Title Policy as Proof of Seller Readiness on a Time-of-the-Essence Closing, Supporting Down-Payment Forfeiture When Buyer Fails to Appear

1. Introduction

In Scott Randolph, LLC v Gholis of Brooklyn Corp. (2026 NY Slip Op 02687), the Appellate Division, Second Department, affirmed summary judgment dismissing a purchaser’s claims arising from a failed all-cash commercial real estate transaction in Brooklyn. The plaintiff, Scott Randolph, LLC (the purchaser), sued the seller, Gholis of Brooklyn Corp. (“Gholis”), seeking specific performance and damages for breach of contract. After the property was conveyed to other parties and financed, the plaintiff expanded its lawsuit to include Bethpage Federal Credit Union (the mortgage lender) and Bushwack 10, LLC, Bushwack 5, LLC, and Dawson Stellberger (the later transaction parties), asserting tortious interference, fraud, and declaratory relief attacking the subsequent deed and mortgage.

The key issues were (i) whether the purchaser could obtain specific performance despite failing to appear at a time-of-the-essence closing, (ii) whether the seller could retain the down payment based on the purchaser’s default, (iii) whether the later transaction parties could be liable for tortious interference or fraud, and (iv) the proper form of relief in a declaratory judgment action.

2. Summary of the Opinion

The Second Department held that Gholis established, as a matter of law, that it was ready, willing, and able to close on the time-of-the-essence date—supported by a title policy showing it could deliver marketable and insurable title—and that the purchaser defaulted by failing to appear at the scheduled closing. The court therefore affirmed dismissal of the purchaser’s specific performance claim and affirmed judgment in principle on Gholis’s counterclaim permitting retention of the down payment.

The court also affirmed dismissal of the purchaser’s tortious interference and fraud claims against Bushwack and Stellberger, where the record showed (among other things) that Stellberger did not enter a “backup contract” until after the purchaser had expressed a wish to terminate its contract with Gholis, and the purchaser failed to raise a triable issue of fact.

Finally, because the case included declaratory judgment claims and counterclaims, the court remitted the matter for entry of a judgment expressly declaring (i) the purchaser has no rights, title, or interest in the property and (ii) Gholis is entitled to retain the down payment.

3. Analysis

3.1. Precedents Cited

  • Latora v Ferreira (102 AD3d 838): Cited for the foundational specific performance requirement that a purchaser must show it was “ready, willing, and able” to close and that the seller was in default. Here, the court used Latora to frame the purchaser’s burden and to underscore that specific performance is not available absent proof of both purchaser capacity to perform and seller default.
  • Aliperti v Laurel Links, Ltd. (27 AD3d 675): Cited to reject conclusory or speculative proof of financing/performance. The court invoked Aliperti to emphasize that “unsubstantiated assertions” that funds could be obtained are insufficient—reinforcing the strict evidentiary showing required at summary judgment when a party claims readiness to close.
  • Perelmuter v LRM Bldrs., LLC (230 AD3d 1165): Cited for two linked propositions: (i) with a time-of-the-essence closing, each party must tender performance on the designated date, and nonperformance constitutes default; and (ii) return/forfeiture of a down payment typically turns on whether the seller was ready, willing, and able on the “law day.” The court relied on Perelmuter to reject the purchaser’s attempt to bypass the time-of-the-essence framework and to align down-payment consequences with seller readiness on the closing date.
  • Grace v Nappa (46 NY2d 560): Cited (through Perelmuter) for the classic New York rule that properly declaring “time of the essence” makes the closing date a firm deadline, elevating punctual performance to a condition of the contract.
  • Martocci v Schneider (119 AD3d 746): Cited for the seller’s burden when seeking to retain a down payment after declaring a purchaser in breach: the seller must show it was ready, willing, and able to perform on the time-of-the-essence date and that the purchaser lacked a lawful excuse for failure to close. The court used Martocci both to state the governing rule and to support the conclusion that Gholis met that burden while the purchaser did not raise a triable issue.
  • Donerail Corp. N.V. v 405 Park LLC (100 AD3d 131): Cited alongside Martocci for the same down-payment/closing-default principles in time-of-the-essence transactions, reinforcing that forfeiture is tethered to seller readiness and purchaser default without lawful excuse.
  • Ashkenazi v Miller (190 AD3d 668): Cited to support the proposition that, once the seller makes a prima facie showing of readiness and buyer default, the burden shifts and the purchaser must raise a triable issue of fact; here, the purchaser failed to do so.
  • Ferdinand v Siegel (236 AD3d 861): Cited in dismissing tortious interference and fraud claims where the evidentiary record fails to show actionable interference or deception. The court used Ferdinand to confirm that speculative or unsupported allegations cannot defeat summary judgment.
  • Ginsburg Dev. Cos., LLC v Carbone (134 AD3d 890): Cited with Ferdinand for standards governing business tort claims in the contracting context, supporting dismissal where the record does not substantiate wrongful conduct causing the alleged breach.
  • Lanza v Wagner (11 NY2d 317): Cited for the remedial/procedural requirement that, in a declaratory judgment action, the court should enter a judgment that actually “declares” the parties’ rights—hence the remittal for entry of a proper declaratory judgment.

3.2. Legal Reasoning

A. Specific performance: strict proof of readiness and seller default

The court applied a familiar but exacting New York framework: a purchaser seeking specific performance must prove its own readiness, willingness, and ability to close on the scheduled closing date and that the seller was in default. In a time-of-the-essence setting, the closing date becomes the “law day,” and failure to tender performance on that date is a default absent lawful excuse.

Critically, the court found that Gholis made a prima facie showing of seller readiness by producing a title policy “that indicated that Gholis was capable of delivering marketable and insurable title.” This is an important evidentiary point: the court treated documentary proof of insurable/marketable title as sufficient to establish the seller’s ability to perform—at least for summary judgment purposes—where the buyer’s competing proof did not raise a genuine factual dispute.

B. Down payment forfeiture: seller readiness + buyer’s failure to close

Once Gholis showed readiness and the purchaser’s failure to appear at the scheduled closing, the burden shifted to the purchaser to raise a triable issue of fact or to demonstrate a lawful excuse. The purchaser did not. Under the authorities cited (including Martocci v Schneider and Donerail Corp. N.V. v 405 Park LLC), that evidentiary failure supports a declaration that the purchaser defaulted and that the seller may retain the down payment.

The purchaser’s attempt to characterize the time-of-the-essence notice as a “nullity” did not succeed because the purchaser failed to show, as a prima facie matter, that the seller was in breach or that the notice was legally ineffective such that the purchaser could be excused from proving readiness to close.

C. Tortious interference and fraud: timing and lack of triable facts

The purchaser’s tort claims against Bushwack and Stellberger failed on summary judgment because the defendants submitted evidence showing that Stellberger did not enter a backup contract until after the purchaser had expressed a wish to terminate its own deal. That timing undermined the narrative that the later transaction wrongfully induced the breach or relied on actionable misrepresentations. With that prima facie showing made, the purchaser’s opposition did not supply concrete evidence sufficient to create a triable issue.

D. Declaratory judgment form: remittal for entry of declarations

Even though the order effectively resolved the merits, the Second Department followed Lanza v Wagner and required a judgment that expressly states the declarations—here, no purchaser interest in the property and seller entitlement to the down payment—prompting remittal for entry of the proper judgment.

3.3. Impact

  • Evidentiary roadmap for sellers at summary judgment: The opinion signals that a seller can satisfy the “ready, willing, and able” requirement with strong documentary title evidence—specifically, a title policy indicating the ability to deliver marketable and insurable title—especially where the purchaser’s opposition is conclusory.
  • Reinforcement of time-of-the-essence discipline: The decision underscores that purchasers cannot avoid the consequences of missing a time-of-the-essence closing by merely attacking the notice; they must show concrete breach/defect or other lawful excuse and must still grapple with the readiness requirement.
  • Constraining “failed deal” tort litigation: By affirming dismissal of tortious interference and fraud claims where the record showed the purchaser had already expressed a desire to terminate before a backup deal was made, the opinion discourages speculative tort claims appended to contract disputes without proof of wrongful conduct and causation.
  • Procedural clarity in declaratory actions: The remittal portion is a reminder to practitioners that declaratory relief must culminate in a formal declaration in the judgment, not merely reasoning in an order.

4. Complex Concepts Simplified

  • Specific performance: A court order compelling a party to perform the contract (here, to convey real property), typically available only when monetary damages are inadequate and the claimant proves strict contractual entitlement.
  • Ready, willing, and able: Proof that a party had the legal capacity and practical ability to close (e.g., funds available for a buyer; marketable/insurable title for a seller) on the required date.
  • Time of the essence / law day: A notice or contractual clause making the closing date a firm deadline. Missing it is a default unless legally excused.
  • Marketable and insurable title: Title that is free from reasonable doubt (marketable) and acceptable to a title insurer (insurable). A title policy indicating insurability can be powerful evidence that the seller can convey as promised.
  • Down payment forfeiture: If a purchaser defaults without lawful excuse and the seller was ready to perform, the seller may be entitled to keep the down payment, depending on the contract and governing law.
  • Summary judgment / triable issue of fact: Summary judgment is granted when there is no genuine factual dispute requiring a trial. A “triable issue” is a real, evidence-based dispute—not speculation or conclusory assertions.
  • Declaratory judgment: A binding court declaration of the parties’ rights and legal relations (e.g., who has title/interest), which must be stated explicitly in the judgment.

5. Conclusion

Scott Randolph, LLC v Gholis of Brooklyn Corp. reinforces New York’s strict approach to time-of-the-essence real estate closings: a purchaser who fails to appear on the law day faces dismissal of specific performance claims and exposure to down-payment forfeiture when the seller demonstrates readiness to perform. The court’s acceptance of a title policy as proof of the seller’s ability to deliver marketable and insurable title provides a practical evidentiary lesson for litigants. The decision also narrows the runway for contract-adjacent tort claims unsupported by concrete evidence of wrongful interference or fraud, and it reiterates that declaratory judgment cases must end with an explicit declaration in the final judgment.