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APPROVAL OF THE APPELLATE DIVISION
This opinion shall not "constitute precedent or be binding upon any court."
Although it is posted on the internet, this opinion is binding only on the
parties in the case and its use in other cases is limited. R. 1:36-3.
SUPERIOR COURT OF NEW JERSEY
DOCKET NO. A-5043-16T2
PIDOR DUONG and SOPHY SUN,
DALE STEIN and ELLEN STEIN,
Submitted June 18, 2018 – Decided July 5, 2018
Before Judges Fisher and Fasciale.
On appeal from Superior Court of New Jersey,
Law Division, Camden County, Docket No. DC-
Law Offices of David J. Khawam, LLC, attorneys
for appellants (David J. Khawam, on the
Subranni Zauber LLC, attorneys for respondents
(Scott J. Good, on the brief).
This appeal requires consideration of a mortgage contingency
clause in a real estate contract and whether buyers, who obtained
a mortgage commitment but failed to meet all the lender's
conditions, was entitled to rescission of the contract. Because
the factual record leaves no doubt that buyers' failure to comply
with all the lender's conditions was not an impediment to closing,
we affirm the motion judge's entry of summary judgment in favor
This action was commenced in special civil part by plaintiffs
Pidor Duong and Sophy Sun (buyers) against defendants Dale and
Ellen Stein (sellers) for a return of a $3000 deposit made pursuant
to the contract buyers executed, on September 5, 2016, to purchase
from sellers a Cherry Hill residence for $295,000. Sellers filed
a counterclaim, asserting their entitlement not only to the deposit
but also to damages caused by buyers' failure to close.
The parties cross-moved for summary judgment. The motion
judge denied buyers' motion and granted sellers' motion. The judge
determined that sellers were entitled to the $3000 deposit and
$12,000 in damages.
Buyers appeal, arguing:
I. . . . GENUINE ISSUES OF MATERIAL FACTS
EXISTED WHICH SHOULD HAVE PRECLUDED SUMMARY
JUDGMENT (Not Raised Below).
II. THE COURT ERRONEOUSLY ASSUMED THAT
[BUYERS] AND THEIR BANK COLLUDED TO EXIT THE
CONTRACT WITHOUT MERIT NOR [sic] PROOF.
III. THE COURT'S APPLICATION OF THE MALUS
HOLDING WAS INAPPOSITE GIVEN THE NATURE OF THE
IV. THE COURT SHOULD LOOK TO FARREL v. JANIK
. . . OR DAVIS v. STRAZZA . . . FOR HOLDING.
We find insufficient merit in these arguments to warrant further
discussion. R. 2:11-3(e)(1)(E). We add only the following few
The relevant facts were not in dispute. The contract was
conditioned upon buyers obtaining a $236,000 mortgage and imposed
on buyers the duty to "supply all necessary information" to the
proposed lender. That same provision required that buyers deliver
– no later than October 3, 2016 – a written mortgage commitment,
while allowing a five-day extension of that deadline. That clause
also called for rescission and return of buyers' deposit if buyers
were unable to obtain the mortgage commitment. That clause,
however, also declared that if:
the failure to obtain the mortgage commitment
is the result of [buyers'] bad faith,
negligence, intentional conduct or failure to
diligently pursue the mortgage application,
then [buyers would not be entitled to the
deposit] without the written authorization of
Malus v. Hager,
312 N.J. Super. 483 (App. Div. 1998).
Farrell v. Janik,
225 N.J. Super. 282 (Law Div. 1988).
Davis v. Strazza,
380 N.J. Super. 476 (App. Div. 2005).
The contract contained the buyers' representation that they had
"all necessary cash assets . . . to complete the [c]losing."
It was also undisputed that the parties agreed to a brief
extension, and the buyers provided a written mortgage commitment
on October 6, 2016. The dispute that inspires the issues before
us concerns the fact that two days before the October 17 closing,
the lender withdrew the mortgage commitment; its notice advised
this action was taken because the buyers lacked sufficient funds
According to buyers' moving certification, the lender's
requirements about the source of certain deposited cash was not
met because that information was in Cambodia,4 even though this
Buyer Sophy Sun certified that the lender determined her account
was "short $10,463" to close the transaction, causing her last-
minute communications with her father in Cambodia. She explained
15. On October 12, 2016, my father gifted me
$20,000 which was wired into my bank account.
Those funds were to be used to cover the
16. I notified the Bank of the $20,000 gift.
17. On October 13, 2016, at 6:46 a.m., the day
before the Bank required satisfaction of the
conditions to the mortgage commitment, the
Bank requested additional information to
document the $20,000 gift, including, but not
limited to, a gift letter which had to be
condition had been made known to buyers when the lender issued its
In seeking summary judgment, sellers asserted that the
lender's condition was met prior to the closing, as buyers' moving
papers acknowledged, and that sellers expressed a willingness to
extend the time for closing until October 31. There is no dispute
that the buyers declined this extension offer, which would have
provided additional time to secure the lender's reinstatement of
the commitment, claiming only – without explanation – "it would
not benefit either party." Sellers contend the buyers simply chose
not to proceed further – that they were concerned about the cost
of flood insurance – and attempted to justify their withdrawal
from the transaction by the loss of the mortgage commitment.
signed by my father and my father's account
statements from his bank in Cambodia.
18. At the time of the Bank's request, my
father was home in Cambodia, which is eleven
(11) hours ahead of Eastern Standard Time. By
the time I received the Bank's request, it was
after business hours in Cambodia.
19. As a result, I was unable to provide the
requested documents before October 14, 2016.
20. On October 14, 2016, the Bank sent me a
Notice of Action Taken which denied our loan
There was also no dispute that, on October 28, 2016, buyers
contracted to purchase another Cherry Hill residence and obtained
a mortgage loan from the same lender. That transaction closed on
November 18, 2016. Meanwhile, sellers put their residence back on
the market but were unable to sell their property until May 2017.
They also realized approximately $17,000 less than they would have
had buyers not failed to go to closing in October 2016.
The judge found no relevant factual dispute and concluded
that buyers' failure to close the transaction after securing the
mortgage commitment warranted a judgment in sellers' favor. He
also determined that sellers were entitled to damages, as evidenced
by the undisputed fact – among other things – that they realized
approximately $17,000 less from a later transaction; the deposit
was forfeited to sellers and $12,000 damages were awarded because
the special civil part jurisdictional limit permitted no greater
award. See R. 6:1-2(a)(1).
We agree that sellers were entitled to summary judgment and
affirm in all respects. Buyers provided no sworn statements that
would create a genuine issue of fact regarding their failure to
close. They rely only on a contention that the lender's withdrawal
of the commitment because of the absence of sourcing of a monetary
gift justified their withdrawal from the transaction. Even if a
good faith failure to meet all the conditions of the mortgage
commitment was a cause for excusing their failure to close – we
have held to the contrary, Malus, 312 N.J. Super. at 487
(concluding that an "unknowing and blameless seller" was entitled
to damages when a buyer lost a mortgage commitment because he lost
his employment two days before closing) – the record one-sidedly
reveals that buyers' attempts to justify their failure to meet one
of those conditions – all others having been satisfied – was not
the real basis for their failure to close. Instead, as the record
reveals, even if this was a real concern and not a "dog-ate-my-
homework" excuse as it very much appears, the sellers provided
buyers with an opportunity to meet that condition and buyers simply
chose to walk away and purchase some other property rather than
honor their promise to buy. Even at the summary-judgment stage,
the buyers' actions here could not be equated with good faith.