Breslin Realty Development Corp. v. Incorporated Village of Freeport

— In an action for specific performance of á contract for the purchase of real property, the plaintiff appeals from an order of the Supreme Court, Nassau County (Roncallo, J.), dated February 25, 1988, which granted the defendants’ motion to dismiss the complaint as barred by the Statute of Frauds. Ordered that the order is affirmed, without costs or disbursements. During the fall of 1986, the defendants Cacciatore, DiCostanzo, Smith and Cohen, members of the Board of Trustees (hereinafter the Board) of the defendant Village of Freeport (hereinafter the Village), "did by public invitation and solicitation invite public offers for the purchase and development” of certain realty in the Village of Freeport, i.e., the Freeport Municipal Stadium. In response to this public invitation, the plaintiff timely submitted a written proposal to purchase and develop the subject premises for $2,500,000. By letter dated February 27, 1987, the defendant Storm, the Mayor of the defendant Village, wrote to the plaintiff stating that at the meeting of the Board on February 23, 1987, the Board had approved the plaintiff’s "submitted proposal for development of the Freeport Stadium parcel in the amount of $2,500,000”. After several months of unsuccessful negotiations between the parties with respect to the execution of a formal contract, the Board, at its meeting of August 31, 1987, voted affirmatively on a motion to break off negotiations with, and rescind its award to, the plaintiff. In this action by the plaintiff for specific performance, the defendants moved to dismiss the complaint on the ground that the alleged agreement violated the Statute of Frauds, i.e., it was not "in writing, subscribed by the party to be charged, or by his lawful agent thereunto authorized by writing” (General Obligations Law § 5-703 [2]). In opposition to the defendants’ motion, the plaintiff argued, inter alla, that the Board’s invitation to bid, the plaintiff’s acceptance thereof, and the Mayor’s signed letter dated February 27, 1987, taken together, satisfied the Statute of Frauds. The Supreme Court granted the defendants’ motion and dismissed the complaint. We agree with the Supreme Court’s determination. It is well settled that: "Subdivision 2 of section 5-703 of the General Obligations Law requires contracts covering real [577] property to be in writing but a contract for the sale of property will not be void if evidenced by a sufficient written note or memorandum subscribed by the party to be charged. * * * If the memorandum is to prove the agreement, it must * * * state all the essential and material terms of the agreement (Villano v G & C Homes, 46 AD2d 907; cf. Birnhak v Vaccaro, 47 AD2d 915, 916). If it does so, the fact that it provides for the subsequent execution of a more formal writing which is not done, will not impair its effectiveness (Lash-way v Sorell, 51 AD2d 97, 98). * * * On the other hand, a provision or undertaking in the memorandum that a more formal contract is to be executed later, when coupled with the fact that material terms have been omitted or left for future negotiation and settlement, renders the memorandum insufficient. In such a case, it is clear that the parties did not intend the memorandum to evidence their complete or final agreement” (Read v Henzel, 67 AD2d 186, 188-189; see also, Willmott v Giarraputo, 5 NY2d 250). In the case at bar, the defendants’ "public invitation for DEVELOPMENT PROPOSAL OF FREEPORT MUNICIPAL STADIUM SITE” (hereinafter Public Invitation) which was accepted by the plaintiff, clearly contemplated the parties’ execution of a formal contract in the future by providing, inter alia: "All proposals must include a narrative statement as to available financing and financial ability of the developer to enter into contract within sixty (60) days of an acceptance of the proposal and further contingent upon the developer’s ability to post a ten percent (10%) deposit of the proposal price at the signing of the contract” (emphasis supplied). Moreover, there were material terms which were left for future negotiations between the parties. The Public Invitation specifically stated that "the instruments of conveyance will contain restrictive covenants limiting the use of the parcel to the uses contained in the proposal” and that "[s]aid covenants will also contain rights of reversion in the event restrictive covenants are breached”. The record indicates that for a period of approximately four months, the parties exchanged drafts of a formal contract containing various proposals with respect to restrictive covenants and rights of reversion. This exchange constitutes further evidence that the parties did not intend to be bound until the signing of a formal contract (see, Monaco v Nelson, 121 AD2d 371). Under these circumstances, the complaint was properly dismissed. Mangano, J. P., Eiber and Hooper, JJ., concur.