Background
Jimmie W. Meek and Deborah S. Olson agreed to sell their Haughton, Louisiana property to Coretta Johnson for $408,500. The contract required a $1,000 deposit and allowed the sellers, upon a buyer default, to terminate the agreement and recover stipulated damages equal to 10% of the sale price, retain the deposit, and recover attorney fees and costs.
The property first appraised below the sale price, but Johnson did not submit the written price-reduction request contemplated by the contract. She instead pursued a second appraisal, which valued the property at $410,000. Johnson then declined to close. The sellers later sold the property to a third party and sued Johnson for stipulated damages.
The Court’s Holding
The court affirmed the judgment for the sellers. Johnson did not challenge the trial court’s finding that she breached the contract, and the contract plainly gave the sellers the option to seek either specific performance or termination with stipulated damages after a buyer default.
The later sale to a third party prevented specific performance, but it did not eliminate the sellers’ contractual option to terminate and seek stipulated damages. The court upheld the $40,850 stipulated-damages award, retention of the $1,000 deposit, $20,000 in attorney fees and court costs, and legal interest on the damages. It also awarded the sellers $2,371.50 in additional appellate attorney fees and costs.
Key Takeaways
- A seller’s sale of property to another buyer after the original buyer defaults does not necessarily bar contractually authorized stipulated damages.
- Clear default provisions may permit an aggrieved seller to elect stipulated damages instead of specific performance.
- A prevailing-party attorney-fee clause supported an additional fee award for defending the appeal.
Why It Matters
The decision enforces the parties’ chosen remedies in a residential real-estate contract. Once Johnson defaulted, the sellers could pursue the stipulated-damages remedy even though a later sale of the property made specific performance unavailable.