Preview
FILED: NEW YORK COUNTY CLERK 07/29/2014 10:05 AM INDEX NO. 653476/2013
NYSCEF DOC. NO. 29 RECEIVED NYSCEF: 07/29/2014
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-
ATTORNEY’S AFFIRMATION
IN SUPPORT OF MOTION
FOR LEAVE TO REARGUE
PURSUANT TO CPLR 2221(a)(2)
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, AIR CARGO SERVICES
L.L.C., DELEX INC., and DELEX AIR CARGO, LLC (collectively, the “Defendants”).
As such, I am familiar with the facts and circumstances underlying this action based upon
communications with the Defendants and review of the contents of the file kept and
maintained by the undersigned’s office.
2. I submit this affirmation in support of Defendants’ motion for leave to reargue prior
motion pursuant to CPLR 2221(a)(2) based upon matters of fact and law overlooked by
the Court in determining said prior motion.
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PRIOR HISTORY
3. Plaintiffs filed the Complaint against the Defendants in New York County Supreme
Court on October 8, 2013 by e-filing through NYSECF system. In the Complaint,
Plaintiffs assert claims sounding in what appears to be a breach of contract, unjust
enrichment, and wrongful transfer of corporate assets. Exhibit A.
4. Annexed to the Complaint was a purported “Sale Agreement”, which Plaintiffs claim was
breached by Defendant Ardachev. Exhibit B.
5. Shortly after the issue was joined, Defendants moved to dismiss several causes of action
in Plaintiff’s complaint for failure to state a cause of action and based on the defense
founded upon documentary evidence, the alleged ‘Sale Agreement’ in question, pursuant
to CPLR 3211(a)(1),(7).
6. After an oral argument, the Court directed the parties to submit further legal briefs on the
issue of whether the Court may permit introduction of parol evidence to ascertain the
intent of the parties and enforce a contract, which is as lacking in subject matter as the
‘Sale Agreement’.
7. After Plaintiffs and Defendants submitted their respective briefs, the Court directed the
parties to present oral arguments on the record. The attorneys for the parties appeared and
presented their arguments on July 7, 2014. Transcript of these proceedings is annexed as
Exhibit C.
8. Having heard from both sides, the Court sided with Plaintiffs and denied Defendants’
motion in its entirety. Defendants respectfully request leave to reargue their motion based
upon matters of fact and law overlooked and misapprehended by the Court in
determining the prior motion pursuant to CPLR 2221 (a), (d)(2).
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LEGAL ARGUMENT
9. On a motion for leave to reargue, the moving party must demonstrate that the Court
“overlooked or misapprehended the relevant facts, or misapplied any controlling
principle of law” Foley v. Roche, 68 A.D.2d 558 (1 Dept. 1979).
10. Here, the Defendants contend that the Court misapplied the standard set forth by the court
of Appeals in Cobble Hill Nursing Home v. Henry & Warren Corp., 74 N.Y.2d 475, 548
N.Y.S.2d 920 (1989), as well as the holdings of the cases cited by Defendants in their
papers, Matter of 166 Mamaroneck Ave. Corp. v 151 E. Post Rd. Corp., 78 N.Y.2d 88
(1991), Korff v. Corbett, 18 A.D.3d 248 (1 Dept. 2005), and Joseph J. Martin, Jr.,
Delicatessen v. Schumacher, 436 N.Y.S.2d 247, 417 N.E.2d 541(1981).
11. The Court relied on Cobble Hill for the proposition that “where it’s clear from the
language of an agreement that the parties intended to be bound and there exists an
objective method for supplying a missing term, the court should endeavor to hold the
parties to their bargain.” Exhibit B, Transcript at p.12, line 6-9 (emphasis mine).
12. However, Cobble Hill is easily distinguishable from the instant matter before the Court.
In Cobble Hill, at issue was a price to be paid for the purchase of a nursing home and a
method by which said price could be determined. Id., at 477. However, the subject
matter of the agreement, the purchase of the nursing home, was sufficiently definite and
never in question. The Court of Appeals enforced the agreement by interpreting the plain
language of the provisions of the agreement. These provisions stated that during the term
of the agreement, plaintiff would have the “option to purchase the premises at any time
during said Term” at a price determined by the Department of Health. The agreement in
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Cobble Hill clearly deferred to the Department, a third party, to determine and set the
price for the property at its sole discretion. Whatever the Department determined the
price should be was to be the price for the property, without any extrinsic reference to its
true market value or any other applicable standard. The court held that since the parties
intended that the price was to be fixed by a third party and because the agreement set
forth a practicable method by which price was to be determined, and the subject matter
(the purchase of the nursing home) was clearly defined, the agreement was not so
indefinite as to be unenforceable.
13. In stark contrast to Cobble Hill, the Agreement in question, while specific on the price
contains no other terms whatsoever. Unlike in Cobble Hill, it is wholly impossible to
determine the subject matter of the agreement, what the parties intended to sell or buy,
and who was selling what to whom. Exhibit B, Transcript at p.3, line 3-5.
14. The court in Cobble Hill aptly stated “Few principles are better settled in the law of
contracts than the requirement of definiteness. If an agreement is not reasonably certain
in its material terms, there can be no legally enforceable contract” citing Joseph J. Martin,
Jr., Delicatessen v. Schumacher, 52 N.Y.2d 105 (1981); Restatement [Second] of
Contracts § 33 (1981).
15. The court then went on to say, “The doctrine of definiteness serves two related purposes.
First, unless a court can determine what the agreement is, it cannot know whether the
contract has been breached, and it cannot fashion a proper remedy… Second, the
requirement of definiteness assures that courts will not impose contractual obligations
when the parties did not intend to conclude a binding agreement (see, Restatement
[Second] of Contracts § 33 [3] [1981]).”
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16. This Court overlooked a pertinent fact of Cobble Hill, that the subject matter of the
agreement there (the sale of the nursing home) was clear and discernible from the four
corners of the document, unlike in the present matter before the Court where the subject
matter is completely missing - and as a result misapplied the law. Defendants contend
that there is no objective method to supply the missing terms, and therefore the
Agreement must be void and unenforceable for lack of certainty and definitiveness, the
bedrocks of contract law principles. See Exhibit C, Transcript at p.12, line 7-9.
17. According to Cobble Hill, if the Court cannot determine what the agreement is, “it cannot
know whether the contract has been breached, and it cannot fashion a proper remedy”
and the Agreement may not be enforced.
18. The Court similarly misapplied the holding of Korff v. Corbett, 18 A.D.3d 248 (1 Dept.
2005), the case cited by the Plaintiffs for the proposition that parol evidence was
admissible to determine the meaning of vague, ambiguous, or uncertain terms of the
agreement. The Court applied Korff’s holding here, and decided that since the subject
matter, the parties, and their capacities are not specifically expressed within the
Agreement, “that would be an ambiguity that would give rise to parole [sic] evidence to
clarify.” Exhibit C, Transcript at p.12, line 12-18.
19. However, the Korff agreement was only “somewhat imprecise”. Korff , at 250. The Korff
agreement contained an introductory sentence, referred to outstanding legal bills as past
consideration for the agreement, which both parties executed thus agreeing to the
repayment terms, and provided specific language that suggested that plaintiff had already
earned this amount. Korff, at 250-251.
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20. The Korff agreement was by far more certain and definite than the document this Court
is asked to enforce. There, it was clear who was going to pay, to whom, how much, and
contained signatures that bound both the signatories and the business entities they owned.
Nevertheless, the trial court initially granted dismissal for failure to state a cause of action
because the agreement did not contain references to subject matter, duration and term of
the agreement were not defined, and provisions for payment as a percentage of gross
receipts were “too indefinite to be enforced.” Id. Although the First Department reversed,
it stated, “The doctrine of definiteness or certainty is well established in contract law. In
short, it means that a court cannot enforce a contract unless it is able to determine what in
fact the parties have agreed to” Korff citing Matter of 166 Mamaroneck Ave. Corp. v 151
E. Post Rd. Corp., 78 N.Y.2d 88 (1991).
21. In the Matter of 166 Mamaroneck, the Court of Appeals referred to a test set forth in
Joseph J. Martin, Jr., Delicatessen v. Schumacher, Id., and identified” 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. (italicized for emphasis)
22. 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,
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the calculation of rent under the lease. Thus, although arbitration was not “methodology
per se” and it did not qualify under the first prong of the Martin Delicatessen test, it did
satisfy the second prong of the test, 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” and thus the term was held to be definite and enforceable. The court
also cited to the Cobble Hill case and agreed that the parties’ intent there 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. However,
we have no such language in the Agreement that could provide any objective standard to
determine the missing terms.
23. The Sale Agreement is silent on all terms, other than the price, and it offers no insight on
the intentions of the parties or the subject matter of the Agreement whatsoever. It is much
less than the “imperfect expression” before the Korff court and it lacks the “objective
standard” which may be used to determine the omitted terms. Although the Court seemed
to indicate that “there exists an objective method for supplying a missing term” (Exhibit
B, Transcript at p.12, line 7,8), the Court failed to define any such method.
24. It appears that the Court misapplied the test delineated by the Court of Appeals in Matter
of 166 Mamaroneck, Martin Delicatessen, and Cobble Hill cases. The Sale Agreement
before the Court fails to satisfy either prong of the test – it contains no methodology for
determining the missing terms within the four corners of the document nor does it invite
recourse to an “objective extrinsic event, condition or standard”. In fact, there is nothing
in the Agreement to guide the Court in its determination as to what the parties might have
intended to be the subject matter of the Agreement.
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25. The facts of our case are much closer to the facts of Rouzani v. Rapp, 203 A.D.2d 446 (2
Dept. 1994). That case involved a proposed sale of a business and the lease of the
premises in conjunction with that sale. The defendant and his sister were co-owners of
the premises. The plaintiff and the defendant signed an agreement setting forth the
purchase price of the business, the “starting” monthly rent, and the approximate duration
of a lease. In addition, the defendant accepted a deposit from the plaintiff. Subsequently,
the defendant's sister rejected the agreement. The plaintiff refused to accept the
defendant's return of the deposits and commenced the action alleging that the defendant
breached the lease. The Second Department affirmed the order of the Supreme Court,
which granted summary judgment to the defendants and held: “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 Martin Delicatessen v Schumacher.
26. This is precisely what is contained in the purported agreement that this Court is asked to
interpret and enforce. There are no material terms contained there whatsoever other than
the price, therefore since the agreement lacks the essential terms – it is too vague and
indefinite to be enforced. “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.
27. To make this contract enforceable, the Court would have to determine and insert the
missing terms there - without any reference to any objective method to guide it in its
determination. This is precisely what the courts of this State have repeatedly declined to
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do where “the void is too great, the omissions are too noticeable and 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).
CONCLUSION
Defendants respectfully submit that this Court misapplied the test set forth by the New
York Court of Appeals in Matter of 166 Mamaroneck, Martin Delicatessen, and Cobble
Hill, when it denied Defendants’ motion to dismiss those branches of Plaintiffs’
complaint, which specifically sought to enforce the “Sale Agreement”. The Court
overlooked the fact that a purchase price, without more, does not state all of the essential
terms of an enforceable agreement. Thus, in the complete absence of the language in the
agreement which would either contain a methodology for determining the missing terms
within the four corners of the document or make reference to “an objective extrinsic
event, condition or standard” which might help to discover what those terms were,
Defendants respectfully ask this Court to reconsider its decision and dismiss Plaintiffs’
first, second, and third causes of action.
DATED: Brooklyn, New York Respectfully submitted,
July 25, 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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