Supreme Court, Westchester County

Decided on May 7, 2026

Index No. 75298/2025

William J. Giacomo, J.

[*1]

In an action to recover damages for breach of an escrow agreement, in motion sequence 001, plaintiff 22 Tomahawk Drive LLC moves, pursuant to CPLR 3213 for summary judgment [*2]in lieu of a complaint against defendants Laura Hiser-Chason and Andrew Chason and moves for an order directing defendant Borsen Law, LLC, as escrow agent, to release the funds to plaintiff. In motion sequence 002, defendants cross-move, pursuant to CPLR 3212 for summary judgment in their favor and for an order directing the escrow agent to release the funds to them. Motion sequence numbers 001 and 002 are hereby consolidated for disposition.

Papers Considered NYSCEF DOC NO. 1-6; 15-35

1. Summons/Notice of Motion/Affirmation of Yesenia Barrantes-Isibor, Esq./ Affirmation of John Lajara/ Exhibits A-B

2. Notice of Cross Motion/ Affirmation of Andrew Chason/ Exhibits A-E/ Memorandum of Law in Opposition to Motion and in Support of Cross Motion

3. Affirmation in Opposition and in Further Support of Yesenia Barrantes-Isibor, Esq./ Affirmation of John Lajara/ Exhibits C-G

4. Correspondence to the Court

5. Chason Affirmation/ Exhibit A/Reply Affirmation of Leo K. Napior, Esq.

FACTUAL AND PROCEDURAL BACKGROUND

Plaintiff commenced this action by filing a summons with notice of motion for summary judgment in lieu of complaint on November 9, 2025. The record indicates that On May 12, 2025, plaintiff, as seller, entered into an escrow agreement with defendants Laura and Andrew T. Chason as buyers, and Borsen Law, LLC, as Escrow Agent, in connection with the sale of 38 Avondale Road, Harrison, New York. The Escrow Agreement memorialized that the parties agreed that the Escrow Agent would hold the sum of $100,000 in escrow after the closing of the property on May 12, 2025 until the Seller obtained certain Certificates of Occupancy (COO) from the Town of Harrison, New York. The Agreement provided that the "following and all open permits at the Premises shall be closed by the Seller ('Open Permits'): Open Building Permit #24-43523 issued on 06/26/2024 for Interior Alterations of Playroom, Kitchen, Bedrooms and Bath Open Building Permit #24-43524 issued on 06/26/2024 for Deck Expansion."

The parties hand-wrote into the agreement that if the open permits are not closed and the COO's not issued by July 12, 2025, then the escrow funds shall be released to the Purchasers. There are additional hand-written notations stating that if all the work is completed and the only outstanding issue is that the actual certificates have not been issued, seller shall have until August 12, 2025 to get the certificates of occupancy and/or completion and still receive the Escrowed Funds.

The Agreement contains the following two clauses related to dispute resolution and legal fees:

"(5) In the event of any dispute between the Buyer and Seller regarding the Escrow Funds, the Escrow Agent shall not release the funds until a mutual written agreement between the parties is provided or a final court order is issued. Notwithstanding same, if Harrison issues a COO, this shall be conclusive evidence of termination of this agreement and Escrow Agent must turn over escrow funds to the Seller.

"(6) In the event of a breach of this Agreement by any party, the non-breaching party shall be entitled to recover reasonable attorney's fees and costs from the breaching party."

The record indicates that two out of the three outstanding open permits were closed by July 9, 2025. On July 9, 2025, the Village of Harrison performed an inspection and noted that deficiencies noted on the May 28, 2025 inspection had been satisfied as follows:

"-There are numerous holes in the basement walls and ceiling that are required to be patched (COMPLETED 7/9/25)

"-There are numerous electrical devices that have been removed and are required to be replaced (COMPLETED 7/9/25)."

However, the July 9, 2025 inspection was disapproved, as the inspector noted the following two deficiencies:

"-There is an opening in the Garage ceiling where the garage door track has been removed that is required to be closed as per the 2020 Residential Code of New York State section R302.6

"-The grass is required to be mowed as per the 2020 Property Maintenance Code of New York State section 302.4

"CALL FOR RE-INSPECTION."

The record indicates that these repairs were completed on or around July 17, 2025, the property was reinspected and the COO was issued on July 24, 2025.

On July 14, 2025 and July 21, 2025, defendants demanded the release of the escrow funds to them, claiming that they were entitled to the funds since the open permits were not all closed by July 12, 2025 and there was no certificate of occupancy issued until July 24, 2025. Plaintiff did not authorize the release of the escrow funds to defendants and commenced the instant action.

Instant Motions

In motion sequence 001, plaintiff moves pursuant to CPLR 3213 for the release of the escrow funds. On July 24, 2025, the Town/Village of Harrison issued the outstanding COO. According to plaintiff, pursuant to the Escrow Agreement, issuance of the Certificates of Occupancy is conclusive evidence of the termination of the Agreement and requires the Escrow Agent to release the $100,000.00 escrow funds to plaintiff. However, defendants refused to authorize release of the funds. Plaintiff argues that the escrow agreement is a self-contained instrument for the payment of money only and defendants' refusal to release the funds constitutes a breach of the agreement. As a result, plaintiff is seeking an order directing the escrow agent to release the funds. Plaintiff also seeks attorneys' fees in accordance with the Agreement.

In motion sequence 002, defendants cross-move for summary judgment in their favor and demand release of the $100,000 in escrow funds to them. In opposition to plaintiff's motion and in support of their cross motion, defendants argue that plaintiff's motion should be denied as the escrow agreement is not an instrument for the payment of money only. In addition, defendants argue that they are entitled to summary judgment under CPLR 3212, as the parties have satisfied the joinder of issue requirement with their moving papers.

According to defendants, the unambiguous terms of the Escrow Agreement required the plaintiff to obtain the COO on or before July 12, 2025 or it would forfeit the escrow funds. As plaintiff failed to do so, the money should be released to defendants. Further, since plaintiff breached the Escrow Agreement by refusing to agree to release the escrow funds to defendants after July 12, 2025, defendants claim they are entitled to legal fees pursuant to the Agreement.

Andrew Chason submitted an affirmation in support of the cross motion. Chason affirmed that, pursuant to the Escrow Agreement, if the open permits were not closed and certificates of occupancy were not issued by July 12, 2025, defendants were entitled to the escrow funds. He states that he allowed the seller access to the property to complete the required work and to arrange for inspections. On July 9, 2025, an inspection was performed and the identified deficiencies were not completed until at least July 17, 2025, with the COO being issued on July 24, 2025. As a result, Chason argues that defendants are entitled to the escrow funds, and not plaintiff.

In opposition to defendants' cross motion, John Lajara, plaintiff's managing member, submitted an affirmation.^FN1 Lajara affirmed, in essence, that all prior interior deficiencies had been repaired by July 9, 2025 and that new deficiencies were noted on the May 28, 2025 inspection, which were not part of the ones contemplated under the initial escrow agreement. Further, throughout this period, inspections were delayed or rescheduled due to conditions outside the plaintiff's control. Despite this, plaintiff fully performed under the agreement, and the final COOs were issued by the Town of Harrison within the extension period provided in the Escrow Agreement. However, plaintiff did not receive the escrow funds to which it is entitled. Lajara also affirms that, "Defendants accepted the benefits of Plaintiff's work, permitted Plaintiff to continue after the stated deadline, allowed issuance of the Final COs, and only thereafter attempted to withhold escrow funds. This conduct constitutes bad faith and violates the clear terms of the escrow agreement."

Chason submitted an affirmation in reply. In brief, Chason affirms, among other things, that any delays in obtaining the COOs were due to plaintiff's defective workmanship and lack of proper oversight.

DISCUSSION

Summary Judgment in Lieu of a Complaint

CPLR 3213 permits a motion for summary judgment in lieu of complaint when "an action is based upon an instrument for the payment of money only . . ." Although plaintiff moved pursuant to CPLR 3213, it is well settled that "an escrow agreement is not an instrument for the payment of money only." Grinblat v Taubenblat, 107 AD2d 735, 735 (2d Dept 1985). Furthermore, in this situation, the escrow agreement required plaintiff to perform certain obligations prior to receiving the Escrow Funds. See e.g. Weissman v Sinorm Deli, 88 NY2d 437, 444 (1996) ("Where the instrument requires something in addition to defendant's explicit promise to pay a sum of money, CPLR 3213 is unavailable").

Accordingly, plaintiff's motion brought pursuant to CPLR 3213 is denied.

Summary Judgment

A party seeking summary judgment has the burden of tendering evidentiary proof in admissible form to demonstrate the absence of material issues of fact. Alvarez v Prospect Hosp., 68 NY2d 320, 324 (1986). In determining a motion for summary judgment, the evidence must [*3]be viewed in the light most favorable to the nonmoving party. Boulos v Lerner-Harrington, 124 AD3d 709, 709 (2d Dept 2015). Failure to make such showing requires denial of the motion, regardless of the sufficiency of the opposing papers. Winegrad v NY Univ. Med. Ctr., 64 NY2d 851, 853 (1986).

"Once this showing has been made, however, the burden shifts to the party opposing the motion for summary judgment to produce evidentiary proof in admissible form sufficient to establish the existence of material issues of fact which require a trial of the action." Alvarez v Prospect Hosp., 68 NY2d at 342. "The function of the court on a motion for summary judgment is not to resolve issues of fact or determine matters of credibility, but merely to determine whether such issues exist." Kolivas v Kirchoff, 14 AD3d 493, 493 (2d Dept 2005).

At the outset, although it was improper for plaintiff to move pursuant to CPLR 3213, under the circumstances, defendants' cross motion for summary judgment is proper. Pursuant to CPLR 3213, "[i]f the motion [brought pursuant to CPLR 3213] is denied, the moving and answering papers shall be deemed the complaint and answer, respectively, unless the court orders otherwise." As a result, the joinder of issue requirements have been satisfied, and defendants' cross motion for summary judgment is proper. See e.g. Nikezic v Balaz, 184 AD2d 684, 685 (2d Dept 1992) (internal quotation marks omitted) (After a motion pursuant to CPLR 3213 was denied, "the moving and answering papers submitted thereon shall be deemed the parties' complaint and answer, respectively . . . , we find that issue had been joined in the present action, in satisfaction of the requirements of CPLR 3212 (a), and the defendants' cross motion for summary judgment was proper, as was the court's ruling thereon").

Breach of Contract

In order to recover damages for breach of contract, plaintiff must demonstrate the existence of a contract, the plaintiff's performance pursuant to the contract, the defendant's breach of its contractual obligations, and damages resulting from the breach. See Investment Retrievers, Inc. v Fox, 150 AD3d 1090 (2d Dept 2017). It is well settled that a "[w]hen an agreement between parties is clear and unambiguous on its face, it will be enforced according to its terms and without resort to extrinsic evidence." City of New York v Quadrozzi, 189 AD3d 1342, 1344 (2d Dept 2020) (internal quotation marks omitted). Courts have held that "[t]he law generally exacts a high price for failure to comply with the precise language of a contract." 135 E. 57th St. LLC v Daffy's Inc., 91 AD3d 1, 2 (1st Dept 2011). Nonetheless, "in some situations, principles of equity have softened the often harsh results of common-law rules of strict contract construction. These equitable principles, such as the doctrine of substantial performance, import the concept of fundamental fairness to the context of contract-dispute litigation." Id. at 3.

"In order to recover for substantial performance, the plaintiff must establish that its failure to perform was inadvertent or unintentional and that the defects were insubstantial." Novair Mech. Corp. v Universal Mgt. & Contr. Corps., 81 AD3d 909, 910 (2d Dept 2011) (internal quotation marks omitted). In reviewing the record, the Court finds that plaintiff substantially complied with the terms of the escrow agreement and the escrow funds must be released back to plaintiff. Here, post-closing, the parties entered into an Escrow Agreement, where plaintiff agreed to place funds in escrow pending the closeout of three open permits. The permits were to be closed out by July 12, 2025, with an extension provided until August 12, 2025 if the work was completed but the COOs had not yet been issued. Two of the three permits [*4]were completed prior to the contractual deadline, and the remaining deficiencies identified by the inspector on July 9, 2025 were cured within days.

The July 9, 2025 inspection noted that plaintiff had corrected the deficiencies from past inspections but also noted that there were two remaining deficiencies. The parties disagree as to whether these were part of the original deficiencies listed and blame one another for the delay in repairing the deficiencies and/or delay in obtaining an inspection. Even accepting defendants' factual assertions, the remaining deficiencies were de minimis and did not constitute a material failure of performance. The escrow agreement contemplated that the COO could be obtained by August 12, 2025. The delay was minimal, as, at the latest, the repairs were complete on or around a week after July 12, 2025, and the COO was issued shortly thereafter, well within the August 12, 2025 extension date. Notably, defendants have shown no prejudice due to the short delay in obtaining the COO. In addition, the remaining deficiencies were immaterial, as the July 9, 2025 inspection had confirmed that all prior interior deficiencies had been corrected.

The Court of Appeals has noted, with respect to substantial performance, that "[t]he policy favoring freedom of contract requires that, within broad limits, the agreement of the parties should be honored even though forfeiture results. Nonetheless, the nonoccurrence of the condition may yet be excused by waiver, breach or forfeiture . . . to the extent that the non-occurrence of a condition would cause disproportionate forfeiture, a court may excuse the non-occurrence of that condition unless its occurrence was a material part of the agreed exchange." Oppenheimer & Co. v Oppenheim, 86 NY2d 685, 691 (1985) (internal quotation marks and citations omitted). As discussed, the deviation from the agreement was minor, did not materially affect its terms and defendants did not demonstrate any prejudice from the deviation. Thus, allowing defendants to retain the amount placed in escrow by plaintiff despite receiving the full benefit of the bargain, would cause a disproportionate forfeiture. See e.g. Pav-Co Asphalt, Inc. v Heartland Rental Props. Pshp., 278 AD2d 395, 395-396 (2d Dept 2000) ("Contrary to the defendants' contention, the Supreme Court properly determined that the plaintiff substantially performed under the contract to construct a parking lot. The defendants received that for which they bargained, a paved parking lot").

Accordingly, for the reasons above, defendants' motion for summary judgment in their favor is denied.

CPLR 3212 (b)

"CPLR 3212 (b) permits a court, on a summary judgment motion, to grant it instead to the movant's adversary, even though the latter did not request such relief. Glass v Wiener, 459 NYS2d 471, 472 (2d Dept 1983).

Here, after searching the record, the Court is granting summary judgment to plaintiff, as plaintiff substantially performed under the contract by the deadline and completely performed with minimal delay. Therefore, plaintiff may recover under the Escrow Agreement and escrow agent is directed to release the $100,000 in escrow funds to plaintiff. Although plaintiff ultimately prevailed, the Court declines to award attorney's fees pursuant to the Escrow Agreement, as defendants' position was based upon a reasonable interpretation of the contractual deadlines and conditions set forth in the Agreement, and the record does not demonstrate bad faith or willful misconduct warranting such relief.

However, plaintiff is entitled to prejudgment interest pursuant to CPLR 5001(a), [*5]computed from July 24, 2025, the date on which the Town/Village of Harrison issued the outstanding Certificates of Occupancy. On that date, plaintiff fully performed under the Escrow Agreement and its entitlement to the escrowed funds vested. The amount of interest shall be awarded pursuant to a supplemental application submitted subsequent to this decision.

All other arguments raised on this motion and evidence submitted by the parties in connection thereto have been considered by this court notwithstanding the specific absence of reference thereto.

CONCLUSION

Accordingly, it is hereby

ORDERED that plaintiff 22 Tomahawk Drive LLC's motion, pursuant to CPLR 3213 for summary judgment in lieu of a complaint is denied (motion sequence 001); and it is further

ORDERED that defendants Laura Hiser-Chason and Andrew Chason's cross motion for summary judgment in their favor is denied (motion sequence 002); and it is further

ORDERED that after searching the record, plaintiff is granted summary judgment on defendants' motion and the Escrow Agent is directed to release the $100,000 in escrow funds to plaintiff; and it is further

ORDERED that upon release of the funds, the Escrow Agent is relieved from any further obligations under the Escrow Agreement; and it is further

ORDERED that plaintiff shall be awarded prejudgment interest from July 24, 2025 until the date the funds are released to plaintiff; and it is further

ORDERED that plaintiff shall submit a supplemental affirmation, on notice, in support of the interest calculations; and it is further

ORDERED that the Clerk is directed to enter judgment accordingly.

Dated: May 7, 2026

White Plains, New York

HON. WILLIAM J. GIACOMO, J.S.C.