Court Opinion

ID: 9652488
Source: CourtListenerOpinion
Date Created: 2023-08-23 17:24:42.437575+00
Date Added: 2024-06-11T18:12:51.820357
License: Public Domain

WEISBERGER, Justice,
dissenting.
I join in the dissenting opinion of Justice Murray and completely agree with the rationale expressed therein. I write separately only to express an additional concept that I believe would support both dissenting opinions.
The majority is quite correct in stating that this court has often enunciated the principle that specific performance is not a matter of right but may be granted in the sound discretion of the trial justice. See, e.g., Gaglione v. Cardi, 120 R.I. 534, 388 A.2d 361 (1978); Jakober v. E.M. Loew’s Capitol Theatre, Inc., 107 R.I. 104, 265 A.2d 429 (1970); DiBiasio v. DiFazio, 103 R.I. 565, 239 A.2d 719 (1968). We have also recognized another principle that is not entirely consonant with the notion that the right to specific performance may be given or withheld at the discretion of the trial justice. This doctrine arises out of the general rule that a purchaser in a contract for the sale of real estate becomes the equitable owner of the real estate and the *1277seller holds legal title merely as security for the purchase price. Dulgarian v. City of Providence, 507 A.2d 448 (R.I.1986); Rustigian v. Celona, 478 A.2d 187 (R.I.1984); George v. Oakhurst Realty, Inc., 414 A.2d 471 (R.I.1980); Jakober v. E.M. Loew’s Capitol Theatre, Inc., 107 R.I. 104, 265 A.2d 429 (1970). The recognition of equitable ownership derives from the maxim that equity regards as done that which ought to be done. See Carpenter v. Providence Washington Ins. Co., 45 U.S. (4 How.) 185, 11 L.Ed. 931 (1846). What might be construed as an apparent discrepancy between these two bodies of settled principle is explained by Professor Willi-ston in volume 11 of his Treatise On The Law of Contracts § 1418A at 665-67 (3d ed. Jaeger 1968):
“Although from its inception, granting specific performance was described as ‘within the sound discretion of the chancellor,’ and courts still render lip service to this outmoded concept, the great majority would unhesitatingly accept the following statement as expressive of the law:
‘Ordinarily the specific performance of a contract to convey land is as much a matter of course as an action of damages for its breach.’ ”
This court has recognized this very principle in Fitzgerald v. O’Connell, 120 R.I. 240, 386 A.2d 1384 (1978). In that case we were called upon to review a denial of specific performance by the trial justice on the ground of laches. In commenting upon the denial of specific performance in the course of reversing the judgment of the Superior Court, Justice Kelleher made the following very pertinent observation:
“There is no dispute that, but for the O’Connells’ defense of laches, the Fitz-geralds would be entitled to a decree ordering the O’Connells to specifically perform the contract of sale. The O’Con-nells chose not to contest the validity of the agreement. Its terms are clear and unambiguous. The seller, Gertrude S. O’Connell, unequivocally promised on behalf of herself and her heirs, successors and assigns, to sell the property to the Fitzgeralds for $500. The Fitzgeralds have shown that they have always been ready, able and willing to perform their part of the bargain. Jakober v. E.M. Loew’s Capitol Theatre, Inc. 107 R.I. 104, 265 A.2d 429 (1970). The record indicates the contract was fairly entered into, without misrepresentation, misunderstanding, mistake or fraud. Accordingly, in the absence of the equitable defense interposed by the O’Connells, the Fitzgeralds would be entitled to have the contract of sale specifically performed. 8A Thompson, Real Property § 4479 at 457 (1963).” (Emphasis added.) Fitzgerald, 120 R.I. at 243, 386 A.2d at 1386.
Consequently it appears that Rhode Island has followed and, it is hoped, will continue to follow the general rule that if a clear and unambiguous contract has been entered into between a buyer and a seller of real estate, and the buyer has at all times been ready, willing, and able to perform his or her part of the bargain, the buyer is entitled to specific performance of that contract in the absence of a legitimate and articulable equitable defense. To refuse specific performance in such circumstances would constitute an abuse of the judicial discretion accorded to the trial justice. The rule has been well stated in 8A Thompson on Real Property § 4479 at 457 (1963) as follows:
“Where a contract for the sale of real estate is entered into without misunderstanding on the part of the purchaser and without misrepresentation on the part of the vendor, specific performance will be granted as a matter of right and not as a matter of discretion.” See also Parker v. Dameika, 372 Ill. 235, 23 N.E.2d 52 (1939).
Under this rule it is deceptive to suggest that the trial justice has discretionary power to give or withhold the remedy of specific performance in the absence of a genuine equitable defense. Consequently the term “discretion” in these circumstances tends to be misleading since it may serve to mask the obligation of the trial justice to grant specific performance when the purchaser is entitled to such relief.
*1278In the case at bar it should be noted that the sellers’ legal title as security for the purchase price was even further diluted by the escrow deposit of the entire purchase price of $265,000 made on December 30, 1986, in implementation of a “partial closing” (accomplished for the tax advantage of the sellers). After that date the purchase price remained completely paid subject to a refund only in the circumstances set forth in paragraph 4 of the escrow agreement dated December 30, 1986. The provision for refund is set forth in the majority opinion and reads as follows:
“If such permissions, licenses, variances or permits have not been received by the buyer by the 1st day of July, 1987, then the escrow agents, Sweeney and Bissonnette, shall pay over the purchase monies, together with accrued interest thereon, to the buyer in exchange for a deed for the subject property to the sellers, Armand H. and Shirley M. Ricci.” (Emphasis added.)
In summary, the contract would be fully implemented by delivery of the purchase price to the sellers and the deed to the buyer unless the necessary zoning changes and permits were not received by the buyer by July 1, 1987. It is undisputed that the zoning change had been received on January 12, 1987, and became final by May of 1987 when the Massachusetts Attorney General formally approved the change. There was on July 1, 1987, only a pending application for a building permit. There was no indication that this building permit would not be granted in the normal course of business. Consequently it was apparent on July 1, 1987, that the escrow agreement would be implemented and there was no basis for repayment of the purchase price to the buyer and return of the deed to the sellers.
Nothing contained in the escrow agreement either specifically provided or even implied that a closing must of necessity take place on July 1, 1987. This was only a date upon which moneys would be refunded to Eastern and the deed returned to the sellers if zoning permits or variances had not been received. As Justice Murray points out in her dissenting opinion, this provision was inserted solely for the benefit of Eastern so that it might abandon the transaction on or after that date if it then appeared that the necessary zoning permissions were not obtainable. It seems obvious in light of the fact that the zoning changes had been obtained that there was no basis for either party to the transaction to withdraw as of July 1, 1987. There is nothing in either the original agreement or the agreement of December 30, 1986, that would justify the contention that a closing must of necessity take place no later than July 1, 1987, or not at all. The majority agrees that equity abhors a forfeiture. To hold that Eastern violated the terms of its contract by failing to close on July 1, even though it was willing to close on July 2, is to create a rigid obligation nowhere to be found in any part of the original contract or escrow agreement entered into by the parties.
To suggest that the trial justice had discretion to forfeit Eastern’s interest in this property by reason of the minimal annoyance which Eastern’s president visited upon Armand Ricci is completely to ignore the fact that this jockeying of dates did not in any way cause any demonstrable prejudice to the Riccis when one considers the faet that the purchase price was safely in escrow at all times during these negotiations. At most one might conclude that the response of Eastern’s president, Aldor Glaude, to Mr. Ricci’s request to establish a closing date was somewhat more cavalier than Mr. Ricci might have expected. However, Mr. Ricci’s drastic reaction to Glaude’s casual attitude could only be considered a magnificent example of overkill.
In my opinion it is unconscionable to forfeit Eastern’s equitable title under these circumstances because of a disagreement over a date of closing that could aptly be characterized as a “tempest in a teapot.” Equity should never support or condone a forfeiture based upon trivial considerations. See J.N.A. Realty Corp. v. Cross Bay Chelsea, 42 N.Y.2d 392, 397-98, 397 N.Y.S.2d 958, 960-61, 366 N.E.2d 1313, 1316 (1977). In the case at bar an examination of the agreement and the facts dis*1279closes no breach of agreement, trivial or otherwise.
I am constrained to conclude that the trial justice erred in his interpretation of the escrow agreement. In the circumstances of this case, he was clearly wrong in determining that time was of the essence and that July 1,1987, was the final date for closing the transaction, even though a zoning change had been obtained and it was reasonably foreseeable that a final permit would later be granted. I am further of the opinion that the trial justice had no discretion in this case to deny Eastern the remedy of specific performance. I would therefore reverse the judgment of the Superior Court and remand the case with directions to grant the remedy of specific performance and direct the escrow agents to transmit the deed to Eastern and the purchase price to Armand and Shirley Ricci together with interest thereon. I would further authorize and direct the trial justice to consider upon remand whether Eastern had suffered damages as a result of the delay in performing the contract.
APPENDIX
Rule 1.7. Conflict of Interest: General Rule. — (a) A lawyer shall not represent a client if the representation of that client will be directly adverse to another client, unless:
(1) the lawyer reasonably believes the representation will not adversely affect the relationship with the other client; and
(2) each client consents after consultation.
(b) A lawyer shall not represent a client if the representation of that client may be materially limited by the lawyer’s responsibilities to another client or to a third person, or by the lawyer’s own interests, unless:
(1) the lawyer reasonably believes the representation will not be adversely affected; and
(2) the client consents after consultation. When representation of multiple clients in a single matter is undertaken, the consultation shall include explanation of the implications of the common representation and the advantages and risks involved.
Rule 1.9. Conflict of Interest: Former Client. — A lawyer who has formerly represented a client in a matter shall not thereafter:
(a) represent another person in the same or a substantially related matter in which that person’s interests are materially adverse to the interests of the former client unless the former client consents after consultation; or
(b) use information relating to the representation to the disadvantage of the former client except as Rule 1.6 or Rule 3.3 would permit or require with respect to a client or when the information has become generally known. »