Capezzuto v Iascone

[*1] Capezzuto v Iascone 2007 NY Slip Op 52159(U) [17 Misc 3d 1126(A)] Decided on November 13, 2007 Just Ct Of Town Of Webster, Monroe County DiSalvo, 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 This opinion is uncorrected and will not be published in the printed Official Reports.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 November 13, 2007
Just Ct of Town of Webster, Monroe County

Cheryl Capezzuto and Lee Dam, Plaintiffs,

against

Peter Iascone and Roselynn Iascone, Defendants.



07060528



Cheryl Capezzuto & Lee Dam, Pro Se

Richard J. Horwitz, Esq., Attorney for Defendants

Thomas J. DiSalvo, J.

The plaintiffs filed an action in the Small Claims Part of Webster

Justice Court on July 26, 2007 against the defendants claiming damages in the amount of

Three Thousand Dollars ($3,000.00). The plaintiffs allege that the defendants breached a real

estate contract by not allowing Cheryl Capezzuto to accompany plaintiffs' engineer in an

inspection of the residence of the defendants prior to the real estate closing.

In response to said claim the Defendants filed an Answer with an Affirmative Defense

and Counterclaim. The answer was in the form of a general denial. The affirmative defense and

counterclaim alleged that the parties entered into a real estate contract for the sale of 1274 Creek

Bend Lane, located in the Town of Webster, and that the Plaintiffs breached said contract. The

Defendants allege that a Notice of Time of the Essence to close the sale was served on the

Plaintiffs on June 9, 2007 demanding that the closing take place on June 14, 2007 at 4:00 P.M. [*2]

at the office of Plaintiff's Bank Attorney, i.e. Dollinger & Associates. Defendants further allege

that the Plaintiffs refused to close said real estate transaction as demanded causing them to be

damaged in the amount of Three Thousand Dollars ($3,000.00).

The matter was set down for a bench trial on September 19, 2007 at 5:00 P.M. Some

testimony was taken on that date and the balance of said trial was adjourned to October 31, 2007

at 5:00 P.M.

Findings of Fact.

1. The parties entered into a Purchase and Sale Contract for Residential Property on

February 11, 2007.

2. The Property in question is located at 1274 Creekbend Lane in the Town of Webster.

3. The Plaintiffs were buyers of said property.

4. The Defendants were the sellers of said property.

5. The agreed upon purchase price was One Hundred Ninety Two Thousand Dollars

($192,000.00).

6. The contract was contingent on the buyers/plaintiffs obtaining a thirty (30) year

conventional mortgage and contingent on an acceptable "engineer's, contractor's, or home

inspection service".

7. The buyers/plaintiffs deposited $1,500.00 with the realtor for the sellers/defendants.

8. The buyers/plaintiffs were represented in this transaction by Pamela J. Gardner, Esq.

9. The sellers/defendants were represented by Richard J. Horwitz, Esq.

10. Both attorneys approved the contract as to form on behalf of their respective

clients. [*3]

11. That the buyers/plaintiffs executed a "Buyer Notice of Removal of Contingency",

relative to a "An acceptable Engineer's or Contractor's inspection", dated February 19, 2007.

12. That the Purchase and Sale Contract provides in paragraph "13" that "Buyer shall

have the right to inspect the property within 48 hours before the time of closing, and Seller

agrees that all utilities shall be on at that time."

13. That pursuant to two addendums to the contract independently executed by the

sellers/defendants and buyers/plaintiffs respectively on March 13, 2007 and March 15, 2007, the

sale price of the property was decreased to One Hundred Eighty Five Thousand Dollars

($185,000.00).

14. That on March 14, 2007 the attorney for the buyers/plaintiffs provided the attorney

for the defendants/sellers with a copy of the required mortgage commitment.

15. That a "Notice of Time of the Essence Iascone to Capezzuto" dated June 9, 2007

was personally served on the buyers/plaintiffs on June 9, 2007 at 11:15 A.M, demanding that

closing take place on June 14, 2007 at 4:00 P.M. .

16. That the Purchase and Sale Contract set out a projected closing date as on or before

May 24, 2007.

17. That the attorney for the plaintiffs/buyers notified the attorney for the

defendants/sellers, by letter dated June 12, 2007, that the plaintiffs/buyers considered the

Purchase and Sale Contract to be breached, because "the licensed engineer employed by them for

the purpose of examining for suspected water damage was not allowed access to the premises

on Monday, June 11th".

18.That the attorney for the defendants/sellers notified the attorney for the plaintiffs/ [*4]

buyers, by letter dated June 13, 2007, that his clients considered the cancellation of said contract

to be without merit.

19.That the said letter of June 13, 2007 indicated that the sellers/defendants denied that

the buyers' inspector was precluded from conducting his examination.

20. That the said attorney for the sellers/defendants indicated in his letter of June 13,

2007 that the property in question could be inspected on the morning of June 14, 2007 at 9:30

A.M. by buyers' inspector and by "Mr. Jacobson".[FN1]

21. That the attorney for the sellers/defendants appeared at the office of bank attorney

at the time designated in the "Notice of Time of the Essence Iascone to Capezzuto", to wit:

June 14, 2007 at 4:00 P.M.

22. That the buyers/plaintiffs, through Kurt Harnischfeger, hired a home inspector, i.e.

Jack B. Kamann of Guardian Home Inspectors to inspect the premises in question.

23.That on June 11, 2007 the said inspector arrived to inspect said premises. Also

present was the brother of the buyer/plaintiff, Cheryl Capezzuto, to wit: Kurt Harnischfeger,

the real estate broker for the seller/defenant, Rick Cooligan and Peter Iascone.

24. That the inspector, Jack B. Kamann, testified that when he arrived to conduct the

inspection on June 11, 2007, he was advised by the said Kurt Harnischfeger that the inspection

was over; that he was never advised by the sellers that he could not do the inspection, but that the

buyer's brother told him the inspection was over. He also testified in sum and substance that [*5]

he would not have inspected the property unless Kurt Harnischfeger was present during the

inspection.

25. The inspector was hired by the buyer's brother and was paid One Hundred Dollars

($100.00) by the said Kurt Harnischfeger on behalf of the buyers/plaintiffs.

26. Attorney for buyers/plaintiffs testified that she was advised by the real estate broker

for the sellers/defendants that the brother of the plaintiffs/buyers could not accompany the

inspector during the inspection.

27. The plaintiffs/buyers had previously hired an home inspector to inspect the property

in question on February 19, 2007. However, he advised said buyers that he could not make a

definitive evaluation of the water stains he observed on the basement walls, because it was too

cold out at the time of the February inspection. Nevertheless, February 19, 2007 was the same

date that the removal of the engineer's inspection contingency was signed.

28. The buyers/plaintiffs requested a further opportunity to inspect the property as

part of the final "walk through" .

29. That the additional inspection did not take place because of the disagreement

between Mr. Harnischfeger and Mr. Iascone, wherein Kurt Harnischfeger was not allowed to

accompany the home inspector on June 11, 2007.

30.The buyers/plaintiffs did not take advantage of the additional opportunity to inspect

the property that was offered via the sellers' attorney's letter of June 13, 2007.

31. That the sellers/defendants hired their own inspector, Geoff Benway, on June 9,

2007 to inspect the property. Said inspector had a B.S. in Civil Engineering and was licensed by [*6]

New York State.

32. That said inspector of the sellers/defendants observed the basement of said house

and noticed dry salt stains on the walls, observed a dry stain on the first row of block around the

entire basement, and that the water in the sump pump was below the under drain.

33.The inspector for the sellers/defendants testified that the walls were dry, including

the areas where water or salt stains were observed. He did not detect any mildew in the

basement. In addition the trench between the basement walls and the "floating basement" slab

was dry. He also indicated that the first row of basement blocks that were stained were in fact

dry.

34. The sellers/defendants did in fact sell the property in question to other buyers on or

about July 3, 2007 for $175,000.00, which was $10,000.00 less than contract price negotiated

with the buyers/plaintiffs.

35.That the Real Estate Commission on the original sale price of $185,000.00 house

was $11,100.00.That the Real Estate Commission on the actual sale of the property at the

sale price of $175,000.00 was $10,000.00. The net savings on the commission being $1,100.00.

36.That the difference in the proceeds earned by the sellers/defendants as a result of

the subsequent sale of the property was $8,900.00. Same was computed as follows: $185,000.00

- $175,000.00 = $10,000.00 less the amount of real estate commission saved as a result of the

reduced sale price, to wit: $10,000.00 - $1,100.00 = $8,900.00.

37. The plaintiffs allege a breach of contract by the sellers and demand damages in the

amount of $3,000.00.

38. The defendants allege in their counter-claim that the buyers breached the contract [*7]

and demand damages in the amount of $3,000.00.

39. The Purchase and Sale Contract entered into by the parties states in Paragraph "15"

that "If Buyer fails to complete Buyer's part of the contract, Seller is allowed to retain the

deposit to be applied to the Seller's damages, and may also pursue other legal rights Seller has

against the Buyer ...."

Issues Presented.

1. Did the sellers/defendants repudiate the contract by refusing to allow plaintiff's

brother to accompany the home inspector during inspection of the residence on June 11,

2007?

2. Did the sellers/defendants properly establish Time of the Essence ?

3. Did the buyers/plaintiffs repudiate the Purchase and Sale Contract by not closing

the transaction after receiving the "Time is of the Essence" Notice?

4. Are either of the parties herein entitled to any damages pursuant to their Claim or

Counterclaim?

Legal Analysis and Conclusions.

A. Repudiation by Sellers/Plaintiffs.The Purchase and Sale Contract entered into by

the parties was subject to "an engineer's, contractors, or home inspection service". However,

that contingency was soon removed. Paragraph "13" of said contract gives the buyer the right to [*8]

inspect the property 48 hours prior to the closing.Said paragraph makes no mention of anyone

other than the buyers as having the right to inspect the property. The sellers/plaintiffs did not

deny the home inspector access to the premises. The sellers/defendants did not deny the buyers

themselves from inspecting the premises. Access was only denied to the plaintiff's brother. He

is the one who declared that the inspection was over.

It is well established that "... the material breach of a contract, performance of which has

begun, will justify an immediate action for all damages, past, present and future (4 Corbin,

Contracts {1951], Section 946." Rozay v. Hegeman Steel Products,Inc. (1962) 37 Misc 2d 10.

12-13, 234 NYS2d 647, 650 -651 . However, under the circumstances described herein, one

would be hard pressed to argue that the sellers/defendants repudiated a material element of the

agreement. As a result, even though the brother of one of the buyers was denied access to the

property as part of the inspection on June 11, 2007, the buyers/plaintiffs could not rightly claim

that the sellers/defendants materially breached the agreement. Only such a material breach

would amount to a repudiation of the agreement, that would result in discharging the

buyers/plaintiffs from a duty to perform their part of the bargain. Failure to allow the brother

of one of the plaintiffs to accompany the inspector during the "walk through" cannot be

described as an action that renounces the contract as a whole or expressly repudiates the contract.

See Hanan v. Nemours Trading Corporation (1921) 187 N.Y.S. 169. 170. See also O'Connor v.

Sleasman (3rd Dept. 2007) 37 AD3d 954, 956, 830 NYS2d 377, 379 where the court stated

that " To support the claim of anticipatory repudiation, there must be an unqualified and clear

refusal to perform with respect to the entire contract'...."

Nevertheless, the sellers acquiesced to the demands of the buyers/plaintiffs, when the [*9]

attorney for the sellers/defendants faxed a letter to the attorney for the buyers/plaintiffs on June

13, 2007, wherein the buyers were advised that they would be permitted to conduct the

inspection the next morning and that Mr. Jacobson could attend if so desired.[FN2] Even assuming

arguendo that the initial denial of access to the property to Mr. Jacobson [sic], could be

considered a repudiation of the contract by the buyers/plaintiffs, one must consider the June 13th

letter from the attorney for defendants/sellers a cure of the alleged repudiation. Certainly, the

position of the parties had not materially changed by that date, notwithstanding the plaintiffs'

attorneys' letter of June 12th, alleging a breach of the contract by the sellers. Nor could the

sellers' actions be considered a final anticipatory breach, because the defendants were not given

a reasonable time within which to cure the alleged breach. As indicated previously, in the case of

an anticipatory breach, a plaintiff need not wait to bring suit until the scheduled or predicted date

of performance. Nevertheless, since the time for the required performance has not taken place,

the defendants should have been given the opportunity to cure the breach, if by doing so the

plaintiffs are not harmed."Furthermore, it has long been the law that a party repudiates a

contract where [that] party, before time for performance arrives puts it out of his power to keep

his contract'..... Stated otherwise a party repudiates a contract when it voluntar[ily] disable[s]

itself from complying' with its contractual obligations...." Computer Possibilities Unlimited, Inc.

v.Mobil Oil Corporation (2nd Dept., 2002) 301 AD2d 70,77, 747 NYS2d 468, 475. In the

instant case the actions of one of the defendants, which denied access to the brother of one of the

plaintiffs to the so-called "walk through", was not an act that either went to a material element of

the agreement or prevented further performance of the contract by the defendants. Since the time [*10]

for performance had not expired, there was room for further consideration by the defendants of

there position relative to said plaintiff's brother. In other words the defendants had time to cure

this perceived anticipatory breach and there had been no unequivocal repudiation of the

agreement by the plaintiffs. Scavenger, Inc. v. GT Interactive Software Corp. (1st Dept. 2001)

289 AD2d 58, 734 NYS2d 141.

Lastly the "walk through" permitted by the contract within forty eight (48) hours of the

closing is generally not meant to be a time for a major examination of the property on par with an

inspection conducted by an engineer, contractor or home inspector. That type of inspection

is done soon after acceptance of the purchase offer. In this particular case the inspection

contingency was waived by the buyers/plaintiffs. The aforementioned "walk through" is

normally meant for the buyers themselves to determine if there are any obvious changes in the

condition of the property from the time the offer was accepted, if any minor repairs are required,

if there are any obvious conditions needing attention or any malfunctions in any of the

utilities, such as electric lighting, plumbing, air conditioning or heating. It is not a time to

conduct a second home inspection by an engineer or other expert.Nevertheless, in the instant

case the parties agreed that on June 11, 2007, the buyers would get a chance to reinspect the

basement for water damage. Although, the sellers/defendants unreasonably refused to allow the

the brother of Cheryl Capezzuto access to the house with the home inspector, they subsequently

relented on June 13, 2007 and indicated through their attorney that they would permit "Mr.

Jacobson " [sic] to enter the premises as well.[FN3] This cured any breach by the sellers/defendants. [*11]

B. Time of the Essence. In the instant case the attorney for the sellers/defendants

personally served the "Notice of Time of the Essence" on the buyers/plaintiffs. It is well

established that "... where time is not stated to be of the essence in the agreement , a party may

give notice making time of the essence provided the notice is clear, distinct and unequivocal,

fixes a reasonable time within which to perform and inform(s) the other party that if he does not

perform by that date, he will be considered in default....'" Whitney v. Perry (3rd Dept. 1994) 208

AD2d 1025,1026, 617 NYS2d 395, 396 . The said "Time of the Essence Notice" was served

five days prior to the projected closing date. It set out the date and time and place of closing and

it indicated that if the buyers/plaintiffs did not close the deal at the stated time, date and place,

same would constitute a default of the contract. Thus the notice sent out by the

defendants/sellers did establish that time was of the essence as far as closing the deal on the

said closing date of June 14, 2007 at 4:00 P.M. at the office of the bank attorney.

C. Repudiation by Buyers/Plaintiffs. The letter of the attorney for the buyers/plaintiffs,

which was sent to the attorney for the sellers/defendants, which was dated June 12, 2007, states

in pertinent part "Under the circumstances, my clients unfortunately feel that they have no option

but to consider the contract for the purchase of 1274 Creek Bend Lane, Webster, breached

by the Sellers, and demand a prompt return of their deposit." That letter constitutes an

anticipatory breach of the contract by the buyers/plaintiffs. "An anticipatory repudiation occurs

when a party disclaims the duty to perform under the contract prior to the time designated for its

performance and before it has received all the due consideration." Rivera -Ramos v. Welsh

(2006) 10 Misc 3d 1071(A) 814 NYS2d 564.Since the buyers/plaintiffs had previously been [*12]

served with a Notice of Time of the Essence on June 9, 2007, they were aware that the

sellers/defendants expected performance of the contract on June 14, 2007. The buyers/plaintiffs

made no effort to cure the breach prior to the "Time of the Essence" closing of June 14, 2007 at

4:00 P.M. As a result, the buyers/plaintiffs breached the Purchase and Sale Contract entered

into by the parties herein.

D. Damages. The buyers/plaintiffs failed to establish by a preponderance of the

evidence that the sellers/defendants breached the contract. In accordance with said verdict the

claim of the plaintiffs is hereby dismissed. As a result, the plaintiffs are not entitled to any

damages with respect to their claim.

On the other hand, the defendants/sellers did establish by a preponderance of the evidence

the allegations set out in their counterclaim, namely that the plaintiffs/buyers breached the

Purchase and Sale Contract entered into by the parties herein. Furthermore, the sellers did

establish that they eventually resold the property in question for $10,000.00 less than they had

contracted to sell said real estate to the plaintiffs. Absent questions of jurisdictional limitations

or mitigation the damages herein would be Ten Thousand Dollars($10,000.00), because "... the

measure of damages incurred as a result of a breach of real estate contract is either the difference

between the contract price and a subsequent lower sale price or, where no subsequent sale has

occurred, the difference between the contract price and the market value of the real property at

the time of breach ...." DiScipio v. Sullivan (3rd Dept. 2006) 30 AD3d 677, 816 NYS2d 578,

579. See also, Tesmer Builders, Inc v. Cimato, (4th Dept. 1995) 217 AD2d 953, 629 NYS2d

594. In mitigation, the evidence did show that the sellers/defendants saved $1,100.00 on the real

estate commission relative to the subsequent sale, resulting in a net loss due to the breach of the [*13]

contract by the buyers in the amount of $8,900.00.

However, the jurisdiction of this court is limited to Three Thousand Dollars ($3,000.00)

pursuant to Uniform Justice Court Act Section 202. Therefore, the court finds that the plaintiffs

are liable to the defendant in the amount of $3,000.00. In accordance with said verdict it is

hereby ordered, adjudged and decreed, that a judgment shall be entered in favor of the defendants

and against plaintiffs on said counterclaim in that sum, together with the $3.00 filing fee paid by

the defendants for a total judgment of $3,003.00. This constitutes the decision and order of this

court.

Dated: Webster, New York

November 13, 2007

E N T E R ,

_________________________________________

Hon. Thomas J. DiSalvo

Webster Town Justice. Footnotes

Footnote 1: The attorney for the sellers/defendants was referring to the brother of Cheryl Capezzuto.

i.e. Kurt Harnischfeger. The name "Jacobson" was confused with Mr. Harnischfeger's employer.

Footnote 2: Again, the referred to Mr. Jacobson was in fact Kurt Harnischfeger, plaintiff's brother.

Footnote 3: Reference to a "Mr. Jacobson" in sellers' attorneys letter of June 13, 2007, apparently

was referring to the said Kurt Harnischfeger.