Alper Restaurant, Inc. v. Catamount Development Corporation

State of New York
Supreme Court, Appellate Division
Third Judicial Department
Decided and Entered: March 31, 2016 521790
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ALPER RESTAURANT, INC., Also
Known as SWISS HUTTE,
et al.,
Appellants,
v MEMORANDUM AND ORDER
CATAMOUNT DEVELOPMENT
CORPORATION et al.,
Respondents,
et al.,
Defendants.
________________________________
Calendar Date: February 8, 2016
Before: McCarthy, J.P., Egan Jr., Rose, Devine and Clark, JJ.
__________
Tuczinski, Cavalier & Gilchrist, PC, Albany (Jonathon B.
Tingley of counsel), for appellants.
Roemer Wallens Gold & Mineaux, LLP, Albany (Matthrew J.
Kelly of counsel), for Catamount Development Corporation,
respondent.
Freeman Howard, PC, Hudson (Andrew B. Howard of counsel),
for Rock Solid Development, LLC, respondent.
__________
Clark, J.
Appeal from an order of the Supreme Court (Mott, J.),
entered December 8, 2014 in Columbia County, which, among other
things, granted a motion by defendant Rock Solid Development, LLC
for summary judgment dismissing the complaint against it.
-2- 521790
Defendant Catamount Development Corporation owns and
operates a seasonal ski area in the Town of Copake, Columbia
County. In the early 2000s, Catamount and Neopolis Consulting
Company, LLC sought approval to develop and construct a resort
hotel on a roughly 10-acre parcel of real property owned by
Catamount. Plaintiffs Gert H. Alper and Cynthia W. Alper own and
operate plaintiff Alper Restaurant, Inc., also known as Swiss
Hutte, on real property that is adjacent to the 10-acre parcel.
In 2005, Neopolis, Catamount and plaintiffs entered into an
agreement relating to the construction of a resort hotel.
Specifically, plaintiffs and Catamount agreed that they would
each convey certain parcels of land (hereinafter referred to as
parcels 4 and 5) to Neopolis "to enable Neopolis, at its cost and
expense, to construct a road to be dedicated to [defendant] Town
[of Copake] for public road purposes." In exchange, the Town was
to convey a particular parcel of real property to plaintiffs
(hereinafter referred to as parcel 2), and Neopolis agreed to
adhere to certain construction restrictions and perform various
construction projects that were favorable to plaintiffs,
including "construct[ing] a delivery and emergency vehicle access
road to the proposed resort hotel." The parties' obligations
under the agreement were binding upon and enforceable against
their successors and assigns. The Town of Copake Planning Board
granted Neopolis conditional site plan approval, but Neopolis
ultimately withdrew from the project.
In January 2011, plaintiffs and Catamount "relinquishe[d]
all rights, title and interest to any rights of way and easements
over and upon the property of [the other party] that it may have
acquired by express grant, adverse possession, or use, except
existing utility easements." Thereafter, the Alpers, believing
that it "was [their] obligation to do so under the 2005
agreement," and Catamount conveyed parcels 4 and 5 to the Town,
and the Town conveyed parcel 2 to the Alpers. In 2013, Catamount
and defendant Rock Solid Development, LLC – "a holding company
for development activities" that was established in 2012 –
applied for grant funding and various municipal approvals to
construct a resort hotel on Catamount's land. The plans
associated with the project did not include the construction of a
secondary access road.
-3- 521790
Plaintiffs commenced this action against Catamount and Rock
Solid, among others, seeking specific performance of the 2005
agreement or, alternatively, damages for breach of contract.
Following joinder of issue, but prior to discovery, Rock Solid
moved for summary judgment dismissing the complaint against it,
on the basis that it was not in privity of contract with
plaintiffs, and seeking an award of costs and/or sanctions
pursuant to 22 NYCRR 130.1-1. Supreme Court granted Rock Solid's
motion for summary judgment dismissing the complaint against it,
but denied its request for costs and/or sanctions. Plaintiffs
appeal.
In their complaint, plaintiffs alleged that Rock Solid was
bound by the 2005 agreement as Catamount's joint venturer or
partner. Liability under a contract can arise in the absence of
privity where it is established that the defendant is in a joint
venture or partnership with a signatory to the contract (see
Partnership Law § 28; Griffith Energy, Inc. v Evans, 85 AD3d
1564, 1565-1566 [2011]). "A joint venture is an association of
two or more persons to carry out a single business enterprise for
profit, for which purpose they combine their property, money,
effects, skill and knowledge" (Kaufman v Torkan, 51 AD3d 977, 979
[2008] [internal quotation marks and citation omitted]; see
Gramercy Equities Corp. v Dumont, 72 NY2d 560, 565 [1988];
Ackerman v Landes, 112 AD2d 1081, 1082 [1985]). "The essential
elements of a joint venture are an agreement manifesting the
intent of the parties to be associated as joint venturers, a
contribution by the coventurers to the joint undertaking (i.e., a
combination of property, financial resources, effort, skill or
knowledge), some degree of joint proprietorship and control over
the enterprise; and a provision for the sharing of profits and
losses" (Schultz v Sayada, 133 AD3d 1015, 1016 [2015] [internal
quotation marks and citation omitted]; see Clarke v Sky Express,
Inc., 118 AD3d 935, 935 [2014]).
Here, Supreme Court concluded that Rock Solid established
its prima facie entitlement to summary judgment as a matter of
law by demonstrating that it was not a party to the 2005
agreement or a successor to Neopolis. While Rock Solid's
submissions on the motion did establish that it "ha[d] not
purchased, acquired and/or assumed" Neopolis and that Neopolis
-4- 521790
was still in existence at the time of the motion, the court
failed to address whether Rock Solid satisfied its additional
burden to refute plaintiffs' assertions in the complaint that
Rock Solid was Catamount's joint venturer or partner. Had the
court performed such an inquiry, it would have discovered that
Rock Solid did not submit any evidence to that effect and that,
in fact, Rock Solid's own submission raised a question of fact as
to the nature of its relationship with Catamount. Specifically,
Rock Solid submitted a grant funding application stating that
Catamount was one of its "development partners" and that, upon
receipt of the grant, a new development entity would be formed
and each partner would "be contributing equity (cash or land) as
well as their expertise." Accordingly, inasmuch as Rock Solid
failed to satisfy its initial burden on the motion by tendering
sufficient evidence to demonstrate the absence of any material
issues of fact as to whether it was in a joint venture or
partnership with Catamount, Supreme Court improperly granted Rock
Solid's motion for summary judgment dismissing the complaint
against it (see Mendelovitz v Cohen, 66 AD3d 849, 850 [2009];
compare Village of Wellsville v Village of Andover, 231 AD2d 870,
870-871 [1996]).
We have reviewed Rock Solid's and Catamount's alternate
arguments for affirmance, including their assertion that this
action was not the proper vehicle for plaintiffs to enforce their
rights under the 2005 agreement, and find them to be without
merit.
McCarthy, J.P., Egan Jr., Rose and Devine, JJ., concur.
-5- 521790
ORDERED that the order is modified, on the law, without
costs, by reversing so much thereof as granted the motion of
defendant Rock Solid Development, LLC for summary judgment
dismissing the complaint against it; said motion denied; and, as
so modified, affirmed.
ENTER:
Robert D. Mayberger
Clerk of the Court