Case Title: Brazelton v. Jackson Drug Co., Inc.

Citation: 

Docket Number: 90-13

State: wyoming

Court: Wyoming Supreme Court

Date: 1990-09-05T00:00:00Z

Document:
Brazelton v. Jackson Drug Co., Inc.1990 WY 91796 P.2d 808Case Number: 90-13Decided: 09/05/1990Supreme Court of Wyoming
JAY W. BRAZELTON, 

APPELLANT 
(PLAINTIFF),

v.

JACKSON DRUG COMPANY, 
INC., A WYOMING CORPORATION, 

APPELLEE 
(DEFENDANT).

Appeal from the District 
Court, Teton County, Elizabeth Kail, J.

James P. 
Castberg, Sheridan, for appellant.

David K. Larson 
of Mullikin, Larson & Swift, Jackson, for appellee.

Before 
CARDINE, C.J.*, and THOMAS, URBIGKIT, MACY and GOLDEN, 
JJ.

* Chief Justice at time of 
oral argument.

CARDINE, Justice.

[¶1]      Appellee Jackson 
Drug Company, Inc. (Jackson Drug) exercised a renewal option in a building 
lease. Lessor, appellant Jay W. Brazelton, brought this action to have the lease 
declared void. Brazelton appeals the summary judgment in favor of Jackson Drug. 

[¶2]      We 
affirm.

[¶3]      Brazelton states 
the issues as follows:

"I. The Right to renew 
the lease is subject to a condition precedent which condition precedent the 
Appellee failed to perform.

"II. Appellant was 
entitled to refuse Appellee's Exercise of option to renew after initial lease 
term had expired for failure of Appellee to fulfill conditions 
precedent.

"III. Appellant did not 
waive his right to refuse the [Appellee's] exercise of the option to renew as 
provided by the Lease Agreement."

[¶4]      The essential 
facts are not in dispute. On October 1, 1978, appellant and his then wife 
entered into an agreement to lease the ground floor and basement of a building 
for ten years to Jackson Drug. Signing the lease for Jackson Drug were Stephen 
Schulz and Charles Gaudet, secretary-treasurer and president of the corporation 
respectively. Schulz and Gaudet became the sole shareholders of Jackson Drug on 
September 30, 1978. The corporation ratified the lease at its annual meeting on 
October 3, 1978.

[¶5]      Brazelton's 
attorney had drafted the lease. The lease required Jackson Drug to pay $10,200 
for the first year's rent in monthly installments with annual increases to be 
based on the cost-of-living index. The lease contained no provision requiring 
Brazelton to give notice to Jackson Drug in order to initiate an increase in 
rent. Additionally, the lease required Jackson Drug to pay any increase in taxes 
and assessments over the amounts assessed in 1978. This requirement was 
contained in two different sections of the lease. The section of the lease 
titled "Rent" stated the increase in taxes and assessments was to be paid 
"without notice." The section titled "Taxes" also provided that Jackson Drug pay 
increases in taxes and assessments but failed to require payment upon notice or 
lack of notice of the amount due. The "Default" section gave Jackson Drug ten 
days after written notice from the landlord to cure any default.

[¶6]      The initial term 
of the lease ran until October 1, 1988. Jackson Drug had the option to renew the 
lease for two additional ten-year periods if it "fully complied with all the 
conditions" of the lease and notified the landlord of its intent to renew 90 
days before expiration of the lease. On February 5, 1988, Jackson Drug delivered 
to Brazelton the requisite notice of intent to renew. Brazelton responded in 
July claiming the lease was of no force and effect because Jackson Drug had 
failed to properly execute the lease in October of 1977. Brazelton considered 
the lease non-binding and demanded that Jackson Drug pay a greatly increased 
amount of rent. In August of 1988, Jackson Drug tendered its rent check twice, 
but Brazelton refused to accept it. Instead, on August 29, Brazelton served a 
notice to quit, vacate and leave the premises by September 2, 1988.

[¶7]      In September of 
1988, Brazelton filed suit, alleging that the lease was void because it was 
never properly executed by Jackson Drug and that the lease was unconscionable. 
He asked for a declaratory judgment finding the lease unenforceable. Jackson 
Drug answered and counterclaimed alleging that Brazelton had breached the lease, 
including the covenant of quiet enjoyment, and abused civil process by filing 
suit. It requested specific performance of the lease plus damages. In May of 
1989, Brazelton moved to amend his complaint by adding an allegation that 
Jackson Drug had failed to pay increased taxes. Upon receipt of the amended 
complaint, Jackson Drug tendered the amount of back taxes which Brazelton 
claimed were due. Brazelton refused to accept the tendered check for 
taxes.

[¶8]      The trial court 
granted Jackson Drug summary judgment following a hearing on July 14, 1989, 
finding that the lease was properly executed and binding upon both parties. 
Since the lease was drafted by Brazelton's attorney, the court construed any 
ambiguities against Brazelton. The court found the lease sections dealing with 
Jackson Drug's responsibility to pay increased taxes and the section pertaining 
to notice upon default ambiguous and construed the lease to require that 
Brazelton notify Jackson Drug of default and that thereafter Jackson Drug could, 
within ten days, cure the default. Since Jackson Drug had tendered payment of 
the increased taxes when it received notice through the amended complaint, the 
court found it was not in default.

[¶9]      A grant of 
summary judgment is proper only when there are no genuine issues of material 
fact, and the prevailing party is entitled to judgment as a matter of law. 
W.R.C.P. 56(c); Wagner v. First Wyoming Bank, N.A. Laramie, 784 P.2d 224, 226 
(Wyo. 1989). Although Brazelton lists three issues, disposition of all three 
issues depends upon construction of the lease. Leases are contractual in nature. 
Kurpjuweit v. Northwestern Development Co., Inc., 708 P.2d 39, 43 (Wyo. 1985). 
Contract construction and interpretation are for the court as a matter of law. 
Woods Petroleum Corp. v. Hummel, 784 P.2d 242, 243 (Wyo. 1989). As no issue of 
material fact exists here, we concern ourselves only with the second prong of 
the requirement for a proper grant of summary judgment, i.e., whether Jackson 
Drug was entitled to summary judgment as a matter of law.

[¶10]   The lease contains an ambiguity 
because its requirement for notice of default and opportunity to cure default 
are unclear. See Farr v. Link, 746 P.2d 431, 433 (Wyo. 1987); Meuse-Rhine-Ijssel 
Cattle Breeders of Canada Ltd. v. Y-Tex Corp., 590 P.2d 1306, 1311 (Wyo. 1979). 
The lease required Jackson Drug to pay increased taxes "without notice" but is 
silent as to whether notice of default after failure to pay additional taxes is 
necessary. The "Default" section provided that Brazelton must notify Jackson 
Drug and allow ten days to cure any default before Brazelton can seek any other 
relief. Read separately, these provisions in the lease are in conflict. One 
section provides that a breach occurs when additional taxes are unpaid 
regardless of notice, while another section provides that no breach occurs until 
the landlord gives notice of a default and opportunity to cure.

[¶11]   The lease is to be construed as a 
whole with the objective to find a reasonable construction which, if possible, 
does not render any provision meaningless. Shepard v. Top Hat Land & Cattle 
Co., 560 P.2d 730, 732 (Wyo. 1977). Any doubts as to its meaning should be 
resolved against the party drafting the lease, in this case, Brazelton. King v. 
Richards-Cunningham Co., 46 Wyo. 355, 28 P.2d 492, 496 (1934). The statement 
that additional taxes are to be paid "without notice" is contained in the "Rent" 
section. Under the terms of that section, annual rent increases are based on 
changes in the consumer price index. The lease contains no specific provision 
for informing Jackson Drug of the amount of such increase. However, logic 
dictates that Jackson Drug must be informed of the amount of the increase in 
order to pay it. Once informed, rent under the lease must be paid in monthly 
installments. The requirement for payment of additional tax is akin to the 
payment of increased rent, i.e., once Jackson Drug is informed of the additional 
taxes, it has a duty to pay. Upon failure to pay, Brazelton must give notice to 
Jackson Drug of its default and allow ten days to cure default before pursuing 
other remedies.

[¶12]   The record indicates that 
Brazelton's motive for attempting to void the lease was to increase the rent 
from Jackson Drug, because the rent charged was lower than rents charged other 
businesses in the vicinity of Jackson Drug. We have the duty to sustain the 
legality of contracts fairly entered into if reasonably possible. Kuehne v. 
Samedan Oil Corp., 626 P.2d 1035, 1040 (Wyo. 1981). Absent overreaching, we will 
not aid one who discovers that he has made a unwise bargain in entering into a 
contract. Matter of Estate of Frederick, 599 P.2d 550, 556 (Wyo. 1979). 
Brazelton asks us to do just that. We decline the invitation. Jackson Drug was 
first informed of an increase in taxes when it received notice in the amended 
complaint. It immediately tendered the amount of the additional taxes. This was 
in compliance with the terms of the lease. Jackson Drug is entitled to extend 
the term of the lease under its renewal option. 

[¶13]   Affirmed.