957 N.E.2d 1131
Page 1
81 Mass.App.Ct. 1101, 957 N.E.2d 1131, 2011 WL 6004024 (Mass.App.Ct.)
(Table, Text in WESTLAW), Unpublished Disposition
(Cite as: 81 Mass.App.Ct. 1101, 2011 WL 6004024 (Mass.App.Ct.))
© 2012 Thomson Reuters. No Claim to Orig. US Gov. Works.
Only the Westlaw citation is currently availa-ble.NOTE: THIS OPINION WILL NOT APPEAR INA PRINTED VOLUME. THE DISPOSITION WILLAPPEAR IN A REPORTER TABLE.
NOTICE: Decisions issued by the Appeals Courtpursuant to its rule 1:28 are primarily addressed to theparties and, therefore, may not fully address the factsof the case or the panel's decisional rationale. More-over, rule 1:28 decisions are not circulated to the en-tire court and, therefore, represent only the views of the panel that decided the case. A summary decisionpursuant to rule 1:28, issued after February 25, 2008,may be cited for its persuasive value but, because of the limitations noted above, not as binding precedent.
Appeals Court of Massachusetts.
v.
Joseph H. McDONOUGH & another.
No. 11
–
P
–
290.
Dec. 2, 2011.
MEMORANDUM AND ORDER PURSUANT TO RULE 1:28
*1
The plaintiffs (buyers) appeal from a judgmententered in favor of the defendants (sellers) on theparties' cross motions for summary judgment. At issueis whether, as the motion judge concluded, the sellersare entitled to the buyers'
deposit
under the terms of the parties' residential
purchase
and
sale
agreement
.
Background.
We recite the material undisputedfacts. See
purchase
the sellers' home in Walpole. The offer stated it was
“
subject to home inspection,
Radon
, Pest & Mortgage
Contingencies
Not subject to the
Sale
of any otherhome.
”
The sellers accepted the offer the followingday, September 4, 2009. That same day, the buyersreceived a conditional pre-approval letter from LeaderBank, stating that subject to certain conditions, thebuyers were pre-approved for a first mortgage in theamount of $492,000 and that the anticipated loan was
“
[n]ot based on
sale
of any residence.
”
The parties entered into a
purchase
and
sale
agreement
(P & S) on September 15, 2009. Althoughthe P & S was based on a Greater Boston
Real
Estate
contingency
provision of the P & S provided:
FN3. The record is silent as to who generatedthe first draft of the P & S or who pro-pounded any of the particular changes to thedocument.
“
In order to help finance the acquisition of saidpremises, the [buyers] shall apply for a conventionalbank or other institutional mortgage loan of $492,000.00 at prevailing rates, terms and condi-tions. If despite the [buyers] diligent efforts acommitment for such loan cannot be obtained on orbefore October 5, 2009, the [buyers] may terminatethis agreement by written notice to the [sellers]and/or the Broker(s), as agent(s) for the [sellers],prior to the expiration of such time, whereupon anypayments made under this agreement shall beforthwith refunded and all other obligations of theparties hereto shall cease and this agreement shallbe void without recourse to the parties hereto. In noevent will the [buyers] be deemed to have useddiligent efforts to obtain such commitment unlessthe [buyers] submit[ ] a complete mortgage loanapplication conforming to the foregoing provisionson or before September 17, 2009.
”
The buyers submitted a mortgage loan applicationto Leader Bank, from which they had previouslyborrowed money and with which they had a rela-tionship.
By October 5, 2009, Leader Bank had approved a
957 N.E.2d 1131
Page 2
81 Mass.App.Ct. 1101, 957 N.E.2d 1131, 2011 WL 6004024 (Mass.App.Ct.)
(Table, Text in WESTLAW), Unpublished Disposition
(Cite as: 81 Mass.App.Ct. 1101, 2011 WL 6004024 (Mass.App.Ct.))
© 2012 Thomson Reuters. No Claim to Orig. US Gov. Works.
first mortgage of $417,000, but had not approved asecond mortgage of $73,400. Beginning on October 5,therefore, the parties agreed to a number of short ex-tensions to the mortgage contingency deadline:
On October 5, the parties extended the deadline toOctober 9, based on the buyers' representation that
“
the first loan has been approved and we are justwaiting to get approval on the second loan.
”
On October 9, the parties extended the deadline toOctober 14, based on the buyers' representation that
“
the bank needed to approve the second mortgage.The first mortgage has been approved.
”
*2
On October 14, the date was further extended byagreement to October 15.
On October 15, the parties agreed to extend the dateto October 19, based on the buyers' representationthat
“
the bank need[s] more time to process the se-cond mortgage.
”
The parties last agreed to extend the deadline fromOctober 19 to October 21, 2009, based on the buy-ers' representation that
“
the bank need[s] to approvethe second mortgage. The delay has been the PoliceDepartment verifying ... employment/income. Allparties involved are working to get the issues re-solved.
”
Each of these extensions was agreed to in writingand each reiterated the provision from the P & S thattime was of the essence.
On October 19, 2009, Leader Bank approved thefirst and second mortgages subject to certain condi-tions, one of which was that the buyers list their pri-mary residence
This condition was unacceptable to the buyers, alt-hough they had not disclosed that fact to the bank when they applied for the loan. It does not appear thatthe buyers notified the sellers either of their unwill-ingness to list or sell their house.
FN4. The buyers also owned a secondaryhome. The bank imposed no condition withrespect to that property.
FN5. The condition imposed by the bank wasmore beneficial to the buyers than the moretypical condition that a borrower's existinghome be sold before the loan closes.
contingent
upon the
sale
of theirhome is not the equivalent of notifying thesellers that they (the buyers) were unwillingto sell their home or that they did not plan tosell their home. It reflects only the absence of a
contingency
that might otherwise make theoffer less attractive to the sellers.
Two days after receiving their loan approval, inother words on October 21, 2009, the buyers notifiedthe sellers (through their agent) that they had
“
notreceived a loan commitment with acceptable condi-tions and thereby terminate [ ] said agreement [the P &S] as provided therein.
”
On October 23, 2009, the sellers asked that thebuyers provide further information regarding theirefforts to obtain financing, as well as any responsesfrom the bank. At that point, the buyers notified thebank of their unwillingness to sell their existing home.The bank then responded, on October 27, 2009, bydenying the mortgage application based on the factthat the
“
[b]orrower would be carrying three mortgagepayments and the debt to income is to[o] high.
”
Discussion.
It is undisputed that, before the ex-tended mortgage
contingency
deadline of October 21,the buyers received a commitment from the bank fortwo mortgages totalling $492,000. The P & S's mort-gage
contingency
was accordingly satisfied unless thebank's requirement that the buyers list their home for
sale
was not a
“
prevailing
”
term or condition.
The undisputed record shows that a typical loancondition for most borrowers is to require them to sellan existing home before the new loan closes. Thecondition here required only that the buyers list, notsell, their home and it was accordingly not a typicalcondition. The buyers argue that because the conditionwas unusual, it was not a
“
prevailing
”
conditionwithin the meaning of the contingency clause of the P& S, despite the fact that the condition was more fa-vorable to them than the standard condition.
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