Lonsdale V Chesterfield

662 P.2d 385 (1983)

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Nature of the Case

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Facts

Chesterfield (D) sold lots in a development with an obligation to install a water system for the entire development. D sold its remaining lots to Sansaria. As part of the consideration for the sale, Sansaria assumed D's obligation to install a water system for the entire development, including that portion already sold via the real estate contracts. The water system was never installed. A declaratory judgment action by D against Sansaria found that Sansaria was in default. Lonsdale and others (P) were assignees of the vendors' interests in that contract. Eventually, those interests became worthless. P then sued D to recover for the failure to install the water system. P also sued D claiming they were third party beneficiaries. A motion to dismiss was granted in favor of D. P appealed. The questions to be answered on appeal are: As a contract assignor is D liable to Ps for its failure to install the water system? Are Ps third party beneficiaries of Sansaria's promise to D to install the system?