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Tauber v. Quan

December 20, 2007

PAUL TAUBER AND PHYLLIS TAUBER, APPELLANTS,
v.
TIN QUAN AND MINTO, INC., APPELLEES.



Appeal from the Superior Court of the District of Columbia (CA 401-03) (Hon. Natalia Combs Greene, Trial Judge).

The opinion of the court was delivered by: Glickman, Associate Judge

Argued January 3, 2006

Before REID, GLICKMAN and FISHER, Associate Judges.

This is an appeal from an award of summary judgment and specific performance in a suit to enforce an agreement to sell commercial real estate. The reluctant sellers, appellants Paul and Phyllis Tauber, argue that the agreement is too indefinite to be enforced. Alternatively, appellants assert that they were entitled to avoid the contract because they signed it by mistake. Appellants further claim that specific performance should have been denied because the purchaser, appellee Tin Quan, had unclean hands, and because the trial court held an evidentiary hearing on that issue without proper notice.

Concluding that appellants' contentions lack merit, we affirm the judgment on appeal.

I.

The commercial property at issue is located at 2412 18th Street, N.W., in the District of Columbia neighborhood of Adams Morgan, and we shall refer to it as the "Adams Morgan property." The owners, Paul and Phyllis Tauber, employed an attorney, Eric Sayles, to manage the Adams Morgan property and to assist them with its sale. Paul Tauber is an experienced real estate investor.

Tin Quan is a restaurateur in Adams Morgan. He hoped to purchase the Adams Morgan property from the Taubers in order to relocate his restaurant there.*fn1 Quan engaged David Crowley of Randall H. Hagner & Co., a real estate brokerage firm, to help him acquire the property.

Quan and Crowley negotiated with Paul Tauber and Sayles over a period of five months, from September 2002 through January 2003. The protracted negotiations culminated in a multi-page standard form Sales Contract dated September 3, 2002, and a General Addendum to that contract prepared by Crowley in January 2003.*fn2 The General Addendum modified the terms of the September 3 Sales Contract in a few respects. Notably, the General Addendum reduced the purchase price stated in the Sales Contract from $699,900 to $625,000.*fn3 This change was attributable, at least in part, to the purchaser's discovery that the Adams Morgan property was encumbered by a long-term, below-market lease, which reduced its market value and impaired Quan's ability to secure independent financing. The Taubers agreed to finance the transaction themselves by taking a first deed of trust note from Quan in the principal amount of $550,000. The essential provisions of that note, including the interest rate, the amount of the monthly payment, and the due date, were spelled out in the General Addendum. Quan agreed to pay the balance of the purchase price, $75,000, in cash at settlement, and to deposit $46,250 in escrow as good faith earnest money.

The General Addendum provided that Quan rather than the sellers would pay the 4.5% brokerage fee. This modification of the September 3 Sales Contract partially offset the reduction of the purchase price (the fee would have been $28,125). The General Addendum also expressly stated that Quan would be responsible for paying transfer and recordation taxes.

As set forth in the General Addendum, settlement was to occur no later than February 18, 2003. Quan stood to forfeit his entire deposit of $46,250 if he was unable to settle on the property by that date. The General Addendum provided that the Taubers were to pay "appropriate fees" to their attorney, Eric Sayles, to prepare the closing documents.*fn4 The General Addendum further stated that "[n]o contingencies exist in this contract. . . ."

Tin Quan signed the General Addendum on January 30, 2003. Paul and Phyllis Tauber each signed it the following day. At that time, Paul Tauber personally inserted two handwritten clarifications relating to the terms of the $550,000 note,*fn5 which Quan initialed to signify his assent. Thus, the agreement to sell the Taubers' Adams Morgan property to Quan was fully executed on or about January 31, 2003.

The Taubers refused to go to settlement with Quan, however. In a letter to David Crowley, Paul Tauber asserted that the General Addendum did not "reflect the arrangement made by you and me." Tauber stated that the total purchase price "according to our agreement" was to be $724,000, adding that the "only reason I agreed to change the listed contract price was to save the buyer some fees and have a separate contract for the remainder of the total price." More specifically, Tauber claimed, Quan was supposed to pay Eric Sayles' fees in addition to the purchase price and the brokerage fee. Accordingly, Tauber concluded, "I will not go to settlement if you do not include Mr. Sayles in the second part of this sale, i.e., the other costs above the net amount due me of $625,000."*fn6

Quan did not accede to Tauber's demand that he pay Sayles. In the ensuing litigation*fn7 to compel the Taubers to sell their Adams Morgan property in accordance with the September 3 Sales Contract and the General Addendum, the trial court eventually granted partial summary judgment in favor of Quan on his breach of contract claim. Rejecting the Taubers' legal defenses, the court ruled on March 10, 2004, that the parties had made "a ...


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