Selvig v. Blockbuster Enterprises, LC
266 P.3d 691
Utah2011Background
- Selvigs sold the Kastle Inn to Blockbuster under a Real Estate Purchase Contract; Blockbuster recorded the deed before paying the full price, triggering a lawsuit for breach of contract, breach of the covenant of good faith and fair dealing, and unjust enrichment.
- Down payment was $125,000 (including $75,000 toward the Property and a $50,000 construction credit); total agreed price was $759,139 funded by assuming the Selvigs’ mortgages totaling $634,139.
- Closing was to occur by Sept. 30, 2005 with conditions including delivery of documents, funded payment, and the deed recording; Blockbuster paid mortgage portions but recorded the deed instead of closing.
- An election of remedies provision allowed the seller to keep the earnest money as liquidated damages or return it and sue; it purportedly applied to buyer defaults.
- Blockbuster later proposed a Lease to Purchase Agreement, Blockbuster took possession, paid the second mortgage by March 28, 2006 but failed to pay the first mortgage by Sept. 1, 2006; the deed was recorded Oct. 3, 2006, before the first mortgage was paid; suit filed Oct. 12, 2006; Blockbuster paid the first mortgage Nov. 29, 2006; trial court dismissed contractual and related claims under Rule 41(b) and awarded partial attorney fees to Blockbuster, which was later vacated on appeal for remand.
- The appellate court reversed the dismissal of contractual claims, held the election of remedies provision does not bar a breach arising from wrongful recording of the deed, affirmed dismissal of unjust enrichment claim, and remanded with instructions to allow remand proceedings; the district court’s findings on contractual issues are not binding on remand.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Does the election of remedies clause bar contractual claims for wrongful deed recording? | Selvigs argue clause only governs buyer defaults, not wrongful recording. | Blockbuster argues clause applies to any default under the contract. | Election clause does not bar contractual claims arising from wrongful recording. |
| Is unjust enrichment available where a written contract governs the dispute? | Contract does not preclude unjust enrichment. | Express contract governs duties; unjust enrichment unavailable. | Unjust enrichment claim properly dismissed. |
| Remand scope: are pre-remand findings binding on remand? | Findings support dismissal; should bind on remand. | Findings may not bind remand; new evidence may prevail. | District court may modify findings on remand; not bound by earlier Rule 41(b) findings. |
| What about attorney fees on remand? | Fees based on contractual provisions; need not be vacated. | Fees tied to the dismissed claims. | Attorney-fee award vacated; remand to reconsider. |
Key Cases Cited
- Close v. Blumenthal, 354 P.2d 856 (Utah 1960) (election of remedies purposes against purchaser)
- Johnson v. Jones, 164 P.2d 895 (Utah 1946) (implied exclusive remedy in real estate contracts)
- First Sec. Bank of Utah, N.A. v. Maxwell, 659 P.2d 1078 (Utah 1983) (forfeiture provisions require notice and opportunity to cure)
- Soter v. Snyder, 277 P.2d 966 (Utah 1954) (elective remedies in real estate contracts)
- WebBank v. Am. Gen. Annuity Serv. Corp., 54 P.3d 1139 (Utah 2002) (contract interpretation; ambiguity and extrinsic evidence)