Brush Grocery Kart, Inc. v. Sure Fine Market, Inc.

47 P.3d 680 (2002)

Purchase the Printed Copy at bsmsphd.com

Nature of the Case

To access this section all you need to do is click here and register.

Facts

P and D entered a five-year 'Lease with Renewal Provisions and Option to Purchase' for real property, including a building to be operated by P as a grocery store. Anytime during the last six months of the lease, P could elect to purchase the property at a price equal to the average of the appraisals of an expert designated by each party. Shortly before expiration, P notified D of its desire to purchase the property and begin the process of determining a sale price. The parties were unable to agree on a final price by the time the lease expired. P then vacated the premises, returned all keys to D. P filed suit, alleging that D failed to negotiate the price term in good faith and asking for the appointment of a special master to determine the purchase price. D agreed to the appointment of a special master and counterclaimed, alleging that P negotiated the price term in bad faith and was, therefore, the breaching party. During litigation over the price term, the property was substantially damaged during a hail storm. Neither party carried casualty insurance, and each asserted that the other was liable for the damage. The issue was added to the litigation at a stipulated amount of $60,000. The court accepted an appraised value of $375,000. The court then found that under the doctrine of equitable conversion, P was the equitable owner of the property and bore the risk of loss. It, therefore, declined to abate the purchase price or award damages to P for the loss. P appealed. The court of appeals affirmed. P petitioned for a writ of certiorari to determine the proper allocation of the risk of loss and the appropriate remedy under these circumstances.