Auernheimer v. Metzen , 99 Or. App. 642 ( 1989 )

RIGGS, J.

Plaintiff appeals from a judgment denying him strict foreclosure of a land sale contract. The trial court held that plaintiff had waived his right to foreclose by accepting installment payments after he knew that defendants were delinquent in their obligation to pay property taxes. On de novo review, we affirm.

In April, 1985, plaintiff sold a parcel of real property to defendants by a land sale contract. The contract included a “time of the essence” clause and provided that defendants would pay “all taxes * * * promptly before the same or any part thereof became past due * * *.” In February, 1987, plaintiff became aware that defendants had posted a “for sale” sign on the property. He checked the county tax record and learned that defendants’ property tax obligation was delinquent. Plaintiff did not declare defendants in default or notify them that he was aware of the delinquency. He continued to accept installment payments in March, April and May. Later in May, when he learned that defendants were planning to move, he filed this action, accelerating the outstanding balance and seeking strict foreclosure of the contract because of the tax delinquency.

Plaintiff was entitled to foreclose immediately when he discovered the default in the payment of taxes, but elected not to do so. The issue is whether he waived the right to exercise the time-of-the-essence provision by accepting three payments without notifying defendants of the default.

In Staats v. Praegitzer, 67 Or App 543, 679 P2d 334, rev den 297 Or 339 (1984), we held that the plaintiff had waived her right to strict foreclosure by accepting the benefit of the defendants’ timely installment payments after declaring the defendants in default for failing to pay taxes. Although plaintiff here did not declare defendants in default before accepting the installment payments, that fact makes no difference in the waiver analysis, because the defendant in Staats never received the default notice. Staats controls here.

We hold that plaintiff waived the time-of-the-essence provision by continuing to accept the installment payments without providing notice of the default. To reinstate that provision, plaintiff was required to provide defendants notice of the default, to allow them a reasonable opportunity to cure it and to advise them that timely performance would thereafter be required.

Affirmed.