Hamilton v. Hopkins, et al.


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Docket Number: 2001-CA-01607-SCT

Supreme Court: Opinion Link
Opinion Date: 01-09-2003
Opinion Author: Waller, J.
Holding: Affirmed in Part; Reversed and Rendered in Part

Additional Case Information: Topic: Contract - Attorney’s fees - Broker’s commission - Earnest money deposit - Punitive damages
Judge(s) Concurring: Pittman, C.J., Smith, P.J., Cobb, Easley, Carlson and Graves, JJ.
Non Participating Judge(s): Diaz, J.
Concurs in Result Only: McRae, P.J.
Procedural History: Bench Trial
Nature of the Case: CIVIL - CONTRACT

Trial Court: Date of Trial Judgment: 08-01-2001
Appealed from: Harrison County Chancery Court
Judge: Thomas Wright Teel
Disposition: The Chancellor held that the Appellees could not recover punitive damages, could recover their attorney's fees in prosecuting the action, that the Buyer's Agent could recover its commission of $3,750, and that the Appellant could not recover his earnest money deposit.
Case Number: C2402-98-1205

  Party Name: Attorney Name:  
Appellant: Billy M. Hamilton




FELICIA DUNN BURKES



 

Appellee: Gerald J. Hopkins, Gay T. Hopkins and Buyer's Agent of The Mississippi Gulf Coast, Inc. WAYNE L. HENGEN WOODROW W. PRINGLE, III  

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Topic: Contract - Attorney’s fees - Broker’s commission - Earnest money deposit - Punitive damages

Summary of the Facts: Gerald and Gay Hopkins sued Billy Hamilton for breach of a real estate sales contract. Hamilton's broker, The Buyer's Agent of the Mississippi Gulf Coast, Inc., intervened seeking a 3% commission. Hamilton counterclaimed for refund of the earnest money deposit and payment of attorney's fees. The court held that the Hopkinses could not recover punitive damages, the Hopkinses could recover their attorney's fees, The Buyer's Agent could recover its commission, and Hamilton could not recover his earnest money deposit. Hamilton appeals, and the Hopkinses cross-appeal.

Summary of Opinion Analysis: Issue 1: Attorney’s fees Hamilton argues that the court erred in awarding attorney's fees to the Hopkinses. If attorney's fees are not authorized by a contract or by statute, they are not to be awarded when an award of punitive damages is not proper. The contract between the parties in this case provides that "If it becomes necessary to insure the performance of the conditions of this contract for purchaser to initiate litigation, then the losing party agrees to pay reasonable attorney's fees and court costs in connection therewith." Therefore, the right to payment of attorney's fees was contingent on the purchaser, Hamilton, initiating litigation. Since an award of attorney's fees to the sellers was not authorized by the contract or statute, the court erred in awarding attorney's fees to the Hopkinses. Issue 2: Commission Hamilton argues that the court erred in awarding a 3% commission to The Buyer's Agent. A broker may by special agreement make the payment of commission dependent upon a contingency, or the happening of a condition precedent, and unless that contingency occurs or the contingency happens, or its performance is excused, there is no right to recovery. The commission clause here provides that Hamilton will pay The Buyer's Agent the commission at the time of closing from the proceeds of the sale. The Buyer's Agent is bound to the specific terms of the contract. Therefore, The Buyer's Agent is not entitled to a commission. Issue 3: Refund/Attorney’s fees Hamilton argues that he is entitled to a return of his earnest money deposit and payment of his attorney's fees because of his dissatisfaction with the HVAC units in the house. A real estate agent is a special agent of its principal and is vested with limited powers. If Hamilton had wanted to rescind the contract because of perceived defects in the HVAC units and recover his earnest money deposit, he would have had to communicate that to The Buyer's Agent. His intention to rescind was not communicated to the Hopkinses until two days prior to the closing. In addition, the Hopkinses had moved out of the house early at Hamilton’s request. In this situation, the court’s refusal to return the earnest money deposit was a reasonable exercise of his equitable power. Issue 4: Punitive damages The Hopkinses argue that the court erred in refusing to award punitive damages, because Hamilton’s intentional refusal to close on the sale of the house was an intentional wrong and in reckless disregard of the Hopkinses' rights. Punitive damages are proper in a breach of contract case where the plaintiff proves by a preponderance that the breach was the result of an intentional wrong or that a defendant acted maliciously or with reckless disregard of the plaintiff's rights. Although Hamilton willingly chose not to complete the contract, there is no evidence he acted maliciously or in reckless disregard of the Hopkinses' rights. He testified that he tried unsuccessfully to contact the broker and agent for a month to tell them he would not purchase the property without a reduction in price or replacement of the HVAC units.


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