Opinion ID: 2604705
Heading Depth: 1
Heading Rank: 7

Heading: Conduct inconsistent with an intent to rescind.

Text: Cal Fed also argues that the Mackintoshes exhibited conduct inconsistent with an intent to rescind. Specifically, Cal Fed argues that after the Mackintoshes discovered the flooding problem in the spring of 1988, they continued to make payments on the house and even made improvements to the property. The Mackintoshes argued that because they pled alternative and inconsistent remedies, i.e., damages and recision, their conduct of making payments and improvements is not evidence of conduct inconsistent with an intent to rescind. We conclude that substantial evidence existed to support the district court's conclusion that the Mackintoshes did not exhibit conduct inconsistent with an intent to rescind the contract. If a party has more than one remedy ..., his manifestation of a choice of one of them by bringing suit or otherwise is not a bar to another remedy unless the remedies are inconsistent and the other party materially changes his position in reliance on the manifestation. Restatement (Second) of Contracts § 378 (1981). The Mackintoshes never elected recision as their sole remedy until the time of trial. Even though the remedies stated in the complaint were inconsistent, no evidence was produced at trial that Cal Fed materially changed its position in reliance upon the fact that the Mackintoshes continued to make payments and some minor improvements to the house. The Mackintoshes made their last principal payment in July 1994, and no payments were made after the Mackintoshes chose recision as their sole remedy at trial in August 1994. The district court concluded that the Mackintoshes continued to make payments in order to protect their credit rating and prevent foreclosure should they lose at trial and that the payments were not evidence that they were affirming the contract. We conclude that the district judge's conclusion was supported by substantial evidence.