Cohen v. Lovitz

• Decision Date: 09 June 1966
• Docket Number: Civ. A. No. 3513-62.
• Citation: 255 F. Supp. 302
• Parties: William COHEN et al., Plaintiffs, v. Marion LOVITZ et al., Defendants.
• Court: U.S. District Court — District of Columbia

255 F. Supp. 302

William COHEN et al., Plaintiffs, v. Marion LOVITZ et al., Defendants.

Civ. A. No. 3513-62.

United States District Court District of Columbia.

June 9, 1966.

Mark P. Friedlander, Washington, D. C., for plaintiffs.

Philip W. Amram, Washington, D. C., for defendants.

HOLTZOFF, District Judge.

The question presented in this case relates to contracts for the sale of real property. The problem is whether a vendee may recover damages for delay in addition to being awarded specific performance, if the vendor declines to convey the property; and, if so, what is the measure of damages for the delay. This subject is of novel impression in this jurisdiction.

The matter comes before this Court on cross-motions for summary judgment on a demand for damages for delay asserted by the vendee, in a counterclaim in which he asked both specific performance and damages. Specific performance was awarded. The claim for damages was severed for later consideration and is now to be determined.

The salient facts may be briefly summarized as follows. On August 31, 1962, Parkwood, Inc., the owner of a triangular parcel of land located at the junction of 14th Street and Vermont Avenue, in Washington, D. C., entered into a contract with one Norton Butler to sell it to him for $1,000,000. Parkwood then conveyed it to the plaintiffs William Cohen and Charles Cohen, subject to Butler's rights under his contract of sale. Butler assigned his rights under the contract to the defendant Marion Lovitz.

The plaintiffs alleged that the defendant had committed an anticipatory breach, because of certain statements made by him, and on November 7, 1962 brought the present action for a declaratory judgment to adjudicate that the contract was cancelled and void. The time for the performance of the contract of sale arrived on December 4, 1962. The vendee was ready, willing and able to perform, but the vendor defaulted. The defendant vendee interposed a counterclaim to the plaintiffs' complaint praying for specific performance and for damages for delay. The matter came before Judge McGarraghy of this Court on the defendant's motion for summary judgment. The Court dismissed the complaint and granted judgment on the counterclaim for specific performance of the contract, severing and reserving the issue of damages for a later trial. It was held that the vendors' "failure and refusal to perform was without legal justification or excuse". A decree in accordance with these rulings was entered on December 13, 1963. An appeal was taken and the decision of the District Court was eventually affirmed on December 14, 1964. Accordingly, on February 5, 1965, the property was conveyed pursuant to the decree—over two years subsequently to the date on which the contract should have been performed.

The claim for damages, which was severed and reserved for later consideration, is now before this Court. As heretofore stated, both sides have moved for summary judgment. The vendee's claim for damages is based on the following facts. The purchase price of the property was $1,000,000. It is claimed by the defendants that he entered into a contract to re-sell it for $1,800,000. Because of delay in performance, however, the prospective purchaser withdrew from the contract of re-sale, as he had a right to do. The defendant alleges that as a result of the delay he was deprived of an expected profit of $800,000. The defendant asserts further, that the market value of the property as of February 5, 1965 —the date on which it was conveyed to him—was $1,445,000, and submits an appraisal to that effect, which is not contradicted. He contends that his damages amount to the difference between $1,800,000 —the price of the prospective resale which fell through—and the market value of the property as of the date of conveyance, namely, $1,445,000. Accordingly he claims damages in the sum of $355,000. In addition he asks for interest on this amount from December 4, 1962. Finally, he claims reimbursement for counsel fees incurred by him in connection with this litigation.

The first question to be determined is whether the vendee is entitled both to specific performance and damages for delay, if the vendor refuses to convey the property in breach of the agreement, or whether the vendee in such an event is limited to receiving either specific performance or damages but may not have both. The overwhelming weight of authority is to the effect that the disappointed vendee under such circumstances may be awarded damages for delay in addition to being granted specific performance. This is the law in England. In Jaques v. Millar (1877) L.R. 6 Chancery Div. 153, 159, 160, Fry, J., an eminent authority on this branch of the law, allowed both specific performance and damages for delay. The same rule was applied in Jones v. Gardiner 1902 1 Chancery Div. 191, 195, where the Court stated that,

"* * * where the breach of contract arises, not from inability to make a good title, but refusal to take necessary steps to give the purchaser possession pursuant to the contract further damages may be recovered. * * *"

In the United States most of the jurisdictions that have passed on this point hold that if the vendor refuses to convey the property, the vendee is entitled to recover damages for delay in addition to receiving specific performance. This doctrine has been approved and applied in New York, Schoen v. Grossman, 33 Misc. 2d 490, 230 N.Y.S.2d 771, 775, affirmed, 17 A.D.2d 778, 232 N.Y.S.2d 871; in Michigan, Reinink v. Van Loozenoord, 370 Mich. 121, 121 N.W.2d 689; in Oregon, Crahane v. Swan, 212 Or. 143, 318 P.2d 942; in Virginia, Nagle v. Newton, 22 Gratt. 814, 821; in South Carolina, Butler v. Schilletter, 230 S.C. 552, 96 S.E. 2d 661; and in Mississippi, McVay v. Castanera, 156 Miss. 785, 126 So. 832, as well as in some other States.

Illinois seems to be the lone dissenter. In Schiavone v. Ashton, 269 Ill.App. 386, the Court in granting specific performance in favor of the purchaser, rejected his claim for damages based on depreciation of the property during the period of delay. It was held that the purchaser may not have both specific performance and damages.

Story in his Commentaries on Equity Jurisprudence ¶ 1085, recognizes that damages for delay may be awarded to a vendee in addition to a decree of specific performance. He said:

Wherever compensation or damages are incidental to other relief, as for instance, where a specific performance is decreed upon the application of either party, with an allowance to be made for any deficiency as to the quantity, quality, or description of the property, or for any delay in performing the contract, there it seems clear that the jurisdiction properly attaches in equity, for it flows and is inseparable from the proper relief. (Emphasis

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