| Zellner v Tarnell |
| 2009 NY Slip Op 06835 [65 AD3d 1335] |
| September 29, 2009 |
| Appellate Division, Second Department |
| Ronald Zellner et al., Respondents, v Paul Tarnell et al.,Appellants. |
—[*1] Matthew A. Noviello, Carmel, N.Y., for respondents.
In an action, inter alia, to recover damages for breach of a contract for the sale of realproperty, the defendants appeal from an order of the Supreme Court, Westchester County(Loehr, J.), entered December 5, 2008, which granted the plaintiffs' motion for summaryjudgment awarding them the down payment as liquidated damages under the contract, and, ineffect, denied that branch of their cross motion which was for summary judgment on their firstcounterclaim for the return of the down payment.
Ordered that the order is reversed, on the law, with costs, the plaintiffs' motion is denied, andthat branch of the defendants' cross motion which was for summary judgment on the firstcounterclaim is granted.
The plaintiffs entered into a contract to sell residential real property in Westchester Countyto the defendants. The contract contained a mortgage commitment contingency clause. Paragraphfive of the second rider to the contract stated, in pertinent part, "[n]otwithstanding anything inthis Agreement to the contrary, Purchaser's obligations hereunder are contingent upon its receiptof a written mortgage commitment . . . in the mortgage amount stated in thisagreement within 30 days from the date Purchaser receives fully executed contracts of sale (amortgage commitment shall be deemed binding if it contains only conditions that are within thecontrol of the Purchaser) . . . If Purchaser does not procure said commitment in thattime, either party may cancel this agreement without any time limitation." On April 13, 2007, thedefendants' attorney faxed a letter to the plaintiffs' attorney, with a cover sheet stating, "[p]leasesee attached regarding the above referenced." Accompanying this cover letter was what theplaintiffs characterize as a mortgage commitment letter issued by American Home Mortgage tothe defendants. Subsequently, the plaintiffs scheduled a closing, but the defendants purported tocancel the agreement. After commencing this action, inter alia, to recover damages for breach ofcontract for the sale of real property, the plaintiffs moved for summary judgment awarding themthe down payment as liquidated damages under the contract. The defendants cross-moved forsummary judgment on their two counterclaims. The Supreme Court determined that the letter atissue was, in fact, a binding mortgage commitment, that when the defendants failed to close onthe subject property, they were in breach of contract, and, pursuant to the contract, the plaintiffswere entitled to retain the down payment as liquidated damages. We reverse.
Whether or not the letter constituted a mortgage commitment letter, a point disputed by theparties, it contained at least one condition not within the control of the defendants. The letterstated that [*2]the mortgage commitment "may be withdrawn orrevoked at any time for any of the following reasons . . . there is a change in thefacts stated in the mortgage application, the documents in support thereof, or the credit report."A change in the facts stated in a credit report is not a condition wholly within the defendants'control. Thus, the mortgage commitment was not binding under the terms of the contract,specifically the second rider thereto (cf. Krainin v McCusker, 45 AD3d 738, 738-739[2007]; Eves v Bureau, 13 AD3d 1004, 1005 [2004]; Chavez v Eli Homes, Inc.,7 AD3d 657, 659 [2004]; Lindenbaum v Royco Prop. Corp., 165 AD2d 254, 259[1991]). Since the defendants did not procure a binding mortgage commitment within the timespecified, they were within their rights under the contract in canceling the agreement, and werenot in breach when they did so. Therefore, the plaintiffs failed to establish their prima facieentitlement to summary judgment, and the Supreme Court should have denied their motion(see Alvarez v Prospect Hosp., 68 NY2d 320, 324 [1986]; Winegrad v New YorkUniv. Med. Ctr., 64 NY2d 851, 853 [1985]). For the same reasons, the defendantsestablished their entitlement to summary judgment on their first counterclaim, by which theysought the return of their down payment. In opposition, the plaintiffs failed to raise a triable issueof fact (see Alvarez v Prospect Hosp., 68 NY2d 320 [1986]; Zuckerman v City ofNew York, 49 NY2d 557, 562 [1980]).
To the extent that the defendants raise any issues regarding that branch of their cross motionwhich was for summary judgment on their second counterclaim, we note that such issues are notproperly before us. As that branch of the defendants' motion was not addressed by the SupremeCourt, it remains pending and undecided (see True v True, 63 AD3d 1145, 1148-1149[2009]; George v Marshalls of MA, Inc., 61 AD3d 925, 931 [2009]; Katz v Katz,68 AD2d 536 [1979]).
The parties' remaining contentions are without merit. Spolzino, J.P., Miller, Angiolillo andDickerson, JJ., concur.