Specific Performance & Injunctions Flashcards
Loveless v. Diehl: facts
The Lovelesses (defendants) owned a farm, which they leased to the Diehls (plaintiffs) for a three-year term. The lease agreement contained an option to allow the Diehls to purchase the property for $21,000 at any time during the lease term. The Diehls expended approximately $5,000 in improvements upon the land during the lease term. Mr. Diehl also purchased equipment from Mr. Loveless, for which a promissory note was executed, but never paid. The Diehls were not able to buy the property themselves. However, just before the option expired, the Diehls entered into an agreement with Dr. Hart, who agreed to purchase the property for a total of $22,000, paying $21,000 to the Lovelesses and $1,000 to the Diehls. The Lovelesses interfered with that agreement, telling Dr. Hart that they did not intend to sell the property to the Diehls. The agreement with Dr. Hart fell through and the $21,000 was not offered to the Lovelesses for the property. The Diehls removed some possessions from the property, but not until after the end of the lease term. The Lovelesses took forcible possession of the property. The Diehls filed suit against the Lovelesses in the chancery court, seeking specific performance of the option or, in the alternative, damages. The Lovelesses counterclaimed for the note regarding the equipment and for the balance of rent. The trial court awarded the Diehls specific performance and damages and awarded the Lovelesses damages on the note. Both parties appealed.
Loveless v. Diehl: rule of law
Equity courts should award specific performance “as a matter of course” and especially when the subject of the contract is real property or an interest in real property.
Loveless v. Diehl: issue
Should specific performance be awarded when the breached contract at issue involves real property?
Loveless v. Diehl: holding
Yes, specific performance should be awarded when the breached contract at issue involves real property. The chancery court, an equity court, should award specific performance “as a matter of course.” An award of specific performance will ordinarily provide complete relief because it awards the innocent party with exactly what he bargained for. While the chancellor has discretion to award what he feels is proper based upon the laws of equity, specific performance is the proper remedy if certain conditions are met. If the agreement is in writing, set out in specific terms, can be enforced without causing hardship to the parties and if there is valuable consideration for the agreement, then specific performance should be awarded. Though specific performance is ordinarily awarded when there is no adequate remedy at law, when the subject of the agreement is land or an interest in land then the adequacy of a legal remedy is not important. In the current matter, all of the above-noted conditions are present. In the original opinion, damages were awarded to the Diehls in the amount of $22,000. The award was based upon the Diehls’ transaction with Dr. Hart and was expected to compensate them for both the failed transaction and the claim for damages. The award was also set off by an award to the Lovelesses for owed rent and the equipment note. However, upon rehearing, it is noted that the damage award does not adequately compensate the Diehls. The land in question is worth more than $22,000 because of the Diehls’ improvements. Because the Diehls’ expenditures have improved the value of the property, the prior award of damages in this matter unjustly enriches the Lovelesses. The only possible reason to deny specific performance is because the Diehls entered into the agreement with Dr. Hart and thus damages could be calculated, but specific performance should not be denied simply because of a future transaction concerning the property at issue. Basing awards on such facts threatens the transferability of property, as parties would be reluctant to enter into such future contracts to sell. Accordingly, the prior award of damages is modified and the case is remanded to the chancery court for a final decree to be entered in accordance with this opinion.
Scholl v. Hartzell: rule of law
In a replevin action under section 2-716 of the Uniform Commercial Code, an injured party does not have an “exclusive and immediate right” to property for which he has only paid a deposit because the contract is still executory.
Scholl v. Hartzell: facts
Hartzell (defendant) advertised his corvette and miscellaneous parts for sale in the newspaper. Scholl (plaintiff) saw the advertisement and met with Hartzell to inspect the car and parts. Scholl agreed to buy the items and paid a deposit for which Hartzell provided a receipt. The receipt also indicated that Scholl would pay the balance when he picked up the items. Later on the same day, Scholl informed Hartzell that he had obtained a money order for the balance, payable to Hartzell, which he would hand-deliver when he picked up the items. Two days later, Hartzell informed Scholl that he would not accept the balance. Hartzell returned the deposit. Scholl filed a replevin action in the Court of Common Pleas of Pennsylvania. Scholl demanded possession of the corvette and miscellaneous parts or, in the alternative, damages.
Scholl v. Hartzell: issue
Is an injured party entitled to replevin of goods when he has not fully performed under the contract, but paid a deposit for the goods?
Scholl v. Hartzell: holding
No, an injured party is not entitled to replevin of goods when he has not fully performed under the contract, but paid a deposit for the goods. Section 2-716 of the Uniform Commercial Code permits an action in replevin when the injured party has an “exclusive and immediate right” to the property. There can be no such right when the contract in question is executory. Section 2-716 also requires the goods to be unique or for there to exist “other proper circumstances,” which includes situations in which the injured party is unable to cover. In the current matter, although Scholl filed his action in replevin, he is indirectly seeking specific performance, which is a common law, equitable remedy. Under his replevin action, Scholl has not acquired the exclusive and immediate right to the car and parts because he has only given a deposit for them. The contract is still executory, which is not sufficient to create such a right. Moreover, the car and miscellaneous parts are not sufficiently unique for Scholl to be able to maintain the replevin action. Scholl also did not allege cover in his complaint and, thus, cannot maintain his replevin action under that theory. Accordingly, Scholl is permitted to file an amended complaint with the Court of Common Pleas.
Sedmak v. Charlie’s Chevrolet: rule of law
Specific performance can be awarded for the sale of a limited edition vehicle if the injured party can establish that it is unique or other proper circumstances exist.
Sedmak v. Charlie’s Chevrolet: facts
Dr. and Mrs. Sedmak (plaintiffs) discovered that Chevrolet intended to manufacture a small number of a limited edition Corvette, the Pace car. Dr. Sedmak contacted Charlie’s Chevrolet, Inc. (Charlie’s) (defendant) to inquire about the car and Kells, Charlie’s sales manager, told him that a deposit would be required. Mrs. Sedmak hand-delivered the deposit to Charlie’s and received a receipt. While there, Mrs. Sedmak ordered upgrades to the standard equipment. According to Kells, he did order the upgrades, but ordered them because they would be better for the car, rather than because the Sedmaks wanted them. Mrs. Sedmak said that Kells told her that the car would cost about $15,000, but Kells denied discussing price. Kells notified the Sedmaks when the car arrived at Charlie’s, but informed them that they could not buy it for the price quoted because there had been so much demand for it that the price had inflated. He also notified them that they could bid on the car, but they did not submit a bid. The Sedmaks filed a suit for specific performance in the trial court. The trial court granted specific performance. Charlie’s appealed to the Missouri Court of Appeals.
Sedmak v. Charlie’s Chevrolet: issue
Can specific performance be awarded for the sale of a limited edition vehicle?
Sedmak v. Charlie’s Chevrolet: holding
Yes, specific performance can be awarded for the sale of a limited edition vehicle. Section 2-716 of the Uniform Commercial Code permits specific performance when “the goods are unique or in other proper circumstances.” One proper circumstance is when the goods could only be obtained elsewhere at a considerable expense, trouble, or loss, none of which could have been expected at the time of contracting. In the current matter, the Pace car is impossible to purchase elsewhere unless the Sedmaks pay a considerable amount of money and suffer delay and inconvenience in trying to purchase it. There were only a limited number of cars developed and few possess the upgrades ordered by the Sedmaks. Moreover, as evidenced by the inflated price, the car is in very short supply and in great demand. Accordingly, the trial court’s award of specific performance was proper. The judgment of the trial court is affirmed.
