Purchase & Sale Agreement

You may not be able to get costs and attorney's fees for the breach of a Purchase & Sale
Agreement (REPSA) according to this case. Courts rarely lay down a blanket rule that applies
in all situations, so watch these facts carefully.

Peringer inherited Seattle property from her parents. The property was purchased in the
1940's, and a paved driveway extends from the garage to the street following the natural
topography. A cement block retaining wall surrounds the driveway and has since the 1950's.

In 1988 Peringer sold the property to the Barbers. Shortly after closing the Barbers discovered
that the driveway is partly on the neighbor's property. The Barbers asked their neighbor to
quitclaim the disputed portion to them or to grant them an easement. Guess what? Their
neighbor wanted money or no deal. Surprise! Can you imagine a neighbor being so
un-neighborly? (But this is Seattle.)

The Barbers commenced a quiet title action against their neighbor and against Peringer. The
court granted summary judgment in favor of the Barbers. (The Barbers had established their
prescriptive or adverse right to this easement.)

The Barbers then sued Peringer to recover their attorney's fees, relying upon the attorney fee
provision in the Purchase & Sale Agreement. Their claim was that Peringer breached the
warranties flowing from the statutory warranty deed and that they were entitled to attorney's
fees under the P&S Agreement.

The trial court granted the Barbers about $7,700 in attorney fees, costs and expenses based
on the costs and attorney fees provision in the REPSA.
Enter Court of Appeals

The key question on appeal was whether the duty to deliver good title as required in paragraph
24 of the Purchase & Sale Agreement merged into the statutory warranty deed. The answer is
yes.

"The doctrine of merger is founded on the parties' privilege to change the terms of their
contract at any time prior to performance. Execution, delivery, and acceptance of the deed
becomes the final expression of the parties' contract and therefore subsumes all prior
agreements. In general, the provisions of a real estate purchase and sales agreement merge
into the deed. . . Once the documents and their obligations merged, Peringer could no longer
breach the REPSA [Real Estate Purchase & Sale Agreement]."

The point is this: Once your real estate transaction has closed and the deed has been
recorded, you cannot rely on language in the REPSA to prove a breach and that you are
entitled to costs and attorney fees. The doctrine of merger may not allow it.

Footnote: Barber tried to get attorney's fees based on a breach of the warranties in the
statutory warranty deed but failed. The general rule in Washington still holds--attorney's fees
and costs are normally granted only when a contract clause provides for them or costs and fees
are allowed under some Washington statute.

Purchase & Sale Agreement Litigation

BARBER v. PERINGER
Court of Appeals of Washington, August 1994

See a Contrary Case on
this Subject of Attorney's
fees:

Lingvall v. Bartmess

"The Lingvall case is
important for another
reason. It is a powerful
lesson on why you
should avoid litigation."

Charles E. Marunde

Facts

If you would like to see a specific real estate issue addressed in future newsletters, forward your question or
issue to chuck@freerealestatelaw.com. This Newsletter is published on a periodic basis as important
case law and legislative law is developed.

"I wrote this newsletter in 1994, but it is as relevant today as it was
then. Interesting. Some things never change." Chuck Marunde

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October 2005