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Lelin v. Shrestha

New York Supreme Court, Appellate Term, Second Department


April 14, 2009

ROSS LELIN, APPELLANT,
v.
MANOHAR SHRESTHA ET AL., RESPONDENTS.

Accepted for Miscellaneous Reports Publication

Published by New York State Law Reporting Bureau pursuant to Judiciary Law § 431.

As corrected through Wednesday, July 15, 2009

{**24 Misc 3d at 9}

OPINION OF THE COURT

Memorandum.

Judgment reversed without costs and judgment directed to be entered in favor of plaintiff in the principal sum of $10,912.{**24 Misc 3d at 10}

Plaintiff, a licensed mortgage broker, commenced this action to recover his unpaid broker's commission. At the non-jury trial, it was shown that defendants had contacted plaintiff to procure a mortgage for them, apparently in the sum of $682,000, and, in July 2006, had signed a pre-application disclosure and fee agreement wherein they had agreed to pay plaintiff two percent of the loan amount as a commission upon their signed acceptance of a commitment, "whether or not the loan closes." Plaintiff applied, on behalf of defendants, for a $545,600 first mortgage and a $136,400 second mortgage. A formal commitment letter was issued by the lender only with respect to the first mortgage; the letter did not mention the second mortgage. Defendants accepted the commitment for the first mortgage, and signed the commitment letter on August 1, 2006. In September 2006, using a mortgage obtained by a different broker, defendants purchased the house. Following the trial, the District Court dismissed the complaint, finding that defendants did not breach their agreement with plaintiff since a $682,000 commitment was not procured.

While defendants had the choice to reject the commitment offered (see e.g. Prime Funding v Demetriades, 126 AD2d 533 [1987]), plaintiff earned his commission once defendants accepted the commitment for the lesser amount (see Midland Mtge. Corp. v Kazarnovsky, 128 AD2d 595 [1987]; see also Lester Morse Co. v 3 Hanover Sq. Owners Corp., 156 AD2d 229, 230 [1989]; Caramoor Capital Group v Moss, 2003 NY Slip Op 50960[U] [App Term, 1st Dept 2003]). Consequently, defendants were obligated to pay two percent of the $545,600 mortgage commitment procured by plaintiff, as agreed to by defendants. Accordingly, the judgment is reversed and judgment is awarded in favor of plaintiff in the principal sum of $10,912.

Molia, J.P., Scheinkman and LaCava, JJ., concur.

20090414

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