This action stems from an aborted conveyance of real property. Plaintiff Annette Rivera commenced this action seeking the return of her down payment for the purchase of real property from defendants Ken Konkol and Caryn B. Adelman. Defendant sellers counterclaim for a declaration that they are entitled to the down payment as damages for plaintiff buyer's alleged breach of the contract. Plaintiff buyer now moves and defendant sellers cross move for summary judgment.

In August 2006, plaintiff Rivera retained a different attorney, Reena Frost, to represent her in the contemplated purchase of the real property owned by defendants, located at 3011 [*2]Netherlands Avenue, Riverdale, New York. In September 2006, plaintiff and defendants executed a residential contract of sale for the subject residential property. The contract set the purchase price at $950,000, and required a down payment of $95,000, with the balance of $855,000, payable at time of closing. The down payment was satisfied by a check drawn from the Attorney Trust Account with Shelley Ann Rivera, Esq. The contract set the closing date for October 12, 2006.

On the afternoon of October 11, 2006, the parties adjourned the closing because counsel for plaintiff had not received the remaining balance ($855,000) of the purchase price from the Attorney Trust Account with Shelley Ann Rivera, Esq. The parties re-scheduled the closing for October 12, 2006. Again, the parties cancelled the closing because counsel for plaintiff had not received the remaining balance of the purchase price from the Attorney Trust Account. This time, in response to the request by plaintiff's counsel for the re-scheduling of the closing, counsel for defendants sent, via telecopier and certified mail, a correspondence to plaintiff's counsel purporting to be a "time of the essence" closing demand. The letter states, in pertinent part, that:

Seller's Demand is hereby formally made for a closing of title in this transaction on any business day hereafter up to and including Wednesday, October 18, 2006.

Obviously, our figures will need to be readjusted for the closing date as to mortgage pay-offs and real estate tax, water and sewer adjustments. We will also expect the Purchaser to cover Sellers' per diem mortgage interest of $70.13/day and home equity loan per diem interest of 21.61/day from tomorrow, October 13, 2006 through the day after closing, in consideration of Sellers' forbearance of their right to declare Purchaser in breach of the Contract of Sale as of today and retain her contract down payment as liquidated damages.

Purchaser's time to close pursuant to the Contract of Sale is hereby extended upon the above stated conditions, to 3:00 P.M. Wednesday, October 18, 2006, time being of the essence.

The parties re-scheduled the closing for the afternoon of October 16, 2006. However, the parties were unable to finalize the closing when attorney Shelley Ann Rivera, Esq. failed to attend the closing, as promised, and provide the balance of the purchase price from the Attorney Trust Account. To her dismay, plaintiff Annette Rivera learned that her niece, Shelley Ann Rivera, Esq., had disappeared, leaving a note apologizing for the misappropriation of most or all the money in her Attorney Trust Account, due to an alleged gambling problem.

Meanwhile, in a letter dated October 17, 2006, counsel for plaintiff advised counsel for defendants not to distribute the down payment to his clients. In response, counsel for defendants sent a letter, dated October 20, 2006, to counsel for plaintiff, indicating, in pertinent part, that:

I am in receipt of your letter of October 17, 2006, in which you advise not to disturb the contract down payment and that it remains Ms. Rivera's intention to complete the transaction. In my follow-up telephone conversation with you, however, you indicated that it was doubtful whether Ms. Rivera would be able to come up with the necessary funds to enable this to happen.

On October 20, 2006, plaintiff buyer commenced this action against defendant sellers, simultaneously seeking a Temporary Restraining Order prohibiting defendant seller's counsel from declaring plaintiff in default and distributing the down payment to his clients. On November 20, 2006, the parties resolved the TRO request by executing a stipulation terminating the contract of sale on mutual consent while preserving the parties' rights to the down payment, to be based upon the parties' conduct prior to the termination of the contract.

Simultaneous with this action, plaintiff made complaints with the Disciplinary Committee and the Westchester County District Attorney's Office with regard to Shelley Ann Rivera, Esq.'s apparent misappropriation of most or all the Attorney Trust Account. Meanwhile, the Westchester Journal News reported on December 10, 2006, that Shelley Ann Rivera, Esq. "has been arrested [in Las Vegas] and is awaiting extradition to Westchester," pursuant to a warrant of arrest issued by the Westchester Country District Attorney's Office.

Since the parties have mutually consented to rescind the contract, the only dispute that remains is the down payment. Both plaintiff buyer and defendant sellers claim that they are entitled to the down payment as a matter of law. A proponent of a motion for summary judgment must make a prima facie showing of entitlement to judgment as a matter of law, tendering sufficient evidence to demonstrate the absence of any material issues of fact. Zuckerman v. City of New York, 49 NY2d 557 (1980). Once this showing has been made, the burden shifts to the party opposing the motion to produce evidentiary proof in admissible form sufficient to establish the existence of material issues of fact which require a trial of the action. Romano v. St. Vincent's Medical Center of Richmond, 178 AD2d 170 (1st Dept., 1991). See also, Bensonhurst Real Estate v. Ltd v. Helsam Realty Co., 1 AD3d 302 (2nd Dept. 2003).

More than a century ago, the Court of Appeals in Lawrence v. Miller, 86 NY 131 (1881) held that a vendee who defaults on a real estate contract without a lawful excuse cannot recover his/her down payment. The so-called "modern rule" is to the contrary and permits a seller, where the buyer has substantially performed prior to the default, to recover his actual damages as a measure of recovery, so long as the amount of damages approximate the amount of the down payment. Barton v. Lerman, 233 AD2d 555 (3rd Dept. 1996). In Maxton Blds v. Lo Galbo, 68 NY 373 (1986), the Court of Appeals considered whether to abrogate the common law rule that it announced in Lawrence v. Chiller, supra. In Maxton, the Court of Appeals, after reviewing the relative merits of both rules, with respect to real estate transactions, held that the rule that permits recovery of actual damages "does not appear to offer a better or more workable rule than the long-established rule in this state with respect to the seller's right to retain a down payment upon default." 68 NY2d at 381-382.

Accordingly, the prevailing rule in this State permits a contract vendor to retain the down [*4]payment where the vendee defaults on a real estate contract without a lawful excuse. Maxton Blds v. Logato, 68 NY2d 373 (1986); Palmiotto v. Mark, 145 AD2d 549 (2nd Dept. 1988); Tom Jones Realty Corp. v. Frick, 144 AD2d 451 (2nd Dept. 1988); Levin v. Trattner, 130 AD2d 462 (2nd Dept. 1985). In such a case, the seller need not prove actual damages. Korabel v. Natoli, 210 AD2d 620, 621-622 (3d Dept. 1994). Moreover, the purchaser is not entitled to a return of the down payment even if the seller resells the property to a third-party for an amount equal or in excess of the original contract price. Micciche v. Homes by the Timbers, Inc., 18 AD3d 833 (2nd Dept. 2005).

In this case, in refusing to return the contract deposit, defendants contend that plaintiff buyer defaulted when she failed to close within the deadline imposed by the purported time of the essence letter. Where a contract for the sale of real property does not contain a specific declaration that time is of the essence, the law permits the parties a reasonable time in which to tender performance, regardless of whether the contract designates a specific date on which such performance is to be tendered. See, Grace v. Nappa, 46 NY2d 560 )1979); 4200 Ave. K Realty Corp. 4200 Realty Co., 123 AD2d 419 (1st Dept. 1986). However, where time was not made of the essence in the original contract, one party may subsequently give notice making time of the essence, and avail himself of forfeiture on default. See, Schmidt v. Reed, 132 NY 108 (1892); ZeMerman, 134 AD2d 555 (2nd Dept. 1989); 76 N. Assoc. Theil Mgt. Corp., 114 AD2d 948 (2nd Dept. 1987).

Before a party may avail himself of forfeiture on default, three requirements must be met. First, the notice must be clear, distinct and unequivocal that time is of the essence. Second, the notice must fix a reasonable time within which to perform. See ZeMerman, 134 AD2d 555 (2nd Dept. 1987); 76 N. Assoc Theil Mgt. Corp,114 AD2d 948 (2nd Dept. 1985). Third, the notice must inform the other party that if he does not perform by that date, he will be considered in default. See, Mohen v. Mooney, 162 AD2d 664 (2nd Dept. 1990); Tarlo Robinson, 118 AD2d 561 (2nd Dept. 1986); Royce Rymkevitch, 29 AD2d 1029 (1st Dept. 1973). It does not matter that the date is unilaterally set. See, ZeMerman, supra; Tarlo Robinson, supra. When the closing does not occur on the specified date, the other party will be in breach of the contract. Sohayegh v. Oberlander, 155 AD2d 436 (2nd Dept. 1985). See, ZeMerman, supra; Tarlo Robinson, supra. A defaulting buyer will forfeit its down payment. Conversely, if the seller defaults, the buyer will be entitled to commence an action for specific performance. Id.

This Court finds that the letter sent by defense counsel purporting to be a time of the essence demand was ineffective because it contained only two of the three required elements. The letter clearly states that "time is of the essence" and specifies the date by which the closing must take place. The letter, however, fails to warn that if the other party does not perform by the deadline, it will be considered to be in default. On the contrary, the letter states that Ain consideration of the Seller's forbearance of their right to declare the Purchaser in breach of the Contract of Sale as of today [October 12, 2006] and retain her contract down payment as liquidated damages," the seller expects the buyer to cover the "Sellers' per diem mortgage interest of $70.13/day and home equity loan per diem interest of 21.61/day from tomorrow, October 13, 2006 through the day after closing...."

The sellers's reference to a breach was factually and legally inaccurate since, as of that date, no time of the essence had ever been communicated either by the original contract or any subsequent writing adjourning the closing date. Moreover, this language cannot be construed as an unequivocal warning that failure to close by the new deadline would result in a default. In [*5]fact, the sellers's reference to its forbearance of the right to declare a breach and to retain the damages payment refers to the purchaser's failure to close on October 12, 2006, and not to the October 18, 2006, time of the essence closing date. Since there was no clear and unequivocal warning that the failure to close by the unilaterally imposed deadline would be considered a default, there was no time of the essence period by which plaintiff was required to perform to avoid being in default. Cf. Rose v. Durham, 21 AD3d 530 (1st Dept. 2005) (Ineffective time of the essence letter where it merely states that plaintiff would be responsible for "any and all damages sustained."); Karamatzanis v. Cohen, 181 AD2d 618 (1st Dept. 1992) (Letter insufficient to render time of the essence since there was no clear and unequivocal warning that failure to close would be considered a default.).

Significantly, defendant sellers' behavior post the unilaterally imposed deadline belies defendant sellers' current argument that an unequivocal time of the essence date had been set. As noted above, after the closing did not take place by the unilaterally imposed deadline of October 18, 2006, counsel for defendants sent a letter to plaintiff's counsel inquiring as to whether plaintiff had any real intention to close. The letter further warns plaintiff's counsel that his failure to respond "by close of business on Wednesday, October 22, 2006 of when Ms. Rivera intends to close this transaction," will compel defendants' counsel "to issue a formal notice of default." Of course, such warning of a prospective default would not have been necessary had defendant sellers already considered plaintiff in default based upon the failure to close by the previously imposed deadline.

In short, defendant sellers' basis for retaining the down payment is untenable as a matter of law. Plaintiff did not breach the contract by failing to close on the unilaterally imposed deadline of October 18, 2006, pursuant to the time of the essence letter. Defendant sellers' time of the essence letter was ineffective because it did not give clear and unequivocal notice that the failure to comply with the deadline would result in an irrevocable default. Under the circumstances, defendant sellers are not entitled to retain plaintiff purchaser's down payment ($95,000). Accordingly, plaintiff's motion for summary judgment is granted in all respects. Plaintiff is entitled to judgment in the sum of $95,000, representing the down payment, plus appropriate interests from the date the down payment was deposited in defendants' counsel's escrow account.

This constitutes the Decision and Order of the Court.

Dated: March 30, 2007__________________________

Bronx, New YorkHon. Dianne T. Renwick, J.S.C.