KRISHNA v. JASPER OLD WESTBURY 66 LLC

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Supreme Court, Appellate Division, Second Department, New York.

Chaitanya KRISHNA, et al., Appellants, v. JASPER OLD WESTBURY 66 LLC, et al., Respondents.

2017–11575

Decided: August 21, 2019

ALAN D. SCHEINKMAN, P.J., MARK C. DILLON, JOHN M. LEVENTHAL, ROBERT J. MILLER, JJ. The Chatrath Law Firm, P.C., Mineola, N.Y. (Sandeep Chatrath of counsel), for appellants. Rheem Bell & Mermelstein, LLP, New York, N.Y. (Richard E. Freeman III and Shannon M. Hagan of counsel), for respondents.

DECISION & ORDER

ORDERED that the order dated September 28, 2017, is reversed insofar as appealed from, on the law, the plaintiffs' motion for summary judgment on so much of the complaint as sought the return of the down payments they paid on the contracts of sale is granted, and that branch of the defendants' cross motion which was for summary judgment in their favor on their first counterclaim is denied;  and it is further,

ORDERED that the order dated November 13, 2017, is reversed, on the law, and that branch of the defendants' cross motion which was to cancel the notices of pendency is denied;  and it is further,

ORDERED that one bill of costs is awarded to the plaintiffs.

The plaintiffs entered into two contracts, one with the defendant Jasper Old Westbury 66 LLC, and one with the defendant Jasper Old Westbury 68 LLC, to purchase two parcels of real property owned by those respective defendants.  The plaintiffs paid a down payment at the time of execution of each contract;  the down payments were held in escrow by the defendant Rheem Bell & Mermelstein, LLP, the sellers' attorney and the escrow agent designated in the contracts.  Each contract provided that the down payment would be a lien upon the property that was the subject of that contract.  After the plaintiffs failed to obtain financing by the date contemplated in the contracts, the defendants purported to make time of the essence by setting a closing date and sending two notices to the plaintiffs, one as to each contract, that the plaintiffs would be held in default if they failed to close “by the date as indicated herein.”  Each notice stated, inter alia, that “a closing has been scheduled for December 19, 2016, at 2:00 p.m.,” and that “[u]nless this transaction is closed by the end of business day on December 15, 2016, Purchaser will be held in default of the Contract” (emphases added).  The plaintiffs sent the defendants a notice of rejection of the defendants' efforts to force time of the essence closings.  The defendants thereafter sent the plaintiffs a “notice of default” as to each contract, stating that the plaintiffs were in default under the contract due to their failure to appear at the closing held on December 19, 2016, the defendants were entitled to a release of the down payments held in escrow, and the defendants reserved their rights to seek damages.

The plaintiffs commenced the instant action, asserting causes of action, inter alia, to recover damages for breach of contract and to foreclose upon the plaintiffs' liens on the properties.  The plaintiffs also filed a notice of pendency against each of the properties that were the subject of the contracts of sale.  The defendants answered and asserted two counterclaims, seeking an order directing the escrow agent to release the plaintiffs' down payments to the defendants, and damages for the plaintiffs' purported improper filing of notices of pendency against the properties.

The plaintiffs moved for summary judgment on so much of the complaint as sought a return of their down payments, and the defendants cross moved, among other things, for an order cancelling the notices of pendency and for summary judgment on the counterclaim which sought relief relating to the release of the escrow funds.  The Supreme Court, inter alia, in effect, denied the plaintiffs' motion for summary judgment, granted the defendants' cross motion for summary judgment and ordered that the plaintiffs' down payments were forfeited to the defendants, and canceled the notices of pendency on the subject properties.  The plaintiffs appeal.

The Supreme Court should have denied that branch of the defendants' cross motion which sought summary judgment on their first counterclaim, and should have granted the plaintiffs' motion for summary judgment on so much of the complaint as sought a return of the down payments paid on the contracts of sale.  The defendants failed to make time of the essence, because the defendants' notices of a purported time of the essence closing failed to clearly and unambigiously set a specific date for the closing (see Latora v. Ferreira, 102 AD3d 838, 839;  Cave v. Kollar, 296 A.D.2d 370, 372;  Kevan v. Modesta, 292 A.D.2d 348;  3M Holding Corp. v. Wagner, 166 A.D.2d 580, 581).  Therefore, the plaintiffs could not be held in default for failing to appear at the closing (see Revital Realty Group, LLC v. Ulano Corp., 112 AD3d 902, 904;  Latora v. Ferreira, 102 AD3d at 839).  Moreover, the plaintiffs demonstrated, prima facie, that the defendants repudiated the contracts by sending the notices of default (see Savitsky v. Sukenik, 240 A.D.2d 557, 559;  3M Holding Corp. v. Wagner, 166 A.D.2d at 581).  The defendants failed to raise a triable issue of fact in opposition.  Thus, the plaintiffs are entitled to the return of the down payments.

The defendants failed to demonstrate that the plaintiffs' notices of pendency were improper.  Since the complaint seeks, inter alia, to foreclose vendees' liens on the properties that were the subject of the contracts of sale, the action is one in which the judgment demanded would affect the title to the real property, and, therefore, falls within the scope of CPLR 6501 (see Tilden Dev. Corp. v. Nicaj, 49 AD3d 629, 631;  Wilson v. Power House Dev. Corp., 12 AD3d 505;  Macho Assets v. Spring Corp., 128 A.D.2d 680).

SCHEINKMAN, P.J., DILLON, LEVENTHAL and MILLER, JJ., concur.