Upon the foregoing papers, defendant's motion, inter alia, for summary judgment and dismissal of the complaint is denied.

Plaintiffs commenced this action to compel specific performance of a contract for the sale of realty dated March 18, 1999 or, in the alternative, money damages arising out of the seller's alleged breach of that agreement. More specifically, plaintiffs' claim that defendant improperly cancelled a contract to sell them a one-family dwelling that was to be constructed at 88 Vulcan Street, Staten Island, New York.

Insofar as it appears on the papers before the Court, some two and one-half years after the parties entered into the subject contract, i.e., in a letter dated September 18, 2001, the prospective purchasers, Iouri Levine and Margaret Levina, were advised by the seller, Olympia Estates, Inc. ("Olympia"), that Olympia would not be able to complete and/or deliver title to the subject premises "for reasons beyond [the] seller's control." Accordingly, Olympia declared the "contract [to be] null and void" and returned plaintiffs' down payment in purported compliance with paragraph 13 of their agreement. Pertinently, paragraph 13 provides that "[t]he Seller's liability under [the] Agreement for failure to complete and/or deliver title for any reason whatsoever, except for Seller's willful default [emphasis added], shall be limited to the return of the money paid and, upon the return of said money, [the] Agreement shall be null and void and the parties released from any and all liability hereunder." This lawsuit followed.

In support of dismissal, defendant maintains that on or about May 1996, the New York State Department of Environmental Conservation ("DEC") transferred a permit authorizing the construction of a residential development on the subject property to Olympia, and simultaneously extended its expiration date until December 31, 1999. It is Olympia's contention that the cancellation of the contract was necessitated by the DEC's subsequent refusal to renew the above permit, as well as Olympia's purported inability to resolve a freshwater wetlands violation. According to Olympia, both failures are related to its alleged inability to remove "voluminous amounts of dirt", i.e., "fill", allegedly placed on the subject property by a prior owner, and not as a result of any fault of its own. As proof, Olympia has proffered a copy of the deposition testimony of its vice president, Michael Pugliese, who stated that such landfill is "not [*2]easily disposed of", and that the ability to effect removal depends on the acts of third parties, i.e., "[w]hen other jobs open up that need fill". According to this witness, such an event could occur within "six months [or...] a year, [but] it could be five years."

Base on this testimony, defendant contends that it has demonstrated prima facie that its inability, e.g., to comply with DEC requirements did not constitute a "willful default" under the contract. In further support, defendant has submitted a copy of a DEC Consent Order dated July 20, 2004 memorializing Olympia's repeated failures to comply with certain freshwater wetlands regulations.

Finally, defendant maintains that plaintiffs' cause of action for specific performance cannot be sustained because they admittedly lack the current financial ability to close title. In support, defendant relies on plaintiffs' deposition testimony that they have only $3,000.00 in savings, and that their newly-formed jewelry business generated only $30,000.00 in gross revenues in the past year. Defendant also contends that plaintiffs cannot afford to buy a new house until they sell their current residence, since they are financially incapable of "carrying" two mortgages.

In opposing the motion, plaintiffs maintain that defendant's default was "willful", as evidenced by (1) the "history of [its] dealings with the DEC" and (2) the record of its architect's correspondence with that agency. According to plaintiffs, the former "plainly suggests that [Olympia] intentionally allowed the permit to lapse in December 1999," while the latter demonstrates that Olympia made no effort to have a new permit issued until May of 2003, after the contract was cancelled.

Plaintiffs further contend that the claimed lack of facilities on Staten Island which would accept defendant's landfill during the two and one-half years preceding defendant's notice of cancellation is wholly unsubstantiated. To the contrary, plaintiff's claim that both the deposition testimony of a DEC agent, Joseph Pane, and a copy of a memorandum subpoenaed from his records prove that there were alternate sites available for the disposition of such landfill, i.e., (1) the Fresh Kills Landfill operated by the City of New York and (2) certain independent contractors who would accept fill on a fee-paid basis.^[FN1] It is plaintiffs' contention that this evidence minimally raises a question of fact as to whether or not defendant's failure to resolve its compliance issues constituted a willful act orchestrated to allow defendant, e.g., to avoid its contractual obligation and default on the contract "for economic reasons", such as attempting to capitalize on the professed increase in property values since the contract was signed.

Finally, plaintiffs contend that the attached copy of a mortgage approval letter from Countrywide Mortgage dated October 25, 2006 demonstrates that their $200,000.00 loan commitment is not contingent upon the sale of their current residence, and that they are ready, willing and able to close on the subject property.

Defendant's motion for summary judgment is denied.

In the opinion of this Court, defendant has failed to establish its entitlement to judgment as a matter of law by demonstrating the absence of any triable issue as to the willfulness of its default (see Alvarez v Prospect Hosp., 68 NY2d 320). In this regard, the Court notes that the [*3]DEC Consent Order dated July 20, 2004 includes the following agreed findings:

13. At some time after the issuance of the first permit,

and while the property was under the prior owner's

control, fill was placed or allowed to be placed in the

freshwater wetlands and the areas adjacent thereto in

violation of ECL §24-0701.1

* * *

21. Thereafter, on or about October 18, 1999, DEC staff

observed Olympia causing or permitting to be caused

the operation of a soil storage and processing operation

at the Site. The operation included: the deposition of

large quantities of fill; the screening of the same; and,

the shipment out of the processed materials *** activities

[which] violated Special Conditions and DEC approved

plans referenced in the Olympia Permit.

22. Respondent's addition of fill to the adjacent area of the

Site without a permit from the Department constituted a

violation of ECL §24-0701.1, 6 NYCRR §663.3(e) and

§663.4(a).

and

23. When DEC extended the expiration date on the Olympia

Permit on May 9, 1996, it did so in reliance on Respondent's

[Olympia's] representations that it would expeditiously complete the

excavation, mitigative grading and planting as required in the

Olympia Permit and the final DEC-approved plans referenced

therein.

In view of these "findings", it is for a jury to determine whether or not defendant's acts amounted to a willful default under its contract with plaintiffs (see Winegrad v New York Univ. Med. Ctr., 64 NY2d 851, 853).^[FN2]

Accordingly, it is

ORDERED, that defendant's motion is denied in its entirety. [*4]

E N T E R,

Dated: 1-10-07/s/ Philip G. Minardo

J.S.C.