Todd J. Phillips v. Richard D. Gomez
162 Idaho 803
| Idaho | 2017Background
- Seller Todd Phillips (trustee) and buyer Richard Gomez executed a multi-document real estate purchase agreement for $660,000 with $66,000 earnest money deposited and made non‑refundable by later amendments; earnest money was released to Phillips (net $62,040) immediately and without restriction.
- Closing was scheduled about a year after possession; Gomez later informed he could not close and vacated after a rental period; Phillips re‑sold the property for $527,500, obtaining less than the contract price.
- Phillips demanded the difference between the contract price and re‑sale proceeds (less the earnest money), and sued Gomez for breach, seeking actual damages (roughly $60k after crediting the earnest money).
- The district court found Phillips’s retention of the non‑refundable earnest money constituted an advance election of liquidated damages and thus was his exclusive remedy; judgment entered for Gomez.
- On appeal Phillips argued he accepted the money but never elected it as liquidated damages and could still pursue actual damages; the Supreme Court affirmed the district court.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Phillips pre‑elected liquidated damages by contracting the earnest money non‑refundable and immediately transferable | Phillips: retaining the earnest money did not mean he elected liquidated damages; he could still sue for actual damages | Gomez: the amendments made the deposit non‑refundable and immediately available, effecting a pre‑election of liquidated damages | Court: The amended agreement unambiguously pre‑elected liquidated damages when earnest money was made non‑refundable and released to seller |
| Whether contract allowed seller to keep earnest money and also recover actual damages | Phillips: contract allowed retaining earnest money as partial satisfaction and suing for remaining actual damages | Gomez: contract gave an either/or choice — liquidated damages OR other remedies, not both | Court: Contract’s language ("or" and explicit exclusivity) bars recovering both; retention of deposit is exclusive remedy |
| Whether extrinsic evidence showing parties’ subjective intent can alter the conclusion | Phillips: offered outside evidence to show different intent | Gomez: contract language controls; subjective intent irrelevant | Court: When agreement is unambiguous, extrinsic evidence is not considered; intent determined from contract text |
| Entitlement to attorney fees on appeal | Phillips: requested fees but did not brief argument | Gomez: requested fees but did not brief argument | Court: Denied fees to both for failing to present required appellate argument; taxed costs to Gomez |
Key Cases Cited
- Potlatch Educ. Ass’n v. Potlatch Sch. Dist. No. 285, 148 Idaho 630, 226 P.3d 1277 (contract interpretation principles — plain meaning and ambiguity rules)
- Margaret H. Wayne Trust v. Lipsky, 123 Idaho 253, 846 P.2d 904 (liquidated damages clause does not always preclude other remedies where contract preserves them)
- Opportunity, LLC v. Ossewarde, 136 Idaho 602, 38 P.3d 1258 (standard of review for legal conclusions and Rule 52(a) findings)
- Zimmerman v. Thompson, 114 N.W.2d 116 (Wis.) (holding seller who retained down payment under contract option to treat it as liquidated damages cannot then recover actual damages)
- McMullin v. Shimmin, 349 P.2d 720 (Utah) (retention of deposit evidences election of liquidated damages)