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Funk v. Seligson, Rothman & Rothman, Esqs.
Citation: 2018 NY Slip Op 6614Docket: 653514/16 6878 6877
Court: Appellate Division of the Supreme Court of the State of New York; October 4, 2018; New York; State Appellate Court
Original Court Document: View Document
The Appellate Division, First Department, reversed a judgment from the Supreme Court, New York County, which had favored the plaintiffs, Neda Talebian Funk and others, against defendant Petit 5, LLC, for $55,180.60. The court vacated the judgment and denied the plaintiffs' motion for summary judgment, ruling that the contract's ambiguity regarding compliance with obligations under Paragraph 25(d) precluded such judgment. This paragraph allows plaintiffs to cancel the contract if no Commitment is issued by the lender, provided they have fulfilled their obligations, which include diligent pursuit of financing. The plaintiffs' cancellation notice only claimed compliance, leading to questions about whether they needed to demonstrate this compliance. The court highlighted that ambiguity in contracts prevents legal interpretation as a matter of law, and there was a factual dispute regarding whether the plaintiffs withdrew their cancellation notice or agreed to proceed with the transaction under specific conditions. The defendants' submissions indicated that plaintiffs might have sought a new written contract, complicating the determination of whether the parties intended to be bound prior to signing. The court also ruled that doctrines such as promissory estoppel did not grant the defendants entitlement to summary judgment. An issue of fact is raised concerning the conditions of a commitment related to an Institutional Lender's approval of an appraisal, as stated in paragraph 25(a). A commitment is not considered valid until an appraisal is approved, and if approval does not occur before the Commitment Date, plaintiffs may cancel unless an extension is granted. Although Petit extended the Commitment Date, this extension was not documented in writing, violating the contract's requirement for written modifications. While a prohibition against oral modifications can be waived, this determination is typically a factual matter. If it is found that defendants failed to return plaintiffs' down payment around June 20, 2016, plaintiffs may be entitled to statutory interest of 9% from that date. Seligson argues for summary judgment on its counterclaim for indemnification due to the dismissal of plaintiffs' claims; however, it does not provide legal support for its claim of foregone income as a basis for reasonable attorneys' fees. Additionally, the reversal of the summary judgment granted to plaintiffs renders defendants' need for discovery irrelevant. The unclear argument regarding paragraph 5(B) of the contract does not support defendants' claim for summary judgment, as it does not grant Petit the unilateral right to adjourn the Commitment Date. The document concludes with the court's decision and order dated October 4, 2018.