Shirley Whitten v. Gregory B. Rich and Karen Rich
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ARKANSAS COURT OF APPEALS
NOT DESIGNATED FOR PUBLICATION
JUDGE DAVID M. GLOVER
DIVISION I
CA07655
October 31, 2007
APPEAL FROM THE SALINE
COUNTY CIRCUIT COURT
[CV20061371]
SHIRLEY WHITTEN
APPELLANT
V.
HONORABLE ROBERT W.
GARRETT, JUDGE
GREGORY B. RICH and KAREN
RICH
APPELLEES
AFFIRMED ON DIRECT APPEAL;
DISMISSED ON CROSSAPPEAL
This case involves a realestate contract for the sale of a residential house.
Appellant, Shirley Whitten, is the seller, and appellees, Gregory and Karen Rich, are the
buyers. When appellant tried to terminate the contract, appellees filed a complaint
seeking specific performance of the contract. Appellant answered, asserting several
defenses, the most pertinent of which was that appellees had breached the contract by
failing to list repairs within ten (10) business days prior to the settlement date as required
by Paragraph 15 of the contract. Following a hearing, the trial court ruled in favor of
appellees, finding that they had not breached the contract, setting a time to close on the
sale, and denying, from the bench, appellees’ request for costs and attorney’s fees. It is
undisputed that damages issues remain to be determined. Appellant appeals based upon a
Rule 54(b) certification. Appellees attempt to crossappeal concerning attorney’s fees.
We affirm on direct appeal, but we do not address the crossappeal.
Direct Appeal
For her first point of appeal, appellant contends that the trial court erred in its
interpretation of Paragraph 15 of the realestate contract between the parties. We
disagree.
Paragraph 15, titled “Inspection and Repairs,” provides in pertinent part:
Buyer shall give written notice listing specific repairs needed to Inspection Items
or stating no repairs are needed to Inspection Items, so written notice is actually
received within allotted ten (10) business day period by Seller or Listing Firm,
stating inspections have been performed and listing all items which need repair,
except repairs required by FHA, VA, USDARD, the lender, or the termite control
company (“Third Party Requirements”), which shall be supplied to Seller promptly
upon receipt by Buyer. If Buyer provides written notice as required, Seller will
have TEN (10) BUSINESS DAYS after date written notice is received to state
which repairs Seller is NOT willing to perform, with the exception of Third Party
Requirements. Should Seller fail to respond with TEN (10) BUSINESS DAYS,
Seller agrees all listed repairs will be completed, including Third Party
Requirements, up to but not exceeding Repair Limit defined below.
IN THE EVENT BUYER DOES NOT MAKE THE NECESSARY
REQUIRED INSPECTION AND DOES NOT PRESENT THE
INSPECTION TO SELLER IN THE ALLOTTED TEN (10) BUSINESS
DAY TIME PERIOD, BUYER WAIVES ALL RIGHTS TO A RE
INSPECTION AND ASSUMES COMPLETE RESPONSIBILITY FOR ANY
AND ALL FUTURE REPAIRS AND THE CONDITION OF THE
PROPERTY. If written notice is given as required, Seller agrees to pay the cost
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to repair the Inspection Items and ThirdParty Requirements in a sum not to
exceed $ 500.00 (the “Repair Limit”) in addition to rights, repairs and corrections
required in Paragraph 18 (Lead Based Paint Risk Assessment/Inspection). If repair
costs to the Inspection Items and ThirdParty Requirements exceed the Repair
Limit Buyer shall have the option to (1) accept the Property in its condition at
closing with credit to Buyer at closing in the amount of the Repair Limit, less the
cost of any repairs made and paid for by Seller after receipt of notice, or (2)
declare this Real Estate Contract null and void and recover the Earnest Money. If
Buyer closes on the Property believing conditions exist at the Property that require
repairs and agrees to a credit equal to the Repair Limit as allowed by this
Paragraph 15B, Buyer waives all right to assert a claim against Seller, Selling Firm
or Listing Firm concerning the condition of the Property.
If Buyer timely inspected the Property and Seller received written
notice thereof within the time period set forth above, Buyer shall have the
right to reinspect the Inspection Items immediately prior to closing to
ascertain whether the Inspection Items are in normal working order and to
insure that all designated repairs have been made. If the Inspection Items are
found not to be in normal working order upon reinspection, Buyer shall have the
option to: (1) accept the Property in its condition at closing with credit to Buyer at
closing for any portion of the Repair Limit which has not already been spent by
Seller for repairs or previously credited to Buyer under this paragraph 15B, or (2)
declare this Real Estate Contract null and void and recover the Earnest Money.
SELLER SHALL NOT BE OBLIGATED TO EXPEND AN AMOUNT FOR
REPAIRS OR PROVIDE A CREDIT TO BUYER TOWARD THE PURCHASE
PRICE CONCERNING REPAIRS IN EXCESS OF THE REPAIR LIMIT.
AGREEMENT BY SELLER TO EXPEND, OR ACTUAL EXPENDITURE OF,
SUMS BEYOND THE REPAIR LIMIT OR OTHER ATTEMPTS TO SATISFY
CONCERNS OF BUYER REGARDING THE INSPECTION ITEMS SHALL
NOT AFFECT OR DEFEAT THE OPTIONS PROVIDED TO BUYER IN (1)
AND (2) ABOVE.
The parties stipulated that the inspection and repair survey was faxed to appellant’s
realestate agent on January 18, 2006, at 8:30 p.m. Appellant’s realestate agent, Robin
Hogue of Century 21, testified that she went over the list of repairs with appellant on
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January 19 or 20, 2006, which was less than ten business days prior to the closing that
was scheduled for no later than January 31, 2006. Appellant’s reasons for deciding to
terminate the contract included “many problems” resulting from the inspection of her
home, e.g., a foul burning odor and insulation debris on her clothing, and the repair list
being furnished to her late, i.e., less than ten business days prior to closing. On this
testimony, the trial court determined that appellant presented no basis for termination of
the contract.
In making her argument on appeal, appellant quotes the contract language and sets
out the facts establishing that notice of the repairs was received by appellant’s agent less
than ten business days prior to closing. However, she offers no explanation as to why that
fact would give her the right under the contract to terminate, and she cites no cases in
support of that position. The only provisions in paragraph 15 that allow for declaring the
contract null and void belong to the buyer, not the seller. We find no basis for reversing
the trial court under this point.
For her second point of appeal, appellant contends that in ordering her to perform
the realestate contract, the trial court placed her “at risk of pecuniary losses for which she
did not agree to pay upon entering into said real estate contract.” She argues that the
testimony of Lisa Toms, the buyers’ realestate agent, established that the settlement
statement appellant would have been asked to sign at closing did not deduct $500 from
her proceeds to cover the repair list, and that without such a deduction, appellees would
continue to have the right to assert a claim against her. In support of her argument, she
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quotes the following language from Paragraph 15B: “If Buyer closes on the Property
believing conditions exist at the Property that require repairs and agrees to a credit equal
to the Repair Limit as allowed by this Paragraph 15B, Buyer waives all right to assert a
claim against Seller, Selling Firm or Listing Firm concerning the condition of the
Property.” In addition, she cites Paragraph 5, which states that if the buyer is entitled to a
credit for repairs at closing, then the amount of the credit should be reflected on the
HUD1 Settlement statement. And, finally, she quotes again from Paragraph 15B, the
portion that provides that the buyer has two options following inspection if the repair
costs exceed the $500 limit: 1) accept the property or 2) declare the contract null and
void. Her argument, apparently, is that if the buyers could declare the contract null and
void if the repairs exceeded the $500 limit, then she should be able to declare it null and
void if the repair list was submitted in an untimely manner and the $500 was not deducted
on the settlement papers – – which she contends would leave her vulnerable to a claim
being brought by the appellees at a later time.
We find no merit in her argument. First, appellees waived any future action
against appellant by proceeding with the closing. Second, even if appellees could
subsequently bring a claim, the amount would still be limited to $500. Without citation to
legal authority and with no convincing legal argument, we conclude that appellant
presents us with no basis for reversal under this point.
For her final point of appeal, appellant contends that the circuit court erred in its
interpretation of Paragraph 5 of the real estate contract. Paragraph 5 provides:
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5. LOAN AND CLOSING COSTS: Unless otherwise specified, all of
Buyer’s closing costs, including origination fees, assumption fees, loan costs,
prepaid items, loan discount points, closing fee, and all other financing fees and
costs charged by Buyer’s lender or any additional fees charged by Closing
Agent(s), are to be paid by Buyer solely except for costs which cannot be paid by
Buyer if Buyer is obtaining a VA or FHA loan (the “Government Loan Fees”)
which shall be paid by Seller, up to the sum of $450.00 (the “Seller Loan Cost
Limit”), which is not included in any loan or closing cost provisions listed below.
Notwithstanding any provision to the contrary, should the Government Loan Fees
exceed the Seller Loan Cost Limit, Seller shall have the option to either pay such
excess amount or terminate this Real Estate Contract and have the Earnest Money
returned to Buyer. Seller is to pay Seller’s closing costs.
Seller is to pay up to but not to exceed 3% of the purchase price for Buyer’s
closing costs and prepaids.
Should Buyer be entitled to a credit at Closing for repairs pursuant to Paragraph 15
of this Real Estate Contract, the amount of such credit shall be reflected on the
HUD1 settlement statement. Buyer and Seller warrant that all funds received by
Buyer from Seller (or other sources) will be disclosed to the Closing Agent and
reflected on the HUD1 settlement statement.
(Emphasis added with italics.) Appellant contends that she retained the right to terminate
the contract pursuant to the emphasized language, regardless of the fact that Century 21
was going to pay the excess amount. Again, she cites no cases in support of her position.
If we ignore the fact that appellant does not make a convincing argument, that she
does not cite legal authority, and that the fees she complains about were assumed by
Century 21, which we decline to do, her construction of the contract in this regard is also
incorrect. The government loan fees charged to the seller (but paid by the realestate
agent) totaled $450.00. This is the amount allowed under the contract. Consequently,
this provision to terminate would not support appellant’s argument. Thus, appellant has
not provided a basis for reversal under her final point of appeal either.
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CrossAppeal
In their crossappeal, appellees challenge the trial court’s denial of their request for
attorney’s fees. We do not address the crossappeal. First, the April 23, 2007 judgment
does not mention attorney’s fees. Neither do appellees mention a specific order or
judgment in their notice of crossappeal – – just the trial court’s denial of attorney’s fees.
See generally Ark. R. App. P. – Civil 3(e) and Ark. R. Civ. P. 58. Second, this matter
was appealed on a 54(b) certification with respect to the specificperformance issue. The
denial of attorney’s fees was not mentioned. Consequently, the matter of attorney’s fees
is not properly before us.
Affirmed on direct appeal; crossappeal dismissed.
HART and MILLER, JJ., agree.
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