Opinion ID: 2629946
Heading Depth: 1
Heading Rank: 8

Heading: The Baltic Properties

Text: [¶ 41] Meima owned and hoped to sell the Baltic properties, which properties had a potential value of $2.5 million if properly marketed. Meima initially sold the properties to Mr. Kubich for $120,000.00, and Mr. Kubich agreed that Meima could repurchase the Baltic properties for $140,000.00. According to the district court, Meima participated in this transaction to keep the value of the properties, and/or the properties, away from [Meima's ex-]wife and Meima was either unwilling or unable to obtain financing from a commercial lender to repurchase the property from Mr. Kubich. Meima asked Broemmel to assume, and pay the $140,000.00 to exercise, the option to repurchase the properties from Mr. Kubich (this served to further hide the properties from Meima's ex-wife and provided Meima the financial backing he apparently did not have). Meima and Broemmel planned to sell the properties for a profit, and agreed that Broemmel would get his $140,000.00 back and receive 20% of the net profits from the eventual re-sale of the properties. [¶ 42] The district court found that the parties reached an agreement on the Baltic properties sometime prior to May 25, 2001; the Baltic properties agreement was separate from the Torrington house purchase, and Broemmel agreed to participate in the Baltic properties transaction as an investment. [21] The district court concluded that the terms of the parties' agreement on the Baltic properties were as follows: (a) Broemmel would obtain and exercise the Kubich option for $140,000.00; (b) Broemmel would control the sale of the Baltic properties until he recovered the money he lent Meima to purchase the Torrington house or for two years, whichever time period was longer; and (c) the proceeds from future sales of the Baltic properties would be applied to recover Broemmel's $140,000.00 (plus costs) and the balance (after expenses) would be divided eighty percent to Meima and twenty percent to Broemmel, with any stock options split 50-50. [¶ 43] While the July 24, 2001, lease/purchase agreement contained terms from the parties' Torrington house purchase contract and the parties' Baltic properties agreement, the lease/purchase agreement did not contain all of the parties' terms regarding the Baltic properties. The district court proceeded to construe the following term that did appear in the lease/purchase agreement: [Meima] further grants Tom Broemmel, as trustee, total control of the Baltic properties to sell or do what[ever] is necessary to recover any losses incurred as a result of the purchase of said property. Broemmel will remain as trustee for 2 years or as long as Broemmel has not been paid off for the purchase of Meima's home. The district court found that the term losses in this provision was ambiguous. According to the district court, the parties anticipated that losses would exist before the Baltic properties were sold and that the parties intended that such losses include the $140,000.00 Broemmel paid to exercise the Kubich option. The district court also found that the term trustee in this provision was ambiguous because the identities of the trust, settlor, beneficiary, and trust terms remained unclear and the parties did not intend to create a trust with this language. Instead, the parties intended that for the requisite time period, Broemmel would have the sole authority to approve or reject sales of the Baltic properties in order to ensure that he was paid the amount he contributed to the Torrington house purchase and the $140,000.00 he invested to exercise the Kubich option. The district court concluded that this construction was consistent with the parties' verbal agreement in early 2001. [¶ 44] In the fall of 2002, Meima negotiated the sale of a portion of the Baltic properties; the sales price was ultimately $440,000.00. In order to sell this portion of the properties, Broemmel had to pay $140,000.00 plus $2,000.00 in expenses to exercise the option to purchase the properties from Mr. Kubich. The district court found that Broemmel obtained title to the properties by exercising the option, but acknowledge[d] that he only holds the [balance of the properties] subject to the 20%-80% [profit-splitting] agreement. After paying the costs and taxes resulting from the sale, $381,603.21 of the sales proceeds remained and were distributed as follows: $187,003.21 to Meima's trial attorney's trust account, $22,600.00 to Meima's trial attorney, $30,000.00 to Meima's financial backer, and $142,000.00 to Broemmel. Broemmel later received $20,000.00 from the balance retained by Meima's trial attorney's trust account, and Meima similarly received $15,000.00. [22] The district court found that the proceeds from this sale should have been distributed as follows: $142,000.00 to Broemmel, $191,682.56 to Meima (eighty percent), and $47,920.65 to Broemmel (twenty percent).