Vockner v. Erickson

712 P.2d 379 (1986)

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Nature of the Case

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Facts

Erickson ran an ad offering a boarding house for sale. Erickson was 73. Vockner, a real estate agent answered the ad and met with Erickson. When they met, Erickson informed Vockner that the boarding house was not for sale, but she wanted to sell her 12-unit apartment house. Vockner took Erickson with him to inspect that building. Upon returning to the boarding house, Vockner prepared an earnest money agreement with forms he had brought with him detailing the terms of the sale. Erickson asked for $265,000, but the final price was settled at $250,000. Vockner agreed to assume the existing trust deed to the SBA for $90,000 and make a down payment of $10,000. Vockner also agreed to execute a second trust deed for $153,365.46 @ 8.5% interest payable at the rate of $500 per month. The earnest money agreement also provided for a balloon payment in the amount of $15,000 due August 13, 1976. The parties signed the agreement, and Vockner delivered an earnest money check for $1,000. Erickson became dissatisfied with the deal because another purchaser offered the $265,000 and the $500 per month payment would not cover the interest accrued on the note. Erickson sent the $1,000 check back. Vockner told Erickson that he expected performance. Vockner sued for specific performance or damages. Erickson filed a pro se answer stating that she was ready to perform. When the agreement was forwarded to the Title Company for closing documents, its lawyer discovered the earnest money agreement did not contain a payoff date. Vockner’s attorney suggested that the Title Company insert a 30-year term. The sale was closed and the note provided for a 30-year term with a $311,000 payoff. At closing, all of these items were carefully explained to Erickson. Four and a half years later P filed a pro se complaint seeking reformation and payment of accrued interest or a return of the property. The complaint also named as a defendant the then owner of the apartment house as Vockner (D) had sold the property within 3-4 months after purchase. The case when to trial. The superior court found that P was never asked if she agreed to the term but that she was informed about them before signing the papers. The court also found that P was not under duress as she had viable alternatives. The court also rejected the contention that D or his attorney had committed an intentional misrepresentation. However, the court ruled that the contract was clearly unconscionable and that laches did not bar the action and that D had not been prejudiced by the 4.5-year delay. The court then reformed the agreement and entered judgment for P for $52,559.72 for principal and interest amortization up to June 1983 and $126,894.50 with 8.5% interest due in installments of $1,075.36 to amortize the remains of the 30-year note. D appealed.