Mokar Properties Corporation v. Hall

Lawrence and Melville Hall (defendants) entered into a real estate contract with Mokar Properties Corporation (plaintiffs) for the sale of two parcels of real estate located in New York. The contract contained a provision stating that the Halls owned the property and that they would provide Mokar Properties with clean title prior to closing escrow. At closing, the Halls failed to provide any of the documents that were required to establish clean title, and they did not convey the deed. The contract contained a damages provision stating that if the Halls were unable to convey title as required by the contract, damages would be limited to returning the funds that Mokar Properties had paid toward the purchase price along with title-examination fees. The Halls refunded Mokar Properties approximately $25,863, which consisted of the returned down payment and the title-examination fees paid by Mokar Properties. Mokar Properties filed suit seeking additional damages of $50,000, alleging that it was not limited to the damages established by the contract because the Halls’ default was willful and deliberate. Mokar Properties further contended that the Halls could have easily cured the defects in the title had they operated with reasonable diligence. The Halls filed a motion to dismiss, and that motion was denied by the trial court. The Halls appealed the trial court’s denial of their request for dismissal.