Summary
The United States Court of Appeals for the Third Circuit affirmed summary judgment for the buyers in a dispute over a land sale agreement. The court held that the sellers could not provide marketable title because a zoning variance permitting a nonconforming roadway had expired after subdivision of the property, exposing the owners to potential enforcement litigation by the township.
Topics
Practice areas
Questions Presented
- Whether the expired variance and nonconforming right-of-way rendered the Scotts' title unmarketable under Pennsylvania law.
- Whether the Turners breached the land-sale agreement by refusing to complete the transaction after learning that the title was unmarketable.
- Whether summary judgment for the Turners was proper.
Holdings
- The Scotts' title was unmarketable because the variance had expired upon creation of the fourth residential lot, leaving the property subject to a potential Township enforcement action requiring the right-of-way to be upgraded to comply with the Ordinance.
- The Turners did not breach the agreement by refusing to consummate the sale because the Scotts had failed to provide the contractually required marketable title.
Key quotations
“The mere creation of the fourth lot terminated the variance, to the extent that the Scotts’ 1993 purchase had not already done so.” (763)
“As a results, the Scotts’ title was unmarketable, and the Turners’ refusal to consummate the sale was not a breach of contract.” (764)
Factual background
The Scotts purchased Lot 2 from the Yohes and later agreed to sell it, together with an adjoining lot, to the Turners for $1.25 million. Access to the property depended on a 16-foot gravel right-of-way authorized by a variance that applied only while the Yohes owned all of the land and became void if the land was subdivided into more than three residential lots. The Yohes later subdivided the tract into four residential lots. After learning of the variance and its expiration, the Turners refused to complete the purchase because the Scotts could not convey good and marketable title.
Procedural history
The Scotts agreed to sell land to the Turners, who refused to complete the transaction after learning that a variance authorizing a nonconforming gravel right-of-way had expired. The Scotts sued for breach of contract, and the Turners counterclaimed for return of their deposit. After removal from the Adams County Court of Common Pleas, the federal District Court granted summary judgment for the Turners, ordered return of the deposit, and concluded that the Scotts had breached by failing to provide marketable title. The Third Circuit affirmed.