Supreme Court At-a-Glance Contributor Jonathan P. Killeen, Shareholder at Boyle | Shaughnessy Law PC in Manchester, New Hampshire

No. 2020-0113

August 27, 2021

Affirmed

 

Contract Dispute

  • Whether the trial court erred in denying prospective homebuyers’ claims for breach of contract, breach of implied covenant of good faith and fair dealing, specific performance, and attorney’s fees following a bench trial.

 

John and Lori LaPlante, as trustees of the LaPlante Family Revocable Trust (“Sellers”), listed their Concord, New Hampshire home for sale because Mrs. LaPlante suffered from debilitating allergies caused by birch and oak trees on the property.  At the same time, Sellers searched for a new home with limited exposure to birch and oak trees and with a large garage.  By the end of May 2018, Sellers looked at more than 100 homes online and visited 15–17 homes in person.  Chad and Kelly Short (“Buyers”) submitted an offer to purchase Sellers’ home on May 24, 2018.  On June 3, 2018, Sellers submitted an offer to purchase a new home located in Stratham, New Hampshire.  Sellers’ purchase of the Stratham home was contingent upon Sellers’ review of any restrictive covenants.  That same day, Sellers and Buyers executed a purchase and sale agreement (“P&S”) for Sellers’ home that included the following disputed provision: “This agreement is subject to Sellers finding suitable housing no later than July 14, 2018” (“Disputed Provision”).  On June 4, 2018, Sellers obtained the restrictive covenants for the Stratham property, which possibly precluded Sellers from building a large garage at the property.  Sellers withdrew their offer on the Stratham property and felt that they had exhausted their search for suitable housing.  On June 5, 2018, Sellers instructed their realtor to exercise the Disputed Provision because they no longer needed to move, as Mrs. LaPlante no longer had allergy symptoms, and Sellers were not confident they would find suitable housing by the July 14, 2018 deadline contained in the Disputed Provision because nearly every house they looked at had covenants of some sort that would prevent building a large garage.  Buyers then filed suit.

 

Following a bench trial, the trial court found that the P&S was not binding and enforceable because there was no meeting of the minds regarding the Disputed Provision.  Accordingly, the trial court denied Buyers’ claims for breach of contract, breach of good faith and fair dealing, and request for attorney’s fees.

 

On appeal, the Supreme Court affirmed the trial court’s ruling. In doing so, it assumed without deciding that Sellers and Buyers did have a meeting of the minds regarding the Disputed Provision. Nevertheless, the Supreme Court concluded that the Disputed Provision was not ambiguous and that “finding suitable housing” was a condition precedent to Sellers’ obligation to sell their home to Buyers. As a result, the P&S agreement became unenforceable as a matter of law upon the non-occurrence of the contingency and Sellers had no duty to sell their home.  The Supreme Court also concluded that Sellers did not breach the P&S by “prematurely ending their search for suitable housing” because the record supported that Sellers were justified in concluding that there was no reasonable likelihood that they would find suitable housing by the July 14, 2018 deadline in light of Sellers’ particular needs.  The Supreme Court next concluded that Sellers did not breach the implied covenant of good faith and fair dealing by terminating their search for suitable housing on June 5, before the deadline, because their exercise of discretion was not unreasonable and they were justified in concluding that they were unlikely to find to find suitable housing. Finally, the Supreme Court affirmed the trial court’s order denying Buyers’ request for attorney’s fees because Sellers’ conduct did not warrant such an award.

 

Dickinson & Silverman, PLLC, of Concord (Gregory L. Silverman on the brief and orally), for the plaintiffs. Cook, Little, Rosenblatt & Manson, p.l.l.c., of Manchester (Kathleen M. Mahan on the brief and orally), for the defendants.