Summary
The Rhode Island Supreme Court affirmed summary judgment awarding Sophie F. Danforth the right to retain a real estate purchase deposit after Timothy T. More failed to close under the purchase and sales agreement. The court held that the buyers failed to timely invoke the agreement’s inspection contingency, that the seller was entitled to statutory prejudgment interest, and that the alleged property defects did not create a genuine issue of material fact. The court also affirmed the denial of attorney’s fees because the buyer’s arguments presented justiciable issues despite being unsuccessful.
Topics
Practice areas
Questions Presented
- Whether summary judgment was proper where the buyers asserted that termites and post-contract damage to the front door created a genuine issue of material fact concerning the property's condition at closing.
- Whether Danforth was entitled to statutory prejudgment interest on the retained deposit under Rhode Island General Laws § 9-21-10(a).
- Whether the Superior Court abused its discretion by denying Danforth attorney's fees under Rhode Island General Laws § 9-1-45(1).
Holdings
- Summary judgment for Danforth was proper because the Mores failed to timely exercise the PSA's inspection-contingency termination right, the alleged front-door damage fell within the PSA's exception for damage caused by an unavoidable casualty, and the evidence showed Danforth was ready and willing to perform while the Mores failed to close.
- Danforth was entitled to statutory prejudgment interest because the deposit was retained as the contractual remedy for the Mores' breach, rather than returned as reimbursement, and the action included a breach-of-contract claim resulting in an award of damages.
- The Superior Court did not abuse its discretion in denying Danforth attorney's fees because the Mores' arguments concerning the termites and door damage presented justiciable issues, even though those arguments lacked merit.
Key quotations
“By failing to avail themselves of the opportunity presented in the PSA to inspect for termite damage, the Mores relinquished any right to base a claim on such damage.” (129 A.3d at 69)
“The focus of prejudgment interest is not on a defendant’s ability to benefit from the money, but, rather, on the plaintiff’s delay in receiving compensation.” (129 A.3d at 72)
Factual background
Danforth agreed to sell the Mores certain Providence real estate for $700,000, with a $30,000 deposit and an inspection contingency requiring written termination by April 4, 2011. The Mores did not timely invoke the inspection contingency, later indicated that they intended to proceed with the transaction, but failed to appear at the October 17, 2011 closing after experiencing difficulty selling their existing home. The Mores relied on termites discovered after the contingency deadline and damage to the property's front door from an attempted break-in as grounds for not closing.
Procedural history
Danforth sued the Mores for breach of a purchase and sales agreement, declaratory relief, and attorney's fees after the Mores failed to close on the purchase of real property. The Superior Court granted Danforth summary judgment on her claims and the Mores' counterclaim, awarded her the $30,000 deposit and prejudgment interest, and denied attorney's fees. More appealed the summary judgment and prejudgment-interest award, while Danforth cross-appealed the denial of attorney's fees.
Remand instructions
The materials associated with the case may be remanded to the Superior Court; no substantive remand was ordered.