Opinion ID: 2551536
Heading Depth: 2
Heading Rank: 1

Heading: availability of specific performance

Text: Tortoise argues that the district court improperly granted specific performance because: A) the purchase agreement limited Kessler's remedies to the return of his earnest money under these circumstances, and B) Kessler was not ready, willing, and able to perform the purchase agreement by the closing date. We disagree.
The purchase agreement contains three potentially applicable provisions regarding the remedies available upon breach: the Earnest Money provision, the Default provision, and the Title Insurance Provision. [1] This Court addressed these provisions in Tortoise I: [O]ur reading of the default provision, the earnest money provision, and the title insurance provision leads us to the conclusion that the purchase agreement is reasonably subject to at least three reasonable and conflicting interpretations concerning the remedy that is available to Kessler in the circumstances presented here . . . . Because the purchase agreement is ambiguous, its interpretation presents a question fact concerning which of the three provisions controls. Id., at 108, 937 P.2d at 420. This Court reversed the summary judgment granted in favor of Tortoise and remanded the case to the district court to determine which of the purchase agreement's provisions applied. Having determined that the agreement is ambiguous regarding the remedies available to Kessler upon default, the interpretation of the agreement is a question of fact to be determined by the district court. Doyle v. Ortega, 125 Idaho 458, 461, 872 P.2d 721, 724 (1994); Bondy v. Levy, 121 Idaho 993, 829 P.2d 1342 (1992). We must now defer to the findings of the district court if they are supported by substantial and competent evidence. Conley v. Whittlesey, 133 Idaho 265, 985 P.2d 1127 (1999). On remand, the district court determined that none of the three provisions applied to the circumstances of this case and held that the purchase agreement did not prevent Kessler from seeking specific performance. This determination was based substantially upon the court's finding that no cash earnest money was deposited by Kessler. Since there was no earnest money deposited, the court determined that neither the Earnest Money provision nor the Title Insurance provision, both of which called for the return of earnest money, were applicable. The court also found the default provision inapplicable because that provision deals solely with Tortoise's remedies. Tortoise agrees that the Earnest Money provision and the Default provision do not apply to the circumstances of this case. [2] Tortoise argues that the district court should have found that Kessler was limited to the return of his earnest money under the Title Insurance provision, which provides: It is agreed that if the title of said premises is not marketable, or cannot be made so within thirty (30) days after notice containing a written statement of defects is delivered to the Seller or if the Seller, having approved said sale fails to consummate the same as herein agreed, the earnest money shall be returned to the Buyer and Seller shall pay for the cost of title insurance, escrow and legal fees if any. Tortoise contends that this provision is clear, unambiguous, and the only provision in the agreement specifically applicable to a failure of marketable title. Therefore, Tortoise argues that the district court erred by admitting extrinsic evidence to contradict the clear meaning of the Title Insurance provision. We do not agree that the purchase agreement clearly and unambiguously limits Kessler's right to specific performance under these circumstances. Admittedly, the language of the Title Insurance provision appears unambiguous when viewed in isolation. The ambiguities become apparent only when the Title Insurance provision is viewed in the context of the whole agreement as amended, and the facts of this case as developed on remand. [3] The Title Insurance provision provides that the earnest money shall be returned to the Buyer. Yet it is clear from the amended purchase agreement as well as the evidence introduced following remand that no cash earnest money was deposited and the parties did not intend that cash would be deposited. Kessler's earnest money was represented by his interest in the underlying property. Thus, it is not clear from the agreement what if anything the parties intended to be returned to Kessler under this provision. It is not clear that the parties intended, through this provision, to restrict Kessler's remedy of specific performance should Tortoise decide that it would not perform the agreement. Tortoise does not dispute the finding that there was no cash earnest money deposited. Instead, Tortoise argues that Kessler did contribute cash towards the purchase of the underlying property and for some improvements to the property. Kessler received a credit for this contribution in exchange for his interest in the property, and, according to Tortoise, he chose to treat this contribution as cash earnest money. Consequently, Tortoise argues that under the terms of the purchase agreement Kessler is only entitled to the cash equivalent of this investment. We agree that this is a reasonable interpretation of the amended purchase agreement, but it is certainly not the only reasonable interpretation. We hold that there is substantial and competent evidence to support the district court's determination on remand that none of the three potentially applicable provisions of the agreement were applicable and that the purchase agreement did not limit Kessler's right to specific performance under these circumstances.
Tortoise argues that the district court erred in granting specific performance because Kessler was not ready, willing, and able to close on April 14, 1995. We disagree. Ordinarily, where time is of the essence of a contract for sale of real estate, a buyer cannot enforce the contract without tendering payment within the time and according to the contract. Machold v. Farnan, 14 Idaho 258, 94 P. 170 (1908). However, a purchaser of real property is not required to tender payment where such a tender would be futile. See Ford v. Lord, 99 Idaho 580, 586 P.2d 270 (1978); Esplendido Apartments v. Olsson, 144 Ariz. 355, 697 P.2d 1105 (App.1984). In this case, Tortoise informed Kessler prior to the date scheduled for closing, that it could not perform. We do not reach the question of whether Kessler would have been able to perform in this case because tender of the purchase price would have been futile. The district court did not err by granting specific performance.