Judge rules agreement over sale of Primrose Mine is void after buyer failed to timely deposit funds

By Takesha Thomas | Oct 12, 2018

SACRAMENTO – The owners of a California mine have won an appeal to stop the sale of its mine to another company.

On Oct. 1, U.S. Magistrate Judge Carolyn Delaney of the U.S. District Court for the Eastern District of California granted a motion to enforce a settlement agreement that had been filed by Kenneth and Susan Zib after an agreement to sell the property had not been met by JMJ Mining.  

Delaney also terminated and voided the purchase and sale agreement made by the Zibs with JMJ Mining Inc. and awarding the Zibs the $4,500 in attorney's fees.

The Zibs had planned to sell the Primrose Mine to JMJ Mining Inc. However, the deal fell through after an adjacent property owner, Richard Siebrecht, made it known that he owned an unrecorded easement on the property. JMJ allegedly also failed to deposit the agreed $110,000 into escrow the funds for the sale, leaving the sale in limbo. 

JMJ had sought to purchase Primrose Mine from the Zibs and in September 2016, began proceedings for the right to mine the property. However, through his attorney, Siebrecht informed the Zibs about the unrecorded easement known as Makin Bacon. 

JMJ contended that that email clouded the title to the Primrose Mine and as a result, JMJ “became reluctant to deposit the money by June 15, 2018, because of these uncertainties," according to the ruling. 

Under the terms of the agreement, JMJ was to deposit $110,000 into escrow on or before June 15. According to the ruling, the agreement clearly stated that if JMJ failed to do so, then the "purchase sale agreement would terminate and the Zibs would have no further duty to sell."

However, attorneys for JMJ argued that it "sought assurances" from the Zibs regarding Siebrecht's claims. The ruling also states that JMJ, "asserted that the deposit would be paid as soon as Siebrecht’s claims were resolved and requested an extension of time to resolve these issues."

However, under the terms of the purchase and sale agreement, JMJ failed to deposit the funds by the closing date, which terminated the contract. 

JMJ and the Zibs entered into a settlement agreement to purchase the property in September 2017. The agreement was formally signed in October 2017.

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