Danny Edwards
De Castro V. Vastola, 877 A.2d 372, 379 N.J. Super. 277 (2004)
Facts: On March 18, 2004 plaintiffs, Carol Kilarjian and Dave de Castro and defendants John and Joan Vastola entered into a contract to sell the Vastola’s house on June 15, 2004. On June 14th the defendants’ real estate attorney wrote plaintiff’s real estate attorney notifying them that they will not convey the title. The reasoning for breaching the contract is that Joan Vastola has spinal muscular atrophy that has gotten considerably worse between the times the contract was entered to the time of closing of the contract. This disease has made it impossible for Joan to live independently and is now confined to either a wheelchair or her bed. Because of this the defendants no longer find it possible to move to Virginia as they had wished. The plaintiffs argue that specific judgment should be awarded since a valid real estate contract exists. They also argue that since the defendants have delayed their performance under the contract the plaintiffs should be awarded monetary damages resulting from attorney’s fees and higher financing costs for the delay in obtaining a second mortgage commitment. The defendants argue that mortgage rates are still favorable and that their finances are tight and should not be held responsible for an increase in mortgage rates that have not actually risen.
Issue: Should specific performance be granted to complete the contract and force the defendants out of their house even though it would cause the defendants hardship? Should the defendants be held liable for attorney fees and higher mortgage rates since their breach of the contract delayed the time it took the plaintiffs to get a second mortgage commitment?
Decision: No. The state trial court denied the plaintiffs request for specific performance. Yes. The state trial court found that the defendants should be pay monetary damages for their breach of contract.
Reason: The state trial court explained that although under normal circumstances when two parties enter into a contract and one party backs out, specific performance would be ordered, this case is different. The trial court explains that a contract must not cause injustice or hardship and by forcing the defendants to move out of their house under these circumstances it would cause both. However, the trial court explained that the plaintiff should not be punished in this situation by having to pay a higher interest rate then what was available before and attorney’s fees.