The Defendants, Kalmon Dolgin Affiliates, Inc., Neil Dolgin, and Grant Dolgin (Defendants), move to dismiss this action pursuant to CPLR §3211(a)(5), 3211(a)(7), and 3211(a)(10), claiming that the action is barred by collateral estoppel, that Plaintiff fails to state a cause of action, and that Plaintiff fails to name all necessary parties in its complaint.

The instant action was initiated on March 18, 2013, by Revital Realty Group, LLC (Plaintiff) against Neil Dolgin and Grant Dolgin, representatives of Kalmon Dolgin Affiliates, Inc. (Defendants)^[FN1], seeking damages for pecuniary loss and loss of opportunity. Plaintiff alleges that such damages arise from tortious interference committed by Defendants in connection with the sale of real property. The Plaintiff alleges in its complaint that the Defendants deliberately interfered with and frustrated the purpose of a valid contract for sale between the Plaintiff and a third party, Ulano Corporation a/k/a Ulano Corp. (Ulano or Seller). The Plaintiff further alleges that the Defendants' actions rendered the performance of the contract impossible, and that as a result of this tortious interference, the Plaintiff suffered substantial monetary damages and loss of opportunity for subsequent development of the property.

There was a prior action before this Court related to the instant case. The prior action arose from a contract for the sale of the subject property ("Property"), entered into on November 3, 2011, by the Plaintiff, as buyer, and Seller, Ulano. Seller hired the Defendants as its exclusive brokers for sale of the Property.^[FN2] As part of its contract with the Seller, the Plaintiff paid $200,000 as a deposit towards the purchase price of $4,550,000. In addition, Seller, through the agency of its brokers, the Defendants, was to permit the Plaintiff access to the premises at reasonable times and upon reasonable prior notice to Seller and its brokers. The contract included a specified date of closing, 120 days from the date of contract, which fell on March 29, 2012.

On January 17, 2012 and continuing thereafter,^[FN3] the Defendants, through Neil Dolgin, denied the Plaintiff's real estate broker access to the premises. It appears, based on the affidavit of [*2]Alex Zoldan, a member of plaintiff Revital, and an e-mail chain between Plaintiff's real estate agent and Defendants, that Defendants denied Plaintiff's real estate agent access to the property because Plaintiff's real estate agent was offering to show the property to potential renters prior to the closing date without permission from Seller or Defendants.

On March 13, 2012, Ulano's counsel sent a letter to Plaintiff's counsel confirming the March 29, 2012 closing date and indicated that such date was "time of the essence" to the contract. Plaintiff's counsel responded asserting that there was no "time of the essence" clause in the contract and that Plaintiff was entitled to a reasonable opportunity to close after the specified closing date. Ulano's counsel rejected Plaintiff's counsel's argument and responded with a letter stating that March 29, 2012 would be the closing date and that the Plaintiff would be in default if it failed to close on that date. In a letter dated March 21, 2012, Plaintiff's counsel requested an adjournment of the closing to April 25, 2012, warning that, should the adjournment not be granted by March 23, 2012, Plaintiff would file a lis pendens in light of the anticipatory breach.

On March 27, 2012, a Notice of Pendency was filed by the Plaintiff in the Supreme Court, Kings County, placing all prospective buyers on notice that a complaint had been filed concerning the subject of the contract for sale. In anticipation of Plaintiff's failure to close on March 29, 2012, the president of Ulano directed Defendants to deny Plaintiff and Plaintiff's representatives access to the premises. On March 28, 2012, a representative of the Plaintiff's financing institution, Investment Sales and Capital Advisory MNS, contacted defendant Grant Dolgin requesting access to the premises at 9:15 AM on March 30, 2012. As an agent of Ulano, Grant Dolgin refused to allow access to the premises

On March 28, the Plaintiff initiated an action against Seller, seeking specific performance of their contract on the grounds that Seller had committed an anticipatory breach. On March 29, 2012, Ulano held a closing before a notary public, at which Plaintiff failed to appear and during which Ulano tendered all the documents required to close title. Ulano declared Plaintiff to be in material breach of the contract.

On April 23, 2012, as an agent of Ulano, Neil Dolgin denied access to the premises to a representative of Plaintiff's financing institution, Hudson Realty Capital. On April 24, 2012, the defendant Neil Dolgin published a real estate listing for the Property, placing the property back on the market.^[FN4] On April 25, 2012, the Plaintiff amended its initial complaint against the Seller to include a second cause of action for breach of contract based on the Defendants' refusal of access.

On June 15, 2012, Ulano filed a motion for summary judgment pursuant to CPLR § 3212 seeking to dismiss both of Plaintiff's causes of action. Ulano argued that Plaintiff breached the contract by failing to appear at the March 29 closing, that no adequate reason was given for an adjournment, and that the Plaintiff was not entitled to specific performance because it was not ready, willing, and able to close on the date specified in the contract. In addition, Ulano argued that Plaintiff's second cause of action failed because the purported refusal to grant access to the property occurred after the Plaintiff had breached the contract, thereby excusing nonperformance by Seller. Plaintiff argued in opposition that because there [*3]was no "time of the essence" clause in the contract concerning the closing date, Ulano had anticipatorily breached by refusing to grant the adjournment and had further breached the contract by refusing Plaintiff's representatives access to the property.

In a decision by this Court, dated September 7, 2012, it was determined that because there was no "time of the essence" clause concerning the closing date, Plaintiff was entitled to an adjournment and had not committed a material breach by failing to appear for the March 29 closing (Revital Realty Group, LLC v Ulano Corp., 36 Misc 3d 1240(A) [Sup Ct, Kings County 2012]). Moreover, this Court ruled that Plaintiff's requested adjournment date, April 25, 2012, would be the operative closing date on the contract (Id.). Plaintiff had to show it was ready, willing, and able to close by April 25, 2012 in order to be entitled to specific performance of the contract (Id.).

Following a framed-issue bench trial, this Court held that Seller's denial to Plaintiff of access to the property constituted a breach of contract that entitled Plaintiff to recover the security deposit it had put towards the purchase price. However, it was also determined that although the Seller had breached the contract, the Plaintiff was not ready, willing, and able to close on the operative closing date, April 25, 2012, and therefore was not entitled to specific performance or recovery of any losses beyond its deposit. The Court concluded from the evidence, including the testimony of Plaintiff's financing officer, that although the denial of access constituted a breach of contract, such denial did not preclude the Plaintiff from obtaining the necessary financing. Upon the evidence adduced at trial, the Court found that it was the Plaintiff's own failure to comply with due diligence requirements set by its financing institutions that led to its lack of financing and inability to complete the purchase (see Revital Realty Group LLC, 2013 WL 1686845, *4 [Sup Ct, Kings County 2013]).

Having failed to recover against Ulano, Plaintiff now brings its instant action against the Defendants for tortious interference with a contractual relationship. In this motion, the Defendants seek dismissal of the complaint in its entirety pursuant to CPLR § 3211(a)(5), 3211(a)(7), and 3211(a)(10), on the grounds of collateral estoppel, that the Plaintiff failed to state a proper claim, and that the Plaintiff failed to name all the necessary parties. Defendants contend that, because they are in privity with the Seller in the prior action as the exclusive real estate brokers representing the Seller's interest in the transaction, as acknowledged in the Plaintiff's Amended Complaint from the prior action alleging that "[Seller's] real estate agent failed to permit access in breach of contract of sale" which "caused the Plaintiff to fail to meet its closing conditions", they are entitled to rely upon the prior adjudication of the only issue raised in the instant complaint (see Heritage Realty Advisors, LLC, v Mohegan Hill Dev., LLC, 58 AD3d 435, 435 [1st Dept 2009]). Moreover, the Plaintiff, which is the party sought to be foreclosed from relitigating the issue, is the same party against whom this issue was previously determined.

The Defendants argue that Plaintiff had a full and fair opportunity to litigate the issue in the prior action. At the bench trial, this Court heard testimony and considered evidence to determine whether the Defendants' denial of access, as Seller's exclusive brokers, prevented Plaintiff from being ready and able to purchase on the operative closing date. The Court determined that denial of access was not determinative of Plaintiff's inability to close because [*4]Plaintiff failed to comply with its financing institution's due diligence requirements, which precluded it from securing proper financing (Revital Realty Group, LLC, 2013 WL 1686845, *4).

The Defendants further contend that the Plaintiff's claim for tortious interference fails as a matter of law in that the Plaintiff fails to allege that the Defendants acted intentionally in committing an independent tort for their own pecuniary gain. In addition, the Defendants contend that, because this Court has determined that no damages were sustained based on the Defendants' refusal of access to the property, the Plaintiff cannot now claim damages based on those same actions. The Defendants assert that by failing to allege one or more of the elements of tortious interference, the claim fails as a matter of law.

Defendants also contend that the Plaintiff's action should be dismissed for its failure to name the Seller, Ulano Corp., as a party in the instant action. Defendants claim that, as the real estate brokers of the Seller, acting under the direction of the Seller, the Seller is a necessary party with a material interest in the outcome of the instant action.

Plaintiff argues that it should not be precluded in this action because did not have a full and fair opportunity to litigate the issue since it was not known to the Plaintiff that, at the time Plaintiff was denied access to the property, Defendants were acting in bad faith and furthering their own interests. Plaintiff claims that, at some point on or about January 17, 2012, Defendants became aware that the Property, had been undervalued, and that, with the knowledge that the Property's greater market value could be realized if the Plaintiff's purchase was not completed, Defendants acted willfully to sabotage the completion of Plaintiff's contract with the Seller.

Plaintiff further contends that it properly pleaded its cause of action for tortious interference by showing there was a valid contract between the Plaintiff and the Seller, of which Defendants were aware, and that the allegation that Defendants intentionally rendered performance of the contract impossible sufficiently establishes that the Plaintiff suffered damages. Lastly, Plaintiff contends that Ulano Corp. does not need to be named in the action in order to afford complete relief because it alleges that Defendants were acting independently, and in their own financial interest, when refusing access to the property, and the Seller would not be inequitably affected should Plaintiff obtain a judgement against the Defendants.

"On a motion to dismiss pursuant to CPLR §3211, the pleading is to be afforded a liberal construction" (ABN AMRO Bank, N.V. v MBIA Inc., 17 NY3d 208, 227 [2011], citing Leon v Martinez, 84 NY2d 83, 87 [1994]). Courts must "accept the facts as alleged in the complaint as true, accord plaintiffs the benefit of every possible favorable inference, and determine only whether the facts as alleged fit within any cognizable legal theory" (Id.). "However, bare legal conclusions are not entitled to the benefit of the presumption of truth and are not accorded every favorable inference" (Ruffino v New York City Tr. Auth., 55 AD3d 817, 818 [2d Dept 2008], quoting Morris v Morris, 306 AD2d 449, 451 [2d Dept 2003]).

The Defendants contend that the action is barred by collateral estoppel pursuant to [*5]CPLR §3211(a)(5). The principle of collateral estoppel "precludes a party from relitigating in a subsequent action an issue clearly raised in a prior action and decided against that party or those in pivity" (Owssom Builders, LLC v J & F Refrigeration Air Condition and Heating, Inc., 28 Misc 3d 1218(A), 1 [Sup Ct, Kings County 2010], citing Buechel v Bain, 97 NY2d 295, 303 [2001]; see also Riley v New York Telephone Co.,62 NY2d 494, 500 [1984], citing Ripley v Storer, 309 NY 506, 517 [1956]).The issue must have been "material to the first action and essential to the decision rendered" (Riley at 500, citing Silberstein v. Silberstein, 218 NY 525, 528 [1916]). "It must be the point actually to be determined in the second action or proceeding such that a judgment would destroy or impair rights or interests established by the first" (Id., citing Schuylkill Fuel Corp. v Neilberg Realty Corp., 250 NY 304, 307 [1929]).

In Buechel v Bain, the Court of Appeals laid out the requirements for invoking collateral estoppel:

"Two requirements must be met before collateral estoppel can be invoked. There must be identity of issue which has necessarily been decided in the prior action and is decisive of the present action, and there must have been full and fair opportunity to contest the decision now said to be controlling (see, Gilberg v Barbieri, 53 NY2d 285, 291, 441 NYS2d 49, 423 NE2d 807 [1981]). The litigant seeking the benefit of collateral estoppel must demonstrate that the decisive issue was necessarily decided in the prior action against a party, or one in privity with a party (see, id.). The party to be precluded from relitigating the issue bears the burden of demonstrating the absence of a full and fair opportunity to contest the prior determination" (Buechel v. Bain, 97 NY2d at 303-304).

The requirements for dismissal based upon collateral estoppel, pursuant to CPLR §3211(a)(5), have been met in this case. Defendants have established that the factual predicate for the Plaintiff's claim for tortious interference against Defendants was previously litigated. Plaintiff alleged in its prior action that as a result of Seller's real estate agents' (Defendants) refusal to provide access to the property, Seller was in breach and as a result of that breach, Plaintiff was unable to close on April 25, 2012. The Court determined in Revital Realty Group, LLC v. Ulano Corp. that, although Ulano, acting through Defendants as its agents, breached the contract by failing to provide access, this breach was not the cause for the Plaintiff's failure to obtain necessary financing and Seller was therefore not responsible [*6]for the Plaintiff's inability to complete the purchase (Revital Realty Group, LLC, 2013 WL 1686845, *4). Plaintiff alleges in the instant action that Defendants' denial of access to the Property caused Plaintiff to fail to be ready and able to close on the operative closing date. The issue here is thus the same as the issue adjudicated against Plaintiff in the prior action (see Gramaton Home Investors Corp. v Lopez, 46 NY2d 481, 485 [1979]; Heritage Realty, 58 AD3d 435). Because the Court heard the evidence and reached a final determination on the issue in the prior case, the Plaintiff has been afforded a full and fair opportunity to litigate the issue (Kovitz v Tesmetges, 186 AD2d 32, 32 [1st Dept 1992]).

In response to the Defendants' argument for dismissal on the grounds of collateral estoppel, the Plaintiff relies on an exception to the protection afforded an agent from liability for the acts of its principal, as set forth in Murtha v Yonkers Child Care Assn., (45 NY2d 913,915 [1978]), which is founded on the principle that an agent is not immune from liability based on agency if it acts in bad faith and commits an independent tort for its own pecuniary gain (see also Bank of NY v. Berisford Intl., 190 AD2d 622,622 [1st Dept 1993]). The Plaintiff's reliance on this exception is misplaced as the acts of which Plaintiff complains in this instant action are the very same acts as alleged against Defendants' principal in the prior action. The Plaintiff was the same in both actions. The fact that Plaintiff did not join Defendants in the prior action, in which Defendants' actions as agents were the subject of the litigation, cannot provide Plaintiff with the opportunity to relitigate these issues (see Buechel v Bain, 97 NY2d at 305-306).

In order to sustain a claim of tortious interference with contract, "it must be established that a valid contract existed that a third party knew about, the third party intentionally and improperly procured the breach of the contract, and the breach resulted in damages to the plaintiff" (Ullmannglass v Oneida, Ltd., 86 AD3d 827, 829 [3d Dept 2011]). Neither party disputes that a valid contract existed between plaintiff and Seller and that defendants knew about that contract (See Buechel v Bain, 97 NY2d 295, 305-306 [2001]). In order to avoid Defendants' agency defense, plaintiff seeks to establish that Defendants committed an independent tort in furtherance of their own purposes separate from their responsibilities as agents, by pointing to Defendants' denial of access on January 17, 2012, prior to Seller's direction to deny access upon Plaintiff's anticipated breach. This single instance in which the Plaintiff was denied access prior to the anticipatory breach by Seller is supported by no evidence that the Defendants acted in bad faith or beyond the scope of their agency. Rather, it appears, based on the minimal evidence provided, that the denial of access was the result of Plaintiff's real estate agent's action in listing the property as rental agent and offering to show the property to potential renters without permission from Seller or Defendants prior to the closing. The Defendants' action clearly was taken in the context of protecting their principal's interest. Moreover, although Plaintiff has alleged a single act of purported bad faith on the part of the Defendants, because this Court previously determined that no damages resulted from the Defendants' refusal of access to the premises, and that Plaintiff was not ready and able to close due to its own lack of diligence in obtaining financing, Plaintiff is thus precluded from proving damages, a necessary element of its cause of action for tortious interference. Plaintiff's cause of action is thus barred by collateral estoppel. [*7]

Accordingly, Defendant's motion to dismiss the complaint in its entirety is granted. This constitutes the decision and order of the Court.

E N T E R,

J. S. C.