Fischer v. Heymann

On February 4, 2006, Michael and Noel Heymann (defendants) signed an agreement with Gayle Fischer (plaintiff) to purchase Fischer’s condominium for $315,000. The transaction closing date was set in May 2006. Under the agreement, the Heymanns could cancel the transaction if Fischer refused to fix a major defect. A few days after signing the agreement, the Heymanns demanded that Fischer fix an electrical problem—three outlets were not receiving electricity—or else they would cancel under the major-defect provision. When Fischer did not fix the problem by a specified date, the Hermanns terminated the agreement. On February 20, 2006, Fischer fixed the electrical issue by hiring an electrician, who pushed the reset button on the three outlets and changed a light bulb. The cost was $117. Before the originally set closing date, Fischer sued the Heymanns for specific performance or, alternatively, damages. Trial- and appellate-level litigation proceedings went on for years, and the real estate market experienced a marked downturn. In 2007, Fischer received an offer from a third party to purchase her condominium for $240,000. Fischer made a counteroffer of $286,000, which was too high at the time and, consequently, rejected. The condominium remained listed for sale until November 2011, when Fischer sold it for $180,000. Prior to selling, Fischer incurred years of expenses related to maintaining the property. A final court ruling concluded that the Heymanns had breached the purchase agreement because the electrical problem was not a major defect. In the determination of Fischer’s damages, the Heymanns argued that Fischer failed to mitigate because she could have simply fixed the electrical issue as demanded and saved the agreement. Fischer contended that she acted reasonably in all respects. The trial court rejected the Heymanns’ argument but found that Fischer had failed to mitigate damages insofar as the reasonable course of conduct would have been to accept the 2007 offer, which in turn would have saved significant further costs. The parties appealed.