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Galway Homes, Inc. v. Manolidis

Court of Appeals of Iowa

May 2, 2018

GALWAY HOMES, INC., Plaintiff-Appellant,
v.
ANTONIA MANOLIDIS and TOM MANOLIDIS, Defendants-Appellees/Cross-Appellants.

          Appeal from the Iowa District Court for Polk County, Jeffrey D. Farrell, Judge.

         A corporation appeals and landowners cross-appeal, from a district court order on claims related to an alleged breach of a real estate option agreement. AFFIRMED.

          Mark A. Critelli of Critelli Law Firm, P.C., Urbandale, for appellant.

          Michael P. Holzworth, Des Moines, for appellees.

          Heard by Vogel, P.J., and Doyle and Bower, JJ.

          VOGEL, Presiding Judge.

         Galway Homes, Inc., owned and operated by James Postma, appeals a district court decision denying its breach-of-contract claim. Antonia and Tom Manolidis cross-appeal the district court's decision denying their counterclaim for earnest money. Both Galway and the Manolidises assert the district court should have awarded attorney's fees. Because Galway did not make a timely and unqualified manifestation of its desire to exercise the option agreement, the district court was correct in finding no breach of the agreement by the Manolidises. Further, because the option agreement did not contain language regarding the earnest money if the closing did not occur, we affirm the district court's ruling denying the Manolidises' claim. As such, we agree with the district court's denial of any award of attorney fees.

         I. Background Facts and Proceedings

         On May 30, 2013, Galway and the Manolidises entered into an option agreement for the purchase of approximately nine acres of undeveloped land that the Manolidises owned in Johnston. The agreement included the purchase price of $235, 000 and, pursuant to an addendum, a requirement for Galway to place $5000 of earnest money into its attorney's trust account. The addendum also gave Galway a period of ninety days "following the date of full execution of the purchase agreement" to perform and complete due diligence on the property. If Galway had not "purchased all of the Land" on or by August 30, at 5:00 p.m. the agreement would automatically terminate. Specifically, the agreement stated:

In the event Purchaser has not purchased all of the Land on or before at 5:00 p.m., then this agreement will automatically be extended for one year. In the event Purchaser has not purchased all of the Land on or by August 30, at 5:00 p.m., then this Agreement will automatically terminate and Purchaser will purchase any remaining Land from Seller at the Purchase Price.
(Strikethrough included in agreement).

         The addendum provided:

Due Diligence: Purchaser shall have a period of 120 90 days following the date of full execution of the purchase agreement during which to perform and complete its due diligence on the Property. Such due diligence shall include but not be limited to:
a) Purchaser obtaining zoning for its intended use of the Property which is the development of single family residential lots with a minimum frontage of . . . .
e) Purchaser being satisfied that its intended use is economically feasible.
On or before the expiration of the due diligence period, Purchaser will have the option to terminate the transaction and all earnest money then held on deposit shall be returned to Purchaser.

         Galway sought to amend the Johnston zoning plan for the parcel of undeveloped land. The current zoning plan required three-acre lots and, because the undeveloped parcel was only nine acres, Galway did not consider the development economically feasible without the amendment. Because of the ongoing rezoning negotiations between Galway and the City of Johnston, the Manolidises agreed to extend the option agreement four times. On October 30, 2013, the parties extended the option to November 21; on November 19 the option extended to December ...


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