Title: ERNEST M. LINTON AND CAROLE J. LINTON V. E. C. CATES AGENCY, INC.

State: wyoming

Issuer: Wyoming Supreme Court

Document:

ERNEST M. LINTON AND CAROLE J. LINTON V. E. C. CATES AGENCY, INC.2005 WY 63113 P.3d 26Case Number: No. 04-163Decided: 06/06/2005
APRIL 
TERM, A.D. 2005

 
 
            

 
 
ERNEST M. 
LINTON and CAROLE J. LINTON,   

Appellants 
(Plaintiffs),

 
 
                   
v.  

 
 
E. C. CATES 
AGENCY, INC.,         

Appellee 
(Defendant).

 

 
 
 
 
Appeal from 
the DistrictCourtofNatronaCounty

The 
Honorable W. Thomas Sullins, Judge

 
 
 
 
Representing 
Appellants:

Stephen R. 
Winship, of Winship & Winship, P.C., Casper, Wyoming.

 

Representing 
Appellee:

Marvin 
L.Bishop, III, of Bishop, Bishop & Yaap, Casper, Wyoming.

 
 
            

Before 
HILL, C.J., and GOLDEN, KITE, VOIGT, and BURKE, JJ.

 
 
 
 
BURKE, 
Justice.

 
 
[¶1]      Ernest M. Linton 
and Carole J. Linton (Lintons) appeal the district court's ruling granting 
summary judgment to E. C. Cates Agency, Inc. (Cates).  They contend the district court erred in 
finding that a Lease Option to Purchase agreement entered into between the 
parties was unenforceable.  We 
reverse.

 
 
[¶2]      The parties 
present numerous issues.  Upon our 
review, we find that the dispositive issue is:

 
 
Did the 
district court err when it found that no genuine issues of material fact existed 
and granted Cates' motion for summary judgment?

 
 
FACTS

 
 
[¶3]      In October, 1995, 
the parties entered into a written agreement entitled Lease Option to 
Purchase.  The agreement states in 
pertinent part:

 
 
This 
agreement, made on the 4thday October 1995 between E.C. Cates 
Agency, Inc. of 5122 North 17th St. Phoenix, AZ 85016-4006 (seller) and Ernest 
and Carole Linton of 7600 East Lake St. Evansville, Wy 62636 (buyer):  WITNESSETH:

 
 
The seller 
agrees to lease the following described real property situate[d] in Natrona 
County Wyoming:

 
 
 [Legal Description]

 
 
Seller 
agrees to lease the above property to the buyer for the sum of $125.00 (One 
hundred twenty-five dollars) per month, beginning September 1995, and to accept 
75% of this lease payment toward the down payment to purchase the above property 
for a total sale price of $20,000 (Twenty thousand dollars).  The buyer agrees to pay the balance of 
$3,000 (Three thousand dollars) down toward the purchase price in July of 1996 
and enter into a sales agreement with the seller.

 
 
In witness 
whereof, this agreement has been executed by the respective parties the day and 
year first above written.

 

[Signatures 
and dates]

 
 
[¶4]      The real property 
described in the agreement comprises approximately 30 acres and is located 
adjacent to the Lintons' home.  
Pursuant to the agreement, the Lintons were required to exercise their 
option to purchase in July, 1996.  
Their daughter was killed in an automobile accident in June, 1996.  Her death resulted in emotional and 
negative financial consequences for the Lintons.  According to the Lintons, E. C. Cates, 
the President of the E. C. Cates Agency, Inc., was understanding and 
sympathetic.  He agreed to waive the 
option payment requirement.   
The Lintons contend that Mr. Cates orally agreed to modify the contract 
and agreed to sell the property to them if they continued to make the $125.00 
monthly payments.

 

[¶5]      The Lintons 
continued to make the payments.  
They rebuilt and maintained a fence on the property.  In June, 2003, the Lintons observed Mr. 
Cates showing the property to a potential buyer.  The Lintons offered to pay Mr. Cates the 
balance of the purchase price.  Mr. 
Cates refused to sell the property to the Lintons and denied any extension of 
the option deadline.  Despite the 
refusal, Mr. Cates continued to accept the $125.00 monthly payments.  The Lintons initiated  this action seeking enforcement of the 
agreement.  Cates countered with an 
action for quiet title and ejectment and filed a motion for summary 
judgment.  The district court 
granted Cates' motion for summary judgment finding that the Lease Option to 
Purchase agreement was "incomplete, uncertain, indefinite and 
unenforceable."  We will set forth 
additional facts as necessary in our discussion.

 
 
STANDARD OF 
REVIEW

 
 
[¶6]      Summary judgment 
is proper "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."  
W.R.C.P. 56(c).  A genuine 
issue of material fact exists when a disputed fact, if proven, would establish 
or refute an essential element of a cause of action or a defense that a party 
has asserted.  Metz Beverage Co. 
v. Wyoming Beverages, Inc., 2002 WY 21, ¶9, 39 P.3d 1051, ¶9 (Wyo. 2002). 

 
 
[¶7]      We evaluate the 
propriety of a summary judgment by employing the same standards and by examining 
the same material as the district court.  
Id.  We examine de novo the record, in 
the light most favorable to the party opposing the motion, affording to that 
party the benefit of all favorable inferences that may be drawn from the 
record.  Roussalis v. Wyoming 
Medical Center, Inc., 4 P.3d 209, 229  
(Wyo. 2000).  If upon review 
of the record, doubt exists about the presence of issues of material fact, that 
doubt must be resolved against the party seeking summary judgment.  Id.  We accord no deference to the 
district court's decisions on issues of law.  Metz, ¶9.

 
 
DISCUSSION

 
 
[¶8]      Cates, as the 
moving party, was required to establish the absence of a genuine issue of 
material fact.  The parties admit 
that in October, 1995, they entered into a written agreement entitled "Lease 
Option to Purchase" for the purchase of certain real estate.  The agreement required the Lintons to 
make payments of $125 per month.  
Cates concedes that the Lintons timely made all monthly payments  from the date of the contract until the 
complaint was filed on December 30, 2003.  
Cates accepted all payments.  
Thereafter, the Lintons deposited their monthly payments with the 
district court.

 
 
[¶9]      The parties also 
agree that the written agreement contained an option clause which, if exercised 
by the Lintons, would allow them to purchase the property for $20,000.  The dispute between the parties centers 
upon this option clause.  The 
Lintons contend that Cates orally agreed to a modification of the option 
clause.  Cates denies that any oral 
modification occurred and asserts that the Lintons failed to timely exercise the 
option and forfeited any rights they had to purchase the 
property.

 
 
[¶10]   According to the Lintons, they 
suffered a family tragedy on June 6, 1996, when their 15 year old daughter was 
killed in a car accident.  The 
emotional fallout from this event negatively impacted Mr. Linton's employment 
and the Lintons' financial situation.

 
 
[¶11]   According to Mrs. Linton's 
affidavit:

 
 
4.  A few weeks after our daughter's death, 
Earl Cates called about the lease-purchase agreement.  He said he had recently lost his beloved 
pet dog so he understood what we were dealing with.  He assured me he would not try to profit 
from our misfortune and would continue to allow us to purchase the property for 
$20,000.00 so long as we continued to pay the monthly lease of $125.00.  I stated I would have Ernest call him 
back.

 
 
5.  Because of these assurances from Mr. 
Cates and his continued acceptance of our monthly payments, I understood that my 
husband and I had the opportunity to purchase the property from him for 
$20,000.00 less the 75% credit for the past rent payments.  I would not have continued to make the 
lease payments for all these years if I did not believe that my husband and I 
could acquire the parcel for $20,000.00.

 
 
6.  Our later attempts to contact Mr. Cates 
about the situation were not successful.  
We learned that he was out of the country living in Mexico.  Our monthly payments were made directly 
into the bank account that E. C. Cates Agency Inc. maintained in Casper, Wyoming at the Wells Fargo 
Bank.

 
 
7.  It was not until June, 2003 that by 
happenstance my husband and I ran into Mr. Cates near the subject property while 
he was apparently showing this real estate for sale to another party.  We offered to pay him the remaining 
amount owing or $11,281.25 based on the fact that through June, 2003, my husband 
and I had paid him $11,625.00 of which $8,718.75 would be credited to the 
purchase price.  Mr. Cates said he 
was no longer interested in selling us the real estate for $20,000.00 and 
instead wanted a higher price or some other arrangement.

 
 
[¶12]   In his affidavit, Mr. Linton 
confirmed Mrs. Linton's statements.  
He provided details of an additional conversation he had with Mr. Cates 
approximately one year after the death of his daughter.  He also described actions taken in 
reliance upon the modified agreement.

 
 
            
4.  After my daughter's death 
and prior to the time to pay the down payment for the purchase of the subject 
real estate, I called Earl Cates to explain the devastating blow I had just 
suffered.  He was very sympathetic 
and said to just keep paying the regular lease amount and they would extend the 
deal until I was "back on my feet".  
I understood that so long as E. C. Cates Agency received the $20,000.00 
from a portion of the rental or whatever source, the property would be sold to 
me.  

 
 
5.  Approximately a year later, I called Mr. 
Cates to discuss the situation and particularly my slow recovery.  He agreed to continue to allow us to 
purchase the real estate for the sum of $20,000.00 with credit towards the 
purchase price from the lease amount as per our agreement of October 4, 1994 if 
my wife and I would continue to pay the monthly $125.00 
lease.

 
 
6.  Because of these assurances from Mr. 
Cates and his continued acceptance of our monthly payments, I understood that my 
wife and I had the opportunity to purchase the property from him for $20,000.00 
less the 75% credit for the past rent payments.  I would not have continued to make the 
lease payments for all these years and rebuild and maintain the fence 
surrounding the property if I did not believe that my wife and I could acquire 
the parcel for $20,000.00.

 
 
[¶13]   Cates does not dispute that in 
June, 2003, the Lintons offered to pay the balance of the $20,000 purchase price 
in full.  Cates stated in its 
answer:

 
 
2.  With respect to paragraph 7 of the 
Complaint, Defendant admits that in June of 2003, Plaintiffs notified Defendant 
through its principal, Earl Cates, of their willingness and readiness to 
purchase the property, and further admits that Defendant refused and continues 
to refuse to sell such property to the Plaintiffs.  Defendant denies the allegation that the 
Plaintiffs had an option to purchase the property.

 
 
[¶14]   Cates alleged in its answer that it 
was entitled to prevail because the Lintons had never complied with the option 
requirement of the contract.  In 
seeking summary judgment, however, Cates contended that it was entitled to 
prevail because the original agreement was unenforceable from inception because 
it was fatally indefinite.  The 
district court granted summary judgment on that basis. The district court 
stated:

 
 
. . . under 
Crockett v. Lowther, 549 P.2d 303 (Wyo. 1976), a provision in a contract 
which leaves open the terms of payment for future negotiation renders the 
contract incomplete and uncertain in one of its material features, and for that 
reason it is unenforceable in equity.

 
 
THE COURT 
FURTHER FINDS that in the case of Bonk v. Boyajian, 274 P.2d 948 (Calif. 
1954) which was referred to in Bentzen v. H.N. Ranch, Inc., 320 P.2d 440 
(Wyo. 1958), the California court, in construing a similar option to purchase as 
the above-named parties have entered into, denied an action of specific 
performance of such option to purchase since such option was incomplete, 
uncertain, and indefinite, so as to render such option to purchase 
unenforceable.

 
 
THE COURT 
FURTHER FINDS that the contract entered into between the parties is indefinite, 
incomplete, and uncertain, and is unenforceable.

 
 
THE COURT 
FURTHER FINDS that summary judgment should be granted in favor of the Defendant, 
E.C. Cates Agency, Inc.

 
 
[¶15]   It appears that the district court, 
in granting summary judgment, disregarded all evidence in the record that the 
original agreement had been modified.  
We conclude that the district court erred in doing so.  When all favorable inferences are 
accorded the Lintons, the record contains sufficient evidence to create genuine 
issues of material fact as to whether an enforceable agreement existed between 
the parties.  

 
 
[¶16]   Whether an oral contract exists is 
a question of fact to be determined by the trier of fact.  Fowler v. Fowler, 933 P.2d 502, 
504 (Wyo. 
1997).  The terms and conditions of 
the oral contract and the intent of the parties are generally questions of 
fact.  Ewing v. Hladky Const., 
Inc., 2002 WY 95, ¶11, 48 P.3d 1086, ¶11 (Wyo. 2002).  The question as to whether the parties 
intended an agreement is a factual one, not a legal one, and, except in the 
clearest cases, is to be resolved by the trier of fact.  Roussalis, 4 P.3d  at 216.  In determining whether a contract was 
formed, we may consider the conduct of the parties with reference to the alleged 
contract.  Id. at 
232.  Their conduct before and after 
making the alleged contract "may shed light on their intent."  Id.

 
 
[¶17]   We have previously indicated some 
skepticism regarding a belated claim of indefiniteness by a party seeking to 
avoid contractual obligation.

 
 
The courts 
must take cognizance of the fact that the argument that a particular agreement 
is too indefinite to constitute a contract frequently is an afterthought excuse 
for attacking an agreement that failed for reasons other than the 
indefiniteness.  In such instances, 
the court should not be too fussy to determine how the gaps should have been 
filled.  It is simply 
unnecessary.

 
 

Id. 
at 238 
(quoting 1 Joseph M. Perillo, Corbin on Contracts § 4.1, at 535-37 (rev. 
ed.1993)).  Indefiniteness in an 
agreement may be fleshed out by the course of performance by the parties after 
the agreement.  Id.  "Indefiniteness may also be cured by the 
addition of such implied terms as will be supplied by law, including--at least 
as to minor items--the parties'  
implied obligations of good faith and fair dealing."  Id.  Under Wyoming law every 
contract is deemed to contain an implied term of good faith and fair 
dealing.  Id.

 

[¶18]   Our review of the record suggests 
that the dispute in this case does not, in actuality, revolve around the 
indefiniteness of the written agreement.  
There is no evidence in the record to indicate a dispute as to the terms 
of the future "sales agreement" referenced in the written agreement.  

[¶19]   Under the Lintons' version of the 
facts, after modification, there were no material contractual terms remaining to 
be negotiated.  The property was 
identified with particularity, the purchase price was stated with specificity 
($20,000) and the method of payment was agreed upon ($125.00 per month with 75% 
going to the purchase price).  The 
$3,000 down payment requirement was eliminated.

 
 
[¶20]   The district court' s reliance upon 
the decisions in Crockett, Bonk and Bentzen was 
misplaced.  Initially, we note that 
all three cases were resolved after trial, not at the summary judgment 
stage.  In Crockett, the 
district court found that the appellant had failed to exercise the option within 
the time required by the contract.  
Crockett was not determined on the basis of an indefinite or 
unenforce able contract.  The Court 
stated:

 
 
All the 
material features [of a contract] appear to be present.  It is not necessary for us to make a 
precise decision as to whether or not the option constituted an enforceable 
contract.  It appears that it does 
have those characteristics which would have made it enforceable upon acceptance 
by the plaintiffs, which they never did. 

 
 

Crockett, 549 P.2d  
at 311.  The Court went on to 
state:

 
 
The 
plaintiffs' failure to sign and their conduct tend to support the conclusion 
that the plaintiffs did not intend to be bound by a contract.  It is reasonable to believe that 
plaintiffs had no intention of asserting any rights under the contract until it 
became financially advantageous for them to do so.

 
 

Id. 
at 
312.

 
 
[¶21]   In this case, the conduct of the 
Lintons supports their claim.  They 
made all monthly payments, built and maintained a fence on the property, and 
offered to tender the balance of the purchase price.  They have an explanation for their 
failure to make the $3,000.00 option payment.  Their daughter had died and Mr. Cates, 
sympathetically, agreed to modify the contract.

 
 
[¶22]   In Bentzen, the Court stated 
the issue as follows:

 
 
Accordingly, 
the principal question to be resolved is narrowed to a determination of whether 
or not there was in fact an enforceable contract. This will depend primarily 
upon the nature of the instrument signed and secondarily upon any conversations, 
dealings, and activities, between the parties which under the circumstances are 
admissible and can be said to have had a legal effect upon the 
"Agreement."

 
 

Bentzen, 
320 P.2d  at 
441.  In affirming the decision of 
the trial court, the Court noted: 

 
 
The parties 
conceded the well-recognized rule that the findings and judgment of the trial 
court will stand if there is any evidence to support them, and we think the rule 
is applicable here. The evidence of what was and was not said at the time the 
signatures were affixed, whether proper or not, went in without objection; and 
it seems clear that the trial court would have been justified in resolving at 
its discretion that the understanding between the parties was either (a) 
definite, or (b) fatally indefinite--depending upon the credence it might 
properly allocate to the conflicting testimony of different 
witnesses.

 
 

Id. at 
444.

 
 
[¶23]   In this case, the district court 
rendered its decision without trial, without weighing the evidence and without 
making any determination regarding witness credibility.  The district court failed to consider 
and apply all reasonable inferences from the evidence which support the Lintons' 
version of the agreement.

 
 
[¶24]   In Bonk, the purchaser 
attempted to unilaterally determine the amount of monthly payments required to 
exercise the option.  The seller 
never agreed to those payment amounts.  
The Bonk court refused to enforce the option 
because:

 
 
The parties 
thus unmistakably reserved for future agreement the amount of monthly payments 
to be made on the balance.  They 
never agreed on this item.  Hence no 
specifically enforceable obligation was created by the option and plaintiffs 
attempted exercise thereof.

 
 

Bonk, 274 P.2d  
at 951.  In this case, there is 
evidence of agreement between the parties regarding all essential terms of the 
sale of the property.

 
 

[¶25]   Cates contends on appeal that any 
oral modification of the written agreement is unenforceable pursuant to 
Wyoming's 
statute of frauds.  Wyo. Stat. Ann. 
1-23-105(a)(v) (LexisNexis 2003).1  Cates concedes that there is no 
indication in the record that the district court based its decision upon 
application of the statute of frauds.  
However, because the Lintons' claim is founded upon their assertion that 
an oral modification of the written contract occurred, a discussion of proper 
application of the statute of frauds in the context of a summary judgment 
proceeding is warranted.

 
 
[¶26]   As a general rule, the statute of 
frauds provides that an agreement for the sale of real property must be in 
writing to be enforceable.  It is 
also the general rule that if the original agreement was required to comply with 
the statute of frauds, any material modification of that agreement must also 
conform to the statute of frauds.  
Roussalis, 4 P.3d at  
242.  There are, however, 
recognized exceptions to the general rule.  
Id.  

 
 
[¶27]   The statute of frauds may be 
inapplicable when there has been substantial performance.  Metz, ¶17; Wyoming Realty Co. v. Cook, 
872 P.2d 551, 554 (Wyo. 1994).  We have also recognized that an oral 
promise otherwise within the statute of frauds may be enforceable on the basis 
of promissory estoppel.  
Roussalis, 4 P.3d  at 243.  
Whether any exception exists that would warrant avoidance of strict 
application of the statute of frauds is a question of fact.  Id. at 244, 253.  We conclude that the record before us 
contains sufficient evidence that creates genuine issues of material fact as to 
the application of the statute of frauds.

 
 
[¶28]   Based upon the foregoing, we 
conclude that the district court erred in granting summary judgment to 
Cates.  Accordingly, we reverse and 
remand.

 
 

FOOTNOTES

1 
.Wyo. Stat. § 1-23-105(a)(v) 
states:

(a) 
In the following cases every agreement shall be void unless such agreement, or 
some note or memorandum thereof be in writing, and subscribed by the party to be 
charged therewith:

            
. . . .

 
 
(v) 
Every agreement or contract for the sale of real estate, or the lease thereof, 
for more than one (1) year;

 
 
                                    
. . . .