112 A.D.2d 197 | N.Y. App. Div. | 1985
(1) In an action, inter alia, for specific performance of a contract for the sale of real property, (a) plaintiffs Levine appeal, as limited by their brief, from so much of a judgment of the Supreme Court, Kings County (Hirsch, J.), dated March 30, 1984, as dismissed their complaint with respect to their claim for the return of their down payment; and (b) defendants Sarbello cross-appeal from so much of the same judgment as is in favor of defendants Giuffre and against them in the sum of $25,370 (we treat the notice of appeal and cross notice of appeal as being from the judgment dated March 30, 1984), and (2) in a proceeding pursuant to RPAPL 1921 to discharge a mortgage lien, the Sarbellos appeal from an order of the same court (Levine, J.), dated December 7, 1984, which directed that the mortgage given to them by Carmelo Giuffre be discharged and that Giuffre’s debt thereunder be canceled.
Judgment dated March 30, 1984, modified, on the law, by (1) deleting the first decretal paragraph thereof and substituting therefor a provision that the plaintiffs Levine have judgment against the defendants Sarbello in the total sum of $25,400; and (2) deleting the third decretal paragraph thereof and substituting therefor a provision that the defendants Giuffre have judgment against the defendants Sarbello in the total sum of $7,500. As so modified, judgment affirmed, insofar as appealed from, without costs or disbursements; judgment dated March 21, 1984 is amended accordingly.
Order dated December 7, 1984, affirmed, with one bill of costs to Carmelo Giuffre.
On May 20, 1982, plaintiffs Carole and Harvey Levine entered into a contract with defendants Carmín and Josephine Sarbello to purchase the Sarbellos’ Brooklyn home. The purchase price was $254,000 and the contract specified June 30, 1982 as the closing date. The contract did not contain a "time is of the essence” clause.
By letter dated June 28, 1982, two days prior to the scheduled closing, the Levines’ attorney contacted Alario and advised him that the Levines would not have the necessary funds to consummate the purchase on June 30, because they had not been able to sell the home they then owned. He requested an adjournment of the closing date until between August 1 and August 15, to permit the Levines the opportunity to secure the necessary funds.
Alario responded that the Sarbellos would only consent to a "reasonable adjournment” of a "couple of weeks” and expressed the opinion that the Levines’ request was not a reasonable one. Alario informed the Levines’ counsel that he would hold the closing as scheduled.
The Levines recorded the contract of sale on the morning of June 30, but did not appear at the closing. By letter dated June 30, 1982, Alario advised the Levines and their attorney that the Sarbellos had elected to cite the Levines in default and that he, Alario, had released the escrow to the Sarbellos.
Thereafter, the Levines continued to express an interest in purchasing the real estate and there were subsequent discussions and negotiations throughout the summer. In the meantime, Carmelo Giuffre indicated a desire to purchase the property.
On August 9, 1982, the Levines entered into a contract for the sale of their home and claim that they requested their counsel to schedule a closing with the Sarbellos on September 15. Alario testified that a closing date was never requested and that on September 1 the Levines’ attorney informed him
The sale to Mr. Giuffre was consummated at a closing held on September 7, 1982. Mr. Giuffre made a payment of $130,573.79, assumed a first mortgage, and executed a purchase-money mortgage to the Sarbellos in the sum of $93,000. The purchase-money mortgage was made "subject to” an indemnification agreement whereby the Sarbellos agreed to hold the Giuffres "free and harmless of any damages resulting from the recording of Contract of Sale * * * between carmín SARBELLO to HARVEY LEVINE and CAROL [sic] LEVINE, to include reasonable attorney fees and any claim for brokerage commissions”.
In late January or early February 1983, the Giuffres entered into a contract for the sale of the subject premises to different buyers. By summons and complaint dated March 15, 1983, the Levines commenced the instant action, inter alia, for specific performance and filed a lis pendens against the realty.
In June or July 1983, the Giuffres canceled the contract for sale of the realty. Mr. Giuffre then requested that the Sarbellos compensate him for his loss pursuant to the contract of indemnity. When the Sarbellos refused to comply, Mr. Giuffre ceased making mortgage payments.
Judgment was entered in the action for specific performance in favor of the Sarbellos and the Giuffres. Mr. Giuffre offered to satisfy the mortgage at a closing at which he intended to convey the premises. Mr. Alario, the Sarbellos’ attorney, disputed the amount due and owing, contending, inter alia, that Mr. Giuffre was obligated to pay the 18% penalty interest rate for his default in making the scheduled payments. Mr. Alario appeared at the closing but refused to accept Mr. Giuffre’s tender of payment at the 14% interest rate.
Mr. Giuffre subsequently commenced the instant proceeding to discharge the mortgage lien, which motion was granted upon the condition that Giuffre deposit into court the amount due and owing with interest accrued at 14%.
Initially, we must determine whether the Levines are entitled to the return of their down payment.
We begin with the premise, accepted by the Levines and Sarbellos, that the contract they entered into did not make time of the essence. It is a well-settled rule of law that where a contract for the sale of real property does not provide that time is of the essence, both the vendor and the purchaser are
Were we not reversing on the above ground we would, nevertheless, hold that the Sarbellos are estopped from asserting that the Levines were in default on June 30, 1982 by their conduct in continuing to negotiate the sale of the real property to the Levines during the summer of 1982. That is, even if it is assumed that the Levines were somehow in default of the parties’ agreement by not appearing at the June 30, 1982 "closing”, the record shows that the Sarbellos dealt with the Levines as if their contract of sale remained in full force and
With respect to their cross appeal, the Sarbellos claim that the Giuffres cannot recover any damages pursuant to their indemnity contract. That claim is premised upon the argument that the Giuffres were not damaged by the Levines’ recording of their contract. Rather, the Sarbellos argue that any damage resulted from the filing of the lis pendens, which instrument was not mentioned in the indemnity agreement. We disagree with that contention. The indemnity agreement between the Sarbellos as sellers and the Giuffres provided as follows: "The purchasers agree to accept title to said premises with exception 'M’, issued in title report made by the Title Guarantee Company and Pioneer National Title Insurance Company, under their report number AC-8200314, and in consideration thereof, the sellers will hold the purchasers free and harmless of any damages resulting from the recording of Contract of Sale, dated the 20th day of May, 1982, and recorded on the 30th day of June, 1982, in Reel 1323 Page 28, between carmín sarbello to harvey levine and carol [sic] levine, to include reasonable attorney fees and any claim for brokerage commissions”.
The title report exception referred to the May 20, 1982 contract of sale between the Levines and the Sarbellos. Quite obviously, the parties to the contract intended that the Sarbellos would indemnify the Giuffres in the event the Levines attempted to enforce the recorded contract of sale. The indemnification agreement was given in order to induce Mr; Giuffre to accept title to the realty despite the refusal of the title insurer to insure against damages arising from the recordation of the earlier contract of sale. The Levines’ complaint sought, inter alia, specific performance of the recorded con