Plaintiff assignee filed an action against defendant seller, alleging breach of a land purchase agreement. The seller filed a counterclaim against the assignee, alleging breach of that agreement, and a third-party complaint against a party that had signed the agreement but later assigned its interests to the assignee. The case was tried in a bench trial to the circuit court.‍

Overview

‍Two businesses signed a land purchase agreement for 595 acres of land. The agreement contained a provision which made the buyer’s obligation to purchase the land contingent on certain conditions, including the condition that the property would be rezoned to permit development of at least 550 lots. The seller also represented that it knew of no graveyards or graves on the property. After the agreement was signed, the buyer assigned its interests to a third party, and the assignee provided letters of credit totaling $ 250,000 to an escrow agent. After the assignment, the assignee sent a letter to the seller which indicated that it waived rezoning. When graves were discovered on the property, however, the assignee asked that they be moved. The seller disagreed and decided to leave the graves untouched in a common area. The assignee subsequently informed the seller that it was exercising its right to withdraw from the agreement because the conditions for transfer of title had not been met and it demanded return of its downpayment. The court held that the assignee had waived the conditions precedent to performance and had breached the agreement by refusing to purchase the property.

‍Outcome

‍The court dismissed the assignee’s complaint with prejudice, granted the seller’s counterclaim and third-party complaint, and held that the seller was entitled to a forfeiture of the assignee’s deposit by drawing upon its letters of credit as liquidated damages.