Contract — Land sale – Loan approval

Where a judge ordered specific performance of a land contract, that was error under applicable Indiana law, as the plaintiff buyer only received conditional loan approval and the purchase agreement unambiguously required him to obtain unconditional, final loan approval.

“Defendant appeals by right the trial court’s order and judgment, entered following a bench trial, which granted plaintiff specific performance requiring defendant to perform his contract with plaintiff to sell and convey a piece of real property as well as court costs and attorney fees. We reverse the order, vacate the judgment, and remand for entry of judgment in defendant’s favor and for determination of the amount of court costs and attorney fees owed to defendant as the prevailing party.

“Defendant argues that the trial court erroneously denied his motion for a directed verdict because the evidence conclusively established that plaintiff only received conditional loan approval and the purchase agreement unambiguously required him to obtain unconditional, final loan approval. We agree.

“In conclusion, the trial court erroneously denied defendant’s motion for a directed verdict because the purchase agreement unambiguously required plaintiff to obtain actual and definitive loan approval by June 9, 2020, and the evidence established that plaintiff only received conditional loan approval by that date. Plaintiff essentially obtained a ‘maybe’ from the lender maybe they would fund the loan and maybe they would not fund the loan. Therefore, the condition precedent of loan approval was not fulfilled and the contract was not enforceable; thus, plaintiff was not entitled to specific performance. We reverse the trial court’s order concluding that plaintiff satisfied the condition precedent, vacate the trial court’s judgment granting plaintiff specific performance of the purchase agreement, and remand for entry of judgment of no cause of action in defendant’s favor.

“Defendant next argues that the trial court erroneously applied a rescission standard to an unsatisfied condition precedent and misconstrued the time-is-of-the-essence provision. We agree.

“Defendant also argues that the trial court erred by finding that he anticipatorily repudiated the purchase agreement. We agree.

“Lastly, defendant argues that because plaintiff was not entitled to specific performance, plaintiff did not prevail on his claim and the judgment awarding plaintiff attorney fees and costs as a prevailing party must be vacated. We agree.

“Because we vacate the trial court’s judgment granting plaintiff specific performance, we also vacate the trial court’s judgment awarding plaintiff attorney fees and costs as the prevailing party. We note that defendant had prevailed on plaintiff’s claim for incidental damages in the trial court. Thus, as the only prevailing party, defendant is entitled to recover court costs and reasonable attorney fees from plaintiff. We remand this matter to the trial court for determination of the amount that defendant is entitled to as the prevailing party.”

Ridgway v. Stratton; MiLW 08-108209, 8 pages; Michigan Court of Appeals unpublished per curiam; Yates, J., Cavanagh, J., Boonstra, J.; on appeal from Berrien Circuit Court; Donald M. Fulkerson for appellant; William J. Stevens for appellee.

Click here to read the full text of the opinion.

Copyright © 2024 BridgeTower Media. All Rights Reserved.

For top headlines, breaking news and more, visit milawyersweekly.com or sign up for our newsletter .