Kutzin v. Pirnie

The Kutzins (plaintiffs) contracted to sell their house to the Pirnies (defendants) for $365,000, and the Pirnies paid a $36,000 deposit before breaching the contract and refusing to close; the sale contract had no clause addressing liquidated damages or forfeiture of the deposit. The Kutzins eventually resold the house six months later and sued the Pirnies for their losses. The trial court calculated actual damages at $17,325 (covering the price differential plus carrying costs like utilities, taxes, and insurance during the delay) and ordered the Kutzins to refund the Pirnies $18,675, the difference between the deposit and the proven damages. On the Kutzins' appeal, the Appellate Division held that because the damages were less than the deposit, the Kutzins could keep the whole deposit but no more; the Pirnies appealed further.