Background
Kalvin Wayne Schanz agreed to purchase partially developed land known as Sherman Hills for $1.6 million. The purchase agreement required him to pay $40,000 in supplemental earnest money by August 28, 2017, and provided that amendments were valid only if made in a written instrument signed by the parties.
On the payment deadline, Schanz requested a three-day extension. The parties disputed whether Douglas Gritter agreed to it, but no written extension was signed and Schanz did not pay the $40,000. Although Schanz’s agent later received an emailed copy of a check drawn on the trust account of an investor’s wife, the check was not delivered that day. Defendants terminated the agreement on August 30. Schanz sued in 2023, alleging that defendants breached by refusing to accept payment on August 31, but the circuit court granted defendants summary disposition and entered a $22,451.94 judgment in their favor.
The Court’s Holding
The Court of Appeals affirmed. It held that the agreement’s payment and closing deadlines, considered together with defendants’ termination following Schanz’s default, showed that time was of the essence. Any disputed oral promise to extend the payment deadline was not binding because the agreement required modifications to be written and signed. Promissory estoppel also did not warrant remand because the alleged oral promise contradicted the binding contract’s written terms.
The court further concluded that the emailed check would not have constituted valid tender because it was drawn on the account of a stranger to the contract rather than Schanz’s account. Because Schanz requested an extension, obtained no signed addendum, and never tendered the required $40,000, defendants were entitled to summary disposition. The court declined to order reassignment to another trial judge, finding no showing of bias beyond adverse rulings.
The court remanded solely to determine and award defendants’ reasonable costs and attorney fees from the appeal. The purchase agreement expressly entitled the prevailing party in litigation, including appeals at all levels, to recover those amounts.
Key Takeaways
- Express payment and closing deadlines may establish that time is of the essence when the contract and surrounding circumstances demonstrate that timely performance matters.
- An alleged oral extension was unenforceable where the purchase agreement required every modification to be written and signed.
- A prevailing-party clause expressly covering appeals supported an award of appellate costs and reasonable attorney fees.
Why It Matters
The decision underscores the risks of relying on informal deadline extensions in real-estate transactions governed by written-modification clauses. A buyer seeking additional time should secure a signed amendment and ensure that payment is tendered in a form attributable to the contracting party.
It also illustrates that a contractual fee-shifting provision covering appellate proceedings can expose the losing party to additional fees even after the underlying judgment is affirmed.