Case Title: Racicky v. Simon

Citation: 

Docket Number: 

State: wyoming

Court: Wyoming Supreme Court

Date: 1992-05-15T00:00:00Z

Document:
Racicky v. Simon1992 WY 57831 P.2d 241Case Number: 91-197Decided: 05/15/1992Supreme Court of Wyoming
C. Bud 
RACICKY,

Appellant 
(Defendant),

v.

James A. SIMON, as 
Personal Representative of the Estate of Dorothy D. Simon, 
Deceased,

Appellee 
(Plaintiff).

 

Appeal from District 
Court, Laramie County, Nicholas G. Kalokathis, J.

 

Georg Jensen, 
Cheyenne, for appellant.

Richard P. 
Boley, Boley & McKellar, P.C., Cheyenne, for 
appellee.

 

Before 
URBIGKIT, C.J., and THOMAS, CARDINE, MACY and GOLDEN, 
JJ.

THOMAS, 
Justice.

[¶1]      The principal 
legal question presented by this appeal is whether the buyer, under a contract 
for the sale of real estate, is entitled to the remedy of rescission if the 
buyer has completed performance and the seller is unable to perform. The issue 
is presented in the context of a summary judgment awarding rescission of the 
contract to the personal representative of the estate of the deceased buyer and 
providing for restitution in the total amount paid plus interest. A collateral 
issue presented in the brief of the personal representative is whether the 
amount of restitution ordered by the district court is subject to modification. 
That issue was not raised by a cross-appeal as required by the Wyoming Rules of 
Appellate Procedure. We hold rescission is available as a remedy; restitution 
was properly awarded by the trial court; and the amount of restitution is not 
subject to a change on appeal. We affirm in its entirety the Order Granting 
Plaintiff's Motion for Summary Judgment; Findings of Fact and Conclusions of Law 
entered in the trial court. 

[¶2]      C. Bud Racicky 
(Racicky), in his Brief of the Appellant, states the issues in this 
way:

1. Did the District Court 
err in concluding that the proper relief on a breach of contract for the sale of 
real property was a rescission of the sale rather than an award of 
damages?

2. Did the District Court 
err in finding that there was no material issue of fact in light of the 
affidavit of the defendant in opposition to the motion for summary 
judgment?

3. Did the District Court 
err in granting equitable relief of rescission when damages at law were capable 
of being awarded?

[¶3]      James A. Simon, 
as personal representative of the Estate of Dorothy D. Simon, deceased (when 
appropriate, "Simon" in this opinion may refer either to the deceased or to the 
personal representative as a party), offers this statement of issues in the 
Brief of Appellee:

I. Was there a disputed 
issue of material fact preventing summary judgment?

II. Was appellee entitled 
to rescission of the contract for sale of real property?

III. Was the proper 
measure of damages to appellee resulting from appellant's total failure of 
performance of the contract for sale of real property repayment of the purchase 
price, plus interest, from the date of each payment to 
appellant?

[¶4]      On January 30, 
1980, Racicky entered into a contract to sell 320 acres of land to Simon. The 
stated consideration was $144,000 to be paid in three installments: $75,000 upon 
execution of the contract; $34,500 plus 10% interest on January 30, 1981; and 
$34,500 plus 10% interest on January 30, 1982. The contract bears the notation 
that it was paid in full on January 30, 1982. The land was not specifically 
described other than its location in Sections 9 and 10, Township 15 North, Range 
66 West, and encompassing 320 acres. Racicky explained that he had an 
understanding with Simon as to the general location of the land which was the 
subject of the contract and the parties understood the land description would be 
particularized by survey.

[¶5]      At the time of 
this contract, Racicky was buying the land, which he had agreed to convey to 
Simon, from a third party under a contract for deed. In September of 1985, when 
he had not completed his contract to purchase and, obviously, had not conveyed 
to Simon, Racicky sought bankruptcy relief pursuant to Chapter 11 of the 
Bankruptcy Act. 11 U.S.C. § 1101-1174 (1979). As a result of the bankruptcy 
proceeding, Racicky forfeited the contract for deed that he had entered into 
with the owner of the land. At that juncture, it became impossible for Racicky 
to perform his contract with Simon. After Simon died, her personal 
representative discovered the agreement; determined that the payments had been 
made to Racicky; and recognized a transfer of the land to Simon had not been 
effected.

[¶6]      The personal 
representative then brought this action against Racicky seeking rescission of 
the contract and restitution of the full amount of the payments made by Simon to 
Racicky. Racicky defended the suit, essentially by asserting that damages in a 
much smaller amount than the payments made by Simon was an adequate remedy under 
the circumstances. After the personal representative had filed a motion for 
summary judgment, the district court granted that motion. The relief afforded 
was rescission of the contract and restitution in the amount of the payments 
received, together with interest at 10% which was calculated from the time that 
Racicky's performance became impossible. The total restitution awarded was 
$212,267.33. It is from the Order Granting Plaintiff's Motion for Summary 
Judgment; Findings of Fact and Conclusions of Law that Racicky has taken his 
appeal.

[¶7]      Racicky contends 
that money damages is an adequate remedy at law for breach of a contract to sell 
real estate, and it follows that the equitable remedy of rescission together 
with restitution should not have been afforded to Simon. In making this 
argument, Racicky concedes that Simon performed completely her obligations under 
the contract and acknowledges that he failed to perform because performance was 
impossible. It is clear that Racicky was unable to obtain title to the land that 
he had agreed to sell.

[¶8]      We recognize that 
the payment of money damages generally is considered an adequate remedy for a 
breach of contract, but this general rule does not control a situation in which 
the contract is one for the sale of land. In the instance of a contract for the 
sale of land, the legal presumption is that equitable concepts will control the 
resolution of the dispute. The rationale underlying this presumption is that the 
unique character of each individual parcel of land renders the remedy of money 
damages inadequate. 11 Walter H.E. Jaeger, Williston on Contracts § 1418A 
(3d ed. 1968). If Racicky's argument were to be recognized and accepted, the 
difference between the money damages that he suggests is an appropriate award 
and the amount actually paid to him by Simon would result in unjust enrichment 
to him by more than $100,000. Obviously, the parties could not be returned to 
the status quo at the time the contract was made by invoking the remedy 
of money damages. We are satisfied that Racicky cannot enjoy the benefit of any 
bargain that he could not, and did not, perform.

[¶9]      The general rule 
recognized by this court is that an injured party may rescind the contract where 
there has been a material breach. Cady v. Slingerland, 514 P.2d 1147 
(Wyo. 1973). Racicky argues, however, that, under Wyoming law, rescission of a 
contract for the sale of real property is available only when the seller has 
made a material misrepresentation. Racicky premises this contention upon 
Hagar v. Mobley, 638 P.2d 127 (Wyo. 1981), but we do not read that case 
as limiting the availability of rescission to actions based on fraudulent 
misrepresentations by the seller. It only elaborates upon the required elements 
in an action based upon fraudulent misrepresentation when that is the theory the 
plaintiff invokes.

[¶10]   We are satisfied that Racicky's 
contention is not correct. Chief Justice Blume wrote for this court the 
proposition that "[t]he right to rescind exists for various reasons. Among them 
are enumerated want of title and insolvency of the vendor." Hawkins v. 
Stoffers, 40 Wyo. 226, 240, 276 P. 452, 456 (1929) (citing 39 Cyc. 1406, 
1419, 2006-2008) (emphasis added). Almost sixty years later, we held that 
"[w]here contrary to a seller's covenant of merchantability, title to realty is 
unmarketable, a buyer . . . is entitled to rescission." Bethurem v. 
Hammett, 736 P.2d 1128, 1134 (Wyo. 1987). We can see no "substantial 
difference in an instance in which the seller cannot obtain title from an 
instance in which title is unmarketable." In Hagar, 638 P.2d  at 133, this 
court adopted with approval the Restatement of Restitution §§ 28 and 150 (1937). 
The pertinent portion of the Restatement of Restitution § 28 
states:

A person who has paid 
money to another because of a mistake of fact and who does not obtain what he 
expected in return is entitled to restitution from the other if the mistake was 
induced:

. . . 
.

(b) By his innocent and 
material representation.

[¶11]   In this instance, Racicky 
represented to Simon that he would transfer title to the property to her upon 
payment of the agreed purchase price. She paid the agreed purchase price, and 
Racicky was unable to transfer the title. Simon obviously failed to obtain that 
which she was entitled to expect, and that sequence of events placed Simon in a 
situation in which she was entitled to rescind the contract pursuant to the 
proposition set forth in the Restatement of Restitution § 28(b). We have been 
unable to identify any authority to support Racicky's position that Wyoming does 
not follow the general rule that rescission is available to a fully performing 
buyer of real property if the seller is unable to transfer title as the seller 
agreed. It is clear that the amount of the consideration paid is the appropriate 
amount of restitution. Restatement of Restitution § 150.

[¶12]   In contending that the award of 
summary judgment was improper, Racicky urges the existence of a controverted 
material issue of fact. For purposes of summary judgment, a fact is material 
only if it serves to establish or refute an element of the legal theory upon 
which the case is decided. Allmaras v. Mudge, 820 P.2d 533 (Wyo. 1991); 
Johnson v. Soulis, 542 P.2d 867 (Wyo. 1975). The claimed controverted 
issue of material fact relates to the actual value of the property. That issue 
of fact depends upon acceptance of Racicky's argument that the proper remedy was 
damages rather than rescission. We have concluded that rescission is the proper 
remedy, and the question of value becomes irrelevant. Racicky's contention of a 
genuine issue does not relate to a material fact in this controversy. The proper 
remedy to be invoked is a question of law, and we are satisfied that the trial 
judge correctly ruled that rescission was available. See Fugate v. Mayor and 
City Council of Town of Buffalo, 348 P.2d 76 (Wyo. 
1959).

[¶13]   Finally, we address briefly Simon's 
argument that the court should increase the amount of the judgment entered by 
the district court by computing the interest owed to Simon by Racicky from the 
date that each payment was made, rather than from the date that Racicky's 
performance became impossible. Simon's calculations would increase the total 
amount of the award to $269,896.83. It is Simon's argument that this is simply 
an adjustment of an error in mathematics. We do not agree that this is simply an 
error in computation. It is clear from the district court's order that the judge 
knew of the claim of interest from the date of payment and, as a substantive 
matter, interest was awarded only from the date that Racicky's performance 
became impossible. Our rule is well settled that a party who does not take an 
appeal may not attack a judgment in this court. Our requirement is that a 
cross-appeal be perfected in order to attack the judgment. Broyles v. 
Broyles, 711 P.2d 1119 (Wyo. 1985); Doenz v. Garber, 665 P.2d 932 
(Wyo. 1983); Wyoming State Treasurer v. City of Casper, 551 P.2d 687 
(Wyo. 1976). Simon did not file a notice of appeal as required by Wyo.R.App.P. 
2.01, and his contention is not open to consideration in this 
court.

[¶14]   In summary, we hold that the remedy 
of rescission was available to Simon under the contract for the sale of real 
property when Racicky was unable to convey the property described in the 
contract. We also hold that, when the remedy of rescission is available, a 
dispute relating to other remedies does not preclude the entry of a summary 
judgment for rescission and restitution. In an instance such as this, an award 
of money damages rather than restitution is neither required nor is it the 
preferred remedy.

[¶15]   The judgment of the district court 
in favor of Simon is affirmed.