Opinion ID: 1745392
Heading Depth: 1
Heading Rank: 2

Heading: All documents executed for related purposes in the same transaction must be construed together.

Text: The effects and terms of a contract are questions of law to be resolved by the court. North River Ins. Co. v. Golden Rule Constr., Inc., 296 N.W.2d 910, 912 (S.D.1980); Delzer Constr. Co. v. South Dakota State Bd. of Transp., 275 N.W.2d 352, 355 (S.D.1979). On appeal, this court can read a contract itself without a presumption in favor of the trial court's determination. North River, supra, 296 N.W.2d at 912-13. The court is to enforce and give effect to the unambiguous language and terms of the contract. GMS, Inc. v. Deadwood Social Club, Inc., 333 N.W.2d 442 (S.D.1983). Whether the language of a contract is ambiguous is a question of law for the court. Enchanted World Doll Museum v. Buskohl, 398 N.W.2d 149 (S.D. 1986). A contract is ambiguous when application of rules of interpretation leave a genuine uncertainty as to which of two or more meanings is correct. North River, supra, 296 N.W.2d at 913; see also Enchanted World Doll Museum, supra, 398 N.W.2d at 151. All writings that are executed together as part of a single transaction are to be interpreted together. See Restatement (Second) Contracts § 202 (1981). We have recognized this rule, noting that: [W]hen two or more instruments are executed at the same time by the same parties, for the same purpose and as part of the same transaction, the court must consider and construe the instruments as one contract.  GMS, supra, 333 N.W.2d at 444 (emphasis added). Moreover, it is not critical whether the documents were executed at exactly the same time or whether the parties to each agreement were identical. As the court in Hampton Roads Shipping Ass'n v. International Longshoremen's Ass'n, 597 F.Supp. 709 (E.D.Va.1984), remanded on other grounds, 746 F.2d 1015 (4th Cir. 1984), cert. denied, 471 U.S. 1017, 105 S.Ct. 2022, 85 L.Ed.2d 304 (1985), cert. denied, 471 U.S. 1102, 105 S.Ct. 2327, 85 L.Ed.2d 845 (1985), stated: Where several writings are connected by internal references to each other, even if they were executed on different dates and were not among all of the same parties, they will constitute a single contract as long as they involve the same subject matter and prove to be parts of an entire transaction. Id. at 716; see also Newman-Green, Inc. v. Alfonzo-Larrain R., 612 F.Supp. 1434 (N.D.Ill.1985) (Agreements executed at the same time and in the course of the same transaction must be read and construed together, regardless whether the parties were identical). The multiple documents executed in order to change the ownership of this business cannot be separated, but must be construed together as a single contract involving the same transaction. Several factors compel the conclusion that the writings were part of a single contract or transaction. For example, the parties required the documents to be executed together at the same time and not in isolation. Wilburn & Steele's attorney testified that his clients would not have entered into the agreement if the partnership dissolution agreement was not completed. The Jurisch/Wilburn & Steele contract refers to the Jurisch/Baker contract, and Baker is included as a secondary party. [2] Moreover, Baker released any security interest in the business and agreed to indemnify Wilburn & Steele against prior partnership acts as part of that agreement. The only consideration for Baker's promise is to include the other documents executed at that time within the transaction. Otherwise, Baker would receive nothing in exchange for his promise to release his security interest and the agreement would not make sense. Wilburn & Steele argue that the following language of the Jurisch/Baker contract is determinative: 1. [Seller's] sole remedy in the event of default shall be an action for breach of contract against Marlow E. Jurisch and Seller hereby waives any right he may have to prosecute an action against Rita J. Jurisch or any assignee or transferee of this agreement or any interest herein.... 2. Seller does by these [promises] waive any and all liens, encumbrances, security interest, and entitlements whatsoever with regard to the subject matter of this agreement and the resulting stock of any corporate entity to which this property may be transferred and the interest of stockholders therein. The first problem with this argument is that it misinterprets the contract language in the first quoted passage. That provision limits Baker's remedy for a default by Jurisch on his obligation to Baker. However, it does not deny Baker a breach of contract action against Wilburn & Steele for a failure to make the escrow payments. The second problem with this argument is that it fails to consider all of the documents, specifically the disbursement instructions for the escrow proceeds. Baker expressly released his interests in the business as against all parties except Jurisch, but did not release his rights to the escrow payments as against any of the parties. In fact, taking all of the documents into consideration, it appears that Baker released his security interest in the business in consideration of the escrow payments. The Jurisch/Wilburn & Steele contract provides at paragraph 8.02: LeMoine J. Baker, for and in consideration of One Dollar ($1.00) and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, does hereby release any right, title, or interest acquired by Baker in Exhibit B and the property subject to this Agreement, including, but not limited to, any security interests, or any interest whatsoever acquired by contract or otherwise. In addition, paragraph 11.05 of said contract provides in part, All payments shall be made through Escrow Agent.