Texas Causes of Action & Affirmative Defenses

Texas Causes of Action & Affirmative Defenses

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Saturday, June 4, 2011

What is specific performance? When can it be granted as a remedy in a contract dispute?

   
WHAT KIND OF REMEDY IS SPECIFIC PERFORMANCE?

Specific performance is an equitable remedy that may be awarded upon a showing of breach of contract. Blue Moon Venture, L.L.C. v. Horvitz, No. 14-09-00459-CV, 2010 WL 4013533, at *1 (Tex. App.-Houston [14th Dist.] Oct. 14, 2010, no pet.) (mem. op.) (citing Stafford v. S. Vanity Magazine, Inc., 231 S.W.3d 530, 535 (Tex. App.-Dallas 2007, pet. denied)).

ELEMENTS OF CLAIM FOR SPECIFIC PERFORMANCE AS REMEDY
 
A party seeking specific performance must plead and prove (1) compliance with the contract including tender of performance unless excused by the defendant's breach or repudiation and (2) it was ready, willing, and able to perform at relevant times. Id. (citing DiGiuseppe v. Lawler, 269 S.W.3d 588, 593-94, 601 (Tex. 2008)). Whether to award specific performance is a matter committed to the trial court's discretion. Chapman v. Olbrich, 217 S.W.3d 482, 491 (Tex. App.-Houston [14th Dist.] 2006, no pet.) (citing Bell v. Rudd, 144 Tex. 491, 191 S.W.2d 841, 843 (1946); Roundville Partners, L.L.C. v. Jones, 118 S.W.3d 73, 79 (Tex. App.-Austin 2003, pet. denied)). A trial court abuses its discretion when it acts in an arbitrary or unreasonable manner or, stated differently, without reference to any guiding rules or principles. Downer v. Aquamarine Operators, Inc., 701 S.W.2d 238, 241-42 (Tex. 1985). Further, a clear failure by the trial court to analyze or apply the law correctly constitutes an abuse of discretion. Walker v. Packer, 827 S.W.2d 833, 840 (Tex. 1992) (orig. proceeding). 

SOURCE: Houston Court of Appeals - 14-08-00329-CV - 5/26/11

CASELAW CLIPS ON SPECIFIC PERFORMANCE AS EQUITABLE REMEDY IN BREACH OF CONTRACT CASES FROM OTHER COURTS OF APPEALS
 
Specific performance is an equitable remedy that may be awarded upon a showing of breach of contract. Kress v. Soules, 152 Tex. 595, 597, 261 S.W.2d 703, 704 (1953); Living Christ Church, Inc. v. Jones, 734 S.W.2d 417, 419 (Tex.App.-Dallas 1987, writ denied).

Not a cause of action in its own right

Specific performance is not a separate cause of action, but rather it is an equitable remedy used as a substitute for monetary damages when such damages would not be adequate. See Scott v. Sebree, 986 S.W.2d 364, 368 (Tex. App.-Austin 1999, pet. denied).
 
Grant of remedy discretionary 
 
Specific performance is an equitable remedy committed to the trial court's discretion. Bell v. Rudd, 144 Tex. 491, 191 S.W.2d 841, 843 (1946); Roundville Partners, L.L.C. v. Jones, 118 S.W.3d 73, 79 (Tex. App.-Austin 2003, pet. denied); Scott, 986 S.W.2d at 368 (Tex.App.-Austin 1999, pet. denied). A party seeking specific performance must demonstrate that they have performed, or tendered performance, of their obligations under the contract. Am. Apparel Prods., Inc. v. Brabs, Inc., 880 S.W.2d 267, 269 (Tex.App.-Houston [14th Dist.] 1994, no writ).
 
Not if there is an adequate remedy, such as monetary damages
 
A contract will not be specifically enforced if there is an adequate remedy at law. Id. However, specific performance may be awarded when the personal property has a "special, peculiar, or unique value or character." Madariaga v. Morris, 639 S.W.2d 709, 711 (Tex.App.-Tyler 1982, writ ref'd n.r.e.). Further, when a closely-held corporation's stock has no ascertainable value, the party may seek specific performance to enforce a stock purchase agreement. Miga v. Jensen, 96 S.W.3d 207, 217 (Tex.2002) (citing Bendalin v. Delgado, 406 S.W.2d 897, 900 (Tex. 1966) (plaintiff could seek specific performance to enforce stock purchase agreement 536*536 where corporation was closely held and stock had no market value)). The doctrine of unclean hands operates as a bar to the equitable relief of specific performance. Lazy M Ranch, Ltd. v. TXI Operations LP, 978 S.W.2d 678, 683 (Tex.App.-Austin 1998, pet. denied).
 
SOURCE: Dallas Court of Appeals - 05-06-00545-CV - 8/14/07 - 231 S.W.3d 530 (2007)
 
Specific performance is an equitable remedy that may be awarded upon a showing of breach of contract. Stafford v. S. Vanity Magazine, Inc., 231 S.W.3d 530, 535 (Tex.App.-Dallas 2007, pet. denied) (citing Kress v. Soules, 152 Tex. 595, 261 S.W.2d 703, 704 (1953)). The essential elements of a breach of contract claim are: (1) the existence of a valid contract; (2) performance or tendered performance by the plaintiff; (3) breach of the contract by the defendant; and (4) damages sustained by the plaintiff as a result of the breach. Valero Mktg. & Supply Co. v. Kalama Int'l, 51 S.W.3d 345, 351 (Tex.App.-Houston [1st Dist.] 2001, no pet.). A party seeking specific performance must show that he is ready, willing, and able to perform the contract. Stafford, 231 S.W.3d at 535 (citing Am. Apparel Prods., Inc. v. Brabs, Inc., 880 S.W.2d 267, 269 (Tex.App.-Houston [14th Dist.] 1994, no writ)); Chessher v. McNabb, 619 S.W.2d 420, 421 (Tex.Civ. App.-Houston [14th Dist.] 1981, no writ). However, when the other party clearly refuses to perform his part of a contract, the party who seeks specific performance need not tender performance before bringing suit. 17090 Parkway, Ltd. v. McDavid, 80 S.W.3d 252, 256 (Tex.App.-Dallas 2002, pet. denied). Even when tender of performance is excused, a party must plead and prove he is ready, willing, and able to perform. Id.; Chessher, 619 S.W.2d at 421; Hendershot v. Amarillo Nat'l Bank, 476 S.W.2d 919, 920 (Tex.Civ. App.-Amarillo 1972, no writ). When a party seeks to prove it is ready, willing, and able to perform under the terms of a contract, but is unable to prove it has a firm commitment for financing, that party is not entitled to specific performance of the contract. Hendershot, 476 S.W.2d at 921.

SOURCE: Houston Court of Appeals - 01-07-00080-CV - 9/4/8 - 274 S.W.3d 140 (2008)

A contract is subject to specific performance if it contains the essential terms of a contract, expressed with such certainty and clarity that it may be understood without recourse to parol evidence. Johnson v. Snell, 504 S.W.2d 397, 398 (Tex.1973); Rus-Ann Dev., Inc. v. ECGC, Inc., 222 S.W.3d 921, 927-28 (Tex.App.-Tyler 2007, no pet.) (holding that lack of closing date in option contract did not preclude enforcement by specific performance). Specific performance is an equitable remedy that may be awarded at the trial court's discretion upon a showing of breach of contract. Kress v. Soules, 152 Tex. 595, 261 S.W.2d 703, 704 (1953); Bell v. Rudd, 144 Tex. 491, 191 S.W.2d 841, 843 (1946); Stafford v. S. Vanity Magazine, Inc., 231 S.W.3d 530, 535 (Tex.App.-Dallas 2007, pet. denied). Specific performance is not a separate cause of action, but rather it is an equitable remedy used as a substitute for monetary damages when such damages would not be adequate. Stafford, 231 S.W.3d at 535; Scott v. Sebree, 986 S.W.2d 364, 368 (Tex.App.-Austin 1999, pet. denied).

SOURCE: Fort Worth Court of Appeals - 02-07-443-CV - 9/11/08 - 266 S.W.3d 559 (2008)


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