Title: Treemont, Inc. v. Hawley

State: wyoming

Issuer: Wyoming Supreme Court

Document:

Treemont, Inc. v. Hawley1994 WY 140886 P.2d 589Case Number: 94-35Decided: 12/08/1994Supreme Court of Wyoming
TREEMONT, INC., a Wyoming 
corporation,

Appellant 
(Plaintiff),

 v.

 Robert C. HAWLEY and Mary 
Elizabeth Hawley, husband and wife,

Appellees 
(Defendants).

 

Appeal from The District 
Court, Converse County, Barton R. Voigt, J.

 

James L. Edwards 
of Stevens, Edwards & Hallock, P.C., Gillette, representing 
appellant.

W. Thomas 
Sullins, II and P. Jaye Ripley of Brown & Drew, Casper, representing 
appellees.

 

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

TAYLOR, 
Justice.

[¶1]      Appellant appeals 
from an order and decree granting summary judgment in favor of appellees. The 
district court found appellant in default for failure to abide by the terms of 
an agreement to purchase land located in Converse County, Wyoming and rendered 
judgment declaring the agreement terminated. Appellant contends that no breach 
occurred and that the district court added language to the contract in order to 
arrive at its result. Appellant argues that termination of the contract and 
forfeiture of the monies paid was not an equitable solution to a dispute 
involving divergent interpretations of the contract requirements. Appellees 
contend they were entitled to summary judgment because appellant blatantly 
ignored a provision of an unambiguous contract.

[¶2]      We 
affirm.

I. 
ISSUES

[¶3]      Appellant 
presents the following issues for review:

I. Whether summary 
judgment against the appellant was proper under W.R.C.P. 
56.

II. Whether summary 
judgment should have been granted in favor of the appellant and against 
appellees.

III. Is termination of 
the contract and forfeiture of the monies paid under the contract 
equitable?

[¶4]      Appellees restate 
the issue:

Whether summary judgment 
was properly granted in favor of appellees in this case based upon the dual 
findings of the court below that there is no genuine issue of material fact with 
respect to the clear and unambiguous contract entered into between the parties 
and that appellees are entitled to judgment as a matter of 
law.

II. 
FACTS

[¶5]      Appellees, Robert 
C. Hawley and Mary Elizabeth Hawley (Hawleys), are the owners of 4,000 plus 
rural acres of real property located in Converse County (Hawley land). The 
property contains substantial forested areas and is described as being uniquely 
suited for recreational activities.

[¶6]      During the summer 
of 1992, John F. Rand (Rand) offered to buy the Hawley land with the 
understanding that the property was being purchased for Rand's personal and 
recreational use and that the land would not be used for commercial purposes. 
The parties agreed on terms and scheduled a closing date.

[¶7]      Shortly before 
closing, the Hawleys were informed that appellant, Treemont, Inc. (Treemont), 
would be the purchaser and that Rand's partner, Richard Maury, would handle the 
routine matters affecting the sale of the property. On December 3, 1992, the 
parties entered into an Agreement for Warranty Deed (Agreement) for the purchase 
of the Hawley land.

[¶8]      According to the 
terms of the Agreement, the total sale price for the Hawley land was 
$665,782.50. Treemont was required to make a down payment of $150,000.00; 
$25,000.00 was presently held by the Hawleys and the remaining $125,000.00 was 
to be paid at the time the Agreement was signed. The balance plus interest was 
amortized over a five year period, with payments of $132,607.68 due 
annually.

[¶9]      The Agreement 
provided that Treemont would furnish the Hawleys with a copy of all contracts 
associated with the removal or sale of timber and provide advance notice of any 
timber removal plans. Additionally, Treemont would deliver all monies received 
under any timber contracts to the Hawleys' escrow agent within five days after 
their receipt, as long as an outstanding balance remained due to the 
Hawleys.

[¶10]   Just prior to the December 3, 1992 
closing of the sale of the property, Treemont entered into a three-year contract 
with the Brand S Corporation (Brand S) for the sale of timber from the Hawley 
land. On December 1, 1992, Brand S paid Treemont a $50,000.00 advance payment on 
the sale of timber. Treemont did not disclose this timber contract to the 
Hawleys at closing nor deposit the timber monies in the escrow account. Instead, 
Treemont silently used the $50,000.00 as part of the down 
payment.

[¶11]   The Hawleys learned of the timber 
contract and the $50,000.00 Brand S payment in April, 1993. On April 29, 1993, 
they notified Treemont that it was in default under the Agreement due to 
Treemont's failure to transfer the $50,000.00 into the Hawleys' escrow account 
as provided in the Agreement. In response to the notice of default, Treemont 
petitioned the district court for a declaratory judgment. The Hawleys 
counterclaimed seeking declaratory relief, injunctive relief and 
damages.

[¶12]   Both Treemont and the Hawleys moved 
for summary judgment. On October 20, 1993, the district court denied Treemont's 
motion. The district court determined that a factfinder could reasonably decide, 
based upon controverted facts, that Treemont had 
defaulted.

[¶13]   On December 21, 1993, the district 
court granted the Hawleys' motion for summary judgment. Finding no genuine issue 
of material fact, the district court determined that the plain intention of the 
parties, as ascertained from the words of the Agreement, was that Treemont was 
to pay a down payment, annual payments of $132,607.68, plus all timber contract 
receipts, as long as a balance was due under the Agreement. The district court 
found that Treemont breached the terms of the Agreement when it failed to pay 
the Hawleys the $50,000.00 Brand S paid as an advance payment on the sale of 
timber. The district court declared the contract terminated and awarded the 
subject escrow, including all monies paid, to the Hawleys.

[¶14]   It is from this order of summary 
judgment that Treemont appeals.

III. 
DISCUSSION

[¶15]   Summary judgment is a proper means 
of reaching the merits of a controversy where no material issue of fact is 
present and only questions of law are involved. England v. Simmons, 728 P.2d 1137, 1141 (Wyo. 1986).

[¶16]   W.R.C.P. 56 governs summary 
judgment and provides, in pertinent part:

(c) * * * The judgment 
sought shall be rendered forthwith if the pleadings, depositions, answers to 
interrogatories, and admissions on file, together with the affidavits, if any, 
show that there is no genuine issue as to any material fact and that the moving 
party is entitled to a judgment as a matter of law.

[¶17]   Our rules for reviewing summary 
judgment on appeal are well established. We will affirm a summary judgment where 
no genuine issues of material fact exist and the prevailing party is entitled to 
judgment as a matter of law. Sandstrom v. Sandstrom, 880 P.2d 103, 105 
(Wyo. 1994) (quoting Foianini v. Brinton, 855 P.2d 1238, 1240 (Wyo. 
1993)); Lyden v. Winer, 878 P.2d 516, 518 (Wyo. 1994); Eiselein v. 
K-Mart, Inc., 868 P.2d 893, 894 (Wyo. 1994); Lynch v. Norton Const., 
Inc., 861 P.2d 1095, 1097 (Wyo. 1993); Prudential Preferred Properties v. 
J and J Ventures, Inc., 859 P.2d 1267, 1271 (Wyo. 1993); Brown v. 
Avery, 850 P.2d 612, 614-15 (Wyo. 1993); Equality Bank of Evansville, 
Wyo. v. Suomi, 836 P.2d 325, 328 (Wyo. 1992).

[¶18]   We give no deference to the 
district court's decisions on issues of law. Smith, Keller & Associates 
v. Dorr & Associates, 875 P.2d 1258, 1264 (Wyo. 1994); Doctors' Co. 
v. Insurance Corp. of America, 864 P.2d 1018, 1023 (Wyo. 1993); 
Prudential Preferred Properties, 859 P.2d  at 1271; Darlow v. Farmers 
Ins. Exchange, 822 P.2d 820, 823 (Wyo. 1991). A grant of summary judgment is 
reviewed from the viewpoint most favorable to the party opposing the judgment. 
Lynch, 861 P.2d  at 1097; Smith v. Nugget Exploration, Inc., 857 P.2d 320, 322 (Wyo. 1993) (quoting Knadler v. Adams, 661 P.2d 1052, 1053 
(Wyo. 1983)); Miller v. Campbell County, 854 P.2d 71, 75 (Wyo. 1993) 
(quoting Abell v. Dewey, 847 P.2d 36, 38-39 (Wyo. 
1993)).

[¶19]   In a contract case such as the one 
before us, summary judgment is appropriate when two conditions are met. First, 
there must be no genuine issues of material fact. Second, the provisions of the 
contract must be unambiguous; because where the language is unambiguous, the 
construction of the contract's provisions is a matter of law. Moncrief v. 
Louisiana Land and Exploration Co., 861 P.2d 516, 523 (Wyo. 1993); 
Continental Ins. v. Page Engineering Co., 783 P.2d 641, 651 (Wyo. 1989); 
Ricci v. New Hampshire Ins. Co., 721 P.2d 1081, 1085 (Wyo. 1986); 
Wyoming Game and Fish Com'n v. Mills Co., 701 P.2d 819, 821 (Wyo. 
1985).

[¶20]   The material facts of this case are 
not disputed. Both parties agree they entered into an agreement to effectuate 
the sale of land from the Hawleys to Treemont. Both parties agree that on 
December 1, 1992, Treemont received $50,000.00 from Brand S in timber monies. 
Both parties agree that Treemont did not pay into the escrow account an 
additional $50,000.00 over and above the December 3, 1992 down 
payment.

[¶21]   Whether a contract is ambiguous is 
a de novo question of law for the reviewing court. Prudential Preferred 
Properties, 859 P.2d  at 1271. An ambiguous contract is one which has 
language conveying a double or obscure meaning. McNeiley v. Ayres Jewelry 
Co., 855 P.2d 1242, 1244 (Wyo. 1993). A party's subsequent disagreement 
concerning the contract's meaning does not establish an ambiguity which would 
require resort to extrinsic evidence. Moncrief, 861 P.2d  at 
524.

[¶22]   We agree with the district court 
that the language of the Agreement between the Hawleys and Treemont is 
unambiguous. The language is plain and the obligations of the parties are 
specifically stated. The question we must ask is whether the Hawleys were 
entitled to summary judgment as a matter of law. The answer lies in whether the 
language of the Agreement disallowed Treemont's use of the $50,000.00 timber 
monies as part of the required $150,000.00 down payment.

[¶23]   When provisions are clear and 
unambiguous, our examination is confined to the "four corners" of the document 
to construe the intent of the parties. Prudential Preferred Properties, 
859 P.2d  at 1271. "In giving effect to the contracting parties' intent, as 
expressed in the language of their written contract, this court abides by the 
rule that common sense and good faith are the leading characteristics of 
contract construction." Moncrief, 861 P.2d  at 524. See also, Wangler 
v. Federer, 714 P.2d 1209, 1213 (Wyo. 1986). We give effect to the language 
of the parties in accordance with the meaning that language would convey to 
reasonable persons at the time and place of its use. Klutznick v. Thulin, 
814 P.2d 1267, 1270 (Wyo. 1991). If we cannot determine a valid reason for 
variance, we will confirm the intent of the parties in their agreement. 
Prudential Preferred Properties, 859 P.2d  at 1271.

[¶24]   Treemont asserts that under the 
terms of the Agreement, no breach occurred; the $50,000.00 timber money was paid 
at closing and that payment was all the Agreement required. Treemont contends 
that the district court added language to the contract in order to find a 
breach. Treemont asserts there was no language in the Agreement prohibiting the 
use of timber monies as part of the down payment.

[¶25]   The district court, in its decision 
letter dated November 24, 1993, concluded:

11. The Agreement for 
Warranty Deed is not ambiguous in its relevant terms.

12. The plain intention 
of the parties may be determined from the words of the Agreement for Warranty 
Deed; Plaintiff was to pay Defendants a down payment of $[1]50,000 plus 
annual payments of $132.607.68 plus all timber contract 
receipts (so long as a balance was due under the 
Agreement).

13. Plaintiff breached 
the terms of the Agreement for Warranty Deed when it did not pay to Defendants, 
through the escrow agent, the $50,000 received from the Brand S timber purchase 
contract. The intent of the Agreement was not, and could not be satisfied by 
including those funds in amounts paid as the down payment.

(Emphasis in 
original.)

[¶26]   The Agreement contains eleven 
provisions, or "terms and conditions," each separately numbered and titled. 
Paragraph I sets forth total cost and provisions for the down payment, interest 
and an annual payment schedule:

I. PURCHASE PRICE: 
The 
total sale price shall be the sum of six hundred sixty-five thousand, seven 
hundred eighty-two dollars and 50/100 ($665,782.50), including all improvements 
now on said property and any other such improvements as may hereinafter be 
placed on said premises by Treemont, the latter to be held as additional 
security in case of failure to fulfill the covenants of this 
contract.

Buyer shall pay to 
sellers the sum of $150,000 down payment as follows: $25,000 presently held by 
sellers and $125,000 to be paid on the signing of this 
agreement.

The remaining five 
hundred fifteen thousand, seven hundred eight-two dollars and 50/100 
($515,782.50) shall bear interest at the rate of nine percent (9%) per annum and 
shall be amortized over a period of five (5) years on an annual payment basis. 
The annual payments of principal and interest shall be $132,607.68, plus the 
annual escrow fees.

(Emphasis 
added.)

[¶27]   Paragraph VII of the Agreement 
contemplates the possibility that Treemont might become involved in selling 
timber from the Hawley land, and controls both the timber removal and the 
receipt of monies from timber sales:

VII. REMOVAL 
OF TIMBER: Treemont shall be 
entitled to thin the timber on the above-described property. Treemont shall, 
prior to the removal of any timber from the property, furnish sellers with a 
copy of all contracts associated with the removal and/or sale of said 
timber. Treemont shall deliver all monies received under said timber 
contracts to the escrow agent within five (5) days of receipt of Treemont, so 
long as there remains an outstanding balance owned to sellers. Treemont 
shall, prior to the removal of any timber from the property, submit to sellers 
the plan of timber removal for sellers' approval, which approval shall not be 
unreasonably withheld.

(Emphasis 
added.)

[¶28]   This court presumes that each 
particular provision is placed in a contract for a purpose. Moncrief, 861 P.2d  at 524. We therefore avoid constructions which would render a provision 
meaningless. Wyoming Game and Fish Com'n, 701 P.2d  at 822. We find it 
significant that Treemont's obligation to pay all timber monies to the Hawleys 
via the escrow account is found in Paragraph VII, the paragraph addressing 
timber sale and removal, and not in Paragraph I, the paragraph stating the 
agreed upon terms of payment.

[¶29]   We surmise that Treemont's goal was 
to have the $50,000.00 credited against two different obligations under the 
contract. We hold that Treemont was unable to do this. Where language used by 
parties to contract is plain and unambiguous, a court is not permitted to take 
liberties with the language to reduce the liabilities clearly assumed. 17A 
C.J.S. Contracts § 296(5) (1963). The construction that Treemont would 
have us give this Agreement would render the provision directing payment of 
timber monies to the Hawleys meaningless. See Wyoming Game and Fish 
Com'n, 701 P.2d  at 822.

[¶30]   We agree with the district court's 
finding that the intent of the parties, as properly determined from the words of 
the Agreement, was that Treemont was to pay the Hawleys the full down payment, 
the balance and interest in annual installments, and, as long as a balance was 
due under the Agreement, all timber contract monies. We affirm the district 
court's summary judgment declaring that Treemont breached the terms of the 
Agreement when it failed to pay the Hawleys, through their escrow agent, the 
$50,000.00 Treemont received from Brand S.

[¶31]   We note that Treemont attempts to 
convolute the default issue by arguing that the only notice of default it 
received was a notice pertaining to Treemont's failure to use the escrow agent 
to transfer the controversial $50,000.00 to the Hawleys. The notice sent by the 
Hawleys stated:

Notice is hereby given 
that you are in default under [Paragraph] VII of our Agreement for Warranty Deed 
dated December 3, 199[2], in that all monies received by you under timber 
contracts concerning the property being purchased are to be delivered to the 
escrow agent within five (5) days of receipt by Treemont.

[¶32]   This notice was followed within a 
week by a letter to Treemont's attorney from the Hawleys' attorney clarifying 
the Hawleys' allegation of default. The letter stated in 
part:

Our interpretation of the 
Agreement for Warranty Deed is that payments received by Treemont, Inc. under 
timber contracts are to be paid to my clients in addition to all 
other payments required under the agreement, including the down 
payment.

(Emphasis in 
original.) We find Treemont's argument without merit.

[¶33]   Treemont also asks this court to 
consider whether termination of the Agreement and forfeiture of the monies paid 
under the Agreement is an equitable disposition. This court does not favor 
forfeiture of contractual rights. Marcam Mortg. Corp. v. Black, 686 P.2d 575, 580 (Wyo. 1984); Barker v. Johnson, 591 P.2d 886, 889 (Wyo. 1979). 
However, where the parties' intentions regarding default are clearly set forth 
in their contract, this court will not controvert the parties' intentions. 
Albrecht v. Zwaanshoek Holding En Financiering, B.V., 762 P.2d 1174, 1179 
(Wyo. 1988); Younglove v. Graham and Hill, 526 P.2d 689, 692 (Wyo. 
1974).

[¶34]   Paragraph VI of the Agreement, 
governing default, provides the following:

VI. 
DEFAULT: 
Any of the following events shall be a default under this 
agreement:

a. The buyer's failure to 
make any payment within fifteen (15) days as required herein, and buyer's 
failure to pay the same within fifteen (15) days after written 
notice.

b. The buyer's failure to 
perform any other term, condition, or covenant of this agreement after ten (10) 
days written notice by sellers.

* * * * * * 

In the event buyer fails 
to correct any default as specified in the written notice of default within the 
prescribed time, then sellers shall have the right 
to:

1. Declare the entire 
unpaid balance of the purchase price, together with interest, immediately due 
and payable by buyer, and sellers may, by appropriate legal action, proceed to 
enforce payment thereof; or,

2. Declare this contract 
null and void. In such event, sellers shall be deemed the owners of said 
real property and improvements thereon free of and clear from any and all rights 
or claims of buyer, either in law or in equity. In this event, sellers shall 
have the immediate right to take possession of the subject real property and 
improvements, and any payments heretofore made by buyer pursuant to this 
contract shall be deemed to be as and for rentals for the use and occupancy of 
said real property and improvements and/or as liquidated damages for the breach 
hereof and shall be retained by sellers. Sellers and buyer shall be 
released from any and all obligations in law or in equity under this contract. 
In the event sellers declare this agreement null and void in accordance with the 
terms hereof, the escrow agent shall deliver all of said instruments to sellers 
upon the receipt of an affidavit of default for reasons hereinabove provided * * 
*.

(Emphasis 
added.)

[¶35]   The intent of the parties is 
obvious. A default by Treemont gives the Hawleys the right to take back the land 
and keep all monies paid. The results are harsh, but when Treemont and the 
Hawleys signed the Agreement, they were bound by its 
terms.

[¶36]   We support the district court's 
disposition and order of forfeiture.

IV. 
CONCLUSION

[¶37]   The purpose of summary judgment is 
to reach the merits of a controversy where only questions of law are involved. 
Once the district court determined there was no genuine issue of material fact 
and determined, as a question of law, that the intent of the parties was to 
transfer to the Hawleys any and all proceeds for timber sales, over and above 
the down payment and annual installment payments, the district court properly 
awarded summary judgment in favor of the Hawleys.

[¶38]   Affirmed.