## Facts

- Daniel Smargon and Audrey Viterbi agreed to buy a not-yet-built resort condominium unit from Grand Lodge Partners, LLC (GLP) and paid deposits and other amounts, including for upgrades.
- Before contracting, the buyers raised concerns that an adjacent mechanical room would cause unacceptable noise and vibration.
- GLP expressly promised it would design and build the project to mitigate mechanical-room noise and vibration affecting the unit.
- At the pre-closing walk-through, the inspection was disrupted by significant noise and vibration from the mechanical room.
- The buyers refused to close because the unit, as delivered for closing, did not conform to GLP’s noise-mitigation assurances.
- Over the next roughly two weeks, GLP sent three letters that vaguely referenced measures taken or possibly to be taken, minimized the problem, treated it as a post-closing “punch list” item, imposed a short deadline to close or forfeit the down payment, and suggested litigation if the buyers did not comply.
- The buyers sued for breach of contract, seeking return of payments and damages; GLP counterclaimed that the buyers breached by failing to close.
- The district court granted summary judgment for the buyers, rejected GLP’s counterclaim, and awarded restitutionary damages (including return of the down payment and certain upgrade-related costs).

## Issues

1. Whether GLP’s communications and insistence on closing, without clear commitment to cure the noise problem, constituted anticipatory repudiation through failure to provide adequate assurances of performance.
2. Whether the buyers breached the contract by refusing to close under those circumstances.
3. Whether the district court properly awarded restitution and related damages after finding repudiation.

## Decision

- The Utah Court of Appeals affirmed summary judgment for the buyers.
- The court held GLP repudiated the contract as modified by its noise-mitigation assurances by failing to provide adequate assurances and by pressing for closing while treating the defect as minor.
- The court held the buyers did not breach by refusing to close; their nonperformance was justified by GLP’s repudiation and the unit’s nonconformity with promised noise mitigation.
- The court affirmed the damages award, including restitution of the buyers’ payments and certain additional sums tied to the transaction.

## Legal Principles

- A seller’s express pre-closing assurances may become part of the parties’ contractual obligations and define what constitutes conforming performance.
- When a party reasonably believes the other side may not perform, it may demand adequate assurances; an objectively insufficient, equivocal response—paired with demands for performance on unfavorable terms—can amount to anticipatory repudiation.
- Material defects central to the bargain cannot be forced into post-closing “punch list” treatment when the parties’ agreement, as modified by assurances, required resolution as a condition of closing.
- Upon anticipatory repudiation, the nonbreaching party may treat the contract as terminated, refuse further performance, and seek restitution and related damages to restore amounts paid in reliance on the agreement.

## Conclusion

The court concluded that GLP’s equivocal, deadline-driven letters and insistence on closing without firm commitment to cure significant mechanical-room noise failed to provide adequate assurances and constituted anticipatory repudiation, entitling the buyers to refuse closing and recover restitutionary damages.


Smargon v. Grand Lodge Partners, LLC, 2012 UT App 305, 288 P.3d 1063 (Utah Ct. App. 2012)