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Denton v. Browntown Valley Associates, Inc.

Supreme Court of Virginia

August 31, 2017

JAMES T. DENTON
v.
BROWNTOWN VALLEY ASSOCIATES, INC.

         FROM THE CIRCUIT COURT OF WARREN COUNTY Dennis L. Hupp, Judge

         PRESENT: All the Justices

          OPINION

          WILLIAM C. MIMS, JUSTICE.

         In this appeal, we consider whether the circuit court abused its discretion by denying a seller specific performance of a contract for the sale of real property. We also consider whether the court abused its discretion when it determined the amount of attorney's fees to award to the prevailing party under the contract's fee-shifting provision.

         I. BACKGROUND AND MATERIAL PROCEEDINGS BELOW

         James T. Denton owns a 122.281-acre parcel of real property ("the Property") in Warren County. In June 2005, Browntown Valley Associates, Inc. ("BVA") contracted to buy the Property from Denton for $740, 500, including a $500 purchase money deposit that it placed in escrow with its purchasing agent. The contract provided that the sale would be settled the following month. By a series of amendments, the settlement date was postponed to October 2005. The contract also provided for an award of costs and reasonable attorney's fees to the prevailing party in any action arising out of it.

         BVA was unwilling to settle on the amended settlement date. In December 2005, it notified Denton's listing agent that it was "going to have to drop the contract" because it was unable to reach an agreement with the owner of an adjacent parcel about improvements to a right-of-way. BVA's purchasing agent offered Denton a release agreement terminating the contract and authorizing the return of the deposit to BVA. Denton's listing agent countered by offering him a release agreement terminating the contract and authorizing payment of the deposit to Denton. Denton did not sign either release agreement.[1]

         A month later, Denton's listing agent sent him an email urging him to sign her proposed release agreement. He refused, responding that he had "no intention of releasing [BVA] from this contract." He wrote that he had accepted BVA's offer instead of competing offers because it alone had included no contingencies for settlement. He felt that BVA's $500 purchase money deposit on a $740, 500 contract indicated that it had made the offer in bad faith, intending to minimize its losses if it later abandoned the purchase for reasons not included as a contingency in the contract. He felt that the contract was enforceable and he intended to enforce it unless he received a better offer from another prospective purchaser.

         Denton continued to list the Property for sale intermittently through November 2010 but he did not receive any offers. In April 2011, he filed an amended complaint in the circuit court alleging that BVA had breached the contract, asserting that he was ready and willing to perform, and seeking specific performance by BVA. He also sought an award of costs and attorney's fees. He tendered a deed conveying the Property to BVA.

         BVA filed an answer and grounds of defense alleging, among other things, that the contract required Denton to convey marketable title. However, it alleged, his immediate predecessors-in-title claimed a 4.191-acre tract ("the Tract") of the Property by adverse possession, but that neither they nor Denton had obtained a decree quieting title. Thus, BVA continued, Denton was unable to perform the contract because his title in the Tract was not clear and thus he could not convey marketable title in the Property as a whole. BVA also counterclaimed for costs and attorney's fees.[2]

         Denton asserted that he had resolved any dispute over ownership of the Tract in a deed dated March 19, 1993, between him and Wayside Inn Limited Partnership ("Wayside"), the owner of an adjacent parcel. The deed purported to settle the boundary between the parcels and each party relinquished any claim to the parcel lying on the opposite side of the boundary. Denton asserted that Wayside thereby relinquished any claim to the Tract, so his title in the Property therefore was clear and marketable.

         To rebut Denton's assertion regarding the boundary settlement deed, BVA sought to admit a substitute trustee's deed dated March 4, 1994 and recorded April 22, 1994, conveying Wayside's parcel to NationsBank of Maryland, N.A. ("NationsBank") following a foreclosure sale of the parcel. BVA noted that although Denton's deed with Wayside was dated March 19, 1993, it was not recorded until December 1994, after the March 1994 substitute trustee's deed was recorded. BVA argued that the boundary settlement deed was not in Wayside's chain of title when NationsBank acquired its parcel, so that deed did not resolve the dispute over ownership of the Tract. Denton filed a motion in limine seeking to exclude the substitute trustee's deed. The circuit court denied the motion, and the case proceeded to a bench trial.

         At the conclusion of Denton's case, BVA moved to strike the evidence. The circuit court deferred its ruling on the motion until BVA presented its case. After all the evidence was heard, the court further deferred its ruling and heard closing argument. It subsequently entered an order in which it granted the motion, awarded judgment to BVA, and dismissed Denton's amended complaint with prejudice.

         Denton filed a motion to reconsider. The circuit court responded with a letter opinion ruling that the motion would be denied.[3]

         The circuit court thereafter held a hearing on BVA's counterclaim for an award of costs and attorney's fees. BVA sought an award of $98, 673.15 in attorney's fees, plus expert witness fees and costs. After receiving evidence and hearing the testimony of competing expert witnesses called by each party, the court entered a final order awarding BVA $47, 800 in attorney's fees, plus expert witness fees and costs.

         We awarded Denton this appeal.

         II. ANALYSIS

         Specific performance is an equitable remedy. A suit in equity for specific performance is distinct from an action at law for breach of contract. There is no right to specific performance that a court is obligated to enforce. Cox v. Cox, 67 Va. (26 Gratt.) 305, 308 (1875); see also 1 William Minor Lile, Notes of Lectures on Equity Jurisprudence 224 (1921) ("The most striking feature of the remedy of specific performance is, that it is not regarded as a strict right which the court is bound to enforce, but as an extraordinary act of grace on the part of the court, to be granted only where the plaintiff makes out his case fully." (emphasis in original)). He who seeks specific performance bears the burden of proving both that there is a definite contract and that he has performed all that is required of him (or that he is ready and willing to perform at the time of his suit), and that all conditions precedent have been fulfilled. Cox, 67 Va. ...


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