Ken Hatch And Cathi Hatch v. Cary Falk
74510-7
| Wash. Ct. App. | Jun 19, 2017Background
- Falk listed his Woodinville house; Hatch offered and accepted Falk's counteroffer, and they signed a REPSA with a $1,139,000 purchase price and $35,000 earnest money deposited with the buyer's agent.
- The REPSA contained a liquidated damages clause: if the buyer fails without legal excuse to complete the purchase, earnest money up to 5% of price is forfeited to the seller as the sole remedy.
- After inspections, Falk agreed to a price reduction conditioned on Hatch releasing either $20,000 and closing earlier or releasing the full $35,000 and keeping the January 5 closing; Hatch signed an inspection response releasing $35,000 as nonrefundable, and the agent released the funds to Falk.
- In late December Hatch informed his agent he could not obtain the loan and sought a lease-purchase; on December 27 the agent told Falk Hatch was not going to close and began searching for rentals for Hatch.
- Closing did not occur on January 5. Hatch sued on May 11 to recover the $35,000, arguing the REPSA terminated because neither party tendered performance. Falk moved for summary judgment asserting Hatch repudiated before closing; Hatch presented no opposing evidence. Court granted summary judgment for Falk and awarded appellate fees to be determined.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether seller must tender deed before keeping earnest money | Hatch: Seller didn't tender deed on Jan 5 so agreement expired; earnest money must be returned | Falk: If buyer repudiated before closing, seller's non-tender is irrelevant and liquidated damages apply | Held for Falk — buyer repudiation excused seller's nonperformance and allowed retention of earnest money |
| Whether Hatch repudiated the REPSA before closing | Hatch: No clear, unequivocal statement or action showing repudiation; evidence ambiguous | Falk: Agent's uncontroverted testimony that on Dec 27 she told Falk Hatch was not going to close constitutes unequivocal repudiation | Held for Falk — uncontroverted evidence shows Hatch repudiated pre-closing |
| Standard for deciding repudiation on summary judgment | Hatch: Repudiation is generally a question of fact; summary judgment improper | Falk: Repudiation can be decided on summary judgment when reasonable minds can reach only one conclusion | Held: Summary judgment appropriate under de novo review because evidence permitted only one conclusion of repudiation |
| Entitlement to appellate attorney fees under the REPSA | Hatch: (did not contest entitlement on appeal) | Falk: Contract provides prevailing party reasonable fees on appeal | Held: Falk entitled to reasonable attorney fees on appeal upon compliance with RAP 18.1 |
Key Cases Cited
- Kofmehl v. Baseline Lake, LLC, 177 Wn.2d 584 (2013) (standard of review for summary judgment)
- Wallace Real Estate Inv. Inc. v. Groves, 124 Wn.2d 881 (1994) (seller not entitled to liquidated damages unless seller tenders deed or buyer repudiates)
- Willener v. Sweeting, 107 Wn.2d 388 (1986) (concurrent obligations rule: payment and deed delivery)
- Celotex Corp. v. Catrett, 477 U.S. 317 (1986) (summary judgment burdens; plaintiff must show specific evidence of a genuine issue)
- Grant County Port Dist. No. 9 v. Wash. Tire Corp., 187 Wn. App. 222 (2015) (repudiation must occur before performance is due)
- VersusLaw, Inc. v. Stoel Rives, L.L.P., 127 Wn. App. 309 (2005) (repudiation may be manifest by conduct; can be decided on summary judgment if only one conclusion is reasonable)