How v. Fulkerson

• Decision Date: 10 December 1974
• Docket Number: No. 2,CA-CIV,2
• Citation: 22 Ariz.App. 467,528 P.2d 853
• Parties: , 15 UCC Rep.Serv. 1099 Jon S. HOW and Rita W. How, husband and wife, Appellants, v. Thomas E. FULKERSON and Jo E. Fulkerson, husband and wife, Appellees. 1674.
• Court: Arizona Court of Appeals

Page 853

528 P.2d 853

22 Ariz.App. 467, 15 UCC Rep.Serv. 1099

Jon S. HOW and Rita W. How, husband and wife, Appellants, v. Thomas E. FULKERSON and Jo E. Fulkerson, husband and wife, Appellees.

No. 2 CA-CIV 1674.

Court of Appeals of Arizona, Division 2.

Dec. 10, 1974.

Rehearing Denied Jan. 15, 1975.

Johnson, Hayes & Dowdall, Ltd. by John G. Stompoly, Tucson, for appellants.

Silverstone & Stern by Maurice M. Stern, Nolen L. McLean, Tucson, for appellees.

OPINION

HOWARD, Judge.

The appeal in this case challenges the court's refusal to order specific performance of a contract for the sale of real estate between appellants and appellees.

While visiting Tucson in August, 1971, appellants sought to purchase a trailer park. A real estate sales agent of Richard H. Huff Realty, Inc., Rose Mariani, showed appellants several such parks, including one owned by appellees. On August 24, 1971, appellants made an offer on appellees' trailer park, known as Desert Sands, depositing a check for $2,000 earnest money with Mariani. The offer was rejected. A second offer was submitted two days later. It, too, was rejected, but appellees made a counter-offer. Under the terms of the counter-offer, the total purchase price was to be $135,000. Appellees added several terms which become important in this appeal. First, after the provision covering the amount of earnest money to be paid, the following phrase was inserted, 'two thousand to seller acceptance of this contract.' Second, appellees added the following provisions:

'Purchasers reserve the option to buy available trailers (those owned by sellers herein) at wholesale blue book price at close of escrow, if trailers are not purchased at close of escrow then the sales price of subject trailers shall be negotiated between the buyers and sellers. The contract of sale mentioned above shall be due and payable in full not later than 120 months from close of escrow. Sale is contingent upon final inspection of books and property by buyer on the day of acceptance by seller of offer to purchase. Seller agrees to pay buyer rental on spaces occupied by trailers owned by seller at regular rates for comparable size trailers until trailers are removed. It is further understood and agreed that the purchasers shall assume and agree to pay the assessments remaining unpaid on subject property with a principal balance of not more than $3,230.72.'

Appellants examined the books and property, signed the agreement and gave Mariani a second check for $2,000 payable to appellees. Having already paid out $2,000 by check, appellants dated the second check to appellees as of September 1, 1971, to allow a transfer of funds to their checking account in San Francisco. Mariani tried to present the contract to appellees, but was unable to do so until August 30, 1971. Upon seeing the post-dated check, appellees declared that the deal was off. Mariani left, contacted a Tucson relative of appellants who gave Mariani a check for $2,000 payable to appellees and dated August 28, 1971, and returned to appellees' residence with the new check. Appellees again rejected the payment, and this time they signed a statement that 'Rose M. offered the check for $2,000.00 on Jon How dated Sept. 1, 1970 which I refused. She later returned with one from Mrs. John Kai for Jon How which I refused to accept delivery at this time.' Nevertheless, the process of closing the sale began. On September 14, 1971, after an additional confrontation between Mariani and appellees, the president of Richard H. Huff Realty, Inc. wrote a letter to appellees in which he acknowledged that 'Mrs. Mariani told me that you . . . did not wish to consummate the sale . . ..' The concluding paragraph of the letter declared that:

'I will expect to hear from you or your attorney within 10 days from the date of this letter if you do in fact intend to withdraw from your commitment to sell. If I do not hear from you, I, together with my attorney, will consider that the sale shall proceed as outlined in the Sales Agreement.'

No reply was forthcoming. In the meantime, to raise the $35,150.00 required on or before closing the sale, appellants sold their home in San Francisco. By December 16, 1971, appellants had performed all of their obligations required to close the sale. Appellees had not.

Appellants filed suit for specific performance of the contract or in the alternative to recover damages. After several amendments, a final judgment was entered declaring:

'(a) There was a Contract between the parties, and

(b) That said Contract is incapable of specific performance, and

(c) by their acts and conduct the Plaintiffs having waived their right to damages and being estopped to claim damages against Defendants,

NOW, THEREFORE, by reason of the law and the evidence,

IT IS HEREBY ORDERED, ADJUDGED AND DECREED, that Judgment be and hereby is entered in favor of the Defendants . . ..'

Because of the approach we take, it is unnecessary to determine whether appellants have waived their rights to recover damages. We hold that the contract between appellants and appellees should be specifically performed.

There are five prerequisites before a contract can be specifically performed. First, there must be a contract; second, the terms of the contract must be certain and fair; third, there must be an absence of inequitable conduct on the plaintiff's part; fourth, there must be an absence of hardship to the defendant or the public outweighing the benefit to the plaintiff from performance of the contract; and fifth, there must be no other adequate remedy at law. Shreeve v. Greer, 65 Ariz. 35, 173 P.2d 641 (1946); H. McClintock, Handbook of the Principles of Equity 129 (1948). Appellees allege that the first four requirements have not been met. As to the last requirement, courts usually find that where the sale of real estate is involved there is no adequate remedy at law. D. Dobbs, Handbook on the Law of Remedies 796 (1973).

Appellees first claim that the Deposit Receipt and Agreement never ripened into a contract because appellants manifested a qualified acceptance. This argument is based upon the assumption that by postdating the $2,000 check appellants did not unequivocally accept ap...