Waddy v. Riggleman
606 S.E.2d 222 (2004)
Rule of Law:
Under the doctrine of impracticability, a party's contractual performance is excused only if an unforeseen supervening event, the non-occurrence of which was a basic assumption of the contract, makes performance impracticable without the fault of the party seeking to be excused, and that party has not assumed the risk of such an event.
Facts:
- On July 5, 2002, William W. Waddy entered into a contract to purchase a 30-acre tract of land from Denver and Christine Riggleman, who were experiencing financial difficulties.
- The contract explicitly required the Rigglemans to convey the property with a clear title, free of all liens, and to cure any title defects and pay for necessary releases prior to closing.
- The property was encumbered by two deeds of trust.
- The parties subsequently executed two more agreements, ultimately increasing the sale to 48 acres and extending the closing date to September 20, 2002.
- An attorney hired to represent both parties, at the Rigglemans' request, did not immediately begin the process of obtaining the lien releases, believing it would be uncomplicated.
- The necessary lien releases were not secured by the September 20, 2002, closing date.
- On or about September 27, 2002, Mr. Riggleman informed the attorney that he would not proceed with the sale.
- After Waddy filed suit, the Rigglemans conveyed a larger tract of land to C. Fred and Carol Ours, which purported to eliminate the right of way to the 48 acres at issue.
Procedural Posture:
- William W. Waddy sued Denver L. Riggleman and Christine Riggleman in the Circuit Court of Grant County, a trial court, seeking specific performance of a land sale contract.
- Waddy later filed an amended complaint, adding C. Fred Ours and Carol A. Ours as defendants.
- A bench trial was held in the Circuit Court.
- At the close of Waddy's case, the Rigglemans moved for a directed verdict, which the court treated as a motion for judgment as a matter of law.
- The Circuit Court granted the motion, finding for the Rigglemans on the grounds of impossibility and that time was of the essence, and dismissed the claims against all defendants.
- Waddy, as the appellant, appealed the Circuit Court's order to the Supreme Court of Appeals of West Virginia.
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Issue:
Does a seller's failure to clear title on a property by a contractual closing date, due to difficulties in obtaining third-party lien releases, excuse the seller's performance under the contract defense of impracticability?
Opinions:
Majority - Justice Davis
No, a seller's failure to clear title by a closing date due to difficulties in obtaining lien releases does not excuse performance under the doctrine of impracticability when the seller contractually assumed the duty to clear the title and their own delay contributed to the failure. The court formally adopts the doctrine of impracticability as defined in the Restatement (Second) of Contracts § 261, replacing the older, stricter doctrine of impossibility. The court found that the Rigglemans failed to demonstrate their performance was impracticable. The evidence suggested the releases could have been obtained within a month, and the Rigglemans had over two months to do so. The difficulty was not an unforeseen event; rather, the Rigglemans explicitly assumed the duty to cure title defects in the contract. Their own delay and failure to exercise reasonable diligence, not an external supervening event, caused the inability to close on time. Therefore, the Rigglemans were at fault and cannot use their own inaction as a defense to excuse their contractual obligations.
Analysis:
This decision officially replaces the traditional, rigid common law doctrine of impossibility with the more flexible, modern doctrine of impracticability in West Virginia, aligning the state with the Restatement (Second) of Contracts and the majority of jurisdictions. The case clarifies that the impracticability defense is not available for difficulties that are self-inflicted or for risks that a party has contractually assumed. This holding reinforces the principle that parties are expected to use reasonable efforts to overcome obstacles to performance, and it will make it more difficult for parties to escape contractual obligations due to foreseeable complications, especially those involving the cooperation of third parties which they agreed to secure.
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