Buku Properties v. Clark
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Appellants Raoel and Janet Clark and Jerry and Betty Peterson appealed the district court's grant of summary judgment in favor of Buku Properties, LLC. Buku filed suit against the Clarks and the Petersons to recover earnest money deposits after two codependent land sale contracts failed to close. At the time the parties entered into the land sale contracts, the properties were zoned "R-1," which allowed for a minimum density of one acre lots. However, after the contracts were executed, but prior to closing, the Jefferson County Planning and Zoning Commission began discussions to change the R-1 designation of the properties to R-5, which mandated a five acre minimum density. While conducting its due diligence, Buku discovered the County’s plan to change the zoning designation of the properties. Aware of the potential re-zoning, Buku sent Appellants proposed addenda to the land sale contracts seeking to extend the review period and closing date due to concerns about zoning and financing. The bank financing Buku’s purchase of the properties sent Buku a letter stating that Buku’s loan was only “conditionally approved,” and that, if the property were re-zoned R-5, the property value would be decreased. The bank stated that in order to fund the loan it “must receive verification from Jefferson County that this property will remain zoned R-1 Residential.” Buku sent Appellants’ counsel a letter demanding that all of the earnest money, except for a non-refundable amount from the Peterson contract, be returned. When none of the earnest money was returned, Buku brought suit alleging: (1) return of earnest money under contract; (2) conversion; and, (3) unjust enrichment. Additionally, Buku requested prejudgment interest on the earnest money and attorney fees. Appellants filed a counterclaim with their answer, asserting seven claims: (1) specific performance; (2) breach of contract; (3) unjust enrichment; (4) estoppel; (5) promissory estoppel/unjust enrichment; (6) Consumer Protection Act violations; and, (7) attorney fees. Upon review, the Supreme Court found no error in the district court's judgment, and affirmed its decision to grant summary judgment in favor of Buku.
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