RICHARD S TASCH V MICHAEL NIEDZIELSKI
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STATE OF MICHIGAN
COURT OF APPEALS
RICHARD S. TASCH,
UNPUBLISHED
April 27, 2004
Plaintiff-Appellant,
v
No. 246399
Grand Traverse Circuit Court
LC No. 01-021625-CK
MICHAEL NIEDZIELSKI,
Defendant-Appellee.
Before: Bandstra, P.J., and Sawyer and Fitzgerald, JJ.
PER CURIAM.
Plaintiff appeals from an order of the circuit court granting summary disposition to
defendant on plaintiff’s claim for damages arising from a failed real estate transaction. We
affirm.
Plaintiff’s parents, Richard E. and Lou Anne Tasch, owned property along the west arm
of Grand Traverse Bay in Grand Traverse County. The property was adjacent to property owned
by John and Ann Rae. In 1959, the two couples entered into a reciprocal option agreement. The
agreement provided that if either couple entered into an agreement to sell their property, the
other couple would have the first right of refusal to buy the parcel at the same price and on the
same conditions of the terms of the bona fide purchase agreement. By 1999, the Raes and Mrs.
Tasch were deceased.1 The Rae heirs offered the Rae property for sale, entering into a purchase
agreement with Barry and Diane Eckhold for a selling price of $600,000. Apparently the Rae
heirs and the Eckholds were unaware of the reciprocal option agreement until it was discovered
during the title search. Notice was then given to Tasch of the pending sale to the Eckholds so
that he could either exercise his option or release it.
Tasch consulted with a realtor and, concluding that the property was probably worth
more than the selling price to the Eckholds, Tasch sought and obtained a potential purchaser,
defendant Niedzielski, with a plan of exercising the option and immediately reselling the
property. The purchase agreement between Tasch and defendant, which was dated October 10,
1
Mr. Tasch died in 2002, apparently assigning his interest in this litigation to his son, plaintiff
Richard S. Tasch. References in this opinion to “Tasch” are to the elder Mr. Tasch, not plaintiff.
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1999, provided for a selling price of $750,000, with a closing on or before October 22,
contingent upon Tasch exercising his option to purchase the property. The agreement further
provided that defendant would deposit the purchase price in escrow and that $600,000 of that
amount would be released to Tasch to complete his purchase from the Rae heirs under the option
agreement.
The October 22 closing never occurred. Rather, Tasch gave notice to the Rae heirs that
he would be executing his option to purchase. The Eckholds responded by filing a lis pendens
and filed suit in Grand Traverse circuit court seeking specific performance of their purchase
agreement with the Rae heirs. The action by the Eckholds caused the closing between Tasch and
defendant to be cancelled. Ultimately, the suit by the Eckholds was settled with Tasch paying
the Eckholds $9,600 to release their interest in the property under their purchase agreement and
to lift the lis pendens.
Further attempts were made to arrange the sale to defendant, including defendant
negotiating directly with the Rae heirs. The situation was further complicated by the discovery
that the property was in an area designated as high risk for erosion and the Michigan Department
of Environmental Quality advised that a permit would have to be obtained before a new home
could be constructed on the property. Eventually, defendant indicated that he was no longer
interested in purchasing the property. Thereafter, the Rae heirs sold the property to a different
purchaser and the instant action was filed seeking damages from defendant for failing to
complete the sale. The trial court granted summary disposition to defendant on two grounds: (1)
that the purchase agreement between Tasch and defendant terminated when Tasch could not
convey marketable title and (2) that the reciprocal option agreement had terminated upon the
death of the Raes, thus Tasch did not have an option to exercise when the Eckholds made their
purchase offer to the Rae heirs.
Turning to the question whether the purchase agreement between Tasch and defendant
had terminated by its own terms, we agree with the trial court that there was no genuine issue of
material fact on this issue. Appellate review of a motion for summary disposition is de novo.
Spiek v Dep’t of Transportation, 456 Mich 331, 337; 572 NW2d 201 (1998).
The purchase agreement included the following provision:
If the owner’s title insurance commitment shall disclose title to be
unmarketable, then Seller shall remedy the title defects to render title marketable.
If Seller does not cure the title defects within 30 days to Purchaser’s reasonable
satisfaction, Purchaser may waive the defect or may terminate this Agreement by
written notice, in which case Selling Broker shall return Deposit in full
immediately. This sale is to be closed on or before October 22, 1999.
Defendant’s position is essentially that, because the sale did not and could not close on October
22, 1999, because at that point Tasch did not have marketable title, the agreement terminated.
Plaintiff, on the other hand, argues that the contract remained in force because defendant never
gave written notice of his termination of the agreement. We agree with defendant and the trial
court that the agreement automatically terminated on October 22, 1999, when the closing did not
occur because Tasch did not have marketable title.
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The provision of curing defects in title and the purchaser’s right to terminate if the
defects are not cured within 30 days is separate from the provision that the transaction must close
no later than October 22. The parties agreed to close on or before October 22. Tasch was unable
to close on October 22. Therefore, defendant was released from his obligation under the
purchase agreement. In other words, what defendant agreed to in the purchase agreement was to
buy the property on or before October 22 under the terms outlined in the agreement. When
Tasch was unable to meet those conditions (i.e., obtain marketable title) by October 22, the
agreement terminated.
This is not to say that the notice provision is necessarily meaningless. Had the parties
agreed to a different, later closing date but, in the meantime, a problem with the title had
surfaced which Tasch was unable to cure in 30 days, defendant would have had the option to
terminate the agreement upon written notice rather than waiting until the date for the scheduled
closing. The 30-day time period provides a reasonable time for the seller to cure defects in title,
without the purchaser being allowed to renounce the agreement as soon as a title problem
surfaces, but also without requiring the purchaser to wait for an unreasonably long period of time
without knowing if the transaction can be completed before looking for a different, problem-free
property. In any event, and more to the point in this appeal, it does not serve to modify the date
chosen by the parties by which the transaction is to be concluded. If the deadline provided for in
the agreement is reached and the transaction is not closed, the agreement terminates. If the
transaction is not closed due to the fault of a party, that party may be liable for damages. Here,
the transaction did not close by the deadline, but not due to defendant’s fault. Therefore,
defendant is not liable for damages.
In light of our resolution of the above issue and our conclusion that summary disposition
in favor of defendant was proper on this ground, we need not consider whether summary
disposition was appropriate on the basis that the reciprocal option agreement terminated on the
death of the Raes.
Affirmed. Defendant may tax costs.
/s/ Richard A. Bandstra
/s/ David H. Sawyer
/s/ E. Thomas Fitzgerald
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