TODD J. PHILLIPS, in his capacity as Trustee of Trust "A" of the Elliott Family Testamentary Trust, Plaintiff-Appellant,
RICHARD D. GOMEZ, Defendant-Respondent.
Opinion No. 113
from the District Court of the Fourth Judicial District,
State of Idaho, Ada County. Hon. Deborah A. Bail, District
court denial of request to recover actual damages, affirmed.
Nicholas Law Offices, Boise, for appellant. Charles J.
Law Office, PLLC, Meridian, for respondent. Steven Fisher
BURDICK, Chief Justice.
case arises from Richard Gomez's breach of a real estate
agreement for the sale and purchase of residential real
estate from Todd Phillips in his capacity as Trustee of Trust
"A" of the Elliott Family Trust. Phillips appeals
the Ada County district court's denial of Phillips's
request to recover actual damages. After a bench trial, the
district court held that Phillips's claim for breach of
contract had been fully satisfied by Phillips's retention
of the non-refundable earnest money as liquidated damages as
provided by the agreement. We affirm.
FACTUAL AND PROCEDURAL BACKGROUND
Phillips, Appellant, is the trustee of Trust "A" of
the Elliott Family Trust ("Trust"). In the spring
of 2008, Phillips listed the Trust's real property
(located at 1372 W. Wickshire Ct., Eagle, Idaho) for sale
with a real estate agency. In the fall of 2008, Richard
Gomez, Respondent, submitted several offers to purchase the
property. The second offer, with amendments, was accepted on
October 30, 2008.
agreement was set forth in several documents,  the first being
the RE-21 Real Estate Purchase and Sale Agreement
("RE-21"), which provided for the deal to be as
follows: The sale of the described real property was to be
for $660, 000. With $66, 000 earnest money to be deposited
into the listing broker's trust account to be applied to
the purchase price at closing, or, in the event Gomez could
not close, Phillips would have the option of accepting the
earnest money as liquidated damages, which would be
Phillips's sole and exclusive remedy, or
pursuing any other legal right or remedy.
remaining documents in the agreement were amendments to
RE-21. The amendments provided that the earnest money deposit
of $66, 000 was to be non-refundable following the inspection
of the property and Gomez's attorney's review and
acceptance of the contract documents. Gomez was to take
possession of the house promptly after the deal was accepted
under the terms of a Residential Lease, but the sale was not
required to close until December 15, 2009, about a year after
Gomez took possession.
the agreement was accepted by both parties, Gomez paid the
$66, 000 non-refundable earnest money into the broker's
trust account, and Gomez moved into the property under the
Residential Lease provisions. The entire $66, 000 was
released from the broker's trust account and paid to
Phillips, with a portion ($3, 960) going to the real estate
agent's commission, and the balance ($62, 040) going to
Phillips. The release of the earnest money was without
December 1, 2009, Gomez advised Phillips that he would not be
able to close on time, and the parties began negotiating.
Those negotiations resulted in Addendum #2 under which
Phillips agreed to carry a $100, 000 note from Gomez, with
closing still set for December 15, 2009. On the day of
closing, Gomez emailed Phillips explaining that due to the
"drop in the value of the home, the real estate market
and the lending crunch" he was unable to close on the
loan for the property in time.
January 2010, an agreement was reached for Gomez to remain in
possession of the property under a month-to-month rental
agreement. Gomez remained in possession until approximately
May 31, 2010, thirty days after Gomez gave written notice to
Phillips that he would be vacating the property. Gomez
vacated the premises in a timely manner without incident.
February 4, 2010, Phillips sent Gomez a letter demanding that
Gomez perform under RE-21 or Phillips would pursue a claim
against Gomez for any deficiency after the house re-sold.
Gomez did not respond. Phillips relisted the property for
sale in the spring of 2010. An appraisal was obtained
indicating the value of the property in the spring of 2010 to
be $540, 000. In June 2010, Phillips received and accepted an
offer to sell the property to an unrelated third party for
$530, 000. The sale closed on June 21, 2010, with a purchase
price of $527, 500.
August 13, 2012, Phillips sent Gomez another letter demanding
payment for the lost "benefit of the bargain"
damages sustained as a result of Gomez's failure to
purchase the property as agreed. Phillips sought the
difference between the proceeds of the sale ($527, 500) and
the price agreed upon by Gomez ($660, 000), less the earnest
money received ($62, 040- $66, 000 minus the $3, 960
commission), for a total damage claim of $70, 460 plus
interest. Gomez did not respond and did not pay any of the
amounts claimed in the demand.
November 6, 2013, Phillips filed his complaint against Gomez
for breach of contract. Phillips claimed damages in the
amount of $60, 143.66 after giving Gomez credit for the $66,
000 earnest money. The case was tried as a bench trial on
September 1, 2015. On September 23, 2015, the district court
entered its judgment in favor of Gomez and against Phillips.
September 6, 2016, this Court entered its order dismissing
the appeal without prejudice because this Court did not
timely receive a copy of a final judgment that conformed with
Idaho Rule of Civil Procedure 54(a). On October 6, 2016, this
Court dismissed Docket #43678 without prejudice because the
conforming judgment was not timely entered. On October 7,
2016, Phillips filed his second notice of appeal, which
initiated the instant appeal, and, pursuant to this
Court's November 9, 2016, order augmenting the prior
appeal, this matter came before the Court.
ISSUES ON APPEAL
Phillips pre-elect the earnest money as liquidated damages
when the parties contracted to make the earnest money
non-refundable and immediately transferrable to
Phillips's account without restrictions?
the language in the agreement give Phillips the option of
accepting the non-refundable earnest money and
pursuing actual damages?
either party entitled to attorney fees on appeal?
STANDARD OF REVIEW
Court exercises free review over the district court's
conclusions of law." Opportunity, LLC v.
Ossewarde, 136 Idaho 602, 605, 38 P.3d 1258, 1261 (2002)
(citing J.R. Simplot Co. v. W. Heritage Ins.
Co., 132 Idaho 582, 584, 977 P.2d 196, 198 (1999)).
"The standard of review of a non-jury trial court's
findings of fact is set forth in Idaho Rule of Civil
Procedure 52(a)." Id. (citing I.R.C.P. 52(a)).
Idaho Rule of Civil Procedure 52(a) provides in pertinent
In all actions tried upon the facts without a jury . . . the
court shall find the facts specifically and state separately
its conclusions of law thereon and direct the entry of the
appropriate judgment. Findings of fact shall not be set aside
unless clearly erroneous. In application of this principle
regard shall be given to the special opportunity of ...