Case Title: Prudential Preferred Properties v. Underwood Ranch Co

Citation: 

Docket Number: 93-139

State: wyoming

Court: Wyoming Supreme Court

Date: 1994-04-26T00:00:00Z

Document:
Prudential Preferred Properties v. Underwood Ranch Co1994 WY 49873 P.2d 598Case Number: 93-139Decided: 04/26/1994Supreme Court of Wyoming
The 
PRUDENTIAL PREFERRED PROPERTIES, a Wyoming corporation,

Appellant 
(Plaintiff),

v.

UNDERWOOD 
RANCH COMPANY, a partnership; Israel Roter; Joe Bowen; and Stanley 
Green,

Appellees 
(Defendants).

 

Appeal 
from the District Court, Platte County, J.T. Langdon, 
J.

 

Representing 
Appellant:

Paul 
J. Drew of Drew & Carlson, Gillette.

Representing 
Appellee:

W.H. 
Vines of Jones, Jones, Vines & Hunkins, Wheatland. 

Before 
MACY, C.J., and THOMAS, CARDINE, GOLDEN and TAYLOR, 
JJ.

CARDINE, 
Justice.

[¶1]      Prudential 
Preferred Properties (Prudential) sued the Underwood Ranch Company (Underwood) 
for a commission they claimed for the sale of Underwood's property. The trial 
court granted Underwood summary judgment holding they did not owe Prudential a 
commission under their listing agreement as a matter of 
law.

[¶2]      We 
affirm.

[¶3]      Prudential raises 
the following issues:

ISSUE 
I

Whether 
the trial court erred in denying appellant's motion for summary judgment, 
holding that the sale of appellees' ranch during the term of the parties' 
exclusive listing agreement did not entitle the appellant to a commission on the 
sale.

ISSUE 
II

Whether 
the trial court erred in granting appellees' motion for summary judgment, 
holding that the sale of appellees' ranch to Jack McGuire's relatives was 
excluded from the exclusive listing contract under the contract's provision 
excluding sales to Jack McGuire from its operation.

[¶5]      In turn, 
Underwood phrases the issues:

I. 
Was the exclusion in the listing agreement of "Jack McGuire" sufficient to 
include his nominees, the son and daughter-in-law.

II. 
Was there any consideration to support the extension of the listing 
agreement.

FACTS

[¶5]      Underwood, a 
partnership, was attempting to sell its ranch property and retained the services 
of Prudential as selling real estate brokers. On November 4, 1991, Underwood and 
Prudential entered into an exclusive right to sell listing contract for the sale 
of what was commonly referred to as the Underwood Ranch in Campbell County, 
Wyoming. The original listing was for six months, from October 28, 1991 to April 
28, 1992. The contract was on a form provided and drafted by the agents or 
employees of Prudential.

[¶6]      On page one of 
the four-page listing contract, Underwood agreed to pay Prudential five percent 
of the selling price if Prudential or anyone else sold the ranch within the time 
specified. On page three of the listing contract, Prudential typed in, under the 
"Additional Provisions" section, the following: "For the period of this listing, 
Jack McGuire shall be excluded from said listing." Both parties knew of Jack 
McGuire's interest in purchasing the ranch, and that was the reason for the 
exclusion.

[¶7]      Prudential was 
not able to sell the ranch before the listing expired on April 28, 1992. On May 
5, 1992, at Prudential's request, Underwood entered into a six-month extension 
of the original listing contract. The extension agreement, also provided and 
drafted by Prudential, extended the listing until October 28, 
1992.

[¶8]      On or about 
August 1, 1992, Underwood negotiated the sale of the ranch with Jack McGuire 
without the assistance or participation of Prudential. Jack McGuire agreed to 
purchase the ranch for $750,000. After negotiating the terms of the sale, Jack 
McGuire asked that the contract for warranty deed and other related documents be 
made in the name of his son and daughter-in-law, Clayton and Cindy McGuire. 
Neither Clayton nor Cindy McGuire were involved in the negotiations to purchase 
the ranch. Underwood agreed to Jack McGuire's request if, as a condition of 
sale, he would personally guarantee the payments and performance of the terms of 
the contract for warranty deed. Jack McGuire executed a guarantee for "payment 
and performance of" the contract for warranty deed, and the sale was completed 
on August 14, 1992, before the expiration of the extension 
agreement.

[¶9]      The trial court 
found that the listing contract's broker compensation provision and the 
corresponding provision excluding Jack McGuire were ambiguous and confusing and, 
as such, should be construed against Prudential. The trial court granted 
Underwood summary judgment and held Prudential was not entitled to a commission 
as a matter of law. Prudential now appeals that decision. 

DISCUSSION

[¶10]   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. Romero v. Hoppal, 855 P.2d 366, 
368 (Wyo. 1993); W.R.C.P. 56(c). The material facts of this case are not 
disputed. The question we must determine, therefore, is whether Underwood was 
entitled to summary judgment as a matter of law.

[¶11]   Prudential argues that the listing 
agreement plainly states that a commission be paid unless the property was sold 
to Jack McGuire; that the sale was not to Jack McGuire because the names on the 
contract for warranty deed are Clayton and Cindy McGuire; and that therefore 
Underwood must pay the commission.

[¶12]   Under the "Broker Compensation" 
provision, appellees agreed to pay appellant a five percent commission if the 
property was sold by any party on or before April 28, 1992, and as provided in 
the extension agreement. The "Additional Provisions" section of the contract 
provided: "For the period of this listing, Jack McGuire shall be excluded from 
said listing." The "Broker Compensation" language on page one of the listing 
agreement is in conflict with the "Additional Provisions" language on page 
three, and the "Additional Provisions" section does not explain what is meant by 
the language "Jack McGuire shall be excluded from said 
listing."

[¶13]   The listing agreement is a contract 
and is to be interpreted according to our well-established rules of contract 
construction. Contract construction and interpretation are a matter of law for 
the court. True Oil Co. v. Sinclair Oil Corp., 771 P.2d 781, 790 (Wyo. 
1989) (citing Amoco Production Co. v. Stauffer Chemical Co., 612 P.2d 463, 465 (Wyo. 1980)). The determination of the parties' intent is our prime 
focus in construing or interpreting a contract. True Oil, at 790; 
State v. Moncrief, 720 P.2d 470, 474 (Wyo. 1986).

[¶14]   If the contract is ambiguous, the 
intent of the parties may be determined by resort to extrinsic evidence. 
Ferguson v. Reed, 822 P.2d 1287, 1289 (Wyo. 1991); True Oil Co., 
771 P.2d  at 790. An ambiguous contract is one which is obscure in its meaning 
because of indefiniteness of expression or because it contains a double meaning. 
Ferguson, 822 P.2d  at 1289; Cliff & Co., Ltd. v. Anderson, 777 P.2d 595, 599 (Wyo. 1989). The question of whether ambiguity exists is a 
question of law which may be independently determined by this court. 
Ferguson, 822 P.2d  at 1289. Any ambiguity in the contract requires that 
it be construed against the drafters of the agreement. Deepwater Investments, 
Ltd. v. Jackson Hole Ski Corp., 938 F.2d 1105, 1111 n. 9 (10th Cir. 1991); 
McCartney v. Malm, 627 P.2d 1014, 1020 (Wyo. 1981).

[¶15]   The intention of the parties 
concerning the "Additional Provisions" clause excluding Jack McGuire from the 
listing discloses a clear intent that a commission would not be earned if Jack 
McGuire were to purchase the ranch. And the listing agreement does not provide, 
nor did the parties intend, a commission upon a sale to McGuire with the 
contract documents, at his request, in the name of third persons. That the 
parties intended to exclude any sale to Jack McGuire is clear and definite and 
generally agreed to by the parties.

[¶16]   The affidavits submitted by 
Underwood are not disputed. They demonstrate that Jack McGuire alone conducted 
all negotiations with Underwood for the purchase of the ranch without the 
participation of either Prudential or Clayton and Cindy McGuire. He executed a 
guarantee, personally ensuring the terms of the contract for sale. Having 
negotiated the sale and being obligated to pay by guaranteeing payment of the 
contract, McGuire's position was that of a purchaser. He could have received the 
contract in his name and then assigned it to his son and daughter-in-law, and 
nothing would change. The sale of the ranch was to Jack McGuire, and that fact 
did not change because he requested that the appellees place the names of his 
son and daughter-in-law on the documents as a favor to him. Appellant Underwood 
should not suffer a loss because of a simple compliance with that request. It 
was McGuire's intention from the beginning of the negotiations that he purchase 
the ranch and then transfer title to his son and daughter-in-law. His 
designation of Clayton and Cindy McGuire as the persons to be named on the 
contract was not the "sale" of the ranch, but merely the transfer of title per 
McGuire's direction, a step-saving device for Jack McGuire. Therefore, even 
though Jack McGuire's son and daughter-in-law's names were on the sales 
contract, the sale was, for all intents and purposes, to Jack McGuire. It was a 
de facto sale of the ranch to Jack McGuire.

CONCLUSION

[¶17]   The trial court's grant of summary 
judgment to the Underwood Ranch Company was correct as a matter of law. The 
court correctly determined the intent of the parties to be that Prudential would 
not receive a commission for this de facto sale to Jack 
McGuire.

[¶18]   Affirmed.