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Weltman v. Struck

Sup Ct, New York County

July 26, 2013

JOHN J. WELTMAN and JAMES C. ATKINS, JR., Plaintiffs,
v.
HARRY STRUCK and FRIEDBERG PINKAS PLLC, Defendants. Index no. 107910/2011

Unpublished Opinion

DECISION/ORDER

HON. CYNTHIA KERN, J.S.C.

Recitation, as required by CPLR 2219(a). of the papers considered in the review of this motion for:

Papers Numbered
Notice of Motion and Affidavits Annexed........................ .......... 1 ........
Answering Affidavits and Cross Motion............................ .......... 2 ........
Replying Affidavits........................................................... ..........3 ........
Exhibits............................................................................ .......... 4 ........

Plaintiffs commenced the instant action to recover $155, 000 advanced as a down payment on the purchase of a condominium apartment owned by defendant Harry Struck ("Struck"). Defendants now move pursuant to CPLR § 3212 for an order granting summary judgment on their counterclaim and dismissing plaintiffs complaint in its entirety. Plaintiffs' cross-move pursuant to CPLR § 3212 for an order granting them summary judgment and ordering defendants to return the down payment. Additionally, plaintiffs seek an order pursuant to CPLR § 3204 striking Edan Pinkas' affidavit as unfair and prejudicial and granting plaintiffs damages for defendants' bad faith. For the reasons set forth below, defendants' motion is denied and plaintiffs' cross-motion is granted in part.

The undisputed facts and procedural history are as follows. This action concerns the rights to a down payment made pursuant to a real estate transaction between the parties. On May 16, 2011, the parties entered into a written contract of sale (the "Contract") in which defendant Harry Struck ("Struck"), as seller, agreed to sell to plaintiffs John J. Weltman ("Weltman") and James C. Atkins, Jr. ("Atkins"), as purchasers, the condominium unit located at 350 West 42ndStreet, Unit 41G, New York, New York (the "Property") at a price of $1, 550, 000.00. Upon the execution of the Contract and pursuant to its terms, plaintiff tendered to defendants a down payment in the amount of $155, 000.00 (the "down payment"). Specifically, the down payment was tendered to defendant Friedberg Pinkas PLLC ("Friedberg"), who was serving as Struck's counsel and escrow agent.

The closing on the Property was scheduled for July 11, 2011. However, the Contract contained a "Mortgage Commitment Contingency" clause, which conditioned plaintiffs' duty to purchase the Property on their ability to obtain a commitment from a lender to provide a mortgage. Specifically, paragraph 22(a) of the Contract provided:

The obligation of Purchaser to purchase under this Contract is conditioned upon issuance, on or before 30 days after a fully executed copy of this Contract is given to Purchaser or Purchaser's attorney .. . (the "Commitment Date"), of a written commitment from an Institutional Lender pursuant to which such Institutional lender agrees to make a first mortgage loan ... to Purchase, at purchaser's sole cost and expense, or $1, 240, 000.00 for a term of at least 30 years (or such lesser sum or shorter term as Purchaser shall be willing to accept) at the prevailing fixed or adjustable rate of interest and on other customary commitment terms (the "Commitment")... a commitment conditioned on the Institutional Lender's approval of an appraisal shall not be deemed a "Commitment" hereunder until an appraisal is approved (and if that does not occur before the Commitment Date, Purchaser may cancel under subparagraphs 22(e) unless the Commitment Date is extended). Purchaser's obligations hereunder are conditioned only on issuance of a Commitment. Once a Commitment is issued, Purchaser is bound under

this Contract even if the lender fails or refuses to fund the loan for any reason. Accordingly, plaintiffs had until June 14, 2011, to secure a "Commitment" or they were entitled to cancel the Contract.

Plaintiffs chose to work with mortgage broker Lisa Ryll of Manhattan Mortgage Co., Inc. to secure the necessary Commitment. Overall, plaintiffs submitted mortgage applications to three Institutional Lenders: (1) Pentagon Federal Credit Union ("PenFed"); (2) Luxury Mortgage Corporation ("Luxury"); and (3) NCB FSB ("NCB"). On or about June 13, 2011, plaintiffs, through their counsel, requested a two week extension of the Commitment Date and ...


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