Case ID: ad2d_213/html/0351-01.html
Source: Caselaw Access Project
Author: {"author": "", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

Lex Tenants Corp., Respondent, v Gramercy North Associates et al., Appellants.
    [624 NYS2d 414]
   —Judgment, Supreme Court, New York County (Alice Schlesinger, J.), entered July 22, 1994, awarding damages in favor of plaintiff cooperative housing corporation and against defendants sponsor and its principals, and bringing up for review an order, same court and Justice, entered July 7, 1994, which, insofar as appealed from, granted plaintiffs motion for summary judgment on its cause of action for conversion of a security deposit, unanimously affirmed, without costs. The appeal from the above order is unanimously dismissed as subsumed within the appeal from the above judgment, without costs.

We agree with the IAS Court that defendant sponsor’s assignment to plaintiff cooperative of its security deposit on the ground lease is not amenable to mutual mistake analysis (see, Chimart Assocs. v Paul, 66 NY2d 570), since the assignment which was executed by one of the sponsor’s principals alone, on behalf of both the sponsor and the cooperative, was not an arm’s length transaction; that the assignment should not be reformed on the ground of unilateral mistake because the amount involved, being only one-quarter of one percent of the total offering price, is immaterial; and also because the party in error, who admits that he did not read the assignment before executing it, did not exercise ordinary care (21 NY Jur 2d, Contracts, § 121; Seyfried v Greenspan, 92 AD2d 563, 566, lv denied 58 NY2d 1114); and that defendants should bear the risk of any mistake (see, Restatement [Second] of Contracts § 154 [c]), since plaintiff was under their control at the time of the assignment, and as sponsors they owe plaintiff and its shareholders "the most rigid standards of fair dealing and good faith” (People v Lexington Sixty-First Assocs., 38 NY2d 588, 595). Concur—Rubin, J. P., Ross, Nardelli, Williams and Tom, JJ.