423 S.W.3d 331
Mo. Ct. App.2014Background
- Sellers owned adjoining 71-acre tract; Buyers contracted to buy the fenced parcel Sellers believed to be 20 acres (house and barn) with seller financing, home warranty, title commitment, termite clearance, washer/dryer included, and right of first refusal on adjoining 51 acres. Closing occurred Sept. 24, 2009.
- At closing Sellers did not deliver title insurance, a home warranty, or a termite letter; Buyers paid $50,000 down and signed a contract for deed and promissory note (6% interest). Buyers provided an insurance receipt at closing.
- Dehaans’ cattle remained on the purchased 20-acre parcel; Sellers told Buyers they needed to lease the 51-acre parcel to oust the cattle; Buyers leased it for $1,000 and incurred feed costs and appliance rental after discovering washer/dryer had been swapped for a nonworking set.
- A Buyers’ insurance payment was dishonored due to a bank error; Sellers received cancellation notice but did not inform Buyers; Sellers later sent a default notice, Buyers responded with explanation and payment, but Sellers recorded the quitclaim deed and continued negotiations while accepting a later installment.
- Trial court found Sellers materially breached (possession, appliances, warranty, tax delivery), awarded Buyers damages on unjust enrichment and breach of contract (with mitigation to avoid double recovery), and awarded Sellers rent; Sellers appealed; appellate court affirms breach finding but reduces damages to eliminate double-counted items and an improper $8,000 tax-credit recapture award.
Issues
| Issue | Plaintiff's Argument (Buyers) | Defendant's Argument (Sellers) | Held |
|---|---|---|---|
| Whether Sellers materially breached the sales contract | Sellers breached by not delivering vacant possession, swapping washer/dryer, failing to provide home warranty, failing to deliver tax info and termite letter | Any buyer defaults (insurance lapse) justified Sellers’ recording of quitclaim deed; Sellers’ breaches not material | Court: Sellers materially breached; Sellers waived or were estopped from relying on insurance lapse to declare default; recording quitclaim deed improper |
| Whether Buyers were unjustly enriched and entitled to recovery | Buyers argued unjust enrichment in addition to breach | Sellers argued unjust enrichment finding was erroneous | Court: Even if unjust enrichment finding erroneous, result stands because breach-of-contract ruling independently supports damages; appellate court declines to reverse on that ground |
| Measure and sufficiency of damages claimed by Buyers (down payment and reliance costs) | Buyers sought return of purchase payments, lease and feed costs, appliance rental, and $8,000 tax-credit recapture | Sellers argued some items lacked causal link, were duplicative, or speculative (math error on down payment, 51-acre lease unrelated, feed not compensable, appliance rental improper measure, tax-credit speculative) | Court: Most awards supported (down payment corrected for double-counted $509; $1,000 lease and $500 feed recoverable; appliance rental supported by evidence); $8,000 tax-credit recapture was improper and removed; judgment modified to reduce total damages |
| Proper appellate review and remedy when trial court’s rationale may be wrong | Buyers relied on trial court’s factual findings and damage award | Sellers urged reversal on multiple grounds or remand for recalculation | Court: Affirmed result on breach theory; exercised Rule 84.14 authority to modify judgment to correct damages math and eliminate improper $8,000 award; concurrence would remand appliance rental issue |
Key Cases Cited
- Boten v. Brecklein, 452 S.W.2d 86 (Mo. 1970) (a party cannot claim benefit of a contract when first to materially breach)
- Wilt v. Waterfield, 273 S.W.2d 290 (Mo. 1954) (measure of purchaser's damages for breach of contract to sell land)
- Snowden v. Gaynor, 710 S.W.2d 481 (Mo.App. 1986) (reliance-based recovery when purchaser relinquishes property after occupation)
- Matt Miller Co., Inc. v. Taylor-Martin Holdings, LLC, 393 S.W.3d 68 (Mo.App. 2012) (materiality of breach is a factual question)
- G & J Holdings, LLC v. SM Properties, LP, 391 S.W.3d 895 (Mo.App. 2013) (definition of material breach)
- MECO Systems, Inc. v. Dancing Bear Entertainment, Inc., 42 S.W.3d 794 (Mo.App. 2001) (cannot recover same damages twice under contract and unjust enrichment)
- Langdon v. United Restaurants, Inc., 105 S.W.3d 882 (Mo.App. 2003) (waiver of right to declare forfeiture is factual)
- Greenstreet v. Fairchild, 313 S.W.3d 163 (Mo.App. 2010) (standard of review for court-tried cases)