Haldiman v. Gosnell Development Corp.

On August 5, 1982, Meredith Haldiman (plaintiff) entered into a real estate contract with Gosnell Development Corporation (Gosnell) (defendant) to purchase a townhome. The contract was prepared by Gael Boden, an employee of Gosnell who was also a licensed real estate agent. The contract utilized Gosnell’s standard form and contained a provision stating that if Haldiman failed to comply with the terms and conditions of the contract, Gosnell would be entitled to terminate the contract and retain any monies received and collected prior to the termination. Boden signed the agreements, identifying himself as Gosnell’s marketing agent. Haldiman was not represented by her own real estate agent or legal counsel during the course of these dealings. Haldiman’s purchase was scheduled to close in January 1983. However, Haldiman was unable to obtain financing by the closing date, and Gosnell granted a four-and-one-half month extension. On May 6, 1983, 10 days before the conclusion of the extension period, Gosnell notified Haldiman that it would terminate the contract if the transaction did not close within the next 10 days. On May 16, Gosnell terminated the contract and retained Haldiman’s earnest-money deposits. Haldiman filed suit against Gosnell, alleging that Boden represented her in the transaction and, therefore, had the duty to engage in full and frank disclosure. Haldiman stated that Boden did not fulfill this duty, because he did not include a provision in the contract conditioning the closing on the financing and selling of her home and did not explain to her the terms of the contract, including the fact that she would lose her earnest money if the transaction did not close. The trial court found in favor of Gosnell, and Haldiman filed an appeal.