Real Property Law

Foreclosure Sale Purchasers May Not Tack Adverse Possession Claim to Predecessors

Munroe v. Cheyenne Realty, LLC

NYLJ 9/25/15, p. 31, col. 1

AppDiv, Second Dept.

(memorandum opinion)

In residential owners' action for a determination that they had acquired a strip of property from their commercial neighbor by adverse possession, residential owners appealed from Supreme Court's grant of summary judgment dismissing the complaint. The Appellate Division affirmed, holding that landowners could not tack their possession to that of their predecessors.

Landowners acquired their parcel in 1994 from a mortgage servicing company that had acquired title by foreclosure in 1993. A chain link fence separated their parcel from the neighboring commercial parcel. The fence, however, did not run along the precise boundary line; a 10- x 60-foot strip of land actually belonging to the commercial owner was on the residential owner's side of the fence. Residential owner used this strip for parking, gardening, and oil deliveries until commercial owner removed the fence in 2002 to 2003 and covered the disputed area with a cement slab. In 2005, residential owners brought this action contending that they had acquired title by adverse possession. Because they had not occupied the parcel for the requisite 10 years, they sought to tack their possession to that of their predecessors, submitting affidavits from two neighbors that the previous owners had maintained a portion of the property as a garden. Supreme Court nevertheless granted summary judgment to the commercial owner.

In affirming, the Appellate Division held that the affidavits from the neighbors did not adequately describe the property occupied by the predecessors, and did not indicated for how long the predecessors had occupied the property. The court also emphasized that residential owners had failed to establish that the predecessors transferred possession to them or that the predecessors had acquired title by adverse possession prior to the transfer.

COMMENT

A mortgage foreclosure sale purchaser who claims title by adverse possession may tack his or her possession onto that of a predecessor to satisfy the statutory period. In Lewis v. Idones 280 A.D. 980, the court held that foreclosure did not interrupt the statutory adverse possession period, and that a referee's deed, which described the adversely possessed land, satisfied the requisite intention to permit the purchaser to tack possession on to that of a predecessor who had erected a wall that encroached on the neighboring property. After building the wall, predecessor executed a mortgage on the property including all improvements that had been made. Years later, when the mortgagee foreclosed, the referee's deed on the foreclosure sale purported to convey the property as described in the mortgage.

Outside the foreclosure context, courts have permitted tacking even when the deed to the subsequent possessor does not expressly include the adversely possessed land, so long as there is testimonial evidence that the predecessor possessor informed the subsequent possessor that the conveyance includes the disputed land. Thus, in Brand v. Prince, 3 5 N.Y.2d 634, the court upheld a subsequent possessor's adverse possession claim, even though the subsequent possessor had not occupied the land for the statutory period, because the possessor's predecessor testified that she believed the disputed land was within the deed. Moreover, predecessor's husband had pointed out the boundary lines, which contained the disputed land, to the subsequent possessor. The court allowed the current possessor to tack even though the deed itself did not describe the disputed land.

Conversely, in Seisser v. Eglin, 7 A.D.3d 505, the court did not allow the adverse possessor to tack his possession of a portion of the disputed land that was neither described in the deed nor pointed out by the predecessor to the current possessor. In Seisser, the land in dispute contained a lawn and a wooded area, neither of which was included in the deed description. The court held that, as a matter of law, the adverse possessor could not tack his possession of the wooded area to that of his predecessor because: 1) the predecessor stated that he intended to turn over the lawn portion of the disputed land, but not the wooded area; and 2) the current possessor confirmed that the predecessor had indicated that the property line included the lawn and not the wooded area. The court did not make a determination regarding the lawn portion of the disputed land because there was a triable issue of fact concerning the predecessor's adverse possession of the lawn area.

'

Prior Replevin Action Does Not Preclude Foreclosure Action

VNB New York Corp. v. Paskesz

NYLJ 10/2/15, p. 23, col. 3

AppDiv, Second Dept.

(memorandum opinion)

In a mortgage foreclosure action, mortgagee appealed from Supreme Court's order dismissing the complaint for failure to comply with RPAPL 1301. The Appellate Division reversed and remanded for consideration of mortgagee's summary judgment motion, holding that commencement of a prior replevin action did not preclude mortgagee from bringing a foreclosure action.

When mortgagor defaulted on the mortgage, mortgagee brought a replevin action, and then brought the instant foreclosure action. Supreme Court granted mortgagor's motion to dismiss, relying on the principle, derived from RPAPL 1301, that the holder of a note and mortgage must elect remedies in order to avoid multiple lawsuits arising out of the same debt. Mortgagee appealed.

In reversing, the Appellate Division distinguished between RPAPL 1301(1) and RPAPL 1301(3). The court noted that RPAPL 1301(3) prohibits a party from bringing an action on the debt while a foreclosure proceeding is pending, but that RPAPL 1301(1) does not prohibit a foreclosure action while an action to recover the debt is pending; instead, 1301(1) precludes a foreclosure action only when the mortgage lender obtains a final judgment in the action on a debt and the execution against the borrower's property has been returned unsatisfied. In this case, only section 1301(1) would be applicable, but mortgagee had not obtained a final judgment in the replevin action when mortgagee brought this foreclosure action. As a result, mortgagor was not entitled to dismissal.

COMMENT

Until a mortgagee obtains a final judgment in an action based on the mortgage debt, a mortgagee may commence an action to foreclose on the property. For instance, in Marine Midland Bank, N.A. v. Lake Huntington Development Group, Inc., 185 A.D.2d 395 (1992) the court held that when no final judgment had been issued in favor of the mortgagee in a pending action on the debt, RPAPL '1301(1) was not a bar to the bank's commencement of a foreclosure action. In Marine, mortgagor initiated an action to rescind note and mortgage, the bank counterclaimed against the debt, but prior to a final judgment on the bank's counterclaim, the bank brought an action to foreclose.

RPAPL ' 1301(3) explicitly prohibits mortgagees from bringing an action against a mortgagor on the debt where there is a pending foreclosure action. Relying on the difference in language between ” 1301(1) and 1301(3), the court in Marine noted in dicta that the legislature had explicitly barred filing an action on a debt while a foreclosure action was pending, and opined that if the legislature had wanted to bar foreclosure actions while an action was pending on the debt, the legislature would have said so explicitly in RPAPL ' 1301.

Once a mortgagee obtains a judgment on the debt, RPAPL ' 1301(1) bars the commencement of a foreclosure action until execution against the property is returned wholly or partially unsatisfied. In Sabbatini v. Galati, 789 N.Y.S.2d 504 (2005), the court held that a mortgagee's foreclosure action was barred by a plain reading of RPAPL ' 1301(1) because mortgagee had previously obtained a judgment on the debt, but had made no attempt to execute on its money judgment. The mortgagee, in Sabbatini, obtained a confession of judgment on the debt from the mortgagors, which he docketed. However, mortgagee did not attempt to execute on the judgment prior to bringing a foreclosure action, so an execution was not returned unsatisfied as required by RPAPL ' 1301(1).

'

Questions of Fact Preclude Summary Judgment on Ownership of Street Bed

Stanley Acker Family Limited Partnership v. DePaulis Enterprises V, Ltd.

NYLJ 10/9/15, p. 25, col. 1

AppDiv, Second Dept.

(memorandum opinion)

In an action to quiet title to land located on a paper street, plaintiff abutting owners appealed from Supreme Court's order denying their summary judgment motion and granting the summary judgment motion of defendant developers declaring that developers owned the bed of the street. The Appellate Division modified to deny both summary judgment motions, holding that questions of fact remained about ownership of the street bed.

Conger Estates acquired title to the disputed area in 1929 pursuant to a deed that conveyed to Conger Estates all title to the streets, roads and avenues abutting the property up “to the centre line thereof.” In 1930, Conger Estates conveyed lots 3,8,9, and 10, all of which abutted Old Orchard Lane, a former railroad bed, by reference to a map which depicted Old Orchard Lane. The deeds purported to convey the lots “to the easterly line of Old Orchard Lane” or “to the westerly right of way line of Old Orchard Lane”, depending on the side of the Lane on which the property was located. This language appeared to exclude the lane from the conveyance. At the same time, however, the deeds also conveyed the parcels together with “all the estate and rights” of Conger Estates in the parcels ' language which could, by reference to the 1929 deed, include the estate and rights in the streets, including Old Orchard Lane. Abutting owners trace their title to lots 3, 8, 9, and 10 to these 1930 deeds.

In 1929, Conger Estates transferred title to all of its remaining land to Lamborn. Developer traces its title to Lamborn. Developer seeks to build a 300-unit residential complex on the land, and represented to the Town Planning Board that it owned Old Orchard Lane in fee. Abutting owners then brought this action to quiet title to the land, and Supreme Court, relying on the deed descriptions, granted summary judgment to developer, relying on the 1930 deed description. Abutting owners appealed.

In modifying, the Appellate Division held that Supreme Court had properly denied abutting owners' summary judgment motion, noting that developer had made a prima facie showing that Old Orchard Land was excluded from the deed description. But the court also concluded that abutting owners had raised triable issues of fact arising from the language purporting to convey all of Conger Estates' right and interest in the property. As a result, neither party was entitled to summary judgment.

'

Seller Entitled to Retain Deposit

Jannetti v. Whelan

NYLJ 10/2/15

AppDiv, Second Dept.

(memorandum opinion)

In purchaser's action for specific performance of a contract for sale of real property, purchaser appealed from Supreme Court's grant of sellers' summary judgment motion. The Appellate Division affirmed, holding that purchaser had not raised a question of fact about whether he was ready, willing, and able to close.

On Sept. 9, 2010, purchaser contracted to buy real property for $6,050,000. Purchaser made a down payment of $100,000, entered into a purchase money mortgage with sellers for a portion of the balance, with $1,450,000 to be paid at closing. The contract provided a closing date of Dec. 24, 2010, and also provided, in a rider, that if purchaser failed to close on or before that date “this contract shall become null and void and [sellers] shall retain the deposit.” In a letter dated Dec. 3, 2010, sellers' lawyer informed purchaser that sellers were prepared to close, subject to timely submission of financial and personal information sufficient and necessary to warrant the $4,500,000 mortgage contemplated by the contract. Sellers then brought this action for specific performance, contending that the letter from sellers' lawyer constituted an anticipatory repudiation. Sellers sought summary judgment, asserting that there was no evidence that purchaser was ready, willing and able to close on Dec. 24, 2010. In 2014, Supreme Court awarded summary judgment to sellers on the ground that there was no evidence that time had been made of the essence. Purchaser appealed.

The Appellate Division affirmed on a different ground. The court concluded that Supreme Court had improperly ignored the contract rider, which provided that the contract would become null and void if closing did not occur by the specified closing date. As a result, it was unnecessary for purchaser to make time of the essence. But the court then held that purchaser had failed to offer any evidence that it was ready, willing, and able to close on the specified date, or to offer any explanation about how discovery would uncover information about his ability to close.

COMMENT

A party to a real estate contract remains bound by the contract, even if the other party is unable to close by the scheduled closing date, unless the contract includes either an express “time is of the essence” clause or language making it clear that failing to close by the scheduled date constitutes a failure of condition that excuses further performance. The Second Department in O'Connell v. Clear Holding Co., 126 A.D.2d 530, held that the seller of a co-op was entitled to specific performance of a sale contract that provided that the closing would take place “on or before” a stated date, even though seller was not able to close by that date. In granting summary judgment to seller, the Second Department reasoned that “on or before” a stated date does not make “time is of the essence” with regards to the closing date. Similarly, in Lightle v. Becker, 18 A.D.3d 449, 450, the Second Department awarded summary judgment permitting sellers to retain purchasers' down payment when purchasers attempted to use seller's failure to close by the specified closing date as an excuse for their own subsequent unwillingness to perform. The court indicated that contract language stating that the closing date would occur on June 10, 2013 “but not later than 8/10/03″ was not equivalent to “time is of the essence.”

“Time is of the essence” language is unnecessary if, as in Janetti, the contract explicitly conditions one party's obligation to perform on the other party's willingness to close by a specified date. For instance, in Squicciarini v. Park Ridge, 199 A.D.2d 376, the court held that seller was not entitled to summary judgment dismissing purchaser's claim for return of the down payment when the contract specifically stated that “[i]n the event that seller is unable or fails to deliver title by Oct. 1, 1989, the sole remedy of the purchaser is to elect to cancel this contract, in which event all monies paid hereunder, less the amounts provided in Paragraph 10 of this contract, shall be refunded and this contract shall be deemed null and void.” The sellers did not deliver title to buyers by date set forth in the contract . The following day the purchaser's attorney sent letter cancelling contract and demanding return of down payment. The Second Department held that the contract language effectively made time of the essence as of the Oct. 1, 1989 date, although the court also held that fact questions remained on seller's claim that purchaser had waived the time is of the essence provision.

'

Foreclosure Sale Purchasers May Not Tack Adverse Possession Claim to Predecessors

Munroe v. Cheyenne Realty, LLC

NYLJ 9/25/15, p. 31, col. 1

AppDiv, Second Dept.

(memorandum opinion)

In residential owners' action for a determination that they had acquired a strip of property from their commercial neighbor by adverse possession, residential owners appealed from Supreme Court's grant of summary judgment dismissing the complaint. The Appellate Division affirmed, holding that landowners could not tack their possession to that of their predecessors.

Landowners acquired their parcel in 1994 from a mortgage servicing company that had acquired title by foreclosure in 1993. A chain link fence separated their parcel from the neighboring commercial parcel. The fence, however, did not run along the precise boundary line; a 10- x 60-foot strip of land actually belonging to the commercial owner was on the residential owner's side of the fence. Residential owner used this strip for parking, gardening, and oil deliveries until commercial owner removed the fence in 2002 to 2003 and covered the disputed area with a cement slab. In 2005, residential owners brought this action contending that they had acquired title by adverse possession. Because they had not occupied the parcel for the requisite 10 years, they sought to tack their possession to that of their predecessors, submitting affidavits from two neighbors that the previous owners had maintained a portion of the property as a garden. Supreme Court nevertheless granted summary judgment to the commercial owner.

In affirming, the Appellate Division held that the affidavits from the neighbors did not adequately describe the property occupied by the predecessors, and did not indicated for how long the predecessors had occupied the property. The court also emphasized that residential owners had failed to establish that the predecessors transferred possession to them or that the predecessors had acquired title by adverse possession prior to the transfer.

COMMENT

A mortgage foreclosure sale purchaser who claims title by adverse possession may tack his or her possession onto that of a predecessor to satisfy the statutory period. In Lewis v. Idones 280 A.D. 980, the court held that foreclosure did not interrupt the statutory adverse possession period, and that a referee's deed, which described the adversely possessed land, satisfied the requisite intention to permit the purchaser to tack possession on to that of a predecessor who had erected a wall that encroached on the neighboring property. After building the wall, predecessor executed a mortgage on the property including all improvements that had been made. Years later, when the mortgagee foreclosed, the referee's deed on the foreclosure sale purported to convey the property as described in the mortgage.

Outside the foreclosure context, courts have permitted tacking even when the deed to the subsequent possessor does not expressly include the adversely possessed land, so long as there is testimonial evidence that the predecessor possessor informed the subsequent possessor that the conveyance includes the disputed land. Thus, in Brand v. Prince, 3 5 N.Y.2d 634, the court upheld a subsequent possessor's adverse possession claim, even though the subsequent possessor had not occupied the land for the statutory period, because the possessor's predecessor testified that she believed the disputed land was within the deed. Moreover, predecessor's husband had pointed out the boundary lines, which contained the disputed land, to the subsequent possessor. The court allowed the current possessor to tack even though the deed itself did not describe the disputed land.

Conversely, in Seisser v. Eglin, 7 A.D.3d 505, the court did not allow the adverse possessor to tack his possession of a portion of the disputed land that was neither described in the deed nor pointed out by the predecessor to the current possessor. In Seisser, the land in dispute contained a lawn and a wooded area, neither of which was included in the deed description. The court held that, as a matter of law, the adverse possessor could not tack his possession of the wooded area to that of his predecessor because: 1) the predecessor stated that he intended to turn over the lawn portion of the disputed land, but not the wooded area; and 2) the current possessor confirmed that the predecessor had indicated that the property line included the lawn and not the wooded area. The court did not make a determination regarding the lawn portion of the disputed land because there was a triable issue of fact concerning the predecessor's adverse possession of the lawn area.

'

Prior Replevin Action Does Not Preclude Foreclosure Action

VNB New York Corp. v. Paskesz

NYLJ 10/2/15, p. 23, col. 3

AppDiv, Second Dept.

(memorandum opinion)

In a mortgage foreclosure action, mortgagee appealed from Supreme Court's order dismissing the complaint for failure to comply with RPAPL 1301. The Appellate Division reversed and remanded for consideration of mortgagee's summary judgment motion, holding that commencement of a prior replevin action did not preclude mortgagee from bringing a foreclosure action.

When mortgagor defaulted on the mortgage, mortgagee brought a replevin action, and then brought the instant foreclosure action. Supreme Court granted mortgagor's motion to dismiss, relying on the principle, derived from RPAPL 1301, that the holder of a note and mortgage must elect remedies in order to avoid multiple lawsuits arising out of the same debt. Mortgagee appealed.

In reversing, the Appellate Division distinguished between RPAPL 1301(1) and RPAPL 1301(3). The court noted that RPAPL 1301(3) prohibits a party from bringing an action on the debt while a foreclosure proceeding is pending, but that RPAPL 1301(1) does not prohibit a foreclosure action while an action to recover the debt is pending; instead, 1301(1) precludes a foreclosure action only when the mortgage lender obtains a final judgment in the action on a debt and the execution against the borrower's property has been returned unsatisfied. In this case, only section 1301(1) would be applicable, but mortgagee had not obtained a final judgment in the replevin action when mortgagee brought this foreclosure action. As a result, mortgagor was not entitled to dismissal.

COMMENT

Until a mortgagee obtains a final judgment in an action based on the mortgage debt, a mortgagee may commence an action to foreclose on the property. For instance, in Marine Midland Bank, N.A. v. Lake Huntington Development Group, Inc., 185 A.D.2d 395 (1992) the court held that when no final judgment had been issued in favor of the mortgagee in a pending action on the debt, RPAPL '1301(1) was not a bar to the bank's commencement of a foreclosure action. In Marine, mortgagor initiated an action to rescind note and mortgage, the bank counterclaimed against the debt, but prior to a final judgment on the bank's counterclaim, the bank brought an action to foreclose.

RPAPL ' 1301(3) explicitly prohibits mortgagees from bringing an action against a mortgagor on the debt where there is a pending foreclosure action. Relying on the difference in language between ” 1301(1) and 1301(3), the court in Marine noted in dicta that the legislature had explicitly barred filing an action on a debt while a foreclosure action was pending, and opined that if the legislature had wanted to bar foreclosure actions while an action was pending on the debt, the legislature would have said so explicitly in RPAPL ' 1301.

Once a mortgagee obtains a judgment on the debt, RPAPL ' 1301(1) bars the commencement of a foreclosure action until execution against the property is returned wholly or partially unsatisfied. In Sabbatini v. Galati, 789 N.Y.S.2d 504 (2005), the court held that a mortgagee's foreclosure action was barred by a plain reading of RPAPL ' 1301(1) because mortgagee had previously obtained a judgment on the debt, but had made no attempt to execute on its money judgment. The mortgagee, in Sabbatini, obtained a confession of judgment on the debt from the mortgagors, which he docketed. However, mortgagee did not attempt to execute on the judgment prior to bringing a foreclosure action, so an execution was not returned unsatisfied as required by RPAPL ' 1301(1).

'

Questions of Fact Preclude Summary Judgment on Ownership of Street Bed

Stanley Acker Family Limited Partnership v. DePaulis Enterprises V, Ltd.

NYLJ 10/9/15, p. 25, col. 1

AppDiv, Second Dept.

(memorandum opinion)

In an action to quiet title to land located on a paper street, plaintiff abutting owners appealed from Supreme Court's order denying their summary judgment motion and granting the summary judgment motion of defendant developers declaring that developers owned the bed of the street. The Appellate Division modified to deny both summary judgment motions, holding that questions of fact remained about ownership of the street bed.

Conger Estates acquired title to the disputed area in 1929 pursuant to a deed that conveyed to Conger Estates all title to the streets, roads and avenues abutting the property up “to the centre line thereof.” In 1930, Conger Estates conveyed lots 3,8,9, and 10, all of which abutted Old Orchard Lane, a former railroad bed, by reference to a map which depicted Old Orchard Lane. The deeds purported to convey the lots “to the easterly line of Old Orchard Lane” or “to the westerly right of way line of Old Orchard Lane”, depending on the side of the Lane on which the property was located. This language appeared to exclude the lane from the conveyance. At the same time, however, the deeds also conveyed the parcels together with “all the estate and rights” of Conger Estates in the parcels ' language which could, by reference to the 1929 deed, include the estate and rights in the streets, including Old Orchard Lane. Abutting owners trace their title to lots 3, 8, 9, and 10 to these 1930 deeds.

In 1929, Conger Estates transferred title to all of its remaining land to Lamborn. Developer traces its title to Lamborn. Developer seeks to build a 300-unit residential complex on the land, and represented to the Town Planning Board that it owned Old Orchard Lane in fee. Abutting owners then brought this action to quiet title to the land, and Supreme Court, relying on the deed descriptions, granted summary judgment to developer, relying on the 1930 deed description. Abutting owners appealed.

In modifying, the Appellate Division held that Supreme Court had properly denied abutting owners' summary judgment motion, noting that developer had made a prima facie showing that Old Orchard Land was excluded from the deed description. But the court also concluded that abutting owners had raised triable issues of fact arising from the language purporting to convey all of Conger Estates' right and interest in the property. As a result, neither party was entitled to summary judgment.

'

Seller Entitled to Retain Deposit

Jannetti v. Whelan

NYLJ 10/2/15

AppDiv, Second Dept.

(memorandum opinion)

In purchaser's action for specific performance of a contract for sale of real property, purchaser appealed from Supreme Court's grant of sellers' summary judgment motion. The Appellate Division affirmed, holding that purchaser had not raised a question of fact about whether he was ready, willing, and able to close.

On Sept. 9, 2010, purchaser contracted to buy real property for $6,050,000. Purchaser made a down payment of $100,000, entered into a purchase money mortgage with sellers for a portion of the balance, with $1,450,000 to be paid at closing. The contract provided a closing date of Dec. 24, 2010, and also provided, in a rider, that if purchaser failed to close on or before that date “this contract shall become null and void and [sellers] shall retain the deposit.” In a letter dated Dec. 3, 2010, sellers' lawyer informed purchaser that sellers were prepared to close, subject to timely submission of financial and personal information sufficient and necessary to warrant the $4,500,000 mortgage contemplated by the contract. Sellers then brought this action for specific performance, contending that the letter from sellers' lawyer constituted an anticipatory repudiation. Sellers sought summary judgment, asserting that there was no evidence that purchaser was ready, willing and able to close on Dec. 24, 2010. In 2014, Supreme Court awarded summary judgment to sellers on the ground that there was no evidence that time had been made of the essence. Purchaser appealed.

The Appellate Division affirmed on a different ground. The court concluded that Supreme Court had improperly ignored the contract rider, which provided that the contract would become null and void if closing did not occur by the specified closing date. As a result, it was unnecessary for purchaser to make time of the essence. But the court then held that purchaser had failed to offer any evidence that it was ready, willing, and able to close on the specified date, or to offer any explanation about how discovery would uncover information about his ability to close.

COMMENT

A party to a real estate contract remains bound by the contract, even if the other party is unable to close by the scheduled closing date, unless the contract includes either an express “time is of the essence” clause or language making it clear that failing to close by the scheduled date constitutes a failure of condition that excuses further performance. The Second Department in O'Connell v. Clear Holding Co., 126 A.D.2d 530, held that the seller of a co-op was entitled to specific performance of a sale contract that provided that the closing would take place “on or before” a stated date, even though seller was not able to close by that date. In granting summary judgment to seller, the Second Department reasoned that “on or before” a stated date does not make “time is of the essence” with regards to the closing date. Similarly, in Lightle v. Becker, 18 A.D.3d 449, 450, the Second Department awarded summary judgment permitting sellers to retain purchasers' down payment when purchasers attempted to use seller's failure to close by the specified closing date as an excuse for their own subsequent unwillingness to perform. The court indicated that contract language stating that the closing date would occur on June 10, 2013 “but not later than 8/10/03″ was not equivalent to “time is of the essence.”

“Time is of the essence” language is unnecessary if, as in Janetti, the contract explicitly conditions one party's obligation to perform on the other party's willingness to close by a specified date. For instance, in Squicciarini v. Park Ridge, 199 A.D.2d 376, the court held that seller was not entitled to summary judgment dismissing purchaser's claim for return of the down payment when the contract specifically stated that “[i]n the event that seller is unable or fails to deliver title by Oct. 1, 1989, the sole remedy of the purchaser is to elect to cancel this contract, in which event all monies paid hereunder, less the amounts provided in Paragraph 10 of this contract, shall be refunded and this contract shall be deemed null and void.” The sellers did not deliver title to buyers by date set forth in the contract . The following day the purchaser's attorney sent letter cancelling contract and demanding return of down payment. The Second Department held that the contract language effectively made time of the essence as of the Oct. 1, 1989 date, although the court also held that fact questions remained on seller's claim that purchaser had waived the time is of the essence provision.

'