Clegg v. Lee

516 P.2d 348, 30 Utah 2d 242, 1973 Utah LEXIS 690
CourtUtah Supreme Court
DecidedNovember 30, 1973
Docket13256
StatusPublished
Cited by5 cases

This text of 516 P.2d 348 (Clegg v. Lee) is published on Counsel Stack Legal Research, covering Utah Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Clegg v. Lee, 516 P.2d 348, 30 Utah 2d 242, 1973 Utah LEXIS 690 (Utah 1973).

Opinions

CALLISTER, Chief Justice:

Plaintiffs, Mr. and Mrs. Blake, initiated this action, seeking specific performance of an earnest money receipt and offer to purchase, executed by Mrs. Blake as vendee and defendant, Mrs. Lee, as vendor, on July 16, 1971. Plaintiff Clegg seeks judgment against Lee for a real estate commission. Defendant, Lee, filed a counterclaim alleging that Mr. Blake had executed a uniform real estate contract to purchase the premises on May 12, 1972; that after service of a notice of default, he had failed to perform thereunder; and that in accordance with the provisions of the con[244]*244tract Lee had elected to be released from all obligations to convey the property, and had declared Blake’s payments forfeited as liquidated damages. Lee sought to have the title to the property quieted in her.

Lee, based upon the pleadings and depositions, filed a motion for summary judgment. The trial court entered judgment, forfeiting Blake’s payments to Lee as liquidated damages, quieting title to the property in Lee and dismissing plaintiffs’ complaint with prejudice.

Mrs. Lee was the owner of a home in American Fork, Utah; she had listed the property for sale with Clegg Realty Company. The Blakes were residents of California. Shortly prior to the expiration of Mrs. Lee’s listing agreement with the realtor, an agent brought Mrs. Blake to see the premises. Mrs. Blake paid a $100 deposit and executed the earnest money receipt and offer to purchase on July 14, 1971. Mrs. Lee accepted the offer on July 16, 1971. Under the terms of this agreement, the purchase price was $26,800. The buyer was to pay $1,900 in ten days, and approximately $6,700 on delivery of the deed or final contract on or before September 13, 1971. The buyer was to assume the existing mortgage on or before the time of closing on September 13, 1971. Approximately on the 20th of July, Mr. Blake arrived in Utah and went to view the premises with his wife. The Blakes informed Mrs. Lee that it would be impossible to move from California and assume possession of the house by September. The Blakes thereafter never fulfilled any of the conditions of performance under the earnest money receipt.

The Blakes did express an interest in purchasing the property in the future, approximately the following year in July of 1972. The Blakes suggested that they pay to Mrs. Lee her house payments of $159 per month during which time they could negotiate a purchase agreement. At Blakes’ urgence and in their presence, Mrs. Lee contacted an attorney, who suggested an option agreement. Mr. Blake was of the opinion that no real estate commission was due, since they were not proceeding to purchase under the earnest money receipt, and he suggested that the option agreement reflect this matter. The Blakes returned to California. The realtor, Clegg, contacted both the Blakes and Mrs. Lee, who informed him that the Blakes did not intend to perform. Relator, Clegg, retained the deposit of $100 paid by Mrs. Blake.

Mrs. Lee’s attorney drafted an option agreement, which he mailed to Mr. Blake on August 18, 1971. Thereafter, Blake neither executed the option agreement nor did he suggest any changes. Mrs. Lee’s attorney sent a series of six letters, including a second copy of the option agreement, explaining that the matter must be reduced to writing and that Mrs. Lee must receive a lump sum in cash. The attorney stated [245]*245that if the option were not executed and the payments made as provided therein, Mrs. Lee would assume Blake desired to abandon the option, and she would sell to someone else. Mr. Blake continued to send the $159 per month payment, but he did not execute the option or fulfill an oral promise to send a $1,000 payment before January 25, 1972. On February 4, 1972, Mrs. Lee’s attorney notified Mr. Blake that his failure to execute the option agreement and to make the promised payments had terminated his option rights. Mr. Blake responded by letter, admitting he had been unable to perform and requesting a meeting.

On March 24, 1972, in a letter to Mrs. Lee, Mr. Blake acknowledged that he had contacted Mrs. Lee in August, 1971, regarding an option to purchase her home. Thereafter, he made several monthly payments of $159, while attempting to work out the terms and provisions of the option. Blake admitted that he received copies of the option agreement but he failed to execute the same. Mr. Blake stated that in February, 1972, he had a discussion regarding the terms of the option and proposed purchase and he failed to pay the sums to fulfill the commitment and was thereafter advised the option was terminated. Mr. Blake specifically declared that he had no rights in or to the option or to purchase the property, and that he released Mrs. Lee from all further liability in connection with the payments made and the negotiations which had taken place between the parties. Janna Blake also admitted in a letter to Mrs. Lee that she had executed an earnest money receipt and offer to purchase, that she had been unable to make the payments within the time period contemplated and to complete the transaction as specified in the agreement. Janna stated that Mrs. Lee 'had notified her the contract was terminated for failure to make the payments, and Janna acknowledged that the contract was cancelled in July, 1971.

Blakes persisted in their desire to purchase the property, and Mr. Blake executed a uniform real estate contract on May 12, 1972. According to the terms of this agreement the purchase price was $27,300. (The upward adjustment was made to reflect the costs of improvements made by Mrs. Lee.) The contract required a $1,000 payment on execution; a $1,000 payment on May 25, together with a loan commitment; a payment of $2,000 on .June 15; and the remainder less the loan commitment on July 1, 1972. Any difference between the loan commitment and the actual loan was to be paid by August 31, 1972, so that the purchase price would be paid in full.

Mr. Blake was notified by letter on June 22 and June 28 that Mrs. Lee had not received the $2,000 payment due on June 15, 1972, that Mr. Blake had a five-day grace [246]*246period which had expired, and that Mrs. Lee intended to exercise her remedies under that contract. Mr. Blake paid the $2,000; he was notified by mail that he owed $3,300 under the terms of the agreement and that he was to make payment. On July 19, 1972, Mr. Blake was sent a notice of default, in that he had failed to pay the $3,300 on July 1, or five days thereafter. Mr. Blake was informed that if he did not remedy the default within five days after receiving the notice, Mrs. Lee was exercising her right to declare a forfeiture and consider herself released. On September 12, 1972, Mrs. Lee by letter notified Mr. Blake that he had failed to pay the $3,300 after notice of default, and that she was declaring his payments forfeited, his right to a conveyance terminated, as provided in the contract.

Plaintiffs’ complaint was filed on June 30, 1972, although it is confusing, evidently their theory was that the earnest money receipt had been subsequently modified by an oral agreement, which provided the Blakes would make the house payments of the vendor in the sum of $159 per month and the vendor would occupy the premises for one year. Blakes claimed that they had paid thereunder seven house payments totaling $1,113 and a $14 water assessment. They claimed that they were subsequently informed that since they had not fulfilled the obligations in the earnest money receipt, the contract was unenforceable and the sums they had paid were forfeited.

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Clegg v. Lee
516 P.2d 348 (Utah Supreme Court, 1973)

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Bluebook (online)
516 P.2d 348, 30 Utah 2d 242, 1973 Utah LEXIS 690, Counsel Stack Legal Research, https://law.counselstack.com/opinion/clegg-v-lee-utah-1973.