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DRAFT FOR ATTORNEY REVIEW — NOT FINAL

Gedula 26, LLC v. Lightstone Acquisitions III LLC, 213 A.D.3d 409 (2023)

Citation
Gedula 26, LLC v. Lightstone Acquisitions III LLC, 213 A.D.3d 409 (2023)
Parent Document
Gedula 26, LLC v. Lightstone Acquisitions III LLC, 213 A.D.3d 409 (2023)
Jurisdiction
New York (state)
Effective Date
2023-02-02

Full Text

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As the motion court properly determined in denying summary judgment to both parties on the contract claims, "the statute of frauds . . . does not render void oral partnership or joint venture agreements to deal in real property" (Livathinos v Vaughan, 121 AD3d 485, 486 [1st Dept 2014]). This case is distinguishable from the statute of frauds cases Gora v Drizin (300 AD2d 139 [1st Dept 2002]) and Magnum Real Estate Servs., Inc. v 133-134-135 Assoc., LLC (59 AD3d 362 [1st Dept 2009]), where, as here, plaintiffs' sale of the real property to defendant 485 Seventh Avenue Associates LLC (485 Seventh) was the subject of a separate purchase and sale agreement (PSA). Here, plaintiff did not sell 100% of the real property to 485 Seventh under the PSA and then seek to subsequently retain a 25% interest in the real property in a separate transaction. Rather, plaintiff alleges that it intended to form a joint venture to obtain an interest in the hotel business to be operated at the real property (see e.g. Ackerman v Landes, 112 AD2d 1081, 1083 [2d Dept 1985] ["it is questionable whether the agreement alleged by plaintiffs can be characterized as one to acquire an interest in real property, as the alleged agreement contemplated the eventual purchase of a business, not merely the real property owned by that business"]). We also reject defendants' argument raised in their earlier appeal that the PSA's merger clause in section 20 bars the putative joint venture agreement, as it is well settled that a merger clause will not "preclude a breach of contract claim based on a subsequent additional agreement" (Cathy Daniels, Ltd. v Weingast, 91 AD3d 431, 434 [1st Dept 2012]). Because a question of fact remains with respect to the contract claims, we do not reach the question of whether the putative agreement was repudiated by defendants or whether plaintiffs' damages [*2]calculation was to be credited (see Wathne Imports, Ltd. v PRL USA, Inc., 101 AD3d 83, 87-89 [1st Dept 2012]).