Ger v. Kammann, Civ. A. No. 79-608.
| Decision Date | 15 December 1980 |
| Docket Number | Civ. A. No. 79-608. |
| Citation | 504 F. Supp. 446 |
| Parties | Ruth Ann GER and Errol Ger, Plaintiffs, and Sachs Realty Inc., a corporation of the State of Delaware, Intervening Plaintiff, v. Donna T. KAMMANN and Richard W. Kammann, Defendants. |
| Court | U.S. District Court — District of Delaware |
L. Kent Wyatt of Aerenson, Balick & Ferrara, Wilmington, Del., for plaintiffs.
Richard A. Levine of Young, Conaway, Stargatt & Taylor, Wilmington, Del., for intervening plaintiff.
Paul H. Spiller of Kimmel & Spiller, P.A., Wilmington, Del., for defendants.
This litigation arises out of a contract dated June 23, 1979, for the sale to Dr. and Mrs. Errol Ger, the plaintiffs, of a residence in Westover Hills, Wilmington, Delaware, owned by Mr. and Mrs. Richard Kammann, the defendants. Plaintiffs made a payment of $15,000 which was placed in an escrow account in advance of October 31, 1979, the date provided for final settlement. The present suit was brought to recover that sum, together with interest and damages.
Prior to signing the contract, on separate occasions, Mrs. Kammann gave to Mrs. Ger two surveys of the property, showing a sanitary sewer line running under the property but away from the house. These surveys had been given the Kammanns by previous owners of the property and were given to Mrs. Ger as a courtesy by Mrs. Kammann.
Prior to settlement, plaintiffs themselves had a survey made of the property and learned for the first time that a portion of an addition to the house had been built on a sewer easement by a previous owner who had failed to obtain a building permit. Plaintiffs notified defendants of the encroachment of the easement and sought to have defendants pay the cost of removing the sewer line. When plaintiffs were unsuccessful, they notified defendants that the contract had been breached, was terminated, and demanded a return of the $15,000 which plaintiffs had deposited. Defendants refused to return the deposit and plaintiffs commenced this action.
Defendants filed an answer which alleged that at all times they were ready, willing and able to perform the contract and complete settlement in accordance with its terms. In a counterclaim, defendants assert that plaintiffs, by refusing to go through with the settlement, had themselves breached the contract. Defendants prayed for specific performance and damages. Since the defendants have resold the property, the claim of specific performance is moot.
The contract provided, in part:
Title to said property to be good, marketable, fee simple title, free and clear of all liens and encumbrances of record, but subject to all existing easements and restrictions of record. In the event the Seller is unable to give a good and marketable title such as will be insured by a licensed title company, subject to the aforesaid, Purchaser shall have the option of taking such title as the Seller can give, or of being repaid all monies paid by the Purchaser to the Seller on account of the purchase price, together with cost of searching title as he may have incurred and this contract shall become null and void.
Defendants refused to move the sewer line but offered to provide plaintiffs with a title insurance policy issued by the Title Insurance Company of Pennsylvania. Mr. Pentecost, a vice president of the company, testified that if the Title Insurance Company knew of the burdened easement, the company would guarantee the holder of the policy against loss because of that condition and purchasers would have a good and marketable title subject to the encroachment. He stated, however, that an insurance policy would not insure holders against damages which they might incur as a result of the encroachment to a subsequently built deck, or to trees or shrubs which might be planted later. Nor would it insure a homeowner against any reduction in value of the property in the event that subsequent potential purchasers were concerned with the encroachment. This was consistent with advice the plaintiffs had received from their attorney, and plaintiffs were unwilling to accept a policy that did not give them this broader coverage.
As a basis for seeking a refund of the $15,000 deposited with defendants, plaintiffs argue that the agreement of sale is void because it was entered into as a result of a mutual mistake of material fact. It is undisputed that neither of the parties knew or had reason to know of the sewer line running under a portion of the house before the contract was signed and both parties intended to buy and sell an unencumbered house. Both plaintiffs testified that they would not have signed the contract had they known of the easement. It is clear that the contract was entered into as a result of a mutual mistake of this material fact, and as such, should be rescinded by the Court.
Mutual mistake of a material fact may be cause for a court to rescind a contract for the sale of realty. In Dugan v. Bosco, 34 Del.Ch. 599, 108 A.2d 586 (1954), plaintiffs bought a house from defendants, paying the full purchase price. Before moving into the house, plaintiffs converted it into apartments. They thereafter discovered that a portion of the septic system was situated on an adjacent vacant lot, and that a portion of the driveway was also on the adjoining property. The plaintiff-buyers brought suit for rescission of the contract, and the court concluded that plaintiffs demonstrated a right to that relief.* The court found that there had been a material misrepresentation by the defendant regarding the...
To continue reading
Request your trial
-
Palumbo v. Ewing, Civ. A. No. 81-257.
...sewer easement case, "The plain fact is that the contract would not have been entered into but for the mutual mistake." Ger v. Kammann, 504 F.Supp. 446, 448 (D.Del.1981). In such circumstances, the plaintiff is entitled to the rescission of the entire transaction and the return of the parti......