Phelps v. O'MALLEY

On June 30, 1979, plaintiffs, Frank K. Phelps and Robert W. Topping, entered into a contract to purchase 10 enumerated lots in Trinity-Lakes Unit II, an Oak Brook, Illinois, subdivision, from defendant, Michael J. O’Malley. The contract price was $800,000. Plaintiffs paid $80,000 earnest money to defendant. The deal never closed, though, and defendant subsequently sold the lots to other purchasers, declaring that plaintiffs had forfeited their earnest money.

Plaintiffs brought this action for return of the earnest money plus compensatory damages. After a bench trial, the trial court found that…