Court Opinion

ID: 9673141
Source: CourtListenerOpinion
Date Created: 2023-08-24 04:07:05.505652+00
Date Added: 2024-06-11T18:16:20.398854
License: Public Domain

. John A. Fogleman, Chief Justice, dissenting. It is extremely difficult for me to see how it can possibly be said that the two instruments involved are the result of a single transaction and are incorporated into each other by reference1 (which makes them a single contract) and then say that there are two separate and independent means of termination for each contract. If all provisions are read in the light of each other, the two provisions in question can be read harmoniously. This the courts must do, if at all possible. Continental Casualty Co. v. Davidson, 250 Ark. 35, 463 S.W. 2d 652. There are provisions other than those reproduced in the majority opinion that are material to the. inquiry here. In reading these provisions and those set out in the majority opinion, the court should give heed to its own teachings in Fowler v. Unionaid Life Ins. Co., 180 Ark. 140, 20 S.W. 2d 611. In essence, they were: The intention of the parties to a contract is to be gathered, not from particular words and phrases, but from the whole context of the contract, even though the immediate object of the inquiry is the meaning of an isolated clause; the interpretation must be upon the entire contract and not upon disjointed or particular parts of it; the contract must be viewed from beginning to end and all its terms must pass in review, for one clause may modify, limit or illuminate the other; seeming contradictions must be harmonized, if that course is reasonably possible; and each of a contract’s provisions must be considered in connection with the others. In the “Contract for the Sale of Life Estate in Living Unit,” there are these provisions: 3. *** It is understood Seller reserves for. its duly authorized officers and employees the right of entry and use as to the facilities aforesaid for management, maintenance and emergency purposes and any other purpose in connection with the duties imposed on Seller by Care Agreement with Elcare, Inc., sometimes herein referred to as “Care Agreement”, executed in connection with this agreement and made a part hereof by reference. Seller agrees to furnish a policy of title insurance for the life estate in said Living Unit, in an amount equal to the purchase price, subject, however, to exceptions contained in the above description and as otherwise herein contained. 4. Time shall be and hereby is made the essence of this contract and of each and all of the conditions herein contained. *** 8. In the event Buyer and Seller do not enter into the agreement known as Care Agreement of Elcare, Inc., or that agreement is voided prior to occupancy of Living Unit by Buyer, the sum of Twenty-five Hundred and nollOO Dollars ($2,500.00) paid herewith shall be refunded to Buyer and this Contract shall be cancelled. Pertinent provisions of “Care Agreement of Elcare, Inc.” are: RECITALS: A. ELCARE, INC. is a business corporation organized under the laws of the State of Arkansas for the purpose of founding and maintaining residences and other facilities, referred to sometimes herein as Concordia, for persons primarily over sixty-five (65) years of age, operated or to be operated in accordance with policies and directives of all applicable government agencies. Its residences and facilities are operated on a non-discriminatory basis and afford equal treatment and access to services and facilities as to all persons regardless of race, sex, color, religion, creed, national origin, or ancestry. B. Resident is 68 years of age; has made application for residence; and such application has been approved by the Corporation, subject to the provisions of this contract; NOW, THEREFORE, IT IS AGREED: 1. Prior to the time this agreement creates any legal obligations, Resident, and Corporation shall sign the Contract for the Sale of Life Estate in a Living Unit, in the properties known as Concordia, as required by the Corporation, and said sale contract is hereby incorporated by reference. 2. The Corporation agrees to furnish the Resident meals, care, facilities and services enumerated in this section, and no others, for the rest of the natural life of Resident, and so long as Resident remains in the accommodations maintained by Corporation and carries out his obligations under this contract. h. CHANGE OF ACCOMMODATIONS. The Corporation will furnish convalescent care, determined necessary by the staff physician, in its own or suitable outside medical facility, unless hereinbefore excluded. If convalescent hospitalization exceeds three (3) months and it is the opinion of the staff physician, in conference with Resident’s personal physician, members of Resident’s family, and/or Resident’s Guardian or Conservator, that convalescent hospitalization will be permanent, Corporation will have the right and will be obliged to repurchase Resident’s interest in said Living Unit and Resident will be obliged to sell his interest in said Living Unit to Corporation in the same manner as set forth in Paragraph 5 (A) of the Contract for the Sale of Life Estate in Living Unit. Credit for the repurchase of Resident’s interest in said Living Unit will be applied to payment of the monthly maintenance fee charged under Section 3 of the Care Agreement. In the event of Resident’s death prior to reimbursement of Resident’s interest, if any, the remainder will be paid to Resident’s Estate. 7. AGREEMENTS, CANCELLATIONS AND REPURCHASES. *** The Corporation reserves the right of action of its Board of Directors to cancel this Care Agreement for what is, in the judgment of the Board, good and sufficient cause. It is specifically agreed that such “good and sufficient cause” shall include, but not be limited to, termination of Resident’s rights according to the terms of Paragraph 4 of the Contract for Sale of Life Estate in Living Unit. Thereupon, the Corporation will be discharged from all obligations hereunder. In the event of such cancellation of the Care Agreement, Corporation shall have the obligation to repurchase the Living Unit of Resident at the price set forth in Paragraph 5 (B) of said Contract for Sale of Life Estate in Living Unit, and Resident shall be obliged to sell said Life Estate in his Living Unit to Corporation for the price and as provided in Paragraph 5 (B) of said Contract. To reach the conclusion reached by the majority and by the trial court, it is necessary to find that two agreements which are so interdependent as to constitute a single contract may be terminated at different times by different means, although one never could have come into effect without the other. It is significant that the determination of the repurchase price depends upon the time of occupancy of the Living Units by the Buyer. It is clearly contemplated that the execution of the Care Agreement and the occupancy of the Living Unit may not be simultaneous, because, under paragraph 8 of the contract for sale of the Living Unit, the down payment is to be refunded if the parties do not enter into the Care Agreement or if the Care Agreement is voided prior to the occupancy of the Living Unit by the Buyer. What is more important, the provision for payment under 5 (A) of the sale agreement could never be meaningless, because the 120 day notice is not applicable if the Resident and Corporation mutually agree upon an earlier termination. Giving effect to paragraph 5 (A) of the sale agreement to the exclusion of paragraph 16 of the Care Agreement is error, because the two are reconcilable. Continental Casualty Co. v. Davidson, 250 Ark. 35, 463 S.W. 2d 652. Whatever the construction of paragraph 5 (A) standing alone may be, it must be read in connection with other clauses limiting it. Continental Casualty Co. v. Davidson, supra. In other words, the two clauses are not really conflicting and certainly not hopelessly so. They can, and certainly should be, harmonized. Paragraph 5 provides the means of arriving at the amount to be paid the resident upon a termination by the resident, when agreed to by the corporation. It also provides the formula for determination of the amount to be paid to the resident if there is a termination by the corporation under another provision of the contract. I simply do not see where the evidence, outside the contracts themselves, enters into the matter at all. I would reverse the judgment.   This was the actual holding of the trial court which the majority finds to have been justified.