Vacova Co. v. Farrell
| Decision Date | 19 August 1991 |
| Docket Number | No. 25397-2-I,25397-2-I |
| Citation | 814 P.2d 255,62 Wn.App. 386 |
| Court | Washington Court of Appeals |
| Parties | VACOVA COMPANY, a Washington General Partnership, comprised of Kris Gratrix, Robert Westover, Tom Vasilatos, Thomas Vasilatos, Marla Vasilatos, Dennis Cooper and Katheryn Cooper, Respondents, v. Gene FARRELL and "Jane Doe" Farrell, husband and wife, and the marital community comprised thereof, Appellants, the Heller Company, a Washington corporation, Defendant. |
Charles B. Allen, Bellevue, for respondents.
Respondent Vacova Company, a Washington general partnership, brought this action below for rescission of a vacant land purchase and sale agreement and for declaratory judgment that the contract was terminated when appellant Gene Farrell, as purchaser, failed to timely pay the first installment of the earnest money due by the terms of the contract. Mr. Farrell counterclaimed for specific performance and for declaratory judgment determining the continued validity of the contract. Vacova moved for and was awarded summary judgment terminating the contract and dismissing Mr. Farrell's counterclaim. Mr. Farrell appeals, assigning error to the entry of the order of summary judgment. We affirm.
The following facts are undisputed. In early February of 1989 Kris Gratrix, Robert Westover and another Vacova partner met with Gene Farrell and David Hopkins to discuss a possible purchase by Mr. Farrell of 20 building lots owned and being developed for sale by Vacova. The engineering design plans necessary to obtain preconstruction approval of the plat improvements had been submitted In early March of 1989 Mr. Hopkins called Mr. Westover and stated that Mr. Farrell was ready to make a very attractive offer to purchase the property. A meeting was scheduled for March 14, 1989, a Tuesday. On that day Mr. Gratrix, Mr. Westover and another Vacova partner went to the offices of The Heller Company and met with Messrs. Hopkins and Farrell. Over a period of some 2 hours a verbal agreement was reached whereby Mr. Farrell would purchase the 20 building lots for $1,150,000. The terms were all cash to seller at closing, inclusive of $60,000 earnest money to be paid in three installments. Closing was to be 30 days following recording of the final plat. The only contingency was the recording of the final plat with King County. The parties shared the realistic expectation that the County review of the engineering design plans would require several months and that the construction of the subdivision improvements would require several additional months, so that recording of the final plat and closing of the sale would necessarily be delayed.
to King County for review in January of 1989. Mr. Farrell is a builder of single family homes. David Hopkins, who is a real estate agent working for The Heller Company Realtors, was at all relevant times serving as Mr. Farrell's agent. Kris Gratrix is Vacova's managing partner. Mr. Westover is a licensed real estate broker
After the verbal agreement was reached, and while all the parties were still present at the offices of The Heller Company, Mr. Hopkins prepared a vacant land purchase and sale agreement, utilizing Puget Sound Multiple Listing Association Form 25. That form contains a printed clause which reads: Mr. Westover prepared two attachments to the contract, one of which set forth the earnest money to be paid. That clause read as follows:
1. EARNEST MONEY. Earnest money shall be $60,000, payable $10,000 in cash at time of this agreement, an additional $10,000 at time of King County approval of engineering for Also included in the attachments prepared by Mr. Westover were the following provisions:
the plat improvements and an additional $40,000 not later than 10 days after final approval of plat improvements and recording of the plat by King County. Said earnest money shall be deposited into an interest bearing trust account with The Heller Co. Said earnest money shall be non-refundable except in the event of Seller's failure to meet the terms of this agreement and shall be released to Seller, together with accrued interest, as liquidated damages upon Purchaser's default
3. INFORMATION TO BE PROVIDED BY SELLER.
Seller agrees to provide available information pertaining to the subject property to Purchaser not later than 5 days after acceptance of this agreement by all principals. Said information shall include soils logs, engineering drawings and calculations, hearing examiner's report, and other data which Purchaser may request. It is understood that Seller shall not be required to produce an[y] new data for the Purchaser, and that the above data is that which is produced in the obtaining of plat approvals and design of plat improvements.
16. Purchaser shall be allowed to meet with engineer to review and approval [sic design details. Additional costs to Seller resulting from Purchaser's change in requirements shall be paid by Purchaser. Additional charges by engineer for such reviews shall be paid by Purchaser.
Upon completion of the contract and attachments, the parties reviewed the documents. The three Vacova partners then signed as seller and Mr. Farrell signed as purchaser. Mr. Hopkins signed as agent for The Heller Company (Mr. Westover's real estate agency was designated as listing agent and the seller agreed to pay a 4 percent commission to The Heller Company and a 2.5 percent commission to Mr. Westover's employer.).
While the parties were in the process of signing the documents, Mr. Hopkins stated that Mr. Farrell did not have the $10,000 with him which the contract required to be paid "at the time of this agreement," that is, immediately upon signing by all of the parties then present. Mr. Hopkins explained that Mr. Farrell would need 3 days (i.e., to Friday, March 17, 1989) to transfer funds in order within three days following notice to Buyer of Seller's acceptance of Buyer's offer.
to pay the first installment of the earnest money. Following discussion, and with Vacova's verbal consent, Mr. Hopkins prepared an Earnest Money Promissory Note which Mr. Farrell signed. The note was made payable to The Heller Company for the sum of $10,000 to be paid
This note is signed as the earnest money for a real estate Purchase and Sale Agreement between the Buyer and Vacova ("Seller") dated March 14, 1989, and is referred to therein.
The note was prepared on Puget Sound Multiple Listing Association Form 31. The contract was not amended to make reference to the note, and the earnest money provisions remained as first written. 1
Mr. Farrell did not pay the note on Friday, March 17, 1989. On that day and again on Monday, March 20, Mr. Westover called The Heller Company to inquire if the $10,000 had been paid, and he was told the money had not been paid. On Tuesday, March 21, 1989, Mr. Westover delivered a letter to The Heller Company with an extra copy for Mr. Farrell, giving notice that
Vacova Company has rescinded the Sales Agreement dated March 14, 1989, due to the breach of agreement in [Mr. Farrell's] failure to comply with the cash requirement as stated in the [earnest money] Addendum.
In response to that letter, and also on March 21, 1989, Mr. Hopkins wrote the following to Mr. Westover:
Dear Bob:
At the time the subject Purchase and Sales Agreement was signed you stated that you would "run over to your office and pickup [sic] the engineering".
Due to the length of our meeting on March 14 you where [sic] pressed for time as you had a "Brokers Open" and you did not have time to get the engineering that was prommised [sic].
All of the parties of the meeting where [sic] aware that I was leaving town for a few days and did not show any concern over the fact that I would not be available untill [sic] Tuesday (the 21st) to complete any further communication needed between the parties. At this time the Buyer has communicated with me that it is his desire to complete the transaction in a business like [sic] manor [sic]. He is prepared to tender his Earnest Money promply [sic].
On March 21, 1989 Mr. Farrell purchased a cashier's check for $5000 payable to The Heller Company upon which were typed the following words in the space for identification of the remitter: "Gene Farrell--$5000 E.M.--Balance of $5000 upon 3 day review of engineering on plat of Eastwood Park." The record on appeal is unclear as to when The Heller Company received the check, when Vacova received notice of The Heller Company's receipt of the check, and when The Heller Company deposited the check. The record does reflect that on April 3, 1989 Mr. Farrell sent Vacova's attorney a copy of the check, in response to a letter from the attorney reiterating Vacova's position that the contract was terminated. In his handwritten response to Vacova's attorney, Mr. Farrell stated that the deal could move forward as soon as he could review the engineering of Eastwood Park.
On May 4, 1989 Vacova filed suit for rescission in superior court. The lawsuit was served on Mr. Farrell on May 15, 1989. In the meantime, and on May 9, 1989, Mr. Farrell paid an additional $5000 to The Heller Company's trust account. On September 19, 1989, Mr. Farrell paid $10,000 into the said trust account, alleging in his affidavit in opposition to the summary judgment motion that he made the second earnest money installment upon belatedly learning that the County had The summary judgment proceedings were heard in November of 1989, and the order granting Vacova's motion was entered on December 4, 1989. 2
approved the engineering for the plat improvements. The County approval occurred on June 14, 1989
DISPUTED ISSUES
Mr. Farrell alleges that immediately after the parties executed the contract on March 14, 1989, and before they left the offices of The Heller...
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