Head & Seemann, Inc. v. Gregg

Bettye Gregg (defendant) offered to buy a home from Head & Seemann, Inc. (H&S) (plaintiff). Gregg fraudulently represented that she had $15,000 to $20,000 of equity in another home, which she would sell to pay for the H&S home. H&S relied on Gregg’s intentionally fraudulent representations, accepted her offer, and entered into a contract. After Gregg took possession, she failed to make payments. H&S sued for fraud, seeking rescission, ejectment, and recovery for five months’ lost use of the property and out-of-pocket expenses. In the alternative, H&S sued for breach of contract, seeking rescission, foreclosure, and ejectment. The trial court granted partial summary judgment for H&S, rescinding the contract for fraud. The trial court further ordered ejectment, which was stayed for two weeks pending Gregg’s voluntary removal, pursuant to a stipulation between the parties that if Gregg left within two weeks, H&S would agree to the dismissal of its claim for damages. Gregg did not leave within two weeks. The trial court entered a judgment of ejectment. Gregg subsequently sought dismissal of the damages claim based on the doctrine of election of remedies. The trial court held that the judgment of ejectment was an election of remedies that barred damages, and therefore dismissed the damages claim. H&S appealed, arguing that both ejectment and damages were necessary to restore H&S to its previous position before the contract. H&S argued that damages would not give H&S the benefit of the bargain or the purchase price and therefore should not be barred under the election-of-remedies doctrine.