Hubbell Homes v. Key

786 N.W.2d 519 (2010)

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Nature of the Case

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Facts

P and D negotiated a Purchase Agreement for $376,900 with a delayed closing date of October 2, 2007, to allow Ds to take advantage of an employer willing to pay for relocation rent. P and D also signed an agreement for rental of the home by D from October 2, 2006, through September 30, 2007. The Rental Agreement provided that Ds would have the option to purchase the home for $376,900. The Rental Agreement also contained a 'put' option that reserved for Pl the right to require D to close on the purchase of the home for $376,900 at the end of the term of the lease. In July 2007, D's position was eliminated, and he became unemployed. On August 6, 2007, P notified Ds of its intent to exercise its option to force the sale of the property to them. P and D negotiated a modification to extend the term of the Rental Agreement for a three-month period ending December 31, 2007. Ds offered to go forward with their purchase of the house at the original purchase price if P agreed to sell on contract or with P's financing. P rejected the offer, and Ds moved out in early January 2008. Hubbell listed the house for sale at the contract price of $376,900. About six months later, P accepted an offer to buy the house for $350,000. The offer was contingent on the sale of the prospective buyer's current residence, a contingency which did not occur. The sale was never completed, and the house remained on the market at the time of trial at a reduced listing price. P sued seeking compensatory damages, consequential damages, and attorney fees. D asserted defenses of frustration of purpose and unconscionability. The district court denied the defenses of frustration of purpose or unconscionability and awarded P damages in the amount of $26,900, the difference between the $350,000 value and the contract price. The court also awarded P consequential damages for internal legal fees and all repairs made to restore the house to marketable condition and $12,960 in attorney fees. P appeals, arguing the district court erred in calculating general damages. Ds cross-appeal, arguing the district court erred in failing to grant relief on their defense of frustration of purpose.