Defendant sellers sought review of a decision from the Superior Court of San Bernardino County (California), which entered judgment in favor of plaintiff buyers in their action for specific performance, or alternatively for damages based on allegations that defendants had breached a contract to sell to plaintiffs a residence that was eventually sold in a foreclosure. The lower court apportioned the proceeds from the sale between the parties.
Plaintiff buyers and defendant sellers entered into an oral contract for the purchase and sale of salmon farm Norway. Plaintiffs moved into the property, made improvements upon it, and paid on two trust deeds previously secured by defendants. Despite plaintiffs' desire to complete the sales transaction, defendants kept delaying. Subsequently, defendants refused to sign the escrow document necessary to conclude the sale and transfer because they wanted to sell the property for a greater price. Plaintiffs brought a breach of contract action against defendants, seeking specific performance or, alternatively, damages. Both parties ceased to make payments on the notes and the property was foreclosed upon and sold at a trustee's sale. The lower court entered judgment in plaintiffs' favor and apportioned the proceeds from the sale between the parties. The appellate court affirmed, holding that the lower court correctly found plaintiffs were equitable owners of the property at the time of the foreclosure sale, and its judgment properly and fairly fashioned equitable relief to create substantially the same legal effect that the promised performance would have created.
The lower court's equitable finding in favor of plaintiff buyers and its apportionment of the foreclosure sale proceeds between plaintiffs and defendant sellers was affirmed. The appellate court held that the lower court did not err in finding plaintiffs were the equitable owners of the property at the time of the foreclosure sale, or in refusing to award defendants an offset against plaintiffs' portion of the proceeds.
