Kim v. Conway & Forty, Inc.

• Decision Date: 25 April 1989
• Docket Number: No. 54845,54845
• Citation: Kim v. Conway & Forty, Inc., 772 S.W.2d 723 (Mo. App. 1989)
• Parties: Longius KIM and Gji Kim, Respondents, v. CONWAY & FORTY, INC. and J.L. Mason of Missouri, Inc, Appellants.
• Court: Missouri Court of Appeals

Page 723

772 S.W.2d 723

Longius KIM and Gji Kim, Respondents, v.CONWAY & FORTY, INC. and J.L. Mason of Missouri, Inc, Appellants.

No. 54845.

Missouri Court of Appeals,

Eastern District,

Division Three.

April 25, 1989.

Application to Transfer Denied Aug. 1, 1989.

John L. Davidson, St. Louis, for appellants.

Canice Timothy Rice, Jr., Margaret E. Zapf, St. Louis, for respondents.

HAMILTON, Judge.

Conway & Forty, Inc. and J.L. Mason of Missouri, Inc., a joint venture, hereinafter referred to as Sellers, appeal from a judgment in the amount of $27,428.57 entered on a jury verdict in favor of Mr. and Mrs. Longius Kim, hereinafter referred to as Purchasers, on Purchasers' petition for breach of contract.We affirm.

In December, 1984, Purchasers signed an agreement with Sellers for the purchase and sale of a condominium.Purchasers delivered to Sellers $20,000 as an earnest money deposit.Pursuant to paragraph 5 of the agreement, Purchasers agreed to complete the color selections for finishing the condominium within fifteen days after the date of the agreement.If a color selection were unavailable, Purchasers agreed to make an alternate selection within twenty-four hours after notification of the unavailability.In addition, paragraph 18 of the agreement provided, inter alia:

Construction deposit and all other deposits made hereunder shall be retained by Seller without interest.If Purchaser shall (a) fail to make color selections in a timely manner as provided for in the contract or ... (c) not close the sale by the date fixed therefore occurring to failure of performance by Purchaser, the Seller at its option shall have one or more of the below listed remedies: (a) all deposits made hereunder shall be forfeited by Purchasers and this contract cancelled, (b) Purchaser shall pay $75 per day to Seller for each day Purchaser causes closing to be delayed or, (c) Purchaser shall be bound to fulfillment of this contract ...

Purchasers selected colors that duplicated those used in the display condominium.When the agreement was accepted, upon payment by Purchasers of the final portion of the earnest money deposit, Sellers informed Purchasers that certain items, duplicative of the display unit, were unavailable.Purchasers failed to make alternate color selections within twenty-four hours after notification.The record is, however, unclear as to when Purchasers eventually made these selections.

The closing, originally scheduled by Sellers for the end of January and later, for February 15, occurred on March 13, 1985.¹Purchasers claimed that, having arrived with a check for the full amount of the agreed upon purchase price, they were ready and willing to perform.No representative of Sellers attended the closing.A title company employee provided Purchasers with a closing statement from Sellers that reflected an additional $3,487.44, representing late charges based upon delay in closing.A dispute arose over Purchasers' obligation to pay the late charges.Because Sellers refused to withdraw the late charges, no title to the property was transferred.

Immediately thereafter, Purchasers' attorney wrote to Sellers informing them they were in breach of contract and demanding return of their earnest money as well as money expended for improvements to the property.Sellers, responding by letter, stated that, because Purchasers had breached the contract, Sellers were cancelling the contract and retaining the earnest money deposit.

Purchasers subsequently filed suit alleging Sellers had breached the sale agreement.They sought damages in the sum of $25,000 that apparently included return of the $20,000 earnest deposit and $5,000 for flooring and lighting improvements.The case was tried to a jury.At the close of the evidence, Sellers moved for a directed verdict, arguing, inter alia, that they had substantially performed their contractual obligations; that they had committed no anticipatory breach; and that Purchasers had failed to provide sufficient notice before declaring Seller in default.Sellers also argued that Purchasers had tendered no payment in satisfaction of their contractual obligations.The trial judge, after overruling the motion for directed verdict, submitted the following to the jury as InstructionNo. 6:

Your verdict must be for plaintiffs if you believe:

First, plaintiffs and defendants entered into an agreement whereby plaintiffs agreed to purchase a condominium unit from defendants and defendants agreed to sell a condominium unit to plaintiff, and

Second, plaintiffs were ready, willing and able to perform their agreement, and

Third, defendants failed to perform their agreement, and

Fourth, plaintiffs were thereby damaged, unless you believe plaintiffs were not entitled to recovery by reason of Instructions Number 7 or 8.²

The jury returned a verdict for Purchasers in the amount of $21,488.87.Thereafter Purchasers moved for an award of prejudgment interest; the trial court granted the motion.Sellers then moved for entry of a judgment notwithstanding the verdict, and in the alternative, for a new trial.In their motion for judgment notwithstanding the verdict, Sellers incorporated the arguments specified in their motion for a directed verdict.In addition, Sellers argued, inter alia, that Purchasers failed to establish that Sellers had breached the agreement because the evidence adduced proved neither an intent not to perform nor a refusal to perform.

Sellers contended in their motion for new trial that the trial court erred in failing to submit Instructions A and B in lieu of InstructionNo. 6.³This error, Sellers argued, precluded the jury from considering whether Sellers substantially performed or whether Sellers' breach related to a vital provision of the contract.The trial court overruled both motions.Thereafter, Sellers filed a timely appeal.

Sellers raise essentially four points on appeal.They assert the trial court erred (1) in failing to direct a verdict in favor of Sellers and in failing to enter a judgment notwithstanding the verdict; (2) in refusing to submit Sellers' Instructions No.A & B in lieu of InstructionNo. 6;(3) in granting Purchasers' post-trial motion for prejudgment interest; (4) in admitting Purchasers' proof of special damages.

Sellers first contend the trial court erred in failing to direct a verdict in their favor and in failing to enter a judgment notwithstanding the verdict.In order to evaluate each such contention, the evidence and the reasonable inferences to be drawn from the evidence must be viewed in the light most favorable to the party against whom the motion has been made.W & S Inv. Co., Inc. v. Mushrush, 669 S.W.2d 601, 603(Mo.App.1984).Moreover, a court should sustain a motion for judgment notwithstanding the verdict only when all of the evidence and the reasonable inferences to be drawn therefrom are so strongly against the Plaintiff's case that reasonable minds cannot differ.Bizzle v. Enterprise Leasing, 741 S.W.2d 84, 85(Mo.App.1987).

The gist of Sellers' first point is that Purchasers' suit was one for recission, not breach of contract, and Purchasers failed to establish the requisite elements of a cause of action for recission.⁴Sellers focus specifically on Purchasers' failure to adduce evidence tending to prove that Sellers breached a substantial or material term of the contract.Sellers also contend that, in order to prevail, Purchasers must prove that Sellers failed substantially to perform their contractual obligations.Additionally, Sellers argue that Purchasers failed to establish they themselves had not defaulted, which is a requirement, Sellers contend, under a recission theory.

Sellers' arguments rest upon the premise that Purchasers' cause of action is for recission rather than for breach of contract, as Purchasers maintain.Sellers reason that, because Purchasers seek restitution, that is, the return of their downpayment, their cause of action is necessarily one for recission.

Sellers' reasoning is based upon a faulty premise.Contrary to Sellers' contention, a party may sue for breach of contract and elect restitution as a remedy.Lopp v. Peerless Serum Co., 382 S.W.2d 620, 626(Mo.1964)."The measure of damages for breach of contract of sale of real estate by the vendor is the actual injury the vendee has sustained, and the courts will put the vendee in statu [sic] quo."Jones v. McGinley Land Co., 228 Mo.App. 944, 74 S.W.2d 853, 856(1934).Moreover, damages properly recoverable may include the return of payments made toward the purchase price as well as the value of improvements.Id.

The Supreme Court in Lopp cites with approval the Restatement of Contracts§ 347. 382 S.W.2d at 626.Explicitly recognizing that restitution is an available remedy where a party alleges breach of contract, the Restatement provides the...