Opinion ID: 2308282
Heading Depth: 1
Heading Rank: 5

Heading: Applicability of Bissonnette in the Specific Performance Context [13]

Text: Under Bissonnette, when a court orders specific performance of a contract, [14] the decree must as nearly as possible order [the contract] to be performed according to its terms, and one of those terms is the date fixed by it for its completion. Bissonnette, 529 A.2d at 143 (internal quotation marks omitted). Thus, when a court orders specific performance of a contract, the buyer and seller are deemed to have consummated the real estate closing as of the original closing date as set forth in the contract. Id. Accordingly, the purchaser under the contract is entitled to the rents and profits earned between that date and the date of specific performance, and the seller is entitled to the interest earned on the purchase money during the same period. Id. When, however, the seller is the cause of the delay in performing the contract, any accrued interest that exceeds the lost rental profits may not be recovered by the seller. Id. In such a situation, the transaction is a wash in which neither the buyer nor the seller receives anything for lost rents or interest on the purchase money. See id. The underlying justification for the Bissonnette rule is that it puts the original seller and the original buyer in the same position that they would have been in had the sale taken place on the original closing date. Greensleeves contends that, because Mr. Friedrich was not a party to the original contract between it and Mr. Smiley, Mr. Friedrich should not have received the benefit of the Bissonnette rule in the specific performance context. We disagree. Mr. Friedrich was a bona fide purchaser of the six Newport dock slips and thus was entitled to have his rental income offset by the interest on the unpaid purchase price in an accounting under Bissonnette. Mr. Friedrich and Mr. Smiley held the closing on the dock slips after the Superior Court had ruled that there was no enforceable contract between Mr. Smiley and Greensleeves and after that court granted the motion to strike the lis pendens. The closing took place before Greensleeves appealed the order and before this Court issued a stay on the motion to strike the lis pendens. Thus, at the time of the closing, there were no legal impediments, and Mr. Friedrich, as a bona fide purchaser, was entitled to the benefits of the Bissonnette rule in the context of the decree of specific performance.