Epstein v. Samaroo

(Sup. Ct. NY 5/17/06)

We represented: Plaintiff Epstein

Hon. Lewis L. Douglass, J.S.C.

DECISION and ORDER This is an action for a specific performance on a contract to purchase real estate which was contingent upon the purchaser's ability to secure a mortgage commitment within eight weeks from the signing of the contract. The contract contained no provision that the purchaser give notice that the commitment had been issued, but allowed either party to withdraw if there was no commitment. The contract was signed on 5/19/04 in the seller's attorney's office and a copy was then mailed to the purchaser's attorney. On July 28, 2004, defendant's attorney sent a letter to the purchaser's attorney indicating that the purchaser was in default because the time to secure the commitment had expired. Purchaser's attorney responded with the commitment which was issued on 7/20/04.

During discussion in chambers prior to the trial, the defendant advanced the arguments that:

  1. The commitment was not signed by the bank.
  2. Since the contract was dated 5/19/04 the eight weeks to secure the commitment expired on 7/14/04.
  3. The seller exercised her right to withdraw from the contract because the commitment had not been issued.

At the trial, a bank representative identified the commitment letter and testified that it was signed by the bank on 7/20/04. In the absence of a "time is of the essence" clause, this tardiness is irrelevant, particularly because the contract had no requirement to give the seller notice of the issuance of the commitment (Schatten v. Briedis 163 AD2d 379). The purchaser also argues that even if the Court finds this was significant, the time should run not from 5/19/04, when the contract was signed and handed to the purchaser, but it should run from the time it was received in the mail by the purchaser's attorney which would have been 5/25/04. Therefore, the commitment issued on 7/20/04 would have been timely.

Although not necessary to this decision I conclude that the time to secure the commitment would run from the time the contract was received by the purchaser's attorney since legal transactions are handled through the attorneys and I would, therefore, find the commitment of 7/20/04 was timely.

I further find that even if there was a five day tardiness in returning the issuance of the commitment, it would be irrelevant in a contract with no "time of the essence" clause. I also find the same election by the seller to declare the contract void did not occur until after the issuance of the commitment, the notice to declare the contract void has no effect (Kramer v. Brown 131 AD2d 816).

Plaintiff's application for specific performance is granted. Plaintiff shall submit, on notice, a formal order consistent with this decision.

Hon. Lewis L. Douglass