In this action arising from the cancellation of a sale of hallway closets in a residential cooperative in Manhattan, the plaintiffs, hopeful bidders, seek, inter alia, money damages for breach of fiduciary duty and breach of contract. The defendants, the corporation and its board members, move, pre-answer, to dismiss the complaint on the grounds that the plaintiffs failed to [*2]state a cause of action (CPLR 3211[a][7]). For the reasons set forth below, the defendants' motion is granted.

The instant action concerns the prospective sale of three closets and two bathrooms located in the common hallways of the cooperative apartment building owned by defendant 911 Alwyn Owners Corp. (the "co-op"). On June 3, 2013, the co-op's managing agent, non-party Halstead Management Company, LLC, sent a notice to all shareholders advising that the co-op was soliciting bids to purchase these spaces. The memo stated that the spaces would be sold to the highest bidder. One of the hallway spaces included in the bidding process was and remains leased by plaintiff Martin Newman, a shareholder and proprietary lessee in the co-op. Another is leased by defendant Mark Branigan, a member of the board of directors.

Plaintiff Newman submitted a sealed bid for one of the closets and one of the bathrooms, which exceeded the minimum amount, on June 24, 2013. Later the same day the co-op rejected the bids it received and subsequently opened an additional round of bidding. The plaintiff submitted a second bid on June 27, 2013, and the managing agent informed him the next day that it was the highest bid for two of the hallway spaces. Thereafter, on August 22, 2013, the managing agent issued a memorandum to all shareholders informing them that the Board of Directors decided not to accept any of the bids submitted and did not take any deposits or enter into any contracts of sale for the hallway closets and bathrooms. The memorandum stated that the Board of Directors cancelled the proposed sale on the grounds that continuing to rent the closets and bathrooms would be more economically advantageous for the co-op.

On March 31, 2014, the plaintiff commenced this action by summons with notice. His complaint, filed June 9, 2014, alleges that he and "Ms. Bronte", another shareholder, were both the highest bidders for most, if not all, of the hallway spaces in both rounds of bidding. The plaintiff alleges that defendants Matus, Branigan, O'Connor, and Friedman (the "individual defendants"), each a member of the board of directors, misused their power to prevent him and Ms. Bronte, both former board members, from purchasing any of the hallway spaces. The plaintiff alleges that the board's personal animus against him is demonstrated by letters posted in the lobby after the commencement of this action which were an attempt to bully him into discontinuing the instant action. The complaint asserts causes of action for breach of fiduciary duty and negligent misrepresentation against the individual defendants and two causes of action for breach of contract against the corporation seeking specific performance and money damages.

The defendants moved to dismiss the complaint pursuant to CLR 3211(a)(7) on the grounds that the complaint fails to state a cause of action for breach of fiduciary duty, breach of contract, or negligent misrepresentation. Specifically, the defendants argue that the plaintiff fails to allege independent tortious conduct by any individual defendant and the requisite wanton or malicious acts to support his claim for punitive damages have not been alleged. The defendants further argue that the plaintiff's claims for breach of contract must fail because the plaintiff's bid did not create a contract between the plaintiff and any defendant. The defendants argue that the plaintiff's negligent misrepresentation cause of action must be dismissed because the [*3]plaintiff fails to allege any detrimental reliance and the claim is duplicative of the breach of contract causes of action.

In opposition, the plaintiff submitted an amended complaint adding Sharon Bronte as a plaintiff and asserting three causes of action against the defendants, one for breach of fiduciary duty against the individual defendants and two for breach of contract against the co-op seeking specific performance and damages, based on the same conduct alleged in the original complaint. The plaintiffs argue that the business judgment rule does not protect the board of directors from liability because they acted in bad faith and not in the best interests of the co-op in deciding to cancel the sale. The plaintiffs allege that the individual defendants were motivated by self-dealing and acted in retaliation for the plaintiffs' criticism of their prior actions. The plaintiffs contend that emails informing them that they "won" or were the highest bidder for particular spaces evidence the co-op's approval of their purchase and, thus, formed a valid contract between the parties. The plaintiffs argue that because their breach of fiduciary duty claim is viable, the claim for punitive damages should not be dismissed.

As the plaintiffs filed an amended complaint as of right pursuant to CPLR 3025 with their opposition to the defendants' motion to dismiss, the defendants have the option to decide whether their motion should be applied to the new pleadings. See Sobel v Ansanelli, 98 AD3d 1020 (2nd Dept. 2012); Fownes Brothers & Company, Inc. v JP Morgan Chase & Co., 92 AD3d 582 (1st Dept. 2012); DiPasquale v Security Mutual Life Ins. Co. of New York, 293 AD2d 394 (1st Dept. 2002). In their reply, the defendants have elected to proceed with their motion and apply it to the amended complaint.

In reply, the defendants argue that the amended complaint fails to cure any of the deficiencies of the original complaint. Specifically, the defendants argue that the board's right to cancel the auction does not constitute a breach of fiduciary duty and there is no allegation that the board's conduct was discriminatory or arbitrary. The defendants reiterate their arguments that the plaintiffs failed to allege that any individual defendant engaged in an independent tort, the amended complaint fails to sufficiently plead the existence of a contract between the parties, and the claim for punitive damages is deficient.

In considering a motion to dismiss for failing to state a cause of action under CPLR 3211(a)(7), the pleading is to be afforded a liberal construction and the court should accept as true the facts alleged in the complaint, accord the pleading the benefit of every reasonable inference, and only determine whether the facts, as alleged, fit within any cognizable legal theory. See Hurrell-Harring v State of New York, 15 NY3d 8 (2010); Leon v Martinez, 84 NY2d 83 (1994). At a minimum, a valid complaint must include "all material elements of the cause[s] of action." CPLR 3013; see MatlinPatterson ATA Holdings LLC v Federal Express Corp., 87 AD3d 836 (1st Dept. 2011) lv denied 21 NY3d 853 (2013). Moreover, where the allegations contained in the pleadings consist of bare legal conclusions, they are not entitled to such consideration. See Beattie v Brown & Wood, 243 AD2d 395 (1st Dept. 1997). The plaintiffs have not met their burden.

Like any other corporate board, the board of a residential cooperative has a fiduciary duty to the shareholders, and where violations of individual board members' fiduciary duties are alleged, a breach of fiduciary duty claim may be maintained against such individuals. See Ramos v 24 Cincinatus Corp., 104 AD3d 619 (1st Dept. 2013); Fletcher v Dakota, Inc., 99 AD3d 43 (1st Dept. 2012); Ackerman v 305 East 40th Owners Corp., 189 AD2d 665 (1st Dept. 1993). However, the party challenging the board's actions has the burden of demonstrating the breach (see Silverstein v Westminster House Owners. Inc., 50 AD3d 257, 258 [1st Dept. 2008]) by showing "(1) the existence of a fiduciary relationship, (2) misconduct by the defendant, and (3) damages directly caused by the defendant's misconduct." See Parekh v Cain, 96 AD3d 812, 816 (2nd Dept. 2012) citing Rut v Young Adult Inst., Inc., 74 AD3d 776, 777 (2nd Dept. 2010).

It is also well settled that "[t]he proper standard of judicial review of decisions by a residential cooperative corporation is the business judgment rule." Silverstein v Westminster House Owners. Inc., supra. This rule does not permit judicial inquiry into actions of a co-op board "taken in good faith and in the exercise of honest judgment in the lawful and legitimate furtherance of corporate purposes." Matter of Levandusky v One Fifth Ave. Apt. Corp., 75 NY2d 530, 537-538 (1990); see Matter of Cylich v Riverbay Corp., 74 AD3d 646, 647 (1st Dept. 2010); Park Royal Owners, Inc., 19 AD3d 246 (1st Dept. 2005).

Applying these guidelines, and accepting all the plaintiffs' factual allegations as true, they fall short establishing a breach of fiduciary duty claim against the corporate board or individual members. See Silverstein v Westminster House Owners. Inc., supra; DeRaffele v 210-220-230 Owners Corp., 33 AD3d 752 (2nd Dept. 2006), lv denied 8 NY3d 814 (2007), rearg denied 9 NY3d 933 (2007); Solow v New Northern Brokerage Facilities, Inc., 255 AD2d 198 (1st Dept. 1998). While the existence of a fiduciary relationship is not disputed, the plaintiffs have not alleged any misconduct on the part of the defendants that might be construed as a breach of that duty. The board's decision to cancel the sale of all hallway spaces does not constitute such a breach as to the plaintiffs or any shareholder, and the plaintiffs' bald allegation that the co-op's loss of immediate revenue from the sales was detrimental to the coop's finances is unsupported. Indeed, the plaintiffs acknowledge that the board determined that it would be financially advantageous to all shareholders to continue to lease the spaces rather than sell them. The fact that the decision allowed one board member to continue to lease one of the spaces does not, alone, make it a breach of fiduciary duty. Indeed, the cancellation of the sale also permitted plaintiff Newman to continue to lease the space he had been leasing. Although the plaintiffs generally allege that the individual defendants harbored a personal animus toward each of them, they do not allege that they were treated unfairly or inequitably in relation to other shareholders. Absent factual allegations showing that the cancellation of the sale was not taken "in good faith and in the exercise of honest judgment in the lawful and legitimate furtherance of corporate purposes" (Matter of Levandusky v One Fifth Ave. Apt. Corp., supra at 537-538), further judicial inquiry is barred by the business judgment rule, and the plaintiffs' claim for breach of fiduciary duty must be dismissed pursuant to CPLR 3211(a)(7).

To properly state a cause of action for breach of contract, a plaintiff must allege: (1) the [*5]existence of a contract, (2) the plaintiff's performance under the contract; (3) the defendant's breach of that contract, and (4) resulting damages from the breach. See Elisa Dreier Reporting Corp. v Global Naps Networks, Inc., 84 AD3d 122 (2nd Dept. 2011); Harris v Seward Park Housing Corp., 79 AD3d 425 (1st Dept. 2010); JP Morgan Chase v J.H. Elec. of New York, Inc., 69 AD3d 802 (2nd Dept. 2010).

To create a binding and enforceable contract, there must be an objective meeting of the minds with respect to the material terms of the agreement. See Metropolitan Enterp. NY v Khan Enterp. Construction, Inc., 124 AD3d 609 (2nd Dept. 2015); Mode Contempo, Inc. v Raymours Furniture Co., Inc., 80 AD3d 464 (1st Dept. 2011). That is, "there must be a manifestation of mutual assent sufficiently definite to assure that the parties are truly in agreement with respect to all material terms." Express Industries and Terminal Corp. v New York State Dept. of Transp., 93 NY2d 584, 589 (1999), rearg denied 93 NY2d 1042 (1999); see Silber v New York Life Insurance Co., 92 AD3d 436 (1st Dept. 2012); Minelli Construction Co. Inc. v Volmar Constr., Inc., 82 AD3d 720 (2nd Dept. 2011).

By contrast, a bid is an "offer to pay a specified price for something that may or may not be for sale." Black's Law Dictionary 183 (9th Ed. 2009). The solicitation of bids merely constitutes a request for offers and the soliciting party has the option to accept or reject any or all offers tendered. See S.S.I. Investors Ltd. v Korea Tungsten Mining Co., Ltd., 80 AD2d 155 (1st Dept. 1981) aff'd 55 NY2d 934 (1981). Thus, no contract exists until a bid has been accepted. See G.L.G. Mini-Storage, Inc. v County of Nassau, 251 AD2d 329 (2nd Dept. 1998). Indeed, the party or body soliciting bids has a right to reject all submitted bids and "reappraise the entire situation" or conduct "an appropriate study" before going forward. Square Parking Systems, Inc. v Metropolitan Transp. Auth., 92 AD2d 782, 784 (1st Dept. 1983); app dism 59 NY2d 608 (1983), lv app dism 60 NY2d 586 (1983).

Here, even affording the complaint the benefit of every reasonable inference, the undisputed facts establish only a solicitation of bids, and not the existence of any valid and binding contract. The plaintiffs do not plead facts indicating that their bids were accepted so as to form a contract, and thus fail to state a cognizable claim for breach of contract. See G.L.G. Mini-Storage, Inc. v County of Nassau, supra. While the managing agent's emails to the plaintiffs indicate that their bids on certain hallway spaces were the highest, the plaintiffs also allege that the managing agent informed them that the board had yet to resolve the issue of existing leases for the spaces, which was necessary before the sale could continue and before their bids and deposits could be accepted. There is no allegation, nor could there be, that such emails from the managing agent constituted the requisite board approval. Because the potential sale was cancelled before the plaintiffs' bids and deposits were accepted, there was no meeting of the minds between the parties and thus no binding agreement. Upon these facts "it cannot be said that these parties intended to be bound by the bid submitted [by] the plaintiff. Any such intention is solely that of the plaintiff and this unilateral, subjective manifestation cannot be elevated to the level of an enforceable contract." S.S.I. Investors Ltd. v Korea Tungsten Mining Co., Ltd., supra at 159; see Silber v New York Life Insurance Co., supra.

Because no contract existed in the first instance, the plaintiffs can show neither their own performance under the contract nor the defendant's failure to perform, two material elements of such a claim. See CPLR 3013; Harris v Seward Park Housing Corp., supra; JP Morgan Chase v J.H. Elec. of New York, Inc., supra. Furthermore, absent a contract, specific [*6]performance is unavailable to the plaintiffs. "Specific performance may be awarded only where there is a valid existing contract for which to compel performance." Rojas v Paine, 101 AD3d 843, 846 (2nd Dept. 2012); see Pfeifer v Groisman, 123 AD3d 684 (2nd Dept. 2014); Richmond v Miele, 30 AD3d 575 (2nd Dept. 2006), lv denied 8 NY3d 805 (2007).

The amended complaint contains no "allegations from which damages attributable to the defendants' conduct may reasonably be inferred" (Lappin v Greenberg, 34 AD3d 277, 279 [1st Dept. 2006]) in regard to either the breach of fiduciary duty claim or the breach of contract claim. Indeed, the plaintiffs do not explain how they suffered any actual damages, much less the $750,000 sought from the corporation and the individual board members on the breach of fiduciary duty claim and the $200,000 sought from the corporation on the breach of contract claim. See Milan Music, Inc. v Emmel Communications Booking, Inc., 37 AD3d 206 (1st Dept. 2007); Gordon v Dino De Laurentiis Corp., 141 AD2d 435 (1st Dept. 1988). The amended complaint is silent as to the basis of those sums.

Finally, because the complaint fails to state a cause of action, there can be no punitive damages. In any event, no showing has been made of any conduct manifesting "spite or malice, or fraudulent or evil motive on the part of the defendant or such a conscious and deliberate disregard of the interests of others that the conduct may be called wilful or wanton." Marinaccio v Town of Clarence, 20 NY3d 506, 511 (2013), rearg denied 21 NY3d 976 (2013) quoting Dupree v Giugliano, 20 NY3d 921, 924 (2012) rearg denied 20 NY3d 1045 (2013); see Walker v Sheldon, 10 NY2d 401, 404 (1961). "[T]he standard for imposing punitive damages is a strict one and punitive damages will be awarded only in exceptional cases." Marinaccio v Town of Clarence, supra at 511. This is not one of those cases.

For these reasons, and upon the papers submitted and the oral argument of the parties, it is,

ORDERED that the defendants' motion to dismiss the amended complaint pursuant to CPLR 3211(a)(7) is granted and the amended complaint is dismissed in its entirety, and it is further,

ORDERED that the Clerk shall enter judgment accordingly.

This constitutes the Decision and Order of the court.