SUPREME COURT OF THE STATE OF NEW YORK

 Appellate Division, Fourth Judicial Department

751 

CA 13-01334 

PRESENT: SMITH, J.P., CENTRA, CARNI, WHALEN, AND DEJOSEPH, JJ. 

 

 

ROGER PASQUARELLA AND 2030 ELMWOOD AVENUE, INC., 

PLAINTIFFS-RESPONDENTS, 

 

V MEMORANDUM AND ORDER

 

1525 WILLIAM STREET, LLC, DEFENDANT-APPELLANT. 

 

STEINER & BLOTNIK, BUFFALO (RICHARD J. STEINER OF COUNSEL), FOR 

DEFENDANT-APPELLANT. 

AUGELLO & MATTELIANO, LLP, BUFFALO (JOSEPH A. MATTELIANO OF COUNSEL), 

FOR PLAINTIFFS-RESPONDENTS. 

 

Appeal from an order of the Supreme Court, Erie County (Timothy J. 

Walker, A.J.), entered May 23, 2013. The order granted the motion of 

plaintiffs for summary judgment. 

It is hereby ORDERED that the order so appealed from is unanimously 

affirmed without costs.

Memorandum: In this action arising from a contract for the sale 

of a parcel of real property, defendant appeals from an order granting 

plaintiffs= motion for summary judgment on their cause of action for 

specific performance. Plaintiffs negotiated intermittently over a 

two-year period to purchase the subject parcel from defendant, a limited 

liability corporation (LLC). All of the contractual negotiations were 

conducted by Zvi Sultan, who indicated to plaintiffs that he was 

president-principal of defendant, by plaintiff Roger Pasquarella as agent 

for the business that subsequently became plaintiff 2030 Elmwood Avenue, 

Inc. (2030 Elmwood), and by the attorneys for the parties. Throughout 

the negotiations, defendant=s attorney acted as if Sultan had authority 

to negotiate on defendant=s behalf. There were several lengthy breaks

in the negotiations, but the parties eventually finalized the details 

of the contract, and, in April 2012, the contract was signed. Sultan, 

in executing the contract on behalf of defendant, indicated that he was 

defendant=s manager, and defendant=s attorney accepted plaintiffs= deposit 

of $7,500.00. When plaintiffs= attorney sought the documents that, 

pursuant to the contract, defendant was obligated to provide prior to 

closing, defendant declined to provide them and refused to schedule a 

closing date. Defendant sought to return plaintiffs= deposit after this 

action was commenced, using the services of a different attorney. 

Defendant contended that Sultan had no authority to bind defendant because, 

shortly before the contract was signed, Sultan sold a controlling interest 

in defendant to his son, and the operating agreement between the two 
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provided that a sale of corporate property must be approved by all members. 

We agree with plaintiffs that, in support of their motion for summary 

judgment, they demonstrated that they Asubstantially performed [their] 

contractual obligations and w[ere] willing and able to perform [their] 

remaining obligations@ (EMF Gen. Contr. Corp. v Bisbee, 6 AD3d 45, 51, 

lv dismissed 3 NY3d 656, lv denied 3 NY3d 607; see generally Pesa v Yoma 

Dev. Group, Inc., 18 NY3d 527, 530-531), and thus demonstrated that they 

were entitled to summary judgment (see generally Zuckerman v City of New 

York, 49 NY2d 557, 562). 

In opposition, defendant failed to raise a triable issue of fact 

whether Sultan lacked apparent authority to bind defendant contractually. 

AEssential to the creation of apparent authority are words or conduct 

of the principal, communicated to a third party, that give rise to the 

appearance and belief that the agent possesses authority to enter into 

a transaction. The agent cannot by his own acts imbue himself with 

apparent authority. Rather, the existence of apparent authority depends 

upon a factual showing that the third party relied upon the 

misrepresentation of the agent because of some misleading conduct on the 

part of the principal C not the agent@ (Hallock v State of New York, 64 

NY2d 224, 231 [internal quotation marks omitted]; cf. N.X. v Cabrini Med. 

Ctr., 97 NY2d 247, 252 n 3). Here, we conclude that plaintiffs reasonably 

relied on, inter alia, their prior course of dealing with Sultan in his 

capacity as president, principal and manager of defendant (see Benderson 

Dev. Co. v Schwab Bros. Trucking, 64 AD2d 447, 456; see also Federal Ins. 

Co. v Diamond Kamvakis & Co., 144 AD2d 42, 46-47, lv denied 74 NY2d 604). 

In addition, the record establishes that defendant allowed its attorney 

to act in a manner consistent with Sultan=s continued authority, and that 

defendant accepted the deposit that plaintiffs provided to that attorney 

in conjunction with the signing of the contract, thus Agiv[ing] rise to 

the appearance and belief that [Sultan] possesse[d] authority to enter 

into [the] transaction@ (Hallock, 64 NY2d at 231). Defendant therefore 

Aallowed [Sultan] to represent that he had the requisite authority[,] 

and it may not now be denied@ (Benderson Dev. Co., 64 AD2d at 456; cf.

56 E. 87th Units Corp. v Kingsland Group, Inc., 30 AD3d 1134, 1134-1135). 

Finally, we note that Limited Liability Company Law ' 412 (a) provides 

that, A[u]nless the articles of organization of a limited liability company 

provide that management shall be vested in a manager or managers, every 

member is an agent of the limited liability company for the purpose of 

its business, and the act of every member, including the execution in 

the name of the limited liability company of any instrument, for apparently 

carrying on in the usual way the business of the limited liability company, 

binds the limited liability company, unless (i) the member so acting has 

in fact no authority to act for the limited liability company in the 

particular matter and (ii) the person with whom he or she is dealing has 

knowledge of the fact that the member has no such authority.@ A nearly 

identical subsection provides that, where management of an LLC is vested 

in a manager, the acts of the manager are binding upon the LLC unless 

the manager at issue has in fact no authority to act for the LLC, and 

the person with whom he or she is dealing knows that the manager lacks 
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CA 13-01334 

such authority (' 412 [b] [2] [A], [B]). Thus, regardless whether Sultan 

was acting as a manager of defendant, as reflected by his signature on 

the contract, or as a member of defendant, as he and defendant=s attorney 

previously had indicated to plaintiffs, he had apparent authority to act 

and his acts were binding upon defendant unless, inter alia, plaintiffs 

had Aknowledge of the fact that [Sultan] ha[d] no such authority@ (' 412 

[a] [i]; [b] [2] [B]). Here, defendant failed to tender any evidence 

indicating that plaintiffs had knowledge of the recent limitation of 

Sultan=s authority. Consequently, defendant failed to raise a triable 

issue of fact whether Sultan lacked authority to enter into the contract 

and thereby bind defendant to perform it (see Zuckerman, 49 NY2d at 562).

Entered: August 8, 2014 Frances E. Cafarell

Clerk of the Court