Tipsy Coachman, Anticipatory Repudiation, and Adhering to Your Own Contractual Remedies: Fourth DCA Affirms Judgment for Prospective Home Buyers Despite Seller’s Assertion of Anticipatory Repudiation DefenseTuesday, July 5th, 2011
Shelby Homes at Millstone, Inc. v. Cullinane, 4D10-289
May 18, 2011
Four months prior to expiration of the contractual time period for completion of a home, the buyers’ counsel sent a letter to the seller’s counsel stating that the home buyers “may not be able to obtain financing under the same terms and conditions as originally intended” and that certain allegedly fraudulent representations by the seller “may render closing impossible.” The buyers also requested various documents from the seller. The seller replied, in a letter from its counsel, that the seller would provide the requested documents once a closing date was scheduled and the buyers had confirmed they were in fact closing. The seller informed the buyers that if the buyers failed to close, the seller would consider them in default and keep their deposits. The buyers never replied. The seller completed the home (after expiration of the contractual time period), sold the home to a different buyer, and kept the original buyers’ deposits.
The buyers sued for breach of contract, seeking return of their deposits, based on the seller’s failure to complete construction of the home in the time required by the contract. The seller raised the defense of anticipatory repudiation based on the buyers’ letter and contract language allowing the seller to treat any written communication informing the seller that the buyers “may be unable or unwilling to close” as an anticipatory breach. The trial court found that the buyers’ letter did not amount to an anticipatory breach and that the seller’s letter in response did not require a response from the buyers confirming that they would close.
On appeal, the Fourth DCA held that the buyers’ letter fell within the contract’s provision allowing the seller to treat it as an indication of inability or unwillingness to close and therefore an anticipatory breach. Despite this holding, the Fourth DCA affirmed based upon the seller’s failure to treat the anticipatory breach according to the applicable procedures contained in the contract. The Fourth DCA stated that this failure to follow its own contract’s remedies led the seller to ultimately breach the contract by failing to timely complete the home. The Fourth DCA held that the trial court had reached the right result for the wrong reasons. In that situation, the Court can still affirm the result. This is sometimes called the “tipsy coachman” rule. See Dade Cty Sch. Bd. v. Radio Station WQBA, 731 So. 2d 638, 644-45 (Fla. 1999).