Opinion ID: 2586150
Heading Depth: 3
Heading Rank: 4

Heading: Was the Written Lease Agreement a Personal Services Contract?

Text: However, a different conclusion could apply to the written lease in this case because the statutory requirements regarding termination do not apply if the parties to a written contract agree to other terms. (K.S.A. 58-2506[a] begins: Except as may be otherwise provided . . . by a written lease signed by the parties thereto. . . .). Furthermore, public policy encourages the freedom to contract, which should not be interfered with lightly. Miller v. Foulston, Siefkin, Powers & Eberhardt, 246 Kan. 450, 463, 790 P.2d 404 (1990). Consequently, nothing should prohibit parties to a contract from agreeing to terms which would take the arrangement outside the statutory rule that a lease is binding upon the heirs of the parties; the parties could agree that a written contract will terminate immediately upon the lessee's death. We, therefore, must construe the contract between Gene and David to determine whether the written contract continued upon David's death. When courts are called upon to interpret a written instrument, the primary rule is to ascertain the intent of the parties. Marquis v. State Farm Fire & Cas. Co., 265 Kan. 317, 324, 961 P.2d 1213 (1998). As a general rule, if the language of the written instrument is clear, there is no room for rules of construction. Courts must ascertain the meaning of a written agreement by considering all pertinent provisions and not by the critical analysis of a single or isolated provision. 265 Kan. 317, Syl. ¶¶ 2, 3, 961 P.2d 1213. Ideally, parties to a farm lease would clearly express their intent regarding the effect of the death of a tenant, the issue we have in this case, or the death of a landlord. Indeed, we would encourage scriveners of such agreements to include a provision expressing the parties' intent. However, in this case, there was no such clear expression. We, therefore, must examine the written lease to determine the effect of various terms which are less clear expressions of the parties' intent. The Court of Appeals, in rejecting the contention the written farm lease between David and Gene was a personal services contract, focused upon paragraph 12, which stated, in part: This lease is not intended nor shall it be construed to be an employment contract, partnership, joint venture, or profit-sharing enterprise between the Landlord and the Tenant. Because the lease expressly disclaimed any intention to create an employment contract, the panel concluded the contract was not one for personal services. Sauder, slip op. at 6. The panel cited no authority for its conclusion that a personal services contract must be an employment contract. Furthermore, no party has argued that the agreement constituted an employment contract; clearly, the agreement indicates that it is not to be so construed. Parties to crop share agreements have been determined to have a variety of relationships, including cropper and employer, landlord and tenant, joint venture participants, partners, and tenants in common. See 21A Am.Jur.2d, Crops §§ 45, 46, 55-62. Paragraph 12 clarifies the parties' intent that the contract establishes a relationship between Gene and David as landlord and tenant and not one of the other types of relationships. When an employment or cropper relationship exists, the contract is usually deemed to be a personal services contract. However, even when the contract is viewed as one between a landlord and a tenant, many jurisdictions have found the cropshare lease to be one involving personal services. 21A Am.Jur.2d, Crops § 53. Contrary to the panel's analysis, we conclude that paragraph 12 does not mean that the written agreement could not be construed as a contract for the performance of personal services independent of an employment relationship. The Court of Appeals panel also considered the district court's conclusion that paragraph 12 was inconsistent with paragraph 4(d). Paragraph 4(d) of the agreement provided that the tenant would not assign this lease nor sublet the premises. Although the provision did not contain language governing assignment upon the death of the lessee, the district court concluded that the parties clearly stated their intent that the contract be a personal services contract subject to the discretion of the landlord. The panel rejected this conclusion based upon its reading of a different provision, paragraph 15, which the panel viewed as evidence of the parties' intent that the lease survive David's death. Sauder, slip op. at 5-6. Paragraph 15 directed that the agreement shall apply to and be binding upon the heirs, successors, executors, and administrators of the parties hereto. The Court of Appeals panel concluded this provision was not inconsistent with the nonassignment clause of paragraph 4(d), apparently because the circumstances surrounding an administrator assuming the duties and obligations of a decedent under a contract is not an assignment or sublease. The Court of Appeals' interpretation is supported by the Illinois appellate court's decision in Ames, 267 Ill.App.3d at 677, 205 Ill.Dec. 223, 642 N.E.2d 1340, in which the court noted that similar language could remove the lease from operation of the common-law rule. We conclude this contractual language had the same effect as K.S.A. 58-2519. When parties to a sharecrop farm lease agree that the terms of the contract shall apply to and be binding upon the heirs, successors, executors, and administrators of the parties, they express an intent that the contract is not a personal services contract. Therefore, under such a contract, the deceased lessee's estate has a fiduciary obligation to perform the contract in the same manner that performance could have been demanded of the decedent. Because of this provision in the contract between Gene and David, the contract did not terminate upon David's death.