BEAUMONT – In a case centered on the sale of a hotel, the Ninth Court of Appeals today affirmed a trial court’s award of $100,000 in earnest money to a company that terminated a sales contract.
The case is a breach of contract dispute between Hotel Apart and American Capital Funding Corp. (AmCap) over the sale of a Port Arthur hotel.
AmCap, the owner of the hotel, contends Hotel Apart, the buyer of the hotel, terminated a contract prior to closing, citing failure of conditions precedent.
In its appellate brief, AmCap argued the trial court erred in granting Hotel Apart’s petition in intervention and awarding the company $100,000 in earnest money because AmCap fully performed its obligations under an “unambiguous” written sales contract.
The contract affords the non-breaching-party the sole remedy of receiving the $100,000 earnest money paid under the contract.
AmCap argues it satisfied all conditions precedent prior to Hotel Apart’s termination and breach of the sales contract – meaning AmCap should receive the $100,000.
Court records show that on Oct. 14, 2020 the trial court signed an order regarding disbursement of registry funds, finding that AmCap failed to satisfy all conditions precedent and ordering that the $100,000 earnest money be disbursed to Hotel Apart.
AmCap appealed, requesting the Ninth Court reverse the ruling and award it the $100,000.
In its brief, Hotels Apart argued AmCap failed to satisfy the requirements of the sales contract with respect to title and title insurance and that it properly exercised its contractual right to terminate the contract.
“We agree with the trial court,” the Ninth Court’s opinion states. “Regardless of whether Hotel Apart was able to obtain financing or not, the real estate contract makes clear that American is required to secure title insurance and that Hotel Apart would not waive the requirements listed in (the contract).”
Judge Kent Walston, 58th District Court, presided over the case in the trial court.
AmCap is represented by Bruce Partain and Zach Celeste, attorneys for the Beaumont law firm of Wells, Peyton, Greenberg & Hunt.
Hotel Apart is represented by attorney Alan Sanders.
Appeals case No. 09-20-00235-CV