Li v. Yaggi

212 Conn.App. 722

276 A.3d 976

Winston Y. LI et al.

v.Valerie M. YAGGI, Administrator (Estate of Henry K. Yaggi III), et al.

AC 43957

Appellate Court of Connecticut.

Argued December 1, 2021

Officially released May 31, 2022

Winston Y. Li, self-represented, and Liping Wang, self-represented, the appellants (plaintiffs).

Philip G. Kent, New Haven, for the appellees (defendants).

Cradle, Clark and Norcott, Js.

CLARK, J.

This action returns to us after this court's decision in Li v. Yaggi , 185 Conn. App. 691, 198 A.3d 123 (2018), in which we reversed the judgment of the trial court and remanded the case for a new trial. In the instant appeal, the self-represented plaintiffs, Winston Y. Li and Liping Wang, appeal from the judgment of the trial court rendered in favor of the defendant, Valerie M. Yaggi, individually and as administrator of the estate of Henry K. Yaggi III.¹ Following a trial to the court, the court concluded that the plaintiffs were not entitled to recover the deposits they made for the purchase of the defendant's home pursuant to a residential purchase and sale agreement (agreement).² On appeal, the plaintiffs claim that the court improperly concluded that they (1) failed to exercise due diligence in obtaining a written mortgage commitment, (2) did not provide adequate notice to the defendant that they were unable to obtain a mortgage commitment, and (3) waived any right they might have had to the deposits. We conclude that the court properly determined that the plaintiffs did not provide adequate notice to the defendant that they were unable to obtain a mortgage commitment pursuant to the terms of the agreement.³ Accordingly, we affirm the judgment of the trial court.

The following facts and procedural history are relevant to this appeal. On October 26, 2012, the parties executed the agreement. The agreement contemplated that the plaintiffs would buy from the defendant a parcel of real property located at 45 Wickford Place in the town of Madison (property) for $810,000. Pursuant to the agreement, the plaintiffs made three separate deposits totaling $25,000, which were held in escrow by the defendant's real estate agent, Lorey Walz.

The agreement included a mortgage contingency clause, which stated: "Buyer's obligation is contingent upon Buyer obtaining financing as specified in this paragraph. Buyer agrees to apply for such financing immediately and diligently pursue a written mortgage commitment on or before the Commitment Date. ... If Buyer is unable to obtain a written commitment and notifies Seller in writing by 5:00 p.m. on said Commitment Date, this Agreement shall be null and void and any Deposits shall be immediately returned to Buyer. Otherwise, the Financing Contingency shall be deemed satisfied and this Agreement shall continue in full force and effect." The commitment date was November 26, 2012.⁴ The closing was to occur no later than December 3, 2012.

The agreement also included a liquidated damages clause, which stated in relevant part: "If Buyer fails to comply with any Terms of this Agreement by the time set forth for compliance and Seller is not in default, Seller shall be entitled to all initial and additional deposit funds provided for in section 4 [of the agreement], whether or not Buyer has paid the same, as liquidated damages and both parties shall be relieved of further liability under this Agreement. ..."

On Saturday, November 24, 2012, the plaintiffs e-mailed the defendant to request an extension of the commitment and closing dates. The subject line of the e-mail was "Mortgage Commitment Extension Request." The e-mail stated in relevant part: "Attached is a request of mortgage extension. Due to the Hurricane Sandy and Thanksgiving holiday. We won't be able to obtain a mortgage commitment by 5 [p.m.] today . We request your approval of extension. We expect a commitment from a bank next week . Please sign and return to us ASAP." (Emphasis added.) The plaintiffs attached to the e-mail a signed, proposed amendment to the agreement, seeking to extend the commitment date to December 3, 2012, and the closing date to December 14, 2012.

That same day, the defendant forwarded the e-mail to Walz. Walz e-mailed the plaintiffs’ real estate agent, Blake Ruchti, stating: "We have received the request to extend the mortgage commitment date and closing date. The sellers, Hank and Val Yaggi, are willing to do so after receiving verification from the bank that you have a mortgage approval contingent upon a bank appraisal. ... Hank and Valerie Yaggi would like to see [the plaintiffs] purchase the home but have to be confident that a bank commitment will be given." The defendant never signed the plaintiffs’ proposed amendment to the agreement.

On Thursday, November 29, 2012, three days after the commitment date had passed, the plaintiffs informed Ruchti that they were experiencing a delay in obtaining a mortgage because of a credit issue, but stated that the loan would be approved and that the parties would be able to close by the end of December. The plaintiffs sent the defendant a second proposed amendment to the agreement, which was signed by the plaintiffs and dated November 30, 2012. The second proposed amendment proposed a commitment date of December 14, 2012, and a closing date of December 21, 2012. The defendant signed the second amendment on December 4, 2012. Next to both the amended commitment and closing dates, however, the defendant handwrote the phrase "[t]ime is of the essence" and initialed next to the handwritten modifications. The plaintiffs did not initial those modifications.

On December 8, 2012, the plaintiffs’ counsel, James Tsui, e-mailed the defendant's counsel, James Segaloff, stating that the "mortgage is in process and [the plaintiffs] expect a written commitment late next week." Thereafter, the plaintiffs sent the defendant a third proposed amendment to the agreement, proposing to extend the commitment and closing dates to December 21, 2012, and January 11, 2013, respectively. The defendant did not sign the third proposed amendment to the agreement.

On December 21, 2012, Tsui sent Segaloff a letter, which stated in relevant part: "Re: Notice to Terminate/ Rescind .... This is to provide notice to Sellers that as of this date, Buyers have not obtained a satisfactory unconditional written mortgage loan commitment or a clear to close. The Buyers have previously submitted an extension request to extend the mortgage contingency date to December 21, 2012, and no response or written acknowledgement was ever signed by Sellers. ... Annexed hereto is another extension signed by Buyers, requesting that the [m]ortgage [c]ontingency date be extended through January 18, 2013, and the [c]losing [d]ate changed and extended through January 25, 2013. If acceptable, please instruct the Sellers to sign and return a fully executed copy to my attention. If unacceptable, this letter shall serve as notice that the contract shall be and is hereby rescinded and terminated." The defendant did not sign the fourth proposed amendment to the agreement.

On December 28, 2012, Segaloff informed Tsui and Ruchti that he believed the plaintiffs had breached the parties’ agreement, entitling the defendant to retain the plaintiffs’ deposits as damages. In January, 2013, the defendant re-listed the property and another buyer made a purchase offer. On February 17, 2013, the plaintiffs e-mailed Segaloff to provide an update about their loan applications. The plaintiffs also requested an update on the status of their request to terminate the contract and have their deposits returned. The plaintiffs further informed Segaloff that they were aware that the defendant had re-listed the property and contended that the defendant was not entitled to sell the home to another buyer, unless the defendant terminated the parties’ agreement. The defendant ultimately sold the home to another buyer for $135,000 less than the purchase price set forth in the parties’ agreement.

The plaintiffs initiated this action on February 27, 2014, alleging in relevant part that the defendant had breached the parties’ agreement by "not timely releas[ing] ... the deposit[s] ...." The action was tried to the court on March 9, 2017. The court, Wilson, J. , found that, because only the plaintiffs signed the first, third, and fourth proposed amendments to the agreement and the plaintiffs did not assent to the defendant's handwritten additions with respect to the second proposed amendment, the parties never agreed to modify the original commitment and closing dates. It also found that the plaintiffs did not diligently pursue financing or provide proper notice that they intended to terminate the agreement prior to the commitment date. The court concluded that the plaintiffs had defaulted on the agreement by failing to close on the property, which entitled the defendant to retain the deposit funds pursuant to the liquidated damages provision set forth in the agreement.

The plaintiffs appealed and this court reversed the judgment of the trial court and remanded the case for a new trial. See Li v. Yaggi , supra, 185 Conn. App. at 713, 198 A.3d 123. This court concluded that the trial court's finding as to whether the plaintiffs diligently pursued a mortgage commitment was clearly erroneous because the court relied exclusively on two loan denial notices that were issued by lenders after the commitment date had passed, which were ambiguous with respect to the plaintiffs’ efforts to obtain financing before the commitment date had passed. Id., at 704, 198 A.3d 123. Pertinent to this appeal, this court further held that the trial court improperly had interpreted the notice provision to require the plaintiffs to provide notice of termination rather than notice of an inability to obtain a written commitment . Id., at 705, 198 A.3d 123. More specifically, this court concluded that "[t]he clear meaning of [the notice] provision is that if the plaintiffs were to...