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COHEN v. LOVITZ

June 9, 1966

William COHEN et al., Plaintiffs,
v.
Marion LOVITZ et al., Defendants



The opinion of the court was delivered by: HOLTZOFF

 The question presented in this case relates to contracts for the sale of real property. The problem is whether a vendee may recover damages for delay in addition to being awarded specific performance, if the vendor declines to convey the property; and, if so, what is the measure of damages for the delay. This subject is of novel impression in this jurisdiction.

 The matter comes before this Court on cross-motions for summary judgment on a demand for damages for delay asserted by the vendee, in a counterclaim in which he asked both specific performance and damages. Specific performance was awarded. The claim for damages was severed for later consideration and is now to be determined.

 The salient facts may be briefly summarized as follows. On August 31, 1962, Parkwood, Inc., the owner of a triangular parcel of land located at the junction of 14th Street and Vermont Avenue, in Washington, D.C., entered into a contract with one Norton Butler to sell it to him for $1,000,000. Parkwood then conveyed it to the plaintiffs William Cohen and Charles Cohen, subject to Butler's rights under his contract of sale. Butler assigned his rights under the contract to the defendant Marion Lovitz.

 The plaintiffs alleged that the defendant had committed an anticipatory breach, because of certain statements made by him, and on November 7, 1962 brought the present action for a declaratory judgment to adjudicate that the contract was cancelled and void. The time for the performance of the contract of sale arrived on December 4, 1962. The vendee was ready, willing and able to perform, but the vendor defaulted. The defendant vendee interposed a counterclaim to the plaintiffs' complaint praying for specific performance and for damages for delay. The matter came before Judge McGarraghy of this Court on the defendant's motion for summary judgment. The Court dismissed the complaint and granted judgment on the counterclaim for specific performance of the contract, severing and reserving the issue of damages for a later trial. It was held that the vendors' "failure and refusal to perform was without legal justification or excuse". A decree in accordance with these rulings was entered on December 13, 1963. An appeal was taken and the decision of the District Court was eventually affirmed on December 14, 1964. Accordingly, on February 5, 1965, the property was conveyed pursuant to the decree - over two years subsequently to the date on which the contract should have been performed.

 The first question to be determined is whether the vendee is entitled both to specific performance and damages for delay, if the vendor refuses to convey the property in breach of the agreement, or whether the vendee in such an event is limited to receiving either specific performance or damages but may not have both. The overwhelming weight of authority is to the effect that the disappointed vendee under such circumstances may be awarded damages for delay in addition to being granted specific performance. This is the law in England. In Jaques v. Millar (1877) L.R. 6 Chancery Div. 153, 159, 160, Fry, J., an eminent authority on this branch of the law, allowed both specific performance and damages for delay. The same rule was applied in Jones v. Gardiner [1902] 1 Chancery Div. 191, 195, where the Court stated that,

 
"* * * where the breach of contract arises, not from inability to make a good title, but refusal to take necessary steps to give the purchaser possession pursuant to the contract further damages may be recovered. * * *"

 In the United States most of the jurisdictions that have passed on this point hold that if the vendor refuses to convey the property, the vendee is entitled to recover damages for delay in addition to receiving specific performance. This doctrine has been approved and applied in New York, Schoen v. Grossman, 33 Misc. 2d 490, 230 N.Y.S.2d 771, 775, affirmed, 17 A.D.2d 778, 232 N.Y.S.2d 871; in Michigan, Reinink v. Van Loozenoord, 370 Mich. 121, 121 N.W.2d 689; in Oregon, Crahane v. Swan, 212 Ore. 143, 318 P.2d 942; in Virginia, Nagle v. Newton, 22 Gratt. 814, 821; in South Carolina, Butler v. Schilletter, 230 S.C. 552, 96 S.E.2d 661; and in Mississippi, McVay v. Castanera, 156 Miss. 785, 126 So. 832, as well as in some other States.

 Illinois seems to be the lone dissenter. In Schiavone v. Ashton, 269 Ill.App. 386, the Court in granting specific performance in favor of the purchaser, rejected his claim for damages based on depreciation of the property during the period of delay. It was held that the purchaser may not have both specific performance and damages.

 Story in his Commentaries on Equity Jurisprudence P1085, recognizes that damages for delay may be awarded to a vendee in addition to a decree of specific performance. He said:

 
Wherever compensation or damages are incidental to other relief, as for instance, where a specific performance is decreed upon the application of either party, with an allowance to be made for any deficiency as to the quantity, quality, or description of the property, or for any delay in performing the contract, there it seems clear that the jurisdiction properly attaches in equity, for it flows and is inseparable from the proper relief.

 This doctrine is likewise approved in Fry's Treatise on Specific Performance of Contracts, 2d Ed., ยงยง 1265-1274.

 A more difficult hurdle for the plaintiff to surmount is the measure of damages. Reverting to a summary of the plaintiff's claim, the sale price of the property was $1,000,000. It is contended that at the time of the conveyance its fair market value was $1,445,000. In other words, it was worth much more than the amount that the plaintiffs were paying for it. As a result of the delay in performance, however, the plaintiffs had to forego an opportunity to re-sell the property for $1,800,000 for which they had a ...


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