Opinion ID: 1161420
Heading Depth: 1
Heading Rank: 6

Heading: Fifth: Nature of Agreement

Text: The crux of this appeal is the trial court's determination (a) that the option agreement of June 19, 1957, is, in fact, an unconditional contract of purchase of real estate; (b) that the liquidated damage provision of paragraph 17 is meaningless; and (c) that Corinthian is entitled to a judgment of $112,500 against W & B for damages for breach of the contract to purchase. Since we reverse the $112,500 judgment against W & B (paragraph 2 (6) of the judgment), it is not necessary to discuss the method used to determine the amount. Standing alone, and not considering the background of the negotiations nor the entire option agreement, paragraph 8, quoted supra, would appear to be an unconditional promise to purchase. An earlier draft of a proposed agreement  exhibit 77  is couched in the terms of a real estate contract which would have bound W & B to purchase Parcels A and B. It contains a paragraph 8 substantially the same as paragraph 8 of the option agreement. Since in the real estate contract draft W & B had already agreed to buy all the property, paragraph 8 was merely a time schedule for development; it was not the operative portion of the contract to buy. When the modus operandi was changed from buyer and seller to optionor and optionee, inclusion of paragraph 8 served the same function; namely, to establish a time schedule which W & B had to meet in order to keep the option. Paragraph 8 did not transform the option into anything other than that which it purports to be. [3] Although the testimony covered a wide range, we do not believe that it was error for the trial court to consider parol evidence to explain ambiguous provisions of the contract ( Brower Co. v. Baker & Ford Co., 71 Wn.2d 860, 431 P.2d 595 (1967)) and to ascertain the intentions of the parties. McKennon v. Anderson, 49 Wn.2d 55, 298 P.2d 492 (1956). We do not find that the parol evidence varied the terms of the option agreement. The trial court concluded that the liquidated damage provision of paragraph 17 is meaningless because all sums paid to the time of the breach were paid on the purchase price of land conveyed; hence, there was nothing upon which the liquidated damage provision operated. We do not agree. The trial court brushes over the fact that W & B had paid the real estate taxes on all of the land and Corinthian's contractual interest for a number of years. Corinthian further benefited by the forced catch-up in payments, to which it was not entitled absent W & B's breach. Corinthian's claim for damages allegedly arises from (1) W & B's competing development; (2) failure to exercise an option on the remaining Corinthian property; and (3) its abandonment of operations. All fall within the ambit of the liquidated damage provision of paragraph 17 of the option agreement; hence, the $112,500 judgment for damages is reversed. [4] Sixth: We do not agree with W & B's contention that Corinthian is not entitled to judgment for attorneys' fees in this action. Paragraph 19 of the option agreement, quoted supra, clearly contemplates that this is an action ... to collect any payment or any charge arising from the agreement. It follows also that a reasonable fee must be allowed for services on appeal. Puget Sound Mut. Sav. Bank v. Lillions, 50 Wn.2d 799, 314 P.2d 935 (1957). We believe it is apparent that the amount of the judgment, including $112,500 damages, was a cogent factor in the trial court's allowance of $50,000 attorneys' fees to Corinthian. Elimination of $112,500 from the judgment changes the picture. At the time the findings of fact were settled and signed by the trial court, counsel for Corinthian stated that the time charge of members of his firm was roughly $36,000. In view of the changed circumstances, we believe an allowance of $36,000 attorneys' fees is fair and reasonable; hence, the $50,000 allowance, as it appears in paragraph 2 (7) of the judgment of April 13, 1966, is reduced to this amount. On appeal, Corinthian is allowed judgment for $7,500 attorneys' fees against W & B. Seventh: That portion of the judgment dismissing with prejudice the counterclaims of Corley, and of W & B against Corinthian, and the cross-claim of Corley against W & B are affirmed. The judgment of April 13, 1966, from which this appeal is prosecuted, is modified as in this opinion set forth. FINLEY, C.J., HILL, ROSELLINI, HUNTER, HAMILTON, HALE, and NEILL, JJ., concur.