For many, purchasing real estate is a stressful endeavor. It’s further complicated when one attempts to buy distressed property through a short sale, when an owner sells property for less than the mortgage balance. Lenders typically allow short sales to recoup a portion of the loan balance quickly and avoid a lengthy and expensive foreclosure proceeding. Westchester Commercial Division Justice Linda Jamieson granted a short sale buyer a temporary restraining order (“TRO”) and a preliminary injunction when the seller attempted to cancel the contract.
In Singh v. DiBerardino, Index No. 67782/2017, Plaintiff contracted to buy Defendant’s property in Mamaroneck through a short sale. The parties signed five contracts related to it, each of which included statements that Defendant would sell the property to Plaintiff. They also signed agreements with Plaintiff’s fiancé to maintain and secure the Property and clear violations and liens. After Plaintiff undertook all of those efforts and was ready, willing and able to close, the Defendant decided to back out. Plaintiff commenced action and immediately moved for a TRO and a preliminary injunction pursuant to CPLR § 6301. Plaintiff sought to prohibit Defendant from taking actions adverse to Plaintiff’s interest in the Property and force Defendant to close on the sale.
A preliminary injunction is a drastic remedy which should be used sparingly. In exercising its discretion, the Court must determine if the movant has established: “(1) a likelihood of success on the merits, (2) irreparable harm in the absence of an injunction, and (3) a balance of the equities in favor of the injunction.” Trump on the Ocean, LLC v. Ash, 81 A.D.3d 713, 715, 916 N.Y.S.2d 177, 180 (2d Dep’t 2011). Based on the facts, Justice Jamieson found that Plaintiff met its “particularly high burden” and granted the motion in its entirety.
In opposition, Defendant claimed that she signed the contracts under duress and without benefit of counsel and that the work performed by Plaintiff was unauthorized. But Justice Jamieson rejected these arguments. Regarding the claim of duress: “it is well-settled that ‘[a] party is under an obligation to read a document before signing it, and cannot generally avoid the effect of the document on the ground that he or she did not read it or know its contents” (citing Augustine v. BankUnited FSB, 75 A.D. 596, 597, 905 N.Y.S.2d 652, 653 (2d Dep’t 2010)).
Justice Jamieson also rejected Defendant’s claim that she was not represented by counsel. Not only is this not a defense, but the evidence demonstrated that she obtained legal advice concerning the transaction. The Court further noted that Defendant signed several contracts over the course of two years. Accordingly, “it is simply implausible to believe that she did not know what she was doing, or that she was pressured into doing so on so many different occasions.” And finally, various text messages and emails indicated that Defendant did in fact authorize Plaintiff and her fiancé to perform work on the Property.
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