Plaintiffs, Central Park East Estates Inc.(Central Park) and Vincent Viola (Viola), individually, commenced this action in Supreme Court, Richmond County (IndexNo. 103594/11) against defendant, Ovas Building Corp.(Ovas), alleging that the defendant breached a written contract to develop a parcel of land in Staten Island, New York. Plaintiffs sought money damages and equitable relief in asserting eight causes of action. Defendant answered and counterclaimed for rent due and owing for property not surrendered by the plaintiffs as required by the contract. The case was transferred to Civil Court pursuant to CPLR§325(d). The Supreme Court action was commenced on August 15, 2011. [*2]

On July 1, 2011, prior to commencement of the Supreme Court action Ovas Building Corp. brought a summary proceeding in Civil Court alleging that Vincent Viola, remained in possession of the premises 1 Bland Place, Staten Island, New York after having had his tenancy terminated. At some point both matters were stayed as Central Park East Inc. filed for bankruptcy. Plaintiff Central Park filed for bankruptcy in the Eastern District of New York on October 18, 2011 listing this property as an asset and the Supreme Court litigation. The court has been informed that the stay has been lifted allowing the matters to proceed to trial. The summary proceeding is not part of the bankruptcy filing because Central Park is not a party in the landlord-tenant case.

By stipulation the parties agreed to consolidate the two matters for trial on all issues in Civil Court. It was agreed that the plaintiffs in the civil matter would present their case first even though it was commenced after the summary proceeding. All parties were represented by counsel in both matters. The trial took place on January 15, 24, 30, and February 7, 2013.

The plaintiff requested the opportunity to submit a post-trial memorandum of law and briefs by March 15, 2013 with opposition due by March 31, 2013. Plaintiff neither submitted any such papers nor requested an extension of time to do so. Counsel for defendant notified plaintiff's counsel of the passing of the date and, receiving no response, did not submit any brief of his own.

Real Estate Involved In This Transaction:

The subject matter of this litigation involves real property located in Richmond County identified as Block 6523 Lot 92,Lot 94, Lot 101 and Lot 103. For the purpose of this litigation only Lot 92 & 94 were included in transactions in which Viola at one time had title and were conveyed to Ovas. Public records show that both Lot 101 and 103 were conveyed to Ovas by separate deeds for Lot 101 and Lot 103 from Marylynn Coppla on May 1, 2001. At no time were either Central Park or Viola in title to Lots 101 & 103. The fact that Ovas acquired title to these lots on May 1, 2001 may seem incongruous with some of the documents made part of the record and discussed below, particularly the Agreement between Central Park and Ovas dated December 29, 2000. However, this is explained by the fact that the agreement between Central Park and Ovas involves the assignment of contracts of sale.

Viola at one point was the owner of Lots 92 and 94. However, on June 20, 1997 he and his wife Ella Viola conveyed title to these properties to Right Frontage Road, Inc., a North Carolina corporation which according to New York Department of State records never was registered as a foreign corporation in New York. Right Frontage Road Inc. conveyed title to Ovas by two deeds. One for Lot 94 dated April 26, 2001 and the second for Lot 92 dated October 25, 2001.

It should be noted that both deeds from Right Frontage Road, Inc. are signed by "Frank Viola" as President and Secretary of the seller. There was testimony at the trial that Frank Viola is a relative of Vincent Viola. [*3]

Viola occupied and continues to occupy a two-family residence bearing the dual address 1 Bland Place and 5251 Amboy Road, Staten Island, New York. Of course, just to make it interesting and for some unexplained reason, the certificate of occupancy for 1 Bland Place lists the Block as 6321 and the Lot as 47, which of course is not the block and lot of the property which is the subject of this litigation. A check of public records discloses that Block 6321 Lot 47 does not match the metes and bounds description of the property in question and 1 Bland Place is located on Block 6523 Lots 92 & 94. However, as set forth in the agreement summarized below, the house is located on Lot 94.

Background:

A. Agreement Dated December 29, 2000:

On December 29, 2000, by written agreement entitled "Assignment of Contract" Central Park East Estates, Inc. (Assignor) assigned to Ovas Building Corp. (Assignee) its rights in certain contracts of sale dated December 11, 2000 for the purchase of the following properties located in Staten Island, New York, and known as Block 6523 Lot 101, 103, 92 & 94. Assignee posted a $35,000.00 deposit which was included in a purchase price of $1,850,000.00. The agreement is signed by John DiScala as Vice President of Central Park East Estates, Inc., and Ottavio Savo as President of Ovas Building Corp.

This immediately created a problem. The contract between Right Frontage and Central Park denotes Right Frontage as the "seller" and Central Park as the "purchaser." It lists the deposit as $25,000.00 on the purchase price of $1,175,000.00. The assignment denotes Central Park as "assignor" and Ovas as "assignee" but it has the $35,000.00 deposit being posted with the "attorneys for the Sellers." There is no indication in the Contract of Sale who is the "attorneys for the Sellers," nor in what account the deposit is being held. It is therefore unclear whether the $35,000.00 posted by Ovas was held by Right Frontage's attorney or by Central Park's attorney. Although there was no evidence presented on this issue, it does create a problem: Are the references to "seller" in the assignment to the contract seller, Right Frontage, or to Central Park?

The assignment further provided that:

In the event Assignee does get the approvals for 14 lots as set forth below in paragraph 4, there will be an additional $40,000.00 due and payable when the job is approved. Said additional $40,000.00 is to be paid to Assignor on approval of said 14 lots. This clause shall survive delivery of the deeds.

Paragraph 4 of the agreement stated:

It is understood and agreed that it is the intention of Assignee to obtain approvals for construction of fourteen (14) buildable lots in the dimensions of no less than 40x100 feet (house size minimum of 25x50 feet). In the event the Assignee is able to obtain approvals for lots in excess of 14, then Assignee agrees to pay Assignor the sum of $135,000.00 for each lot so approved. This paragraph shall survive delivery of the deeds and closing of title. If more than 14 lots are approved, said $135,000.00 per lot shall be paid by Assignee within two(2)years of subdivision and plans approval, or sooner if the whole job is sold. When the first house of the additional lots are sold, Assignee shall pay $135,000.00 per additional lot [*4]sold. Assignee agrees to pay eight (8%) percent interest on the price of the additional lots. Said interest shall become earned and due on approval of the additional lots and interest is to be paid quarterly. This clause shall survive delivery of the deeds.

Paragraph 7 contains the following language:

It will be the obligation of Assignor to reduce or eliminate any wetland designation (and wetland buffer zone) on the subject property within one (1) year from closing. In the event Assignor is not able to eliminate or reduce existing wetland or wetland buffer zones within one (1) year from closing, and in the event Assignee has served Assignor with written notice no less than thirty (30) days before the expiration of the year, then the provision hereinbefore set forth regarding additional consideration to be paid for additional lots will be eliminated and Assignee will not be obligated to pay the sum of $135,000.00 for each additional lot to Assignor for any additional lots whether approved or not.

Paragraph 9 states:

It will be Assignor's obligation to fill in any low areas in strict accordance with local laws and all applicable regulations. Assignor will obtain, at its own cost and expense, all necessary permits. Said work shall be completed by February 1, 2001.

Paragraph 10:

In relation to the Contracts for Lots 103 and 101, it is understood and agreed that closing will be on March 1, 2001, with time being of the essence. The Seller shall be allowed to remain in possession until August 1, 2001, with time of the essence to vacate. Assignor agrees to pay Assignee the sum of $1,500.00 per month each and every month of Seller's possession.

Paragraph 11:

In relation to the Contract for Lot 94, it is understood and agreed that Seller requires one (1) year's possession of the house after closing. Assignor agrees to pay Assignee the sum of $2,000.00 per month for each and every month of Seller's possession.

Paragraph 12:

It is agreed that the rentals payable in paragraph 10 and 11 above shall be deducted from the additional $40,000.00 due and payable on approval of 14 lots. Assignee shall obtain fire and liability insurance on both houses and Assignor agrees to pay the premiums for said insurance.

Attached to the Assignment was a copy of a contract dated December 11, 2000 from Right Frontage Road Inc. to Central Park East Estates Inc., for the sale of Block 6523 Lots 92 & 94. The purchase price for these properties was $1,200,000.00. The closing date was to be on or about February 15, 2001. The agreement provided for the assignment of the contract. It was signed by an illegible signature for Right Frontage Road, Inc., and by John DiScala as "President" of Central Park East Estates, Inc. It appears that the original [*5]purchaser was to be Vincent Viola but his name was deleted and Central Park substituted.

It should be noted that this contract is only for Block 6523 Lots 92 & 94. No contract for the sale of Block 6523 Lots 101 & 103 is attached to the Assignment Agreement. Nor was any such contract placed into evidence at trial. Further, defendant submitted as exhibits two deeds: one dated April 26, 2001 from Right Frontage to Ovas for Block 6523 Lot 94 for a purchase price of $400,000.00 and a second one dated October 25, 2001 from Right Frontage to Ovas for Block 6523 Lot 92 for $900,000.00. No deeds were placed into evidence in regard to Block 6523 Lots 101 & 103.

B. Agreement Between Central Park and Viola:

By an agreement notarized on October 21, 2010, and otherwise undated, it is recited that Central Park assigned "65% of its interest in the aforementioned Assignment of Contract dated December 29, 2000, to Viola by Assignment dated June 5, 2001." Edward DelliPaoli acknowledged the signature. Although referenced in the document, no copy of the June 5, 2001 agreement between Viola and Central Park was produced or placed into evidence.

This agreement went on to provide:

That under the June 5, 2001 Assignment Viola warrants and represents that he is the sole 65% owner of all monies due to Central by Ovas, under the Assignment of Contract dated December 29, 2000 less the sum of $2,000.00 per month from December 29, 2000 pursuant to paragraph 11 (eleven) of the December 29, 2000 Assignment of Contract. As of October 31, 2010 there is due and owing to Viola from Ovas, less the adjustment of $2,000.00 per month, the sum of $33,750.00 under the Assignment of Contract dated December 29, 2000. Any possession by Viola after October 31, 2010 shall be at $2,000.00 per month to be deducted from said $33,750.00.

The document included a paragraph in which Viola agreed to indemnify Ovas if it had to make any payments to Robert Roselli and Dominick Guido in regard to any claims by them arising from the December 29, 2000 contract. Roselli and Guido are not otherwise described or referred to in this litigation.

This document is signed only by Viola. It is not signed by either Central Park or Ovas. There is no explanation as to how the $33,750.00 number was calculated. Whether it was a net figure, due Viola after his rental charges through October 21, 2010 were deducted from the amount he was due from the 14 lots or the 3 additional lots or both. In any event, as this document is only signed by Viola and neither by Ovas who allegedly would owe that amount of money as the assignee of the contract of sale nor Central Park as the assignor to whom that money would be owed, it is impossible to determine if the $33,750.00 is an accurate number.

C. Undated Agreement October 2010

This undated agreement between Ovas and Central Park was signed by Ottavio Savo, as President of Ovas, and John DiScala, as President of Central Park, acknowledges [*6]the existence of the Assignment of Contract dated December 29, 2000 in regard to Block 6523 Lots 101, 103, 92 & 94. It further recites that Central Park was to receive $135,000.00 for each buildable lot over fourteen (14) lots and that from these four original tax lots a total of seventeen (17) buildable lots were created. The document is witnessed by Edward DelliPaoli.

As set forth in this document, Ovas agreed to pay Central Park $141,750.00 which was separate and apart from monies due Viola which was:

representing Central Park's thirty-five (35%) percent interest to said three extra buildable lots ($135,000.00 x 3=$405,000.00 x .35=$141,750.00). Said sum of $141,750.00 is to be paid as follows:

A.$21,750.00 on the execution of this Agreement;

B.$120,000.00 is the balance due and owing to Central Park; and

C.In addition thereto, Central Park shall use its best efforts to have Vincent Viola vacate the premises he presently in possession of by March 31, 2011. Central Park shall pay all costs and expenses required to have Mr.Viola vacate the premises and pay any and all back rent due to Ovas as per the Agreement of Contract.

D. Checks Issued By Ovas

Plaintiff as part of its case introduced into evidence seven checks. Each was issued by Ovas Building Corp. and was payable to Edward DelliPaoli as Attorney. Each check contained the following notation on the memorandum line "Part Commission for Bland & Amboy." The checks were issued on the dates and for the amounts set forth below:

October 22, 2010 $21,750.00

November 22, 2010 $20,000.00

December 7, 2010 $30,000.00

December 21, 2010 $10,000.00

January 7, 2011 $20,000.00

January 28, 2011 $20,000.00

February 14, 2011 $20,000.00

The seven checks total $141,750.00, the same amount Ovas agreed to pay to Central Park in the undated agreement dated October 2010.

Legal Issues Presented-Civil Action:

Plaintiffs Central Park and Viola alleged eight separate causes of action. Prior to trial, counsel for plaintiff withdrew seven of these claims leaving only the breach of contract action as a viable cause of action. The court thanks counsel for narrowing the issues as based on the evidence presented at trial all of those seven claims would have been dismissed for failure to state a prima facie case thereby leaving only the breach of contract claim anyway.

A. Does Central Park Have Standing To Commence This Litigation? [*7]

The Supreme Court action was commenced by both Central Park East Estates, Inc. and Vincent Viola, individually, as plaintiffs. As a party to the contracts with Ovas, Central Park would on its face be a proper plaintiff. However, there are several problems with reaching that conclusion.

First, John DiScala testified at trial that he is the only officer of Central Park and that he never authorized the commencement of the Supreme Court action. DiScala stated that he understood that Viola may have thought he had an interest in the corporation because of how they had agreed to divide the compensation from the sale of the property, but Viola had no interest in the corporation and was never an officer, director, shareholder or employee of Central Park.

Second, there is no legal entity with the name of the plaintiff Central Park East, Inc. although that name appears in the caption of numerous documents filed in this action. The correct name is Central Park East Estates, Inc., the name used on the summons and complaint. The dropping of the word "Estates" appears to have been a scrivener's error inadvertently continued by the parties on various pleadings.

The above being said, a search of the Department of State, Division of Corporations records shows that Central Park East Estates, Inc. was initially incorporated on May 5, 1997 as a domestic business corporation. Anthony DiScala was listed as its agent for service of process, and its chairman or chief executive officer. This contradicts the testimony of John DiScala that he is the only officer of the corporation. Assuming that Anthony and John are in fact two different persons, there is no explanation of this discrepancy between the testimony and the documents filed with New York State.

The situation is further complicated by the fact that Central Park was subject to "Dissolution by Proclamation" on July 28, 2010 by the Secretary of State. This usually means the corporation has failed to pay its franchise taxes or other required fees for a period of three years [Tax Law §203-a]. It also means that the Central Park ceased being a viable entity in New York over one year before this action was commenced in Supreme Court on August 15, 2011. Once a corporation has been dissolved by proclamation for failure to pay taxes, the corporation is legally "dead" and is no longer permitted to sue or be sued [41 East 1st Street Rehab Corp. v Lopez, 26 Misc 3d 990 (2009)].

Based on the foregoing, it must be concluded that Central Park lacks the standing to assert any cause of action against Ovas. Central Park has ceased to exist as a legal entity, over a year prior to the institution of the lawsuit, its witness testified that to his knowledge this litigation was never authorized by Central Park, and Viola had no legal status or authority to commence an action on behalf of Central Park.

B. Does Viola Have Standing To Commence This Litigation?

The other plaintiff in the initial civil action was Vincent Viola individually. He is not a party to the assignment of contract agreement between Central Park and Ovas dated December 29, 2000. Nor is he a party to the undated October 2010 Agreement between [*8]Central Park and Ovas. For Viola to be able to be a party to this action he would have to be considered a "third party beneficiary" of the contract between Central Park and Ovas.

Although the actual agreement between Central Park and Viola is not made part of the record, it is referred to in the document signed only by Viola on October 21, 2010. The October 21, 2010 document refers to the existence of an Assignment dated June 5, 2001 in which Central Park acknowledged that Viola is the "65% owner of all monies due to Central by Ovas." The existence of this agreement was testified to by Viola and DiScala at the trial. The fact that Ovas agreed to pay 35% of the value of the three additional buildable lots on the undated October 2010 agreement to Central Park, implicitly acknowledged that the additional 65% was due and payable to some other party or entity. There is no showing that Ovas was unaware of Viola and his claim to compensation.

The facts establish that Viola is the third party beneficiary of the contract between Central Park and Ovas and has a right to assert a claim directly against Ovas for payment of the monies he alleges are owed to him by Central Park.

It is uncontroverted that the Central Park and Ovas agreed to pay Central Park $135,000.00 for each buildable lot above the fourteen originally contemplated and that from the property conveyed to Ovas by Central Park, or included in the Assignment of Contract from December 29, 2000, only three additional buildable lots were identified as being able to be constructed on the conveyed real property so as to be in compliance with municipal and state codes. It is agreed that Viola would be entitled to 65% of $405,000.00 ($135,000.00 x 3 lots) or $263,250.00.

Therefore, Viola has a viable claim for $263,250.00 as the third party beneficiary of the contract between Central Park and Ovas.

C. Does Ovas Have Any Counterclaim Against Viola?

The evidence established, and the parties agree, that Viola is the occupant of the premises known as both 1 Bland Place and 5251 Amboy Road, Staten Island, New York. In the Agreement signed only by Viola on October 21, 2010, Viola acknowledged that he had agreed to pay the "sum of $2,000.00 per month from December 29, 2000." The $2,000.00 is not labeled either rent or use and occupancy in that document. In the December 29, 2000 assignment agreement at paragraph 11, the "seller" agreed to pay $2,000.00 a month.

The "seller" is not identified in the Assignment Agreement. The seller's identity is determined from the contract of sale attached as an exhibit. In the contract of sale the "seller" is Right Frontage Road, Inc. Viola was not the seller of the property at that time, but subsequently agreed to step into the shoes of the seller by the October 21, 2010 document with his acknowledgment of debt. The seller who was obligated to make the occupancy payment for the house on Lot 94 was Right Frontage and then Viola. Central Park, in signing the Assignment Agreement, never became the "seller" nor did it ever agree to pay to Ovas any monies for occupancy. Had Viola not signed the October 21, 2010 document, Ovas would have to pursue Right Frontage for the monies due from Viola's [*9]occupancy. Whether that claim would have survived delivery of the deed from Right Frontage to Ovas is not clear, as there is no indication that any documents specifically dealing with this issue were ever executed at closing of title.

In fact, the contract of sale between Right Frontage and Central Park which was assigned to Ovas, makes no mention of any tenancy, the collection of rent or the like. Perhaps that is because the original purchaser was Viola and his name was deleted and Central Park substituted. On the other hand there is no showing that the sale price to Viola then Central Park was in any way increased because Viola owed Right Frontage rent. Although the purchase price from Right Frontage to Viola for two lots (92 & 94) was $1,200,000.00 while the purchase price of the assigned contract from Central Park to Ovas was $1,850,000.00 for four lots ( 92, 94, 101, & 103).

The calculation of the monies for occupancy due from Viola on beginning January 1, 2001, through April 30, 2013 finds there would be 148 months of payments outstanding. This totals $296,000.00 ($2,000.00 x 148).

The document dated October 21, 2010 signed only by Viola recited that Viola was owed $33,750.00 by Ovas less any deduction due Ovas of $2,000.00 for each month of Viola's occupancy of 1 Bland Place. There is no indication as to how the $33,750.00 was calculated or what in fact it was for. For instance, is it the net due Viola at that date for the monies due on the additional three lots less the $2,000.00 a month he was obligated to pay while remaining in possession or the premises? Or does it represent some other monies due Viola not recited in any of these agreements or presented to the court? As written the document is a promise by Viola to be responsible for the occupancy charges he had incurred at 1 Bland Place.

In any case, the document containing the language that Viola was owed $33,750.00 was only signed by Viola. It is therefore a self-serving statement not in any way accepted by either Central Park or Ovas as being correct. Although the witnesses who testified for both Central Park and Ovas acknowledged that Viola was entitled to 65% of $405,000.00 ($263,250.00) as his share of the payment due from Ovas in regard to the three additional buildable lots created from Lots 92, 94, 101 & 103.

If the numbers the court has calculated are correct, Viola is entitled to $263,250.00 but he owes Ovas $296,000.00 for occupancy for the period January 1, 2001 through April 30, 2013. This would leave a net balance due Ovas of $32,750.00. If the court were to include the $33,750.00 mentioned in the October 21, 2010 document as being some other monies owed to Viola by Ovas, even though not proven at trial, Viola would only be entitled to $1,000.00. As noted however, there is no basis to credit Viola with this amount.

D. Is Any Part Of Defendant's Counterclaim Barred By The Statute Of Limitations?

Viola alleges that any monies due to Ovas arising from his occupancy would be barred by the statute of limitations. Viola asserts that even assuming the truth of the allegations by Ovas and conceding that he has failed to make any payments to any person [*10]or entity in regard to his occupancy since the date of the agreement in December 29, 2000, the counterclaim is a contract action. As a contract action CPLR§213 with its six-year statute of limitations would be applicable and would bar defendant from asserting any claim for the period six years prior to the date of plaintiff's bringing his cause of action [CPLR§203(d)].

Giving the plaintiff the benefit of this argument, it would mean that the statute of limitations would be calculated back six years from the date plaintiff filed this action on August 15, 2011 thereby terminating any counterclaim for monies owed prior to August 15, 2005. Under this interpretation, the defendant would be time barred from asserting any counterclaim for 56 months, January 1, 2001 through August 15, 2005. This would total $112,000.00.

Two things obviate against this conclusion. First, CPLR§203(d) permits a defendant to assert a "set-off" against monies due the plaintiff accruing before the statute of limitations ran if the counterclaim arises out of the same transaction as the plaintiff's claim under the theory of equitable recoupment. This means that the defendant can use the $112,000.00 theoretically time barred as a set-off against the monies due Viola from Ovas for the creation of the three additional lots [See Siegel, New York Practice, 5th edition, §48 Counterclaims].

The second reason that the statute of limitations does not bar the counterclaim is that on October 21, 2010 Viola signed a document acknowledging that he owed the $2,000.00 a month for the period of his occupancy. He revived the debt by recognizing the existence of this obligation since its creation on December 29, 2000. Therefore, defendant has a valid counterclaim for monies due and owing by Viola since January 1, 2000. A debt made uncollectible by the running of the statute of limitations may be revived by a writing acknowledging that debt [General Obligations Law §17-101].

Likewise, if the original occupancy debt was the debt of Right Frontage and not Viola, by agreeing in writing to assume payment of this obligation, Viola made himself personally liable for the entire debt [GOL§5-701 (a)(2)].

Ovas' counterclaim is not barred by the statute of limitations. Viola revived his obligation to pay the occupancy monies by the document he signed on October 21, 2010.

E. Has Plaintiff Proven His Case Is Timely?

The Assignment Agreement between Central Park and Ovas provided for the payment to Central Park of $135,000.00 for each additional lot above 14 lots for which approvals were obtained. Paragraph 4 of that agreement required Ovas to make payment "within two (2) years of subdivision and plans approval." The contract is silent as to who or what agency will be making the approval. Presumably it is the New York City Building Department. The trial record is devoid of any evidence to establish that these approvals were ever obtained. Although it may be concluded that Ovas did comply with this contract term because it issued seven checks payable to the order of Edward DelliPaoli As Attorney [*11]between October 22, 2010 and February 14, 2011 for what Ovas alleges was Central Park's share of these payments. Ovas did not present any evidence that the approvals were obtained prior to 2010. Also, Ovas did not specifically deny this allegation in its answer.

It is conceded that approvals were obtained for 17 buildable lots triggering an obligation on the part of Ovas to compensate Central Park and Viola. Plaintiff started this action on August 15, 2011 which was within two years of its first payment to Central Park. Presumably Ovas would not have made these payments if the approvals had not been obtained albeit about ten years later than anyone contemplated. What makes this a potential issue is that the plaintiff submitted plot plans from 2004 drawn by an architect showing 17 lots. If these had been filed at that time in 2004, it would have triggered a statute of limitations defense by the defendant, as plaintiff would have waited in excess of six years to try to collect what it claims it was owed under the December 29, 2000 agreement.

F. Did Central Park Fulfill Its Contractual Obligations?

Defendant alleges that it fulfilled its contractual obligations to Central Park, Viola and DiScala. In fact, an argument can be made that under the terms of the Assignment Agreement dated December 29, 2000, Central Park was in breach of its obligations under the terms of that agreement and not entitled to any payment for the three additional lots.

As set forth at the beginning of this decision, paragraph 7 of the Assignment of Contract required the assignor, Central Park, to "reduce or eliminate any wetland designation (and wetland buffer zone) on the subject property within one (1) year from closing." The failure of Central Park to triggered a right in Ovas to be released from its obligation to pay Central Park $135,000.00 for any additional lots created above the 14 lots originally anticipated to be created on the property. It is uncontroverted that Central Park never accomplished this task and therefore was in breach of the contract. However, in order to be relieved of this obligation the assignee, Ovas, was to serve Central Park with "written notice no less than thirty (30) days before the expiration of the year," to make the requirement to pay Central Park null and void. If Ovas served such a notice, then there would be no obligation to pay Central Park $135,000.00 for each additional lot.

Unfortunately, there is no evidence that Ovas sent any such letter. In any case, even if Central Park was in default, the parties entered into a new agreement undated in October 2010 in which Ovas agreed to pay Central Park the $135,000.00 as previously promised if three additional lots were created. By doing this Cental Park waived any right it may have had to hold Central Park in breach of the December 29, 2000 agreement as well as seeking reimbursement for the costs Ovas incurred in obtaining the approvals in regard to the wetlands which Central Park had been contractually obligated to do.

The later agreement relieves the court of the obligation of trying to make sense of paragraph 7 as it seems contradictory by its very terms in that Central Park had one year to eliminate the wetlands designation, while at the same time, Ovas no less than thirty days before the end of that year can in writing notify Central Park of what? That Ovas is getting [*12]the approvals or that it does not want to pay the $135,000.00 per lot? As written, then the day after entering into this agreement Ovas could send a letter saying it does not want to pay the $135,000.00 per lot, do its own filings and subdivide the property into more than 14 lots and not compensate Central Park. If Ovas could do that then why have a clause saying Central Park had one year to do the filings when it really did not?

It has to be questioned whether each side was represented by independent counsel when this and the other agreements were drafted or that even after being drafted anyone bothered to read the document. In view of the fact that the obtaining approvals for additional lots triggered a payment to Central Park of $135,000.00 for each additional lot, it would seem that Ovas should have exercised its right to cancel, and obtain the approvals at its own cost and expense which had to cost less than the $405,000.00 it obligated itself to pay Cental Park.

It is conceded that Central Park and the seller in the December 29, 2000 agreement also failed to vacate the premises on Lot 94 within one year of closing of title to Ovas as promised in paragraph 11. As part of the undated October 2010 contract, Central Park agreed to use its best efforts to have Viola vacate the premises by March 31, 2011 and agreed to "pay all costs and expenses required to have Mr. Viola vacate the premises." Which means that should Ovas prevail on its summary proceeding, it can recover the expenses incurred evicting Viola from Central Park.

As this clause is written, it may be concluded that Central Park is not only agreeing to pay the costs of recovering the premises from Viola but also is agreeing to "pay any and all back rent due to Ovas, as per the Assignment of Contract." The structure of this clause leads to the conclusion that Central Park has made itself independently liable for Viola's "rent." It is conceded and proven at trial that Viola has failed to pay any money for the period of his occupancy whether it is labeled "rent" or "use and occupancy."

G. Was Central Park Paid Its Required Share?

The undated agreement of October 2010 required Ovas to pay Central Park $141,750.00 as its share of monies due for creating three additional buildable lots. Ovas testified that the seven checks it issued between October 2010 and February 2011 were in payment of this obligation. Ovas stated that the checks were typed payable to Edward DelliPaoli as Attorney at the request and insistence of DiScala for Central Park. Likewise the notation "Part Commission for Bland & Amboy"was added specifically at DiScala's request. DiScala does not deny receiving the payments, however, he says that the notation "part commission" does not refer to the Block 6523 Lots 92, 94,101 & 103 transaction, but is recognition that DiScala was owed commissions from another transaction between the parties known as "Spanish Camp" for which DiScala claims he is still owed commissions and other monies by Ovas and Savo.

Ovas does not deny the existence of the Spanish Camp transaction, but denies that the monies paid in regard to this Bland Place project had anything to do with Spanish Camp. Irrespective of what DiScala alleges, the evidence does not support his version of [*13]the facts. First, the total of payments to DelliPaoli adds up to $141,750.00 the amount due in the undated October contract. Second, the initial check is dated October 22, 2010 and is in the amount set forth in the agreement as the sum due to be paid in the first check on the date of the execution of the Agreement. Third, DiScala has failed to produce any agreement involving Spanish Camp which would support his contentions.

Fourth, DiScala has not established that he is a licensed real estate broker in New York State and that he was so licensed on the date the commission was earned and paid. Only a licensed real estate broker may collect commissions [Real Property Law§442-a]. A search of the Division of Licensing, Department of State, Records shows a John DiScala currently being licensed until 2014. The fact he is currently licensed does not make him entitled to compensation for services rendered years previously.

Fifth, the underlying sales contract from Right Frontage to Central Park at paragraph 8 specifically states that no broker was involved in that contract of sale.

A more believable explanation for DiScala's directing the checks from the Block 6523 transaction to be payable to DelliPaoli is the fact that as of July 28, 2010 Central Park was dissolved by proclamation and ceased to exist. Any checks payable to that entity might be subject to attachment by New York State for taxes and fees due and owing or other judgment creditors, if any. Also because the corporation was legally "dead" it may not have had any bank accounts into which the checks could be deposited or negotiated.

Assuming for the sake of argument that DiScala is correct and that the payments were related to Spanish Camp, then Ovas would owe Central Park $141,750.00. However, Ovas would be entitled to a set-off for the unpaid "rent" Central Park agreed to pay on behalf of Viola. This totals $296,000.00. It means Central Park owes Ovas $154,250.00 in "rent" after deducting the $141,750.00 from $296,000.00.

Also, as the checks were payable to Edward DelliPaoli "as attorney" for payment to his trust or escrow account, with the notation that it was for commissions on "Bland & Amboy," if he disbursed them to DiScala for Spanish Camp commissions or to DiScala rather than Central Park, would he be in violation of his duty as escrow agent absent some written instructions from Ovas?

However, as the evidence does not substantiate any of DiScala's allegations, it must be concluded that Central Park was paid in full all that it was due under the terms of the undated October 2010 agreement.

H. Did Ovas Create More Than 17 Buildable Lots?

Viola alleged as part of his case that although Central Park acknowledged that 17 lots had been created and he agreed to that number, in actuality, Ovas was able to add more lots to be subdivided entitling both Central Park and Viola to $135,000.00 for each additional buildable lot. [*14]

In support of this position, plaintiff submitted into evidence a letter dated March 12, 2012, from Moss & Sayd Architects, who were hired by Savo on September 9, 2002 to provide some initial designs as to the use of the property so as to maximize the number of 40x100 foot plot houses that could be built. The letter indicates that the maximum number under the laws then existing would not permit more than 16 or 17 houses owing to many municipal regulations in place as well as the wetlands included in the parcel. Rather than support plaintiff's allegation, the letter confirms the position of the Ovas. Three alternate site plans reflecting the development potential before August 2004 allow only 17 houses to be built.

The architect testified that only 17 houses can be built under current codes. When questioned about a site plan he prepared dated July 25, 2005 showing 21 houses, he explained that plan presumed that Ovas could encroach into the wetlands so as to add four houses. The architect testified the Building Department accepted a plan for 21 houses assuming that the wetlands could be reduced. He pointed out that because permits were not issued until two years ago, the regulations have changed and 17 is the maximum number of units allowed. It also appears that the design for 21 homes includes an additional Lot 91 which Ovas purchased independently from those included in this transaction. A search of the land records at the Richmond County Clerk's office shows Ovas purchasing part of the adjacent lot (Block 6523 Lot 91) on March 10, 2004 from a disinterested third party and a member of the Savo family purchasing an additional part of Lot 91 on March 27, 2006 from that same third party, Pland Place Realty Corp. (that is not a typographical error the corporation was Pland Place and not Bland Place).

In any case, plaintiff has failed to prove by expert testimony that additional "buildable" lots could have been created from the four included in this transaction. There is a difference between the number of lots that can be created mathematically by dividing the square footage of the parcel by the square footage permitted under the zoning law for a lot, and a "buildable" lot which by definition must comply with all federal, state and local laws so as to be legal once constructed.

I. Did Plaintiffs Receive All Of The Money To Which They Were Entitled?

Paragraph 3 of the December 29, 2000 Assignment Agreement provides that in addition to the purchase price of $1,850,000.00 "an additional $40,000.00" will be "due and payable when the job is approved" for 14 lots. The language of this paragraph is written so as to require $40,000.00 to be paid in total on approval of the 14 lots and not an additional $40,000.00 per lot. Plaintiff has the burden of proof, and no evidence was produced to either establish that this money was paid or not paid. Nor was there any testimony to indicate that the total due was other than the $40,000.00 as written. The fact that the issue of any additional monies being due was not provided for in the undated October 2010 agreement between Central Park and Ovas would lead to the conclusion that no further compensation was due from Ovas in regard to the underlying contract.

Paragraph 4 of the December 29, 2000 Assignment Agreement contains the following language, "Assignee agrees to pay eight (8%) percent additional 14 lots. Said [*15]interest shall become earned and due on approval of the additional lots and interest is to be paid quarterly." Of course the first sentence makes no sense, because there are not an "additional 14 lots." There are 14 lots. So is the interest due on the 14 lots when approved or on any additional lots beyond 14? Plaintiff has the burden of proof, and plaintiff has not produced any evidence to clarify this paragraph. Normally under the common law if there is an ambiguity in the language of a contract, the ambiguity is presumed against the drafter. In this case there was no testimony as to who was the preparer of the agreement, although there was some indication that DelliPaoli prepared this document and did in fact represent all parties or more than one party on this transaction and in the preparation of some of the other documents.

If this paragraph survived, and it applies to the three additional lots and not the 14 original lots, then at best Viola might be entitled to 8% interest on the monies due to him since the approval of the plans sometime in 2010. This totals $1,755.00 per month, which Viola could use to apply against the occupancy charges he incurred and due to Ovas since January 1, 2001. For instance if the approvals were obtained in January 2010 (there is no testimony as when they were in fact obtained) through April 30, 2013 Viola would be entitled to interest of $70,200.00 ($1,755.00 x 40 months).

However, this is all academic because plaintiff has not established when the plans were approved, whether the interest charge applied to the additional lots at all, and if this money was in fact owed, why was it not provided for in either the October 21, 2010 agreement signed by Viola or the undated October 2010 agreement between Central Park and Savo. The only conclusion is that the issue of interest is not a viable claim to be resolved by this litigation.

Legal Issues Presented-Summary Proceeding:

Prior to the commencement of the Supreme Court action by Central Park and Viola on August 15, 2011, Ovas filed a summary proceeding in the Civil Court (L & T#52122/11) on July 1, 2011 alleging that Viola and "John Doe" and "Richard Doe" remained in possession of the premises 1 Bland Place, Staten Island, New York after having had their occupancy terminated.

On April 11, 2011, Ovas, by its agent, Anthony Barone, caused to be issued a notice terminating the tenancy of Vincent Viola, as the tenant, and "Joan Doe" and "Richard Roe" undertenants of the premises 1 Bland Place. The notice terminated the tenancy as of May 31, 2011. Service was effectuated by delivery on April 29, 2011 at the premises to "Ella Viola" of the termination notice. She accepted service on behalf of Vincent Viola and "Doe" and "Roe." Additional service was made by mailing another copy to those persons within one day by regular and certified mail. Service was accomplished in a manner permitted by Real Property Actions and Proceedings Law §735. [*16]

Respondents failed to vacate the premises by May 31, 2011 as requested in the termination notice. On June 16, 2011, Ovas, by its President Ottavio Savo, caused to be issued a Notice of Petition and Petition seeking recovery of the premises 1 Bland Place and a money judgment for unpaid use and occupancy accruing since January 1, 2001. Service of the pleadings was made by delivery to "Steven Doe" at the premises on July 5, 2011 and the mailing within one day of additional copies by regular and certified mail. Service was accomplished in a manner permitted by RPAPL §735.

A review of the court file shows only a "notice of appearance" filed by counsel for respondents on July 13, 2011. No written answer was ever filed on behalf of respondents nor was there any motion filed to dismiss the summary proceeding. Respondents' counsel instead commenced the civil action in Supreme Court in Viola's name and moved to consolidate the two matters for trial in Supreme Court. This was done and after consolidation the two cases were transferred to Civil Court pursuant to CPLR §325(d).

The court notes that the notice of petition did not require a written answer and that the respondents appeared on the return date of July 13, 2011. Presumably an oral answer was imposed on that date, although if it was, according to RPAPL §743 the essence of the answer and if there was a counterclaim being asserted, should be noted on the court file. No such notation is noted. Even if Viola wanted to assert a counterclaim for the monies he was owed from the real estate transactions concerning Block 6523 Lots 92, 94,101 & 103, those claims would have to be severed as they are not inextricably intertwined with the issue of which party is entitled to possession of the premises.

Litigation of the issues raised by Viola in the Supreme Court action would, and actually did, delay this summary proceeding. Summary proceedings by their very nature are to proceed expeditiously and counterclaims arising from issues existing between the parties other than which party is entitled to possession of the premises, unduly delay a resolution of the possession issue. This litigation is a prime example as to why summary proceedings should not be subjected to litigation containing issues irrelevant to which party has a right to occupancy, as almost two years have passed because the matters have been linked together.

The fact that Central Park filed for bankruptcy should not have been grounds for a stay of the summary proceeding because Central Park is not a party to the summary proceeding.

Based on the foregoing, the credible testimony is that Ovas is the owner of the real property and pursuant to the terms of the agreements between the parties, is entitled to possession of the premises. Viola and the "Doe" occupants remain in possession of the premises after their rights of occupancy have been properly terminated.

Judgment in favor of Ovas. Ovas has established its prima facie case. A warrant of eviction shall be issued forthwith. Execution of the warrant is stayed until June 30, 2013 provided respondents pay use and occupancy in the amount of $2,000.00 a month for May [*17]2013 on or before May 15, 2013 and June 2013 on or before June 10, 2013. The failure of respondents to make these payments as set forth herein, will permit the petitioner to accelerate execution of the warrant of eviction. The marshal may pre-serve the eviction notice. The court will accept the amount of $2,000.00 per month for the reasonable value of the respondents' occupancy an amount set forth in the agreements between all of the parties. Petitioner did not produce any evidence that the fair and reasonable market value was in excess of that amount. Nor did respondents establish that the fair and reasonable value would be less than $2,000.00.

Because Viola never filed an answer or a counterclaim, petitioner's claim for monies due and owing remains unchallenged. The credible evidence is that Viola owes monies for occupancy from January 1, 2001 through April 30, 2013 in the sum of $2,000.00 a month. A total of $296,000.00.

Petitioner is entitled to a money judgment against Viola in the amount of $296,000.00 with interest from the date of judgment, costs and disbursements. Although there is no counterclaim specifically filed in the summary proceeding, the court did find that the petitioner owes Viola $263,250.00 pursuant to the terms of the above cited agreements. Viola can assert that amount as a set-off in the summary proceeding reducing the judgment amount to $33,750.00.

Conclusion:

In the civil action brought by Central Park and Viola (Index# 300052/12) all claims of Central Park East Estates, Inc. are dismissed on the merits. Central Park ceased being a viable corporation on July 28, 2010. It lacked the ability to commence and maintain this proceeding.

Viola established that pursuant to certain written agreements he is entitled to the payment of $263,250.00 from Ovas Building Corp. However, Ovas has established its counterclaim by the credible evidence that Viola has failed to pay occupancy as agreed and which he acknowledged in writing on October 21, 2010 in the amount of $296,000.00.

Judgment for Ovas on its counterclaim in the amount of $32,750.00 with interest from June 1, 2011 the date after Ovas terminated his occupancy on May 31, 2011 and became entitled to possession of 1 Bland Place.

In the summary proceeding, Ovas has proven its prima facie case. Viola and "Doe" and "Roe" remain in possession of the premises 1 Bland Place, after having had their occupancy terminated as of May 31, 2011. A warrant of eviction will be issued forthwith, with execution of the warrant stayed until June 30, 2013 provided Viola and respondents pay use and occupancy of $2,000.00 a month as set forth above in the decision.

In addition, Ovas is entitled to a money judgment in the amount of $296,000.00 for unpaid occupancy charges incurred by Viola between January 1, 2001 and April 30, 2013 with interest from June 1, 2011 costs and disbursements. Viola is entitled to a set-off of [*18]$263,250.00 for the monies owed to him by Ovas under the terms of the agreements which were the basis of the civil action tried with the summary proceeding. This leaves a net amount due Ovas of $32,750.00.

Exhibits, if any, will be available at the office of the clerk of the court thirty days after receipt of a copy of this decision.

The foregoing constitutes the decision and order of the court.

Dated: April 30, 2013
Staten Island, NY
HON. PHILIP S. STRANIERE
Judge, Civil Court