Case Title: EAST BROADWAY ASSOCIATED, LTD. v. DOWELL

Citation: 

Docket Number: 01-223

State: wyoming

Court: Wyoming Supreme Court

Date: 2002-07-12T00:00:00Z

Document:
EAST BROADWAY ASSOCIATED, LTD. v. DOWELL2002 WY 10649 P.3d 1004Case Number: 01-223Decided: 07/12/2002

April Term, A.D. 2002

EAST 
BROADWAY ASSOCIATES, LTD.,

a 
Wyoming corporation, 

Appellant(Defendant) 
,

v.

TERRIE 
L. DOWELL, 

Appellee(Plaintiff) 
.

The 
Honorable Nancy J. Guthrie, Judge

Representing 
Appellant:

Peter 
F. Moyer, Jackson, WY. 

Representing 
Appellee:

Kenneth 
S. Cohen, Jackson, WY.

Before 
HILL, C.J., and GOLDEN, LEHMAN,* KITE, and VOIGT, JJ. 

*Chief 
Justice at time of oral argument.

LEHMAN,  Justice. 

[¶1]      This is 
an appeal from a decision of the district court to enforce the sale of real 
property under earlier agreed upon written contract terms reached between the 
parties.  Although we do not agree 
with a legal conclusion reached by the district court, we affirm the ultimate 
decision of the district court on a different basis. 

ISSUES

[¶2]      Appellant East 
Broadway Associates, Ltd. (EBA) sets forth the following issue on 
appeal:

Where a 
written real estate sale contract called for closing on the sale of a Jackson 
Hole condominium "on or before December 31, 1997" but the buyer was unable to 
obtain financing until November 17 of 2000, and there was no written or verbal 
extension agreement, was the district court empowered to order the sale of the 
property at the fixed 1997 contract price more than three years after the 1997 
deadline based upon promissory estoppel or equitable estoppel? 

Appellee Terrie L. Dowell (Dowell) phrases the issue on appeal 
as:

Did the district court properly apply the principles of estoppel when 
it ordered appellant to sell the condominium unit to appellee at the 1997 
contract price?

FACTS1

[¶3]      EBA is a Wyoming 
corporation owned by William and Mrs. Racow; William Racow (Racow) is 
president.  In 1992, Dowell leased 
unit B-1 of the East Broadway Condominiums from EBA under a written lease 
agreement and paid a $1,500.00 deposit.  
Dowell resided in this condominium unit along with her children.  After this lease expired by its terms, 
Dowell continued to rent unit B-1 from EBA on a verbal month-to-month tenancy 
basis.  

[¶4]      In March of 1994, 
Dowell received a letter from EBA informing each of the tenants of the 
condominium complex that EBA would be selling the condominium units but would 
first offer them for sale to the present tenants.  Shortly after receiving this letter, 
Dowell had a conversation with Racow and advised him that she desired to 
purchase unit B-1.  On April 26, 
1994, Dowell then made a $1,000.00 earnest money deposit to EBA.  The parties then entered into a contract 
for the sale of unit B-1 on or about August 3, 1994 (1994 
contract).

[¶5]      Later that 
summer, Dowell had a discussion with Racow and advised EBA that she did not 
desire to purchase unit B-1 because there had been a double murder in that unit 
a couple of years earlier.  However, 
unit B-2 had become available in the interim.  Therefore, during this conversation, 
Racow, on behalf of EBA, suggested a method for Dowell to purchase unit 
B-2.  This suggestion was then put 
into a written memorandum dated October 1994 (1994 
memorandum).

[¶6]      The 1994 
memorandum contained the following language:

                        
Terrie Dowell

                        
PO Box . . .

                        
Jackson WY  
83001

   Date

10/1/94     sales price                 
$138,000.00                              
$138,000.00

10/1/94     Escrow                       
  ($1,000.00)                              
$137,000.00

10/1/94     Deposit                      
  ($1,500.00)                              
$135,500.00

10/1/94     30 years 7% WCDA                            
$901.50            
$       
901.50

10/1/94 
    Condo Fees                                         
$  75.00            
$       
976.50

10/1/94     Taxes                                                     
$  45.00            
$    
1,021.50

10/1/94     Tax Credit                          
$62.00

10/1/94     Price January 1996  
$133,500.00

[¶7]      Later in 1994, 
Dowell and her children moved into unit B-2.  Prior to them moving into this unit, EBA 
installed a downstairs bathroom and recarpeted the unit, and Dowell painted some 
of the interior of the condominium.  
However, in the summer of 1994, Dowell had just started a barber 
business, and she was advised by her bank that she needed to be in business for 
two years before the bank could make her a loan.  EBA then agreed that it would hold to 
the $138,000.00 purchase price of unit B-2 for two years.  This two-year period passed without any 
additional communication between the parties.

[¶8]      Before October of 
1994, Dowell paid EBA $761.50 per month for unit B-1.  Beginning in October of 1994, this 
amount rose to $1,021.50 per month with the amount of $140.00 allocated towards 
the purchase of the condominium unit, $45.00 paid toward real property taxes, 
and $75.00 paid toward homeowner's association dues.  Previously, no tenant including Dowell 
had paid either real property taxes or homeowner's association dues on their 
unit.  Dowell continued to make 
additional payments to EBA each month since October 1994, except that the 
homeowner's association dues were increased in September of 1997 from $75.00 to 
$100.00 per month.

[¶9]      In September of 
1997, Dowell intended to apply for financing to purchase unit B-2 but was 
advised that she needed a contract of sale in order for her application to be 
considered.  Therefore, EBA and 
Dowell entered into another written contract for the sale of unit B-2 (1997 
contract).  The purchase price for 
this transaction was set at $147,000.00 less credits/deposits leaving a net 
sales price of $132,300.00.  This 
amount was calculated by giving Dowell credit for $2,500.00 in deposits and 
$12,200.00 in deposits from the monthly payments made by Dowell to EBA under 
those terms mentioned above.  
Closing of this transaction was set to take place on or before December 
31, 1997, again subject to Dowell obtaining financing.  A $1.00 earnest deposit was to be made 
by Dowell to EBA. 

[¶10]   After the 1997 contract was signed 
but before Dowell made application for financing, Dowell learned that her son 
needed medical treatment costing approximately $8,000.00 and notified Racow on 
behalf of EBA of this circumstance and that this situation would impair her 
ability to qualify for financing.  
EBA, through Racow, suggested to Dowell that she take care of her family 
first, words to the effect of  "do 
what you need to do."  December 31, 
1997 passed by; however, neither party gave written notice to the other that the 
1997 contract was terminated.  
Almost two years then elapsed with neither party discussing the 
contract.  Nevertheless, Dowell 
continued to make monthly payments to EBA for rent, purchase of the condominium 
unit, taxes, and homeowner's association dues in those amounts mentioned 
above.  These payments were accepted 
by EBA.

[¶11]   In August or September of 1999, 
Dowell was cutting Racow's hair and asked Racow on behalf of EBA for a payoff 
figure for unit B-2.  Racow became 
upset and stated that his aunt was coming to town in the near future and it 
seemed silly for him (EBA) to sell the unit since this was the case.  Dowell responded by reminding Racow of 
their earlier conversation when her son needed medical treatment.  Nothing else was said concerning this 
issue, and Racow paid for his haircut and left.

[¶12]   A month later Dowell telephoned 
Racow and asked him to meet with him.  
However, Racow was leaving town at the moment.  Dowell asked Racow if she should be 
looking for a new place to live.  
Racow responded by saying, "No, no, I don't know what I'm doing."   Dowell said that she was under the 
belief that she had been buying the unit for five years, and that she was not 
buying Racow's aunt a new dishwasher since the unit then needed a replacement 
dishwasher.  Racow did not respond 
to this statement by Dowell. 

[¶13]   The Racows were gone from the area 
for the winter.  Dowell telephoned 
Racow in February of 2000 and left a message on his answering machine.  However, Dowell did not receive a return 
call from Racow.  In September of 
2000, Dowell again left a message for Racow.  Racow returned this call that same 
day.  Dowell asked Racow if he had 
thought about their last discussion.  
Racow responded by stating he had not thought about it at all.  Later during Thanksgiving week, Dowell 
telephoned Racow and asked to meet with him.  At a meeting held later that day, Dowell 
advised Racow on behalf of EBA that she had obtained financing and was now able 
to purchase unit B-2.  Racow became 
angry and left the meeting.

[¶14]   EBA, through Racow, then responded 
on November 22, 2000, in writing shortly after the meeting stating that EBA did 
not intend to sell the unit to Dowell unless she paid an additional $78,000.00, 
which increased the purchase price for the unit to $225,000.00 (November 22, 
2000 letter).  EBA also notified 
Dowell that unless she agreed to pay an increased rental she would be evicted on 
January 1, 2001.  This is the first 
written  communication received by 
Dowell from EBA since the parties entered into the 1997 contract.   

[¶15]   During the time period in which 
Dowell was making monthly payments to EBA, she intentionally did not pursue 
purchasing other houses because she believed she was purchasing unit B-2 even 
though there was an opportunity through WCDA to obtain 100% financing.  Dowell also paid for numerous repairs to 
unit B-2 during these years without seeking reimbursement.  In response, Dowell filed the instant 
lawsuit asking the district court to enter a declaratory judgment that Dowell 
had the right to purchase the unit for the original purchase price expressed 
within the 1997 contract.  

[¶16]   After trial, the district court 
entered a judgment dated March 15, 2001, ruling that the 1997 contract was clear 
and unambiguous and had lapsed by its terms but that EBA was estopped from 
asserting the 1997 contract was no longer enforceable and ordered that Dowell 
had thirty days to purchase the condominium unit under the terms of the 1997 
contract.  On April 12, 2001, Dowell 
paid EBA the 1997 contract purchase price amount and obtained a warranty deed 
for the property from EBA.  This 
appeal followed.  

STANDARD 
OF REVIEW

[¶17]   Trial of this case was held before 
the district court with the district court issuing specific findings of fact and 
conclusions of law.  In its recently 
published case of Hutchings v. Krachun, 2002 WY 98,  ¶10, __ P.3d __, ¶10 (Wyo. 2002), 
this court reiterated our standard of review in such an instance.  

The 
purpose of specific findings of fact is to inform the appellate court of the 
underlying facts supporting the trial court's conclusions of law and disposition 
of the issues.  Hopper v. All Pet 
Animal Clinic, 861 P.2d 531, 538 (Wyo. 1993).  While the findings of fact made by a 
trial court are presumptively correct, we examine all of the properly admissible 
evidence in the record.  Because 
this court does not weigh the evidence de novo, findings may not be set 
aside because we would have reached a different result.  Rather, the appellant has the burden of 
persuading the appellate court that the finding is erroneous.  Id.  See also Maycock v. Maycock, 2001 
WY 103, ¶11;  33 P.3d 1114, ¶11 
(Wyo. 2001).  Findings of fact are 
not set aside unless inconsistent with the evidence, clearly erroneous, or 
contrary to the great weight of the evidence.  The definitive test of when a finding of 
fact is clearly erroneous is when, although there is evidence to support it, the 
reviewing court on the entire evidence is left with the definite and firm 
conviction that a mistake has been committed.  A determination that a finding is 
against the great weight of the evidence means that a finding will be set aside 
even if supported by substantial evidence. Id.  See also Mathis v. Wendling, 962 P.2d 160, 163 (Wyo. 1998).  
Conclusions of law made by the trial court are not binding on this 
court and are reviewed de novo.  Maycock, ¶12. 

(Emphasis 
added.)  This court has also 
recognized:

The 
primary purpose in interpreting or construing a contract is to determine the 
intent and understanding of the parties, and our initial inquiry centers on 
whether the language of the contract is clear and unambiguous.  Reed v. Miles Land and Livestock 
Co., 2001 WY 16, ¶10, 18 P.3d 1161, ¶10 (Wyo. 2001).  The interpretation and construction of a 
contract are done by the court as a matter of law.  Id. Where an agreement is in 
writing and the language is clear and unambiguous, the parties' intent is to be 
secured from the four corners of the contract. Cliff & Co., Ltd. v. 
Anderson, 777 P.2d 595, 598 (Wyo. 1989).  We consider the contract as a whole, 
taking into consideration the relationship between the various parts. Id. 
"We turn to extrinsic evidence and rules of contract construction only when the 
contract language is ambiguous and its meaning is doubtful or uncertain." 
Wolter v. Equitable Resources Energy Company, Western Region, 979 P.2d 948, 951 (Wyo. 1999).  Whether 
or not a contract is ambiguous is a question of law for the court.  Corpening v. Corpening, 2001 WY 
18, ¶8, 19 P.3d 514, ¶8 (Wyo. 2001). 

(Emphasis 
added.)  Collins v. Finnell, 
2001 WY 74, ¶15, 29 P.3d 93, ¶15 (Wyo. 2001). This court has also 
enunciated:

Common 
sense and good faith are leading precepts of contract construction, and the 
interpretation and construction of contracts is a matter of law for the 
courts.  Reed [v. Miles 
Land and Livestock Co., 2001 WY 16], ¶10 [18 P.3d 1161, ¶10 (Wyo. 
2001)].  We have also recognized 
that the language of a contract is to be construed within the context in which 
it was written, and the court may look to the surrounding circumstances, the 
subject matter, and the purpose of the contract to ascertain the intent of the 
parties at the time the agreement was made.  Polo Ranch Company v. City of 
Cheyenne, 969 P.2d 132, 136 (Wyo. 1998).

Williams 
Gas Processing-Wamsutter Co. v. Union Pacific Resources Co., 2001 
WY 57, ¶12, 25 P.3d 1064, ¶12 (Wyo. 2001).

[¶18]   Finally, this court has stated that 
in the absence of any ambiguity, the contract will be enforced according to its 
terms because no construction is appropriate.  Boley v. Greenough, 2001 WY 47, 
¶10, 22 P.3d 854, ¶10 (Wyo. 2001) (citing Amoco Prod. Co. v. EM Nominee 
Partnership Co., 2 P.3d 534, 539-40 (Wyo. 2000) and Burbank v. Wyodak 
Resources Dev. Corp., 11 P.3d 943, 946-47 (Wyo. 
2000)).

DISCUSSION

[¶19]   Both parties primarily 
focus upon arguments related to the district court's determination with respect 
to the principles of promissory estoppel and equitable estoppel on appeal.  In addition,  EBA does assert within its initial brief 
on appeal that the district court's ruling that the 1997 contract is clear and 
unambiguous and had lapsed by its terms was correct.  However, while our de novo review of the 
1997 contract leads us to the conclusion that the 1997 contract is clear and 
unambiguous, we hold that the 1997 contract did not terminate on its own 
terms.  Moreover, as we find our 
conclusion dispositive of this case, we do not address those issues raised by 
the parties on appeal.   

[¶20]   The 1997 contract, in applicable, 
part provides:

15.  Time 
is of the essence hereof, and if any payment or any other condition hereof is 
not made, tendered or performed by either the Seller or Purchaser as hereby 
provided, then this contract, at the option of the party who 
is not in default or breach, may at the party's option, be terminated by such 
party, in which case the nondefaulting party may recover such 
damages as may be proper or such party may require specific performance of the 
other herein.  In the event of such 
default by the Purchaser, and the Seller elects to treat the contract as 
terminated, then all payments made hereunder shall be forfeited and 
retained on behalf of the Seller.  
In the event, however, the nonbreaching or nondefaulting party 
elects to treat this contract as being in full force and effect, then nothing 
herein shall be construed to prevent its specific 
performance.

. . .

18.  Each 
party hereto shall have the right to require specific performance of each and 
every provision of this Agreement as contemplated herein and may, if necessary, 
bring an action in a court of competent jurisdiction to compel the same.  

(Emphasis 
added.)  Thereafter, the Addendum to 
the 1997 contract provides in relevant part:

c.  If 
Purchaser is not "pre-qualified" by a local institutional lender within 30 days 
hereafter, or if Purchaser does not actually obtain financing by the scheduled 
closing date, then either party may cancel this Agreement on written 
notice to the other party, and Purchaser will receive a prompt refund of the 
earnest money.

d.  Closing 
will occur at the office of the local institutional lender or Teton Land Title 
Company in Jackson, Wyoming on or before Dec. 31, 1997. 

                                                                                                                       
                                                                                                                                                                                                                                                                                              

(Emphasis added.)  Upon review of the clear and concise 
language and application of our standards of review for contract interpretation, 
we must conclude, as did the district court, that the 1997 contract is 
unambiguous.  Contrary to the 
district court, however, we also hold that the 1997 contract did not terminate 
automatically by its own terms.  

[¶21]   The 1997 contract clearly specifies 
that the termination of that contract was to be at the option of the 
nonbreaching or nondefaulting party, in this case EBA, and would be terminated 
solely upon written notice of termination being given by that party.  However, EBA at no time ever advised 
Dowell in writing of its desire to consider the contract terminated.  Indeed, EBA admits in its briefs on 
appeal on a number of occasions, and it is established by the facts in this 
case, that there were no further written communications between the parties 
until the November 22, 2000 letter sent by EBA to Dowell.

[¶22]   Accordingly, we conclude that 
because EBA did not advise Dowell that it had elected to terminate the 1997 
contract due to her breach of the terms of the contract by Dowell failing to 
obtain timely financing for the purchase of the condominium unit, no termination 
of that contract occurred.   As 
indicated earlier, in the absence of any ambiguity, the contract will be 
enforced according to its terms because no construction is appropriate.  Boley, 2001 WY 47, 
¶10.

[¶23]   In addition, although we have 
reviewed the entire 1997 contract, we do not find any other language within that 
contract that convinces us that the intent of the parties was anything different 
than that concluded above.  True, 
while we do recognize that the contract called for closing of the contract to 
occur on or before December 31, 1997, we do not find that the failure to meet 
this closing deadline, in and of itself, mandated the automatic termination of 
the contract.

[¶24]   Furthermore, whereas under the 
circumstances it is not necessary for the 1997 contract to be construed within 
the context in which it was written, the surrounding circumstances, the subject 
matter, and the purpose of the contract to ascertain the intent of the parties 
at the time the agreement was made, review of these elements solely supports our 
conclusion that the 1997 contract is unambiguous and did not automatically 
expire pursuant to its terms.  The 
surrounding circumstances and the actions of the parties clearly evidence that 
it was the intent of EBA to sell the involved condominium unit to Dowell.  

[¶25]   This unquestionable intent is 
gleaned upon review of the initial written offer by EBA to sell the condominium 
units to the current tenants residing within them, review of the wording used 
within the 1994 contract, EBA's two-year extension of that contract, the 
language used within the 1994 memorandum and the 1997 contract, Racow on behalf 
of EBA suggesting to Dowell that she take care of her family first inferring 
that Dowell take those actions that she needed to take to care for her son, and, 
perhaps of most significance, acceptance by EBA of the monthly payments for the 
purchase of the condominium unit, taxes, and homeowner's association dues over a 
number of years.  

[¶26]   As noted above, EBA also failed to 
provide written notice to Dowell of its intent to deem the 1997 contract 
terminated.  Further, EBA failed to 
remit to Dowell the earnest money deposit and other payments made to EBA in 
conjunction with the 1997 contract.  
In addition, as late as the fall of 1999, Racow on behalf of EBA did not 
respond to Dowell's statement that she was under the belief that she had been 
buying the unit for five years.  
Finally, during this same conversation, when Dowell asked Racow if she 
should be looking for a new place to live, Racow responded by saying, "No, no, I 
don't know what I'm doing."

[¶27]   EBA complains that it is unfair to 
EBA, as a Wyoming property owner, for a Wyoming court to extend a written real 
estate sale contract by over three years, when there was not even a verbal 
promise to do so, and no conduct amounting to such a promise.  Further, EBA complains that enforcement 
of the 1997 contract through use of the application of estoppel against the 
statute of frauds will simply create immense uncertainty under Wyoming real 
estate contracts, with great incentive for lawsuits such as this one, 
particularly in a rising market.

[¶28]   We point out that there was no need 
for a verbal promise by EBA to extend the 1997 contract as the 1997 contract was 
extended by the non-action of EBA to advise Dowell that it intended to treat 
that contract as terminated.  
Further, as identified above, EBA took many acts over a period of years, 
which substantiated that it intended to sell the condominium unit to 
Dowell.  Additionally, our 
enforcement of the 1997 contract merely pursuant to its specific and explicit 
terms alleviates any argument regarding the statute of frauds and only serves to 
create certainty with respect to Wyoming real estate contracts.   We have often recognized 
that

[c]ourts 
are not free to rewrite contracts under the guise of interpretation where the 
contractual provisions are clear and unambiguous.  [Snyder v. Lovercheck, 992 P.2d 1079, 1089 (Wyo. 1999)] (citing Klutznick v. Thulin, 814 P.2d 1267, 1270 
(Wyo. 1991).  "Accordingly, in 
private disputes, a court must enforce the contract as drafted by the parties 
and may not relieve a contracting party from anticipated or actual difficulties 
undertaken pursuant to the contract." Id.

Kendrick 
v. Barker, 2001WY 
2, ¶18, 15 P.3d 734, ¶18 (Wyo. 2001).   It is also axiomatic that once 
parties formally agree to terms and a contract is formed, those parties must 
then abide by those plainly stated terms agreed upon.  Id. (citing Patel v. 
Harless, 926 P.2d 963, 966 (Wyo. 1996)); see also Snyder v. 
Lovercheck, 992 P.2d 1079, 1089 (Wyo. 1999).

[¶29]   Finally, EBA asserts that it is 
unfair to enforce the 1997 contract because such will force EBA to lose out on 
the increase of the price of the subject condominium unit in a severely rising 
real property market which has prevailed in the Jackson area over the past many 
years.   To avoid this 
circumstance, EBA simply had to provide Dowell with timely written notice of its 
intent to deem the 1997 contract terminated and, at the same time, return those 
monies paid to EBA by Dowell over the many years for the anticipated purchase of 
the condominium.  

CONCLUSION

[¶30]   For the reasons set forth above, we 
affirm the ultimate decision of the district court. 

FOOTNOTES

1This case was tried to the district 
court without a court reporter.  
After the district court entered its judgment and several post-trial 
motions were entertained, including motions regarding statements of the 
evidence, the district court adopted the Statement of the Evidence filed by 
Dowell.  This statement of facts is 
taken substantially from the Statement of the Evidence filed by Dowell, as well 
as documentation admitted into evidence by the district court at the time of 
trial.