Chan v. Smider

Decision Date03 May 1982
Docket NumberNo. 8787-8-I,8787-8-I
Citation31 Wn.App. 730,644 P.2d 727
CourtWashington Court of Appeals
PartiesRodney C. Y. CHAN, Respondent, v. Antone SMIDER and Odette Smider, husband and wife; Metropolitan Mortgage& Securities Co., Inc., a Washington corporation; Metropolitan Homes, Inc., a Washington corporation; David Meyers, Inc., a Washington corporation; Pioneer National Title Insurance Corporation, a Washington corporation, Appellants.

Adair, Kasperson, Petersen & Hennessey, Stanley Kasperson, Seattle, for appellants.

Max Nicolai, Llewellyn S. Jordan, Seattle, for respondent.

CORBETT, Judge.

This is an appeal and cross-appeal from a decree of specific performance for the sale of an apartment house.

The appellants, Anton and Odette Smider, purchased the apartment building on contract in 1973 for $170,000. In fall 1977, the respondent, Rodney C. Y. Chan, a businessman residing in Hong Kong, visited Seattle to look for an apartment house in which to invest. He contacted a realtor David Meyers, Inc. Although the realty company did not have a formal listing of the apartment house bearing the Smiders' signatures, it did have specific information as to price and terms of sale. David Meyers contacted Mrs. Smider who directed him to Floyd Wikstrom, who had assisted the Smiders in tax and business affairs. After conferring with Wikstrom, Meyers prepared an earnest money receipt and agreement, which was presented to Wikstrom. The Smiders signed the agreement, dated October 25, 1977. It provided for a purchase price of $315,800 with a $75,000 cash down payment, and a balance payable at $1,935 per month, including interest at 81/2 percent, over a period of 15 years. It also provided that the sellers agreed to pay a commission of 5 percent of the total sales price. The purchaser, Chan, deposited $2,500 earnest money. By letter dated November 3, 1977, the real estate broker informed the Smiders that the transaction had been placed in escrow. There followed an exchange of letters and memoranda in November and December 1977, and January 1978, reflecting a negotiated transaction proceeding towards closure. At the time of trial, the Smiders contended that because Wikstrom failed to explain the nature of the contract to them, and had presented it to them in a rush, they were unaware that they had signed a binding contract. They claimed that Mr. Smider, a native of Yugoslavia, had difficulty understanding English, although he has resided in the United States since 1969, and is a trained machinist and former draftsman. Mrs. Smider, a native of Chile, holds a master's degree in psychiatric social work from an American university and has resided in the United States since 1954. She has also taken real estate courses in Washington. Neither the closing officer nor David Meyers recalled the Smiders objecting to the validity of the earnest money receipt and agreement.

When the Smiders refused to close, Chan brought this action for specific performance of the earnest money receipt and agreement. After a trial, findings of fact and conclusions of law and a decree of specific performance were entered on April 1, 1980. The court found that Chan was entitled to all rents received by the Smiders from January 1, 1978 to the time of transfer ($67,004.59), against which the Smiders were entitled to offset their expenses ($17,727.21) during that time period for utilities, taxes, improvements, and the like. Of the $73,290.56 down payment tendered into the court registry, the Smiders were held entitled to $24,013.18 (the amount of tender less rents plus offsets) and Chan to the balance of.$49,277.42. In addition, the Smiders were held entitled to all of the interest ($7,026.96) earned on the down payment while it was held in interest-bearing accounts prior to being tendered into the court registry. The court also found that the real estate broker, David Meyers, Inc., was entitled to the balance of its commission, $13,290. The Smiders were ordered to execute a real estate contract under which the monthly payments would commence on April 1, 1980. The court retained jurisdiction for an accounting of 1980 rents and offsets.

After entry of the original decree, the Smiders retained new counsel and the trial court granted their motion to alter or amend the judgment. In the amended findings of fact and conclusions of law entered on April 29, 1980, the court found that Chan was entitled to $1,000 in reasonable attorneys' fees in connection with the belated motion to amend. The amended decree ordered the Smiders to execute a real estate contract under which the monthly payments began as of January 1, 1978, instead of April 1, 1980. The court found that Chan was entitled to all rents received by the Smiders from January 1, 1978, to the time of transfer with interest at 81/2 percent, less the Smiders' expenses offset year by year, for a total net credit due Chan of $56,461.67. The court also credited the Smiders with a total of $59,271.96, representing $7,026.96 interest on the down payment and 27 monthly contract installments. Of the $73,290.56 down payment tendered into the court registry, the Smiders were held entitled to $56,461.06, as opposed to the earlier award of $24,013.18, and Chan was held entitled to $16,829.50, as opposed to the earlier award of.$49,277.42. Chan was directed to pay the sellers' charges arising from the escrow, including the $13,290 commission owed to Meyers. The court again retained jurisdiction for an accounting of 1980 rents and damage deposits. Sometime on or after May 12, 1980, the Smiders, with Chan's approval, drew down the $56,461.06 from the court registry.

Chan moves to dismiss the Smiders' appeal, claiming that under the "acceptance of benefits doctrine", the Smiders have waived their right to appeal.

RAP 2.5(b) provides, in pertinent part:

(1) Decision Subject to Modification. A party may accept the benefits of a trial court decision without losing the right to obtain review of that decision only (i) if the decision is one which is subject to modification by the court making the decision or (ii) if the party gives security as provided in subsection (b)(2).

(2) Other Decisions-Security. If a party gives adequate security to make restitution if the decision is reversed or modified, a party may accept the benefits of the decision without losing the right to obtain review of that decision. The trial court making the decision shall fix the amount and type of security to be given by the party accepting the benefits.

Very few Washington cases deal with this doctrine, which was first recognized in Lyons v. Bain, 1 Wash.Terr. 482, 483-84 (1875). See, e.g., Murray v. Murray, 38 Wash.2d 269, 273-74, 229 P.2d 309 (1951); Potter v. Potter, 46 Wash.2d 526, 527, 282 P.2d 1052 (1955). The reason why an appellant accepting the benefits of the trial court's decision waives the right to appeal is because the appellate court might rule that the appellant is not entitled to those benefits. 4 Am.Jur.2d Appeal and Error § 251 (1962). That would not be presented in this case. To secure return of the money that the Smiders withdrew from the court registry, Chan has the apartment building of substantially greater value. For that reason, the motion to dismiss the appeal is denied.

The appeal by the Smiders is primarily factual, error being assigned to a number of the findings. Our review of the entire record discloses substantial evidence that Chan proved he was entitled to specific performance by clear, cogent and convincing evidence. See In re Sego, 82 Wash.2d 736, 739, 513 P.2d 831 (1973). We will not substitute our judgment for that of the trial court which had the witnesses before it. Holland v. Boeing Company, 90 Wash.2d 384, 391, 583 P.2d 621 (1978).

The Smiders contend that because Chan was buying the property as an investment, he could have been made whole by an award of money damages and, therefore, specific performance was not an appropriate remedy. An earnest money receipt will support an action for specific performance. Kreger v. Hall, 70 Wash.2d 1002, 1008, 425 P.2d 638 (1967); Hubbell v. Ward, 40 Wash.2d 779, 787-88, 246 P.2d 468 (1952). Specific performance is not a matter of right in equity, but a remedy which rests in the sound discretion of the trial court. Carpenter v. Folkerts...

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    ...performance should place the parties in the condition that they would have been in had the contract been performed. Chan v. Smider, 31 Wash.App. 730, 736, 644 P.2d 727 (1982). However, specific performance alone can rarely achieve this objective:"[A] decree for specific performance seldom b......
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    ......To the extent possible, specific performance should place the parties in the same condition as contract performance would have. Chan v. Smider, 31 Wn. App. 730, 736, 644 P.2d 727 . Page 5 . (1982). A trial court sitting in equity has broad discretion in fashioning remedies "to do ......
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