Court Opinion

ID: 6055055
Source: CourtListenerOpinion
Date Created: 2022-01-13 15:20:31.951717+00
Date Added: 2024-06-11T08:51:46.661661
License: Public Domain

McGinity, J.,
dissents in part and votes to modify the order appealed from by deleting the provision thereof which granted those branches of the cross motion which were for summary judgment on the respondents’ first and third counterclaims and substituting therefor a provision denying those branches of the cross motion, with the following memorandum: On February 26, 1998, the plaintiffs (hereinafter the purchasers) entered into a contract, whereby the defendants Robert French and Suzanne French (hereinafter the sellers) agreed to sell the subject premises, 34 Sunnyridge Road, Harrison, for a purchase price of $595,000. The contract set a closing date on or about April 13, 1998. In accordance with the terms of the contract, the purchasers gave the sellers a down payment of $59,500. Paragraph 8 to Rider I of the contract provided as follows: “The premises shall be delivered vacant and broom clean, and the plumbing, heating and electrical systems and the air conditioning shall be in working order on the date of closing and the roof and basement shall be free of leaks.” The fact that the basement was subject to leaks was known by the sellers. They signed a seller’s disclosure statement dated November 3, 1997, which asked whether there had been any water leakage in the basement of the subject premises. The sellers checked the box marked “YES” and wrote in the following response— “minor floor water during extensive rain — water does not accumulate”. This disclosure statement was furnished to the sellers’ broker, the defendant Coldwell Banker Real Estate Corporation.
The closing did not take place on the date specified, April 13, 1998, because it was postponed by the sellers. On April 15, 1998, the purchasers, having been advised that the interest rate on their loan would expire on May 13, 1998, made time of the essence and set a closing date for May 13, 1998. Thereafter, the parties agreed to schedule a closing for May 11, 1998.
On the date of closing, May 11, 1998, the purchasers conducted a pre-closing inspection wherein they discovered that the basement was inundated with water and had suffered water damage. The purchasers’ engineer inspected the base*546ment that day. The engineer concluded that substantial work would be required to rectify the water damage and repair the leaks so that the premises could be delivered “free of leaks” as provided by the terms of the contract. The proposed work included the installation of a pumping system, an interior perimeter drain to be cut into the concrete floor, and the placement of drywells in the lawn area at least 25 feet from the foundation of the premises. The engineer estimated the cost of these repairs to be approximately $20,000.
The parties then met for the scheduled closing. It appeared that the necessary repairs to the basement to deliver the premises “free of leaks” could not be made by the law date, May 13, 1998, some 48 hours later. With the parties unable to agree on an amount of the sellers’ money to be held in escrow pending correction of the leakage problem, the purchasers exercised their contractual right to terminate the contract concluding that the sellers could not complete the necessary work by May 13, 1998.
Upon the sellers’ failure to return the contract down payment, this action ensued. Each party moved for partial summary judgment, the principal issue being whether the purchasers properly terminated the contract. The Supreme Court, finding that the purchasers’ cancellation of the contract was an anticipatory breach, determined that the sellers were entitled to retain the $59,500 down payment.
In my view, clear issues of fact are presented as to whether the sellers could have remedied the leaks in the basement by the law date. Accordingly, the Supreme Court improperly granted summary judgment to the sellers. It is well settled that “ ‘[o]nce it becomes clear that one party will not live up to the contract, the aggrieved party is relieved from the performance of futile acts’ ” (Oak Bee Corp. v Blankman & Co., 154 AD2d 3, 8). Further, where time is of the essence, as in the case at bar, each party must tender performance on the law date unless the time for performance is extended by mutual agreement (cf., Grace v Nappa, 46 NY2d 560, 565). Thus, the purchasers were clearly within their rights to demand that the basement leak be corrected by the law date.
Here, there is no dispute that, notwithstanding their knowledge that the basement leaked, the sellers agreed to deliver the premises, including the basement, free of leaks. Since the closing had to occur by May 13, 1998, the parties were required to tender performance by that date (see, Grace v Nappa, supra). A triable issue of fact is presented as to whether the sellers could have cured their default by May 13, 1998, precluding the *547grant of summary judgment (see, Sillman v Twentieth Century-Fox Film Corp., 3 NY2d 395, 404; cf., Lipshy v Sabbeth, 134 AD2d 409). Accordingly, the sellers were not entitled to retain the $59,500 down payment as a matter of law.