1. Why did the trial judge refuse to grant rescission?

2. Generally when is the equitable remedy of rescission warranted in a contract dispute?

3. Did the appeals court determine that the breach of contract in the case was so substantial and fundamental as to defeat the purpose of the contract?

Edgar Buck owns Rookie IV, a $6 million 61-foot boat requiring a dock slip 20 feet in width. Buck’s daughter Susanne owns ZAN, LCC, and Buck has authority to act on behalf of ZAN. Susanne wanted a waterfront lot to build a home, and Buck wanted a boat slip out of the Intercoastal Waterway where the boat regularly sustained damage. ZAN (Buck) agreed to purchase a slip for Buck’s boat and lot 3 for Susanne. Just prior to the closing, Buck discovered that the slip designated as B1 was actually two slips, B1 and B2 and Rookie IV would not fit into B1. Buck was informed by Ripley Cove’s agent and later its closing attorney Dan David that the sellers owned B2 and that it would be no problem to give Buck the 20 foot clearance he needed and to place two pilings in the adjoining slip. Buck then agreed to close on the property. It was later discovered that at the time of the closing, Ripley Cove no longer owned B2. Since Rookie IV could not fit into the slip, ZAN sued for rescission of the contract for the lot and slip and damages. The trial court determined that ZAN proved its claims, awarded $10,000 for breach of contract and negligent misrepresentation but refused to rescind the contract. ZAN appealed.

JUDICIAL OPINION

I.

PER CURIAM … [A]s to ZAN’s entitlement to the remedy of rescission, the trial judge found the following: This case presents a unique situation as there is no issue with the upland parcel the Bucks purchased with the slip. Ordinarily, if part of a contract can be performed, the damages can be fashioned so as to reflect the breach. However, in this case the Master Deed specifically forbids the separation of the upland parcel from [the] boat slip, complicating this Court’s task. The Court cannot order the return of the slip with Z[AN] keeping the upland parcel about which there is no quarrel. Rescission is an equitable remedy which I choose not to grant. Rather, I award damages in the sum of $10,000.00 for the breach of the contract and negligent misrepresentation.

II.

ZAN argues the trial judge erred in refusing to rescind the contract after concluding Respondents were liable in contract and tort. We agree.

Under our own view of the preponderance of the evidence, we agree with the trial judge’s findings of fact. It was clear to all parties that the main purpose of the contract was to provide Buck with a slip to accommodate Rookie IV. ZAN refused to close at the first scheduled closing when it appeared B1 was not sufficiently wide to berth Rookie IV. ZAN again refused to close at the second scheduled closing until promised accommodation for Rookie IV. Furthermore, the testimony indicates the existing clearance in B1 could not accommodate Rookie IV. Next, Respondents led Buck to believe they owned B2 and would utilize B2 to enlarge B1. Finally, we agree with the trial judge that ZAN’s reliance on David’s letter at the closing was reasonable. We likewise agree with the trial judge’s conclusion that ZAN proved its claims for breach of contract and negligent misrepresentation. However, we respectfully disagree with the learned trial judge’s conclusion that ZAN was not entitled to the remedy of rescission. The trial judge denied rescission because there was no dispute regarding the upland parcel. Because we find the slip was a fundamental and substantial purpose of the contract, we conclude ZAN was entitled to rescission despite the parties’ lack of dispute regarding the upland parcel. Furthermore, rescission is not unavailable due to the restriction in the Master Deed prohibiting the separation of the lot and slip. Rather, rescission would undo the contract in toto, rescinding the sale of both the lot and the slip. ………………