Action for the return of escrow deposits; Real property purchase agreement financing-contingency provision; “Financing approval”; Whether the agreement identified a specific amount that had to be approved for financing; Contract interpretation

The court held that, under the plain meaning of the parties’ real property purchase agreement, defendant-seller should have returned the escrow deposits at issue to plaintiff-would be buyer after they did not close on the sale. Thus, it affirmed summary disposition for plaintiff in this action for return of the escrow deposits. Plaintiff relied “on a financing-contingency provision in the agreement, whereby the purchase was to be canceled and deposits returned if plaintiff did not obtain financing. Defendant counterclaimed, arguing that it could keep the deposits because plaintiff received financing, even though the amount authorized was less than the amount sought.” The court found that the real dispute depended on whether the agreement identified “a specific amount that must be approved for financing. Plaintiff” contended that it did – $2,000,000. Defendant argued that no amount was “identified, and the only specific quantity tied to ‘financing approval’” was the interest rate. The court determined that neither party was correct, but plaintiff was “closer to the mark.” It concluded that while “the actual amount to be financed is not set forth explicitly in” the last sentence of the relevant paragraph, the first and third sentences “explicitly set forth the total amount to be paid by the purchaser, i.e., $2,363,636 + $236,364 = $2,600,000. This is the amount of funds needed to be obtained by plaintiff to complete the transaction—in other words, the amount that one or more entity must agree to provide in satisfaction of the purchase price. Whether plaintiff was planning to self-finance a portion is irrelevant to the plain meaning of this agreement, which is silent as to how the purchase price would be financed with the exception that any interest charged could not exceed 8%.” The court found that defendant’s insistence that “the only quantity tied to the ‘financing approval’” was the interest rate constituted “a myopic reading of the” agreement. Plaintiff presented “evidence that it could not obtain financing sufficient to complete the transaction, and defendant did not rebut this with material evidence of its own.”