Analyzing an Interesting Appellate Court Decision: Lessons Learned from IHG Harlem I, LLC v. 406 Manhattan LLC
This week we direct your attention to an interesting Appellate Court decision in the 1st Department which affirmed and modified a lower court ruling granting a Plaintiff-Purchaser’s motion for Summary Judgment for breach of contract. The decision was based, in part, on the fact that the Defendant-Sellers had failed to meet all of its contractual obligations before issuing Time of the Essence Letters to the Purchaser as a pre-cursor to holding Purchaser in default.
The relevant facts of, as well as a link to, the case are set forth below.
Three contracts of sale executed by the Plaintiff-Purchaser and the Defendant-Sellers required that the Sellers obtain assignments of existing mortgages. The assignments had not been obtained when the Defendants issued time of the essence letters or on the dates set for the closing. The Appellate Division affirmed the ruling of the Supreme Court, New York County, which had granted the Plaintiff’s motion for summary judgment as to liability for breach of contract. According to the Appellate Division, First Department, “[h]aving thus breached the contracts, defendants were not in a position to place plaintiff in default [citation omitted].” However, the lower court’s Order was modified to direct the return of the contract deposits to the Plaintiff as liquidated damages as provided for in the contract since the Plaintiff did not seek specific performance. IHG Harlem I, LLC v. 406 Manhattan LLC, 2021 NY Slip Op 06761, decided December 2, 2021, is posted at
https://www.nycourts.gov/reporter/3dseries/2021/2021_06761.htm
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