Chaya Shusterman and Eliezer Lever v. Zev Cadaner and Vilma Louise Johnson

Summary

The United States District Court for the Eastern District of New York reviews an appeal from a bankruptcy court judgment concerning competing contracts to purchase residential real property. The court affirms the bankruptcy court’s findings that the seller was ready, willing, and able to close, that liens and violations could be resolved at closing, and that the mortgage contingency was triggered despite delivery of the contract by email. The appeal is dismissed.

Holdings

1. The Bankruptcy Court did not clearly err in finding that Johnson was ready, willing, and able to perform on the July 30, 2021 closing date. Because the appellants failed to appear for closing, they did not give Johnson the opportunity to perform.
2. The Lever Contract did not require all liens, violations, and encumbrances to be cleared before closing. The contract permitted Johnson to satisfy them at closing from the purchase proceeds or through acceptable title-company arrangements, and the Bankruptcy Court correctly concluded that the outstanding items did not prevent delivery of marketable title at closing.
3. Email delivery of the fully executed Lever Contract triggered the mortgage-commitment contingency because the appellants had actual notice of the contract and did not demonstrate prejudice from the deviation from the contract's specified notice method. The appellants' failure to obtain an unconditional mortgage commitment or timely request an extension placed them in default.
4. The appellants could not obtain specific performance because they were not ready, willing, and able to perform the Lever Contract and did not perform on the closing date.

Questions Presented

1. Whether the Bankruptcy Court clearly erred in finding that Johnson was ready, willing, and able to close on July 30, 2021.
2. Whether the liens, violations, and encumbrances affecting the property had to be cleared before closing rather than at closing or through closing-related escrow arrangements.
3. Whether email delivery of the fully executed Lever Contract triggered the mortgage-commitment contingency despite the contract's specified notice procedures, and whether any deviation prejudiced the appellants.
4. Whether the first-in-time doctrine or business-judgment rule required enforcement or assumption of the Lever Contract.

Disposition

affirmed