Contracts Keyed to Calamari
Donovan v. Bachstadt
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The Defendant, Bachstadt (the "Defendant"), purchased a piece of land from Joan Lowden ("Ms. Lowden"). Ms. Lowden received the deed to the land from Middletown Township, but she never recorded it. The Defendant built a house on the land and entered into a contract to sell it to the Plaintiffs, the Donovans (the "Plaintiffs"). The purchase price was $58,900. The Plaintiffs put down a deposit of $5,890. On May 1, 1980, the Plaintiffs were to pay an additional $9,010 in cash and take out a 30-year mortgage for the remaining $44,000, at 10% interest. The seller promised the title would be marketable and insurable. A title search was conducted and title was found to be with Anthony and Jane Mettrich (the "Mettrichs") and not Middletown Township or Joan Lowden. Based on these developments, the Plaintiffs filed an action requesting specific performance, and the trial court granted specific performance. The Defendant could not obtain marketable title, and the Plaintiffs filed this suit for compensatory and punitive damages. The trial court granted the Plaintiffs motion for summary judgment. The Plaintiffs' damages, not the Defendant's liability was at issue. The trial court allowed the Plaintiffs to recover for their costs for the title search and survey. However, the trial court would not allow them to recover the difference between the percentage of interest they were to pay on their mortgage and the percentage of interest they were to pay on a different house they purchased in the interim. The trial court concluded "the financing 'was only incidental to the basic concept.' " The Appellate Division revered and found "the statute intended that the general law of damages for breach of a contract applies and stated that the difference in interest rates could be the basis for a measure of damages depending on whether the plaintiffs 'have entered into a comparable transaction for another home ••• or are likely to do so in the near future ••••' "
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