Plaintiffs, Sellers, have commenced the instant litigation seeking $186,397.94, plus

statutory interest, based upon a claim of Defendants, Buyers, breach of a contract of sale for

Plaintiffs' former principal residence at 6810 Salt Road, Clarence, New York in 1995. Buyers have

answered, denied Sellers' claim of breach, and are relying upon their attorney's (Amy Stromberg,

Esq.) exercise of the Contract's "Attorney Approval Contingency" clause to render the contract null

and void. At issue between the parties is whether the Buyers acted unfairly and in bad faith by their

Attorney's letter disapproving the contract. [*2]

A non-jury trial was conducted before the undersigned in January, 2006, and

subsequently, proposed Findings of Fact and Conclusions of Law were submitted by the parties.

Now therefore, upon due consideration of the proof presented at the non-jury trial and the subsequent

submissions by the parties, with due deliberation having been had thereon, I find and determine as

follows:

Sellers decided to sell their home at 6810 Salt Road, Clarence, New York, in 1995,

and contracted with real estate broker, Clayton Ertel, to act as their listing agent. The home was a

5,000 square foot ranch style located on ten acres and consisted of four bedrooms, three bathrooms,

a large guest room, and other amenities, including an indoor swimming pool, a four-car garage, a

finished basement, and a deck. The home in question has been described variously by the witnesses

as "in excellent condition", "relatively new, built in 1990", "beautiful", and a "dream house".

In September, 1995, Sellers vacated the home when they moved to Canandaigua, New

York. Clayton Ertel, a registered listing agent since 1971 and broker in excess of 20 years, who

specializes in Town of Clarence properties, listed the home originally at a price between $550,000

and $600,000. In December of 1995, Mr. Ertel was advised by Buyers real estate broker, Carol

Barnhart, that Buyers (married Doctors/Obstetricians with four sons) were interested in the home,

having visited and viewed the home on two separate occasions. On or about December 22, 1995,

the Buyers submitted to Mr. Ertel a written offer to purchase the home for $505,000, (The

"Contract", Trial Exhibit No. 1) and, in turn, Mr. Ertel met with the Sellers at a restaurant where the

offer was accepted and signed by the Sellers without change on December 22, 1995. By letter dated

December 28, 1995, (Trial Exhibit No. 3), Attorney Stromberg disapproved the contract, without [*3]

citing any reasons. By letter, dated January 10, 1996, (Trial Exhibit No. 12) and in response to

numerous Sellers' attorney's inquiries concerning the disapproval, Ms. Stromberg indicated "her

disapproval related to the closing date". By letter dated January 12, 1996, Sellers' attorney

responded that Sellers were ready, willing and able to perform the executed contract and were willing to make any reasonable accommodations in regard to the closing date.

Contemporaneous with the above-mentioned described events, Buyers became

interested in a different piece of real property in the "Spaulding Lake" area of Clarence at 9785

Keystone Court, Clarence, New York. Buyer Susan Erk conceded that they were looking at the

Spaulding Lake premises simultaneously with the Salt Road premises. Between December 18 and

27, 1995, Buyers even possessed a key to the Spaulding Lake premises. By a contract, dated

December 28, 1995, (Trial Exhibit No. 8) Buyers purchased the Spaulding Lake premises from its

owner/builder Richard Tesmer. That same day, Buyers traveled to a local showroom to purchase

fixtures for the Spaulding Lake premises. On December 30, 1995, Buyers tendered a check in the

amount of $20,100 to Richard Tesmer as a deposit for the Spaulding Lake premises.

Pre-dating the aforesaid events are the following circumstances: on December 13th,

Buyer Mehmet Erk's mother expressed concerns to him over the rural location of the Salt Road

property. On December 14th, Buyers measured the drive time from the Salt Road premises to

Suburban Hospital, where they had surgical privileges. On either December 16th or 17th, Buyer took

note, for the first time, of the surrounding neighborhood and presence of numerous motorcycles. On

December 18, 1995, Buyer Mehmet Erk was informed by a third party named Dave, (last name

unknown) that the Salt Road premises had burned down twice during construction. During the days

between December 13 and 18, 1995, Buyers talked extensively between themselves about their [*4]

misgivings concerning their purchase of the Salt Road residence.

At some point in December of 1995, Buyer Susan Erk and Attorney Amy J.

Stromberg had the one and only conversation, which activated the Attorney Approval Contingency

clause of the contract in issue, the substance of that conversation being the linchpin of this litigation.

In pertinent part, Ms. Stromberg testified that (the parties stipulated NOT to call her

at trial, and instead, to submit her pretrial testimony into evidence):

"Q. During the time period between December 13th and December 28th, did the Erks have conversations with you that they wanted to find a way in which to disapprove the contract because of concerns they had with the property?

A. No, they instructed me to disapprove the contract.

Q. And their instructions were based upon substantively what conversations or communications they made to you?

A. They didn't tell me why."

(Page 31; see also pages 41 and 49.)

This Court credits fully as worthy of belief the substance of Ms. Stromberg's

testimony and rejects any and all of Buyer Susan Erk's testimony to the contrary.

Moreover, this Court can only conclude that this conversation did not occur on

December 18, 1995, as has been suggested by Buyers, but rather at some point after Sellers executed

their acceptance on December 22, 1995. As previously noted, Sellers' realtor Clay Ertel received

the Buyers' offer shortly (either on December 21st or the 22nd) before his presentation of that offer

to Sellers for their acceptance on the 22nd. Clearly, Ms. Stromberg would not have been rejecting

a contract where none existed, and she could not have been in possession of the contract until after

Sellers accepted the offer on the 22nd. [*5]

Simply put, I find that Buyers rejected the contract in issue because they decided to

purchase the "Spaulding Lake" premises instead and that is the one and only reason why they

instructed Ms. Stromberg to disapprove the contract. In doing so, they prevented her from

considering the contract.

It is well settled law that where a Buyer acts in bad faith by instructing his attorney

to disapprove a real estate contract, the condition that the contract be approved by an attorney is

deemed waived and a contract is formed. See McKenna v. Case, 507 NYS2d 777 {123 AD2d 517} (4th Dept. 1986)

and Ulrich v. Daly, 225 AD2d 229, 231( 3rd Dept. 1996).

In this case, the preponderance of evidence establishes that the Buyers instructed Ms.

Stromberg to disapprove the contract so they could purchase the Spaulding Lake premises and in

doing so, acted in bad faith.

Accordingly, on the facts presented, I must conclude that Buyers breached the instant

contract. In sum, I find a verdict for Plaintiff Sellers.

As previously noted, Plaintiffs are seeking damages in the amount of $120,000 which

represents the difference of the subject contract price and the price at which the property was sold

three years later to August J. Lasky. In addition, Plaintiffs seek $66,397.94 for various and assorted

items denominated by the parties as "carrying costs" associated with the premises, for a total award

in the amount of $186,397.94, plus statutory interest.

It is well settled law that the measure of damages in a breach of realty contract, where

the real property is subsequently sold, is the difference in contract price and the price at which the

vendor subsequently sells the property. See Tesmer Builders v. Cimiato, 217 AD2d 953, 954 (4th [*6]

Dept. 1995) lv. denied 87 NY2d 810 (1996) and Binks v. Farooq, 178 AD2d 999, 1001 (4th Dept.

1991) lv. denied 80 NY2d 752 (1992). Additionally, Plaintiffs contend that a party may recover

consequential damages, citing Kjellgren Realty Corp. v. Galop, Inc., 205 NYS2d, 765, 772.

In this case, Plaintiffs offered no proof of the fair market value of the premises at the

time of the breach. They elected instead to rely exclusively on the difference between the Contract

price ($505,000) and the amount received three years later ($385,000) from August J. Lasky.

Consequently, Defendants argue that Plaintiffs have failed to demonstrate a sufficient basis to

support a finding for a monetary award of damages, and or, in the alternative, that this Court should

require the parties to adduce evidence of a fair market value at a future hearing.

Such a position is rejected by this Court in light of the circumstances of this case, the

proof presented, and the Fourth Department authorities previously cited. While proof of fair market

value was not presented, proof of an aggressive three-year marketing plan and strategy was offered

(albeit mostly generally disappointing to Plaintiffs). This circumstance, coupled with proof of the

subsequent Lasky sale price, in this Court's view is more than sufficient to form a basis for a

$120,000 measure of damages.

Turning to the issue of "carrying costs" in the amount of $66,397.94, this Court need

not itemize or address each and every item sought by Plaintiffs, as all are rejected for the following

reasons: first, it should be noted that the body of law submitted by Defendants in this area (See

Defendants' Proposed Findings of Fact, pgs. 25-26) is persuasive and controlling. Secondarily and

most important, it should be noted that Plaintiff Kathleen D. Moran failed to testify at trial and it

appears that she and not her husband would have been in the best position to offer such proof, had [*7]

such proof existed. Plaintiff James J. Moran's testimony in this aspect of the case is simply

unavailing and unpersuasive.

As to the claim by Defendants on post trial submissions that Plaintiffs failed to

mitigate their damages, to wit, that they failed to attempt to rent the property over the three-year

period, it appears to be directed more towards Plaintiffs' claim for "carrying costs" and not at the

difference in the two contract prices. Accordingly, it must also be rejected. In addition, I find

that Plaintiffs took all reasonable steps to mitigate by actively marketing the instant property as

quickly as possible post breach.

Finally, the parties take issue with the date from which statutory interest should be

imposed. In this case, I find that Plaintiffs' cause of action accrued when Amy Stromberg

disapproved the contract at the direction of Defendants on December 28, 1995, and therefore award

statutory interest from that date forward.

SO ORDERED.

__________________________________

Honorable Joseph R. Glownia

State Supreme Court Justice

ENTERED: