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Keywords

contractdamageslitigationattorneytrialgood faithliquidated damagesspecific performance

contractdamageslitigationattorneytrialgood faith

Related Cases

K.G.M. Custom Homes, Inc. v. Prosky, 468 Mass. 247, 10 N.E.3d 117

Facts

In 1999, the Proskys executed a purchase and sale agreement with K.G.M. for approximately 45.7 acres of land in Norton, with the price contingent on the number of approved buildable lots. After a lengthy approval process, the Proskys' attorney falsely claimed they had a higher offer and advised K.G.M. to calculate damages based on the liquidated damages provision. When K.G.M. was ready to close the sale, the Proskys' attorney's actions led to the failure of the closing, prompting K.G.M. to file suit for specific performance and damages.

In 1999, the Proskys executed a purchase and sale agreement with K.G.M. for approximately 45.7 acres of land in Norton, with the price contingent on the number of approved buildable lots.

Issue

Did the Proskys commit an actual breach of the purchase and sale agreement, and were they liable for attorney's fees incurred by K.G.M. in the litigation?

Rule

The court held that anticipatory repudiation can lead to an actual breach if actions taken by the breaching party prevent the other party from fulfilling the contract. Additionally, attorney's fees are not recoverable unless explicitly provided for in the contract.

The court held that anticipatory repudiation can lead to an actual breach if actions taken by the breaching party prevent the other party from fulfilling the contract.

Analysis

The court determined that the Proskys' attorney's actions at the closing, including bringing a videographer and refusing to provide necessary documents, constituted an actual breach of the implied covenant of good faith and fair dealing. This breach allowed K.G.M. to elect between specific performance and liquidated damages. However, the court found that the liquidated damages provision did not cover attorney's fees incurred in litigation, as it only referred to fees related to the transaction itself.

Conclusion

The court affirmed the trial judge's findings regarding the Proskys' breach and K.G.M.'s entitlement to damages, but reversed the award of attorney's fees, concluding that the contract did not provide for such recovery.

The court affirmed the trial judge's findings regarding the Proskys' breach and K.G.M.'s entitlement to damages, but reversed the award of attorney's fees.

Who won?

K.G.M. Custom Homes, Inc. prevailed in the case as the court found that the Proskys committed an actual breach of the agreement, allowing K.G.M. to recover damages.

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