In Davis v. Harmony Development, LLC, 2020 WY 39 (Wyo. 2020), the Wyoming Supreme Court affirmed the availability of specific performance in a breach of contract case and clarified Wyoming law on the statute of frauds. At trial, Hirst Applegate attorneys Billie LM Addleman and Kara L. Ellsbury successfully obtained a judgment granting specific performance in favor of their client Harmony Development.
In February 2015, Jerry Davis, a Casper developer and owner of Lifetime Fitness, entered into a contract to purchase a six-acre lot from Harmony Development. The contract was subsequently amended in March 2015 to increase the size of the lot and price. The lot increased to nearly seven acres in size with a purchase price of $1,578,319.83. Relying on the contract, Harmony Development developed the lot, including investing in roads, sidewalks, and utilities in an amount of almost $1.85 million. Davis, in turn, began plans to build a second Lifetime Fitness facility and for additional spec lots. In March 2015, however, Davis walked away from the contract, suggesting that the development no longer fit his planned facility. Harmony filed suit for breach of contract seeking specific performance. Davis counterclaimed asserting breach of contract and negligent misrepresentation.
During the litigation, Davis raised various defenses, including the statute of frauds, failure to show money damages were inadequate, violation of city ordinances, and other affirmative defenses justifying his breach of the contract. Prior to trial, the court dismissed Davis’s claims for negligent misrepresentation. Following a four-day bench trial, the Honorable Thomas Sullins ruled for Harmony concluding Davis breached the contract and granted specific performance ordering him to close on his purchase of the lot. The Judge rejected Davis’s counterclaims.
On appeal, Davis raised two issues: (1) did the contract satisfy the statute of frauds and, if not, does the doctrine of partial performance apply, and (2) did the trial court abuse its discretion in awarding specific performance.
The Supreme Court held that the contract and addendum failed to identify the property “with reasonable certainty” in violation of the statue of frauds. However, there are equitable exceptions to the statue of frauds, including the doctrines of part performance and promissory estoppel. Under the doctrine of part performance, a contract violating the statute of frauds may be enforced by a party that has partially or fully performed the contract. The Supreme Court affirmed the trial court’s finding of facts detailing Harmony Development’s partial performance of the contract, including significant investment in developing the lot and building infrastructure, and that the performance was substantial.
With respect to the award of specific performance, Davis argued that Harmony failed to prove that money damages were inadequate and that a seller cannot seek specific performance. The Court rejected both arguments and held that specific performance may be awarded at the discretion of the court, depending on the facts and equities in each case. The Court again recognized the presumption that money damages are insufficient in contracts for the sale of land where the buyer seeks specific performance. Keystone Sheep Co. v. Grear, 263 P.2d 138, 142-43 (Wyo. 1953). The Court held that the trial court did not abuse its discretion when it awarded specific performance to the seller, Harmony Development. Most importantly, the Wyoming Supreme Court recognized that while the analysis depends on the facts and equities of the case, specific performance is alive and well in Wyoming and available to both a buyer and seller.
Ultimately, the Wyoming Supreme Court affirmed the trial court’s judgment ordering specific performance.
Kara Ellsbury and Billie Addleman both practice in Hirst Applegate’s litigation division, including representing clients in commercial, real estate, and professional liability matters. They can be reached at 307.632.0541.