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Matthew 2535 Props., LLC v. Denithorne, 2024 Pa. Super. LEXIS 89, 2024 WL 1126110 (March 15, 2024) (Kunselman, J.).

This case involves the sale of a restaurant which burned down after the parties signed a sales agreement but before they closed on the deal. A court of equity ordered specific performance – namely, that the owners of the now-vacant land, Richard and Priscilla Denithorne (Sellers), transfer legal title to Matthew 2535 Properties, LLC (Buyer). The court directed Buyer to pay the purchase price of $400,000, minus the value of insurance proceeds that a third party received following the fire. On appeal, Sellers challenge the finding that they breached the sales agreement and the order of specific performance. We affirm the finding of breach, but we vacate and remand for a new trial on what the order of specific performance should be.

The court ordered specific performance of the contract at the purchase price of $400,000, “minus the amount of insurance proceeds paid to Denithorne Brothers, Inc. for the loss of the restaurant structure, excluding therefrom any amount paid for the loss of equipment and inventory contained within the structure.” The court considered this to be equitable, given the unique circumstances of this case.

The equity court’s ruling of ambiguity is final and binding. Also final and binding is the equity court’s ultimate conclusion that sellers breached the contract that they would deliver the restaurant to the buyer in the condition it existed at the time the parties signed the sales agreement.

Buyer did not breach the agreement in any way. We agree with the equity court that Sellers’ post-trial motion did not contend that specific performance was inappropriate. Indeed, Sellers did not seek judgment, as a matter of law, on that ground. They only sought a modification of the order. Thus, the Sellers’ third appellate issue differs from the one they raised below in their post-trial motion.

Because Sellers’ motion for post-trial relief did not challenge the grant of specific performance, as a matter of law, that issue is waived.

The equity court could not consider the insurance proceeds when fashioning the order of specific performance. Because the order of specific performance lacked evidentiary support on the record, it cannot be affirmed.

The court of equity needed to know how much money it was ordering sellers to deduct from the purchase price. Potentially, the deduction was reasonable in light of the loss that the property suffered.

Because the record is devoid of any competent evidence regarding the post-fire value of the property, the only equitable result is a new trial on the amount of the purchase price that Buyer owes Sellers. This will allow the equity court another opportunity to modify the order of specific performance based on competent evidence.

Judgment vacated. Order denying motion for post-trial relief partially affirmed and partially reversed. Case remanded for a new trial in accordance with this Opinion.