Opinion ID: 1864487
Heading Depth: 1
Heading Rank: 2

Heading: agreements for purchase of taylors' farm

Text: Sometime in September 1986, Taylors decided to list for sale certain farmland owned by them in Nance County. Immediately after the For Sale sign went up on the Taylors' property, Frenzen, who had lived on and farmed the land as a tenant for 25 years, expressed an interest in buying the land. Richard Wallick, real estate agent for the Taylors, recalled Frenzen's expressing his belief that the property was worth no more than $70,000, which was substantially less than Taylors' initial asking price. Wallick's efforts to sell the property continued, as he combed the area for potential buyers for Taylors' farm. In October of 1986, Wetovick indicated his interest in buying the Taylor farm. Wallick showed the farm to Wetovick, who offered $85,000 for the Taylor farm in early December. Taylors rejected Wetovick's offer, and negotiations continued between Taylors and Wetovick until they agreed on a sale price of $90,000 for the farm. Taylors and Wetovick entered a purchase agreement, dated December 19, 1986, containing two specific contingencies: Taylors' enrolling at least 75 acres of their farm in the federal government's Conservation Reserve Program (CRP), and an appraisal by a licensed appraiser, setting the farm's value at a figure equal to or exceeding the purchase price offered by Wetovick. Both contingencies were for Wetovick's benefit alone. Wetovick believed that the appraisal was necessary to obtain sale financing from his bank, and CRP land would ensure a steady income from the farm. Consequently, when he signed the purchase agreement, Wetovick understood that he could waive either or both of these contingencies. The contract also stated that Taylors [agree] to furnish without delay, [an] abstract of title certified to date of sale. The Taylor-Wetovick contract specified March 1, 1987, as the closing date for the sale. Later, Taylors, for [n]o particular reason, expressed their desire to advance the closing date to February 17, 1987. As Eugene Taylor expressed: I had an investment opportunity on the 20th [of February], and I thought if I could have the money by that time I might take advantage of it. The closing date for February 17 was only a convenience, and from day one, Taylors intended to close the sale whenever possible. Wallick then began to inquire into the feasibility of enrolling acres in the CRP. Sometime in January 1987, Wallick checked with local soil conservation offices and was informed that, as a condition of a sale, enrollment of the Taylor farm in the CRP would constitute a fraud on the federal government. At the end of January, Wallick received a phone call from Frenzen, who asked [i]f everything was going to happen regarding the sale to Wetovick. Frenzen's wife, Judy, worked in the Nance County soil conservation office and had become aware of the CRP contingency in the Taylor-Wetovick contract. At this point, Wallick was a hundred percent convinced that the property could not be enrolled in the CRP and that, without a waiver of the contingencies by Wetovick, the Taylor-Wetovick sale would not be consummated. At that time, Frenzen expressed further interest in buying the land with financial backing by his relatives in California. On February 6, Frenzen and Taylors entered a purchase agreement which covered the same land involved in the Taylor-Wetovick sale and which contained a purchase price of $90,000. The Frenzen-Taylor agreement was contingent upon the Purchase Agreement dated December 19, 1986 between the Seller and Rodney Wetovick not being consumated [sic] on or before February 17, 1987 as set forth in said agreement. Wallick, the realtor, told Frenzen that the contingencies in the Taylor-Wetovick agreement could be waived by Wetovick. The Frenzen-Taylor agreement required that Taylors furnish an abstract of title, showing Taylors' merchantable title for the farm, and specified February 20, 1987, as the date for closing the sale. Frenzen made a downpayment of $10,000. On February 6, Taylors discovered that one of the three abstracts for their farm was missing and decided that title insurance would be needed to close the sale with Wetovick. On or about February 13, 1987, Wallick told Wetovick about the existence of a second purchase agreement for the Taylor farm. There is a conflict in testimony regarding the extent of information conveyed to Wetovick concerning the additional purchase agreement. Wetovick testified that Wallick never told him about the terms of the contract, including the name of the other prospective purchaser or the fact that the other contract was contingent on Wetovick's failure to close the sale by February 17. Wallick, however, testified that he was reasonably sure that he told Wetovick that the Taylor-Wetovick sale had to be closed on or about February 17th or Frenzen's contract would become operative in the sale of Taylors' farm. Near the time Wallick informed Wetovick about the other purchase agreement, Wallick told Wetovick that the CRP contingency could not be accomplished. After learning that CRP enrollment would be impossible, Wetovick orally offered to pay Taylors $85,000 for their farm without CRP acres. However, Wallick informed Wetovick that this offer was unacceptable in view of Frenzen's offer of $90,000 without any contingencies. Wetovick did not agree to waive the contingencies until February 16, 1987, when Wetovick knew that the sale would not be closed on February 17 on account of the delay in obtaining title insurance. Wallick testified that Taylors did not obtain title insurance before February 16 because Wetovick had not waived the CRP contingency. In Wallick's words, We didn't order a title insurance policy for Rod [Wetovick] until we knew that he owned the farm. Until those contingencies were dropped we couldn't order title insurance. If we ordered it, we would have paid for it, and we weren't about to pay for it. February 17 passed, and the Taylor-Wetovick sale was not closed. On February 18 and 20, Wetovick and Taylors signed an Addendum to their purchase agreement, reducing to writing Wetovick's previous oral waiver of the two contingencies contained in the original contract. The addendum also changed the closing date stated in the original purchase agreement to as soon as the paperwork can be completed. Wallick testified that the parties had set a tentative closing date of February 28, 1987. Also on February 18, Frenzen talked to Wallick regarding purchase of Taylors' farm. Wallick told Frenzen that Wetovick had waived the contract contingencies and that the sale to Wetovick would be completed. Frenzen testified that he was overwhelmed because, at midnight on February 17, he thought he had the farm bought. Frenzen also testified that he offered to pay the balance of the purchase price on February 18 and 19, but that Wallick said Taylors would not sell the farm to Frenzen in view of the contract with Wetovick. A policy of title insurance was not issued and mailed to Taylors' attorney until February 25, 1987. On February 26, Frenzen's attorney wrote Wallick and stated Frenzen's contract claim to the Taylor farm. As a result of the correspondence, the Taylor-Wetovick sale was not closed on February 28 as scheduled. Subsequently, Wetovick and Frenzen each filed a specific performance suit against Taylors.