from the Superior Court in Maricopa County No. CV2014-015038
The Honorable Karen A. Mullins, Judge The Honorable Katherine
M. Cooper, Judge REVERSED AND REMANDED.
Office of Lawrence K. Lynde, PLLC, Lawrence K. Lynde Counsel
Manning & Kass, Ellrod, Ramirez, Trester, LLP, Richard V.
Mack Counsel for Defendant/Appellant
Michael J. Brown delivered the opinion of the Court, in which
Presiding Judge Diane M. Johnsen and Judge Jennifer B.
Michael J. Brown, Judge
Granada, LLC ("Granada") appeals the superior
court's judgment in favor of Douglas Offerman ordering
specific performance of an alleged option to purchase a home
owned by Granada. Because the option was not sufficiently
definite to support specific performance, we reverse and
remand for further proceedings consistent with this decision.
AND PROCEDURAL BACKGROUND
Offerman leased a home from Granada from August 2012 through
August 2014. Granada's principal Gilbert Houseaux, a
licensed real estate agent, acted as the agent for both
Offerman and Granada in the transaction. Before the lease
began, Offerman expressed an interest in purchasing the
property, but Granada declined to sell at that time. The
parties, however, added the following language to their lease
agreement, which Houseaux drafted:
At the completion of the 24 month lease, the Tenant has the
option to purchase [the] property . . . for a sales price to
be determined at that time by an independent appraiser
acceptable to both Tenant and Landlord. (Terms and Conditions
to be stipulated by both parties at such time).
If the Tenant chooses to exercise his right to purchase this
property at the end of the 2 year lease agreement, he shall
be credited $200.00 of each $1900.00 of monthly rent paid
The acceptable condition of the property when Tenant takes
occupancy will be considered the condition Tenant agrees to
accept at time of closing. All inspections and contingencies
to be performed and satisfied prior to initial move-in.
Property to be sold AS-IS.
As the end of the lease term neared, believing this language
gave him an option to purchase the property, Offerman told
Houseaux he intended to exercise the option and asked Granada
to name an independent appraiser. Receiving no response from
Houseaux, Offerman retained an appraiser who valued the
property at $240, 000 and shared the appraisal with Granada.
Granada did not name an appraiser or obtain an additional
appraisal. Instead, Granada sent Offerman a draft purchase
contract with a proposed $350, 000 sale price, which Offerman
rejected. Granada later notified Offerman it would not renew
the lease, but Offerman remained in the house, paying the
monthly rent of $1, 900 for several months after the original
lease term ended.
Offerman sued Granada for breach of contract, alleging
Granada had failed to agree on an independent appraiser,
refused to respond to Offerman's efforts to exercise the
option by proposing a "grossly inflated" cash
purchase price, and served him with an eviction notice rather
than engaging in the purchase process. Offerman asked the
court to (1) order Granada to "specifically perform
pursuant to the terms of the purchase option"; (2) set
the purchase price at $240, 000; (3) compel Granada to open
escrow at a title company of Offerman's choosing and to
"cooperate in the purchase process, the establishment
and completion of escrow and the closing"; and (4) order
all of the $1, 900 payments Offerman made after September 1,
2014, be applied toward the purchase price.
After a bench trial, the superior court found that Offerman
was entitled to specific performance of the option. The court
then held an evidentiary hearing "on all issues"
relating to the form of judgment. Following that hearing, the
court entered judgment ordering Granada to sell the property
to Offerman for $240, 000. The court also, inter
alia, named a title agency to hold escrow, determined
the date for close of escrow, divided the various transaction
fees between the parties, and ordered Granada to arrange for
a property inspection. The court further directed the title
agency to use the judgment "as the ...