Monday, July 16, 2007

Appellate Victory - Real Estate Breach of Contract Case

The next post shows the importance of a fee-shifting clause. This time, in the context of a standard real estate sales contract.

Recently we were hired by a local home seller who was frustrated when the couple purchasing his home refused to go to closing. The purchasers contended that they had not received the Home Owners Association Disclosure Documents (“HOA Documents”) to which they were entitled under Maryland Law. After investigating the matter, we learned the purchasers’ real estate agent had previously told the seller’s real estate agent that he had in fact received the HOA Documents.

We demanded that the purchasers go to closing. The purchasers refused. After some time, the seller re-sold his home, but he suffered a loss due to a downturn in the real estate market. He also had incurred carrying-costs during the months that had passed between his original closing date and the date that he sold to the subsequent purchasers. The total of his damages was approximately $20,000.00.

Eventually, the case was tried before a jury in the Circuit Court for Montgomery County, Maryland. The jury found that the purchasers’ real estate agent had received the HOA Documents on behalf of the purchasers, and awarded our client just under $20,000.00 in damages. After trial, we submitted a petition for payment of our attorneys' fees, and the purchasers were found liable for approximately $17,000.00 in legal fees incurred by our client.

The purchasers then appealed the jury’s verdict to the Court of Special Appeals of Maryland. The Court of Special Appeals affirmed the jury verdict, finding that the purchasers had waived most of their appellate arguments, and also finding that a real estate agent’s receipt of documents constituted receipt of those documents by his clients.

Once the case returned to the Circuit Court, we claimed entitlement to reimbursement of our client's attorneys fees incurred during the course of the appeal. The Purchasers settled, paying out an additional $12,000.00 in legal fees. All tolled, our client collected all of his legal fees and all of the damages awarded by the jury. Without the fee-shifting clause, the case may not have been worth litigating.

A copy of the unreported opinion can be viewed as a PDF document here: Click Here for the PDF File

No comments: