Opinion ID: 784121
Heading Depth: 2
Heading Rank: 2

Heading: The Shared Appreciation Agreement.

Text: 26 The Paulys contend that the SAA is ambiguous and should therefore be construed against the drafter, the FSA. They urge this Court to reform the contract to comply with their reasonable belief that recapture was due only upon one of three enumerated triggering events: sale of the property, cessation of farming, or payment of the loan in full. Even a sympathetic reading of the SAA does not support the Paulys' argument. 27 The SAA requires the Paulys to pay a percentage of any appreciation between the date of this Agreement and either the expiration date of this Agreement or the date Borrower pays the loan in full, ceases farming or transfers title of the security.... (emphasis added). This language is not ambiguous. The Paulys are obliged to pay a portion of the appreciation upon expiration of the SAA if no other triggering event has occurred prior to expiration. 28 Any ambiguity in the SAA is resolved by the statute authorizing the agreement. A plain reading of section 2001(e)(4) suggests that recapture at the end of the term of the SAA is not only permissible but is also, in fact, mandatory. See 7 U.S.C. § 2001(e)(4) (Recapture shall take place at the end of the term of the agreement, or sooner.... (emphasis added)). Both of the circuit courts to consider the matter have determined that the terms of the SAAs are unambiguous and require recapture at the end of the contract period. See Stahl v. USDA, 327 F.3d 697, 703 (8th Cir.2003); Israel v. USDA, 282 F.3d 521, 527-28 (7th Cir.2002). In both cases, the courts observed that this interpretation of the SAA was strongly supported by the language of the relevant statute. See Stahl, 327 F.3d at 702; Israel, 282 F.3d at 527. The reasoning in both these cases is persuasive and applies with equal force to the Paulys' claims. 29