Court Opinion

ID: 9578455
Source: CourtListenerOpinion
Date Created: 2023-08-21 21:45:25.174429+00
Date Added: 2024-06-11T13:27:47.743695
License: Public Domain

BERMAN, Judge,
dissenting.
I respectfully dissent.
The appellees sought rescission of a land purchase contract on the basis that the deed to real property sold to them under a contract with the Westons, Wells, and Todd was short in acreage. The court granted rescission based on mutual mistake and awarded a refund to plaintiffs against the sellers in the amount of $5,670.12 plus interest and against Apple Ridge for $7,475 plus interest. The judgment against Apple Ridge represented its commission paid by sellers based on the full purchase price of $74,750 and which Apple Ridge refused to refund, even though requested by sellers who wished to rescind the transaction.
Rescission is an equitable remedy which requires the parties to be placed in status quo. Bankers Trust Co. v. Hall, 116 Colo. 566, 183 P.2d 986 (1947); Rice v. Hilty, 38 Colo.App. 338, 559 P.2d 725 (1976). “In equity cases, such as this, the court must fashion a remedy that does justice under the particular circumstances with which it' is confronted." Dlug v. Wooldridge, 189 Colo. 164, 538 P.2d 883 (1975). The plaintiffs, as buyers, have the option of seeking rescission or for an abatement of the purchase price. See Dlug v. Wooldridge, supra.
Section 12-61-202, C.R.S.1973, provides that:
No real estate agent or broker is entitled to a commission when a proposed purchaser fails or refuses to complete his contract of purchase because of defects in the title of the owner, unless such owner, within a reasonable time, has said defects corrected by legal proceedings or otherwise.
I view this statute as establishing the public policy of this state to preclude payment of a commission when a real estate transaction fails because of defects in the seller’s title. *62And, if the broker may not claim a commission when the transaction fails to close because of a title defect, certainly the trial court does not err when, in fashioning an equitable remedy necessitated by a mutual mistake of fact as to the title, it orders a refund of that commission in order to return all parties to the status quo.
I disagree with the majority’s conclusion that Apple Ridge was not a party to the contract. Indeed, the contract was signed by an agent for Apple Ridge and the broker undertook by its signature to perform three affirmative duties in order to complete the transaction, namely: To serve as the stakeholder for and to distribute the purchasers’ downpayment; to designate the time and place of closing; and to accept notice of title defects. While Apple Ridge assumed no duties with reference to rectifying any defects in the title, its status in structuring and completing the transaction clearly appears from the contract, as does its right to compensation therefor. Hence, I view the trial court’s decision to order a refund of the benefits of this contract as equitable and eminently correct.
It is true that neither sellers nor Apple Ridge filed any cross-claims against each other. The trial court noted this and stated:
“The Court therefore feels that in order to put the parties back in the position they were in before this occurred as closely as can be done, that what should happen is that the commission should be returned, and I am not quite sure how the judgment should read on this. The commission should in effect be returned to the people who paid the commission and then by them turned over to the plaintiffs, and the balance of the $14,299.96 which was paid less the $1,154.84, which is properly chargeable to the plaintiffs, should be turned over to the plaintiffs. That’s a round-about way of doing things, and no claims or cross-claims were made between the defendants, and so the Court exercising its equitable jurisdiction is going to enter money judgments in order to effectuate this equitable remedy . . .”
Thus, I view the trial court’s decision to order a refund of the benefits of the contract as a proper method to “achieve justice.” Ulander v. Allen, 37 Colo.App. 279, 544 P.2d 1001 (1976).
Thus, in my view, the majority’s basis for reversal is improper, and we should address the other seven points of error which Apple Ridge claims would justify reversal.