Case Title: MARTIN v COMMUNITY GAS OIL CO

Citation: 

Docket Number: 83-073

State: montana

Court: Montana Supreme Court

Date: 1983-08-24T00:00:00Z

Document:
Xo. 83-73 IN THE SUPREME COURT OF THE STATE OF MONTANA 1983 HOMER V. MARTIN and LORETTA MARTIN, d/b/a IURTIN REALTY, Plaintiff and Appellants, COIIIMUNITY GAS AND OIL COMPANY, INC., Defendant and Respondent. APPEAL FROM: District Court of the Fourth Judicial District, In and for the County of Ravalli, The Honorable James B. Wheelis, Judge presiding. COUNSEL OF RECORD: For Appellants: Datsopoulos, MacDonald & Lind, Missoula, Montana For Respondent: Boone, Karlberg & Haddon, Missoula, Montana - - Submitted on Briefs: June 2, 1983 Decided: August 24, 1983 Filed: AUG 24 1 9 8 3 Clerk Mr. J u s t i c e L . C. Gulbrandson d e l i v e r e d t h e Opinion of t h e Court. T h i s c a s e comes on appeal from a summary judgment rendered i n t h e District Court of t h e Fourth J u d i c i a l D i s t r i c t , R a v a l l i County. The p e r t i n e n t p a r t i e s t o t h e a c t i o n a r e a p p e l l a n t Martin R e a l t y ( M a r t i n ) and respondent Community Gas and O i l Co., I n c . (Community). For t h e reasons s t a t e d below, w e a f f i r m t h e judgment of t h e D i s t r i c t Court. Martin arranged f o r t h e s a l e of a t r a c t of land from Community t o t h e L i f e E v a n g e l i s t i c ~ s s o c i a t i o n ( L i f e E v a n g e l i s t i c ) f o r a p r i c e of $1,168,926. On October 6 , 1975, Community and L i f e E v a n g e l i s t i c e n t e r e d i n t o a c o n t r a c t f o r deed f o r t h e s a l e of t h e land. The c o n t r a c t f o r deed c a l l e d f o r annual payments according t o a p a r t i c u l a r schedule. I n a d d i t i o n , t h e c o n t r a c t f o r deed contained a "deed r e l e a s e " p r o v i s i o n a l l o w i n g L i f e E v a n g e l i s t i c t o o b t a i n t r a c t s of t e n a c r e s or more upon t h e payment of $1,000 p e r a c r e . The deed r e l e a s e p r o v i s i o n a l s o contained t h e following s e n t e n c e : " I t is s p e c i f i c a l l y understood and agreed t h a t any such payment (deed r e l e a s e ) made t o t h e Escrow Agent s h a l l not r e l i e v e t h e Buyer of t h e o b l i g a t i o n t o make t h e next annual payment on t h e purchase and s a l e p r i c e and of i n t e r e s t a s h e r e i n provided f o r ." On October 8, 1975, Martin and Community executed a w r i t t e n agreement, d r a f t e d by Community, which o u t l i n e d t h e terms of M a r t i n ' s commission i n c i d e n t t o t h e s a l e of land t o L i f e E v a n g e l i s t i c . Because L i f e E v a n g e l i s t i c was unable t o make t h e e n t i r e down payment from which M a r t i n ' s 6 p e r c e n t commission was t o be p a i d , Martin agreed t o payment of t h e commission over a p e r i o d of t i m e . The agreement i n d i c a t e d t h a t r e c e i p t of t h e com- m i s s i o n payments would occur a s each payment under t h e c o n t r a c t f o r deed was made by L i f e E v a n g e l i s t i c . I n p a r t i c u l a r , t h e com- m i s s i o n c o n t r a c t s t a t e d : " I t is s p e c i f i c a l l y understood t h a t Community Gas w i l l n o t be r e s p o n s i b l e t o you f o r any of t h e commission payments s p e c i f i e d above u n l e s s - - and u n t i l t h e Buyer makes t h e payment from -- -- which t h e commission payment is t o be made." (emphasis added ) P u r s u a n t t o t h e s e two documents, L i f e E v a n g e l i s t i c made its f i r s t payment on t h e d a t e t h e c o n t r a c t f o r deed was signed and M a r t i n r e c e i v e d t h e corresponding commission payment. The n e x t two payments were made, although not on t h e d a t e s s p e c i f i e d i n t h e c o n t r a c t f o r deed and t h e commission c o n t r a c t , and M a r t i n r e c e i v e d t h e corresponding commission payments. Community's f i n a l payment t o Martin was t o occur on December 6 , 1978, upon L i f e E v a n g e l i s t i c making a $110,000 payment t o Community. L i f e E v a n g e l i s t i c was unable t o make t h e December 6 payment, a l t h o u g h it d i d make payments f o r deed r e l e a s e s both p r i o r t o and f o r s e v e r a l months following t h e due d a t e . On February 1 5 , 1979, Community and L i f e E v a n g e l i s t i c e n t e r e d i n t o a m o d i f i c a t i o n agreement extending t h e time f o r payment t o J u l y 31, 1979. L i f e E v a n g e l i s t i c paid $25,000 a t e x e c u t i o n of t h e agreement but f a i l e d t o make a payment due on A p r i l 1 5 , 1979. A s a r e s u l t , Community d e c l a r e d t h e c o n t r a c t f o r f e i t e d and c l o s e d t h e escrow. On J u l y 11, 1979, t h e p a r t i e s made a n o t h e r a t t e m p t a t e x t e n d i n g t h e due d a t e . When L i f e E v a n g e l i s t i c missed a payment under t h a t agreement, Community deemed money r e c e i v e d t o be " r e n t " and r e p o s s e s s e d t h e land on August 31, 1979. M a r t i n brought t h i s a c t i o n i n District Court contending t h a t it was e n t i t l e d t o t h e l a s t commission payment because Community a c t u a l l y r e c e i v e d more money from L i f e E v a n g e l i s t i c t h a n was r e q u i r e d t o t r i g g e r t h e f i n a l payment under t h e commission c o n t r a c t of October 8 , 1975. S p e c i f i c a l l y , Martin a s s e r t e d t h a t Community was o b l i g e d t o count t h e money paid f o r " r e n t " and deed r e l e a s e s toward t h e $110,000 amount o r i g i n a l l y due on December 6 , 1978, because a t t h e time of e x e c u t i o n of t h e commission agreement t h e p a r t i e s d i d n o t intend t o exclude t h e s e amounts. Community argued t h a t Martin was paid e v e r y t h i n g due under t h e commission agreement of October 8 , 1975, because, by t h e t e r m s of t h a t agreement, c o n d i t i o n s p r e c e d e n t t o t h e payment of any a d d i t i o n a l commission were not met. B e f o r e commencement of a j u r y t r i a l , t h e c o u r t g r a n t e d Community's motion i n l i m i n e t o exclude a l l evidence a s t o t h e i n t e n t of t h e p a r t i e s t o t h e commission c o n t r a c t e x c e p t t h e com- m i s s i o n c o n t r a c t i t s e l f and c o n t r a c t f o r deed. I n a d d i t i o n , t h e t r i a l c o u r t concluded t h a t although deed r e l e a s e payments f o r l e s s t h a n t e n a c r e s accepted b e f o r e d e f a u l t on t h e c o n t r a c t f o r deed c o u l d be counted towards L i f e E v a n g e l i s t i c 's annual payments, t h o s e amounts were s u b s t a n t i a l l y i n s u f f i c i e n t t o c o n s t i t u t e $110,000 and t h e r e b y t r i g g e r M a r t i n ' s l a s t commission payment. A s a r e s u l t of t h e s e r u l i n g s , t h e t r i a l c o u r t granted Community's motion f o r a summary judgment. M a r t i n now a s s e r t s t h a t t h e t r i a l c o u r t e r r e d i n its r u l i n g t o exclude e x t r i n s i c evidence of t h e i n t e n t of t h e p a r t i e s t o t h e commission c o n t r a c t . S p e c i f i c a l l y , M a r t i n contends t h a t t h e c o n t r a c t f o r deed and commission c o n t r a c t cannot be read t o g e t h e r because i n o r d e r f o r two c o n t r a c t s t o be read a s one, t h e p a r t i e s must be t h e same f o r both. Thus, t h e o n l y agreement t h e t r i a l c o u r t should have considered is t h e commission agreement between M a r t i n and Community which Martin a r g u e s is ambiguous on its f a c e because it does not i n d i c a t e whether t h e p a r t i e s would c o n s i d e r deed r e l e a s e payments o r r e n t towards annual payments under t h e c o n t r a c t f o r deed. T h e r e f o r e , because of t h e a l l e g e d ambiguity, t h e t r i a l c o u r t e r r e d i n d i s a l l o w i n g e x t r i n s i c evidence of t h e p a r t i e s ' i n t e n t a t t h e time of e n t e r i n g i n t o t h e commission c o n t r a c t . G e n e r a l l y , when a c o n t r a c t is reduced t o a w r i t i n g t h a t is p l a i n and unambiguous, t h e i n t e n t of t h e p a r t i e s is t o be a s c e r - t a i n e d from t h a t w r i t i n g a l o n e i f p o s s i b l e . S e c t i o n 28-3-303, MCA; Merritt v. Merritt ( 1 9 7 4 ) , 165 Mont. 172, 526 P.2d 1375. Moreover, t h e p a r o l evidence r u l e p r o v i d e s t h a t t h e terms of a w r i t t e n c o n t r a c t cannot be a l t e r e d o r c o n t r a d i c t e d by e x t r i n s i c e v i d e n c e s u b j e c t t o c e r t a i n recognized e x c e p t i o n s . Ambiguity is a n e x c e p t i o n t o t h e p a r o l evidence r u l e . S e c t i o n 28-2-905, MCA; Payne v. Buechler ( 1 9 8 1 ) , - Mont. ---- , 628 P.2d 646, 38 St.Rep. 799. The t r i a l c o u r t examined t h e commission c o n t r a c t and t h e c o n t r a c t f o r deed and determined t h e c o n t r a c t f o r commission of October 8 , 1975, was not ambiguous. The c o n t r a c t s t a t e d : " I t is s p e c i f i c a l l y understood t h a t Community Gas w i l l n o t be r e s p o n s i b l e t o you f o r any of t h e commission payments s p e c i f i e d above u n l e s s and u n t i l the Buyer makes t h e payment from -- - - - which t h e commission Davment is t o be made." C . ' - - - - ( emphasis added ) C l e a r l y , t h e words of t h e agreement show t h a t it was t h e i n t e n t of t h e p a r t i e s t h a t t h e commission payments be c o n t i n g e n t upon payments owed under t h e c o n t r a c t f o r deed. The commission c o n t r a c t cannot be c o n s t r u e d o t h e r w i s e . Payne v. B u e c h l e r , s u p r a . Ambiguity o n l y e x i s t s when a c o n t r a c t t a k e n a s a whole i n i t s wording o r phraseology is r e a s o n a b l y s u b j e c t t o two d i f f e r e n t i n t e r p r e t a t i o n s . K e i s e r v. S t a t e Bd. of Regents of Higher Educ. (1981) I Mont . , 630 P.2d 194, 38 St.Rep. 674; Williams v. I n s . Co. of North America ( 1 9 6 7 ) , 150 Mont. 292, 434 P.2d 395. Because t h e language of t h e commission c o n t r a c t was c l e a r and unambiguous it was t h e duty of t h e t r i a l c o u r t t o a p p l y t h e language, a s w r i t t e n , t o t h e f a c t s of t h e c a s e and d e c i d e accord- i n g l y . S e c t i o n 1-4-101, MCA; K a r t e s v. K a r t e s ( 1 9 8 1 ) , Mont. , 636 P.2d 272, 38 St.Rep. 1941; Danielson v. Danielson ( 1 9 7 7 ) , 172 Mont. 55, 560 P.2d 893. Thus, t h e t r i a l c o u r t by way o f Communityls motion i n l i m i n e , p r o p e r l y d i s a l l o w e d e x t r i n s i c e v i d e n c e of t h e p a r t i e s ' i n t e n t t h a t would modify, a l t e r , o r c o n t r a d i c t t h e terms of t h e w r i t t e n commission c o n t r a c t . M a r t i n a r g u e s f u r t h e r t h a t because t h e t r i a l c o u r t looked t o t h e c o n t r a c t f o r deed i n making its d e c i s i o n , a d d i t i o n a l e v i d e n c e of t h e p a r t i e s 1 i n t e n t should have been allowed. I n determining t h e terms of a c o n t r a c t , however, t h e c o u r t was allowed t o r e f e r t o t h e c i r c u m s t a n c e s under which it was made and t h e m a t t e r t o which it r e l a t e s . S e c t i o n 28-3-402, MCA; Mathis v. Daines (1982) t Mont . , 639 P.2d 503, 39 St.Rep. 73. A p p l i c a t i o n of t h i s r u l e does not i p s o f a c t o open t h e door t o n o n a p p l i c a t i o n o f t h e par01 evidence r u l e . On t h e c o n t r a r y , it o n l y a i d s t h e c o u r t i n a s c e r t a i n i n g whether t h e r e is an ambiguity i n t h e c o n t r a c t . The c o n t r a c t f o r deed i n paragraph 16 r e l a t i n g t o deed r e l e a s e payments s t a t e s , ". . . t h a t any such payment made t o t h e Escrow Agent s h a l l n o t r e l i e v e t h e Buyer of t h e o b l i g a t i o n t o make t h e n e x t annual payment." Once it was c l e a r t o t h e t r i a l c o u r t t h a t deed r e l e a s e payments made under t h e c o n t r a c t f o r deed were not t o be counted toward t h e annual payments, it p r o p e r l y concluded t h a t t h e com- m i s s i o n c o n t r a c t was not ambiguous and t h a t it governed t h e i n t e n t of t h e p a r t i e s . E x t r i n s i c evidence could o n l y be con- s i d e r e d i f t h e commission agreement had, on its f a c e , appeared t o be ambiguous or u n c e r t a i n . H i l l C a t t l e Corp. v . 79 Mont. 327, 256 P. 497. I n a d d i t i o n , t h e a p p e l l a n t argues t h a t t h e commission agreements could n o t have been considered along w i t h t h e c o n t r a c t f o r deed because t h e p a r t i e s t o t h e two agreements were not t h e same. See 28-3-203, MCA. However, it was not t h e purpose of t h e t r i a l c o u r t t o examine t h e c o n t r a c t f o r deed i n o r d e r t h a t it be t a k e n t o g e t h e r w i t h t h e commission c o n t r a c t a s a s i n g l e agreement. R a t h e r , t h e c o n t r a c t f o r deed was u t i l i z e d t o d e t e r - mine if t h e commission c o n t r a c t was ambiguous, and 28-3-402, MCA, p r o v i d e s t h a t a c o n t r a c t "may be explained by r e f e r e n c e t o t h e c i r c u m s t a n c e s under which it was made and t h e m a t t e r t o which it r e l a t e s . " Although Martin asserts t h a t t h e commission agreement should be construed most s t r o n g l y a g a i n s t Community, it has long been h e l d t h a t t o i n t e r p r e t t h e language of a c o n t r a c t a g a i n s t t h e d r a f t o r , t h e d r a f t o r must c a u s e --- t h e u n c e r t a i n t y . P a r k h i l l v. F u s e l i e r ( 1 9 8 1 ) , Mont. , 632 P.2d 1132, 38 St.Rep. 1424; G l a c i e r Campground v. Wild R i v e r s , I n c . ( 1 9 7 8 ) , 182 Mont. 389, 597 P.2d 689. I n t h e case a t bar t h e t r i a l c o u r t p r o p e r l y h e l d t h a t t h e commission c o n t r a c t lacked any u n c e r t a i n t y . I n h i s r e p l y b r i e f , Martin maintains t h a t , i n any e v e n t , t h e commission agreement does n o t c o n t a i n a v a l i d c o n d i t i o n p r e c e d e n t and, t h e r e f o r e , payment of t h e commission must be made. Martin a r g u e s t h a t t h e c o n t r a c t language p r o v i d i n g t h a t Community would n o t be r e s p o n s i b l e f o r making any commission payments " u n l e s s and u n t i l t h e Buyer [ L i f e E v a n g e l i s t i c ] makes t h e [ c o n t r a c t ] payment . . .I1 e s t a b l i s h e s o n l y a time f o r payment and n o t a c o n d i t i o n p r e c e d e n t t o payment. A p p e l l a n t c i t e s a l i s t of c a s e s from o t h e r j u r i s d i c t i o n s f o r t h e p r o p o s i t i o n t h a t t i m e con- t i n g e n c i e s a l o n e w i l l not excuse payments. S e e , e.g., Mignot v. P a r k h i l l ( 1 9 6 4 ) , 237 O r . 450, 391 P.2d 755. W e do not d i s a g r e e w i t h a p p e l l a n t ' s s t a t e m e n t of t h e law w i t h r e s p e c t t o time c o n t i n g e n c i e s . N e v e r t h e l e s s , we b e l i e v e t h e agreement does e s t a b l i s h a s p e c i f i c and unambiguous c o n d i t i o n p r e c e d e n t . The p a r t i e s agreed t h a t Community would not make com- m i s s i o n payments " u n l e s s and u n t i l " L i f e E v a n g e l i s t i c f u l f i l l e d its d u t i e s under t h e c o n t r a c t f o r deed. The word " u n l e s s " s u g g e s t s t h a t one has a r e s e r v a t i o n or an o p t i o n t o change o n e ' s mind provided a c e r t a i n e v e n t o c c u r s . S e e , B l a c k ' s Law D i c t i o n a r y 1378, ( r e v . 5 t h ed. 1 9 7 9 ) . By use of t h e word " u n l e s s " Community r e s e r v e d t h e r i g h t t o withhold commission payments i n t h e e v e n t t h a t L i f e E v a n g e l i s t i c f a i l e d t o f u l f i l l i t s c o n t r a c t u a l d u t i e s . The time contingency, which a r i s e s from t h e use of t h e word " u n t i l " , does not come i n t o p l a y u n t i l t h e c o n d i t i o n p r e c e d e n t o c c u r s . Cases r e l i e d upon by a p p e l l a n t speak t o c o n t r a c t s c o n t a i n i n g o n l y time c o n t i n g e n c i e s . S e e , e.g., Mignot, s u p r a . Community was a c t i n g w i t h i n c o n t r a c t u a l bounds by w i t h h o l d i n g t h e f i n a l commission payment u n l e s s L i f e E v a n g e l i s t i c came up w i t h t h e f i n a l b u y e r ' s payment. F i n a l l y , Martin a r g u e s t h a t because it d i d not r e c e i v e t h e f i n a l commission payment of $23,378.52 on t o p of t h e $46,757.04 it had p r e v i o u s l y r e c e i v e d , it was somehow s u b j e c t e d t o an " a b h o r e n t " f o r f e i t u r e . I n o r d e r fox a f o r f e i t u r e t o o c c u r , however, t h e p a r t y whose p r o p e r t y is d i v e s t e d must have a r i g h t i n t h a t p r o p e r t y . S e e , Ridgeway v. C i t y of Akron (1940 Ohio C t . App.), 42 N.E.2d 724, 726. Martin cannot c l a i m a r i g h t t o t h e f i n a l commission payment. Any r i g h t he might have obtained was c o n d i t i o n e d on t h e f i n a l payment by L i f e E v a n g e l i s t i c under t h e c o n t r a c t f o r deed. S i n c e t h e r e was no v a l i d c o n t r a c t payment, t h e r e was no e n f o r c e a b l e r i g h t i n t h e commission payment. With no e n f o r c e a b l e r i g h t , Martin cannot make a v a l i d c l a i m t h a t he h a s s u f f e r e d a f o r f e i t u r e . ~7 I n sum, w e f i n d no r e v e r s i b l e e r r o r , and & r e f o r e a f f i r m . I Justice / We concur: /