Second Department Dismisses Action for Specific Performance Due to Indefiniteness of Property Description
Print Article- Posted on: Dec 27 2024
Many times, remedies for the breach of a contract other than monetary damages are necessary to make a plaintiff whole. One such remedy is specific performance.[1] The remedy of specific performance “will not be ordered where money damages would be adequate to protect the expectation interests of the injured party.” Sokoloff v. Harriman Estates Development Corp., 96 N.Y.2d 409, 415 (2001) (citations and internal quotation marks omitted). Specific performance is an equitable remedy that, instead of awarding money damages to the prevailing party, requires the breaching party to perform under the contract. “Specific performance is appropriate … when ‘the subject matter of the particular contract is unique and has no established market value.’” BT Triple Crown Merger Co., Inc. v. Citigroup Global Markets Inc., 19 Misc. 3d 1129, *8 (NOR) (Sup. Ct. N.Y. Co. 2008) (quoting Van Wagner Advert. Corp. v. S&M Enters., 67 N.Y.2d 186, 193 (1986)). “The point at which breach of a contract will be redressable by specific performance thus must lie not in any inherent physical uniqueness of the property but instead the uncertainty of valuing it….” Van Wagner, 67 N.Y.2d at 193. The Sokoloff Court also stated that:
The decision whether or not to award specific performance is one that rests in the sound discretion of the trial court. In determining whether money damages would be an adequate remedy, a trial court must consider, among other factors, the difficulty of proving damages with reasonable certainty and of procuring a suitable substitute performance with a damages award (see, Restatement [Second] of Contracts § 360). Specific performance is an appropriate remedy for a breach of contract concerning goods that “are unique in kind, quality or personal association” where suitable substitutes are unobtainable or unreasonably difficult or inconvenient to procure (see, id., comment c).
Sokoloff, 96 N.Y.2d at 415. It is generally accepted that “the equitable remedy of specific performance is routinely awarded in contract actions involving real property, on the premise that each parcel of real property is unique.” Alba v. Kaufman, 27 A.D.3d 816, 818 (3rd Dep’t 2006) (citations and internal quotation marks omitted); EMF General Contracting Corp. v. Bisbee, 6 A.D.3d 45, 52 (1st Dep’t 2004) (same).
In order to be valid, certain contracts for the sale of real property must be in writing to comply with the statute of frauds, New York General Obligations Law 5-703.[2] As we have previously noted in this BLOG, the statute of frauds provides that “[a] contract for the … the sale, of any real property, or an interest therein, is void unless the contract or some note or memorandum thereof, expressing the consideration, is in writing, subscribed by the party to be charged, or by his lawful agent thereunto authorized by writing.”New York General Obligations Law 5-703(2). “To satisfy the statute of frauds, a memorandum evidencing a contract and subscribed by the party to be charged must designate the parties, identify and describe the subject matter, and state all of the essential terms of a complete agreement.” Nesbitt v. Penalver, 40 A.D.3d 596, 598 (2nd Dep’t 2007) (citation and quotation omitted). The memorandum may be informal – it can be a series of emails – and therefore in compliance with the statute of frauds “where it identifies the parties, [and] describes the subject property, [and] recites all essential terms of a complete [real estate] agreement.”O’Brien v. West, 199 A.D.2d 369, 370 (2nd Dep’t 1993). “If the contract does not contain all the necessary terms, the law presumes that the parties have not reached an agreement as to such terms and, therefore the agreement is fatally flawed and unenforceable.” 3-32 Warren’s Weed New York Property § 32.10. In that instance, or if “it is necessary to resort to parol evidence to ascertain what was agreed to, the remedy of specific performance is not available.”Nesbitt, 40 A.D.3d at 598 (some citation and internal quotation marks omitted).
In Madison Trust Co. v. Starwood I, LLC, which was decided on December 18, 2024, the Appellate Division, Second Department, affirmed the dismissal of the plaintiff’s specific performance action due to the insufficiency of the property description. In so doing, the Court stated:
To be enforceable, a contract for the sale of real property must be evidenced by a writing sufficient to satisfy the statute of frauds. A writing satisfies the statute of frauds if it identifies the parties to the transaction, describes the properties to be sold with sufficient particularity, states the purchase price and the down payment required, and is subscribed by the party to be charged. While the description of real property in a contract of sale need not be as detailed and exact as the description in a deed, the property must be described with such definiteness and exactness as will permit it to be identified with reasonable certainty. Where the property is described with such definiteness and exactness as will permit it to be identified with reasonable certainty, parol evidence would then be admissible to enable the court to identify precisely the property to which the contract relates.
Here, the defendants demonstrated their prima facie entitlement to judgment as a matter of law dismissing the cause of action, in effect, for specific performance of the agreement. The agreement specified that the defendants would convey “part of” the 61.40-acre parcel they owned, without any further description of either the amount or location of the land intended to be conveyed. This vague description did not permit the property to be identified with reasonable certainty, such that the defendants demonstrated, prima facie, that the agreement failed to satisfy the statute of frauds. [Citations and internal quotation marks omitted.]
The strict writing requirement imposed by the statute of frauds for the conveyance of real property can sometimes be overcome when there is partial performance of an oral agreement. See, e.g., S&S Golden Estates, LLC v. New York Golf Enterprises, Inc., 216 A.D.3d 831, 832 (2nd Dep’t 2023); Pinkava v. Yurwin, 64 A.D.3d 690, 692 (2nd Dep’t 2009). Indeed, “[c]odified in New York’s General Obligations Law, section 5-703(4), the doctrine of part performance is based on principles of equity, and, specifically, recognition of the fact that it would be a fraud to allow one party to a real estate transaction to escape performance after permitting the other party to perform in reliance on the agreement.” Messner Vetere Berger McNamee Schmetterer Euro RSCG Inc. v. Aegis Group PLC, 93 N.Y.2d 229, 235 (1999) (citations and footnote omitted). In order for one to avail itself of the doctrine, the partial performance relied upon must be “unequivocally referable” to the purported oral agreement. Id; see also Pinkava, 64 A.D.3d at 692, S&S Golden, 216 A.D.3d at 832. “‘Unequivocally referable’ conduct is conduct which is inconsistent with any other explanation.” 745 Nostrand Retail Ltd. v. 745 Jeffco Corp., 50 A.D.3d 768, 769 (2nd Dep’t 2008) (citation and some internal quotation marks omitted).
The Madison Trust Court rejected the plaintiff’s partial performance argument because “[i]n light of all of the surrounding circumstances testified to by the parties, the plaintiffs’ $220,000 payment to the defendants was not explainable only with reference to the alleged agreement.”
Jonathan H. Freiberger is a partner and co-founder of Freiberger Haber LLP. This article is for informational purposes and is not intended to be and should not be taken as legal advice.
[1] Eds. Note: this BLOG has written numerous articles addressing specific performance of, inter alia, real estate contracts. To find BLOG articles related to specific performance, visit the “Blog” tile on our website and enter “specific performance” (or any related topic of interest) in the “search” box.
[2] Moreover, the definiteness doctrine requires that promises must be “sufficiently certain and specific” before “the power of the law can be invoked to enforce” same. Joseph Martin, Jr., Delicatessen, Inc. v. Schumacher, 52 N.Y.2d 105, 109 (1981). This BLOG has previously discussed the definiteness doctrine [here].
