Crabby's, Inc. v. Hamilton

244 S.W.3d 209 (2008)

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Nature of the Case

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Facts

Ps listed a restaurant and accompanying real property for sale. D offered $290,000, and it was accepted. D then assigned his interest in the contract to Paragon Ventures, L.L.C. ('Paragon'), a business that Hamilton and Richard Worley set up to operate a restaurant. D also remained as an individual buyer on the contract. The contract contained a contingency provision that Ds were to obtain a conventional loan or loans in the amount of $232,000, payable over a period of not less than 15 years and bearing interest at a rate of not more than 5.5% per annum. Ds were to use reasonable diligence in seeking to obtain such loan or loans, and if D did not furnish Ps with a copy of an effective written loan commitment within 30 days from the Effective Date, then the Contract shall automatically terminate, and the Earnest Money shall be returned to Ds. D never furnished a copy of an effective written loan commitment within 30 days of the effective date of the contract. After entering into the contract Ds made arrangements for financing at the Bank of Joplin. They were approved by the bank for a loan in the amount of $340,000.00. The bank agreed to loan them $225,000.00 amortized over fifteen years on the real estate, $65,000.00 amortized over seven years on the equipment, and a $50,000.00 revolving line of credit all at the rate of interest of prime plus 1.5%. Ds were present a title report showing tax liens attached to the property. A closing date was set but then extended due to repair issues. On that date of the extension for closing, the parties also entered into an agreement that allowed Ds to take possession of the property prior to closing so that they could start cleaning it. Ds also made application for appropriate licenses to operate a restaurant on the property and had the utilities for the property transferred into Ds' name. Ds s sent a letter to Ps stating their intention not to close the transaction two days before the transaction. Ds claimed 'items, which they consider fixtures, have been taken from the premises.' This property was used televisions, a couple of mirrors, a set of stereo speakers, and a computerized cash register. The letter also specified the existence of the tax liens as an additional reason for Ds' refusal to close the transaction as scheduled. On August 5 D offered to buy a building for the purpose of establishing a restaurant. This offer was accepted by those sellers on August 6, 2003, and closed September 22, 2003. The purchase price for that property was $170,000.00. Eventually, J and A Café of Kansas, L.L.C., offered to purchase the property for $235,000.00. Ps accepted that offer, and the transaction closed on July 15, 2004. P sued for breach of contract. P claimed the difference in sales price of' $290,000 and the $235,000 price actually obtained when the property subsequently sold eleven and one-half months later on July 15, 2004. Ps also claimed real estate and personal property taxes, utilities, and mortgage interest accruing during that period as damages. P got a judgment for $95,547.30. Ds appealed.