Guardian Construction Co. v. Dinkin

Singley, J., delivered the opinion of the Court. Dr. Harvey Dinkin and his wife, Gail M. Dinkin (the Dinkins) on 8 November 1969 entered into a contract for the purchase of a house in Vienna, Virginia from Guardian Construction Co., Inc. (Guardian). The contract provided for settlement “[w]ithin ten (10) days from the date of notification by Seller to Purchaser of completion of the work to be done . . . .” On 21 April 1970, the Dinkins were notified that settlement had been set for 6 May 1970 at 2 p.m. They asked for an extension, which was refused.

When they failed to appear at settlement, Guardian declared a forfeiture of their $1,000.00 deposit as liquidated damages. The Dinkins brought suit in the Circuit Court for Montgomery County for the return of the deposit. Guardian counterclaimed for actual damages allegedly sustained in consequence of the Din-kins’ failure to settle. From a judgment in the Dinkins’ favor for $1,000.00 with interest and costs and dismissing the counterclaim, Guardian has appealed. ³²⁷ The contract contained a provision that “ ‘Completion of the work’ shall mean that date on which V.A. [Veterans Administration], F.H.A. [Federal Housing Administration] or Conventional lender makes final inspection of work.” In an addendum there was a provision that “. . . this contract is contingent on the approval of the house and the buyer by the Veterans Administration ....

If the aforesaid approval is not obtained, it is expressly agreed that [the buyer] shall be refunded his deposit. . . .” On 19 March 1970, an inspection of the premises had been made by the Federal Housing Administration, apparently acting for the Veterans Administration. That agency’s Compliance Inspection Report, identifying Provident Mortgage Corporation as the Dinkins’ mortgage lender, was made on a printed form, and contained several significant entries. Under the heading “Compliance inspection of on-site improvements reveals:” appeared Item 13, “On-site improvements acceptably completed except items listed below, completion of which is delayed by conditions beyond control. (See IV below).” Under “Field inspection of off-site improvements reveals :” there was keyed to Item 13 the comment, “Complete fine Grading and seeding Back yard.” Under IV, headed “To mortgagee” Box A was checked.

It read, “Compliance. Conditional commitment subject to inspection before issuance of Firm Commitment.” Returning to the section dealing with off-site improvements there was a check mark opposite Item 16, “Completion essential as explained below,” and the explanation read, “Surface,” which apparently meant “Surface street,” since this comment also