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FILED: NEW YORK COUNTY CLERK 08/21/2014 03:10 PM INDEX NO. 653476/2013
NYSCEF DOC. NO. 35 RECEIVED NYSCEF: 08/21/2014
SUPREME COURT OF THE STATE OF NEW YORK
COUNTY OF NEW YORK
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PETER STERN and EXPRESS TRADE CAPITAL, INC.
Plaintiffs, Index No. 653476/2013
-against-
AFFIRMATION
IN REPLY
OLEG ARDACHEV, AIR CARGO SERVICES L.L.C.,
DELEX INC., DELEX AIR CARGO, LLC, a Delaware
limited liability company, and DELEX AIR CARGO, LLC.
a Washington limited liability company.
Defendant.
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Robert Bondar, Esq., an attorney at law duly admitted to practice before the Courts in the State
of New York, hereby affirms the following to be true under the penalties of perjury:
1. I am the attorney for the Defendants OLEG ARDACHEV, DELEX INC., AIR CARGO
SERVICES, LLC, and DELEX AIR CARGO, LLC, (together hereinafter referred to as
‘DELEX’ or ‘Defendants’). As such, I am fully familiar with the facts and circumstances
surrounding this action.
2. I submit this affirmation in Reply to Plaintiffs’ arguments raised in their opposition to
Defendants’ motion for leave to reargue.
3. Plaintiffs contend that the Sales Agreement is an enforceable instrument, at least at this
pleading stage, because “the parties stated an intent to be bound, their names, and due
dates for the payment of the agreement”, Aff. of Estrakh, at ¶20. Plaintiffs further
contend that they should be permitted to proceed to the discovery stage, where they wish
to elicit and introduce extrinsic parol evidence to support their claim that there exists an
enforceable written contract between Plaintiff Stern and Defendant Ardashev.
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a. The agreement Plaintiffs seek to enforce lacks essential terms stated within four
corners and is therefore too vague and indefinite to be enforced
4. What Plaintiff calls “an intent to be bound” is the word “Agreed:”, written on the top of
the document. However, there are no indications what the parties had actually agreed to
anywhere on the face of the document. Other than a stated dollar amount and a payment
schedule, the document is wholly void of any other material terms, which is undisputed.
5. In Rouzani v. Rapp, 203 A.D.2d 446 (2 Dept. 1994), the court said “There is no evidence
of an agreement to any material terms other than the purchase price stated in the
memorandum. The purported contract for the sale of the business, containing only the
purchase price, lacked other essential terms and was therefore too vague and indefinite
to be enforced” citing Joseph J. Martin, Jr., Delicatessen v. Schumacher, 436 N.Y.S.2d
247, 417 N.E.2d 541(1981).
6. Plaintiffs’ counsel argues that the above language suggests “the judicial practice of
allowing Plaintiff to perform discovery” to prove its case. Aff. of Estrakh, at ¶30.
Plaintiffs’ argument lack any merit because the holdings of Rouzani and Martin
Delicatessen clearly state that the “evidence of an agreement” must be “stated in the
memorandum.” Id. In other words, where the four corners of the agreement are
demonstrably lacking “other essential terms”, it renders the agreement unenforceable for
vagueness and indefiniteness.
7. To be enforceable, “the agreement must designate the parties, identify and describe the
subject matter, and state all of the essential terms of a complete agreement. Rouzani v.
Rapp, at 447. The Sale Agreement does not designate the parties, as the agreement
contains nothing but the parties’ signatures - without any indication as to what their role
was in this transaction.
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8. It is undisputed that the subject matter is neither identified nor described within the four
corners of the agreement but is rather missing in its entirety. Similarly, of “the essential
terms of a complete agreement” the purported Sale Agreement contains only a dollar
amount, without describing its nature.
9. Plaintiffs contradict themselves by even their interpretation of what this number
represents. In their complaint, Exhibit A at ¶25, Plaintiffs claim that it is a price for
Plaintiffs’ “share of ACS”. However, at the hearing Plaintiff’s counsel equivocated and
referred to some failure to pay on a promissory note, Exhibit B at p.5, ln.16-18. Even
given Plaintiffs’ entitlement to plead in the alternative, these two causes of action are so
different from each other, as to clearly suggest a myriad of other possibilities in which the
subject matter of this agreement could be interpreted, rather than being reasonably
certain.
10. “If an agreement is not reasonably certain in its material terms, there can be no legally
enforceable contract” Cobble Hill Nursing Home v. Henry & Warren Corp., 74 N.Y.2d
475, 548 N.Y.S.2d 920 (1989) citing Joseph J. Martin, Jr., Delicatessen v. Schumacher,
52 N.Y.2d 105 (1981); Restatement [Second] of Contracts § 33 (1981).
11. It is only when the subject matter is reasonably certain but ambiguous that the courts of
this State permit extrinsic evidence. “To the extent that any of the agreement's terms may
be ambiguous, indefinite or uncertain, it is well settled that extrinsic or parol evidence is
admissible to determine their meaning.” Korff v. Corbett, 18 A.D.3d 248 (1 Dept. 2005).
12. Here again, counsel misguidedly argues that “New York courts have allowed parties to
ambiguous or incomplete contracts to determine the subject matter of these contract (sic)
through parol evidence”. Aff. of Estrakh, at ¶18. In fact, none of the cases cited by
Plaintiffs, including Korff and Meathe v. State University Const. Fund, 410 N.Y.S.2d 702
(3 Dept. 1978), hold that incomplete contracts may be determined by parol evidence. It is
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only when “any of the agreement's terms may be ambiguous, indefinite or uncertain, […]
that extrinsic or parol evidence is admissible to determine their meaning”. Korff, at 251.
b. There is no objective method for supplying the missing material terms.
13. Plaintiffs’ counsel takes issue with Defendants’ reference to an “objective standard which
is the only way a court can supply a term not listed within the four corners of the
contract”. Aff. of Estrakh, at ¶24. However, this Court itself in its prior decision referred
to the test used by the Court of Appeals in Matter of 166 Mamaroneck Ave. Corp. v 151
E. Post Rd. Corp., 78 N.Y.2d 88 (1991) and Joseph J. Martin, Jr., Delicatessen v.
Schumacher, 52 N.Y.2d 105 (1981), when the Court stated that if “there exists an
objective method for supplying a missing term, the court should endeavor to hold the
parties to their bargain”. Exhibit C, Transcript at p.12, line 6-9.
14. Court of Appeals had developed a two-pronged test, which it set forth in Joseph J.
Martin, Jr., Delicatessen v. Schumacher, by identifying ”two ways in which the
requirement of definiteness could be satisfied in the absence of an explicit contract
term:
(1) an agreement could contain “a methodology for determining the [missing
term] ... within the four corners of the lease, for a [term] so arrived at would
have been the end product of agreement between the parties themselves”; or
(2) an agreement could “invite recourse to an objective extrinsic event, condition
or standard on which the amount was made to depend”. Matter of 166
Mamaroneck, at 91-92, Martin Delicatessen at 110.
15. In 166 Mamaroneck, the court found that the agreement was enforceable because parties
clearly intended to be bound by the arbitrator’s determination to supply the missing term,
the calculation of rent, however subjective it might have been. Thus, the agreement could
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be enforced under the second prong, as the court concluded that the parties agreed to
invite recourse to “an objective extrinsic event, condition or standard on which the
amount was made to depend” - the arbitrator’s determination.
16. The agreement in Cobble Hill case satisfied the first prong of 166 Mamaroneck test. The
court held that the parties’ intent that a third person fix the sale price for the nursing
home “itself provided an objective standard without the need for further expressions by
the parties”. Cobble Hill, at 484.
17. However, the language of the Agreement before this Court fails to satisfy either prong of
the 166 Mamaroneck test, thus the requirement of definiteness cannot be satisfied and
this Court should not enforce the Agreement.
18. Merriam-Webster dictionary defines “objective” as “based on facts rather than feelings or
opinions”. An objective method for determining the missing terms would necessarily
have to be found within the four corners of the contract, and would have be based on
facts and evidence to be gleaned from the contract.
19. Plaintiffs instead urge this Court to use a subjective method, which would be based on
“feelings or opinions rather than facts”, Merriam-Webster. Plaintiffs argues that this
Court should permit introduction of testimonial evidence of the Plaintiff Stern, and
another interested biased third-party witness, to establish the existence of the Agreement
and to supply the missing terms. This is clearly impermissible, according to Cobble Hill
Martin, Jr., Delicatessen, and 166 Mamaroneck and such methodology cannot determine
the missing term from the four corners of the document because “the risk of ensnaring a
party in a set of contractual obligations that he never knowingly assumed is too serious”.
Mocca Lounge v. Misak, 94 A.D.2d 761, 462 N.Y.S.2d 704 (2 Dept. 1983).
20. The purported Sale Agreement is completely silent on all essential terms of the contract,
except the price. The intent of the parties is impossible to ascertain, as is the subject
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matter. There is simply no objective methodology, by which the parties’ intent or the
missing terms may be determined from the document itself, as per the first prong of
Martin, Jr., Delicatessen and Matter of 166 Mamaroneck test.
21. “This is not to say that the requirement for definiteness in the case before us now could
only have been met by explicit expression of the rent to be paid. The concern is with
substance, not form. It certainly would have sufficed, for instance, if a methodology for
determining the rent was to be found within the four corners of the lease, for a rent
so arrived at would have been the end product of agreement between the parties
themselves. Nor would the agreement have failed for indefiniteness because it invited
recourse to an objective extrinsic event, condition or standard on which the amount
was made to depend. All of these, inter alia, would have come within the embrace of the
maxim that what can be made certain is certain. Martin, Jr., Delicatessen, at 249, 250.
22. Plaintiffs also fail to satisfy the second prong. The Agreement absolutely does not “invite
recourse to an objective extrinsic event, condition or standard” on which the missing
terms could have been made to depend. As was correctly noted by this Court “The only
thing that is somewhat clear is that there is a price. We don’t know the subject matter of
the contract. We don’t know who is selling what to whom.” Exhibit B, Transcript at p.3,
line 3-5. The Agreement refers to no other documents, records, events, or conditions to
which the Court could turn to ascertain what the terms of this Agreement were.
23. The Agreement cannot be made certain by either methodology contained within the
Agreement or by a reference to some extrinsic standard or event. Therefore, it does not
come under the purview of Korff, 166 Mamaroneck, or Cobble Hill decisions but must
fail for uncertainty, indefiniteness, and impenetrable vagueness as in Martin, Jr.,
Delicatessen and Rouzani.
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DATED: Brooklyn, New York Respectfully submitted,
August 20, 2014 By: /s/ Robert Bondar
Robert Bondar, Esq.
Attorney for Defendants
28 Dooley Street, 3rd floor
Brooklyn, New York 11235
Telephone (347) 462-3262
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Preview
FILED: NEW YORK COUNTY CLERK 08/21/2014 03:10 PM INDEX NO. 653476/2013 NYSCEF DOC. NO. 35 RECEIVED NYSCEF: 08/21/2014 SUPREME COURT OF THE STATE OF NEW YORK COUNTY OF NEW YORK ------------------------------------------------------------------------X PETER STERN and EXPRESS TRADE CAPITAL, INC. Plaintiffs, Index No. 653476/2013 -against- AFFIRMATION IN REPLY OLEG ARDACHEV, AIR CARGO SERVICES L.L.C., DELEX INC., DELEX AIR CARGO, LLC, a Delaware limited liability company, and DELEX AIR CARGO, LLC. a Washington limited liability company. Defendant. ------------------------------------------------------------------------X Robert Bondar, Esq., an attorney at law duly admitted to practice before the Courts in the State of New York, hereby affirms the following to be true under the penalties of perjury: 1. I am the attorney for the Defendants OLEG ARDACHEV, DELEX INC., AIR CARGO SERVICES, LLC, and DELEX AIR CARGO, LLC, (together hereinafter referred to as ‘DELEX’ or ‘Defendants’). As such, I am fully familiar with the facts and circumstances surrounding this action. 2. I submit this affirmation in Reply to Plaintiffs’ arguments raised in their opposition to Defendants’ motion for leave to reargue. 3. Plaintiffs contend that the Sales Agreement is an enforceable instrument, at least at this pleading stage, because “the parties stated an intent to be bound, their names, and due dates for the payment of the agreement”, Aff. of Estrakh, at ¶20. Plaintiffs further contend that they should be permitted to proceed to the discovery stage, where they wish to elicit and introduce extrinsic parol evidence to support their claim that there exists an enforceable written contract between Plaintiff Stern and Defendant Ardashev. 1 a. The agreement Plaintiffs seek to enforce lacks essential terms stated within four corners and is therefore too vague and indefinite to be enforced 4. What Plaintiff calls “an intent to be bound” is the word “Agreed:”, written on the top of the document. However, there are no indications what the parties had actually agreed to anywhere on the face of the document. Other than a stated dollar amount and a payment schedule, the document is wholly void of any other material terms, which is undisputed. 5. In Rouzani v. Rapp, 203 A.D.2d 446 (2 Dept. 1994), the court said “There is no evidence of an agreement to any material terms other than the purchase price stated in the memorandum. The purported contract for the sale of the business, containing only the purchase price, lacked other essential terms and was therefore too vague and indefinite to be enforced” citing Joseph J. Martin, Jr., Delicatessen v. Schumacher, 436 N.Y.S.2d 247, 417 N.E.2d 541(1981). 6. Plaintiffs’ counsel argues that the above language suggests “the judicial practice of allowing Plaintiff to perform discovery” to prove its case. Aff. of Estrakh, at ¶30. Plaintiffs’ argument lack any merit because the holdings of Rouzani and Martin Delicatessen clearly state that the “evidence of an agreement” must be “stated in the memorandum.” Id. In other words, where the four corners of the agreement are demonstrably lacking “other essential terms”, it renders the agreement unenforceable for vagueness and indefiniteness. 7. To be enforceable, “the agreement must designate the parties, identify and describe the subject matter, and state all of the essential terms of a complete agreement. Rouzani v. Rapp, at 447. The Sale Agreement does not designate the parties, as the agreement contains nothing but the parties’ signatures - without any indication as to what their role was in this transaction. 2 8. It is undisputed that the subject matter is neither identified nor described within the four corners of the agreement but is rather missing in its entirety. Similarly, of “the essential terms of a complete agreement” the purported Sale Agreement contains only a dollar amount, without describing its nature. 9. Plaintiffs contradict themselves by even their interpretation of what this number represents. In their complaint, Exhibit A at ¶25, Plaintiffs claim that it is a price for Plaintiffs’ “share of ACS”. However, at the hearing Plaintiff’s counsel equivocated and referred to some failure to pay on a promissory note, Exhibit B at p.5, ln.16-18. Even given Plaintiffs’ entitlement to plead in the alternative, these two causes of action are so different from each other, as to clearly suggest a myriad of other possibilities in which the subject matter of this agreement could be interpreted, rather than being reasonably certain. 10. “If an agreement is not reasonably certain in its material terms, there can be no legally enforceable contract” Cobble Hill Nursing Home v. Henry & Warren Corp., 74 N.Y.2d 475, 548 N.Y.S.2d 920 (1989) citing Joseph J. Martin, Jr., Delicatessen v. Schumacher, 52 N.Y.2d 105 (1981); Restatement [Second] of Contracts § 33 (1981). 11. It is only when the subject matter is reasonably certain but ambiguous that the courts of this State permit extrinsic evidence. “To the extent that any of the agreement's terms may be ambiguous, indefinite or uncertain, it is well settled that extrinsic or parol evidence is admissible to determine their meaning.” Korff v. Corbett, 18 A.D.3d 248 (1 Dept. 2005). 12. Here again, counsel misguidedly argues that “New York courts have allowed parties to ambiguous or incomplete contracts to determine the subject matter of these contract (sic) through parol evidence”. Aff. of Estrakh, at ¶18. In fact, none of the cases cited by Plaintiffs, including Korff and Meathe v. State University Const. Fund, 410 N.Y.S.2d 702 (3 Dept. 1978), hold that incomplete contracts may be determined by parol evidence. It is 3 only when “any of the agreement's terms may be ambiguous, indefinite or uncertain, […] that extrinsic or parol evidence is admissible to determine their meaning”. Korff, at 251. b. There is no objective method for supplying the missing material terms. 13. Plaintiffs’ counsel takes issue with Defendants’ reference to an “objective standard which is the only way a court can supply a term not listed within the four corners of the contract”. Aff. of Estrakh, at ¶24. However, this Court itself in its prior decision referred to the test used by the Court of Appeals in Matter of 166 Mamaroneck Ave. Corp. v 151 E. Post Rd. Corp., 78 N.Y.2d 88 (1991) and Joseph J. Martin, Jr., Delicatessen v. Schumacher, 52 N.Y.2d 105 (1981), when the Court stated that if “there exists an objective method for supplying a missing term, the court should endeavor to hold the parties to their bargain”. Exhibit C, Transcript at p.12, line 6-9. 14. Court of Appeals had developed a two-pronged test, which it set forth in Joseph J. Martin, Jr., Delicatessen v. Schumacher, by identifying ”two ways in which the requirement of definiteness could be satisfied in the absence of an explicit contract term: (1) an agreement could contain “a methodology for determining the [missing term] ... within the four corners of the lease, for a [term] so arrived at would have been the end product of agreement between the parties themselves”; or (2) an agreement could “invite recourse to an objective extrinsic event, condition or standard on which the amount was made to depend”. Matter of 166 Mamaroneck, at 91-92, Martin Delicatessen at 110. 15. In 166 Mamaroneck, the court found that the agreement was enforceable because parties clearly intended to be bound by the arbitrator’s determination to supply the missing term, the calculation of rent, however subjective it might have been. Thus, the agreement could 4 be enforced under the second prong, as the court concluded that the parties agreed to invite recourse to “an objective extrinsic event, condition or standard on which the amount was made to depend” - the arbitrator’s determination. 16. The agreement in Cobble Hill case satisfied the first prong of 166 Mamaroneck test. The court held that the parties’ intent that a third person fix the sale price for the nursing home “itself provided an objective standard without the need for further expressions by the parties”. Cobble Hill, at 484. 17. However, the language of the Agreement before this Court fails to satisfy either prong of the 166 Mamaroneck test, thus the requirement of definiteness cannot be satisfied and this Court should not enforce the Agreement. 18. Merriam-Webster dictionary defines “objective” as “based on facts rather than feelings or opinions”. An objective method for determining the missing terms would necessarily have to be found within the four corners of the contract, and would have be based on facts and evidence to be gleaned from the contract. 19. Plaintiffs instead urge this Court to use a subjective method, which would be based on “feelings or opinions rather than facts”, Merriam-Webster. Plaintiffs argues that this Court should permit introduction of testimonial evidence of the Plaintiff Stern, and another interested biased third-party witness, to establish the existence of the Agreement and to supply the missing terms. This is clearly impermissible, according to Cobble Hill Martin, Jr., Delicatessen, and 166 Mamaroneck and such methodology cannot determine the missing term from the four corners of the document because “the risk of ensnaring a party in a set of contractual obligations that he never knowingly assumed is too serious”. Mocca Lounge v. Misak, 94 A.D.2d 761, 462 N.Y.S.2d 704 (2 Dept. 1983). 20. The purported Sale Agreement is completely silent on all essential terms of the contract, except the price. The intent of the parties is impossible to ascertain, as is the subject 5 matter. There is simply no objective methodology, by which the parties’ intent or the missing terms may be determined from the document itself, as per the first prong of Martin, Jr., Delicatessen and Matter of 166 Mamaroneck test. 21. “This is not to say that the requirement for definiteness in the case before us now could only have been met by explicit expression of the rent to be paid. The concern is with substance, not form. It certainly would have sufficed, for instance, if a methodology for determining the rent was to be found within the four corners of the lease, for a rent so arrived at would have been the end product of agreement between the parties themselves. Nor would the agreement have failed for indefiniteness because it invited recourse to an objective extrinsic event, condition or standard on which the amount was made to depend. All of these, inter alia, would have come within the embrace of the maxim that what can be made certain is certain. Martin, Jr., Delicatessen, at 249, 250. 22. Plaintiffs also fail to satisfy the second prong. The Agreement absolutely does not “invite recourse to an objective extrinsic event, condition or standard” on which the missing terms could have been made to depend. As was correctly noted by this Court “The only thing that is somewhat clear is that there is a price. We don’t know the subject matter of the contract. We don’t know who is selling what to whom.” Exhibit B, Transcript at p.3, line 3-5. The Agreement refers to no other documents, records, events, or conditions to which the Court could turn to ascertain what the terms of this Agreement were. 23. The Agreement cannot be made certain by either methodology contained within the Agreement or by a reference to some extrinsic standard or event. Therefore, it does not come under the purview of Korff, 166 Mamaroneck, or Cobble Hill decisions but must fail for uncertainty, indefiniteness, and impenetrable vagueness as in Martin, Jr., Delicatessen and Rouzani. 6 DATED: Brooklyn, New York Respectfully submitted, August 20, 2014 By: /s/ Robert Bondar Robert Bondar, Esq. Attorney for Defendants 28 Dooley Street, 3rd floor Brooklyn, New York 11235 Telephone (347) 462-3262 7