Judge Favors Seller in Real Estate Contract Dispute
A seller in a real estate deal claiming anticipatory repudiation against the buyer doesn't need to demonstrate that it was ready to close on the deal if it is not seeking lost profits, Manhattan Supreme Court Justice Charles Ramos ruled in Princes Point v. AKRF Engineering, 601849/08.
The buyer, Princes Point LLC, contracted to buy a 23-acre parcel on Staten Island's waterfront for development. The seller, Allied Bay Co., failed to get all the necessary approvals before an agreed-upon closing deadline. Princes Point then sued Allied, seeking an abatement of the purchase price.
However, their contract specifically said that Princes Point was not to commence any legal action against Allied if Allied failed to get the approvals. Allied therefore claimed that Princes Point had anticipated breaching the contract by filing the lawsuit. It sought to rescind the contract and keep the down payment.
Princes Point, in turn, claimed that Allied had to show that it was ready, willing and able to close the deal, which it had not done because it lacked the approvals.
In a Jan. 31 decision, Ramos rejected that argument, writing, "The ready, willing and able requirement only applies when the non-breaching party is seeking to recover lost profits or expectation damages, and does not apply where, as here, a party merely seeks to recover a down payment."
He dismissed Princes Point's case in its entirety.
Allied is represented by Scott Mollen, a partner at Herrick, Feinstein, and by Darlene Fairman, counsel at that firm.
Princes Point is represented by Robert Fishler of Gaines & Fishler.