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Steven D. Johnson v. Harrell L. Sellers and

May 25, 2011

STEVEN D. JOHNSON,
PLAINTIFF AND APPELLEE,
v.
HARRELL L. SELLERS AND
DEFENDANT AND APPELLANT, SANDRA L. GREEN,
HUSBAND AND WIFE,
DEFENDANT.



APPEAL FROM THE CIRCUIT COURT OF THE THIRD JUDICIAL CIRCUIT BROOKINGS COUNTY, SOUTH DAKOTA HONORABLE DAVID R. GIENAPP Judge

The opinion of the court was delivered by: Zinter, Justice

CONSIDERED ON BRIEFS

ON MARCH 21, 2011

[¶1.] Steven Johnson sued Harrell Sellers for specific performance of a written agreement to purchase real estate. Sellers refused to sell after the transaction was unable to be closed on the agreed date. On cross motions for summary judgment, the circuit court ordered specific performance. The court ruled that Sellers waived the right to insist on the initial closing date and that fulfillment of the contract was possible. We affirm.

Facts and Procedural History

[¶2.] Johnson entered into a written agreement to purchase real estate from Sellers. The thirty-four acre parcel included a residence and farmland. The purchase agreement, which was prepared by Johnson's attorney, incorrectly indicated that Sellers was a single person.*fn1 Sellers was married at the time but was in the process of obtaining a divorce from Sandra Green. Green and Sellers lived in the residence during their marriage. Green moved out in October 2008, and Sellers started the divorce in January 2009.

[¶3.] The May 21, 2009, purchase agreement specified a closing date of June 15, 2009. An initial title insurance commitment was prepared on May 22. The title commitment disclosed that Sellers was married and that Green's name was not on the title. Johnson's attorney mailed a copy of the title commitment and a letter to both parties on June 3. The letter again incorrectly stated that Sellers was single.

[¶4.] Some time after signing the purchase agreement, Sellers told his attorney about the agreement. Because of Green's potential homestead rights*fn2 and the pending divorce,*fn3 Sellers's attorney told him that he could not sell the property without Green's permission. On June 4, Green's attorney indicated that Green would not authorize the sale. On June 9, Sellers's attorney wrote Green's attorney asking for permission to complete the sale. On June 15, Green's attorney responded that Green had not yet made a decision whether to allow the sale. On June 19, Green's attorney indicated that Green would not consent to the sale for the amount specified in the purchase agreement. Partly as a result of these difficulties, the closing did not occur on June 15.

[¶5.] There were also difficulties in closing because of Sellers's inability to move his personal property from the real estate. Johnson indicated in his deposition that "a few days" before the closing "Harrell [Sellers] had expressed that he wouldn't be able to have all of his stuff moved by [the June 15 closing]." In his affidavit supporting summary judgment, Johnson explained that "[o]n or about June 10, 2009, Sellers told me that he wouldn't be ready to close by the 15, due to a pending auction sale, scheduled for June 27, 2009." Johnson responded "that, if [Sellers] needed more time, that was no problem." From June 10 through June 27, Johnson helped Sellers prepare Sellers's personal property for the auction. Sellers admitted in his deposition that he "asked for a continuance" of the June 15 closing. Sellers indicated that he "needed several months to clear out."

[¶6.] During this same period of time, Sellers was clearing the title problems caused by the pending divorce. On June 25, Sellers signed a stipulation and agreement in the divorce proceeding to vest all Green's rights in the real estate in Sellers. On July 22, Green signed the stipulation. Notwithstanding this resolution of the problems holding up the closing and notwithstanding Sellers's oral request to extend the closing, Sellers sent a letter to Johnson on July 24 "rescinding" the purchase agreement. Sellers stated that the property was no longer for sale "due to aspects of [his] divorce."

[¶7.] On July 31, Johnson filed a notice of lis pendens. On August 4, the divorce court entered a judgment and decree of divorce awarding all interest in the property to Sellers. On August 5, Johnson filed this suit for specific performance of the agreement. Sellers was served on August 13.

[¶8.] On August 14, Sellers's attorney sent a letter to Johnson indicating that Sellers then agreed to perform the agreement. The letter stated that "Mr. Sellers agrees that the real property will be sold to Mr. Johnson." A new closing date of September 16 was suggested.*fn4 But on August 21, Sellers's attorney sent another letter stating that he was no longer representing Sellers. This letter indicated that Sellers then intended "to contest and defend himself in the lawsuit for specific performance."

[ΒΆ9.] Following the filing of cross motions for summary judgment, the circuit court ruled that Sellers continued the date for closing without objection from Johnson. The court further ruled that the entry of the judgment and decree of divorce resolved any title problems. Because performance of the agreement was then possible, the court rejected Sellers's impossibility of contract defense. The court awarded specific performance, noting that specific performance ...


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