462 P.3d 397
Utah Ct. App.2020Background
- 2006 option and purchase agreement for ~19 acres in Springdale, Utah, for $1,800,000; $50,000 option payment non‑refundable and applied to principal; payment schedule was amended several times, ultimately extending the closing deadline to January 10, 2013.
- Buyer paid roughly $800,000 in principal and $671,250 in interest prior to ceasing interest payments after February 2012; Buyer struggled to secure financing and repeatedly missed payments and deadlines.
- Seller sent a First Notice of default (Dec. 2011) which Buyer cured, then a Second Notice (July 2012) that did not specify particular breaches; Seller later sent a notice of forfeiture and filed suit to quiet title (Aug. 2012); Buyer counterclaimed seeking specific performance or, alternatively, restitution/unjust enrichment.
- Trial court originally ordered specific performance but amended its findings, concluding Buyer had unclean hands (failure to tender interest/principal), denying specific performance, holding Seller’s Second Notice defective (so liquidated damages could not be retained), and awarding Buyer recovery of principal under unjust enrichment.
- Both parties appealed; the appellate court affirmed denial of specific performance and the liquidated‑damages ruling, but reversed quiet title and remanded the unjust enrichment award for further findings.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Buyer entitled to specific performance | Buyer: Seller’s conduct excused tender; Buyer was ready/willing to close | Seller: Buyer failed to tender required payments and tainted his equity by withholding interest | Denied — Buyer had unclean hands (failed to make interest payments and did not discharge contractual duties) |
| Whether trial court properly quieted title in Seller’s favor | Buyer: Quiet title improper because resolution of contract remedies is pending | Seller: Entitled to quiet title after Buyer’s defaults and forfeiture notice | Reversed and remanded — quiet title determination is premature pending resolution of contract remedies on remand |
| Whether Seller could retain prior payments as liquidated damages without strict notice/termination | Seller: Liquidated‑damages sentence is self‑executing on missed payment; no separate termination notice required | Buyer: Liquidated damages triggered only after statutory/contract termination procedure (written notice and 30‑day cure) | Affirmed for Buyer — clause must be harmonized; termination/notice prerequisite not satisfied by Second Notice, so Seller could not forfeit payments as liquidated damages |
| Whether Buyer could recover principal under unjust enrichment | Buyer: Contract remedy unavailable (liquidated damages not triggered), so quasi‑contract restitution is available | Seller: Express contract governs the subject matter; unjust enrichment barred where an express contract exists | Reversed and remanded — trial court erred to award unjust enrichment without adequate findings; quasi‑contract recovery generally unavailable when an enforceable express contract governs the dispute |
Key Cases Cited
- Carr v. Enoch Smith Co., 781 P.2d 1292 (Utah Ct. App. 1989) (specific performance is discretionary and party seeking it must have clean hands)
- PDQ Lube Center, Inc. v. Huber, 949 P.2d 792 (Utah Ct. App. 1997) (tender requirement for specific performance; excuses for failure to tender must be pleaded)
- Selvig v. Blockbuster Enters., LC, 266 P.3d 691 (Utah 2011) (unjust enrichment/quasi‑contract recovery unavailable when an express contract covers the subject matter)
- Peterson & Simpson v. IHC Health Services, Inc., 217 P.3d 716 (Utah 2009) (contract interpretation requires harmonizing provisions and applying plain meaning)
- Commercial Real Estate Inv., LC v. Comcast of Utah II, Inc., 285 P.3d 1193 (Utah 2012) (liquidated damages clauses are contractual provisions reviewed under ordinary contract principles)
- Adair v. Bracken, 745 P.2d 849 (Utah Ct. App. 1987) (strict compliance with notice provisions required in some real estate forfeiture contexts)