Whiteley v. O'Dell, 47841
| Decision Date | 10 April 1976 |
| Docket Number | No. 47841,47841 |
| Citation | 219 Kan. 314,548 P.2d 798 |
| Parties | Roy L. and Evelyn L. WHITELEY, Appellants, v. Clinton E. O'DELL, d/b/a O'Dell Construction Company, Appellee. |
| Court | Kansas Supreme Court |
Syllabus by the Court
1. In an action brought to recover for breach of a real estate purchase contract the record is examined and it is held: The trial court did not err in granting rescission and placing the parties in status quo. The judgment of the trial court is modified only to the extent that court costs are to be charged against defendant.
Frank W. Hylton, Wichita, argued the cause, and Douglas K. Womack, Wichita, was with him on the brief for appellants.
No appearance by appellee.
This is an action brought to recover damages for a breach of a real estate purchase contract. Plaintiffs appeal from the trial court's entry of judgment generally in favor of defendant contractor.
On April 16, 1973, plaintiffs Roy L. and Evelyn L. Whiteley entered into a written contract with defendant Clinton C. O'Dell for the purchase of a house in Wichita, Kansas. Under the terms of the contract, O'Dell, doing business as the O'Dell Construction Company, agreed to construct and convey to plaintiffs a house similar to another built by O'Dell. The contract price was listed at $31,040, with $1,000 to be paid as earnest money and the balance due upon closing. It further specified that the buyers were to apply for a conventional loan in the amount of $27,950, at a maximum interest rate of 7 3/4%. In the event the buyer was unable to qualify for such a loan, his earnest money was to be refunded. The closing date was designated as September 1, 1973, or a 'reasonable time thereafter.' On the back of the contract, and incorporated therein, were listed certain specifications to be followed by the contractor.
The Whiteleys subsequently obained the requisite financing and paid O'Dell $1,000 in earnest money. Shortly thereafter, O'Dell commenced construction of the house, but he did not comply with certain contract specifications. Specifically, the first bathroom fixture placed in the 'roughed in' bath area was white rather than colored; sealdown shingles were used instead to T-lock shingles; and instead of as all brick exterior on the house, only the front was brick. The Whiteleys discovered these variances in June, 1973, and immediately notified O'Dell they no longer wanted to purchase the house. At that point O'Dell ceased further work on the house except for laying cement blocks to accommodate a brick veneer on the three unfinished sides. The parties met on several occasions following the Whiteleys' repudiation of the contract in an attempt to arrive at a mutually suitable solution. Failing to reach agreement, the Whiteleys filed a petition in the district court seeking damages for O'Dell's alleged breach of contract.
The Whiteleys' petition alleged that O'Dell refused, failed and neglected to carry out the terms of the contract, resulting in damages from increased expenses and other items in the total amount of $20,000. As a further result of the breach of the contract, the Whiteleys alleged they would be forced to finance similar housing at an increased rate of interest and they sought recovery of the $1,000 paid to O'Dell as earnest money.
In his answer, defendant O'Dell denied he breached the terms of the contract in any manner or that he was liable for any damages alleged by plaintiffs. By way of cross-petition O'Dell alleged he had fully performed the contract in a workmanlike manner and in accordance with the terms of the contract and all building codes, but the Whiteleys had wrongfully repudiated the contract. O'Dell prayed for relief in the form of specific performance of the contract, or, in the alternative, for damages in the amount of $10,000. In addition, O'Dell asked for whatever equitable relief the court felt was proper.
The case was tried before the trial court and the court issued its findings and conclusions of law. In ruling in favor of defendant O'Dell on the plaintiffs' petition, the court concluded that 'time not being of the essence,' the contractor had a reasonable time to complete the house according to specifications, but plaintiffs never gave him an opportunity to do so. The court reasoned that the variances noted by plaintiffs in June could easily have been rectified prior to the completion date of the contract. As a result, the court ruled that plaintiffs were premature in assuming the contract had been breached and the house would not be built according to specifications. In the words of the trial court, 'The plaintiff's fears alone are not enough or sufficient to justify renouncing the contract even though real estate is a unique item.'
Based on these findings the trial court entered judgment generally for defendant and against plaintiffs. The court directed plaintiffs to convey the property to defendant and ordered the $1,000 in earnest money returned to plaintiffs. Defendant's cross-petition for damages was denied.
Before reaching the merits of the controversy we should mention that we are deciding this case solely on the basis of the record, plaintiffs' brief, and plaintiffs' oral argument. Counsel for defendant has failed to file a brief with this court. Pursuant to Supreme Court Rule 10(e) of appellate practice, counsel for defendant was not permitted to argue before this court. Hence, we will consider the appeal without the benefit of defendant's oral or written arguments.
Plaintiffs contend the trial court erred in finding defendant had not breached the contract. The record reveals that at the time plaintiffs inspected the house in June, 1973, there were variances from the contract specifications in at least three respects. First, the bathroom fixtures were not the color specified in the contract. The trial court determined this was an insignificant difference which could have been resolved rather simply. The fixtures had not been installed at that time. Although O'Dell made no offer to cure the defect we cannot say this alone would entitle the purchaser to rescind the contract. It is not every breach which gives rise to the right to rescind a contract. In order to warrant rescission of a contract the breach must be material and the failure to perform so substantial as to defeat the object of the parties in making the agreement. (Kohn v. Babb, 204 Kan. 245, 461 P.2d 775; In re Estate of Johnson, 202 Kan. 684, 452 P.2d 286.) Obviously, the variance in the appearance of the bathroom fixtures is not so substantial that it would constitute a material breach of contract.
The variances in the shingles and the brick veneer are entirely different matters. While the sealdown shingles used by the builder differed only in appearance from those specified, the contract disclosed that plaintiffs specifically ordered T-lock shingles. Defendant offered no excuse for the variance, nor did he offer to replace them with the proper shingles. From the testimony it is apparent to this court that defendant had no intention of curing this defect. We find nothing in the record to support the finding of the trial court that the shingles could have been replaced before the date of closing.
An even more serious variance of the contract specifications was discovered by plaintiffs when they saw that...
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