Facts

Michele Hagan's parents arranged a trust for the benefit of Hagan and her siblings. Hagan subsequently decided to buy a house in the San Francisco area. She therefore decided to access $194,000 from the trust in order to do so. However, before being able to access the funds, Hagan's father asked her to sign an agreement that stipulated she would be entitled to the funds only if she used them to purchase a primary residence. In addition, upon sale of that house, she would have to use the funds to purchase another residence. In the event that Hagan breached the agreement, she would have to repay the trust. Two years after purchasing the San Francisco residence, Hagan rented it out and moved to San Diego. Approximately four years later, Hagan moved back into the San Francisco residence. Roseanne Bertuccelli, Hagan's aunt, filed a lawsuit alleging breach of contract against Hagan on behalf of the trust.

PLAINTIFF'S CONTENTIONS:
The plaintiff claimed that the defendant breached the terms of the agreement in question when she moved out of the San Francisco residence.

DEFENDANT'S CONTENTIONS:
The defense took the position that the plaintiff's claim was untimely in violation of the applicable statute of limitations. Even if filing was not untimely, the agreement did not contain language that specifically required the primary residence to be sold instead of leased in order for the terms of the agreement to be met. Further, the defense claimed that the plaintiff could not enforce the agreement because the trust was not even a party to the contract.

Damages

The plaintiff sought $194,000 reflecting the amount from the trust received by the defendant. The defense challenged this amount.

Result

Defense verdict. The trust was not entitled to a recovery because Hagan's father was not acting in any official capacity as an agent for the trust when he entered into the agreement with the defendant; assuming a breach, there was no damage to the trust; and, the claim was barred by the applicable statue of limitations.