Facts

Defendants sold a commercial building to the plaintiff in 1989. She made a down payment, with defendants holding a note for the balance. Under the terms of the note, plaintiff was required to make monthly payments.

In mid-2000, the plaintiff stopped making payments and defendants initiated foreclosure proceedings. The plaintiff twice filed for bankruptcy to prevent the foreclosure. This caused the foreclosure to be continued many times. Defendant induced plaintiff to enter into a forbearance agreement to have plaintiff dismiss the $13,000 petition in order to foreclose. According to plaintiff's counsel, the forbearance agreement contained unlawful excessive charges to prevent plaintiff from curing. Under the terms of the Agreement, plaintiff was required to continue making payments as before, as well as make certain payments towards money owed in arrears. The Agreement also provided that plaintiff must make payment by cashiers check or money order.

Three months after signing the Forbearance Agreement, plaintiff made payment by personal check as opposed to cashier's check or money order and defendants foreclosed.

PLAINTIFF'S CONTENTIONS:
Plaintiff contended that defendants engaged in various fraud relating to the foreclosure and therefore she was entitled to set aside the sale and recover the damages. She also claimed damages for loss rents, loss profits and loss of personal property in the building when the foreclosure took place. Plaintiff also claimed that payment by check was a reasonable form of payment and therefore there was no material breach of the contract. If there was no material breach, then defendants could not foreclose.

DEFENDANTS' CONTENTIONS:
Defendants contended that all statutory requirements for a proper foreclosure were met. To the extent that there were irregularities or variances with the foreclosure statutes, they were minor. With regard to the breach of contract, defendants contended that the payment by cashiers check or money order was a material term of the contract such that payment by personal check was a material breach, which was denied by prior course of appeal ruling reversing defendant's summary judgment.

Settlement Discussions

Plaintiff demanded a return of the building ($850,000 value) plus payment of an additional $350,000, for a total demand of $1.2 million. By way of statutory offer to compromise, defendants offered $40,000. The case was twice mediated without success.

Result

Verdict for the defendants on both the fraud and breach of contract causes of action.

Other Information

Defendants will be filing a motion for attorney's fees and costs in excess of $150,000. FILING DATE: Nov. 17, 2003.

Deliberation

0.35 hours

Poll

12-0 (defense)

Length

four days