Court Opinion

ID: 9652487
Source: CourtListenerOpinion
Date Created: 2023-08-23 17:24:42.429865+00
Date Added: 2024-06-11T18:12:51.817919
License: Public Domain

MURRAY, Justice,
dissenting.
I respectfully dissent and do not join my brethren in affirming that portion of the trial justice’s decision insofar as it concludes that time was of the essence to each party’s performance under the December 30, 1986 escrow agreement. The competent evidence of record clearly does not establish an intent on the part of the parties to make July 1, 1987, the absolute definitive date for performance of contractual obligations.
The law in this jurisdiction with respect to stipulations to time in contracts has been settled for over thirty years:
“[Ojrdinarily contract provisions relating to time do not by their mere presence in an agreement make time of the essence thereof so that the breach of the time element will excuse nonperformance by the other party. We recognize, however, that the parties to a contract have the right to make time of the essence thereof. * * * That the parties to a contract intended to make time of the essence [1] may appear by express stipulation therein or it [2] may be found in the nature or purpose of the contract or [3] in the circumstances under which it was made. There must, however, be some evidence from which such intent can be ascertained, and the party contending that time is of the essence of the contract has the burden of proof thereon.” (Emphasis added.) Sal’s Furniture Co. v. Peterson, 86 R.I. 203, 208, 133 A.2d 770, 773 (1957).
Application of the standard enunciated above puts in focus three undisputed facts significant to the disposition of this case. First, there is no express stipulation in either the July 1986 purchase and sales contract or the December 1986 escrow agreement that time was essential to the performance of each party’s obligations. Second, it was Ricci who requested that an escrow closing be held before the year’s end solely to avail himself of the favorable capital-gains tax advantages of 1986. And third, the July 1, 1987 “dropdead” date was inserted into the escrow contract at the December 30 closing only upon the insistence of Eastern’s attorney.
In light of these uncontested facts, it is most logical to deduce that the sole purpose of the July 1, 1987 deadline was to allow Eastern to walk away from the transaction if all the necessary “permissions, licenses, variances or permits have not been received by the buyer by the first day of July 1987.” Upon this view, the trial justice clearly erred in finding that the benefit of the contested contractual provision accrued to both parties.
Having determined that neither the express language nor the purpose of the contract establishes an intent to make time of the essence, an examination of the circumstances in which the escrow agreement was executed is pertinent. The issue in the present case requires an analysis of the evidence to determine the intent and understanding of the parties in drafting the agreement at the time the contract was made. See Safeway System, Inc. v. Manuel Bros., Inc., 102 R.I. 136, 145, 228 A.2d 851, 856 (1967) (citing Sal’s Furniture Co. v. Peterson, 86 R.I. 203, 208, 133 A.2d 770, 773 (1957)). It is apparent from the record that both parties entered into the contract realizing that Ricci had encountered great difficulties in obtaining zoning variances prior to his dealings with Eastern. Equally apparent is the fact that Eastern and Ricci were experienced and sophisticated buyers and sellers of real estate. Yet neither party had communicated directly or through *1276counsel at the December escrow closing or anytime thereafter that performance by July 1, 1987, was an essential element of the escrow contract.
The majority places much emphasis on facts occurring after the contract was executed to conclude that Eastern’s course of conduct was dilatory and against the actions of a ready, willing, and able purchaser. The decision to grant specific performance undoubtedly rests in the sound discretion of the trial justice, and the party seeking this equitable remedy must show that he or she was ready, willing, and able to perform his or her contractual obligations. Jakober v. E.M. Loew’s Capitol Theatre, Inc., 107 R.I. 104, 114, 265 A.2d 429, 435 (1970). Further recognized is the principle that parties to a contract cannot flout a provision relating to time in order to suit their own convenience or profit. Id. The majority’s conclusion, however, overlooks the fact that Eastern clearly had no obligation to close before July 1, 1987, under the plain language of the agreement, until all necessary permits were obtained.
Although we are not endorsing Eastern’s somewhat cavalier attitude toward prompt performance of its contractual duties, the unique circumstances of this case justify a fifteen-hour delay in closing. The record indicates that Eastern had assented to and then canceled two previous closings because (1) the Massachusetts Attorney General’s office had not issued its final approval of the proposed January zoning change and (2) a potential hazardous-waste problem had been detected on the site. Once these legitimate concerns were alleviated, Eastern informed Ricci that it was ready and willing to close during the last week of June, excepting the thirtieth, despite the fact that a building permit application was still pending. Owing to bungled communications caused mainly by a recent move by Glaude, Eastern’s president, the two were unable to meet until July 1, 1987. At this meeting, Ricci refused to close the following day because it would “take away from my vacation time” and because, in his opinion, “the contract was over.”
That Eastern was willing to close on July 2, 1987, just fifteen hours after the “closing deadline,” was reasonable in the circumstances of the instant case. There is no evidence of bad-faith delay by Eastern. There is no evidence that Ricci suffered or would have suffered any serious detriment because of a fifteen-hour delay in closing. Moreover, Ricci candidly admitted that he knew the property was “worth a lot more” than the agreed price with the newly acquired zoning change and therefore only stood to gain from termination of the contract.
Relying primarily on Ricci’s testimony and ignoring key undisputed facts, the majority, in upholding the denial of Eastern’s request for specific performance, airbrushes the analysis set forth in Sal’s Furniture Co., supra, and instead chooses to emphasize, perhaps too heavily, Eastern’s po-stcontractual conduct.
For the reasons delineated, I am unable to join with the majority of the court in concluding that time was of the essence to the Ricci-Eastern agreement.