Case Title: Weil & Associates v. Urban Renewal Agency

Citation: 206 Kan. 405, 479 P.2d 875

Docket Number: 45,852

State: kansas

Court: Kansas Supreme Court

Date: 1971-01-23T00:00:00Z

Document:
206 Kan. 405 (1971)
479 P.2d 875
WEIL AND ASSOCIATES, Appellant,
v.
THE URBAN RENEWAL AGENCY OF THE WICHITA, KANSAS METROPOLITAN AREA, and its Board of Commissioners, Appellees.
No. 45,852

Supreme Court of Kansas.
Opinion filed January 23, 1971.
William L. Fry, of Wichita, argued the cause, and John P. Schaefer, of Wichita, was with him on the brief for the appellant.
Jack Glaves, of Wichita, argued the cause, and Edward Weil, of Wichita, was with him on the brief for the appellees.
The opinion of the court was delivered by
HARMAN, C.:
This is an action for damages for breach of contract. Plaintiff appeals from an order sustaining defendants' motion to dismiss for failure of the petition to state a claim upon which relief can be granted (K.S.A. 60-212 [b] [6], as amended). The trial court found no contract existed between the parties.
The trial court had before it only plaintiff's petition to which were attached numerous exhibits. The petition was detailed in nature, revealing the following: Plaintiff is an unincorporated joint venture consisting of Bernard Weil of New Orleans, Louisiana, and Bruce C. Quantrell and William L. Fry of Wichita, Kansas. Defendant agency is a body corporate created under our urban renewal law (K.S.A. 17-4742, et seq.) with its affairs conducted by a board of commissioners, also named as a defendant.
On December 6, 1965, defendants published notice to interested developers of their intention to offer for sale and development a tract of about four and one-half acres in the downtown Wichita business district, a part of the Civic Center Urban Renewal Project. The property was described as having a frontage of 318 feet along Douglas avenue with a depth of 600 feet. Defendants also furnished documents containing a map and description of the project and outlining generally the basic land use and building requirements as well as requirements for proposals submitted in response *407 to the offering. Plaintiff then expended much time and money in preparing its proposal and offer to purchase and develop the land. On April 11, 1966, plaintiff submitted a written offer to purchase the tract for the sum of one million dollars and thereafter made a public presentation to defendants of its proposal. By letter April 18, 1966, defendants acknowledged plaintiff's bid and requested more information. Defendants' letter indicated three proposals had been submitted. By letter dated May 11, 1966, plaintiff furnished the information requested by defendants. July 8, 1966, defendants adopted a resolution making a tentative selection of plaintiff as the redeveloper for the project. The resolution described the land to be developed as follows:
After reciting certain preliminary actions taken, the resolution further stated:
Plaintiff's petition then alleges it performed every requirement in said resolution including the making of the $50,000 good faith deposit, and was at all times ready, willing and able to execute and perform under the standard form of contract used by defendants. One of the other bidders, Garvey Center, Inc., withdrew its bid by letter of July 13, 1966. By letter dated September 6, 1966, defendants sent plaintiff a copy of a proposed disposition contract for review and suggestions as to contents. This letter confirmed a previous telephone conversation regarding the eventual vacation of Wichita street between Douglas avenue and First street, stating defendants had a contractual agreement with the city regarding vacation of the street, which contract defendants believed was enforceable. The letter continued:
Section 8, Part 1, paragraph (f) of the proposed agreement provided:
Under date December 9, 1966, defendants wrote plaintiff the following letter:
"Subject: Execution of Contract, Civic Center
By letter of December 19, 1966, defendants mailed plaintiff another form of disposition contract. This contract included changes for the setback and sign requirements mentioned in the third paragraph of the December 9 letter. The letter made no mention of the vacation of Wichita street. It concluded with the assumption defendants would be hearing soon as to the date the contract could be executed. Plaintiff responded by its letter of December 28, 1966, as follows:
Plaintiff then sent defendants its January 6, 1967, letter which read:
By letter of January 17, 1967, defendants advised plaintiff as follows:
Plaintiff's petition then continues:
"XI.
"XII.
"XIII.
"XIV.
As indicated, in sustaining the motion to dismiss the trial court specifically found no contract existed between the parties.
Upon appeal plaintiff principally contends the trial court erred in dismissing the action in that the petition showed the existence of a contract between the parties. It asserts the petition contained "a short and plain statement of the claim showing that the pleader is entitled to relief", as provided by K.S.A. 60-208 (a), which is all that is required. The argument is, as stated in its brief, "all terms of the contract were agreed upon and merely the clerical act of formalizing these terms remained". Plaintiff insists its petition clearly pleaded the existence of a contract between the parties, as well as breach thereof and resulting damage.
In Robertson v. McCune, 205 Kan. 696, 472 P.2d 215, we considered the scope of a motion to dismiss and said:
Obviously, disputed issues of fact cannot be resolved or determined on a motion to dismiss for failure of the petition to state a claim upon which relief can be granted. The question for determination is whether in the light most favorable to plaintiff, and with every doubt resolved in plaintiff's favor, the petition states any valid claim for relief. Dismissal is justified only when the allegations of the petition clearly demonstrate plaintiff does not have a claim.
The thrust of the foregoing is the court must accept the plaintiff's description of that which occurred, along with any inferences reasonably to be drawn therefrom. However, this does not mean the court is required to accept conclusory allegations on the legal effects of events the plaintiff has set out if these allegations do not reasonably follow from the description of what happened, or if *414 these allegations are contradicted by the description itself (see 5 Wright & Miller, Federal Practice and Procedure, § 1357).
Plaintiff here filed more than a simple "barebone" notice-type pleading. Its petition was detailed and specific as to events. All transactions and dealings between the parties were either evidenced or confirmed by writings, which were pleaded. Although the parties disagree upon interpretation, no dispute appears from the record as to what transpired throughout the entire negotiations between the parties.
It is elemental that in order for parties to form a binding contract, there must be a meeting of the minds as to all essential terms thereof (Topeka Savings Association v. Beck, 199 Kan. 272, 428 P.2d 779). Moreover, (with possible exceptions not here applicable) an agreement to make a contract in the future is not binding unless all the terms and conditions are agreed upon and nothing is left to future negotiation (Railroad Co. v. Gorman, 79 Kan. 643, 100 Pac. 647).
Such being the law, we are unable to see, under the facts of this case, the existence of a contract. We have set forth much of the writings passing between the parties. In those, as well as in others we have omitted, is the definite expression that all the terms of the final contract were not agreed upon but remained subject to negotiation and that a written formal instrument embodying any final agreement was contemplated. Plaintiff's petition is replete with this. We mention a few. The initial "prospectus" pointed out amendments to the entire urban renewal plan might be made in order to achieve the desired objectives. Negotiation was clearly indicated in case new or amended proposals came into being. One item of information sought by defendants in its April 18th letter was the earliest date upon which plaintiff would be prepared to execute a legally binding contract for the site purchase and construction of improvements, without reservation or contingency. Plaintiff's response to this was: "At such time as the Agency can fully deliver land for development". Defendants' July 8th resolution selecting plaintiff as the developer repeatedly stated such designation was tentative; it specifically stated "further negotiations must be conducted and completed, additional official actions taken, and appropriate procedures complied with before a formal Contract of Sale can be executed"; it directed that negotiations be entered *415 into as to the contract provisions effecting the sale; it provided the $50,000 deposit should remain on deposit as earnest money to guarantee performance of the contract in the event of execution thereof; it stated the tentative designation was conditioned upon the execution of an appropriate contract within stated time limits and that such designation should cease if the parties failed to agree as to any provision proposed to be included in the contract or if plaintiff failed to make timely execution of the contract; additionally the resolution provided defendants would not be liable to plaintiff by reason of plaintiff's proceeding in planning and determining feasibility of the development and finally that defendants at all times had the right to rescind the designation at any time without penalty or liability. Later correspondence between the parties evinced the same understanding.
As indicated, disagreement arose respecting three items: Width of setback of buildings from the street, sign restrictions and the vacation of Wichita street, the east half of which was initially contemplated as being within the tract to be sold. Negotiations between the parties evidently resulted in agreement upon the first two items. Vacation of the street remained in controversy, either over the amount of land to be delivered, or, if a lesser amount were delivered than initially contemplated, then price. Plaintiff throughout recognized this lack of agreement. In its December 28th letter it stated it could not sign the contract presented unless the whole parcel was delivered or a reasonable price adjustment made in lieu thereof. In its January 6th letter it asserted a right to withdraw its good faith deposit if there was no provision for a timely abandonment of Wichita street. (It had this right under the so-called "escape" clause, Section 8, Part I, paragraph [f] of the proposed contract). The initial proposal offered only a lump sum consideration for the entire tract mentioned.
Undoubtedly execution of a binding contract was expected, but the intention of the parties seems clear: They negotiated with the definite understanding the terms of any contract were not fully agreed upon; a written formal agreement was contemplated and no valid, enforceable contract was to exist until the execution of such an instrument. The intention of the parties is controlling. In such case, where a written agreement was never executed, a binding contract never came into existence, and we so hold, as *416 did the trial court (see anno. 122 ALR 1217, 1232, 165 ALR 756, 759, 764). Plaintiff's position that a contract existed is not strengthened by the fact it made expenditure of time and money  these were simply normal business expenses incurred on the expectancy of ultimate success.
Plaintiff also complains in its brief the trial court overlooked two other possible theories available for it to obtain relief, "These being the administrative law theory predicated upon the position that the agency acted arbitrarily and capriciously, and in so doing was guilty of abuse of administrative discretion. The other theory being fraud". Plaintiff fails to elaborate this basis for possible relief. We have quoted the latter part of plaintiff's petition containing the matter referred to. As we read paragraphs XI, XII and XIII of the petition any statements arbitrary or capricious conduct, or other so-called wrongdoing, were simply descriptive of the alleged breach of contract for which plaintiff sought recovery. Here, again, existence of a binding contract is presupposed and is the basis of the claim for relief.
We find no mention of fraud in the petition nor any compliance therein with K.S.A. 60-209 (b) which requires that in all averments of fraud the circumstances constituting the fraud shall be stated with particularity. Nor does the record reveal plaintiff raised the matter before the trial court so as to avoid the consequence of its failure to plead properly the issue of fraud.
Plaintiff argues defendants wrongfully failed to accomplish the abandonment of Wichita street; however, it makes no contention an urban renewal agency has the power to vacate municipal streets or to compel their vacation and we are aware of none. Plaintiff can scarcely take advantage of any overextension on the part of defendants based on lack of authority to act. The rule is one who makes a contract with a municipal corporation is bound to take notice of limitations on its power to contract and also of the power of the particular officer or agency to make the contract. The municipal corporation cannot in any manner bind itself by any contract which is beyond the scope of its powers, and all persons contracting with the corporation are deemed to know its limitations in this respect (10 McQuillin, Municipal Corporations, 1966, § 29.04). We have always followed this salutary rule (City of Leavenworth v. Rankin, 2 Kan. 357; Roberts v. St. Marys, 78 Kan. 707, 98 Pac. 211; State, ex rel., v. City of Coffeyville, 127 Kan. 663, 274 Pac. 258).
*417 Finally, plaintiff complains the trial court's ruling was prematurely rendered prior to completion of discovery thereby depriving it of that right. In its brief plaintiff argues it should have the right to amend its petition and through further discovery "elect as to what theory it could prove or which theory is most provable". K.S.A. 60-212 (b) (6) authorizes the treatment of the motion to dismiss as one for summary judgment where matters outside the pleading are presented to and not excluded by the court, and it further grants all parties the opportunity to present all material made pertinent to such a motion. The difficulty with plaintiff's present position is, the trial court's order of dismissal specifically informed plaintiff of the reason for the dismissal yet plaintiff at no time sought either to present additional factual data to the court or to amend its petition. Indeed it seems fairly apparent from the voluminous nature of the petition with its fifteen exhibits that plaintiff did embody all factual data pertinent to its claim in the pleading and that plaintiff elected to stand on the pleading. Nor has plaintiff made clear to this court just what additional facts it might present which would be of sufficient benefit to avoid dismissal. This belated complaint does not warrant disturbance of the order appealed from.
The judgment is affirmed.
APPROVED BY THE COURT.