Opinion ID: 1792682
Heading Depth: 2
Heading Rank: 1

Heading: Size of the Property

Text: Both parties dispute the meaning of the terms describing the property to be conveyed. The Restatement (Second) of Contracts provides rules to aid our interpretation of contract terms. See Fausel v. JRJ Enters., Inc., 603 N.W.2d 612, 618 (Iowa 1999) (applying sections 202 and 212 to the interpretation of contract terms). Section 202 provides: (1) Words and other conduct are interpreted in the light of all the circumstances, and if the principal purpose of the parties is ascertainable it is given great weight. (2) A writing is interpreted as a whole, and all writings that are part of the same transaction are interpreted together. Restatement (Second) of Contracts § 202 (1981). These rules do not depend upon any determination that there is an ambiguity, but are used in determining what meanings are reasonably possible as well as in choosing among possible meanings. Id. § 202 cmt. a. In addition, section 212 provides: Any determination of meaning or ambiguity should only be made in the light of the relevant evidence of the situation and relations of the parties, the subject matter of the transaction, preliminary negotiations and statements made therein, usages of trade, and the course of dealing between the parties. But after the transaction has been shown in all its length and breadth, the words of an integrated agreement remain the most important evidence of intention. Restatement (Second) of Contracts § 212 cmt. b (emphasis added) (citations omitted); see also id. § 209(1) (An integrated agreement is a writing or writings constituting a final expression of one or more terms of an agreement.). With these rules in mind, we turn to the language of the agreement and the circumstances surrounding the signing of the agreement. The settlement agreement and the real estate contract both recite the following description of the property to be conveyed: The acreage locally known as 513 160th St., Latimer, Iowa and described as: An approximate five acre tract located in the Northwest Quarter (NW1/4) of section 26, Township 92 North, Range 22 West of the 5th P.M., Franklin County, Iowa. The legal description shall be determined by survey, which shall coincede [sic] with existing fence boundaries required by Franklin County Zoning. (Emphasis added.) At trial, Passehls argued the parties wrote the contract so that Passehls could keep the junkyard as defined by the boundary fence. The Estate argued the fence was immaterial because the land to be conveyed was the land described by the zoning ordinance. The record belies the Estate's argument. To conclude the intent of the parties was to convey only the property set forth in the zoning ordinance would require us to excise any reference to the fence in the property description as follows: The legal description shall be established by survey which shall coincide with existing fence boundaries required by Franklin County Zoning Ordinances. (Strikethrough added.) We value each word in a written contract, and we are not persuaded to eliminate the phrase existing fence when a more suitable explanation is apparent. See id. § 212 cmt. b (the words of an integrated agreement remain the most important evidence of intention). A more sensible interpretation of the contract is that the phrase required by Franklin County Zoning Ordinances described the fence that was to be the subject of the survey. There were at least two fences in the areaa horse pasture fence and the boundary fence surrounding the junkyard. The boundary fence was erected in 1990 after the Franklin County Zoning Board of Adjustment approved the use of the site as a dismantling and recycling center on the condition that a six-foot-high enclosure fence surround the premises. The reference in the contract to the zoning ordinance was meant to describe the fence that controlled the size of the property; the zoning ordinance itself was not meant to control the size of the property. The circumstances surrounding the signing of the contract also do not support the Estate's proposed description. Such a description would result in a property line that divided an existing garage, horse barn, and driveway. Such a description would also require that the existing fence be moved. Karen and David, the co-executors of the Estate, both testified they did not contemplate the boundary fence or any building or driveway would have to be moved for the conveyance. Their testimony indicates their primary concerns were to keep the junkyard from growing onto the land rented to a third party and to shield themselves from any liability relating to possible environmental contamination. We therefore agree with the finding of the trial court; the intent of the parties was clear at the time the agreements were signedPassehls contracted to purchase the land contained within the fenced boundary. Presenting a deed conveying property that is 22,457 square feet less than the property bargained for does not constitute substantial performance of the terms of the settlement agreement or the real estate contract. Therefore, the Estate effectively refused to perform its obligations under the contract.