PDQ Lube Center, Inc. v. Huber
| Decision Date | 04 December 1997 |
| Docket Number | 960617-CA,Nos. 950752-C,s. 950752-C |
| Citation | 949 P.2d 792 |
| Parties | 331 Utah Adv. Rep. 56 PDQ LUBE CENTER, INC., a Utah corporation, Plaintiff and Appellee, v. R. Lowell HUBER, Defendant, Third-party Plaintiff, and Appellant, v. June T. BOWEN, Estate of Darold J. Bowen, Dennis Greene, Pete Riggs, Bob Riggs, Reed Hooley, Troy Hooley, and John and Jane Does 1-10, Third-party Defendants. PDQ LUBE CENTER, INC., a Utah corporation, Plaintiff and Appellant, v. R. Lowell HUBER, Defendant and Appellee. |
| Court | Utah Court of Appeals |
Joseph M. Chambers, Logan, for R. Lowell Huber.
Larry E. Jones, Logan, for PDQ Lube Center, Inc.
Before DAVIS, P.J., WILKINS, Associate P.J., and JACKSON, J.
R. Lowell Huber appeals the findings of fact and conclusions of law and judgment entered by the trial court on July 3, 1995, determining that Huber failed to perform his obligations under a real estate agreement in good faith. PDQ Lube Services Center, Inc. (PDQ) appeals the trial court's later order terminating Huber's obligation to convey the property. This order was entered after the trial court ruled that PDQ had failed to timely tender its payment pursuant to the July 3, 1995 judgment. The two appeals have been consolidated for purposes of entering our opinion.
On September 17, 1993, PDQ made an offer, on a standard Real Estate Purchase Contract form, to buy Huber's property located on North Main Street in Logan, Utah for $125,000. Huber accepted PDQ's offer with additional negotiated terms on September 22, 1993. In relevant part the contract provided:
2.1 Existing/New Loan Application. Buyer [PDQ] agrees to make application 2.2 Qualification. Buyer and the Property must qualify for a loan for which application has been made under Section 2.1 within 60 calendar days (Qualification Date) after Acceptance. The Property is deemed qualified if, on or before the Qualification Date, the Property, in its current condition and for the Buyer's intended use, has appraised at a value not less than the Total Purchase Price. Buyer is deemed qualified if, on or before the Qualification Date, the Lender verifies in writing that Buyer has been approved as of the verification date.
for a loan specified above[ 2] within 5 calendar days (Application Date) after Acceptance. Buyer will have made Loan Application only when Buyer has: (a) completed, signed, and delivered to the Lender the initial loan application and documentation required by the Lender; and (b) paid all loan application fees as required by the Lender. Buyer will continue to provide the Lender with any additional documentation as required by the Lender. If, within seven calendar days after receipt of written request from Seller [Huber], Buyer fails to provide to Seller written evidence that Buyer has made Loan Application by the Application Date, then Seller may, prior to the Qualification Date below, cancel this Contract by providing written notice to Buyer....
2.3 Qualification Contingency. If Seller has not previously voided this Contract as provided in Section 2.1, and either the Property or Buyer has failed to qualify on or before the Qualification Date, either party may cancel this Contract by providing written notice to the other party within three calendar days after the Qualification Date, otherwise Buyer and the Property are deemed qualified....
3. CLOSING. This transaction shall be closed on or before Dec. 15, 1993. Closing shall occur when: (a) Buyer and Seller have signed and delivered to each other (or to the escrow/title company), all documents required by this Contract, by the Lender, by written escrow instructions and by applicable law; and (b) the monies required to be paid under these documents, have been delivered to the escrow/title company in the form of cashier's check, collected or cleared funds....
....
9. SPECIAL CONTINGENCIES. This offer is made subject to: A.) Buyer obtaining new financing. The terms of attached Addendum # 1 are incorporated into this Contract by this reference....
Because the property had previously been the site of a gas station and still had storage tanks underground, both parties were concerned about the affect these tanks would have on the deal. Consequently, they included a handwritten addendum, Addendum # 1, which provided:
The following terms are hereby incorporated as part of THE AGREEMENT:
(1) Seller will provide State of Utah/Bear River Health Department environmental clearance and remove any unacceptable contamination at Seller[']s expense. (2) Buyer to provide a $4,000 non-refundable cleanup deposit, forfeited if Buyer does not complete transaction, credited to reduce purchase price upon completing transaction. (3) Buyer is responsible for all demoli[t]ion and removal and dump fees. (4) Seller retains first right to match lowest demolition bid and complete bid project within 30 days after closing, weather permitting reasonable delays. (5) Seller to remove all fuel and oil storage tanks. (6) Seller to retain all salvage rights. (7) Offer subject to approval of Logan City as to building, site and construction permits. (8) Site subject [to] approval of Pen[n]zoil Products within 30 days after acceptance. (9) Buyer agrees to facilitate Seller[']s 1031 Exchange. (10) Seller to fill all holes caused by removal of tanks with fill material.
The contract also contained an integration clause and specified that time was of the essence.
Within a week, PDQ sought financing to develop the site. It contacted the Certified Development Company in Salt Lake City and eventually met with Joel Rush, a banker with the Bank of Utah, 3 to begin the SBA application process. Over a period of four weeks, PDQ supplemented its application with various materials requested by Rush, including demographic data, building plans, ten-year projections, balance sheets, tax returns, and financial statements. PDQ obtained site approval from Pennzoil Products, and although a building permit was not formally approved, also met with Logan City personnel concerning its plans to build on the property.
Huber was licensed and worked as an underground storage tank remover. At the time of this deal, he had permits to remove the underground tanks from the property. Although Huber represented that he could remove the tanks within thirty days of the signing of the contract, he failed to do so. Huber testified that he did not remove the tanks because he had not received the $4,000 cleanup deposit from PDQ. 4 However, the trial court found that Huber had received the cleanup deposit, and, further, that Huber had "failed to make a good faith effort to remove the tanks" and had "engaged in bad faith conduct in an attempt to kill the deal" because he did not receive anticipated funding from the property's previous owners to assist in the tank removal. 5 The trial court also found that as a consequence of Huber's bad faith conduct, PDQ was prevented from formally applying for a loan and obtaining an appraisal of the property because PDQ's banker believed that an appraisal and loan application would be futile until the site was cleaned and inspected.
Having entered the findings of fact and conclusions of law based on its analysis, the trial court ordered specific performance, requiring that Huber comply with the contract by "providing [PDQ] with a state and local environment clearance certificate for the site." The court further ordered Huber "to convey the property to [PDQ] if [PDQ] is able to tender the full purchase price within 84 days following the proof to [PDQ] of environmental clearance for the site." Finally, the court ordered both parties to comply with the terms of the contract. Huber appeals from these findings of fact, conclusions of law, and judgment entered July 3, 1995.
On September 7, 1995, PDQ received a letter from the Utah Department of Environmental Quality stating that the requirements of environmental cleanup had been satisfied. On November 28, 1995, two days before the court-ordered eighty-four-day period had expired, PDQ delivered a "letter of tender" to Huber indicating that the "$1,000 Earnest Money Deposit [was] in the Coldwell Banker account" and that "[t]he remaining $124,000 [was] being delivered" to the title company. Upon Huber's demand for payment at 6:00 p.m. on the same day, however, the title company denied payment because it indicated that it had not yet received the funds. At that time the title company had received only $39,000. Primarily because the full amount had not been delivered to the title company, Huber immediately rejected PDQ's "letter of tender" as a written tender of performance under Utah Code Ann. §§ 78-27-1 and 78-27-3 (1996).
Later that evening the title company received the balance of the funds, which included a cashier's check from Guardian State Bank for $84,150. Negotiation of the cashier's check was conditioned upon PDQ providing "[e]vidence of proper registration with the State of Utah of both P.D.Q. Lube Center of Logan, L.L.C. and PDQ Lube Center, Inc." Although Guardian State Bank apparently On December 12, 1995, Huber filed a motion for an order to terminate the contract and on December 14, 1995, PDQ filed a motion to compel compliance with the contract terms. After a hearing on the motions, the trial court issued a memorandum decision ruling that PDQ had "failed to make a proper tender of payment" and granting Huber's motion and denying PDQ's motion. In response, PDQ filed a motion for a new trial or amendment of judgment and requested an evidentiary hearing to take additional testimony. The trial court issued a second memorandum decision reiterating that PDQ had failed to make a proper tender and denied PDQ's motions. PDQ appeals from this order.
orally authorized the removal of the condition on December 4, 1995, the condition was never formally removed or satisfied until December 21, 1995.
Huber appeals from the July 3, 1995 jud...
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