Fullerton v. Griswold

• Decision Date: 25 April 2006
• Docket Number: No. 31775.,31775.
• Citation: 142 Idaho 820,136 P.3d 291
• Parties: Ralph FULLERTON and Myra Friedman, husband and wife, Plaintiffs-Respondents, v. Henry B. GRISWOLD and Peggy Griswold, husband and wife, Defendants-Appellants.
• Court: Idaho Supreme Court

Page 291

136 P.3d 291

142 Idaho 820

Ralph FULLERTON and Myra Friedman, husband and wife, Plaintiffs-Respondents, v. Henry B. GRISWOLD and Peggy Griswold, husband and wife, Defendants-Appellants.

No. 31775.

Supreme Court of Idaho, Boise, March 2006 Term.

April 25, 2006.

Hawley Troxell Ennis & Hawley, LLP, Boise; McDevitt & Miller, Boise, for appellants. Merlyn W. Clark argued.

Speck & Aanestad, PC, Ketchum, for respondents. Douglas J. Aanestad argued.

SCHROEDER, Chief Justice.

This is an action for specific performance of an agreement for the sale of real property brought by the purchasers, Ralph Fullerton and Myra Friedman (collectively, the Fullertons), against the sellers, Henry Griswold (Griswold) and Peggy Griswold (Mrs. Griswold), (collectively, the Griswolds). The district court granted the Fullertons' motion for summary judgment and the Griswolds appealed.

I. FACTUAL AND PROCEDURAL BACKGROUND

Griswold is a licensed realtor who listed a condominium he owns in Sun Valley for sale with Joanne Wetherell (Wetherell), a real estate broker with RE/MAX. The listing agreement provided the price to be $1,250,000 and the brokerage fee to be 5% of the sale price. The listing agreement provided that the buyer must cooperate in a tax-deferred "§ 1031" exchange. Wetherell continued to market the condominium after the listing agreement expired on October 31, 2003.

The Fullertons made an offer to purchase the condominium on April 15, 2004, for $1,200,000. Griswold rejected the offer and made a counteroffer of $1,265,000. The Fullertons rejected the counteroffer and submitted a second counteroffer for $1,240,000; providing that the purchase price would remain undisclosed to the multiple listing service and others, and that "upon removal of all contingencies, the Buyer agrees to release the earnest money in the amount of $50,000 to the Title Company." Griswold accepted the second counteroffer on April 20, 2004, and initialed or signed every page of the agreement. He also signed a commission statement in which he agreed to pay Wetherell a commission of $45,000, which is $17,000 less than she would have been entitled to under the expired listing agreement. The Real Estate Purchase and Sale Agreement, the second counteroffer, and all addenda are collectively referred to as "Purchase Agreement."

The Purchase Agreement included an Inspection Contingency Clause, which made the Fullertons' offer contingent upon their acceptance of the condition of the condominium. The Fullertons had a right to inspect the condominium and object to its condition by serving a written notice of their objections to the Griswolds within 14 business days from the date of "mutual acceptance," which was April 20, 2004, making the deadline May 10, 2004. The Inspection Contingency Clause provided the Fullertons could declare the Purchase Agreement null and void or could request correction of the conditions or defects on a Contingency Release form if they objected to the condition of the condominium. If the Fullertons elected to request correction of conditions or defects, the Purchase Agreement provides, "Seller shall have 3 business days to give Buyer written notice (by signing the Buyer's Contingency Release form) that Seller will correct such condition(s) and/or defect(s) prior to closing." If the Seller does not sign the Buyer's Contingency Release form, the "Buyer may, within 3 days following Seller's notice period, above, release the contingency in writing" or the "Agreement shall be null and void, in which case the Earnest Money shall be refunded to Buyer."

Fullerton executed a Contingency Release form on April 27, 2004, notifying Griswold that there were six conditions of the condominium that required correction and that the Fullertons released all contingencies subject to Griswold agreeing to repair the six items. On May 3, 2004, Griswold received the signed documents from Wetherell at his Florida residence with instructions to sign and return them. A day later Wetherell spoke with Mrs. Griswold who indicated she received the documents and would make sure they were delivered to Griswold. Mrs. Griswold also said that they would be on vacation for about three weeks. Thereafter, Wetherell made several unsuccessful attempts to reach the Griswolds and informed the Fullertons that if Griswold did not return the Contingency Release form by May 6, 2004, the Fullertons had until May 11, 2004, to remove the contingency by depositing $50,000 in earnest money with the title company.

On May 7, 2004, Wetherell corresponded with the Fullertons and suggested they extend the time for Griswold to sign the Contingency Release form. She prepared a form granting Griswold additional time to sign the Fullertons' Contingency Release form. The Griswolds assert that the Fullertons signed the Addendums, which were served on Griswold, though he did not sign them, while the Fullertons contend the addenda were not sent to the Griswolds. Regardless, on May 10, 2004, the Fullertons deposited $50,000 into an account at the title company to be used for the closing.

On May 26, 2004, Wetherell spoke with the Griswolds on the phone. Wetherell told the Griswolds they would not have to make any repairs because she would pay for her repairman to do any work required of the Griswolds and would arrange for the homeowners association to take care of the work required of it. Griswold signed the Contingency Release form and made notations in the margin indicating he would address four of the conditions to be corrected and that two of the conditions were to be taken care of by the homeowners association. Also, on May 26, Wetherell informed the Griswolds that the earnest money had been deposited with Sun Valley Title Company. Mrs. Griswold asked that the earnest money be deposited into Griswold's personal interest bearing account. That same day, an escrow associate at the title company, Heather Thompson, spoke with Mrs. Griswold about placing the earnest money into such an account. On June 10, 2004, Mrs. Griswold told Ms. Thompson that Griswold intended to use Wachovia Bank to do the exchange and that she would provide the contact information.

Mrs. Griswold requested that the Griswolds be allowed to remain on the property two days beyond the possession day of July 19, 2004, even though she understood the transaction would still close on July 16, 2004. Wetherell specifically recalled Mrs. Griswold stating that she did not want the request to extend the possession date to "squelch the deal." The Fullertons stated they could not extend the possession date. On June 11, 2004, the Griswolds walked through the condominium with an employee of Sun Valley Transfer and Storage to get a cost estimate for moving their belongings. At that time Mrs. Griswold stated the packing would begin July 16 and that they would move out on July 19, 2004. Mrs. Griswold told Wetherell that the Griswolds had purchased one-way tickets to fly from Florida to Salt Lake City so they could drive to Sun Valley to pick up some of their belongings and then drive their personal car back to Florida.

In June 2004, the Griswolds met with a friend and attorney, Bob Korb. After this meeting Griswold informed Wetherell that he was not going to close the sale of the condominium due to personal reasons. Mrs. Griswold unsuccessfully attempted to cancel the escrow for the condominium on June 16, 2004. The Fullertons received a letter written by legal counsel retained by the Griswolds indicating that the Griswolds would not perform the Purchase Agreement because Griswold did not sign the Contingency Release form within three days after the Fullertons' written notice of the requested repairs. Further, Griswold did not consent to make the repairs and the Contingency Release form indicated his consent was conditioned upon his later approval, and the Purchase Agreement had become null and void by the time he signed the Contingency Release form. The Griswolds did not attend the closing and continue to intermittently occupy the condominium.

On June 21, 2004, the Fullertons filed an action against the Griswolds for specific performance of the Purchase Agreement and subsequently moved for summary judgment. The district judge granted the Fullertons' motion, finding that the payment of the earnest money was an unconditional waiver of the contingencies by the Fullertons, that Griswold intended to go forward with the sale when he signed the Contingency Release form, and that the Griswolds' subsequent conduct evidenced their intention to waive the right to claim the Purchase Agreement was void. While the Griswolds attempted to disassociate Mrs. Griswold's actions from Griswold, it is clear that the Griswolds were acting together and the district court could properly consider the conduct of each. The district judge indicated summary judgment was proper based on any one of the reasons given and awarded costs and attorney fees to the Fullertons.

The Griswolds appeal to this Court. Both parties request attorney fees on appeal.

II. STANDARD OF REVIEW

Specific performance is an extraordinary remedy that can provide relief when legal remedies are inadequate. The inadequacy of remedies at law is presumed in an action for breach of a real estate purchase and sale agreement due to the perceived uniqueness of land. . . . The decision to grant specific performance is a matter within the district court's discretion. When making its decision the court must balance the equities between the parties to determine whether specific performance is appropriate.

Kessler v. Tortoise Dev., Inc., 134 Idaho 264, 270, 1 P.3d 292, 298 (2000) (internal citations omitted). Like the district court in Intermountain Forest Mgmt., Inc. v. Louisiana Pacific Corp., 136 Idaho 233, 236, 31 P.3d 921, 924 (2001), the district judge in this case was not the trier of fact during a trial but was ruling on a summary judgment motion. As noted in Intermountain Forest Mgmt.,...