Head& Seemann, Inc. v. Gregg

311 N.W.2d 667 (1981)

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Nature of the Case

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Facts

D offered to buy a home from P. She represented, verbally and in writing, that she had $15,000 to $20,000 of equity in another home and would pay this amount to P after selling the other home. P knew that she had no such equity. P accepted D's offer to buy, and the parties entered into a land contract. After taking occupancy, D failed to make any of the contract payments. Investigation then revealed the fraud. P sued D. Based on the fraud, plaintiff sought rescission, ejectment, and recovery for five months of lost use of the property and out-of-pocket expenses. Alternatively, based on D's breach of contract, P sought rescission, foreclosure, and ejectment. The trial court granted partial summary judgment for P, rescinding the contract for fraud. The court ordered ejectment but stayed the order for two weeks pending D's voluntary removal. D failed to vacate the property, and the court entered an interlocutory judgment of ejectment. D later sought dismissal of the damages claim based on the election of remedies doctrine. The court determined that the judgment for ejectment was an election of remedies barring recovery of damages and, therefore, dismissed the cause of action based on fraud. P contends that it is entitled to recover for the lost use of the property and out-of-pocket expenses during defendant's possession of the property. It contends that recovery for these items, in addition to the rescission and return of the real estate, is necessary to restore P to his status before the fraud and execution of the contract. Since these 'damages' would only restore plaintiff to its previous position and would not give P the purchase price or the benefit of the bargain, P argues that the remedies are not inconsistent, and the doctrine of election of remedies should not be applied.