Tuesday, December 24, 2013

Kutzin v. Pirnie case brief

Kutzin v. Pirnie case brief summary
591 A.2d 932 (1991)

Plaintiff sellers sought review of a judgment by the Superior Court, Appellate Division (New Jersey), that awarded them the deposit paid on a property sale contract but denied them any interest or credit due to increased capital gains taxes paid. The trial court had found that defendant buyers had breached the sale contract, but that plaintiffs were only entitled to keep the portion of the deposit equal to their actual losses.

Plaintiff sellers brought suit against defendant buyers for breach of a property sale contract when defendants decided not to go through with the deal. The trial court found in favor of plaintiffs and awarded them damages in the amount of the difference between what the property then sold for and related costs and expenses, and that the excess deposit should be returned to defendants. The appellate court ruled that plaintiffs were entitled to keep the entire deposit.


  • The court affirmed the decision in favor of plaintiffs, finding that defendants had breached the contract, but that the amount awarded should be that set by the trial court. 
  • The court accepted defendants contentions that allowing plaintiffs to keep the entire deposit was unjust enrichment.
  • The court overruled the New Jersey cases adhering to the common-law rule allowing the nonbreaching party to keep the entire deposit as liquidated damages and adopted the modern approach of refunding the amount to the breaching party in excess of the actual damages suffered.

The court affirmed the judgment of the appellate court, but modified the amount awarded to plaintiff sellers to the amount awarded by the trial court for the actual damages suffered. The court held that plaintiffs were only entitled to the difference in the price in which they eventually sold their property, plus related costs, and that the excess from the deposit should be returned to defendant buyers.

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