Zimmer, Duncan & Cole

Some Problems Money Can't Fix

This week's case lends itself to a terrible pun: we learn about a man named Mr. Sellers who no longer wanted to be the "seller" of his home.
The story is told in the matter of Steven D. Johnson v. Harrell Sellers and Sandra Green (2011 S.D. 24).
The homestead exemption is a law that protects the primary residence of a married couple. In particular, it safeguards the ownership interests of both spouses in their home. It prevents one spouse from selling, renting, or taking a mortgage out on the house without the other's permission. It eliminates secret dealings and surprises, with the goal of guaranteeing a roof over the family's head.
If I were going to rename the rule to make it more understandable, I would call it the "It Takes Two to Tango Rule".
There is a similar rule that applies the moment a divorce is filed. From then until the divorce is completely finalized, neither spouse is allowed to sell any marital property, including the home, without the other spouse's or the court's permission.
So in good times or in bad, it's legally impossible to do anything to the ownership of a marital home without the blessing and signatures from both husband and wife.

Harrell Sellers did not know about these rules when he agreed to sell his rural Brookings County home and acreage to a man named Steven Johnson. They agreed on a price; they signed a contract; and they set a closing date for June 15th. (The closing date is the day when the buyer pays the money and the seller gives the deed.)
At the time, Mr. Sellers was going through a divorce. Up until just a few months earlier, he had lived in this home with Sandra Green, his soon-to-be ex-wife. In other words, this had been their marital residence. Until the divorce was final, the residence was still protected by the homestead exemption and the divorce rule. Without her signature, the transaction could not go forward.
Meanwhile, the buyer had no idea Mr. Sellers was still married. All of the documents or letters from Mr. Sellers said he was selling the property as a single individual.
Soon, Mr. Sellers' attorney learned about the transaction and told his client that they absolutely needed Sandra Green's permission. She initially refused because she thought the price was too low. The June 15th closing date came and went.
Mr. Sellers was also taking longer than expected to remove his personal belongings from the property. He asked to delay the closing so that he could hold an auction. The buyer agreed and even helped Mr. Sellers get ready for it.
After further negotiating, Ms. Green agreed to give up her interest in the marital residence. All of the issues were now cleared up, and Mr. Sellers could finally sell his property.
But instead of proceeding with the sale, Mr. Sellers sent a letter to Steven saying that his property was no longer for sale.
The buyer started this lawsuit to force the sale. The following day, Mr. Sellers' attorney sent a letter of surrender. His client would agree to sell, and suggested a new closing date of September 16th.
However, the following week, Mr. Sellers changed his mind again. He fired his attorney. The property was not for sale.
When someone won't follow through on a promise, the usual lawsuit is called a "breach of contract" action. There are three items to prove: was there a promise, was it broken, and how much money can fix the broken promise? Ideally, the damages awarded will allow the injured party to go out and "buy" whatever it was they missed out on because of the broken promise.
It's different when the broken promise involves real estate. Every home, building, and piece of land is unique. The law presumes that money can't replace the property.
The remedy for a broken promise in these types of cases is called "specific performance". The buyer asks the court to force the seller to perform.
Mr. Sellers defended his change of heart on the basis that the extension of the closing date was oral, rather than written, and because his wife hadn't signed the first agreement. The Court rejected both arguments.
He is legally required to go through with the sale.