Opinion
Rehearing Denied Oct. 30, 1974.
Page 960
Ashen & Fogel, George T. Ashen, John F. Griebel, Denver, for plaintiff-appellee.
Richard L. Whitworth, Wheat Ridge, for defendant-appellant.
SMITH, Judge.
Plaintiff (seller) sued defendant (buyer) on a $1000 check made by buyer to the seller as payee. Buyer answered denying that the check was intended to operate as a negotiable instrument and counterclaimed alleging breach of the contract which gave rise to the check. The trial court entered judgment for the seller for the amount of the check and dismissed buyer's counterclaim.
The primary issue on appeal is whether under C.R.C.P. 52 the trial court's findings of facts are sufficient to support the judgment in compliance with C.R.C.P. 52.
The pertinent facts are as follows: Seller and buyer entered into a receipt and option contract wherein seller was to convey residential property. Buyer delivered to seller a check for $1000 to be held by the seller as earnest money and, in the event the sale was closed, as part payment on the property. The contract also contained a standard provision which provided that all payments made should be retained on behalf of the seller as liquidated damages in the event the purchaser failed to make any payment or to fulfill any condition. The buyer refused to attend the closing of the transaction because he felt that certain of the closing costs were improper. The seller deposited buyer's check, which was dishonored by buyer's bank upon presentment for lack of sufficient funds.
The test in determining the sufficiency of the trial court's findings of fact is whether the findings are sufficient to give the reviewing court an understanding of the basis of the trial court's decision. Twin Lakes Reservoir & Canal Co. v. Bond, 156 Colo. 433, 399 P.2d 703; American National Bank v. Quad Construction, Inc., 31 Colo.App. 373, 504 P.2d 1113. In the instant case, the trial court found that the buyer had tendered the check to the seller; that buyer had never deposited funds sufficient to cover the check; and that the check was given as consideration for the option contract. The court also found that buyer in fact had breached the contract and dismissed buyer's counterclaim alleging breach of contract by the seller. The court also found that seller had proven damages. These are sufficient findings to give us an understanding of the trial court's judgment.
Buyer urges that the trial court decided the case on a breach of contract theory and erred in concluding that buyer had breached the contract. The question of breach of contract was put in issue by the buyer's counterclaim. Although such a finding was not required by C.R.C.P. 52, the trial court did make a specific finding that buyer breached the contract; however, that finding was only for the purpose of ruling on the counterclaim. See Uptime Corp. v. Colorado Research Corp., 161 Colo. 87, 420 P.2d 232. Thus, the record shows that the seller sued on the check and the case was decided on that issue.
Buyer also argues that the trial court did not apply the correct measure of damages. The check was given in consideration for the option contract. When the buyer refused to close, the seller attempted to exercise her right to liquidated damages under the contract. The essential elements necessary for a valid and enforceable liquidation clause are: (1) The anticipated damages in case of breach must be difficult to ascertain; (2) the parties must mutually intend to liquidate them in advance; and (3) the amount stated as liquidated damages must be reasonable and proportionate to the presumed injury, occurring as a result of any breach. Perino v. Jarvis, 135 Colo. 393, 312 P.2d 108. In the instant case, inasmuch as damages for breach of contract to convey real property are difficult to ascertain, the parties intended the damages be liquidated in advance by the terms of the contract, and the amount is reasonable and proportionate in light of seller's actual damages established by the evidence, the trial court properly enforced the liquidation damages provision of the contract.
Judgment affirmed.
COYTE and PIERCE, JJ., concur.