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THERE EXISTS A QUESTION OF FACT WHETHER DEFENDANT’S FAILURE TO APPEAR AT THE LAW DAY CLOSING WAS WILLFUL WITHIN THE MEANING OF THE REAL ESTATE CONTRACT, PLAINTIFFS’ MOTION SEEKING SUMMARY JUDGMENT ON THE ACTION TO RETAIN THE DOWN PAYMENT PROPERLY DENIED, DEFENDANT’S MOTION FOR SUMMARY JUDGMENT SEEKING THE RETURN OF THE DOWN PAYMENT SHOULD NOT HAVE BEEN GRANTED (SECOND DEPT).

The Second Department, modifying Supreme Court, determined that defendant’s motion for summary judgment in plaintiffs’ action to retain the defendant’s down payment because defendant did not appear at the real estate closing should not have been granted. Although plaintiffs demonstrated they were ready and willing close on the time-of–the-essence closing date, defendant raised a question of fact whether the failure to appear was “willful” within the meaning of the real estate contract. Defendant submitted evidence his application for credit in connection with a mortgage on the property had been declined. Plaintiff’s motion for summary judgment was properly denied. But defendant’s motion for summary judgment seeking return of his down payment should not have been granted:

“The fundamental, neutral precept of contract interpretation is that agreements are construed in accord with the parties’ intent” … . The best evidence of the parties’ intent is their own writing… . A written agreement that is complete, clear, and unambiguous on its face is to be enforced according to the plain meaning of its terms … . Here, the contract provided that a party would be considered in breach if a default was willful, and that the plaintiffs could retain the down payment as liquidated damages only if the defendant “willfully” defaulted under the contract. The defendant submitted a copy of a “Statement of Credit Denial” from his lender which indicated that his application for an extension or renewal of credit with respect to a mortgage on the property had been declined. Consequently, a triable issue of fact existed as to whether the defendant had a lawful excuse for defaulting given the denial of his application to extend or renew his mortgage commitment, or whether he willfully defaulted.

Accordingly, we agree with the Supreme Court’s determination denying the plaintiffs’ motion for summary judgment on the complaint.

However, the Supreme Court should not have, upon searching the record, awarded summary judgment to the defendant dismissing the complaint and directing the return of the down payment to the defendant. A buyer who defaults on a real estate contract without ” lawful excuse'” cannot recover the down payment amount, “at least where . . . that down payment represents 10% or less of the contract price” … . Since a triable issue of fact existed as to whether the defendant’s failure to close was willful, the Supreme Court should not have determined, at this juncture, that he was entitled to the return of his down payment. Goetz v Trinidad, 2019 NY Slip Op 00099, Second Dept 1-9-19

 

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