Haisfield v. Lape

Kenneth R. Lape and Barbara Gsand Lape owned 148 acres of land known as Oakmont Farm. In 1994, the Lapes conveyed 48 acres of their land to Dr. Hamilton Moses III and Alexandra G. Moses. The deed contained an easement granting the Moseses a line-of-sight easement. The easement restricted the Lapes from building structures visible from the Moseses home. In 2000, the Lapes’ trustees (plaintiffs) contracted to sell 99 acres of their remaining land, known as Laurel Ridge Farm, to Audrey Lea Haisfield and Laurel Ridge, LLC (Haisfield). Paragraph 14 of the purchase agreement stated that the Lapes would convey the property free of encumbrances but nevertheless subject to restrictive covenants that did not render title unmarketable. Haisfield gave an earnest money deposit of $50,000, which the Lapes were entitled to take if Haisfield defaulted. The parties agreed to close on June 30, 2000. On June 29, however, Haisfield discovered that Laurel Ridge Farm was subject to the line-of-sight easement previously granted to the Moseses. Haisfield argued that the easement rendered title unmarketable and, pursuant to the purchase agreement between Haisfield and the Lapes, Haisfield gave the Lapes 60 days to cure the defect. She also asserted that, pursuant to Paragraph 14, she was entitled to refuse to close the transaction and to collect her $50,000 deposit if the Lapes failed to cure the defect. The Lapes disagreed that the easement rendered title unmarketable and brought suit, claiming their right to the $50,000 deposit as liquidated damages. Haisfield counterclaimed, arguing that the Lapes lacked marketable title and demanding the return of the deposit. The trial court held that the line-of-sight easement did not render title unmarketable and granted the Lapes a judgment of $50,000 plus interest.