REAL ESTATE LAW UPDATE June 8, 2015
From the office of real estate attorney Scott Souders:
Superior Court Clerk Signs Grant Deed and Escrow Documents on Behalf of Reluctant
Seller In Order to Close Escrow.
In the case of Blueberry Properties, LLC vs. Chow, the Court of Appeal affirmed the
Superior Court’s Order appointing the Clerk of the Court to execute all transfer documents on behalf of the reluctant seller.
In this case, the seller, Chow, entered into a purchase contract to sell her apartment complex in Los Angeles. She changed her mind and developed seller’s remorse. She refused to complete the sale. The buyers filed a lawsuit for Specific Performance and recorded a Lis Pendens against the title to the property. Eventually the seller signed a Settlement Agreement, which required her to close the escrow.
Thereafter, the seller again got wet feet and refused to complete the terms of the Settlement Agreement and refused to close the escrow.
After a motion to enforce the Settlement Agreement pursuant to CCP 664.6, the Superior
Court Judge ordered specific performance of the Settlement Agreement. Furthermore, the court ordered the Court Clerk to sign all escrow documents and transfer documents to close the escrow on behalf of the reluctant seller.
The Appellate Court examined the court’s inherent power under CCP 128(4) and concluded
the courts can use elisors to enforce court orders. Therefore, the court’s exercise of its inherent authority to enforce compliance of a court order was reasonable in this case.
Comment: Many times over my career I have received phone calls from sellers who have no excuse other than having seller’s remorse in trying to get out of a valid contract. Once the contact is signed and it contains all the appropriate terms required for an enforceable contract, one does not need the seller’s cooperation to enforce the contract. This case aptly demonstrates that a complaint for Specific Performance and requesting the court order the Court Clerk to sign all necessary documents is the remedy if the seller refuses to sign documents. All the seller accomplishes is more attorneys fees it will have to eventually pay as part of the lawsuit for Specific Performance. In the days when interest rates were rising, part of the buyer’s damages also included the difference between what their rate lock was for their loan and any increase in interest rate that was proximately caused by the delay in closing escrow due to the seller’s breach of contract.
Scott Souders is a real estate attorney who has practiced real estate law in excess of 39 years in Southern California.
Disclaimer: The Real Estate Law Update cites cases or statutes which are summarized and
should not be relied upon without fully reading the cases or statute in the advance sheets and shepardizing the same and consulting with your own attorney.
J. SCOTT SOUDERS, P.C.
ATTORNEY AT LAW
13 CORPORATE PLAZA DR., SUITE 200
NEWPORT BEACH, CA 92660
(949) 718-3582 FACSIMILE
scottsouders @ sbcglobal.net