Court Opinion

ID: 9610280
Source: CourtListenerOpinion
Date Created: 2023-08-22 03:39:19.42065+00
Date Added: 2024-06-11T12:47:05.096235
License: Public Domain

ORME, Judge
(concurring in the result in part and dissenting in part):
With the exception of minor aspects of the awards of interest and attorney fees, and, apparently, of the extent of Edmunds’ security interest in the UREC, I see the ultimate resolution of this appeal essentially as my colleagues do. But primarily because I fail to see the contractual ambiguity which is the lynchpin of the majority’s analysis, I reach that result by a different route.
I see no ambiguity in the key provision of the NAA and thus cannot agree that the trial court was entitled to consider extrinsic evidence of what the parties intended or that this court should defer to the findings made upon consideration of that evidence. Moreover, in accepting the assignment of the benefits under the NAA, Edmunds acceded to all of the terms of the NAA, as a matter of law, even though he did not sign it. He cannot enforce the parts he likes and claim he is not bound by the rest. If unhappy with its terms, his remedy was to refuse the assignment until the document was revised to correspond with his understanding of the parties’ agreement concerning the commission.
The key provision of the agreement, with my emphasis, is as follows:
The parties hereto understand and agree that this instrument does not obligate the undersigned to personally pay the amounts set forth herein. The obligation for payment hereunder arises only out of the payments received by Heritage under the Unif[or]m Real Estate Contract referred to above.
The provision is crystal clear in insulating Sprouse from personal liability for the unpaid commission reflected in the note portion of the NAA. The provision, with equal clarity, restricts the source of payment on the note to amounts paid by the purchaser under the UREC.
That is the good news for Sprouse. The bad news is that the NAA, while contemplating installment payments on the commission obligation, does not put UREC payments in excess of the amount needed to satisfy current commission installments forever beyond Edmunds’ reach. Rather, the NAA unambiguously makes Sprouse’s liability for the commission co-extensive with payments received under the UREC. Since Sprouse received more than the amount of the commission in UREC payments, the commission obligation could be fully satisfied out of those payments. Thus, Sprouse cannot take refuge behind the “no personal liability” provision of the NAA. Edmunds’ judgment for unpaid commissions should, in my view, be sustained on this basis.
As to Edmunds’ security interest in the UREC and its proceeds, once again the NAA is unambiguous. The NAA grants such a security interest in favor of, ultimately, Edmunds. However, the security interest is capped at $25,000. The foreclosure sale “proceeds” are chargeable to the extent of $25,000 to satisfy Edmunds’ lien. While I otherwise see no problem in Sprouse utilizing a credit bid approach to purchase the property — it would be silly to *228make him come up with hundreds of thousands of dollars just so he could pay himself — the $25,000 on which Edmunds had first claim had to be paid in cash.
From what I have said, it will be no surprise that I believe the rate of prejudgment interest was unambiguously set in the NAA at 10.5% absent default and 12% after default. Moreover, the only relevant attorney fee provision is in the NAA. The earnest money agreement was superceded by the UREC so its attorney fee provision is of no effect. Edmunds is not a party to the UREC and the mere fact he had a security interest in payments made under the UREC does not mean he can claim substantive contractual rights, such as an entitlement to attorney fees, under the UREC. Edmunds is, accordingly, entitled to recover attorney fees only insofar as attributable to collection of amounts due him under the NAA. As I see it, the one-third of the $9,000 fee attributable to “asserting appellee’s rights to participate in the foreclosure,” i.e., to seeking enforcement of the lien given in the NAA, as well as the one-third allocated to “collecting on the Note portion of the NAA,” are covered by the NAA’s attorney fee provision. Staving off Sprouse’s counterclaim is not and the third of attorney fees attributable to that effort is not recoverable.
I would affirm the determination that Edmunds is entitled to his commission with prejudgment interest as provided in the NAA. I would remand to permit fine-tuning of the judgment to adjust the interest as necessary; to limit Edmunds’ lien in the UREC proceeds to the $25,000 amount clearly provided for in the NAA, the balance to be the subject of a personal judgment against Sprouse; to require that the portion of the foreclosure purchase price in which Edmunds has a lien, i.e., $25,000, be paid by Sprouse in cash as a condition of delivery to him of a sheriff’s deed; and to reduce the trial court’s attorney fee award to $6,000. As Edmunds prevailed on appeal and the only issues here were ones within the scope of the NAA fee provision, I take no issue with remanding for assessment of all attorney fees reasonably incurred by Edmunds on appeal.