Houston v. Willis

24 So. 3d 412, 2009 Miss. App. LEXIS 941, 2009 WL 4800617
CourtCourt of Appeals of Mississippi
DecidedDecember 15, 2009
Docket2008-CA-01155-COA
StatusPublished
Cited by10 cases

This text of 24 So. 3d 412 (Houston v. Willis) is published on Counsel Stack Legal Research, covering Court of Appeals of Mississippi primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Houston v. Willis, 24 So. 3d 412, 2009 Miss. App. LEXIS 941, 2009 WL 4800617 (Mich. Ct. App. 2009).

Opinion

BARNES, J.,

for the Court.

¶ 1. This case involves a contractual dispute over the sale of a house in Grenada, Mississippi between Robert Willis, the seller, and Gary Houston, the buyer. Willis contends the parties entered into a contract for the sale and purchase of the property, whereby Houston would temporarily rent the house for a period of time and then purchase it. Houston contends that he entered into a contract for the rental of the house with an option to purchase. When Houston failed to go through with the purchase of the house, Willis sued for specific performance in the Chancery Court of Grenada County. The chancery court granted Willis specific performance of the contract, ordering Houston to close on the sale of the property and to pay Willis $365,000. Additionally, the chancery court awarded Willis $62,761.41 in damages, which represented back rent from the date of the breach of the contract until the date of the hearing, and $7,320.34 in attorney’s fees and costs. Houston appealed. We affirm the grant of specific performance and attorney’s fees. However, we reverse and remand for a recompu-tation of damages, consistent with this opinion.

*415 STATEMENT OF THE FACTS AND PROCEDURAL HISTORY

¶ 2. In March 2004, Willis and Houston entered into a contract for the sale of a house owned by Willis in Grenada, Mississippi. Prior to this date, in February 2004, Houston came to Mississippi from Michigan as director of operations for Ice Industries, which owns several industrial plants throughout the United States and Mexico. 1 At this time, Houston owned a house in Michigan, where his family resided.

¶ 3. Initially, Houston spoke with Clara Maxwell, a real estate agent in Grenada, about finding a house “to rent with the option to purchase,” as he needed to sell his house in Michigan before he purchased a house in Mississippi. Maxwell showed him one house to lease, but she testified that to her knowledge there were not any other houses for lease in Grenada. Houston then spoke with Janet Kinard, a real estate agent for Coldwell Banker in Grenada. Kinard showed Houston several houses, one of which Houston was interested in; however, the owner was unwilling to lease it. After a few weeks, Kinard contacted Houston about Willis’s house, which was for sale. Kinard had spoken with Willis about the possibility of leasing his house, but she testified Willis was not interested in leasing it. However, after looking at the house, Houston expressed the desire to “go forward.”

¶ 4. On March 11, 2004, Kinard provided Houston and Willis with a Coldwell Banker Landmark Realty (“Coldwell Banker”) form contract, entitled “Contract for the Sale and Purchase of Real Estate.” 2 Ki-nard claims that she made it clear to Houston that he was entering into a contract to purchase the property. Houston contends that at all times he was under the impression that he was executing a contract to rent the house with the option to purchase the property. Willis testified that he understood this was a sale, not a lease, but he agreed to lease the house while Houston attempted to sell his house in Michigan; then, Houston would buy Willis’s house. 3

¶ 5. Both parties executed the contract, whereby, according to the first paragraph, Houston agreed to “buy” the house from Willis for $385,000. Also, Houston agreed to pay $10,000 in “earnest money” to Cold-well Banker as broker/trustee. A section of the contract entitled “Special Provisions & Contingencies” provided, in pertinent part, that:

SELLER AGREES TO RENT THE PROPERTY TO THE BUYER MONTH TO MONTH NOT TO EXCEED 6 MONTHS AT A RATE OF $2,000 PER MONTH WITH HALF OF THE RENT TO GO TOWARD THE PURCHASE OF THE PROPERTY. BUYER AGREES TO PUT UP $10,000 NON-REFUNDABLE EARNEST MONEY AND TO FORFEIT ALL RENTS PAID IF FOR ANY REASON THE BUYER DOES NOT GO [THROUGH] WITH THE SALE.

The contract stated the closing would be on or before September 11, 2004, “not to exceed six months.” After executing the contract, Houston and his family moved into the house.

¶ 6. On September 10, 2004, the parties entered into an addendum to the contract (First Addendum) prepared by Kinard. *416 Houston explained to Kinard that he still had not sold his house in Michigan and his work situation was uncertain. The First Addendum set a new closing date not to exceed another six months, and it stated that “Buyer agrees to put up an additional $10,000.00 non-refundable earnest money. Buyer further agrees to forfeit all past rents and future rents with payment changing to $2,489.18 per month until closing.”

¶ 7. Then, on March 11, 2005, the parties executed another Coldwell Banker form contract, entitled “Contract for the Sale and Purchase of Real Estate,” that had a few significant changes from the original contract, as well as many of the same terms of the original contract. For clarity’s sake, we shall refer to it as the “Second Addendum.” In the first paragraph, the purchase price for the property was still $385,000; however, regarding earnest money, the purchaser was to pay a “sum of $00.” The Second Addendum stated that the “Buyer agrees to release” to the Seller $20,000, which had been previously held by the broker as earnest money, as “down payment,” on March 14, 2005. Therefore, the balance remaining on the property was listed as $365,000. Also, in the “Special Provisions & Contingencies” section, the Second Addendum stated:

SELLER AGREES TO EXTEND THE ORIGINAL SALES CONTACT, DATED MARCH 11, 2004, PER THE FOLLOWING NEW TERMS: BUYER IS TO RENT THE PROPERTY AT A NEW RATE OF $2,615.06 PER MONTH. PURCHASER AGREES TO PAY HOME OWNERS INSURANCE PREMIUM ... OF $2,604.00 AT THE TIME OF SIGNING. PURCHASER ALSO AGREES TO PAY CITY AND COUNTY TAXES FOR 2005 TAX YEAR ... IN THE AMOUNT OF $4,389.15. THE SELLER AGREES TO CREDIT THE PURCHASER FOR ANY PRINCIPAL PAID UNDER THE NEW TERMS ON THE NEW LOAN WITH MERCHANTS & FARMERS BANK BASED ON THE NEW PAYMENT OF $2,615.06.... THIS AGREEMENT WILL START DATE OF SIGNING NEW SALES AGREEMENT WITH THE FIRST PAYMENT BEING DUE 3-28-2005.

The closing date was changed to March 11, 2006, “not to exceed twelve months.” On March 14, 2005, Coldwell Banker issued a $20,000 check to Willis from Coldwell Banker’s escrow account.

¶ 8. Both the original contract and the Second Addendum had the same “Breach of Contract” provision, and the provision stated “[sjpecific performance is the essence of this contract.” If Houston breached the contract, Willis was given the following options: “(a) accept the earnest money deposit as liquidated damages and this contract shall then be null and void, or (b) enter suit in any court of competent jurisdiction for damages for the said earnest money deposit, or (c) enter suit in any court of competent jurisdiction for specific performance.”

¶ 9. On March 1, 2006, ten days before the closing date specified in the Second Addendum, Houston wrote a note to Ki-nard that he did not intend to go forward with the purchase of Willis’s property. The note read: “I know that over the two years of leasing ...

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Cite This Page — Counsel Stack

Bluebook (online)
24 So. 3d 412, 2009 Miss. App. LEXIS 941, 2009 WL 4800617, Counsel Stack Legal Research, https://law.counselstack.com/opinion/houston-v-willis-missctapp-2009.