Demurrers sustained in real estate contract case

Defendant’s demurrer to plaintiff’s suit for specific performance of a contract involving real estate is sustained. The contract cannot be read as giving plaintiff the right to buy the property at any time.

Plaintiff’s other claims against defendant are either not ripe or are based on inapplicable statutes.

Overview

Plaintiff Davis seeks specific performance and other relief based on an “alleged rent-to-own arrangement for the lease and subsequent sale” of residential property that he signed with Randolph Williams at Goose Creek, LLC on Oct. 25, 2018. The contract price was $1,595,000, less credits for payments plaintiff made on defendant’s behalf for the construction and maintenance of the property.

Defendant has demurred to all claims.

Count I

“Defendant demurs to Plaintiff’s request for specific performance in Count I of the Complaint essentially on the ground that Plaintiff’s specific performance claim relies upon allegations that contradict the actual terms of the Sales Contract. Specifically, Defendant argues that the Sales Contract, pursuant to its express terms, is not an option contract but rather a sales contract with a settlement date that is subject to change only if the parties agree.

“Hence, Defendant concludes, Plaintiff ‘cannot be awarded the extraordinary remedy of specific performance when the contract [Plaintiff] seeks to have specifically enforced is different than the contract [Defendant] signed.’

“Plaintiff counters that he is entitled to specific performance of his contract ‘right to exercise an option to purchase the Property.’ That right, Plaintiff continues, is ‘unequivocally acknowledged’ in the Sales Contract. Thus, Plaintiff concludes, the Sales Contract gives him the ‘option to purchase the Property at any time.’ …

“[T]he Sales Contract provides that Plaintiff’s purchase of the Property from Defendant would occur ‘on, or with mutual consent before,’ December 30, 2021, ‘except as otherwise provided in th[e] Contract.’ (Emphasis added.)

“It is clear, therefore, that, absent an agreement by the parties to go to closing prior to that date, the closing is contractually set to occur on December 30, 2021, unless some other provision in the Sales Contract allows for a unilaterally set earlier settlement date. The Court sees no such provision in the Sales Contract.”

Plaintiff points to the phrase “option to purchase” in one of the contract’s provisions. The phrase “appears to simply constitute an acknowledgement by the parties that the settlement date may change if the parties agree to exercise their mutual option to move up the purchase of the Property to a date before December 30, 2021.

“In such an instance, Plaintiff would understandably need to notify the Settlement Agent in advance of the new mutually-agreed-to settlement date to allow the agent to timely prepare for closing.

“Clearly, had the parties actually intended to override the Sales Contract’s provision requiring the parties’ ‘mutual consent’ to change the closing date by allowing a party to do so unilaterally, they would have explicitly provided so in the contract. But they did not.”

The demurrer to Count I is sustained.

Counts II and III

Plaintiff’s unjust enrichment and constructive trust claims are premature because the contract’s closing date has not yet come. “Defendant cannot be found to have retained the benefit of the funds paid by Plaintiff without paying for their value yet. That is to say, based on the factual allegations in the Complaint, Defendant has not been unjustly enriched and Plaintiff has no cognizable unjust enrichment claim against Defendant, as a matter of law.”

The constructive trust claim fails for similar reasons. The closing date has not been changed so “the alleged ‘injustice’ upon which Plaintiff bases his claim has not occurred, as a matter of law.”

The demurrers to Count II and Count III are sustained.

Count IV

“Plaintiff fails to state a claim for breach of contract because the first alleged breach – Defendant’s purported ‘failure to deliver the Property to the Plaintiff in the condition agreed upon by the Parties, by December 1, 2019’ – is premised on a duty that is not contained in the Sales Contract sued upon. Indeed, the Sales Contract does not require that Defendant deliver the Property by December 1, 2019, and instead only requires closing by December 30, 2021. …

“[W]ith regards to any defects in the condition of the Property, the parties agreed on numerous occasions throughout the relevant time period that Plaintiff would advance money to Defendant to cover the costs of repairs, maintenance, and construction work on the Property or would pay those costs himself directly, and that such advances and payments would be credited against the sales price of the Property. …

“[A]ny purported requirement on Defendant’s part to repay those advances and payments prior to closing was waived by Plaintiff. In light of that waiver and the parties’ recurring agreements regarding the repairs, maintenance, and construction work on the Property, it cannot reasonably be said that Defendant’s alleged obligation to deliver the Property by December 1, 2019, is legally enforceable or that Plaintiff has suffered any compensable damages to date as a result of any such purported breach.”

The demurrer to Count IV is sustained.

Remaining counts

“Defendant demurs to Plaintiff’s claim in Count V of the Complaint for breach of the statutory new home warranties primarily on the ground that Plaintiff has failed to state a claim upon which the requested relief can be granted because Code § 55.1-357 and its predecessor provide protection only to vendees and not to tenants, like Plaintiff. …

“Plaintiff was not a ‘vendee’ as that term is used in Code§ 55.1-357, but rather a ‘tenant,’ when he took possession of the Property. … [I]t is clear from the allegations in the Complaint and the attachments to the Complaint that Plaintiff took and has possession of the Property pursuant to the terms of the Lease rather than the Sales Contract. … Plaintiff was exclusively a ‘tenant,’ rather than a ‘vendee,’ at the time he took possession of the Property and remains one to this day. …

“In Count VI of the Complaint, Plaintiff seeks damages in the amount of $750,000, as well as specific performance of the Sales Contract, under Code§ 55.1-3002[.] …

“Defendant demurs … on the ground that Code§ 55.1-3002 does not apply to the Sales Contract because the statute was not effective until October 1, 2019, and has no retroactive application. The Court agrees with Defendant’s position.”

The demurrers to Count V and Count VI are sustained.

Davis v. Randolph Williams at Goose Creek, LLC., Case No. CL 20-2607, Dec. 31, 2020 (Order), 20th Cir. Ct. (Irby). VLW 021-8-005, 22 pp.