Addie v. Kjaer

Real estate investor Robert Addie, financial advisor Jorge Perez, and former Miami Dolphins player Jason Taylor (buyers) (plaintiffs) entered into a contract to buy two pieces of land in the Virgin Islands from the land’s current owners (sellers) (defendants) for $23.5 million total. Under the contract, the buyers were to make an initial deposit of $1 million. At closing, the buyers were to pay the remaining balance, and the sellers were to provide clear and marketable title to the property. There was an option for the buyers to make an additional $500,000 deposit to extend the closing deadline if needed. Finally, the contract provided that the sellers would return the deposits if the sellers defaulted on the sale through no fault of the buyers, and that the sellers could keep the deposits if the buyers defaulted on the sale through no fault of the sellers. The buyers made the initial $1 million deposit and later made the extra $500,000 deposit to extend the closing deadline. The parties were unable to complete the sale by the extended closing deadline. The sellers had provided escrow documents indicating that there were problems with providing clear and marketable title to the properties. The sellers did not provide documents fixing these issues, and the buyers did not pay the remaining purchase price. The sellers sent the buyers notices of default, but the buyers still did not pay. The parties cross-claimed against each other in United States district court, arguing about whether the contract had been breached and who was entitled to the deposit money. The matter was appealed to the United States Court of Appeals for the Third Circuit.