Payne v. Hurwitz

978 So. 2d 1000, 2008 WL 141734
CourtLouisiana Court of Appeal
DecidedJanuary 16, 2008
Docket2007 CA 0081
StatusPublished
Cited by15 cases

This text of 978 So. 2d 1000 (Payne v. Hurwitz) is published on Counsel Stack Legal Research, covering Louisiana Court of Appeal primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Payne v. Hurwitz, 978 So. 2d 1000, 2008 WL 141734 (La. Ct. App. 2008).

Opinion

978 So.2d 1000 (2008)

Wesley and Gwendolyn PAYNE
v.
Keefe HURWITZ.

No. 2007 CA 0081.

Court of Appeal of Louisiana, First Circuit.

January 16, 2008.

Michelle Mayne Davis, Mandeville, LA, for Plaintiffs/Appellees, Wesley and Gwendolyn Payne.

Prescott L. Barfield, Covington, LA, for Defendant/Appellant, Keefe Hurwitz.

Before GAIDRY, McDONALD, and McCLENDON, JJ.

*1002 GAIDRY, J.

The prospective purchasers of a home under a purchase agreement sued the prospective seller, alleging the seller's noncompliance with the agreement and refusal to consummate the sale. The trial court rendered judgment in favor of the prospective purchasers for the return of their deposit, a contractual penalty, and attorney fees, expenses, and costs. The seller appeals and the prospective purchasers have answered his appeal, asserting error by the trial in failing to grant them specific performance. For the following reasons, we amend the judgment to grant the prospective purchasers specific performance, vacate the awards for the deposit return and contractual penalty, affirm the judgment in all other respects, and remand the case for further proceedings.

FACTS AND PROCEDURAL BACKGROUND

The plaintiffs, Wesley Payne and Gwendolyn Payne (the Paynes), decided to purchase a smaller home, and in July 2005 began searching for one. Using the Internet, they eventually located a home for sale at 4018 Willow Lane in Madisonville, Louisiana. The owner was Keefe Hurwitz. After viewing the home, the Paynes made an offer that was acceptable to Mr. Hurwitz, and a purchase agreement for the price of $241,500.00 was signed on August 22, 2005. On the same date, the Paynes wrote a check in the amount of $1,000.00, representing the required deposit, made payable to Houlemarde Realty, the real estate agency representing Mr. Hurwitz. The purchase agreement provided for a closing date for execution of the act of sale of September 26, 2005, or sooner if mutually agreed. However, it also provided for an automatic extension of the closing date for up to sixty days in the event repairs were necessary.

On August 29, 2005, Hurricane Katrina made landfall, causing extensive damage to property in southeast Louisiana, including Madisonville. Mr. Hurwitz's home sustained substantial roof damage from the hurricane winds and a fallen tree, as well as water damage to the sheetrock, windows, and other interior fixtures of the left side of the home. The costs of repair were estimated by Mr. Hurwitz, a self-employed contractor with experience as an insurance adjuster, at approximately $60,000.00.

Due to disruption of electronic communications systems and mail service following the hurricane, the Paynes, who had evacuated to Kansas City, Missouri, experienced considerable difficulty in contacting Mr. Hurwitz regarding the status of the sale of the home. On September 9, 2005, they hand-delivered a letter containing their contact information to Michelle Poliski, Mr. Hurwitz's wife, and attempted to contact Mr. Hurwitz by e-mail directed to Angela Houlemarde, Mr. Hurwitz's agent. The Paynes also contacted their loan officer, who suggested that they ask the lender's title attorney to attempt to contact Mr. Hurwitz regarding the status of the closing date and a proposed extension of that date, as authorized by the agreement.

On September 20, 2005, Mr. Hurwitz e-mailed the lender's title attorney, acknowledging a conversation of that date and stating:

Per our conversation today I was blunt that the house was in need of major repair due to storm damage. It will take months to get this work completed. I will not be interested in selling for the same amount when and if I decide to sell my house. Naturally the house goes up in value each day. Your client states on the contract a sale for cash. That means no bank loan or approval is needed. I understand that Katrina was an inconvenance [sic] to every *1003 one[.] I'm sorry at this time I cannot afford to sell my house under the previous terms and conditions or the present status of my house and my life at this time. I thank you for your understanding. KH

On October 3, 2005, the Paynes filed a petition seeking specific performance and damages, alleging that Mr. Hurwitz breached the terms of the purchase agreement. On October 28, 2005, Mr. Hurwitz answered the petition, alleging that the agreement was unenforceable due to Hurricane Katrina and that his performance was impossible due to force majeure. He also alleged that the property could not be repaired within the automatic sixty-day extension for closing, or by November 24, 2005.

The matter was tried on May 8, 2006. At the conclusion of the trial, the trial court took the matter under advisement after ordering the submission of posttrial memoranda. On September 11, 2006, the trial court issued its judgment, incorporating its written reasons.[1] The court ruled in favor of the Paynes, awarding them the return of their $1,000.00 deposit and an equal amount representing a contractual penalty, as well as costs, fees, expenses and reasonable attorney fees, as provided in the agreement.

The Paynes answered the appeal, seeking amendment of the trial court's judgment to grant them the alternative remedy of specific performance in lieu of the return of their deposit and the contractual penalty.[2]

ASSIGNMENTS OF ERROR

Mr. Hurwitz designates four assignments of error on the part of the trial court:

(1) The trial court erred in determining that he breached the terms and conditions of the purchase agreement;

(2) The trial court erred in determining that the home could have been repaired in time to accomplish the closing;

(3) The trial court erred in determining that the obligation was not rendered null and void due to force majeure or an "Act of God"; and

(4) The trial court erred in determining that he was in bad faith under the terms and conditions of the purchase agreement.

In their answer to the appeal, the Paynes assign the following error on the part of the trial court:

(5) The trial court erred in holding that the Paynes were required to set a closing or to "put the seller in default," in order to be entitled to the remedy of specific performance authorized by the terms of the purchase agreement.

DISCUSSION

The purchase agreement at issue was signed by the Paynes on August 19, 2005 and presented in the form of an offer, and was accepted and signed by Mr. Hurwitz on August 22, 2005. It consisted of a *1004 two-page form agreement entitled "Agreement to Purchase or Sell," and bore language stating that it was produced through the use of a computer software program. The first page, bearing the parties' signatures, confirmed that the Paynes' offer was submitted to Angela Houlemarde, Mr. Hurwitz's designated real estate agent. The purchase agreement contained the following provision relating to the effect of necessary title work or repairs upon the date of the act of sale:

CURATIVE WORK/REPAIRS In the event curative work in connection with the title is required, and/or if repairs are a requirement for obtaining the loan(s) upon which this agreement is conditioned, the parties agree to and do extend the date for passing the Act of Sale to a date not more than fifteen (15) days following completion of curative work/repairs; but in no event shall extension exceed sixty (60) days without the written consent of all parties.[3]

The purchase agreement also included the following pertinent provisions:

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Cite This Page — Counsel Stack

Bluebook (online)
978 So. 2d 1000, 2008 WL 141734, Counsel Stack Legal Research, https://law.counselstack.com/opinion/payne-v-hurwitz-lactapp-2008.