LELIN v. SHRESTHA (2009)

Appeal from a judgment of the District Court of Suffolk County, Third District (C. Steven Hackeling, J.), entered February 14, 2007.   The judgment, after a nonjury trial, dismissed the complaint.

Judgment reversed without costs and judgment directed to be entered in favor of plaintiff in the principal sum of $10,912.

Plaintiff, a licensed mortgage broker, commenced this action to recover his unpaid broker's commission.   At the nonjury trial, it was shown that defendants had contacted plaintiff to procure a mortgage for them, apparently in the sum of $682,000, and, in July 2006, had signed a pre-application disclosure and fee agreement wherein they had agreed to pay plaintiff two percent of the loan amount as a commission upon their signed acceptance of a commitment, “whether or not the loan closes.”   Plaintiff applied, on behalf of defendants, for a $545,600 first mortgage and a $136,400 second mortgage.   A formal commitment letter was issued by the lender only with respect to the first mortgage;  the letter did not mention the second mortgage.   Defendants accepted the commitment for the first mortgage, and signed the commitment letter on August 1, 2006.   In September 2006, using a mortgage obtained by a different broker, defendants purchased the house.   Following the trial, the District Court dismissed the complaint, finding that defendants did not breach their agreement with plaintiff since a $682,000 commitment was not procured.

While defendants had the choice to reject the commitment offered (see e.g. Prime Funding v. Demetriades, 126 A.D.2d 533, 510 N.Y.S.2d 654 [1987] ), plaintiff earned his commission once defendants accepted the commitment for the lesser amount (see Midland Mtge. Corp. v. Kazarnovsky, 128 A.D.2d 595, 513 N.Y.S.2d 14 [1987];  see also Lester Morse Co. v. 3 Hanover Sq. Owners Corp., 156 A.D.2d 229, 230, 548 N.Y.S.2d 492 [1989];  Carammor Capital Group v. Moss, 2003 N.Y. Slip Op. 50960(U), 2003 WL 21297307 [App. Term, 1st Dept. 2003] ).   Consequently, defendants were obligated to pay two percent of the $545,600 mortgage commitment procured by plaintiff, as agreed to by defendants.   Accordingly, the judgment is reversed and judgment is awarded in favor of plaintiff in the principal sum of $10,912.