Opinion ID: 2424191
Heading Depth: 2
Heading Rank: 1

Heading: Adequacy of Money Damages

Text: Specific performance is appropriate where `the legal remedy, usually money damages, is deemed to be either inadequate or impracticable.' Independence Mgmt. Co. v. Anderson & Summers, LLC, 874 A.2d 862, 870 (D.C.2005) (quoting Flack, 417 A.2d at 400). The core purpose of the equitable doctrine of specific performance is to effect a desire to do justice, which the legal remedy would fail to give. POMEROY, supra, § 1401, at 1033. In her order, Judge Hedge properly equated expectation damages with specific performance, in that both are for the purpose of placing the aggrieved party in as good a position as it would have been had the contract been performed. Judge Hedge also correctly noted that even though the parties had entered into a preliminary Type II agreement, [t]his may be the rare case in which a remedy based on the anticipated contract may be appropriate because all the terms of the deal had been agreed upon. Finally, Judge Hedge recognized, specific performance is deemed particularly apt in the context of contracts involving real property, especially where the property has unique features such as the Hotel. See City Stores Co. v. Ammerman, 266 F.Supp. 766, 776 (D.D.C.1967) (noting clear inadequacy of damages for breach of contracts involving interests in land or unique chattels); see also Johnson v. Jones, 109 Utah 92, 164 P.2d 893, 895 (1946) (preliminary agreement concerning land is specifically enforceable). Here, Stanford invested considerable time, money, and effort in negotiating with Potomac Creek and conducting due diligence investigation because it wanted to acquire the Hotel, but Potomac Creek's breach of the Preliminary Agreement and bad faith actions frustrated Stanford from accomplishing its objective, and rendered valueless Stanford's investment of time, effort and expense. Stanford, which owned and managed sixteen substantial hotels, represented to the court that its interest was to acquire the Hotel for its operations, not merely to realize financial benefits from the transaction. Potomac Creek recognized this interest in the Definitive Agreement which provides, in Paragraph 9.3(b), that in the event that closing on the transaction did not occur as a result of Potomac Creek's breach, Stanford, at its option, may require that Seller specifically perform its obligations. [11] Yet Potomac Creek would limit Stanford's remedies to damages. Although we agree that expectation damages can be an adequate remedy in some cases, they will not achieve substantial justice where the benefit of the bargain to the prevailing party is difficult to calculate or realize by the payment of money. As Judge Gasch noted in the context of breach of an agreement to lease space at the then-new Tysons Corner shopping center, money damages would in no way compensate the plaintiff for loss of the right to participate in the shopping center enterprise and for the almost incalculable future advantages that might accrue to it as a result of extending its operations. See City Stores Co., 266 F.Supp. at 776 (holding, as a matter of law, that mere fact that a contract, definite in material respects, contains some terms which are subject to further negotiation... will not bar a decree for specific performance, if in the court's discretion specific performance should be granted). In view of the presumptive suitability of specific performance of contracts involving land, and based on the facts of record, we think that in this case the burden is more appropriately placed on Potomac Creek to show that money damages would have been adequate, rather than on Stanford to disprove that damages are inadequate. The trial court will need to determine whether expectation damages would have been adequate in this case, including what weight should be given to Stanford's decision to ask for specific performance as its sole remedy.