White v. Russell

1

TREVOR WHITE, Plaintiff, v. TERESA RUSSELL, and CHARLES GRISDALE, Defendants

C. A. No. 2020-0462-SEM

Court of Chancery of Delaware

May 2, 2023

Submitted: January 5, 2023

Catherine M. Cramer, Brian V. DeMott, and J. Garrett Miller BAIRD, MANDALAS, BROCKSTEDT, FEDERICO &CARDEA, LLC Wilmington, Delaware; Counsel for Plaintiff.

Shane C. Herberling, PARKOWSKI, GUERKE, &SWAYZE, P.A., Rehoboth Beach, Delaware; Counsel for Defendants.

MOLINA, M.

Pending before me are the parties' cross-motions for summary judgment. The parties present three successive questions: (1) is the real estate contract enforceable, if so, (2) did the defendants breach it, if so, (3) is the plaintiff entitled to specific performance. I find the answer to all three questions should be "yes" and recommend the Court grant specific performance.

This is my final report.

I. BACKGROUND^[1]

The property at issue is located at 34826 North Road in Rehoboth Beach, Delaware (the "Property"). It is a corner lot within Midway Park, improved by a manufactured home, with an attached garage and a detached shed.^[2] Charles Grisdale ("Grisdale") and Teresa Russell ("Russell" and collectively with Grisdale, the "Sellers") own the Property as joint tenants with the right of survivorship.^[3] But Trevor White (the "Buyer," together with the Sellers, the "Parties") contends he has an enforceable contract to purchase the Property. I start with the Sellers' historical ownership of the Property and work my way forward to the matter at hand.

A. The Sellers' Ownership

Grisdale purchased the Property with his wife in the 1980s.^[4] But it was never their primary residence; Grisdale and his wife would split their time between their Florida home and the Property.^[5] For Grisdale, specifically, he retired approximately eighteen (18) years ago and for the last fifteen (15) years has resided in Florida and traveled north for the summer months.^[6] In 2005, after his wife passed, Grisdale added Russell, his daughter, to the deed for the Property.^[7] Like her father, Russell does not reside fulltime in the Property; she lives in Boyertown, Pennsylvania.^[8] But Grisdale would visit Russell during the weekends at her home or their shared home in the Pocono area while he was up north.^[9]

Grisdale's ability to travel back and forth between Florida and Delaware/Pennsylvania changed in 2019. His significant other in Florida was ill and he devoted considerable time to her and her care.^[10] This kept him from traveling as he normally would and he began to consider selling the Property.^[11]

B. The Buyer Enters the Scene

The Buyer was looking to purchase a property near Rehoboth Beach. He already owned property at 6869 Marshall Street in Milford, Delaware, but he worked for the Delaware State Police in Lewes and was looking to buy property in a more convenient location.^[12] The Buyer was familiar with Midway Park and liked the area.^[13] And he was particularly interested in the Property, because it was a corner lot and has a porch and a garage.^[14]

Neither the Buyer nor Grisdale can recall precisely how their discussions began.^[15] Both agree, though, that sometime in 2019 they became connected and started talking through texts and calls.^[16] Their discussions were initially productive, but they were sidelined in May of 2019 when Grisdale's significant other suffered a major stroke.^[17] Grisdale shared the news but assured the Buyer: "the house is still yours it's just going to have to be a while now it looks like before I can get up there."^[18] Grisdale made the same assurances in June, emphasizing: "I can tell you I will never do nothing with the house until I can come up and get everything settled with you."^[19]

The Buyer was patient while Grisdale dealt with his partner's illness. And, despite the stress in Grisdale's life, Grisdale continued to communicate his interest in selling the Property to the Buyer. He noted only one hesitation, based on a discussion with his accountant: "I talk[ed] to my accountant about selling a house he's now telling me if I sell the house now I got a pay [sic] probably $30,000 in . . . capital [gains] but I'm still gonna sell the house."^[20]

These guarantees picked up steam as 2019 ended and 2020 began. Around that time, Russell entered the negotiations as Grisdale's power of attorney and coowner of the Property.^[21] Grisdale confirmed he would be in "Delaware Pennsylvania" in early January 2020 for about a week so the Parties could "get together and make things happen."^[22] They did. While Grisdale was in the area, the Parties went to the Property, packed up some items for Grisdale, and left some items in the Property for the Buyer's future use and enjoyment.^[23]

During that visit, the Buyer also accompanied the Sellers to the Delaware Department of Motor Vehicles (the "DMV") to work on transferring title for the manufactured home on the Property.^[24] At the DMV, Grisdale executed a limited power of attorney in the Buyer's favor giving him authority to sign all documents as may be necessary to transfer ownership of the manufactured home.^[25] Russell explained "even though it's a double wide modular, apparently when there was a single trailer on the [P]roperty, there was a title confusion or something that needed to change[.]"^[26] With the authority granted to him under the limited power of attorney, the Buyer retired the mobile home's title.^[27] Sussex County then reassessed the manufactured home on the Property as a "'C' grade home," declaring it was "no longer priced as a mobile home," and "for purposes of titling," would be "considered real estate."^[28] During that January 2020 visit, the Parties also went to the Sussex County Assessment Division so that Grisdale could obtain a tax release.^[29] The tax release verified that, as of January 9, 2020, no outstanding taxes were due on the Property.^[30]With this paperwork in order, the Parties finally turned to memorializing the sale.

C. The Agreement

The Buyer took the lead, hiring the law office of May &Perza, P.A. (the "Firm") to draft an agreement of sale.^[31] The Firm did so and circulated a proposed agreement on January 17, 2020, which provided that the Sellers would sell the Property to the Buyer for $165,000.00, with closing to occur on or before March 31, 2020 (the "Agreement").^[32] The Agreement further required a "[d]eposit of $500 to be paid by the [Buyer], to be held by settlement attorney . . . until settlement."^[33] The Agreement further specified that it was "not binding until signed by and delivered to all parties" (the "Acceptance Clause").^[34] The Acceptance Clause further provides:

"[w]hen accepted by all parties, this Agreement becomes a legal and binding document."^[35] The Agreement also had default provisions which provided:

Purchaser's Default. If Purchaser shall, for some reason not excused hereunder, fail or refuse to perform his obligations to Seller, and Seller shall not also be in default, all monies paid hereunder by Purchaser on account of the purchase price shall be retained by Seller as liquidated damages, whereupon, all rights and obligations hereunder shall cease and determine.^[36]

Seller's Default. If Seller shall, for some reason not excused hereunder, fail or refuse to perform his obligations to Purchaser, and Purchaser shall not also be in default, Purchaser shall either have all monies paid hereunder on account of the Purchase Price, together with such reasonable costs incurred in preparation for settlement (survey, inspections, appraisal, title search, and loan application fees), refunded forthwith.^[37]

The Agreement provided it "shall be construed under and governed by the laws of the State of Delaware."^[38]

The Buyer emailed the Agreement to the Sellers who then signed the Agreement and delivered their signed copy to the Buyer on February 3, 2020.^[39]Russell, as Grisdale's power of attorney, signed on the Sellers' behalf; Grisdale confirmed he directed Russell to do so.^[40] The Buyer then signed and forwarded the Agreement, fully executed, to the Firm on February 6, 2020.^[41]

After the Agreement was fully executed, the Parties worked toward closing. On or about February 19, 2020, Russell asked the Buyer if he had "any updates."^[42]The Buyer responded that once an appraisal was completed, "the settlement should be 3/31/2020 or before," to which Russell responded "Ok. Thanks."^[43] One day later, on February 20, 2020, the Firm emailed the Sellers congratulating them on the sale and including additional instructions to prepare for closing.^[44] Four (4) days later, the Buyer sent the $500 deposit to the Firm to be held in escrow until closing.^[45] The Property was then appraised and valued, as of February 27, 2020, at $165,000.00, matching the purchase price.^[46] Continuing to move the transaction forward, on March 12, 2020, Russell submitted various forms requested by the Firm.^[47] One week later, she emailed the Firm, providing a revised tax form and asking the Firm's paralegal to "[p]lease advise on next steps."^[48] On his end, the Buyer completed all the requirements of his lender.^[49]

D. The Deal Falls Through

On March 22, 2020, three (3) days after Russell provided the revised tax form and asked for an update, she told the Buyer the Sellers were withdrawing their offer to sell the Property.^[50] The conversation was audio recorded and, in pertinent part, went as follows:

[Russell]: I can make this very quick. And, I am sorry to make this call. My father has decided that he is not going to proceed with the sale of that house. It has less to do with anything that has been discussed over the last few days and more to do with what's happening in his life. He is going to be moving back north effective tomorrow or next

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