Daily Development for Monday, February 12, 2007
by: Patrick A. Randolph, Jr.
Elmer F. Pierson Professor of Law
UMKC School of Law
Of Counsel: Blackwell Sanders Peper Martin
Kansas City, Missouri

VENDOR/PURCHASER; SPECIFIC PERFORMANCE: Once seller complies with court’s specific performance order, seller’s appeal of the case is moot, even when seller alleges error in the trial court’s refusal to permit evidence of buyer fraud.

Thorn v. Walker, 912 A.2d 1192 (D.C. 2006)

Seller executed a contract for the sale of residential property for a price of $190,000.  The closing date was more than six months after execution.  The contract was subject, apparently, to a financing condition that benefitted both parties.  In a timely fashion, Buyer submitted a loan pre-approval letter that satisfied the financing condition, but Seller, who had lived in the home for more than 30 years, changed her mind about selling and attempted unsuccessfully to refund the $1000 security deposit.

After execution of the contract, the court notes, the value of the home increased in value substantially (we aren’t told why - must be a story in there someplace).  Buyers brought a specific performance action to compel the Seller to complete the contract.  The trial court granted specific performance.  About two years later, the trial court awarded specific performance to Buyers.  The trial court ordered that the sale occur no later than six months from the date of the order (postponing the original sale to a date more than three years from the execution of the contract.)

A month after the trial court’s order, Seller moved for a new trial. She presented a letter from the General Counsel of the lender listed in the “pre approval letter” that Buyer had submitted.  The letter indicated that the party shown as the lender’s representative in that letter was not shown on the lender’s records as ever employed by the company, and opined that it appeared that the pre-commitment letter was a fraud.  The employee in question had testified at the trial a few months before, and the trial court commented that it found that party credible, and that this new evidence was not timely submitted, although Seller had adequate time to obtain it before trial.  The court concluded that the un-cross examined statement of the general counsel of the lender “does nothing to change the Court’s view.”  Further, it did not itself suggest that Buyers’ themselves made any misrepresentation.  The court denied the new trial.

Seller did not seek a stay of the court’s order pending appeal, and complied with the court’s order to sell the property, but also continued the appeal. 

The appeals court heard argued on December 5 and issued its opinion less than three weeks later, concluding that the case was moot and non-justiciable.  There were no money damages issues, and the entire subject of the lawsuit was the sale of the property, which had now been carried out.

The court distinguished several other precedent cases that seemed to be pretty close - on the grounds that in those cases there was no concrete evidence that the property sale had actually taken place (although the facts before the court suggested that this might have happened). 

Comment 1:  It seems inescapable  that a stay is necessary in order to prevent the carrying out of a judicial decree. Of course, typically a stay will require the posting of a bond, which likely the Seller in this case couldn’t afford.  Is this a case of “justice delayed is justice denied?”  Ythe editor doesn’t think so.  The court made a point of evaluating Seller’s claims supporting her new trial motion, which it didn’t have to do, and indicated that the trial judge made the right call.  The circumstances surrounding the pre-commitment  letter were suspicious, admittedly, but there has to be an end to litigation, and the information could have been produced in the two years preceding the trial. 

Comment 2: One of the great war stories the editor knows in this area concerns a law school classmate who is a colorful trial attorney in Sacramento, California.  He obtained a substantial judgment against Montgomery Ward (then still active and vital) and the defense filed an appeal, but did not post an appeal bond.  Plaintiff’s counsel got a charging order for all the receipts from a local Montgomery Ward store and appeared on television inviting everyone in the area to come shop at that location because all the proceeds would be used to pay his client for the injustice Montgomery Ward had perpetrated.  A stunt - but makes a good story.  It’s not his only good story.

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