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STANWOOD v. WELCH

October 16, 1995

HERBERT A. STANWOOD, III, Plaintiff,
v.
GARLAND J. WELCH, Defendant.


HAROLD H. GREENE, United States District Judge


The opinion of the court was delivered by: GREENE

Plaintiff, Herbert A. Stanwood, III ("Stanwood"), initiated this action against Garland J. Welch ("Welch"), alleging a breach of a May 18, 1994 real estate option contract under which Stanwood had the option to sell a commercial warehouse property to Welch for $ 300,000, provided that he satisfy certain stated conditions. Before the Court is plaintiff's motion for summary judgment.

 There are essentially four issues in dispute between the parties. First, whether there was a legally binding contract between the parties. Second, if there was a valid contact, did Plaintiff Stanwood satisfy the conditions precedent to invoking Welch's obligation to purchase the property. Third, if Stanwood did not satisfy the conditions precedent, was he excused from such by defendant's alleged anticipatory repudiation of the contract. Finally, whether, and in what amount, damages should be awarded.

 For the reasons set out below, the Court denies plaintiff's motion for summary judgment.

 I

 Background1

 From the late 1970's until mid-1993, Plaintiff Stanwood managed a family-owned business operating under the corporate name of Capitol Hill Service Center, Inc. ("CHSCI"). CHSCI operated a gas station and owned a commercial warehouse property at 1323 E Street, S.E. (the "Property").

 The CHSCI ownership dispute resulted in a 1993 action in the District of Columbia Superior Court between Stanwood and several members of his wife's family. During the course of the Superior Court litigation, Stanwood received a settlement offer under which he would get title to the Property subject to the existing mortgage.

 As the Superior Court settlement negotiations progressed, Stanwood asked Welch whether he would buy the Property from him for $ 300,000 if he were to obtain title to it. Welch agreed. Stanwood's attorney wrote out an agreement (the "Agreement") setting out the terms of the sale for Stanwood and Welch to sign. The Agreement provided that in consideration of $ 10 paid to Welch, Welch promised to purchase the Property for $ 300,000 if (1) Stanwood tendered a valid deed to the Property within 180 days of the agreement and, (2) at the time of tender the Property was in substantially the same condition as it was on May 17, 1994.

 Stanwood brought two copies of the Agreement to Welch, Welch signed the Agreement, and Stanwood handed Welch a check for $ 10.00 drawn on his personal account at National Capital Bank. The parties dispute whether Welch read the Agreement before signing it. Stanwood claims that Welch did read the Agreement.

 Welch claims that he told Stanwood that he did not have time to read the papers, and that in response Stanwood stated that the papers concerned the potential sale of the building and he should just sign them. Welch claims that when he signed the papers he stated that the sale price would be determined by an appraisal. Welch also claims that he asked Stanwood what the check was for, and when Stanwood stated that it was for signing the Agreement, he unsuccessfully attempted to return the check to Stanwood. At no time has Welch cashed the check. Welch claims that at no time did he believe he was signing a contract for the sale of the building. He claims that he did not think the Agreement was a contract even when he later read it. Welch did, however, apply for a loan with Signet Bank in order to be able to purchase the property.

 Stanwood settled the Superior Court case, and accordingly received title to the Property on July 29, 1994. Stanwood's attorney signed a stipulation of dismissal with prejudice of the Superior Court case, and Stanwood signed a note in the amount of $ 126,000 and a deed of trust that secured the note with the Property.

 The ensuing events are the subject of much dispute. Stanwood claims that he informed Welch that he had obtained title to the Property, and after some failed attempts to meet in person, the two spoke on the phone. Stanwood claims that during this conversation Welch stated that he did not intend to purchase the Property, and did not care if the two had an agreement.

 Welch claims that this conversation never took place. Instead, Welch asserts that Stanwood came to his shop a few days after their first scheduled meeting. Welch claims that during this meeting he told Stanwood that he was still waiting for a response to his loan application, and was not in a position to proceed until the loan was approved.

 Stanwood agrees that this meeting took place, but claims that during the meeting Welch stated that he would not purchase the Property because the Property's roof leaked. Stanwood claims that he offered to reduce the price to $ 290,000 if they could go to settlement right away, and that Welch agreed. Stanwood alleges that he gave Welch an unsigned sales contract embodying these terms, but that Welch never returned a signed copy to him.

 Welch claims that at no point in August did he state that he would not purchase the Property. He asserts that he made no statement about the matter other than to state that he would be ...


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