Grillo v Camardo

[*1] Grillo v Camardo 2005 NY Slip Op 51372(U) [9 Misc 3d 1102(A)] Decided on July 7, 2005 City Court Of Auburn McKeon, J. Published by New York State Law Reporting Bureau pursuant to Judiciary Law § 431. This opinion is uncorrected and will not be published in the printed Official Reports.

Decided on July 7, 2005
City Court of Auburn

Brendan Grillo, Plaintiff

against

Joseph A. Camardo JR. ROBERT BRUNO DONNA BRUNO, Defendant



SC05-0085



For the Plaintiff:Samuel Giacona, Esq.

75 Genesee Street

Auburn, New York 13021

For the Defendant:Joseph Camardo, Jr.

127 Genesee Street

Auburn, New York 13021

Michael F. McKeon, J.

In this Small Claims action plaintiff sues for return of a down payment paid on the signing of a purchase agreement for the purchase and sale of Lewis' Restaurant to the plaintiff by the defendants. At the time of the hearing, defendants filed a motion to remove the case to Supreme Court, Cayuga County on grounds that they had filed a complaint in Supreme Court, Cayuga County setting forth two causes of motions, the first alleging that the plaintiff breached [*2]the purchase contract and thus they were entitled to retain the down payment and the second seeking consequential damages for the alleged breach.

The motion was denied by this Court on grounds that a removal motion must be brought in Supreme Court, the court the defendants sought to remove the instant action and not in this Court CPLR 325(b) and CPLR 602.

The contract signed by the parties was contingent upon the plaintiff obtaining commercial financing in the maximum amount at the prevailing rate within 30 days of the signing of the contract. Although the contract did not specify a loan amount, a letter of intent dated October 25, 2004 did specify an amount of $150,000. The contract also provided for a refund of the security deposit if the financing contingency was not met in good faith. The contract was signed on or about January 25, 2005.

Previously, while negotiations were apparently taking place, the plaintiff on

November 10, 2004 commenced the application process with Elmira Savings and Loan, a bank with which he had a regular and ongoing business relationship. On December 1, 2004, the application forms for a $150,000 commercial loan were signed pending the signing of the contract. On March 1, 2005 Elmira Savings declined the plaintiff's loan citing insufficient capital participation, insufficient collateral and the inability to verify the income and expenses numbers provided. Subsequently, the plaintiff made a demand for the return of the down payment which was refused and this action ensued.

Defendants argue that the plaintiff did not make a good faith effort in seeking financing citing a failure to seek financing at another financial institution. This Court is not aware of any legal requirement that a prospective purchaser make repeated applications in order to obtain financing after being rejected at one financial institution. Moreover, the contract did not require the plaintiff to make repeated applications to other financial institutions. As such this argument has no merit.

Defendants also argues that the plaintiff did not act in good faith by failing to obtain additional financial information from them to help clarify for the bank the business's financial picture. However, the defendants failed to specify what additional documentation they could have been asked to provide. Other than the handwritten monthly income and expenses provided to the plaintiff by the defendants, upon which he relied in signing the contract, no other financial documents were provided until the 2003 Profit and Loss Statement was delivered to the plaintiff on February 18, 2005, some four weeks after the signing of the contract. Significantly, no claim was made by the defendants that year end financial information for year 2004 were available which may have alleviated the bank's concerns, since the 2003 financial statement reflected only a nine month period of operation by the defendants and showed zero profit. This argument therefore also lacks merit.

Finally, the Court has reviewed all other claims raised by the defendants and finds them to be without merit. Accordingly, judgment is granted to the plaintiff as against defendants Robert and Donna Bruno (Defendant Camardo not a signator on the agreement, is not a proper defendant) in the amount of $2,500.00 plus costs of $36.00 for a total judgment of $2,536.00.

Auburn, New York

Dated this____ Day of July 2005 [*3]

______________________________________ Hon. Michael F. McKeon

City Court Judge