Installment Contracts

Splittorff v Fehn, 810 NE2d 385 (Ind Ct App 2004).

Facts: Fehn entered into an installment land sale contract to purchase land from the Splittorffs. The contract provided that the failure to pay installments would be an act of default. For the Splittorffs to foreclose, the contract required them to send Fehn a notice of nonpayment. After making the down payment and the first monthly installment payment, Fehn learned of the existence of three judgment liens against the property and thereafter stopped all payments. Fehn filed a complaint for completion of a real estate agreement, asking for the execution and delivery of a warranty deed conveying the property and a declaration of superior title than that of the lien holders. The trial court granted Fehn's motion of summary judgment and the Splittorffs appealed. The Splittorffs argued that the trial court's ruling was erroneous because Fehn breached, repudiated, and abandoned the land sale contract when she stopped making payments.

Holding: Affirmed. The failure to make payments on a conditional land sale contract after liens are entered against the property does not constitute a default of the contract when the buyer files suit to quiet title to the property and arranges to pay the balance due under the contract to the court. A non-breaching seller must comply with the terms of the contract providing for giving notice to the buyer of nonpayment in order to recover damages for breach. Fehn did not abandon the contract because the Splittorffs neglected to provide such notice pursuant to the terms of the contract.

© ATG atgc0503vol29

 

Print this page