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

Heading: district court's authority to conditionally decree specific performance

Text: On cross-appeal, Kessler argues that the district court erred by reforming the contract to increase the purchase price. This argument mischaracterizes the district court's holdingthe court did not reform the contract. The court simply found that it would be inequitable to grant Kessler the remedy of specific performance unless he was willing to share the unexpected costs of constructing the project. The court also required the dismissal of Kessler's claims for damages in addition to specific performance. In other words, Kessler was given the choice of accepting conditional performance or of pursuing his remedies at law. The question in this case is whether the district court had the authority to impose those conditions upon its decree of specific performance. There is no legal right to specific performance. Suchan v. Rutherford, 90 Idaho 288, 410 P.2d 434 (1966). Specific performance is an extraordinary remedy that can provide relief when legal remedies are inadequate. Hancock v. Dusenberry, 110 Idaho 147, 152, 715 P.2d 360, 365 (Ct.App.1986)(citing J. CALAMARI & J. PERILLO, CONTRACTS § 16-1 (2d ed.1977)). The inadequacy of remedies at law is presumed in an action for breach of a real estate purchase and sale agreement due to the perceived uniqueness of land. Perron v. Hale, 108 Idaho 578, 701 P.2d 198 (1985). But, specific performance is an equitable remedy and should not be granted when it would be unjust, oppressive, or unconscionable. Suchan. When seeking the remedy of specific performance: [a party] comes into a court of conscience asking for a remedy beyond the letter of his strict legal right . . . . To come within the equitable rule he must stand before the court prepared to meet its scrutiny, relying upon the fairness and equitable character of the contract. This must not only be his own position, but he must also show that it is not unjust or oppressive to the defendant to compel him to perform specifically. Suchan, at 302, 410 P.2d at 442-43. The decision to grant specific performance is a matter within the district court's discretion. Suchan (citing Bedal v. Johnson, 37 Idaho 359, 218 P. 641 (1923)). When making its decision the court must balance the equities between the parties to determine whether specific performance is appropriate. Suchan; Barnard & Son, Inc. v. Akins, 109 Idaho 466, 708 P.2d 871 (1985). Specific performance should be granted under terms and conditions reflecting the equities of the case. A decree of specific performance should be equitable to both the plaintiff and the defendant, and a court of equity, being a court of conscience, is capable of rendering a conditional decree in an action for specific performance, because it can insist that if a party, either plaintiff or defendant, seeks the assistance of such a court, he must do what good conscience demands in the particular case. 71 Am.Jur.2d. Specific Performance § 222 (1973). In circumstances where an order for specific performance would operate to benefit the petitioner inequitably and unconscionably, a court of equity has discretion to refuse to order specific performance or where possible to condition an order for specific performance so as to account for the petitioner's inequitable conduct. Boyd v. Head, 92 Idaho 389, 393, 443 P.2d 473, 477 (1968). This Court has also stated that once the equitable jurisdiction of the court has attached, the court should retain jurisdiction to resolve all portions of the dispute between the parties and render equity to all parties without regard to the technical niceties of pleading and procedure. Barnard & Son, Inc. v. Akins, 109 Idaho 466, 708 P.2d 871 (1985). We hold that the district court had the discretion to enter a conditional decree of specific performance in order to properly balance the equities of the case. We do not believe that the court abused its discretion in this case. The district court made the following findings in this case: The Court finds that the piece of property in question in this case is unique as the term is applied to the law of specific performance. The property is located in a commercial area and the property has been constructed to host a four-plex theatre. Additionally, Kessler has operated a theatre in this specific area of Ketchum for 20 years and testified it is the perfect location for a theatre. The public is familiar with the area and they have developed a custom of coming to this particular area to view movies. The property is located in an area of Ketchum which provides substantial parking for customers. The property is one of a few areas in Ketchum suitable for the development of a four-plex theatre. . . . Mr. Kessler has a 20 year history of operating a theater in the Ketchum area. His hopes and dreams are placed in this project. Mr. Kessler has done a lot of footwork and put a lot of thought into this project. He has also invested $140,000.00 in real property. Mr. Kessler entered into the Purchase and Sale Agreement before the construction financing was in place for the project. When the project began to fail, Kessler did not have the personal financing to rescue the project. Kessler also refused to pay additional rent when the project went over budget, thus shifting the entire burden of saving this project to Kingen. In August of 1994, Mr. Kingen saved this project. But for Kingen, this project would have been lost. Kingen has invested $1,760,000.00 or the equivalent thereof to finish this project. Additionally, Kingen placed Kessler in the theater in a timely manner. The court also noted that there was some question regarding the responsibility for the liens that prevented the closing and caused the extra construction expenses. Kingen paid the liens, but in the rush to close and place Kessler in the theater unit some questionable liens may have been inadequately defended. The court stated [i]t is this Court's belief, that not all of these liens may have been well founded. We will never know the answer to this question. Based upon these findings, the court determined that it would be inequitable either to deny Kessler specific performance entirely or to grant specific performance without a contribution by Kessler toward the unexpected additional costs of construction and the dismissal of Kessler's damage claims. Therefore, the court held that Kessler was entitled to specific performance only upon payment of a share of the additional costs and dismissal of Kessler's damage claims. Under the unique circumstances of this case, we hold that the court did not abuse its discretion.