FILED: QUEENS COUNTY CLERK 01/22/ :09 PM INDEX NO /2016 NYSCEF DOC. NO. 72 RECEIVED NYSCEF: 01/22/2018

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1 SUPREME COURT OF THE STATE OF NEW YORK COUNTY OF QUEENS x JIAN CllEN and YONG MAO CHEN. â X Plaintiffs. NOTICE OF ENTRY PATRICK MCKENNA, as Executor of the Estate Index No /16 of Virginia A. McKenna a/k/a Jean McKenna and Patrick McKenna, Individually, X SIRS: Defendants. PLEASE TAKE NOTICE that the within Order dated September 11, 2017, has been duly entered with the Clerk of the within named Court n Septem 20, Dated: January 19, RNER, ESQ. torne y or jets ' 2" Street, 2 Floor, Rm. 2A Brooklyn, NY Tel: SALVATORL' To: SALVATORE E. BENISATTO, ESQ..4(lorney for Defendants 375 North Broadway, Suite 201 Jericho, NY Tcl: (5 16) of 5

2 FILED: QUEENS COUNTY CLERK 09/20/ :13 INDEX NO. AM) /2016f NfSSEF DOC. NO. 69 RECEIVED NYSCEF: 09/20/2017 Short Form Order NEW YORK SUPREME COURT - QUEENS COUNTY Present: HONORABLE ALLAN B. WEISS IA Part _2_ 2 Justice JIAN CHEN and YONG CHEN Index Number /16 Plaintiff, Motion -against- Date 3/9/17 PATRICK MCKENNA, as Executor of the Motion Seq. No. Estate of VIRGINIA A. MCKENNA and PATRICK MCKENNA, Individually Defendants. ~" ~0201] OJ 4l~ LFgy ~ RK The following papers read on this motion by plaintiffs Jian Chen (Jian) and Yong Mao Chen (Yong) for summary judgment declaring that defendants return their deposit under a contract to purchase real property, with related relief, and dismissing defendants' affirmative defenses and counterclaims, and a cross motion by defendants Patrick McKenna, as Executor of the Estate of Virginia A. McKenna a/k/a Jean McKenna, and Patrick McKenna, individually, for summary judgment on their counterclaim to recover damages pursuant to the liquidated damages clause based on breach of contract. Papers Numbered Notice of Motion - Affidavits - Exhibits....,... EF Notice of Cross Motion - Affidavits - Exhibits.. EF Answering Affidavits - Exhibits... EF Reply Affidavits EF Upon the foregoing papers it is ordered that this motion and cross motion are determined as follows: Plaintiffs commenced this action to recover from defendants their $94, deposit or down payment held in escrow in connection with a contract to purchase real estate located at rd Street in College Point, New York, plus monetary and exemplary damages. 1 of 3 2 of 5

3 FILED: UEENS COUNTY CLERK : INDEX NO /2016 NYSCEF DOC. NO. 69 RECEIVED NYSCEF: 09/20/2017 Defendants listed the subject property for sale in February Subsequent to the offer to purchase and prior to signing the contract on March 11, 2016, plaintiffs provided defendants with a copy of their checking account at East West Bank reflecting a current balance of $557, and a mortgage pre-qualification letter from Dollarwise Mortgage dated February 24, 2016, to demonstrate that plaintiffs could afford to purchase the subject property. Paragraph parties' 8 of the contract contained a mortgage contingency clause which conditioned the purchase and transaction upon plaintiffs/buyers obtaining financing for the real estate purchase within 60 days. According to Yong's affidavit, after signing the contract, plaintiffs made mortgage inquiries at several banks and worked with a broker to gather the necessary documentation to apply for a mortgage during the months of April and May Plaintiffs requested extensions to obtain financing on May 9, 2016 and May 27, 2016, both of which defendants granted. On June 1, 2016, Cathay Bank issued a letter of denial in response to the mortgage application submitted by Yong, stating that Yong's income was "insufficient to sustain payments on the amount of the credit requested/shows insufficient cash flow." By letter dated June 2, 2016, plaintiffs forwarded the lender's denial to defendants and requested that their down payment be returned. By letter dated June 13, 2016, defendants refused to return the down payment on the ground that only one of the purchasers applied for financing and that the denial was based on insufficient income. Plaintiffs maintain that they timely informed defendants of the mortgage denial from Cathay Bank and are entitled to a return of their deposit. In their cross motion, defendants argue that plaintiffs defaulted on the terms of the contract and the deposit was deemed forfeited because only Yong, alone, applied for the mortgage, which was not a diligent and good faith effort to obtain financing. On a motion for summary judgment, the moving party has the burden of demonstrating "a prima facie showing of entitlement to judgment as a matter of law, tendering sufficient evidence to eliminate any material issues of fact from case" the case ( Winegrad v New York Riniv. Med. Ctr., 64 NY2d 851, 852 [1985]).. Once the movant has made this showing, the burden of proof shifts to the party opposing the motion to produce evidentiary proof in admissible form to establish that material issues of fact exist which require a trial ( see Al varez v Prospect Hosp., 68 NY2d 320, 324 [1986]). In an action to recover a deposit or down payment based on a contract for the sale of real property which, as here, contains a mortgage contingency clause, the purchasers are entitled 2 2 of 3 3 of 5

4 FILED: UEENS COUNTY CLERK :13 INDE X NO /2016 NY%CEF DOC. NO..69 RECEIVE D NYSCEF: 09/20/2017 to recover their down payment if the mortgage is not in fact approved through no fault of their own, as long as they exert a genuine effort to secure mortgage financing and act in good faith (see Astrada v Archer, 51 AD3d 954 [2008]; Sciales v Foulke, 217 AD2d 693 [1995]). The court agrees that plaintiffs were diligent in attempting to procure financing, as evidenced by their showing that they were engaged in good faith efforts to obtain a mortgage commitment within the 60-day time period (see Fallah v Hix, 268 AD2d 501 [2000]; cf. Miloslavskaya v Gokhberg, 126 AD3d 678 [2015]). However, it is unclear whether plaintiffs acted in good faith based on their decision to have Yong, alone, apply for a mortgage from Cathay Bank, even though plaintiffs presented their ability to afford the subject property as based on the financial qualifications of both Yong and Jian prior to entering the contract of sale, made in good faith (see generally Zuckerman v City of New York, 49 NY2d 557, 562 [1980]).. In this regard, pre-qualification letter was addressed to both Yong and Jian, and the bank account they showed defendants was jointly owned by Yong and Jian as well. As Yong's mortgage application was ultimately denied due to insufficient income, triable issues remain, including whether this failure to obtain financing under the terms of the contract was due to own doing or fault, whether they intended to bring about the failure of the subject real estate transaction, and whether the mortgage application would have been denied even if both plaintiffs had applied together (see Samson v Sapphire capital, Inc., 74 AD3d 1172 [2010]; Sibinga v Ingenito, 306 AD2d 457 [2003]; Kapur v Stiefel, 264 AD2d 602 [1999] ; Marx v Shustek, 226 AD2d 351 [1996] ; BTS, Inc. v Webny Corp., 157 AD2d 638 [1990]).. are Accordingly, denied. motion and defendants' cross motion I Dated: September, 2017 S{p J.S.c. 0 c~ co~ Rg 3 3 of 3 4 of 5

5 Index No /16.' St PRI \ll COt R 1 OF THE.: STATI 01 NEW YORK t OLNTY OF QLT1 NS N ' JI.I \\ CI II N and.'. YONG (-HEN..: Plaintitis. -it t'it I T151- PATRICK \K K F NNA. as Executor I'.i>.'o(.t> or the Estate of VIRGINIA A. ICKI NNA and.in PA,'~ I RICK.(I( IXI% IX MCKENNA. IX IXL.. 1. i. 1 Indiv idually. Detendants. â â â â X NOTICE OF ENTRY ROBERT N. LERNER, ESQ..1IA~rni Attorney for l'laintif fk, ('III.'.I' JI-1N ClIEN and YONG.II "' Street 2"" Floor, Room 2A Brooklyn, NY Tel: Fax: Vai: 71tt-S " '-C'.1112 C.'HE,1' CHEN 5 of 5