Libasci v. Singares

State of New York
Supreme Court, Appellate Division
Third Judicial Department
Decided and Entered: May 21, 2015 518956
________________________________

ARGELIS DEL CARMEN LIBASCI,
Respondent,
v MEMORANDUM AND ORDER

ARIADNE SINGARES,
Appellant,
et al.,
Defendant.
________________________________

Calendar Date: February 10, 2015

Before: Lahtinen, J.P., Garry, Lynch and Devine, JJ.

__________

Hacker Murphy, LLP, Latham (Ryan M. Finn of counsel), for
appellant.

Henry Blumenthal, New York City, for respondent.

__________

Devine, J.

Appeals (1) from an order of the Supreme Court (Nichols,
J.), entered July 5, 2013 in Columbia County, which, among other
things, granted plaintiff's motion for summary judgment against
defendant Ariadne Singares, and (2) from the judgment entered
thereon.

Following the death of her father in 1990, defendant
Ariadne Singares (hereinafter defendant), her mother and her
siblings inherited shares in a condominium unit located in New
York City. Defendant held a 37.7778% interest in the condominium
unit and her sister, plaintiff, held a 4.4444% interest.
Defendant experienced financial difficulties and, in 2010, sought
to obtain a private refinancing loan upon the condominium unit
 -2- 518956

which would enable her to pay off the existing mortgage and
recover $125,000 in equity. To proceed with this plan, defendant
required the approval of each of the co-owners. She allegedly
obtained the approval and an executed power of attorney from each
of her family members for this purpose, with the exception of
plaintiff.

In September 2010, defendant's attorney forwarded a
proposed power of attorney form to plaintiff, together with a
separate document that he had prepared to memorialize an
agreement between the two sisters. This agreement provided that,
for the stated consideration of $10 "and other good and valuable
consideration," the proceeds of any future sale of the
condominium unit allocable to their combined 42.22% ownership
"shall be divided equally between them." Plaintiff executed and
returned this agreement, but refused to execute the power of
attorney. In December 2011, the unit was sold. Defendant Andrew
F. Blumenthal distributed the proceeds to the various co-owners
in accord with their respective interests prior to the purported
agreement between plaintiff and defendant. Contrary to the
suggestion of our dissenting colleague, defendant maintained that
the agreement was invalid after learning that plaintiff intended
to rely upon it, but agreed to let the sale move forward and save
the dispute between herself and plaintiff for another day.
Blumenthal accordingly held in escrow the sum representing the
share that was to be transferred by defendant to plaintiff by the
terms of the agreement.

Plaintiff thereafter commenced this action demanding
enforcement of the terms of the agreement, and subsequently moved
for summary judgment against defendant. Defendant opposed the
motion and cross-moved for summary judgment dismissing the
complaint. Supreme Court granted plaintiff's motion and denied
defendant's cross motion, finding that the agreement was
unambiguous on its face and that extrinsic evidence for the
purpose of revealing additional terms was therefore inadmissible.
Defendant appeals.1

1
Blumenthal supported plaintiff's position before Supreme
Court and has not submitted a brief on this appeal.
 -3- 518956

Defendant contends that Supreme Court erred in refusing to
consider extrinsic evidence showing that the parties never
reached a meeting of the minds as to the consideration for the
agreement, specifically a commitment by plaintiff to execute the
power of attorney. We have no quarrel with the dissent's
assertion that, where an agreement between parties is
unambiguously set forth in writing, "[e]vidence outside the four
corners of the document as to what was really intended but
unstated or misstated is generally inadmissible to add to or vary
the writing" (W.W.W. Assoc. v Giancontieri, 77 NY2d 157, 162
[1990]; see Schron v Troutman Sanders LLP, 20 NY3d 430, 436
[2013]). We do not, however, share the view of our dissenting
colleague that this is what defendant is attempting to do here.
In order "'[t]o create a binding contract, there must be a
manifestation of mutual assent sufficiently definite to assure
that the parties are truly in agreement with respect to all
material terms' and consideration" (Wild v Hayes, 68 AD3d 1412,
1414 [2009], quoting Matter of Express Indus. & Term. Corp. v New
York State Dept. of Transp., 93 NY2d 584, 589 [1999]). Defendant
is not arguing that a valid agreement between the parties
included an unstated commitment by plaintiff to execute the power
of attorney; instead, she is asserting that she proposed an
agreement upon that understanding, but that there was never a
meeting of the minds on the issue sufficient to give rise to a
valid agreement. Accordingly, she was entitled to use parol
evidence "to show that what appears to be a contractual
obligation is, in fact, no obligation at all" (Paolangeli v
Cowles, 208 AD2d 1174, 1175 [1994] [internal quotation marks,
brackets and citations omitted]; see Kamp v Fiumera, 69 AD3d
1168, 1170 [2010]; Jerome Prince, Richardson on Evidence § 11-203
[Farrell 11th ed 2008]).

Turning to that parol evidence, defendant provided an email
exchange between her counsel and plaintiff that corroborates her
contention that she only agreed to give up a part of the sale
proceeds to which she was entitled in return for the grant of
plaintiff's power of attorney that would allow her to obtain a
refinancing loan. Counsel simultaneously sent the proposed
agreement and a power of attorney form to plaintiff and, had she
executed both, they would undoubtedly have been construed
together (see Whittlesey v Delaney, 73 NY 571, 575-576 [1878];
 -4- 518956

Smith v Shields Sales Corp., 22 AD3d 942, 943 [2005]). Plaintiff
only executed the proposed agreement, however, indicating that a
power of attorney was unnecessary because she was "ready,
will[ing] and able to attend in person any required closing or
meetings." Plaintiff confirmed that a refinancing was
contemplated when she sought further details on "the refinance"
the next day, and those details were provided in short order.
She then consulted with an attorney and, four days later,
abruptly changed course and indicated that the unit "should not
be refinanced under any circumstances." Plaintiff further
stated, for the first time, that she did not execute a power of
attorney because she was concerned about defendant's management
of the condominium unit.

None of this proof regarding the contours of the deal is
contradicted by the language of the proposed agreement, which
only refers to the exchange of $10 "and other good and valuable
consideration" (see Ehrlich v American Moninger Greenhouse Mfg.
Corp., 26 NY2d 255, 258 [1970]; Diamond v Scudder, 45 AD3d 630,
632 [2007]; compare Cammeby's Equity Holdings LLC v Mariner
Health Care, Inc., 106 AD3d 563, 563-564 [2013]). The
correspondence between the parties demonstrates, at a minimum,
that there was no meeting of the minds as to what that "other
good and valuable consideration" was. Indeed, in light of
plaintiff's refusal to execute a power of attorney and
unwillingness to allow a refinancing to move forward, one is left
to question whether she gave any consideration in return for a
greater share in the sale proceeds that rightfully belonged to
defendant. Therefore, defendant met her burden of demonstrating
that the purported agreement was unenforceable (see e.g. Connolly
v Knight, 95 AD3d 926, 927-928 [2012]; Von Bing v Mangione, 309
AD2d 1038, 1040 [2003]).2

2
We are unpersuaded that plaintiff is correct in arguing
that General Obligations Law §§ 5-1103 and 5-1107 apply to the
purported agreement between the parties. In any case, those
provisions do not alter the result because the proof demonstrates
that plaintiff materially misrepresented the consideration that
she was willing to give in order to induce defendant to convey a
portion of her ownership interest in the condominium unit (see
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Plaintiff did not raise any questions of fact in response.
An affirmation was submitted by Blumenthal, who handled the
closing when the unit was sold, but he gave no explanation as to
how he has personal knowledge of the facts surrounding the
execution of the agreement. The record thus demonstrates that
defendant is entitled to judgment as a matter of law, and we
modify the order and judgment of Supreme Court to grant her cross
motion insofar as she sought summary judgment dismissing the
complaint. Questions of fact continue to exist with regard to
defendant's counterclaim – which asserts that she is entitled to
counsel fees due to the sanctionable conduct of plaintiff in
commencing this action to recover under the purported agreement –
and further proceedings are required upon that issue.

Lahtinen, J.P. and Lynch, J., concur.

Garry, J. (dissenting).

I respectfully dissent. At the outset, it must be noted
that defendant Ariadne Singares (hereinafter defendant) failed to
object or to seek relief for more than a year following receipt
of the subject contract from plaintiff. When this action was
commenced, defendant did not assert a defense of fraud or
unconscionability. Thereafter, in the affidavits submitted upon
this appeal, defendant did not claim that there was any failure
of consideration, other than plaintiff's failure to execute and
return the power of attorney, a separate document left wholly
unmentioned and unaddressed within the subject contract.

Against this backdrop, the majority determination
nonetheless reaches for parol evidence outside the contract in an
effort to relieve defendant of the unfortunate consequences of
her attorney's poor draftsmanship. This necessarily results in
undermining longstanding principles of contract law. In contract
analysis, the "vital first step" is that "before looking to
evidence of what was in the parties' minds, a court must give due
weight to what was in their contract" (W.W.W. Assoc. v

McFarland v Salerno, 40 AD3d 514, 514 [2007]).
 -6- 518956

Giancontieri, 77 NY2d 157, 162 [1990]). Here, the majority
instead allows an improper reliance upon the parol evidence to
examine the parties' intent, in derogation of the clear and
unambiguous terms of their contract.

It is well settled that "when parties set down their
agreement in a clear, complete document, their writing should as
a rule be enforced according to its terms. Evidence outside the
four corners of the document as to what was really intended but
unstated or misstated is generally inadmissible to add to or vary
the writing" (id. at 162 [citations omitted]; see Stevens &
Thompson Paper Co., Inc. v Niagara Mohawk Power Corp., 49 AD3d
1011, 1012-1013 [2008]; Mount Florence Group v City of Peekskill,
235 AD2d 787, 789 [1997]). Moreover, "courts may not by
construction add or excise terms, nor distort the meaning of
those used and thereby make a new contract for the parties under
the guise of interpreting the writing" (Stevens & Thompson Paper
Co., Inc. v Niagara Mohawk Power Corp., 49 AD3d at 1013 [internal
quotation marks and citations omitted]). Nowhere within this
plainly worded, one-page contract does the term or any reference
to a "power of attorney" appear, nor does the contract contain
anything that would render it ambiguous or remotely susceptible
to differing interpretations. It is solely by first reviewing
and resorting to the parol evidence that any support may be found
for the conclusion that the parties' agreement included a
commitment by plaintiff to provide a power of attorney as
consideration.

This case does not truly fall within the narrow exception
to the parol evidence rule permitting consideration of parol
evidence "to show that what appears to be a contractual
obligation is, in fact, no obligation at all" (Paolangeli v
Cowles, 208 AD2d 1174, 1175 [1994] [internal quotation marks and
citation omitted]). As applied in our cases, including those
cited by the majority, this limited exception applies only where
a party alleges that a document, although appearing to be a
contract, was never intended by the parties to operate as such
(see Paolangeli v Cowles, 208 AD2d at 1175 [parol evidence
admissible where "not offer[ed] . . . to vary the terms of [a]
promissory note, but rather to show that the note was never
intended to take effect"]; Kamp v Fiumera, 69 AD3d 1168, 1170
 -7- 518956

[2010] [parol evidence may be considered when offered "not merely
to contradict the express terms of [a] note, but . . . to
demonstrate that the note was never intended to be an obligation
enforceable against [the defendant]"] [internal quotation marks
and citations omitted]; see also Greenleaf v Lachman, 216 AD2d
65, 65-66 [1995], lv denied 88 NY2d 802 [1996] [parol evidence
admissible to show that "the parties never considered [the
purported loan agreement to be] a binding debt"]). Here, in
contrast, neither party argues that they did not intend to enter
into an enforceable contract; instead, the parties' sole dispute
pertains to whether the contract should have included an
additional, unstated form of consideration. The expansive
interpretation of this exception, as advanced here, threatens to
swallow the parol evidence rule itself by allowing any
dissatisfied party to call an unambiguous contract into doubt by
simply suggesting that some other, additional consideration
beyond that set forth in the contract was contemplated.

Finally, "the commonplace recital of 'other good and
valuable consideration' does not render the . . . contract
ambiguous or incomplete" (Schron v Troutman Sanders LLP, 20 NY3d
430, 436-37 [2013]). If this nearly universal language may be
used to read ambiguity into a contract, there is hardly a
contract in existence that is not thereby rendered susceptible to
judicial second-guessing. This would then ultimately result in
precisely the climate of uncertainty that the parol evidence rule
was designed to prevent. In a variety of contexts we are called
upon to disregard evidence that – although clearly probative to
the case at hand – simply cannot be considered without
threatening fundamental principles of law, based upon sound
underlying policy. I find the exercise of such restraint to be
necessary here. Accordingly, I must dissent.
 -8- 518956

ORDERED that the order and judgment are modified, on the
law, without costs, by reversing so much thereof as granted
plaintiff's motion for summary judgment and denied defendant
Ariadne Singares' cross motion insofar as it sought summary
judgment dismissing the complaint; motion denied, cross motion
granted to that extent, and matter remitted to the Supreme Court
for further proceedings not inconsistent with this Court's
decision; and, as so modified, affirmed.

ENTER:

Robert D. Mayberger
Clerk of the Court