Court Opinion

ID: 5156507
Source: CourtListenerOpinion
Date Created: 2022-01-02 02:22:36.630115+00
Date Added: 2024-06-11T13:54:47.052978
License: Public Domain

¶ 41 I reluctantly dissent. In my view, the plain language of the Contract provides that the election of remedies clause applies when a party is in default under the contract. Blockbuster was in default under the terms of the Contract when it failed to pay amounts due as required by the parties' agreements. Because Blockbuster was in default, the Selvigs were required to return Blockbuster's earnest money before bringing a suit for breach of contract. I would conclude that the district court correctly determined that by failing to return the earnest money, the Selvigs elected their remedy, and thus, the breach of contract claim was properly dismissed.
 ¶ 42 According to the majority, it is clear from the language of the contract that the election of remedies provision "does not apply to a default arising out of a wrongful recording of the deed."1
The majority's analysis proceeds under the assumption that wrongful recordation is a default under the express terms of the Contract.2 I disagree. Nothing in the Contract requires that the deed be placed in escrow or that recordation must take place at closing.3
 ¶ 43 My review of the record indicates that there are three relevant events that could govern the rights and obligations of the parties in this case: (1) the signing of the Contract, (2) the signing of the Lease *Page 15 
to Purchase Agreement (LPA), and (3) a subsequent oral exchange between Blockbuster and the Selvigs. The first event is the signing of the Contact, a standard real estate purchase agreement entered into by the parties to govern the sale of the Inn. This Contract outlined the purchase price, payments due, and provided that closing would occur on or before September 30, 2005. The second event is the signing of the LPA. The parties entered this agreement on September 20, 2005, because closing was approaching and Blockbuster had failed to make payments as required under the terms of the Contract. This agreement modified the terms of the Contract and gave Blockbuster an additional year to satisfy its obligations under the original agreement. The third event concerns an oral exchange between the parties. After the parties signed the LPA, Blockbuster produced a warranty deed for the Property and asked the Selvigs to sign it. In exchange for the Selvigs' signature, Blockbuster orally promised that it would not file the deed until closing. This promise was not written into the LPA or incorporated into the Contract, and it may or may not be enforceable.
 ¶ 44 Analyzing the Selvigs' claims in light of these events, I would hold that the district court appropriately concluded that the Contract and the LPA form one governing agreement, and that under that agreement, the election of remedies clause applies to bar the Selvigs' breach of contract claim. In their complaint, the Selvigs brought three causes of action against Blockbuster: breach of contract, breach of the implied covenant of good faith and fair dealing, and unjust enrichment. The breach of contract action was based on the Contract and the LPA. The Selvigs alleged that under these agreements, Blockbuster "was obligated to pay off the balances on both mortgages by September 1, 2006," but failed to do so "as required by the agreement." In other words, the Selvigs sued Blockbuster for its default — or failure to pay the amounts due under the terms of the Contract and the LPA.
 ¶ 45 Blockbuster's failure to pay the amounts due as required under the Contract and the LPA is governed by the express provisions of the Contract and is properly characterized as a breach of contract claim. But in order to pursue this breach of contract claim, the Selvigs had to follow the procedures outlined in the written contract between the parties.4 And the parties were bound by the *Page 16 
consequences and remedies contained in the written agreements — including the election of remedies clause. This provision of the contract provides as follows:
 If Buyer defaults, Seller may elect to either retain the Earnest Money Deposit as liquidated damages or to return the Earnest Money Deposit and sue Buyer to enforce Seller's rights. . . . Where a Section of this Contract provides a specific remedy, the parties intend that the remedy shall be exclusive regardless of rights which might otherwise be available under common law.5
Under the plain language of the contract, the election of remedies clause applies when a buyer "defaults."6 Although the term "defaults" is not expressly defined in the agreement, in the real estate purchase context, the term "defaults" at the very least, and in its most traditional sense, applies to a party's failure to pay amounts due under the agreement.7 This is exactly what was alleged in the Selvigs' complaint. Because the Selvigs were alleging that Blockbuster was in default under the agreement, the Selvigs were bound by the election of remedies clause contained in the contract. Under *Page 17 
this clause, the Selvigs had a choice — they could either retain the earnest money, or return the earnest money and sue to enforce their rights under the contract. By keeping the earnest money, the Selvigs elected their remedy and foreclosed their claim for breach of contract.8
 ¶ 46 But instead of focusing on Blockbuster's default as the failure to pay amounts due under the Contract and the LPA, the majority chooses to focus instead on facts not governed by the written agreements. Specifically, the majority hangs its hat on the oral exchange between Blockbuster and the Selvigs — that if the Selvigs would sign the warranty deed to the Property, Blockbuster "would not file the deed until closing."9 Although Blockbuster's decision to prematurely record the deed was unquestionably improper, and likely forms the basis of some other noncontractual cause of action, the wrongful recordation does not give rise to a breach of contract claim under any express term of the Contract or the LPA.
 ¶ 47 Because I conclude that the election of remedies clause unambiguously applies to Blockbuster's default under the terms of the written contracts, I would affirm this aspect of the district court's decision. However, to the extent the Selvigs may have some noncontractual, timely cause of action arising out of the wrongful recordation of the deed, I would not foreclose the Selvigs from pursuing it.
1 See supra ¶ 28.
2 See id. ¶ 26.
3 See id. ¶ 25. The provision of the standard real estate purchasing agreement governing closing states, "This transaction shall be closed on or before 9/30/05. Closing shall occur when . . . Buyer and Seller have signed and delivered to each other
(or to the escrow/title company), all documents required by this Contract . . . and the deed which the Seller has agreed to deliver . . . has been recorded." (emphasis added).
4 See, e.g., Soter v. Snyder, 277 P.2d 966, 968 (Utah 1954) ("The question depends for its answer upon the law of election of remedies. Where two inconsistent remedies, proceeding upon irreconcilable claims of right, are open to a suitor, the choice of one bars the other." (internal quotation marks omitted)).
5 See supra ¶ 23 (emphasis added).
6 See id. ¶ 24.
7 See, e.g., Mgmt. Servs. Corp. v. Dev. Assocs.,617 P.2d 406, 408 (Utah 1980) (discussing the relevant "default" under the election of remedies provision of a standard real estate purchase contract as the party's failure to pay purchase price when due); see also Mahmood v. Ross,1999 UT 104, ¶ 11, 990 P.2d 933 (describing default as failure to pay amounts due under an agreement); Timm v. Dewsnup,851 P.2d 1178, 1179 (Utah 1993) (describing a "default" under a real estate purchase agreement as the failure to pay the price due under the contract); Imlay v. Gubler, 298 P. 383, 384-86 (Utah 1931) (describing a party's default under a standard real estate purchase contract as failure to pay amounts when due).
8 See, e.g, McKeon v. Crump,2002 UT App 258, ¶¶ 8-10, 53 P.3d 494 (noting that under the election of remedies clause contained in a standard real estate purchase contract, seller had a duty to release her interest in the earnest money deposit to the buyer before filing suit for damages);Palmer v. Hayes, 892 P.2d 1059, 1061-62 (Utah Ct. App. 1995) (noting sellers had "an affirmative duty to release their interest in the deposit money to the [buyers] before they filed their suit for damages").
9 See supra ¶ 10. *Page 1