Summary
The Appellate Division, First Department affirmed a summary judgment order granting the plaintiff seller's motion to retain a $1 million down payment after the defendant buyer defaulted on a condominium purchase agreement. The court found that the plaintiff properly terminated the contract and forfeited the deposit by providing clear notice that time was of the essence and setting a final closing deadline. The court also rejected the defendant's challenge to the service of notice, concluding that emailing the designated attorney's associate caused no actual prejudice.
Topics
Practice areas
Questions Presented
- Whether the contractual provision that the down‑payment is forfeited if closing does not occur by Dec. 11, 2023 is enforceable.
- Whether the plaintiff’s notice satisfied the agreement’s notice requirements despite a minor deviation in the method of service.
Holdings
- The down‑payment is forfeited because the contract expressly provided that failure to close by the specified date would result in forfeiture, and the plaintiff gave proper notice of termination.
- A minor deviation from the notice provisions does not defeat notice when the defendant actually received the communication.
Key quotations
“Plaintiff sufficiently advised defendant that it would not "abide by any further delay," and that failure to close by December 11, 2023 would result in forfeiture of the down payment (see Westreich v Bosler, 106 AD3d 569, 569 [1st Dept 2013]).”
“There was no showing that defendant did not receive actual notice or was prejudiced in any way from this minor deviation from the agreement's notice provisions (see Baker v Norman, 226 AD2d 301, 304 [1st Dept 1996]).”
Factual background
Plaintiff agreed to sell three condominium units to defendant for $15.5 million, with a $1 million down‑payment. The parties amended the agreement on Nov. 8, 2023, setting a closing date of Nov. 30, 2023. After delays, the parties agreed to extend the closing to Dec. 8, 2023, with a notice that failure to close by Dec. 11, 2023 would forfeit the down‑payment. Defendant failed to close, and plaintiff terminated the contract on Dec. 11, 2023, seeking forfeiture of the down‑payment.
Procedural history
The Supreme Court, New York County entered an order on August 30, 2024 granting Miracle NY Props. LLC’s motion for summary judgment, denying Nayber 18 LLC’s cross‑motion, authorizing release of the down‑payment, and ordering damages. The defendant appealed to the Appellate Division, First Department.