Ruble v. Reich

In July 1996, Tim and Karen Ruble (plaintiffs) entered into a real estate purchase agreement with Harold Reich (defendant). The agreement stated that the purchase was contingent on the sale of the Rubles’ property closing escrow. The agreement further established that the closing on Reich’s property would occur on August 31, 1996, or within zero days of the Rubles obtaining loan approval, whichever occurred later. The purchase price of the property was $83,000, and the Rubles applied for a conventional loan of $62,500. The Rubles’ intent was that the proceeds from the sale of their home would make up the difference and be used as the down payment for their purchase of Reich’s property. On August 16, the Rubles’ representative notified Reich that they would not be able to close on August 31. There was no further communication between the parties until September, when Reich notified the Rubles that he did not want to proceed with the closing. On September 26, the Rubles closed on the sale of their own property and informed Reich that they were ready to close on the purchase of his property. The closing never occurred. The Rubles filed suit against Reich, alleging breach of contract and seeking special damages. Specifically, the Rubles sought $775 per month for rental payments for the six months they were without a home because of Reich’s breach of contract. Reich challenged this request, stating that the Rubles testified at trial that they would have been paying $630 in mortgage payments on the property purchased from Reich, with $500 going toward principal and $130 toward taxes and other expenses, and therefore only were entitled to $145 per month. The lower court held that Reich breached the contract and awarded damages to the Rubles, including $775 per month for rental payments. Reich appealed this decision. The appellate court affirmed the trial court’s decision.