- Understand your client’s unique circumstances and communicate about the importance of contingencies and impending deadlines throughout the transaction process.
- Avoid the unauthorized practice of law by exercising caution when interpreting and/or amending contractual provisions, and recommend legal counsel to ensure your client’s interests are protected.
- Always act in good faith, and cooperate with the other party to avoid unnecessarily discouraging or hindering the agreement’s completion.
On April 6, 2023, the Supreme Court of Wyoming ordered two homeowners to sell their home, overturning a lower court’s decision only awarding monetary damages to aggrieved buyers after sellers breached a signed purchase agreement. The court found the monetary award essentially “rewrote the contract” allowing the homeowners to avoid contractual performance after their desired home became unavailable.
In July of 2021, Christopher and Rachel Robison (“Sellers”) listed their Daniel, Wyoming property for sale after becoming interested in a nearby vacant lot for their “forever home.” Shortly after, Virgil and Vickie Morningstar (“Buyers”) made a formal written offer to Sellers that included additional provisions specifically allowing Buyers to enforce the agreement and proceed to closing in the event Sellers defaulted on the agreement. After brief negotiations, the parties agreed to terms, and Buyers deposited $10,000 in earnest money. Closing was set for August 27, 2021.
In early August of 2021, Sellers informed Buyers that the vacant lot the Sellers planned to purchase was no longer available, therefore they intended to cancel the transaction with Buyers. In response, Buyers refused to cancel, stating they intended to close the transaction. Sellers responded by indicating a continued intention to cancel the agreement, claiming their own real estate agent failed to insert a home-of-choice contingency into the contract. The Buyers again rejected the Sellers attempts and insisted on closing the transaction, eventually arriving at the closing table with financing in place. The Sellers failed to appear.
Buyers subsequently brought suit, claiming Sellers’ breach entitled them to a specific performance remedy and other damages including attorneys’ fees. Specific performance is an equitable remedy which compels a party’s performance under the contract. In Wyoming, typically a party requesting specific performance must establish that monetary damages are an inadequate and impractical remedy before specific performance may be awarded. However, in disputes where a buyer of real estate is seeking specific performance, precedential decisions in Wyoming have presumed monetary damages are inadequate with no further inquiry.
Sellers did not dispute the factual allegations in Buyers’ complaint, but Sellers did argue the purchase agreement was invalid and unenforceable due to their own agent’s alleged mistakes and misrepresentations regarding the home-of-choice contingency. Prior to trial, Buyers moved for summary judgment, claiming the facts combined with the agreement’s language entitled them to force Sellers to close the transaction. The district court agreed with Buyers in ruling that the purchase agreement was binding and enforceable despite the Seller agent’s alleged errors, but the court determined more evidence was needed to establish whether circumstances entitled Buyers to a specific performance remedy.
The Sublette County District Court conducted a bench trial focused on the potential specific performance remedy and ultimately denied Buyers’ request, instead awarding $6,128 in compensatory damages for Sellers’ breach. The district court found a forced sale would impose a financial and practical hardship on Sellers that would outweigh the benefits to Buyers, highlighting factors like potential displacement, loss of equity and other costs and fees. Buyers appealed.
The Supreme Court of Wyoming considered Buyers’ contention that the district court misapplied precedent involving property purchase disputes and the denial of the specific performance remedy. The court overturned, finding the district court misapplied precedent involving agreements for real estate transfers and abused its discretion in awarding monetary damages. The inadequacy of monetary damages should have been presumed based on precedent involving a property sale, and the facts underlying the analysis of relative hardship should have revealed specific performance as the proper remedy.
In its opinion, the supreme court stated the district court should have required the parties to abide by the contract’s clear provisions, and by awarding monetary damages, the district court “essentially rewrote the [c]ontract” to allow Sellers to cancel based on the unavailability of their preferred home, a contingency not included in the agreement. The case was remanded back to the district court with instructions to order specific performance and to determine what other damages, if any, should be awarded to Buyers.
Morningstar v. Robison, 527 P.3d 241, 243 (Wyo. 2023), reh'g denied (May 2, 2023).