## Facts

- Michael Sassower (plaintiff, with Laureen Sassower) agreed to sell a residential property at 108 Stonebridge Court, New Hartford, New York, to David Blumenfeld (defendant) for \$1.8 million.
- Upon signing the contract (dated November 18, 2008), Blumenfeld paid a \$180,000 deposit (10%), held in escrow by plaintiffs’ attorney.
- The contract set the closing for “on or about” December 12, 2008.
- The contract allowed the purchaser to adjourn the closing on five business days’ notice, but not beyond December 31, 2008, and provided that time was of the essence for the purchaser’s obligation to close on any adjourned date (no later than December 31, 2008).
- The contract stated that if the purchaser willfully defaulted, the seller’s sole remedy was retention of the down payment as liquidated damages; it recited that damages from default could be difficult to determine and that the down payment was a reasonable amount and not a penalty.
- The contract contained a prevailing-party attorney’s fee clause for actions to enforce rights under the agreement.
- On December 10, 2008, Blumenfeld requested an adjournment of the closing.
- On December 11, 2008, Blumenfeld learned he had lost nearly all his financial assets as a victim of a fraudulent investment scheme by a well-known investor.
- On December 24, 2008, Blumenfeld terminated the contract and demanded return of the deposit.
- The Sassowers claimed they were ready, willing, and able to close and that Blumenfeld failed to close by December 31, 2008; they also alleged they continued to incur substantial carrying charges (stated as exceeding \$16,000 per month).
- The Sassowers filed an action for declaratory judgment that they were entitled to keep the deposit as liquidated damages and moved for summary judgment; Blumenfeld opposed and asserted counterclaims, arguing his nonperformance should be excused by impossibility.

## Issues

1. Whether a purchaser’s loss of financial assets due to a fraud scheme can excuse performance under the doctrine of impossibility, where the contract required closing by a time-of-the-essence date.
2. Whether the sellers were entitled to summary judgment declaring they could retain the \$180,000 deposit as liquidated damages after the purchaser failed to close by December 31, 2008.
3. Whether the sellers, as prevailing parties in an action to enforce the contract, were entitled to recover reasonable attorney’s fees under the contract’s fee-shifting clause, and whether the purchaser’s counterclaims should be dismissed.

## Decision

- The court granted the plaintiffs’ motion for summary judgment on their claim for declaratory relief.
- The court held that Blumenfeld failed to close by the contractual time-of-the-essence deadline (December 31, 2008), constituting a default under the agreement.
- The court rejected Blumenfeld’s impossibility defense, concluding that his loss of assets and resulting inability to fund the purchase was not legal impossibility.
- The court declared the plaintiffs were entitled to retain the \$180,000 deposit as liquidated damages pursuant to the contract.
- The court dismissed Blumenfeld’s answer and counterclaims.
- The court held that plaintiffs were entitled to reasonable attorney’s fees as the prevailing parties under the contract, with the amount to be determined at a later inquest.

## Legal Principles

- When a contract makes time of the essence for a real-estate closing date, a purchaser’s failure to close by that date, if unexcused and with the seller ready to perform, constitutes a material default.
- A liquidated-damages clause allowing a seller to retain a down payment is enforceable when actual damages are hard to measure at contract formation and the amount is not plainly disproportionate to foreseeable losses; a typical 10% deposit may be upheld as a reasonable pre-estimate rather than a penalty.
- The doctrine of impossibility is applied narrowly in New York; financial hardship or inability to pay—even from unexpected events or fraud—generally does not excuse performance absent objective impossibility (such as destruction of the subject matter or the means of performance).
- On summary judgment in a deposit-forfeiture dispute, proof of the contract terms, deposit payment, the seller’s readiness to close, and the buyer’s failure to close can establish entitlement to judgment unless the buyer raises a triable issue of fact on a legally valid excuse.
- Contractual attorney’s fee provisions are enforceable; once entitlement is established by prevailing on the merits, the reasonable amount may be set in a subsequent proceeding.

## Conclusion

The Nassau County Supreme Court enforced the contract’s time-of-the-essence and liquidated-damages provisions, holding that the purchaser’s claimed financial collapse from an investment fraud did not amount to impossibility, that his failure to close by December 31, 2008 was an unexcused default, and that the sellers could keep the \$180,000 deposit and recover attorney’s fees, with the fee amount to be determined later.


Sassower v. Blumenfeld, 878 N.Y.S.2d 602 (2009)