Title: Schulz v. Miller

State: wyoming

Issuer: Wyoming Supreme Court

Document:

Schulz v. Miller1992 WY 94837 P.2d 71Case Number: 92-31Decided: 08/05/1992Supreme Court of Wyoming
Stephen P. SCHULZ, 

Appellant 
(Defendant),

v.

Polly L. MILLER, 

Appellee 
(Plaintiff).

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

William R. Fix 
of Fix & Mulligan, Jackson, for appellant.

Kenneth S. 
Cohen, Jackson, for appellee.

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

* Chief Justice at time of 
oral argument.

URBIGKIT, Justice.

[¶1]      Appellant, 
Stephen P. Schulz, and appellee, Polly L. Miller, established an unmarried 
familial relationship after the commencement of dating in about 1985 and 
continued to live together into 1989. In 1990, the "living together" status 
ended when Mr. Schulz developed another romantic direction following a trip to 
South America (alone) where he met his newer bride-to-be. Prior to the end of 
the Schulz-Miller cohabitation, they received a deed to an extremely valuable 
residential site located on a golf course which was acquired for the purpose of 
building "their" home on it. After Mr. Schulz had redirected his romantic 
interest to the lady from Chile, he asked Ms. Miller to reconvey to him any 
interest in the home site lot. She refused, and this litigation followed, to end 
in district court with summary judgment in favor of Ms. Miller and against Mr. 
Schulz in determining that each record owner had a fifty percent interest in the 
lot.

[¶2]      We agree with the 
district court and affirm its summary judgment decision.

[¶3]      This home site 
lot was not realistically subject to partition and the district court decreed in 
summary judgment that the joint acquisition should be sold and the proceeds 
divided. To understand the issues presented, we outline, in advance, some 
essential facts, most of which are undisputed.

[¶4]      Following the 
commencement of the relationship in 1985, after a period of about a year later, 
the parties first moved into Ms. Miller's house trailer and then into Mr. 
Schulz's house to live together with the continued domestic relationship ending 
in early 1990. Both worked and contributed to their mutually maintained 
household. Mr. Schulz owned a downtown Jackson, Wyoming retail business with 
excellent income and Ms. Miller was a bookkeeper with more limited 
resources.

[¶5]      There came a time 
when the couple discussed building a house which required the acquisition of a 
home site, not so easy to do and certainly not so inexpensive in Jackson. After 
viewing variant properties with a realtor, Ward Keevert (a friend of Mr. 
Schulz), the parties came to the realtor's office on July 21, 1989 and signed a 
pre-printed "Offer, Acceptance & Receipt" - a 1979 Wyoming Association of 
Realtors purchase agreement form. The sellers accepted and the deal was struck. 
Mr. Schulz and Ms. Miller agreed to purchase a home site lot on a golf course 
which would cost $79,500.

[¶6]      The stated 
purchasers in the agreement were "Stephen P. Schulz & Polly L. Miller" 
therein referred to as "Purchaser," and the document further 
provided:

     7. Title shall be 
conveyed to the following named purchaser(s):

     as Stephen P. Schulz 
and Polly L. Miller.

Both litigants 
actually signed as purchasers. The agreement recognized an earnest money 
deposit, a total purchase price of $79,500 and provision to pay the remaining 
balance of $54,500 in two expeditiously early installment 
obligations.

[¶7]      The payments were 
made and the deed was, in August 1989, executed by sellers, accepted by the 
purchasers and recorded as prepared by an attorney representing the sellers. 
Prepared by the attorney on a non-printed form, the conveyance stated as the 
grantees "Stephen P. Schulz, a single man, and Polly L. Miller, a single woman, 
as joint tenants with right of survivorship, GRANTEES * * *." The deed was 
recorded and then given by Mr. Schulz to Ms. Miller "to keep." Forbes v. Volk, 
358 P.2d 942 (Wyo. 1961). Cf. May v. McCormick By and Through Swallow, 704 P.2d 709 (Wyo. 1985).

[¶8]      The record, in 
addition to these undisputed facts, further shows that the entire purchase price 
was paid by Mr. Schulz. It is not only the significant original purchase price 
which fuels this litigation, but it was suggested in the record and stated in 
oral argument that by May 1991, the lot had increased in value to around 
$125,000 from the original 1989 purchase price of $79,500.

[¶9]      With these basic 
facts established, the issues of dispute can be more easily understood. Mr. 
Schulz identifies the issues as:

I. Did the trial court 
err in refusing to consider parol evidence in this action to reform a voluntary 
conveyance mistakenly conveying a larger estate than was intended?

II. Did the trial court 
err in granting summary judgment where genuine issues of material fact existed 
as to the mistaken voluntary conveyance of a larger estate than was 
intended?

III. Is unilateral 
mistake by the grantor in a voluntary conveyance sufficient to permit 
reformation of a deed?

[¶10]   Ms. Miller simplifies her interest 
and issue to ask: "Is parol evidence admissible to reform the deed to plaintiff 
and defendant?"

[¶11]   The concept of the ex-boyfriend who 
now wants his real estate back free and clear of claim by the co-grantee 
provides the more complex issue in contention that his realtor, Ward Keevert, 
provided bad legal advice regarding acquisition of the real estate title. Mr. 
Schulz argues his intention, which he attempted to prove by parol and which 
creates the issue on appeal at this time by contending a unilateral expectation, 
was to establish that the only interest Ms. Miller would acquire was "a 
contingent future interest." This intent, he argues, was deterred by the 
erroneous legal advice of the realtor and constitutes a unilateral mistake 
justifying his demand that reformation be granted to limit Ms. Miller's interest 
as only a contingent future interest1 to be valuable only if she survived 
him and they continued in cohabitation until his death occurred. Consequently, 
unilateral mistake derived from faulty advice was his explicit appellate 
contention. Parol evidence by Mr. Schulz's testimony of the unexpressed intent 
was to be introduced to reform the executed warranty deed to prove his 
case.

[¶12]   Actually, the original pleadings do 
not directly reach this status where Ms. Miller was the initial plaintiff in 
complaint with prayer for either partition as a co-owner or, if partition could 
not be achieved, then in the alternative that the property be sold and the 
proceeds be divided. By amended answer and counterclaim, Mr. Schulz denied her 
right, title and interest; alleged his interest in fee simple; and, in the 
nature of a quiet title proceeding, prayed for a decree validating his title in 
fee simple.

[¶13]   The complaint for partition was 
filed in April 1990 and, in July 1991, Mr. Schulz filed his second amended 
answer and counterclaim which, for the first time, presented a claim for relief 
other than quiet title. Added as requested relief was a count for reformation 
which specifically addressed a change in the deed but made no reference to 
reformation of the basic document by which title was acquired - the initial 
"Offer, Acceptance & Receipt" purchase agreement which established the 
status for issuance of title. The pleadings, consequently, presented 
differentiated and alternative demands for relief - first, quiet title alleging 
no interest in the co-grantee and, secondly, a request for reformation to 
establish that the intended interest was only a right of survivorship. Although 
the pleadings allege that the entire purchase price payment had been made by Mr. 
Schulz, no claim was made by him to recover the gift in money which he had made 
under the purchase contract. Summary judgment came on Ms. Miller's complaint 
with establishment of co-ownership which was supplemented by decree provision 
determining partition was not possible so that the property should be sold and 
the proceeds be divided.

[¶14]   The principal thrust of the 
argument of both litigants addresses the form of the deed, e.g., estate in 
common, joint estate, or a contingent future interest. We find that this 
direction of attention provides no value for our decision. Factually, this was 
not a grantor-gift conveyance, but was instead a real estate purchase 
undertaking executed by both litigants; although thereafter, Mr. Schulz paid the 
contracted purchase price for both as mutual obligors.

[¶15]   It is obvious that from the 
standpoint of Mr. Schulz (since he is still alive), whether the deed could have 
provided either a tenancy in common or joint estate would make no difference in 
his present effort to divest his prior girlfriend of the vested title interest 
recorded in her name. What we directly consider, since the joint estate or 
tenancy in common difference is insignificant, is what the signed document 
executed by both litigants did establish and then whether that document leaves 
an issue of fact repelling any proper grant of summary judgment regarding the 
conveyance which confirmed the original agreement in final 
execution.

[¶16]   The basic law is well 
recognized:

The essential elements of 
mutual mistake in a written instrument for which a court of competent 
jurisdiction may grant appropriate relief are that there was an antecedent 
agreement which the written instrument undertakes to evidence; that a mistake 
occurred in the drafting of the instrument and not in the antecedent agreement 
which it undertakes to evidence; and that in the absence of fraud or inequitable 
conduct on the part of one of the parties, the mistake was mutual.

Northern Pacific 
Railway Co. v. United States, 277 F.2d 615, 619 (10th Cir. 1960).

[¶17]   Once we examine this file in review 
of the "Offer, Acceptance & Receipt" document (purchase agreement), we 
recognize that these two litigants agreed how title was to be vested: "Stephen 
P. Schulz and Polly L. Miller." By this document, each became an equal co-owner 
and whether by tenancy in common as originally indicated or joint tenancy as 
ultimately defined in the conveyance makes no difference within this record. 

[¶18]   What Mr. Schulz really argues is 
what he made as a gift to his girlfriend should now be subject to reclamation 
since the cohabitation relationship ended following his more recent change of 
plans. It should be made clear that he neither pled nor argued that he made a 
gift to Ms. Miller of one-half of the $79,500 or, for that matter, that he did 
not make a gift. He only said that the deed, which means the purchase agreement 
in legal reality, should be reformed to specifically change the written 
provisions of both documents - one he signed and the other executed and prepared 
by the sellers and accepted by him as co-grantee. Reformation would serve to 
extinguish Ms. Miller's present ownership interest so Mr. Schulz could freely 
build a house on the site for his present wife.

[¶19]   If there is a real issue to be 
extrapolated from this case, it is whether the gift maker can retain an 
unexpressed limitation on the totality of the executed gift, unconfirmed in the 
written agreement, to permit reconsideration after his relational intentions 
have been altered by acquisition of a more recent subject for his romantic 
attention. Cordova v. Gosar, 719 P.2d 625 (Wyo. 1986) provides a firm basis for 
our discussion. Parol evidence would be available to reform the written 
agreement only on account of a mutual mistake.

"* * * The general rule 
is that parol evidence may not contradict, vary, or add to deeds. This Court, 
however, has recognized mutual mistake as an exception, even if the property 
description is definite and certain. This Court has said that one type of 
mistake justifying reformation is where the deed fails `to conform to what both 
parties intended.'" Neeley v. Kelsch, supra, 600 P.2d [979] at 981 [(Utah 
1979)].

     The Wyoming Supreme 
Court delineated the parole-evidence rule when it said in Cary v. Manfull, 41 
Wyo. 476, 287 P. 433, 435 (1930), "[n]othing can be added to or taken from the 
contract, except for fraud or mistake;" and then said in Russell v. Curran, 66 
Wyo. 173, 206 P.2d 1159, 1166-1167 (1949):

"It is proper to note 
also that in Stoll v. Nagle, 15 Wyo. 86, 86 P. 26, 28, this court has recognized 
the rule that parol evidence is admissible to reform an instrument on account of 
mistake and it was remarked that there can be no doubt of the rule's 
correctness. In the same case Mr. Justice Beard also said that: `The mistake, 
however, must have been a mutual one. There must have been a meeting of the 
minds and a contract actually entered into, but, by reason of the mistake, the 
instrument as written does not express what was really intended by the parties. 
Both the mistake and its mutuality must be established by evidence that is clear 
and satisfactory.'["]

Cordova, 719 P.2d  at 640-41. Obviously, this is not a faulty real estate description case; 
this is real estate acquired by two people which was titled in both 
names.

[¶20]   As this court further said in 
Cordova, 719 P.2d  at 641-42 (quoting Schinnell v. Doyle, 6 Wn. App. 830, 496 P.2d 566, 568-69 (1972)):

"Parole evidence is 
admissible only if a contract is ambiguous as a matter of law. Such evidence 
should not be introduced for the purpose of creating ambiguity but should be 
admitted only when the court has determined that parol is necessary in order to 
explain or remove ambiguity apparent on the face of the instrument. * * * Where 
a contract is not ambiguous, its meaning should be ascertained from the language 
of the contract and not from parol evidence concerning it. * * *

"`[W]here there is no 
ambiguity, all conversations, contemporaneous negotiations, and parol agreements 
between the parties prior to a written agreement are merged therein. In the 
absence of accident, fraud or mistake, parol evidence is not admissible for the 
purpose of contradicting, subtracting from, adding to, or varying the terms of 
such written instruments.'

"Fleetham v. 
Schneekloth, 52 Wn.2d 176, 178, 324 P.2d 429, 430 (1958). * * 
*" 

[¶21]   Mr. Schulz has thoughtfully 
provided a series of cases, but we conclude they are unpersuasive for this 
decision. This is not a scrivener's mutual mistake, unanticipated result 
situation. Sunnybrook Children's Home, Inc. v. Dahlem, 265 So. 2d 921 (Miss. 
1972); Nelson v. Harris, 32 N.C. App. 375, 232 S.E.2d 298 (1977). Nor is the 
case a grantee's fraud. Sparks v. Sparks, 388 S.W.2d 508 (Mo. App. 1965). 
Likewise, the mutuality of any contended mistake is absent since contest 
regarding the grantee-purchaser designations of the legal documents were not in 
any regard contended to be contrary to the expectation of the co-grantee. Ms. 
Miller got what she was offered and that is what she expected. Huang v. Cheng, 
583 N.Y.S.2d 370 (N.Y.A.D. 1992). Cf. Gablick v. Wolfe, 469 P.2d 391 (Alaska 
1970).

[¶22]   Since the district court was 
provided no evidence of a mutual mistake, the test of clear, convincing and 
satisfactory evidence for reformation cannot be met. Longshaw v. Corbitt, 4 
Ariz. App. 408, 420 P.2d 980 (1966). See also Norwest Bank Minnesota, N.A. v. 
Midwestern Machinery Co., 481 N.W.2d 875, 881 (Minn.App. 1992) (considering the 
parol evidence rule and the clear and convincing evidence test). In essence, Mr. 
Schulz contends he did not intend to give Ms. Miller any real ownership even 
though the written documents executed and authenticated the result to be her 
co-ownership including the conveyance which he accepted and recorded. Differing 
from Longshaw, this is not the typical boundary dispute reformation case nor is 
this a case where the unexpressed intention of the grantor is at issue in any 
regard. Gregory v. Sanders, 635 P.2d 795 (Wyo. 1981). Furthermore, as earlier 
noted, this is not a real estate gift conveyance case where the donor 
subsequently questions the extent of his gift by deed. A third party, the 
vendor, in accord with these litigants' purchase agreement, conveyed the 
property as required by the purchase agreement. Consequently, the exception for 
which Mr. Schulz argues does not apply. Cf. Twyford v. Huffaker, 324 S.W.2d 403 
(Ky. 1958). The gift, such as it was, consisted of the payment of the mutually 
undertaken obligation to purchase.

[¶23]   As addressed in Twyford, mutuality 
of the mistake as a basis for reformation "need * * * be established when there 
is a mutuality of obligation, as in a contractual relationship." Id. at 406. 
That is the situation that existed here.

[¶24]   Furthermore, this is not a Twyford 
kind of error in physical description for the involved real estate. The grantor 
gift conveyance of a half interest in the donor's homestead found in the cited 
case of Papke v. Pearson, 203 Minn. 130, 280 N.W. 183 (1938) is likewise 
inapplicable. These cases recognize that a gift is unilateral in its nature and, 
consequently, only a unilateral mistake can occur. There is nothing about this 
case that comes within the narrow confines of the donor gift conveyance 
unilateral mistake concept. This man and woman homebuilding program was about as 
bilateral as can be found.

[¶25]   Two long established principles 
delineate Wyoming law. For consideration of reformation, the claimed mistake 
must be mutual, State Bank of Wheatland v. Bagley Bros., 44 Wyo. 244, 11 P.2d 572 (1932); Stoll v. Nagle, 15 Wyo. 86, 86 P. 26 (1906), and that mistake and 
its mutuality must be established by clear and satisfactory evidence. The burden 
of proof to present evidence that is clear, satisfactory and convincing rests 
with the party requesting reformation. Pfister v. Brown, 498 P.2d 1243 (Wyo. 
1972); Grieve v. Grieve, 15 Wyo. 358, 89 P. 569 (1907).

[W]hen a mistake in a 
writing is claimed, the burden rests on the party claiming the mistake to 
establish by evidence that is clear, satisfactory and convincing that the 
contract as written does not contain the agreement entered into between the 
parties; that the mistake was mutual; and that it did not occur by or result 
from negligence of the party claiming it.

Pfister, 498 P.2d  at 1245.

[¶26]   Where the written document, as an 
agreement, actually expresses the concurrence of the parties, the court cannot 
reform the writing for a party into one he thinks he would have made but, in 
fact, never did. State Farm Mut. Auto. Ins. Co. v. Petsch, 261 F.2d 331 (10th 
Cir. 1958). Courts do not reform a valid agreement of the parties to conform to 
the unexpressed desires of the participants, regardless of any appealing reasons 
to do so. Mullinax Engineering Co. v. Platte Valley Const. Co., 412 F.2d 553 
(10th Cir. 1969).

[¶27]   We agree with the district court 
that the documentation is determinative regarding reformation within the status 
of these pleadings in this case. The factual argument of whether the sellers' 
attorney, in contact with Mr. Schulz and not the buyers' realtor, prepared the 
deed serves little basis to defeat the entry of summary judgment because the 
deed was in specific accord with the form required by the purchase agreement 
which had been mutually executed by these litigants. Additionally, it does not 
add substance to any assertion about a dispute of fact whether this transaction 
might be construed to have encompassed a gift made in futuro when the purchase 
agreement was signed, a gift made in three installments when the purchase price 
was paid, or a gift which occurred when the deed was executed, recorded and the 
original instrument which designated the gift was given to the 
donee.

[¶28]   In reality, the transaction can be 
most accurately delineated as an agreement to make a gift when the purchase 
agreement was signed, with the gift then finalized and completed by delivery and 
acceptance of the recorded deed, B-T Ltd. v. Blakeman, 705 P.2d 307 (Wyo. 1985), 
all of which, following consummation, is not now subject to parol challenge. 
Once the deed was executed and delivered, the executory contract (to purchase) 
became executed, Bakken v. Price, 613 P.2d 1222, 1227 (Wyo. 1980), and the gift 
became a fact. Hundley v. Neely, 365 P.2d 196 (Wyo. 1961). Consequently, we 
agree with the district court that the documentation is determinative and parol 
attack by a participant on the completed transaction after consummation is not 
available. "[W]here the words used in a deed clearly designate the estate 
conveyed, there is no need to resort to rules of construction or to give 
judicial interpretation." Witzel v. Witzel, 386 P.2d 103, 104 (Wyo. 
1963).

[¶29]   These two litigants authenticated 
by signed documents that each was to be a co-owner of real estate to be acquired 
in their common interest as their home site. Certainly, under any construction 
of the pleadings or evidentiary record, there is no issue presented contending 
Ms. Miller was obligated to repay one-half of the value of the property or its 
purchase cost as the portion of the transaction which constituted a gift to her 
in recorded real estate title interest. The written transaction was not defined 
by a condition subsequent, namely a change in cohabitation interest of one of 
the participants.

[¶30]   We similarly find no merit in Mr. 
Schulz's argument that he should be permitted at trial to testify about a 
differing intent regarding the form and effect of the deed. Although that 
instrument was received, accepted, recorded and given to Ms. Miller, it was not 
the document of decision since, within its terms, that deed only carried into 
effect what had been stated in the purchase agreement whereby these parties 
jointly purchased the property for their contemplated future home.2

[¶31]   We agree with the district court's 
rejection of parol evidence to impeach the recorded deed since that document 
only accommodated the earlier agreement as executed by both parties in finite 
recognition of the accomplished gift.3 Extrinsic evidence will not be used 
to contradict the plain meaning of a clear and unambiguous agreement. Kerper v. 
Kerper, 780 P.2d 923 (Wyo. 1989).

[¶32]   The only real issue of fact in this 
case was raised by the question of contributory conduct by Mr. Schulz's own 
realtor who handled the purchase; the realtor who represented the sellers; and, 
perforce, the attorney who prepared the deed in behalf of the sellers. Who made 
the decision to have title in a survivorship estate rather than a tenancy in 
common may be in dispute, but it certainly does not make any difference at this 
stage of the proceeding.

[¶33]   Reconstruction of the written 
record by reformation through parol evidence to take back what was once given in 
order for it to be given to another was appropriately rejected by the district 
court. Nelson v. Nelson, 740 P.2d 939 (Wyo. 1987).

[¶34]   Affirmed.

CARDINE, Justice, 
dissenting.

[¶35]   The purchase offer and acceptance 
agreement indicates only that appellant and appellee are the purchasers of this 
real estate. From the writing itself, it is impossible to ascertain who should 
pay, whether there was a gift, or how title should be held. Appellant was 
lawfully entitled to introduce parole evidence, and the district court should 
have allowed it to arrive at the intent of the parties to this transaction. This 
is not to say that appellant should prevail - only that parole evidence offered 
by him should have been received and considered by the court. For this reason, I 
would reverse and remand.

 FOOTNOTES

1 This court was not 
provided by either briefing or by oral argument any exact description of the 
contingent future interest which Mr. Schulz intended to be different from the 
tenancy in common, except, by the time of litigation, the co-grantee should be 
excluded from present right, title and interest despite what both the purchase 
agreement and the deed had explicitly provided. Clearly, no argument was 
provided nor can documentation justify identifying the claimed interest as the 
estate of a co-tenancy fee simple determinable or fee simple subject to a 
condition subsequent. Wood v. Board of County Com'rs of Fremont County, 759 P.2d 1250 (Wyo. 1988).

2 We need not pursue the 
inexcusable negligence defense to reformation. First, the inquiry would present 
factual questions probably not properly resolved by summary judgment; but more 
directly considered, this is not a challenged written agreement which reduced 
the understanding to writing. Bagley Bros., 44 Wyo. 244, 11 P.2d 572. The signed 
agreement was not the subject of reformation challenge by Mr. Schulz for this 
appeal.

3 We do not further 
continue to expand reformation to accommodate a "unilateral" mistake since we 
have no evidence of either a unilateral or bilateral mistake in the original 
documents signed by both participants.