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Ash v. Barrett

SEPTEMBER 27, 1971.




APPEAL from the Circuit Court of Lake County; the Hon. WILLIAM WEBB JOHNSON, Judge, presiding.


This suit involves the proposed rental of a house owned by defendant. After a lease was signed, defendant refused possession to the plaintiffs and an action for breach of contract was instituted. The court, in a bench trial, awarded plaintiffs $11,984.36 in compensatory damages and $5000 in punitive damages.

Defendant, on appeal, contends (1) he accepted plaintiff's repudiation of the executory contract thereby rescinding the contract, (2) compensatory damages awarded included items which could not have been reasonably anticipated at the time of the breach, and (3) the punitive damage award was improper.

All negotiations concerning the rental were carried on through a realtor. During the course of these negotiations, a dispute arose concerning three items: inclusion of a refrigerator, extension of the lease period, and a provision for lawn care. Due to the nature of the issues it is necessary to describe the negotiations in some detail.

In April, 1968, the plaintiffs, George and Sarah Ash, contracted to sell their residence with delivery of possession to be on June 30, 1968. Also in April, defendant decided to rent a house owned by him and arranged with John Channer of John Channer & Associates, Inc. realtors, to list it. The monthly rental was to be $635.00 with lawn care or $550.00 without. On May 9, Tom Bermingham, a salesman for Channer, showed the house to plaintiffs. They liked it immediately and decided to rent it. Ash noticed the house contained certain household appliances, including stereophonic equipment, and asked which of these items were included in the lease. Bermingham did not know. Later that afternoon, at Channer's office, Ash told Channer he wanted to rent the house with lawn care and tendered a $1000.00 check.

On May 12, Channer notified defendant of the lease negotiations and took copies of the lease, which plaintiffs had signed, to defendant for signature. Defendant and Channer determined which of the personal property was to be included and defendant's wife typed a description of this property on the lease. The refrigerator in question was not included. That evening Bermingham took the leases to the plaintiffs, they initialed the changes, and wrote a check for $635.00, the month's rental including lawn care.

At this point all parties agree there was a valid lease. However, the next morning Ash noticed that the lawn care provision had been omitted. The plaintiffs contacted Bermingham to correct the error. Thereafter, an ensuing series of conversations between plaintiffs and the realtor and defendant and the realtor resulted in defendant's decision to withhold possession.

Bermingham testified that when he arrived at the office the morning of May 13th, he was given a message to call Ash. Upon calling, Ash, in a loud voice, told him that the lawn care provision had been omitted and he wanted the lease extended from May 15, 1970, to June 30, 1970. Bermingham made a memo of the conversation which read "5/13/68. Mr. Ash wants lease extended to June 30, 1970 (additional six weeks) Also wants yard maintenance included in written lease. (signed) Tom." Since he was leaving on vacation the next day, Bermingham went to plaintiff's house, picked up the lease and gave it, along with the memo, to Channer to arrange the changes. While at plaintiff's house, he talked with Mrs. Ash who said it would be more convenient if the lease were extended so they would not have to move while their children were still in school. Bermingham had no further connection with the dispute. On cross-examination he stated that he did not remember any discussion about a refrigerator at the time he showed plaintiffs the house and no mention of any statement by plaintiffs regarding a refrigerator was made during telephone conversations.

Channer testified that when he and defendant inspected the house defendant was definite about the refrigerator not being included. After Bermingham left, Channer had several telephone conversations with Ash during which Ash insisted the lease be extended, the lawn care provision be included and that Ash said "The refrigerator goes with the house or it's no deal". Channer, after one of the calls, wrote "Kitchen refrig (stays)" on the Bermingham memo. On May 15th, Channer called defendant and explained what he thought were Ash's demands. The defendant said "If that's the way he feels about it, forget it. There is no deal." That afternoon Channer and his lawyer met with defendant. At the meeting defendant again stated that he did not want to rent the house giving as his reasons the extension of the lease, the refrigerator and the fact that his father was ill, and if something happened to him, he wanted the house for his mother. That evening Channer called Ash and advised him of defendant's decision. Ash immediately said "We don't care about the refrigerator. . . Get me the house". During the next few days Ash repeated, several times, that they would take the house on the original terms.

Defendant, testifying on his own behalf and as an adverse witness, agreed that the lawn care provision was omitted in error, that he told Channer on the telephone the deal was off and that at the meeting he again refused to go ahead with the agreement. He added that he later was aware of plaintiff's desire to take the house under the original terms, that plaintiffs had formally demanded possession by telegram and that the house remained vacant during the next few months.

Ash testified he only suggested, not demanded, that the lease be extended when he talked to Bermingham. He described the telephone conversations as "a lot of wrangling" and flatly denied ever telling Channer that the inclusion of the refrigerator was a prerequisite to their taking the house. He testified further to his willingness to take possession under the original lease and his repeated demands for possession.

Mrs. Ash testified that when Bermingham picked up the lease to insert the lawn care provision they talked about extending the period of the lease. She told him it would be nice but it would not make a difference if defendant did not wish to extend the term. She stated that the only time the parties discussed the refrigerator was during the inspection of the house, that they owned two refrigerators along with a freezer and would not have need for another one.

During May and June, plaintiffs advertised, without success, for rental housing. On June 28th they moved out of their house and stored their furniture. Plaintiffs checked with various motels in the area and rented two rooms in the least expensive one. For the next 100 days plaintiffs, their six children and their dog lived in these rooms. The motel provided no kitchen facilities so the family ate their meals in restaurants. During this period they continually searched for a house but found none. On August 10th they rented a house which was under construction with possession to commence after September 15th. On October 5th they moved into the home.

We first consider the contention concerning the repudiation of the contract by plaintiffs. On this point it is argued that the judgment was erroneous as a matter of law, or alternatively, that ...

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