Justice Kathryn Freed
Defendants sellers moved for dismissal of the complaint. Buyer Bodak sought return of a down-payment in this contract of sale of a cooperative action. Sellers sought to sell a coop for $565,000 and the purchase was contingent on Bodak obtaining a co-op loan for $282,500 and approval of the co-op board. Defendants claimed that by submitting a loan amount in excess of that provided for in the contract, Bodak committed a material breach, entitling them to retain the down-payment as liquidated damages. They also argued Bodak’s co-op board application was untimely. The court disagreed finding the affidavit of defendants’ real estate agent confirmed that Bodak’s loan commitment was timely submitted. It also noted the submission of a higher loan amount was not a material breach of the contract, stating even if the loan commitment amount submitted was higher than that contained in the contract, absent an affirmative showing of bad faith, buyer was entitled to the return of her down-payment. The court stated absent a blatant demonstration of bad faith by Bodak, it would be "onerous" to rule that she must forfeit a substantial down-payment. It ruled defendants failed to show the submission of the higher amount was the reason for the co-op’s rejection, denying dismissal.