Ex. A.

12.) Throughout New York State, courts will deny a down

payment refund when the purchaser has defaulted, regardless of
whether the down payment was 10%, 25%, or even 50% of the
purchase price. See Uzan v. 845 UN Limited Partnership, 10
A.D.3d 230, 237

(1st Dep't 2004)

(25% down payment), citing

Chateau D'If Corp. v. City of New York,

denied 88 N.Y.2d 811,

641 N.Y.S.2d 252, lv.

(1st Dep't 1996); Armas v.

Yuska,

768

N.Y.S.2d 641 (2nd Dep't 2003); Collar City Partnership v.
Redemption Church,

651 N.Y.S.2d 729 (3 rd Dep't)

(50% down

payment), lv. denied 661 N.Y.S.2d 179; Badame v. Bock Enters.,
Inc., 593 N.Y.S.2d 384

(4th Dep't 1993)

(more than 10% down

payment).

Such deposits have been refunded only upon "a showing
of disparity of bargaining power between the parties, duress,
fraud,

illegality or mutual mistake." Uzan, 10 A.D.3d at 237

(reversing denial of seller's motion for summary judgment). This
Agreement was the product of months-long negotiation, between
sophisticated parties, both represented by counsel of their
choosing.

(Compl. Ex. A.

~

12(d); see also Reply Ex. M.) The

parties have disclaimed any reliance on any understanding
entered into prior or simultaneously with the Agreement that was
21

not contained in the Agreement itself.

(Id. i i 18, 20).

Defendant has not put forth a genuine issue as to any material
fact that would justify his refusal to permit the Escrow Agent
to release the deposit to Plaintiff.

Defendant argues that, even if his cross-motion is
denied,

Plaintiff is not entitled to judgment on its affirmative

claims.

Plaintiff's pleadings demonstrate an ability to close on

the Closing Date designated by the closing notice; and Defendant
has failed to raise a plausible claim to the contrary. Because
Defendant in the Agreement specifically disclaimed reliance upon
the very same representations he now claims he was fraudulently
induced by, and because Defendant, by his own admission,

is a

sophisticated businessman represented by counsel in the parties'
negotiations, the Agreement's merger clause bars that claim.

Defendant also argues that Plaintiff's motion cannot
succeed because the Complaint:

(1) does not allege that

Plaintiff was ready, willing and able to close on any date; and
(2) he is entitled to further discovery to "learn and test"
Plaintiff's proof that it was ready, willing, and able to close.
Both arguments are unavailing.

22

Contrary to Defendant's claim, the Complaint pleads,
and the record suggests, that Plaintiff was ready, willing, and
able to close on the "Closing Date" (erroneously defined as
"June 21, 2017,")
~

(Reisbaum Deel. Ex. 1 at Ex. Eat l; Ex. 3 at

22). As with a 12(b) (6) motion for failure to state a claim,

in determining a Rule 12(c) motion, courts may consider the
facts alleged in the pleadings, as well as "documents that are
attached to or incorporated by reference in the pleadings, and
documents not incorporated in, but integral to, the pleadings."
Gov't Employees Ins. Co. v. Saco, No. 12 Civ. 5633, 2015 WL
1527611, at *3 (E.D.N.Y. Mar. 31, 2015), citing Daniels ex rel.
Daniels v. Comm'r of Soc. Sec.,

2012)

456 F. App'x 40, 41 (2d Cir.

(summary order).

Defendant's pleadings offer little more than
speculation in response to Plaintiff's well-pled facts. This is
insufficient to defeat Plaintiff's motion. Defendant's
Counterclaims, for example, state that the Notice of Default
"does not indicate that Highline was ready, willing and able to
close on July 24, 2017, let alone by August 23, 2017." (Reisbaum
Deel. Ex. 4, Counterclaims~ 22). This is clearly contradicted
by the Notice of Default: "[o]n the Closing Date, and at all
time since,

[Plaintiff] was ready, willing and able to convey

23

title to the Unit and perform all of its obligations under the
Complete Agreement." (Reisbaum Deel. Ex. 1 at Ex. Eat 1).

Defendant does not allege any facts that plausibly
rebut Plaintiff's pleadings. E.E.O.C. v. Kelley Drye
LLP, No. 10 Civ.

655 (LTS)

(S.D.N.Y. July 25, 2011)

&

Warren,

(MHD), 2011 WL 3163443, at *2

(applying 12(b) (6) plausibility

standard to affirmative defenses and granting 12(f) motion to
strike in part, because "it has long been held that affirmative
defenses that contain only 'bald assertions' without supporting
facts should be stricken"); citing Shechter v. Comptroller of
City of New York,

79 F.3d 265, 270

(2d Cir. 1996)

(stating on

12(c) motion that "affirmative defenses which amount to nothing
more than mere conclusions of law and are not warranted by any
asserted facts have no efficacy")

(internal quotations omitted).

Defendant's answer, affirmative defenses, and
counterclaims do not include factual material to state a
"plausible" claim to relief. Defendant has simply not pled any
facts to defeat Plaintiff's evidence that it was ready, willing,
and able to close. See Neopharm Ltd. v. Wyeth-Ayerst Int'l LLC,
170 F. Supp. 3d 612, 620

(S.D.N.Y. 2016)

(granting plaintiff's

motion for judgment on the pleadings, and dismissing
counterclaim, where defendant's interpretation of a document
24

failed to state a "plausible" claim that defendant had right to
terminate agreement).

While Defendant contends that the Court should infer
that Plaintiff was not ready, willing, and able to close because
Plaintiff "allowed several months to pass" before sending the
Notice of Default, his pleadings fail to rebut the fact that
Plaintiff demonstrated a readiness to close by sending the
Notice of Closing Date on June 21, 2017, scheduling closing for
July 24, 2017.

(Reisbaum Deel. Ex. 1 at Ex. C at 1). Plaintiff's

pleadings show that the only reason Plaintiff delayed sending
the Notice of Default was because it mistakenly believed that
Defendant would timely close.

(Reisbaum Deel. Ex. 3 at Exs. A-

D). 5

In sum, Defendant raises the "mere possibility," that
Plaintiff was not ready, willing, and able to close on this
date. Ashcroft v. Iqbal,

556 U.S. 662,

679 (2009). Without more,

Defendant has alleged-but has not "show[n]"-"that [he] is
entitled to relief." Id. Absent such a showing, his resistance
to Plaintiff's motion for judgment on the pleadings is
insufficient, and Plaintiff's motion should be granted.

25

The Cross-Motion of the Defendant for Declaratory Judgment is
Denied

First Defendant has claimed that Plaintiff breached
the Agreement by repudiating its obligations. However, a
repudiation claim cannot lie where the claimant fails to state a
claim for breach of contract. DiFolco, 831 F. Supp. 2d at 641
(anticipatory repudiation excuses the non-breaching party from
performance where the breaching party has indicated that he
"will commit a breach that would of itself give the obligee a
claim for damages for total breach" or has committed a
"voluntary affirmative act which renders the obligor unable or
apparently unable to perform without such a breach"), citing
Norean Power Partners, L.P. v. Niagara Mohawk Power Corp.,

92

N.Y.2d 458, 463 (1998). Defendant states no such claim.
Defendant has failed to plead that he was ready, willing, and
able to perform his obligations under the contract-to close on
the Apartment-at the time of Plaintiff's supposed breach. See
Record Club, 890 F.2d at 1275 (the party asserting repudiation

bears the burden of proving its own performance); Tradax Energy,
Inc. v. Cedar Petrochemicals, Inc.,

317 F.Supp.2d 373, 377

(S.D.N.Y. 2004).

The doctrine of anticipatory repudiation permits the
non-breaching party to elect to state a claim for breach of
26

contract at the time of a repudiation, instead of at the time
for performance. Lucente v.
Supp. 2d 298, 317 n.5

Int'l Bus. Machines Corp.,

(S.D.N.Y. 2001).

146 F.

It is therefore dependent

on the existence of a material breach of contract. DiFolco,

831

F. Supp. 2d at 641 (S.D.N.Y. 2011); see also De Forest Radio
Tel.
75,

&

78

Tel. Co. v. Triangle Radio Supply, 243 N.Y. 283, 153 N.E.
(1926).

Plaintiff's supposed repudiatory acts-issuing the
Notice of Termination and instructing the Escrow Agent to
release the deposit

(see Counterclaims~~ 30-34)-are acts within

Plaintiff's discretion under the Agreement once Defendant failed
to close on the Apartment within 30 days of receiving the Notice
of Default.

(Compl. Ex. A.

~

12 (b),

( d) ) . Nothing contained

within Defendant's pleadings rebut this. Defendant did not close
on the Apartment by December 9, 2017, which was 30 days after he
received the Notice of Default.

(Complaint Ex. E.; see also

Answer~ 38). Therefore, it was he, not the Plaintiff, who was
in breach of the Agreement at the time the Notice of Termination
issued.

Because Defendant fails to state a claim for breach,
he cannot state a claim for anticipatory breach. Chatsworth

Realty 344 LLC. v. Hudson Waterfront Co. A, LLC., Index No.
27

10999/2002, 2003 WL 1085888, at *6 (N.Y. Sup. Mar. 4, 2003)
("Given that the court has found no basis for a claim of breach
of the applicable agreements, this claim [for anticipatory
breach] is found wanting.") aff'd 309 A.D.2d 567

(1st Dep't

2003); Metro. Suburban Bus Auth. v. Cty. Of Nassau,
451042/2012, 2013 WL 4526021 at *4

Index No.

(N.Y. Sup. Aug. 26, 2013)

("an anticipatory breach of contract.

occurs before

performance of a contractual duty is due ...

[where Defendant]

owes no duty under the Agreement, and there can be no
anticipatory repudiation of a duty not owed")

(internal

citations omitted).

In any event, Defendant's repudiation claim fails
because he has not pled that he had the requisite "willingness
and ability to perform before the repudiation and that [he]
would have rendered the agreed performance" if not for
Plaintiff's supposed repudiation. Randolph Equities, LLC v.
Carbon Capital, Inc.,

648 F. Supp. 2d 507, 519 (S.D.N.Y. 2009),

citing United States v. Hon Yee-Chau, 17 F.3d 21, 26 (2d Cir.
1994). A claimant must so plead because because it is
"axiomatic" that damages for breach of contract are not
recoverable where they were not actually caused by the breach.
Pesa v. Yoma Dev. Grp., Inc.,

18 N.Y.3d 527, 532 ability to

perform is supported by common sense.") Nowhere does Defendant
28

state that he was ready, willing, and able to close on the
Apartment when Plaintiff issued the Notice of Termination on
January 24, 2018.

(See generally, Counterclaims). The

anticipatory repudiation claim is dismissed.

Defendant's claim for fraudulent inducement also fails
because (1)

it is entirely dependent on alleged oral

misrepresentations (Counterclaims~~ 4-8), yet

(2)

in signing

the Agreement, Defendant specifically disclaimed reliance on any
such representations and affirmed that the written Agreement
reflected the parties' entire agreement with respect to the
Property.

( Comp 1. Ex. A

~~

2 0, 3 8. ) There are "venerable

principles" of New York law on this point. Aetna Cas. and Sur.
Co., 404 F.3d at 575 (2d Cir. 2005)

(referring to the principles

laid out in Danann Realty Corp. v. Harris, 184 N.Y.S. 2d 597
( 1959)) .

"Under the New York law of fraudulent inducement,

'a

specific disclaimer [in an agreement] destroys the allegation in
[a] plaintiff's complaint that the agreement was executed in
reliance upon .

contrary oral representations.'" Warner

Theatre Assocs. Ltd Partnership v. Metro. Life Ins. Co., 149
F.3d 134, 136 (2d Cir. 1998) quoting Danann, 184 N.Y.S. 2d at
320-21; see also Harmit Realties LLC v. 835 Avenue of the
29

Americas, 135 A.D.3d 564, 564-65 (1st Dep't 2016)

(affirming

dismissal of fraudulent inducement claim based on disclaimers in
agreement).

Permitting such a claim in these circumstances "would
allow the plaintiff to 'deliberately misrepresent' its purported
non-reliance in the contract, and would make it impossible for
'two businessmen dealing at arm's length to agree that the buyer
is not buying in reliance on any representations of the seller
as to a particular fact.'" Aetna Cas. and Sur. Co., 404 F.3d at
575. "For a contract term to be sufficiently specific under this
standard, there need not be a 'precise identity between the
misrepresentation and the particular disclaimer.'" Id., at 576
quoting Grumman Allied Industries, Inc. v. Rohr Industries,
Inc.,

748 F.2d 729, 735 (2d Cir. 1984). "Rather,

'[t]he Danann

rule operates where the substance of the disclaimer provisions
tracks the substance of the alleged misrepresentations,
notwithstanding semantical discrepancies.'" Id. "The specificity
requirement is further relaxed when the contracting parties are
'sophisticated business people,' and the disclaimer clause is
the result of negotiations between them." Id.
N.A. v. Plapinger, 495 N.Y.S.2d 309, 311-12

30

(quoting Citibank,

(1985)).

Alleged oral representations about facts or events yet
to occur are not actionable. Wild Bunch, SA v. Vendian Entm't,

LLC, No. 17 CIV. 1383, 2018 WL 1365690, at *3 (S.D.N.Y. Feb. 26,
2018)

(granting, inter alia, partial judgment on pleadings),

citing Cohen v. Koenig, 25 F.3d 1168, 1172 (2d Cir. 1994)
(noting that "statements will not form the basis of a fraud
claim when they are mere 'puffery' or are opinions as to future
events"); see also Stewart v. Jackson & Nash,

976 F.2d 86, 89

(2d Cir. 1992).

Defendant alleges three oral misrepresentations:
the Building was 60-70% sold out;

(1)

(2) the Sponsor had a present

plan to increase prices by 8 to 12%, though the alleged increase
had not gone into effect; and (3) Ms. Hadid, the Building's
architect, had committed to purchasing the apartment directly
above the one Defendant was interested in.

(Counterclaims~ 5.)

Each of these alleged misrepresentations are disclaimed in the
Agreement, wherein Defendant promised:

Purchaser [(Defendant)] acknowledges that
Purchaser has not relied upon any architect's
plans, sales plans, selling brochures,
advertisements, representations, warranties,
statements or estimates of any nature whatsoever,
whether written or oral, made by Sponsor, Selling
Agent or otherwise, including, but not limited
to, any relating to the description of physical
condition of the Property, the Building or the
31

Unit,
. or any other data, except as herein
or in the Plan specifically represented.
No
person has been authorized to make any
representations on behalf of Sponsor. No oral
representations or statements shall be considered
a part of this Agreement.

(Compl Ex. A.

~

20.) Each of the alleged misrepresentations are

"sales plans," "representations," "estimates," and/or "data"upon all of which Defendant specifically promised not to rely.
The alleged misrepresentations further involve predicted events
set to occur in the future: prices would increase, but had not
yet; and Ms. Hadid had committed to purchase, but had not yet.

Moreover, Defendant is a sophisticated business
person: He "founded Domain Venture Partners, a structured
investment fund group," and he also was represented by counsel
throughout negotiations with Plaintiff.

(Reply~ 8, Exhibit M.)

If these alleged misrepresentations were truly material to
Defendant, he certainly had the sophistication, guidance, and
means to ensure that the Agreement required Plaintiff to affirm
them. "[W]here ... a party has been put on notice of the
existence of material facts which have not been documented and
he nevertheless proceeds with a transaction without securing the
available documentation or inserting appropriate language in the
agreement for his protection, he may truly be said to have
willingly assumed the business risk that the facts may not be as
32

represented. Defendant cannot now complain that he has been
defrauded when his own lack of due care is responsible for his
predicament. Lazard Freres

&

Co. v. Protective Life Ins. Co.,

108 F.3d 1531, 1543 (2d Cir.1997)
&

(citation and internal Freres

Co. v. Protective Life Ins. Co., 108 F.3d 1531, 1543 (2d

Cir.1997)
also St.

(citation and internal quotation marks omitted); see
Paul Mercury Ins. Co. v. M

&

T Bank Corp., No. 12 Civ.

6322(JFK), 2014 WL 641438, at *5 (S.D.N.Y., Feb. 19, 2014)
("Where the party asserting reliance is sophisticated, and the
purported statement relates to a business transaction that has
been formalized in a contract, New York courts are generally
reluctant to find reliance on oral communications to be
reasonable.")

( internal quotation omitted) ; DDJ Mgmt., LLC v.

Rhone Grp. L.L.C., 905 N.Y.S.2d 118, 122, 15 N.Y.3d 147, 154
( 2010)

(" Indeed, there are many cases in which the plaintiff's

failure to obtain a specific, written representation is given as
a reason for finding reliance to be unjustified.")

Defendant was in default of the Agreement upon the
expiration of all of his contractual adjournment rights. To
avoid this default, Defendant now argues that he was entitled to
an "indefinite" adjournment of the Closing Date, because
Plaintiff did not send a "time is of the essence" letter setting
a law day for closing.
33

Defendant's contention is defeated because the
Agreement contains a "time is of the essence" clause.

(Reisbaum

Deel. Ex. 1 at Ex. A, § 12(b)). Defendant erroneously claims
that the Agreement's "time is of the essence" clause appears in
the Agreement "connect[ed] with a defined 'Event of Default',"
as though time were "of the essence" only once an Event of
Default had occurred.

(Defendant's Memorandum of Law in

Opposition (Dkt. No. 32)

("Opp'n Br.") at 3.) However, that is

not what the Agreement says; it explicitly provides that time is
of the essence at all times as to all Defendant's obligations
under the Agreement:

"TIME IS OF THE ESSENCE with respect to
[Defendant's] obligations to pay the Balance and
to pay, perform or observe [Defendant's] other
obligations under this Agreement."

(Reisbaum Deel. Ex. 1 at Ex. A, § 12(b)). This clause
encompasses all of Defendant's obligations under the Agreement
and is not contingent on, or limited to, an Event of Default
occurring. See, e.g.
A.D.3d 946,

947-48

Sherman v. Real Source Charities, Inc.,

(3d Dep't 2007)

41

(finding that provision

providing that "[i]f the Buyer fails to perform this contract
within the time herein specified, time being of the essence of
this agreement, the deposit made by the Buyer shall be
34

forfeited," appearing in sentence describing the disposition of
buyer's deposit in event of his default, applied by its terms
"to the whole agreement"). Because the Agreement contains an
unlimited "time is of the essence" provision, the majority of
the cases Defendant cites on this are inapplicable. See, e.g.,
N.

Triphammer Dev. Corp. v. Ithaca Assocs., 704 F. Supp. 422,

429 (S.D.N. Y. 1989)

(contract did not state that time was of the

essence); Mazzaferro v. Kings Park Butcher Shop, Inc.,
A.D.2d 434, 435 (2d Dep't 1986)

121

(same).

Based on the faulty premise that the Agreement did not
make time of the essence, see discussion supra, Defendant argues
that no "time-of-the-essence closing date" was set "because the
Agreement afforded Mr. Roache the opportunity to adjourn the
closing date." (Opp'n Br. at 4; see also at 9 ("the Rider to the
Purchase Agreement amended Section 5.1 to enable [Defendant] to
adjourn the initial closing date ... [t]hus, the initial closing
date of July 24, 2017 was not a time-of-the essence closing
date[.]"). Therefore, Defendant claims, his Notice of
Adjournment entitled him to an "indefinite adjournment of the
initial closing date," because the outside date set by
Defendant, "no later than August 23, 2017," was an "on or
before" closing date, never scheduled, and "not time-of-theessence." (Opp'n Br. at 10).
35

However, the fact that the Agreement gave Defendant
the right to adjourn the Closing Date (one time, for no longer
than thirty days) does not vitiate a valid "time is of the
essence" clause. Courts will enforce time of the essence clauses
in contracts that nonetheless grant one or both parties the
right to extend or modify the date of closing. See, e.g.
Sherman,

947-948

(purchaser defaulted under contract that

specified (i) a closing date,

(ii) "the circumstances under

which that date [might] be extended," and (iii) that time was of
the essence; and "[s]ince the contract expressly provides that
time is of the essence, defendant's failure to timely tender
performance placed it in default."); see also Town House Stock
LLC v. Coby Haus. Corp., 2007 WL 726839

7-8

(N.Y. Sup. Ct. 2007)

*3,

(enforcing "time is of the essence" provision of agreement

and releasing down payment to seller despite contractual right
of both seller and purchaser to adjourn the closing date of the
sale up to June 15, 2006), aff'd, 49 A.D.3d 456 (1st Dep't
2008) .

Defendant is held to the Closing Date his Notice of
Adjournment set: "no later than August 23, 2017 at 2:00 P.M."
(Reisbaum Deel. Ex. 1 at Ex. D). Where, as here, a contract sets
an "on or before" closing date, but also states that time is of
36

the essence, courts hold that time is of the essence as to the
contract's performance on or before that date. See, e.g., Bardi
v. Estate of Morgan,

61 A.D.3d 625, 625 (2d Dep't 2009)

("[c]ontrary to [Defendant's] assertion that time was not of the
essence due to the fact that the terms of sale only provided
that the closing date would be "on or before 9/15/06," which
language has been held not to be clear and unequivocal so as to
render time of the essence

the terms of sale provided that

'time is of the essence with respect to the Closing Date as to
the purchaser only.' Therefore, the contract clearly expressed
that time was of the essence .... "). Here, because the Agreement
"clearly expresse[s] that time was of the essence," the "on or
before" date must be complied with. Id.

Plaintiff did not need to send a time is of the
essence letter setting a "law day" before holding Defendant in
default because time already was of the essence under the
Agreement. Defendant cites a string of cases in support of his
argument that are inapposite because each explicitly found that
the underlying purchase agreement did not have a "time is of the
essence" clause. See, e.g. Cave v. Kollar, 296 A.D.2d 370, 371
(2d Dep't 2002)

("it is undisputed that there was no provision

in the contract that time was to be of the essence"); Tarlo v.
Robinson, 118 A.D.2d 561, 562

(2d Dep't 1986)
37

("[t]he contract

did not contain a provision stating that time was of the
essence"); ADC Orange, Inc. v. Coyote Acres, Inc.,
487

(2006)

7 N.Y.3d 484,

("[t]he contract contained no time-of-the-essence

clause and did not provide that ADC's failure to make the
interim payment by December 31, 2001 would put it in default");
Point Holding, LLC v. Crittenden, 119 A.D.3d 918, 919
2014)

(2d Dep't

(contract "[did] not make time of the essence"); Levine v.

Sarbello,

112 A. D. 2d 197, 197

(2d Dep' t 1985)

(" [t] he contract

did not contain a "time is of the essence" clause"). Properly
construed, these cases support Plaintiff's motion.

Built upon his contention that time was not of the
essence and that a letter setting a law date was required to
make it so-Defendant argues that the Notice of Default was
improperly sent.

(Opp'n Br. at 10-11.) The circumstances

constituting an "Event of Default" by Defendant are explicitly
enumerated in Section 12 of the Agreement, and Defendant does
not challenge that he failed to "pay the Balance ... on the Closing
Date designated by Sponsor pursuant to Article 5 hereof[.]"
(Reisbaum Deel. Ex. 1 at Ex. A,

§

12 (a) (i).) Therefore, under

the Agreement, Plaintiff sent a Notice of Default warning him
that his failure to close within 30 days would result in
Plaintiff's exercise of its remedies under the Agreement,

38

'

'

.
including,

inter alia,

retention of the Deposit.

(Id. § 12(b);

see also Reisbaum Deel. Ex. 1 at Exhibit Eat 1.)

Accordingly,

Defendant's first counterclaim, based on

Plaintiff's alleged repudiation of the Agreement by sending the
Notice of Termination,

is predicated on his assertion that

Plaintiff issued a Notice of Termination based on "a purported
'default' by [Defendant]

that did not exist."

(Opp'n Br. 14)

Because Defendant's pleadings fail to show that Plaintiff
breached the Agreement, his anticipatory repudiation claim
fails.

Chatsworth Realty 344 LLC. v. Hudson Waterfront Co. A,

LLC., 2003 WL 1085888, at *6 (N.Y. Sup. Ct. Mar. 4, 2003)
("Given that the court has found no basis for a claim of breach
of the applicable agreements, this claim is found wanting."),
aff'd 309 A.D.2d 567

(1st Dep't 2003) .And because only a party

who is not in breach of an agreement can bring a claim for
anticipatory repudiation,

Defendant's claim fails for this

additional reason as well.
831 F. Supp. 2d 634,

641

See DiFolco v. MSNBC Cable L.L.C.,

(S.D.N.Y. 2011)

(anticipatory

repudiation excuses the non-breaching party from performance)

Defendant's third counterclaim is for fraud in the
inducement. Defendant contends that this cause of action must
survive because

(i)

he seeks rescission of the entire contract,
39

~

'

.
including the merger clause;

(ii) the clause is too general to

track the substance of the alleged misrepresentations; and (iii)
the facts alleged to have been misrepresented were "peculiarly
within" Plaintiff's knowledge.

Although "an omnibus statement that the written
instrument embodies the whole agreement, or that no
representations have been made" is insufficient to bar a claim
of fraudulent inducement, here the Agreement's merger clause is
specific enough to bar Defendant's reliance upon the alleged
misrepresentations. Mfrs. Hanover Tr.

Co. v. Yanakas,

7 F.3d

310, 315 (2d. Cir. 1993). In Danann, the New York Court of
Appeals rejected a claim for fraudulent inducement where the
merger clause contained a statement that the seller had "not
made and does not make any representations as to the physical
condition, rents,

leases, expenses, operation, or any other

matter or thing affecting or related to the aforesaid premises,
except as herein specifically set forth,

and the Purchaser

hereby expressly acknowledges that no such representations have
been made .... " Danann Realty Corp. v. Harris,
(1959); see also Aetna Cas.

5 N.Y.2d 317, 320

& Sur. Co. v. Aniero Concrete Co.,

404 F.3d 566, 576 (2d Cir. 2005)

(there need not be a "precise

identity between the misrepresentation and the particular
disclaimer" as long as the "substance of the disclaimer
40

.'
provisions tracks the substance of the alleged
misrepresentations"); Psenicska v. Twentieth Century Fox Film
Corp., No. 07 Civ. 10972
Sept. 3, 2 0 0 8)

(LAP), 2008 WL 4185752, at *6 (S.D.N.Y.

(waiver of reliance on "any promises or

statements made by anyone about the nature of the Film or the
identity of any other Participants or persons involved in the
Film" sufficiently specific to sustain 12(b) (6) dismissal of
fraudulent inducement claims), aff'd,

409 F. App'x 368

(2d Cir.

2009) .

And the "peculiar knowledge" exception cannot apply
here.

( Opp' n Br. at 2 3-2 4. ) The exception is "stringently

applied" when the contracting parties are sophisticated
companies or businessmen, because "the [Defendant] had a low
cost alternative such as insisting that the written contract
terms reflect any oral undertaking on a deal-breaking issue."
SOL Grp. Mktg.

Co. v. Lines, No. 14 Civ.

205444, at *5 (S.D.N.Y. Jan. 15, 2016)
inducement claim on 12 (b) ( 6) motion)

9929

(SHS), 2016 WL

(dismissing fraud in the

(internal quotations

omitted); O.F.I. Imports Inc. v. Gen. Elec. Capital Corp., No.
15 Civ. 7231
2016)

(VEC), 2016 WL 5376208, at *6 (S.D.N.Y. Sept. 26,

(exception applies only when a party takes "reasonable

steps to verify its counterparty's statements but is unable to
do so because the underlying information is impractically
41

6

'

expensive to obtain or solely within the control of the
counterparty"); Lazard Freres & Co. v. Protective Life Ins.
108 F.3d 1531, 1543 (2d Cir. 1997)

Co.,

("where, as here, a party has

been put on notice of the existence of material facts which have
not been documented and he nevertheless proceeds with a
transaction without securing the available documentation or
inserting appropriate language in the agreement for his
protection, he may truly be said to have willingly assumed the
business risk that the facts may not be as represented ... a
party will not be heard to complain that he has been defrauded
when it is his own evident lack of due care which is responsible
for his predicament.")

(internal quotations omitted).

Although Defendant argues that his level of
sophistication is an issue for further discovery, he does not
contest that he founded, and is the Chairman of, a structured
investment fund for experienced investors.
at Answer~ 3; Reisbaum Deel. Ex. 2

~

(Reisbaum Deel. Ex. 4

12.) Nor does he deny that

he was represented by real estate counsel in New York throughout
the negotiation of the Agreement and afterwards.
Ex. 4 at Answer~ 11; Reisbaum Deel. Ex. 3
Reisbaum Deel. Ex. 2
negotiate for,

~

~

(Reisbaum Deel.

8, Ex. M; see also

3-4, 14.) Indeed, Defendant clearly did

and obtain, benefits such as the right to a

limited, thirty-day adjournment of the Closing Date.
42

(Reisbaum

\

Deel. Ex. 1 at Ex. A, Rider to Agreement 1 A.) He cannot
disclaim reliance upon descriptions of the Building (regarding
the number of units sold and a potential plan to increase
prices) and the Unit

(i.e., its prospective neighbors), and then

claim to have been defrauded by statements he has already
disclaimed.

Based on the conclusions set forth above,

judgment for

Plaintiff on the pleadings is granted and the Defendant's crossmotion is denied. For the reasons set forth,

Defendant's second

counterclaim, for declaratory judgment that he is entitled to
the return of the Deposit, is dismissed.

In view of the Opinion in this action entered this
date, the discovery motions are moot and dismissed. Enter
judgment on notice.

It is so ordered.

New York, NY
February

V1,,,,-r 2019

U.S.D.J.
43