Court Opinion

ID: 9573158
Source: CourtListenerOpinion
Date Created: 2023-08-21 20:48:51.278153+00
Date Added: 2024-06-11T12:37:38.522697
License: Public Domain

Rose, J.,
dissenting,
with whom Springer, J., agrees:
The parties entered into eight agreements for the sale of Darling’s ranch to Serpa. The district court concluded that the agreements were severable and that, because of language in an addendum, the other contracts were made illusory and therefore unenforceable. Since both of these findings are erroneous, I cannot join in affirming the lower court’s decision.
When several contracts are executed, an initial determination often must be made as to whether the contracts are to be viewed as a whole or as individual, severable agreements. In doing this, this court will make an independent review of the contracts and, if necessary, testimony surrounding their execution to determine the intent of the parties. As we stated in Sprouse v. Wentz, 105 Nev. 597, 781 P.2d 1136 (1989):
Whether two agreements constitute a single, inseverable contract or two separate contracts is a question of law. Linebarger v. Devine, 47 Nev. 67, 72, 214 P. 532, 534 (1923); Bethea v. Investors Loan Corp., 197 A.2d 448 (D.C.App. 1964). We have announced that ‘[wjhether a contract is entire, or separable into distinct and independent contracts, is a question of the intention of the parties, to be ascertained from the language employed and the subject-matter of the contract.’ Linebarger, 47 Nev. at 72, 214 P. at 534.
105 Nev. at 605, 781 P.2d at 1140. Our first task is to determine the parties’ intent in executing the contract — was it essentially for *306the sale of various parts of the ranch separately with each agreement to be independent of the other, or were the contracts intended as a sale of the entire ranch, but contained in a number of documents?
Serpa was interested in purchasing Darling’s entire ranch. The parties initially executed a document entitled “Letter of Intent,” which stated that each would negotiate in good faith to “option” the entire ranch to Serpa for about three million dollars. As the parties entered into negotiations to finalize the ranch sale, the intent was to accomplish the sale or option to sell to Serpa the entire ranch.
Darling insisted on retaining the headquarters portion of the ranch and Serpa acceded to this. The parties then agreed that the remaining ranch would be available to Serpa in three segments through agreements to purchase or options to purchase. First, there was a planned unit development (PUD) area, that Darling had created. Second were the water rights to the property, and third was the land that received effluent pursuant to a contract with Carson City. However, prior to and during the negotiations, Serpa insisted that he did not want the PUD without the other two segments because he felt the water rights and effluent contract were more valuable and necessary for the final development of the ranch as a whole.
After negotiations, the parties entered into eight agreements for the sale of the ranch to Serpa, with the sole exception of the ranch headquarters. The first was entitled Master Agreement and it was to “memorialize” the parties’ intentions. It then referred to the other agreements that dealt with the sale or option of the three specific portions of the ranch.
After reading the Letter of Intent and the eight agreements, there is no doubt that the parties intended the sale to be for the entire ranch and the agreements were not divisible. And if there was the slightest doubt, it was removed by the testimony of Darling’s own attorney, Scott Heaton, who prepared the agreements. He stated that “[i]t was always my understanding that all of these agreements were integrated documents, that none of them stood by themselves” and that this was the intention of the parties.
In Sprouse, the parties entered into agreements to exchange their ranches and cash. Subsequently, the parties entered into other agreements for the exchange of livestock by sale or option to purchase. The district court held that the livestock agreements were severable from the agreements for the sale of land. But upon independent review, this court determined that the land and livestock sales were intended by the parties to be interdependent and integrated, and therefore not severable.
*307If the agreements in Sprouse were not severable, the agreements in this case, executed at the same time and dealing with the sale of one ranch, certainly are not. The record establishes, at least by a preponderance of the evidence, that the agreements were to accomplish the sale or option of the entire ranch to Serpa and that they were interdependent and integrated, not severable.
The second error I believe the district court made was in concluding that the addendum to the seven agreements made them illusory and therefore unenforceable. The reason for such a conclusion was that the agreement gave Serpa the opportunity to review the status of the property and water rights and he could eventually terminate the contract if his objections were not eliminated. While this issue presents a closer question, I do not think the addendum rendered the contracts conditional or made the seven preceding agreements unenforceable.
When the parties met to execute the agreements which Darling’s attorney had prepared, Serpa realized that there were a number of loose ends that had not been finalized. He had not received a preliminary title report to see if title was as Darling represented, there was uncertainty as to the status of Darling’s contract and subsequent negotiations with Carson City regarding the effluent, and the open area designation by Carson City on the PUD property had to be confirmed. Therefore, an addendum was added to the previously prepared agreements addressing these concerns, and it was executed by the parties along with the other agreements. The addendum provided that Serpa would have ten days to approve the status of those areas of concern. If Serpa had any objections, Darling was to use due diligence to eliminate them. If he could not, Serpa would then have the opportunity to elect to terminate or purchase, subject to such objections.1
*308The district court held that the provision giving Serpa the right to object to certain information and then terminate the agreements if the objections were not removed made the entire sale conditional and, in effect, gave Serpa an option to cancel. In reaching this conclusion, the court relied on Sala & Ruthe Realty, Inc. v. Campbell, 89 Nev. 483, 515 P.2d 394 (1973).
In Sala, a real estate broker sued for a commission he believed he earned when the owner of a motel entered an offer and acceptance agreement with a prospective purchaser, but conditioned the purchase on the buyer’s approval of an inventory and accounting within ten days from the date of the offer. We held that this approval clause was a condition precedent to the existence of a contract and made the buyer’s promise illusory because he was not obligated to perform. While Sala is somewhat persuasive for the plaintiff, I do not think it is factually the same as this case or controlling.
Serpa was given the right to object to any liens or other problems with the preliminary title report and with the status of the water rights, the effluent contract with Carson City, and the PUD property. In the agreement and options, Darling had warranted that he had clear title to the property and that his water rights and effluent contract with Carson City were as represented. The addendum was merely to give Serpa the opportunity to check and see if the representations made by Darling were correct. And if Serpa objected, Darling was given the opportunity to satisfy the problem or cure the objection. Only if Darling failed to remove or cure the objection could Serpa terminate the agreements. This factual situation is easily distinguishable from that of Sala and the addendum did not make the agreements and options illusory.
I find this case more akin to those where an agreement is conditioned upon a specific event, performance or status being met to the buyer’s satisfaction. See Jenkins Towel Service, Inc. v. Tidewater Oil Co., 223 A.2d 84 (Pa. 1966) (contract for sale of real property contingent upon vendors obtaining curb cut permit satisfactory to purchaser); Converse v. Fong, 205 Cal.Rptr. 242 (Ct.App. 1984). And in Parsons Drilling, Inc. v. Polar Resources, 98 Nev. 374, 649 P.2d 1360 (1982), we held that where a buyer was given the option to terminate the contract by *309returning the purchased rig, the exercise of such contractual right to terminate was enforceable. We reached this result by concluding that the seller had no right to claim rent for the time the rig was used because this was not an equitable rescission of a contract, but rather a contractual termination. I see little difference between the right to terminate in the Parsons case and the case at bar.
Because I believe the district court erred in reaching the two conclusions as I have stated, I would reverse the judgment and remand the case for a new trial.

Specifically, the clause stated as follows:
The undersigned hereby agree as follows:
Buyer shall have a period of ten (10) days from the date hereof to approve the following:
1. The Preliminary Title Reports for all subject properties;
2. The status of the PUD property, particularly the open area designation and any other conditions existing as of the date hereof;
3. The status of the water rights;
4. The status of the real property taxes, particularly any deferred taxes;
5. The number and status of the existing PUD lots;
6. The status of all effluent negotiations and agreements between the Seller and Carson City.
Seller to furnish Buyer a written statement of status.
If Buyer objects to any of the foregoing items, Seller shall use due diligence to resolve such objections at his own expense before close of escrow.
If such objections cannot be resolved before close of escrow, all *308rights and obligations hereunder may, at the election of the Buyer, terminate unless Buyer elects to purchase the property subject to such objections.
In all escrows between the parties, the following terms shall prevail:
1. Seller shall furnish title insurance at his cost, together with paying the documentary transfer tax for any deeds;
2. The remaining costs and expenses of escrow, excluding survey costs, quiet title actions, and the like, shall be divided and paid equally.