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Crumble v. Blumthal

decided: February 9, 1977.

CHARLES CRUMBLE AND DORIS CRUMBLE, PLAINTIFFS-APPELLANTS, CROSS-APPELLEES,
v.
DONALD BLUMTHAL AND BARBARA BLUMTHAL, DEFENDANTS-APPELLEES, CROSS-APPELLANTS, JOSEPH A. THORSEN COMPANY AND MARQUARDT-ROBNETT, PROPOSED INTERVENING PLAINTIFFS-APPELLANTS, CROSS-APPELLEES



Appeal from the United States District Court for the Northern District of Illinois, Eastern Division, No. 73 C 2814 - Frank J. McGarr, Judge.

Fairchild, Chief Judge, Cummings, Circuit Judge, and Christensen, Senior District Judge.*fn*

Author: Fairchild

FAIRCHILD, Chief Judge.

These appeals deal with an alleged racial discrimination in the sale of real estate. The plaintiff-buyers brought this action in the district court November 2, 1973 alleging that the defendant-sellers refused to perform their contract to sell their house to the buyers because of their race, in violation of the Civil Rights Act, 42 U.S.C. § 1982,*fn1 and the Fair Housing Act, 42 U.S.C. § 3604.*fn2 Jurisdiction was alleged under 28 U.S.C. §§ 1343(3), (4) and 2201 and 42 U.S.C. § 3612. The buyers moved for a preliminary injunction and for a consolidation of the trial on the merits with the preliminary injunction hearing.

On November 16, 1973, following an evidentiary hearing, the court granted the buyers' motion for a preliminary injunction, enjoining ". . . the defendants and their agents . . . from refusing to sell the premises at 3816 Florence Avenue, Downers Grove, Illinois, in accordance with the terms of the contract for sale of real estate previously entered into by the parties. . . ." The closing was subsequently carried out.

On November 21, defendant-sellers filed their answer and counterclaim. The answer alleged that defendants had terminated their contract because of dishonor of plaintiffs' earnest money check; that notwithstanding the termination, defendants had been willing to sell, and executed an escrow agreement for such purpose, which plaintiffs refused to execute. The counterclaim sought damages and other relief because of the breach by plaintiffs.

On November 29, Thorsen and Marquardt-Robnett moved for leave to intervene as plaintiffs. They are real estate brokers and in the contract for sale to plaintiffs, defendant-sellers had promised to pay them a commission. Intervenors asserted that sellers' refusal to pay the commission punished intervenors for securing housing for plaintiffs. The court denied intervention.

On January 18, 1974, the court held an evidentiary hearing on the question of damages, granted plaintiff-buyers' motion for consolidation of the trial on the merits with the preliminary injunction hearing, and offered to hear additional evidence on the merits. The court granted judgment for the buyers for their actual loss in the amount of $322.00. The court denied, however, the buyers' claim for punitive damages and attorneys' fees.

The buyers then appealed from that order. We dismissed the appeal for lack of jurisdiction because the order appealed from was not final. The defendant-sellers' counterclaim was still pending and the trial court had not made the express determination required under Rule 54(b) of the Federal Rules of Civil Procedure. This court also dismissed an appeal from the denial of intervention. Following the dismissal of the appeal, arguments were heard and evidence taken in the district court concerning the defendants' counterclaim, and on April 7, 1975 the court denied the counterclaim. The court again refused leave for the brokers to intervene.

The buyers then appealed challenging the order denying their claim for punitive damages and attorneys' fees, and the brokers appeal from denial of leave to intervene. The sellers cross-appeal challenging the orders granting the injunction, awarding the buyers actual damages, and denying their counterclaim.

I

Plaintiff-buyers, who are black, were shown the defendant-sellers' house by an employee of one of the brokers. After an initial draft of August 13, 1973, the parties executed a contract, as modified, September 6, 1973, and an earnest money check was delivered to sellers' attorney. The check, dated September 6, was signed by plaintiff Doris Crumble, in the amount of $6,700, drawn on the Continental Bank, and payable to sellers' attorney as escrowee. On September 7, sellers' attorney wrote buyers' attorney terminating the contract and stating that the check "has been returned NSF." He had asked his bank, the Northern Trust, to obtain certification, and had received word that the check was NSF.

In fact, Mrs. Crumble had made an adequate transfer of funds from her savings account, and the NSF report arose either from a delay in recording the transfer at Continental or from a misunderstanding at Northern Trust of the reason for Continental's refusal to certify.

The buyers' attorney advised the sellers' attorney that the check was covered at all times, and there were further negotiations. Buyers tendered a certified check. An escrow agreement was prepared and signed on behalf of sellers on October 1. The sellers, however, were unwilling to have the amount of the commission disbursed to the brokers, and ...


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