Jaramillo v. Case
| Decision Date | 01 May 2007 |
| Docket Number | No. 27437.,27437. |
| Citation | 919 A.2d 1061,100 Conn.App. 815 |
| Court | Connecticut Court of Appeals |
| Parties | Martin JARAMILLO v. Robert A. CASE et al. |
Michael S. McKenna, New Milford, with whom was Mary M. Looby, Brooklyn, NY, for the appellant (plaintiff).
Mark J. Kovack, Westport, for the appellees (intervening defendants).
BISHOP, ROGERS and LAVINE, Js.
This appeal concerns an action for the specific performance of a contract of sale for certain real property. Following a trial to the court, the plaintiff, Martin Jaramillo, appeals from the judgment rendered in favor of the defendants and the intervening defendants.1 On appeal, he claims that the trial court (1) applied an improper legal standard to determine that the defendants, Robert A. Case and Suzanne P. Case, reasonably refused to extend the mortgage contingency date, (2) made findings that are clearly erroneous, (3) improperly concluded that the plaintiff was unable to close the transaction and (4) abused its discretion by precluding him from recalling a witness to testify. We affirm the judgment of the trial court.
Given the nature of the claims, a detailed recitation of the court's finding of facts is necessary. In the summer of 2004, the defendants offered for sale property at 34 Echo Drive, located on the shore of Candlewood Lake in New Milford. The plaintiff was looking to purchase property on Candlewood Lake, and on September 24, 2004, offered to buy the property for $1,825,000 contingent upon several events, including his "obtaining a first mortgage from an accredited money lending institution in the amount of $1,556,750," an event that never occurred. The offer to purchase did not specify a date by which the mortgage loan commitment had to be obtained, but anticipated that a contract for sale would be signed later. The plaintiff represented that he had been prequalified for a mortgage.2 The defendants accepted the plaintiff's offer to purchase on September 24, 2004. The plaintiff and the defendants entered into a contract of sale (contract) on October 22, 2004.
At the time the defendants received the plaintiff's purchase offer, they were entertaining another offer from the intervening defendants, Peter N. Reikes and Randi B. Reikes, who had offered to buy the property for $1.7 million in cash, contingent on a full inspection.3 The intervening defendants were disappointed by the turn of events and asked to be informed if the plaintiff did not consummate the transaction.
The plaintiff's inspection of the property revealed a problem with the roof, but he and the defendants reached a compromise. When they agreed to the compromise, the defendants sent the plaintiff a letter dated October 15, 2004, stating in part: 4
The plaintiff signed the contract on October 22, 2004. The contract was contingent on his obtaining a commitment for a loan in an amount not less than $1,556,750. The contract provided that (Emphasis added.) The contract did not contain a "time is of the essence" clause, but provided that closing of title was to take place within two months after all of the contingencies had been met. It also required that the defendants convey the premises free of any tenants on the property.
The plaintiff completed a mortgage application for Manhattan Mortgage Company on October 25, 2004. His mortgage broker, Melissa Cohn, requested an appraisal of the property on October 27, 2004. Scott Keland, the appraiser, performed an incomplete inspection on October 30, 2004. To obtain information about the property, Keland attempted to reach the defendants' attorney, Terry Pellegrini, on November 1, 2004, but he was on vacation. Keland made no other attempts to get the information he needed, but simply waited to speak with Pellegrini.
In a November 4, 2004 letter to Pellegrini, the plaintiff's attorney, Kenneth E. Taylor, requested an extension of the mortgage contingency date from November 5, 2004, to November 12, 2004. Taylor also stated that if the defendants were "not agreeable to an extension, we will have no choice but to ask for a refund of our deposit monies." The defendants refused to grant the extension until November 12, 2004, but agreed to extend the mortgage contingency date until November 9, 2004, and stated that they would consider a further extension beyond November 9, 2004, provided the plaintiff gave them a satisfactory explanation for the delay in obtaining a mortgage loan commitment. Robert Case wanted an explanation for the delay, as six weeks had passed since the defendants had accepted the plaintiff's purchase offer. Taylor's letter was the first indication the defendants had that the plaintiff needed more time to obtain a mortgage loan, but it gave no explanation as to why. Robert Case spoke by telephone with Cohn on November 8 or 9, 2004, in an effort to satisfy himself as to the status of the plaintiff's mortgage application. The conversation became contentious when Cohn refused to discuss the plaintiff's financial situation. In a subsequent conversation with Taylor, Robert Case learned that the plaintiff's potential lender wanted to review the plaintiff's tax returns.
Taylor again wrote to Pellegrini on November 9, 2004, asking for a further extension of the mortgage contingency date from November 9, 2004, to November 16, 2004. The letter stated that Manhattan Mortgage Company had not completed its review of the plaintiff's tax returns and that the plaintiff did not have an unconditional loan commitment. Taylor again told the defendants that if the request for an extension was not granted, the plaintiff had no choice but to ask for a refund of his deposit. The defendants refused to grant an extension until November 16, 2004. Pellegrini informed Taylor by letter on November 9, 2004, that if the plaintiff was unwilling to waive the mortgage contingency, the defendants would consider the contract terminated as of 5 p.m. that day and would refund the plaintiff's deposit.
On November 10, 2004, Taylor informed Pellegrini that the defendants' refusal to extend the mortgage contingency date to November 16, 2004, was unreasonable under the circumstances, as the plaintiff and his accountant had provided Manhattan Mortgage Company with all of the documents that had been requested and that the incomplete appraisal was the cause of the delay. On November 11, 2004, the defendants returned the plaintiff's deposit to him.
The defendants executed an agreement to sell the property to the intervening defendants for $1,767,500 on November 14, 2004. This was $57,500 less than the price offered by the plaintiff.5 The agreement with the intervening defendants had no mortgage contingency.
On November 16, 2004, Manhattan Mortgage Company issued a mortgage loan commitment to the plaintiff in the amount of $1,460,000, which is $96,750 less than the amount specified in the contract. The mortgage loan commitment was conditioned on receiving a letter from the plaintiff's accountant stating that the use of business funds in the transaction would have no adverse financial effect on his business. Cohn forwarded the mortgage loan commitment to the plaintiff with a letter informing him that the closing could not be scheduled until he provided Manhattan Mortgage Company with certain documents, including a copy of the contract of sale of his current residence, which was not on the market for sale.
The complaint commencing the underlying action was signed on November 18, 2004.6 At that time, the plaintiff still did not have an unconditional mortgage loan commitment and was not ready to close the transaction. On November 30, 2004, Taylor informed Pelligrini's office that the plaintiff had received an unconditional mortgage loan and was ready to close the transaction.7
In its memorandum of decision, the court stated that the plaintiff's right to specific performance was dependent on whether he had a right to an extension of the mortgage contingency date. The issue, the court stated, was whether the defendants' refusal to grant further extensions beyond the initial four day extension—from November 5, 2004, to November 9,2004—was unreasonable. The court concluded, on the basis of all the facts and the surrounding circumstances, that it was not. The plaintiff had failed to satisfy his burden of proof that he was ready, willing and able to purchase the property on November 5, 2004, or within a reasonable time thereafter because he had not received a mortgage loan commitment in accordance with the contract. The court concluded that the plaintiff was not entitled to equitable relief and rendered judgment in favor of the defendants and intervening defendants.
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