In this breach of contract action based upon the failure to close on a purchase of real property, plaintiff Chana & Devorah Realty, Inc. (the plaintiff or the seller) moves for summary judgment or, in the alternative, an in limine ruling regarding the defendant's exercise of the attorney-client privilege. Defendant Beatrice Degliuomoini (the defendant or the purchaser) cross-moves for summary judgment on her counterclaims for the return of her down payment.^[FN1]

BACKGROUND

In April 2006,^[FN2] the plaintiff, as seller, entered into a contract with the defendant, as purchaser, for the conveyance of two improved, contiguous parcels of commercial real property at 249-251 East 49th Street and 255 East 49th Street in Brooklyn (collectively, the [*2]property). During this real estate transaction, the plaintiff was represented by its attorney Fay Taub Stern (Stern), and the defendant was represented by her attorney, Lawrence M. Gottlieb (Gottlieb). The purchase price was $2,150,000 (§ 2.01 ^[FN3]). Upon the signing of the contract, the defendant made a down payment or deposit of $210,000 (Schedule C, § [a]), which was held in escrow by Stern (§ 2.05 [a]). Under the terms of the contract, the defendant had the right, within a specified period of time (the revocation period), to cancel the contract "upon written notice to seller's attorney" and receive a full refund of the down payment if "a Phase I Environmental Inspection," conducted by the defendant, "disclose[d] the presence or threat of Hazardous Substances on the property or recommend[ed] any remediation or additional testing" (Rider, § 7 [ii]). Otherwise, the defendant was to acquire the property "as is" and in its "present condition" (§ 5.01). The parties subsequently extended the revocation period through and including June 30th.^[FN4]

During the revocation period, the defendant, at her own expense, retained Expedited Environmental Services, Inc. (EESI) to perform a Phase I inspection of the property.^[FN5] On or before June 12, EESI issued to the defendant a report prepared in accordance with ASTM E1527 ("Standard Practice for Environmental Site Assessments: Phase I Environmental Site Assessment Process").^[FN6] "In defining a standard of good commercial and customary practice for conducting an environmental site assessment of a parcel of property, the goal of the processes established by this practice is to identify recognized environmental conditions."^[FN7] [*3]This term means:

"[T]he presence or likely presence of any hazardous substances or petroleum products on a property under conditions that indicate an existing release, a past release, or a material threat of a release of any hazardous substances or petroleum products into structures on the property or into the ground, ground water, or surface water of the property."^[FN8]

According to its Phase I report, EESI found two "recognized environmental conditions" on the property:

(1)An underground petroleum storage tank with a potential fill port partially covered with soil and concrete; and

(2)Approximately twelve pits previously used for waste oil disposal.^[FN9]

In addition, EESI discovered during the site reconnaissance "suspect asbestos-containing materials, such as air-cell pipe insulation, boiler insulation, tank insulation, plaster, floor tiles, and roofing materials" (to be definitely verified by laboratory analysis).^[FN10]

On June 12, Gottlieb, the defendant's counsel, provided a copy of the EESI Phase I report to Stern, the plaintiff's counsel.^[FN11] On June 23, Gottlieb manually signed and sent a letter to Stern (by facsimile, with a copy to the defendant), stating that the EESI Phase I report disclosed certain environmental issues that required the commissioning of a Phase II investigation, that such investigation would cost $15,300, that the defendant had proposed that if the investigation did not reveal that remediation was required, the defendant would pay [*4]one-half of the cost of the Phase II investigation, but that if such investigation disclosed that remediation was, in fact, required, the plaintiff would be responsible to perform the clean-up and assume the full cost. The letter concluded:

"In our telephone conference of this date, you [Stern] confirmed that your client [the plaintiff] has rejected the foregoing proposal. Accordingly, pursuant to ¶ 7 (ii) of the rider to the contract of sale between the parties dated April 21, 2006, as well as your e-mail extension dated June 1, 2006, enlarging the environmental . . . contingenc[y] through June 30, 2006, our client [the defendant] is hereby cancelling the contract.

Please return the contract deposit, with accrued interest immediately upon receipt."^[FN12]

On June 28, Gottlieb manually signed and sent another letter to Stern (also by facsimile, with a copy to the defendant), stating, in relevant part:

"Further to our correspondence of June 23, 2006, our client [the defendant] has advised that the Seller has consented to the assumption of the cost of the Phase II investigation as well as committed to the clean up [of] the Premises at the Seller's sole cost and expense and to our lender's satisfaction, if environmental issues are discovered.

The remaining issue, however, is the timing of the foregoing . . . [T]he remediation must be completed not later than August 31, 2006 or the Buyer will complete it on its own and reduce the purchase price by the cost of completion.

Please advise if the foregoing is acceptable to the Seller. If not, please return the contract deposit, with accrued interest, immediately such that it is received by the undersigned no later than June 29, 2006."^[FN13]

On June 29, Stern replied to Gottlieb with the following memorandum typed on a facsimile cover page:

"I am in receipt of your fax of June 23rd. You misquoted me in paragraph No. 3, I did not say that my client outright rejected paying for the [*5]Phase II but that he probably would not go for it. I therefore advised you to put the proposal to me in writing so that I can for[ward it] onto [sic] my client for his decision.

. . . I will advise you as soon as my client advises me of his decision."^[FN14]

On June 30, the revocation period expired. Plaintiff did not communicate an agreement to the defendant's proposal, nor did the plaintiff refund the deposit to the defendant.

In July, the parties were negotiating modifications to the contract.^[FN15] By way of background, the defendant was originally required by the contract to acquire the property for all cash (§ 2.01), except that she had 35 days from the date of the contract (as extended by the parties' agreement to June 30th) within which she could cancel the contract if she did not obtain a mortgage commitment (Rider, § 7 [i]).^[FN16] Before June 30th, the defendant obtained a conditional commitment from Lehman Brothers Bank, FSB (Lehman), subject to, among other things, that Lehman was satisfied with a Phase I investigation of the property and that the property was "free of toxic materials and other contaminants."^[FN17] However, rather than proceed with Lehman as the direct lender, the parties discussed whether the plaintiff would extend interim financing to the defendant in the form of a purchase money note and mortgage to be ultimately assigned to Lehman. Based on this proposal, Stern drafted a 60-day bridge note, bearing a fixed interest rate of 8.5% per annum, and a mortgage, and e-mailed them to Gottlieb who forwarded them to Lehman for its comments.^[FN18] However, there is nothing in the record indicating that the parties ever agreed on the interest rate and/or the maturity of the bridge note either in writing or orally.^[FN19]

In August, another modification was proposed. The contract originally provided for a single deed to be delivered at closing for both parcels (§ 10.01) and contained no allocation [*6]of the deposit between the parcels (Schedule C, § [a]). On August 7, Gottlieb manually signed and e-mailed a letter to Stern in which he conveyed the defendant's desire that title to the property be transferred by way of two deeds, the first with respect to the larger parcel, for consideration of $1,800,000 to be financed with the contract deposit of $210,000 and a $650,000 purchase money mortgage, and the second, with respect to the other parcel, for consideration of $350,000 to be financed in its entirety by purchase money mortgage.^[FN20] Gottlieb further stated in his August 7th letter that Stern had agreed to transmit the defendant's proposal to the plaintiff's "accountant and advise immediately," concluding, "we have tentatively scheduled the closing for the afternoon of Wednesday, August 16, 2006."^[FN21] At some point thereafter, Stern prepared two form deeds, one for each parcel.^[FN22]

Late in the evening of August 7, the plaintiff, the defendant, and their respective counsel each received a Phase II report from EESI by e-mail.^[FN23] A copy of the Phase II report is not in the record.

On August 10, Gottlieb received, and forwarded to Stern by e-mail, a remediation work proposal from EESI.^[FN24] The work proposal was for the removal from the property of the underground petroleum storage tank as well as an above-ground oil/water separator tank. As far as the timing of the work was concerned, EESI warned that it was providing no guarantees:

"In a perfect world, we can be completed with the final report in 30 days. However, if we run into a situation w[h]ere we need to register and close these tanks with the DEC [Department of Environmental Conservation], the project will be completed but an actual closure letter will take time to get back from the DEC. Can take two weeks to months for the review based on the DEC's backlog. Please also keep in mind that if the samples continue to be high, we will have to remobilize to the site to do additional removal."^[FN25]

On August 11, Gottlieb inquired of Stern, by e-mail, whether the plaintiff had received [*7]a formal remediation contract.^[FN26] There is nothing in the record indicating that Stern ever responded to Gottlieb's August 11th e-mail.

On August 14, Gottlieb prepared a letter, to be manually signed and exchanged by both Gottlieb and Stern prior to closing, memorializing the proposed amendments to the contract with respect to: (1) the two deeds to be transferred upon purchase money mortgages to be taken by the plaintiff at closing; (2) proof of an executed agreement between plaintiff and EESI for the post-closing clean-up of the property, plus removal of the asbestos, to be undertaken at plaintiff's sole cost in accordance with EESI's August 10th proposal; (3) deduction from the purchase money mortgage of the cost to defendant of the clean-up if EESI failed to clean up the property within 45 days after closing; and (4) the fixing of the interest rate for the purchase money notes at "swap rate plus 3.20%" as provided under the terms of the Lehman commitment.^[FN27] The August 14th letter has Gottlieb's and Stern's typewritten names and spaces for their respective signatures, but lacks any manual signatures. The August 14th letter states that it was to be transmitted to Stern by e-mail. Gottlieb testified at his pre-trial, non-party deposition that he did not send the August 14th letter to Stern because his practice was to manually sign a letter before scanning it and sending its image by e-mail.^[FN28]

On August 15, Gottlieb prepared and transmitted to Stern by facsimile a proposed amendment to the contract to be signed by the plaintiff and the defendant at closing.^[FN29] In addition, on August 15, Gottlieb telephoned his client, the defendant, to advise her of the upcoming, tentatively scheduled closing for August 16th. According to the defendant, she refused to close because the contract had been canceled as of June 23rd:

"I only know that when he call[ed] me, he said, Tomorrow, you have schedule.' What kind of schedule? What kind of closing?'

I said, Larry, my deal was over the 23rd. Where is my money?' . . ."^[FN30]

In her affidavit in support of her cross motion for summary judgment, the defendant avers that "[i]n mid August, 2006 there was a time when a potential agreement was forwarded to my attention for review. I reviewed it, did not agree with its terms, and refused [*8]to sign it . . . Again, I demanded the return of my down payment."^[FN31]

On August 16, Gottlieb sent Stern the following e-mail:

"[W]e will not be able to proceed to closing and will exercise our rights to cancel the contract under the environmental contingency clause. Please call me so that we can arrange for the immediate return of our client's contract deposit."^[FN32]

Later on August 16, Stern responded with the plaintiff's position that the deal was firm and that the deposit would be retained by the plaintiff as liquidated damages.^[FN33] On August 24, Stern sent, by certified mail, a letter to both Gottlieb and the defendant, setting a time-of-the-essence closing for September 26.^[FN34] On September 7, Gottlieb responded to Stern's letter, reiterating the defendant's position that the contract had been canceled on June 23rd pursuant to the environmental contingency clause and further stating that "[a]fter that date of cancellation, without a writing signed by both sides evidencing an amendment to or a new contract (which as you know, is required under the statute of frauds and which was proposed by us several times and never accepted, in writing, by your client), your client proceeded at its own peril."^[FN35]

On November 16, the plaintiff commenced the instant action, asserting as its first cause of action that the defendant breached the contract and that the plaintiff may retain the down payment as liquidated damages, and, as its second cause of action, that the defendant is liable to the plaintiff for reasonable attorneys' fees as expressly permitted by the contract.^[FN36] On January 16, 2007, the defendant answered asserting as one of its affirmative defenses that the plaintiff had failed to comply with the terms of the contract of sale, and further asserting as counterclaims that the plaintiff breached the contract and that the defendant was entitled [*9]to reasonable attorneys' fees as the successful party in this action.^[FN37] Thereafter, by decision and order, dated July 2, 2008, the court denied the plaintiff leave to amend the complaint to add Gottlieb as a party defendant.^[FN38]

On December 17, 2008, the plaintiff filed a note of issue.^[FN39] On January 14, 2009, the plaintiff moved for summary judgment or, alternatively, for in limine relief to prevent the defendant from asserting at trial that Gottlieb acted without her authority. In mid-January 2009, the defendant's litigation counsel, Morris Markowitz, died.^[FN40] In early March 2009, the defendant retained her current litigation counsel.^[FN41] On May 14, 2009, the defendant served a cross motion for leave to amend her answer to assert the affirmative defenses set forth in General Obligations Law (GOL) §§ 15-301 and 5-703, and for summary judgment, together with a separate opposition to the plaintiff's motion. At oral argument held on July 21, 2009, the court granted that branch of the defendant's cross motion for leave to amend her answer, and the amended answer was deemed served.^[FN42] The court reserved decision on the plaintiff's motion and the remainder of the defendant's cross motion.

The plaintiff contends that the defendant waived the environmental contingency clause and her right to cancel the contract when she reached a new agreement with the plaintiff after the expiration of the revocation period. Plaintiff argues that the Statute of Frauds is inapplicable because the plaintiff "performed every part of the new terms"^[FN43] when it agreed to pay for the environmental clean-up and when it incurred legal fees in preparing two deeds, a bridge note, and a mortgage.

In the alternative, the plaintiff argues that even if a writing were necessary to comply with the Statute of Frauds (GOL 15-301 and 5-703), Gottlieb's August 7th letter confirming a tentatively scheduled closing for August 16th, together with the e-mail exchanges, constitute the requisite writings. Next, the plaintiff maintains that if the court did not view these writings as sufficient, then the conversations that Stern had with Gottlieb as well as the [*10]defendant's own behavior would amount to an oral modification or waiver of the environmental contingency clause. If such conversations did not constitute a waiver or modification, the plaintiff concludes that the defendant should be equitably estopped from raising the Statute of Frauds as a defense.

The Defendant

The defendant's position is that she is entitled to summary judgment because the defendant properly and timely exercised her right to cancel the contract pursuant to the environmental contingency clause and that, following her cancellation, there was no enforceable modification or new written agreement reached by the parties. The defendant contends that the plaintiff did not fully perform the contract and that the doctrines of part performance and equitable estoppel cannot be satisfied by the plaintiff to avoid the application of the Statute of Frauds.

CPLR 3212 (b) requires that "a motion for summary judgment shall be supported by . . . a copy of the pleadings." Rule 16 (a) of the Commercial Division of the Supreme Court provides that "[c]ounsel must attach copies of all pleadings and other documents as required by the CPLR and as necessary for an informed decision on the motion (especially on motions pursuant to CPLR . . . 3212)." CPLR 3011 defines pleadings as a complaint, an answer, and a reply to a counterclaim. The CPLR 3212 (b) requirement that a complete set of the pleadings be attached to a summary judgment motion is for the benefit of the court (see Casanova v Nacco Materials Handling Group, Inc., NYLJ, Aug. 24, 2009, at 21, col 1 [Sup Ct, Kings County]).

The plaintiff's motion did not contain a copy of the complaint and a reply to counterclaims. In lieu of the actual complaint, the plaintiff attached an unauthorized amended complaint, even though by decision and order of July 2, 2008, this court denied the plaintiff leave to amend.^[FN44] Nevertheless, because the defendant did not object to the plaintiff's failure to comply with CPLR 3212 (b) and Rule 16 (a), the court will consider the plaintiff's motion on the merits, rather than dismiss it. This is consistent with the court's overall mandate to decide matters "on their merits whenever possible" (Jenkins v City of New York, 13 AD3d 342, 342 [2d Dept 2004]).

Cancellation Pursuant to Environmental Contingency Clause

The threshold issue is whether Gottlieb's letters to Stern of June 23rd and June 28th validly canceled the contract pursuant to the environmental contingency clause. That clause has three requirements: (1) a Phase I inspection must "disclose[ ] the presence or threat of Hazardous Substances on the property or recommend[ ] any remediation or additional testing"; (2) written notice of cancellation must be given to the plaintiff's attorney; and [*11](3) such notice must be given within 35 days from the contract date (Rider 7 [ii]).

The first requirement is satisfied because EESI's Phase I report found on the property: (1) an underground petroleum storage tank, and (2) approximately twelve pits previously used for waste oil disposal. According to EESI, these findings constituted "recognized environmental conditions," which are defined by ASTM E1527, § 1.1.1, as "the presence or likely presence of any hazardous substances or petroleum products on a property under conditions that indicate an existing release, a past release, or a material threat of a release of any hazardous substances or petroleum products into structures on the property or into the ground, ground water, or surface water of the property." In addition, EESI noted the presence of "suspect asbestos-containing materials" on the property requiring further investigation. The foregoing obviously constituted the presence or threat of "Hazardous Substances" on the property as well as a recommendation of additional testing of the property, thereby meeting the first prong of the environmental contingency clause.

The second requirement is also satisfied because Gottlieb gave (1) written notice to Stern, the plaintiff's attorney, on June 23rd requesting the return of the deposit pursuant to the environmental contingency clause, and (2) another written notice to Stern on June 28th requesting the return of the deposit by no later than June 29th unless the plaintiff agreed to perform a clean-up and so advised Gottlieb. Stern's June 29th response to Gottlieb, stating that her client needed to review Gottlieb's June 23rd letter, did not reflect the plaintiff's agreement to perform a clean-up.

The manner in which Gottlieb's notice of cancellation was given — by manually signed letters transmitted by facsimile, rather than by personal delivery or by registered or certified mail — was permitted by the contract. Section 15.01 provides that "[a]ll notices under this contract shall be . . . delivered personally or shall be sent by prepaid registered or certified mail, addressed as set forth in Schedule D, or as Seller or Purchaser otherwise have given notice as herein provided" (emphasis added). The defendant purchaser gave notice in the manner provided for in Rider 7 (ii) (i.e., in writing addressed to the plaintiff seller's attorney), and thus complied with Section 15.01. Even if Section 15.01 were deemed inconsistent with the notice provision of Rider 7 (ii), the latter notice provision would govern in accordance with Section 17.06, which states that "[i]f the provisions of any . . . rider to this contract are inconsistent with the provisions of this contract, the provisions of such . . . rider shall prevail."^[FN45]

The third and final requirement of timing was expressly waived by the plaintiff when it extended the revocation period to June 30th. The plaintiff admitted that fact in its moving papers. Stern received Gottlieb's cancellation letters of June 23rd and June 28th before [*12]June 30th. Accordingly, the defendant's cancellation of the contract pursuant to the environmental contingency clause of Rider 7 (ii) was proper in all respects.

Post-Cancellation Negotiations

Section 17.02 of the contract (the merger clause) provides that "[n]either this contract nor any provision hereof may be waived, modified, amended, discharged or terminated except by an instrument signed by the party against whom the enforcement of such waiver, modification, amendment, discharge or termination is sought, and then only to the extent set forth in such instrument." Pursuant to GOL 15-301 (1), a written agreement which includes a proscription against oral modification "cannot be changed by an executory agreement unless such executory agreement is in writing and signed by the party against whom enforcement of the change is sought or by his [or her] agent." GOL 15-301 (1) referring to oral changes in executory contracts has been interpreted to relate to actual changes of terms as opposed to waivers of a condition subsequent that has the sole effect of keeping the contract viable for the mutual benefit of both parties (see Avendanio v Marcantonio, 75 AD2d 796, 797 [2d Dept 1980] ["The statute (GOL 15-301) contemplates modification of an executory term of performance; it is not concerned with an oral waiver of a condition subsequent, such as a contingency date in a contract for the sale of real property"] [internal citations omitted]). In addition, pursuant to GOL 5-703 (2), "[a] contract . . . for the sale . . of any real property . . . is void unless the contract or some note or memorandum thereof, expressing the consideration, is in writing, subscribed by the party to be charged, or by his lawful agent thereunto authorized by writing." However, "[a]n oral waiver of a contingency date in a condition subsequent in a contract for the sale of real property is not barred by section 5-703 of the General Obligations Law, which only contemplates modifications of executory terms of performance" (Patten v Nagy, 86 AD2d 890, 890 [2d Dept 1982]).

An oral waiver is enforceable, however, only where one of the parties to the contract continued to perform under the contract and continued to seek performance by the other party, thus perpetuating the transaction under the terms of the original agreement notwithstanding a deadline in the contract which was not met. For example, in Loper v O'Rourke (86 Misc 2d 441 [Dist Ct, Suffolk County 1976]), the purchasers obtained a conditional mortgage commitment within the 45-day mortgage contingency period. The firm mortgage commitment was issued 25 days later. The parties scheduled the closing. The purchasers wrote to the seller within days before the scheduled closing date advising the seller that they could not proceed because of marital problems. There was no cancellation due to the passing of the 45-day mortgage contingency period. The court held that the purchasers, through their conduct of proceeding under the contract, obtaining a firm commitment, and scheduling the closing, waived the 45-day mortgage contingency period. Since the purchasers willfully defaulted, the seller was entitled to keep the money deposited in escrow. In Golfo v Kycia Assocs., Inc. (15 AD3d 540 [2d Dept 2005]), there was an issue of fact as to whether the sellers waived the closing date of "on or before August 31, 2001 and September 30, 2001" when they wrote a letter in December 2001 seeking to schedule a [*13]closing and did not thereafter purport to exercise contractual right to cancel until March 2002.

These decisions are distinguishable from the instant case wherein the defendant purchaser's continuing negotiation was in contemplation of a new contract on materially different terms from those set forth in the original contract (i.e., the plaintiff seller would be paying for the clean-up of the property instead of conveying it "as is" and would be taking a purchase money mortgage instead of conveying the property on an all-cash basis), and was not simply a waiver of a contingency deadline. Such negotiations were not inconsistent with defendant's effective cancellation of the original contract in conformity with the environmental contingency clauses. The original contract, as executed by the parties, did not provide that the seller would clean up the property upon the discovery of hazardous substances on the property; it provided only that if the purchaser raised objections during the revocation period, she could cancel the contract and recover her deposit. The contract did not provide that the seller would extend bridge financing to the purchaser; it provided only that if the purchaser was unable to obtain financing, she could cancel the contract and recover her deposit. The purchaser was limited to the remedies provided for in the contract, entitling her only to either take the property as it was for all cash or to cancel the contract. Such new and different proposed terms were a "modification," not a "waiver," and required a writing signed by the defendant.^[FN46] Gottlieb's draft letter of August 14th, purporting to "confirm" the proposed amendments to the contract of sale, was never manually signed by Gottlieb, as was his custom and practice, or the defendant, nor was it transmitted to Stern. Gottlieb's draft contract amendment of August 16th was never signed by any party. Thus, there was no signed writing reflecting the amended terms of contract in compliance with the requirements of GOL 15-301 (1) or 5-703 (2).^[FN47]

Further support for the conclusion that a writing was mandatory in this case is a last-minute change allegedly agreed to by the parties. According to the plaintiff, "[s]ince the defendant[ ] needed to close quickly we both agreed to close with my [plaintiff's] loans on the property."^[FN48] Yet, the contract provided for the defendant to acquire the property free and [*14]clear of existing mortgages,^[FN49] and there is nothing in Gottlieb's draft letter of August 14th or his draft contract amendment of August 16th indicating that the defendant purchaser was taking the property subject to existing mortgages. This major change was not originally raised by either party in its moving papers and was first raised by the plaintiff in its reply affidavit. Apart from the impropriety of first raising this issue in reply, such representation, so materially inconsistent with terms of the written contract, establishes that there was no meeting of the minds with respect to the alleged amendments.

It is well established that "when the oral agreement to modify has in fact been acted upon to completion, the same need to protect the integrity of the written agreement from false claims of modification does not arise. In such case, not only may past oral discussions be relied upon to test the alleged modification, but the actions taken may demonstrate, objectively, the nature and extent of the modification" (Rose v Spa Realty Assocs., 42 NY2d 338, 343 [1977] [emphasis added]).

While the conduct of both parties may have prepared the ground for the sale of the property, the title was not conveyed and no consideration changed hands (see Rose, 42 NY2d at 344). Moreover, the plaintiff seller did not clean up the property as was required by the terms of the alleged amendment or produce evidence of a signed contract to do so. Thus, plaintiff has not demonstrated that it was ready willing and able to convey title in compliance with the terms of the modified agreement. Accordingly, the oral modification was not fully executed.

The equitable doctrine of part performance, codified in GOL 5-703 (4), which provides that "[n]othing contained in this section abridges the powers of courts of equity to compel the specific performance of agreements in cases of part performance," applies where a party "induc[es] or permit[s] without remonstrance another party to the agreement to do acts, pursuant to and in reliance upon the agreement, to such an extent and so substantial in quality as to irremediably alter the situation and make the interposition of the statute against performance a fraud" (Messner Vetere Berger McNamee Schmetterer Euro RSCG Inc. v Aegis Group PLC, 93 NY2d 229, 235 [1999] [internal quotation marks, citations, and brackets omitted]). The performance must be "unequivocally referable" to the disputed agreement (id.) and "inconsistent with any other explanation" (Richardson & Lucas, Inc. v New York Athletic Club of City of New York, 304 AD2d 462, 463 [1st Dept 2003]). The acts of part performance must have been those of the party insisting on the contract (i.e., the plaintiff seller in this case) (see Messner Vetere, 93 NY2d at 237).

The only part performance established by the plaintiff here was its payment for a Phase II investigation and its counsel's preparation of a form bridge note, bridge mortgage, and two deeds. The plaintiff's payment for a Phase II investigation, viewed alone, is not "unequivocally referable" to the contract to convey the property to the defendant. While the [*15]proposed contract amendment reflected in the Gottleib letters of June 23 and 28 provides a possible motivation for the plaintiff's payment, this performance is equivocal, for it is as reasonably explained by the possibility of other expectations, such as the plaintiff's desire to learn more about its property in order to be able to advise other potential buyers about the extent of the environmental contamination on the property.^[FN50]

The preparation of the form note, mortgage, and two deeds is also not "unequivocally referable" to the contract, but, rather, can be explained as a preliminary step which contemplated the future formulation of an agreement and, thus, does not qualify as part performance (see Gracie Sq. Realty Corp. v Choice Realty Corp., 305 NY 271, 281 [1953]). To illustrate, in Merrill Lynch Interfunding, Inc. v Argenti (155 F3d 113 [2d Cir 1998]), the defendants executed closing documents and the underlying agreement for the transaction at the same time. Two days later, on the day of the scheduled closing, they refused to close. The Court of Appeals for the Second Circuit dismissed a breach of contract claim, holding that the execution and delivery of the closing documents to their attorneys was "merely preparatory, or at most, a memorialization of, rather than performance under, the oral agreement" (id. at 123). In this case, the documents were never finalized, much less executed. There was no agreement on the interest rate and the maturity of the purchase money mortgage, among other things. Therefore, the doctrine of part performance has no application to this case.

"Analytically distinct from the doctrine of partial performance, there is the principle of equitable estoppel. Once a party to a written agreement has induced another's significant and substantial reliance upon an oral modification, the first party may be estopped from invoking the statute [GOL 15-301] to bar proof of that oral modification" (Rose, 42 NY2d at 344). Similar to the requirement that partial performance be "unequivocally referable" to the oral modification, "so, too, conduct relied upon to establish estoppel must not otherwise be compatible with the agreement as written" (id.).

Here, the principal proposed modifications were a clean-up of the property by the plaintiff, as well as a bridge mortgage to be taken by the plaintiff at closing. The plaintiff has not demonstrated a "significant and substantial reliance" on these modifications. There is no evidence in the record that the plaintiff or EESI ever cleaned up the identified environmental hazzards.^[FN51] That Stern drafted a two-page form bridge note and a five-page form mortgage does not indicate a significant and substantial reliance by plaintiff because no agreement on the interest rate and the maturity of the note had ever been reached. That [*16]Stern drafted 2 two-page form deeds in response to Gottleib's communications does not represent significant and substantial reliance, but merely preparation for a possible agreement to amended terms. Plaintiff's payment for a Phase I examination was for a different examination performed by a different entity (Singer), not by EESI, and was not usable by the defendant. It was clearly not unequivocally referable to an alleged amended agreement with defendant. Plaintiff's allegations that it paid for a Phase II examination and for some legal fees in connection with the contemplated sale of the property to the defendant in reliance upon the negotiated modifications do not compel a finding in its favor. Defendant's obligations under the proposal of June 23 only accrued if the result of the Phase II report indicated no need for remediation. In fact, remediation was required which, under the terms of the proposal, was the responsibility of plaintiff to perform. Significantly, the plaintiff does not assert that it paid anything to EESI to clean up the property, nor that EESI performed any clean-up on the property.^[FN52] The doctrine of equitable estoppel does not apply in these circumstances.

In sum, the defendant has made a prima facie showing of entitlement to judgment as a matter of law on her counterclaims for the return of her down payment, by relying upon the language of the environmental contingency provision in Rider 7 (ii) to the contract of sale and Gottlieb's letters of cancellation of June 23rd and June 28th received by Stern before June 30th. In opposition to the defendant's cross motion and in support of its own motion, the plaintiff has failed to raise a triable issue of fact as to whether the parties modified the contract of sale in writing, whether there was full or part performance of the alleged modification, and whether the defendant should be equitably estopped from exercising her right to cancel the contract pursuant to Rider 7 (ii). As Judge Cardozo warned, "[t]he peril of perjury and error is latent in the spoken promise" (Burns v McCormick, 233 NY 230, 234 [1922]). In this case, there was not even a well-defined oral promise by Gottlieb or the defendant, much less actual performance by Stern or the plaintiff in response thereto. Rather, the plaintiff consistently rebuffed Gottlieb's efforts to put their alleged oral modification in writing and did nothing to comply with the defendant's requests to perform an environmental clean-up of the property or agree on the interest rate and the maturity of the bridge note. The fault, if any, lies solely with the plaintiff. Thus, that branch of the defendant's cross motion for summary judgment on her counterclaims is granted, the plaintiff's counsel (Fay Taub Stern) is directed to return the down payment with accrued interest to the defendant, and the [*17]complaint is dismissed.

In the absence of an otherwise enforceable modification, the court need not address whether Gottlieb had the requisite authority to enter into a modification on the defendant's behalf. Similarly, the issue of whether the plaintiff was ready to close, despite the pendency of judgments against the property, is moot.

Additional Amounts Due

In accordance with the contract, "[a]fter any litigation or proceeding between the parties hereto, the successful party shall be entitled to all costs, expenses and reasonable attorney's fees that it may actually incur in enforcing the terms of this agreement against the other party" (Rider, § 3). The defendant requests leave to submit additional papers with respect to the subject of attorneys' fees, including the fees of the defendant's late counsel, Morris Markowitz.

Defendant also seeks pre-judgment interest on her down payment. Pursuant to CPLR 5001 (a), a party is entitled to recover, as a matter of right, statutory interest "upon a sum awarded because of a breach of performance of a contract." Pursuant to CPLR 5001 (b), "[i]nterest is computed from the earliest ascertainable date the cause of action existed, except that interest upon damages incurred thereafter shall be computed from the date incurred." In accordance with CPLR 5004, interest is calculated at the rate of 9% per annum from the filing of the complaint.

In summary, the court rules as follows:

(1)That branch of the plaintiff's motion for summary judgment is denied.

(2)The remaining branch of the plaintiff's motion for an in limine ruling regarding the defendant's intended exercise of the attorney-client privilege is denied as moot.

(3)That branch of the defendant's cross motion for summary judgment on her counterclaims for the return of her $210,000 down payment is granted, and the complaint is dismissed.

(4)Defendant's request for attorneys' fees is granted. Defendant is directed to submit her affidavit and supporting documentation to support the amount and reasonableness of fees actually paid.

Defendant shall settle an order on notice together with an affidavit of the defendant's counsel as to reasonable attorneys' fees, such affidavit to recite the hourly rate for the legal services, the specific services rendered, and the time spent by the defendant's current litigation counsel, Kaston Aberle Levine & Wiss, and her former litigation counsel, the late Morris Markowitz.

The foregoing constitutes the decision and order of the Court.

E N T E R :

________________________________________________________

J. S. C.