Hubbell Homes v. Key

Billy Michael Key (defendant) was reassigned by his employer to work in Norwalk, Iowa. Key’s employer provided a monthly rental-house allowance for one year as a benefit for the reassignment. Key and his wife entered into a purchase agreement with Hubbell Homes, L.C. (Hubbell) (plaintiff) for the purchase of a new home for $376,900. Hubbell was a builder and seller of single-family houses and townhomes. The Keys and Hubble agreed to a delayed closing and also entered into a lease agreement to allow the Keys to take advantage of the rental allowance. However, Key’s position was eliminated during the first year, and the Keys refused to purchase the home at the end of the lease agreement. Hubbell placed the home on the market at the original purchase price of $376,900. Approximately six months later, Hubbell accepted an offer to purchase the home for $350,000. However, the contract was contingent on the buyer selling his or her current residence. This did not occur, and the home remained unsold. Hubbell sued the Keys for breach of contract and sought $36,137.50 for lost profits, along with incidental damages. The trial court granted judgment to Hubbell and awarded $26,900 in general damages, which was calculated by subtracting the market value of $350,000 from the contract price of $376,900, and also awarded a portion of the incidental damages. Hubbell appealed to the Iowa Court of Appeals.