Court Opinion

ID: 9388670
Source: CourtListenerOpinion
Date Created: 2023-04-21 14:03:40.789509+00
Date Added: 2024-06-11T17:18:21.631118
License: Public Domain

IN THE SUPREME COURT OF IOWA

                                  No. 22–0038

                  Submitted March 22, 2023—Filed April 21, 2023

WILLIAM LEE PITZ and LYNN S. PITZ,

      Appellants,

vs.

UNITED STATES CELLULAR OPERATING COMPANY OF DUBUQUE,

      Appellee.

      On review from the Iowa Court of Appeals.

      Appeal from the Iowa District Court for Dubuque County, Michael J.

Shubatt, Judge.

      The lessors of a cell tower site seek further review of a court of appeals

decision affirming a district court ruling that prepayment of rent was not a

condition of the lessee’s exercise of a lease renewal option. DECISION OF THE

COURT OF APPEALS AND DISTRICT COURT JUDGMENT AFFIRMED.

      Mansfield, J., delivered the opinion of the court, in which all justices

joined.

      Todd J. Locher of Locher & Davis PLC, Farley, and Chad D. Brakhahn and

Joseph J. Porter of Simmons Perrine Moyer Bergman PLC, Cedar Rapids, for

appellants.

      Bret A. Dublinske and Brandon R. Underwood of Fredrikson & Byron, P.A.,

Des Moines, for appellee.
                                         2

MANSFIELD, Justice.

      I. Introduction.

      In 1988, when most cell phones were the size and shape of bricks and were

stored in vehicle consoles, a cell phone service company had the foresight to

enter into a thirty-year lease of property to build a cell tower. Even more

remarkably, the lease included a thirty-year renewal option. To no one’s surprise,

when the lease came up for renewal in 2018, the rent was substantially below

market. The cell phone company gave written notice of renewal to the property

owners as specifically required by the option-exercise clause. However, the cell

phone company did not immediately pay the renewal rent, even though the lease

provided elsewhere that the renewal rent was “payable in a lump sum in advance

at the exercise of the option.” The property owners decided that this was not a

proper exercise of the option and took the cell phone company to court. In the

district court and the court of appeals, the cell phone company prevailed.

      On further review, we too conclude that payment of the renewal rent was

not a condition for exercise of the option, and therefore, that the cell tower lease

was properly renewed. Strictness and literalism in the law of offer and

acceptance work both ways. The optionee must comply with all stated conditions

for exercise of the option, but when those conditions have been expressly set

forth in a separate provision, the list should normally be treated as exclusive.

For this reason, we affirm the judgment of the district court and the decision of

the court of appeals.
                                                  3

      II. Background Facts and Procedural History.

      Robert and Dorothy Pitz owned a 320-acre farm property in rural Dubuque

County. In 1988, the Pitzes agreed to lease six acres for a cell tower site; the

lessee was a subsidiary of United States Cellular Corporation.1 U.S. Cellular then

erected an approximately 380-foot cell tower on the leased portion of the

farmland. The official commencement date of the lease was November 14, 1988.

      The lease provided that Robert and Dorothy would receive $20,000 in total

rent for the thirty-year term of the lease, all to be paid in advance on or before

January 5, 1989. The lease also contained a renewal option under “ARTICLE

THREE” for a second thirty-year term as follows:

            3.2 Option to Renew. Lessee shall have the option to renew
      this Lease Agreement for one (1) additional term of thirty (30) years,
      at the rental rate set forth in Article Four and upon all the other
      terms and conditions hereof. Lessee may exercise such option by
      giving written notice to Lessor at least sixty (60) days before the
      expiration of the initial term of this Lease Agreement.

      At trial, a U.S. Cellular official described this lease as a “one-off lease,”

meaning that it was not a standardized document. On a different page under

“ARTICLE FOUR,” the lease went on to state that the option term rent would be

as follows:

            4.2 Option Term Rent. Lessee shall pay to Lessor as full
      consideration for use of the Leased Premises during the option term,
      payable in a lump sum in advance at the exercise of the option, the
      amount of Twenty Thousand Dollars ($20,000.00), adjusted upward
      by the percentage of increase in the Consumer Price Index (“CPI”)
      from the Commencement Date to the first day of the last month of
      the current lease term. . . . If the amount of the CPI increase is not
      known at the time the option is exercised, Lessee shall pay Lessor

      1We   will refer to the lessee hereafter as “U.S. Cellular.”
                                        4

      Twenty Thousand Dollars ($20,000.00) at the time of exercise and
      the balance of the option term rent within thirty (30) days of Lessor’s
      notice of calculation.

      In 2009, Robert and Dorothy transferred ownership of the farm to their

son, William Pitz, and his spouse, Lynn. This transfer included the U.S. Cellular

lease. In reality, William had been farming the property since the early 1980s.

Currently, William grows corn and soybeans and raises livestock on the property.

      When William and Lynn acquired the farmland from Robert and Dorothy,

U.S. Cellular was not notified of the change of ownership. The warranty deed to

William and Lynn, however, was recorded. Meanwhile, through the years, U.S.

Cellular continued to operate the cell tower on the leased portion of the farmland.

      Anticipating the expiration of the original lease term, U.S. Cellular sent a

certified letter to Robert and Dorothy on September 1, 2017—over one year

before the September 14, 2018 deadline for exercise of the option. This letter

stated that it would “serve as notice that [U.S. Cellular] is exercising its option

to renew the Lease Agreement dated November 14th, 1988 for the first of one

renewal terms (Option 1) of thirty years.” The letter was accompanied by an IRS

Form W-9 (request for taxpayer identification number) and a direct deposit form,

both of which U.S. Cellular asked to be completed and returned. The letter and

enclosures reached William, but he took no action on them.

      With the deadline for exercise of the option looming approximately a year

later, U.S. Cellular followed up with an overnight letter to William on September

11, 2018. This letter recited a recent conversation in which William had

apparently informed U.S. Cellular that he and his spouse had purchased the
                                        5

farm property from Robert and Dorothy. The letter set forth U.S. Cellular’s

position that it had already renewed the lease. The letter enclosed fresh copies

of the September 2017 letter, the W-9, and the direct deposit form. It asked again

that the latter two items be completed and returned. The letter concluded, “Once

we have these documents, we will be able to disburse the option rental payment

to you.”

      As before, William did not take action. On October 29, U.S. Cellular

forwarded a check for $31,494.02 to William and Lynn. As explained in the body

of the letter, this amount represented the $41,439.50 advance rent due based

on the formula set forth in paragraph 4.2 of the lease, minus required income

tax withholding.

      William and Lynn responded through counsel with a letter that returned

the rent check. Counsel’s letter explained, “U.S. Cellular failed to properly

exercise its option to renew due to the fact that it did not timely tender the rent

payment.” Quoting paragraph 4.2 of the lease, counsel advised that U.S. Cellular

had failed to validly exercise the renewal option because it had not tendered

payment “in advance at the exercise of the option.” The letter also expressed

William and Lynn’s willingness to enter into a new lease for the cell tower site at

“fair market value.”

      Neither party budged from their position, so on June 19, 2019, William

and Lynn filed a declaratory judgment action in the Dubuque County District

Court. Their petition sought a judicial determination that the option had not

been validly exercised and that the lease had expired on November 13, 2018.
                                          6

William and Lynn’s petition also requested that U.S. Cellular be ordered to

remove all structures from their land and that they be awarded fair rent from the

date of expiration of the original lease term until the structures were removed.

      The district court conducted a half-day bench trial, at which William and

Lynn offered expert testimony that a fair market rental for thirty years would be

over $200,000.

      The district court ruled for U.S. Cellular, holding that the option had been

validly exercised. The court determined that “[t]he payment of rent was not a

condition precedent to the exercise of the option” but instead was a term and

condition under the renewed lease. Thus, “[a]ny failure to meet obligations under

the term of the renewed lease did not negate the exercise of the option or the

existence of the new lease itself.” The district court also found that U.S. Cellular’s

notice was unqualified and properly identified the legal entity on whose behalf

the option was being exercised. Lastly, the district court denied “[a]ll associated

claims for relief.”

      William and Lynn appealed, and U.S. Cellular cross-appealed, arguing

that it should have been awarded attorney fees. We transferred the case to the

court of appeals, which affirmed as to both appeals. Regarding the exercise of

the option, the court of appeals’ reasoning largely echoed that of the district

court. In affirming the denial of attorney fees, the court of appeals noted that the

lease contained only an indemnification clause, which would not support an

attorney fee award in an action between the parties. See NevadaCare, Inc. v. Dep’t
                                        7

of Hum. Servs., 783 N.W.2d 459, 471 (Iowa 2010). William and Lynn sought

further review, and we granted their application.

      III. Standard and Scope of Review.

      The parties agree that this action was tried at law. We review a district

court’s interpretation and construction of a contract for correction of errors at

law. Homeland Energy Sols., LLC v. Retterath, 938 N.W.2d 664, 683 (Iowa 2020).

“The district court’s factual findings have the effect of a special verdict and are

binding on us if supported by substantial evidence.” Metro. Prop. & Cas. Ins. v.

Auto-Owners Mut. Ins., 924 N.W.2d 833, 839 (Iowa 2019).

      “When we grant further review, we may exercise our discretion to let the

court of appeals decision stand as the final decision on particular issues.”

Farnsworth v. State, 982 N.W.2d 128, 135 (Iowa 2022) (quoting State v. Fogg,

936 N.W.2d 664, 667 n.1 (Iowa 2019)). We do so with respect to all issues except

the question of whether payment of the renewal rent was a condition for exercise

of the renewal option.

      IV. Analysis.

      The parties disagree over what U.S. Cellular had to do to validly exercise

the option to renew the lease for an additional thirty-year term. Was notice

enough, or did U.S. Cellular also have to pay the rent in advance? If payment

was a condition precedent, then U.S. Cellular’s failure to pay the rent when it

provided the renewal notice could mean that the option was not properly

exercised, and no renewal contract was formed. See SDG Macerich Props., L.P. v.

Stanek Inc., 648 N.W.2d 581, 586 (Iowa 2002) (“Any conditions precedent to the
                                              8

option provision must be fulfilled according to the agreement for the option to

become a contract between the parties.”).

      A party exercising an option must strictly comply with conditions

precedent. Id. For example, if a time is prescribed, that time is of the essence. Id.

Substantial performance is not good enough. Id.; see Steele v. Northup, 143

N.W.2d 302, 305 (Iowa 1966) (“The general rule is that the time prescribed for

exercise of an option is of the essence, and if the option is not exercised within

the time limited all rights of the optionee stand forfeited without notice.”);

Restatement (Second) of Contracts § 25 Reporter’s Note cmt. d, at 75 (Am. L.

Inst. 1981) (“Despite equity’s dislike of forfeitures, requirements governing the

time and manner of exercise of a power of acceptance under an option contract

are applied strictly.” (citation omitted)).

      Simply stating these general principles does not resolve this case, however.

The lease here has two potentially relevant provisions. Section 3.2 (“Option to

Renew”) expressly requires U.S. Cellular to give written notice to renew the

option, without mentioning payment of option rent. Section 4.2 (“Option Term

Rent”) requires the option term rent to be paid “in advance at the exercise of the

option.” Does section 4.2 amount to an additional condition for the exercise of

the option, or is it a separate covenant? U.S. Cellular argues that the option to

renew stands on its own and does not require prepayment of rent in order to

exercise the option. William and Lynn counter that the contract should be read

as a whole, that section 4.2 should be incorporated into section 3.2, and that it
                                                 9

doesn’t make sense to say that U.S. Cellular properly exercised the option if it

went into breach the minute that it exercised it.2

       A. Prior Caselaw in Iowa. Our caselaw concerning renewal and purchase

options offers guidance, although it doesn’t necessarily resolve this case, either.

Just after the Civil War, in McFadden v. McCann, we found that notice and

payment were both conditions precedent to the exercise of an option rather than

independent covenants. 25 Iowa 252, 255 (1868). The lease provided that the

tenancy of the lessee shall end “unless he shall have notified [the lessor] of his

election to continue three years longer, . . . and unless he shall, on or before that

day, secure to the parties . . . the rent to accrue.” Id. at 253. We held, “These

conditions are most evidently precedent to the renewal or continuance in force

of the lease, and unless they were performed the instrument ceased to operate

for a future term.” Id. Notably, the lease spelled out that both notice and

payment—connected by the conjunctive “and”—had to be performed if

termination of the lease was to be avoided.

       Some years later, in Lockman v. Anderson, we again held that payment

was a condition precedent where the plaintiff had an option to buy a building

“for the consideration of $5,500; this being upon the condition that the [plaintiff]

desires to buy the same by the first of March, 1900.” 89 N.W. 1072, 1072 (Iowa

1902). The plaintiff notified the defendant on February 28 that he intended to

“avail[] himself of the option to take the property,” but he did not tender the price

       2William and Lynn also point out that U.S. Cellular drafted the lease, so any ambiguities
should be resolved against it. See Shelby Cnty. Cookers, L.L.C. v. Util. Consultants Int’l, Inc., 857
N.W.2d 186, 195 n.8 (Iowa 2014).
                                        10

until March 3. Id. at 1073. We held the option had not been properly exercised

because the plaintiff had to make payment by the March 1 deadline:

      [I]t is contended on behalf of plaintiff that the option was exercised
      on the 28th of February, by the notice to defendant that plaintiff
      would take the property, and that thereupon the contract became
      one simply for the purchase of the property at an agreed price, and
      that the failure of plaintiff to pay on the exact day named in the
      contract would not defeat plaintiff’s right to a specific performance.
      In answer to this argument it is enough to say that the contract does
      not so provide. It is true, nothing is said, in connection with the
      exercise of the option of purchase, as to when payment is to be
      made; but, in the absence of any express provision, it must certainly
      be implied that the option to be exercised was not simply the making
      of an election to take the property, but the payment of the purchase
      price. If this is not so, then there is no provision as to the time when
      the purchase price is to be paid; and, rather than presume that the
      parties intended that the time of payment should be left wholly
      indefinite and undetermined after plaintiff had notified defendant of
      his election to take the property, we think that we are bound to hold
      that the intention was that the purchase price was to be paid by the
      day named.

Id. In effect, silence in the manner of exercise, with only a naming of price,

required the price to be paid in order to validly exercise the option.

      On the other hand, in Breen v. Mayne, we concluded that a differently

worded agreement did not require payment as a condition of exercising the

option. 118 N.W. 441, 442–43 (Iowa 1908). The agreement provided that the

defendants “agree to sell to [plaintiff], at his option, at any time on or before

October 17th, 1906, the following described premises” with the agreed price

payable “on delivery of deed.” Id. at 442. We held that “payment of the purchase

price was not essential to the completion of the contract” and that “Plaintiff might

make his election in any lawful method before the expiration of the time limit.”

Id. at 443. We added, “The only fixed rule regarding the manner of the exercise
                                         11

of an option under a contract granting it is to discover from the language of the

instrument, construed in the light of competent parol testimony, the intent of

the parties with reference thereto.” Id. We also observed, “It is important in such

cases to distinguish that which pertains to the performance of a contract from

that which pertains to its making.” Id. In Breen, it appeared to be important that

the agreement by its terms did not require payment until the deed had been

delivered. See id.

      Also of note is our decision in Steele v. Northup, 143 N.W.2d 302. There,

the agreement stated that the plaintiffs would have “until the date of March 1st,

1962 to execute this option by tender of the total sum due the party of the first

part as hereinafter set out.” 143 N.W.2d at 304. A month before the deadline,

the plaintiffs notified the defendant of their intent to exercise the option and

asked the defendant to provide the amount due. Id. After the defendant

procrastinated instead of responding with the amount due, the plaintiffs filed

suit. Id. We held that the plaintiffs had given an unqualified notice of their intent

to exercise the option and that payment was a condition subsequent, not a

condition precedent, to exercising the option. Id. at 306. Yet the significance of

Steele’s holding is diminished by the fact that we also held any obligation to

make a tender before the option expiration date had been foiled by the

defendant’s conduct and was therefore excused. Id. As we put it, “[The plaintiffs]

could hardly have done more.” Id. at 307.

      Figge v. Clark, like Lockman, involved an option that was silent as to the

manner of exercise. 174 N.W.2d 432, 433 (Iowa 1970) (“The agreement is silent
                                        12

as to how this option was to be exercised, and no particular form of notice was

provided therein.”). But this time, unlike in Lockman, we decided that “anything

amounting to an unqualified manifestation of an optionee’s determination to

accept [was] sufficient.” Id. at 435. Payment was not a condition of exercise but

“a condition subsequent.” Id. at 437. Still, it is worth noting that the Figge

defendants had in any event failed to cooperate and that “reasonable efforts to

make that tender proved futile.” Id.

      Finally, in Lyon v. Willie, we considered another notice-plus-payment

option-exercise provision that stated as follows:

      The party desiring to exercise this first right to buy referred to above
      shall notify the negotiating party in writing within sixty (60) days
      from the date of Notice and by making full payment in cash of the
      above purchase price within one hundred twenty (120) days from
      the date the written Notice of the negotiated sale is mailed to or
      delivered in person to the party or parties not negotiating the
      sale . . . .

288 N.W.2d 884, 887 (Iowa 1980). As in McFadden over a hundred years earlier,

we held that the defendant “was required to take two steps to exercise his

option”: (1) give notice and (2) tender the purchase price. Id. at 894. Despite a

“grammatical defect” in the agreement, we found that the use of the conjunction

“and” was dispositive and meant that there were two conditions precedent to

exercise the option to renew. Id. at 888–89.

      Our present case doesn’t fit neatly into any of these paradigms. It doesn’t

involve a conjunctive, notice-and-payment provision the way McFadden and

Lyon did. Nor is the agreement silent as to how the option would be exercised,
                                        13

as in Lockman and Figge. Additionally, the agreement doesn’t allow payment to

be deferred until a later date, as in Breen.

      So perhaps the most we can distill from prior cases are the two points we

made long ago in Breen: (1) there are no fixed rules about manner of exercise of

an option, and (2) acceptance and performance are two different things. 118 N.W.

at 443; see also Lyon, 288 N.W.2d at 888 (quoting Breen for both points); Figge,

174 N.W.2d at 435 (same); Steele, 143 N.W.2d at 305 (same).

      Here, both the district court and the court of appeals emphasized that the

option-to-renew provision—viewed in isolation—only required delivery of a

written notice for acceptance. This is an important point, but it doesn’t quite

suffice to explain why section 3.2 should not be read in conjunction with section

4.2. It also doesn’t quite answer William and Lynn’s point that U.S. Cellular’s

reading of the option would allow it to both form a renewal contract and be in

breach of that contract at the same time—seemingly an odd result. Nonetheless,

we believe there are several answers to William and Lynn’s arguments.

      B. Acceptance vs. Performance. First, acceptance and performance

really are two different things. Courts typically take a strict, compartmentalized

view of acceptance and a broader, more holistic view of performance. That’s why

offer and acceptance are often taught at the beginning of first-year contracts; the

legal principles are more straightforward and therefore easier to learn. So the

principle that we read contracts as a whole has less relevance when the issue is

whether an option was properly exercised.
                                       14

      We follow the rule that “acceptance must conform strictly to the offer in all

its conditions,” Shell Oil Co. v. Kelinson, 158 N.W.2d 724, 728 (Iowa 1968), but

the corollary to that rule is that the conditions for acceptance should be spelled

out. Someone deciding how to exercise an option thirty years after the original

contract was executed normally ought to be able to rely on the clause specifically

devoted to that subject. This means that it is appropriate for us to focus on what

the clause entitled “Option to Renew” itself said rather than scanning the

agreement for other implied terms of acceptance. More importantly, we can take

at face value a sentence that began, “Lessee may exercise such option by giving

written notice”—and didn’t disclose that anything other than the giving of notice

had to be done.

      Moreover, section 3.2 said that exercise of the option occurred “by” the

giving of written notice. Elsewhere, section 4.2 described something else that

must occur “at” the exercise of the option. A distinction was seemingly being

drawn between that which was necessary for the “making” of the renewal

agreement and that which was necessary for its “performance.” See Breen, 118

N.W. at 443. “By” sounds like a condition, “at” like a term of performance.

      A good out-of-state case illustrating what we have been saying is Northern

Plains Alliance, L.L.C. v. Mitzel, 663 N.W.2d 169 (N.D. 2003). The case involved a

right of first refusal (RFR) in a divorce decree. 663 N.W.2d at 170–71. The

provision concerning exercise of the RFR stated, “Lee Roy will have seven days

from receipt of the original purchase agreement to either sign a waiver of his
                                         15

right of first refusal or give written notification to Barbara that he will purchase

the property at the same price.” Id. at 174. A separate provision stated,

             If Lee Roy decides to purchase the property with his written
      notification of purchase he will pay an identical amount of earnest
      money as provided in the purchase agreement and will have the
      same amount of time as provided the purchaser in the purchase
      agreement to pay the remaining purchase price.

Id. The North Dakota Supreme Court held, “We do not construe the latter

provision governing payment terms to engraft an additional requirement for

exercise of the right of first refusal.” Id. Instead, the court found “that provision

merely clarifies that Lee Roy must pay earnest money and will have the same

amount of time as the other purchaser to perform under the contract.” Id.

      In our case the district court cited a similar decision, Welsh v. Jakstas, 82

N.E.2d 53 (Ill. 1948), in its thorough and well-researched opinion. In Welsh, the

underlying contract said that the lessees could exercise a purchase option “upon

thirty (30) days’ notice in writing given to Lessor by Lessees,” while also stating

that “[u]pon the exercise of the option to purchase by Lessees, Lessees shall

immediately pay to Lessor” a specific sum. 82 N.E.2d at 55–56. The court rejected

the argument that payment was a condition precedent to exercise of the option:

      There is nothing in the option which requires the payment of any
      money to be made or tendered when the option right is exercised in
      order to constitute an acceptance. The parties to an option may or
      may not make payment an essential condition to the exercise and
      acceptance of the option. Acceptance in writing was the only thing
      necessary. The initial installment of the purchase price was then to
      be made immediately, but such payment was a matter pertaining to
      the performance of the contract and not to its creation.

Id. at 59.
                                         16

      C. No Absurdity. Second, there is less absurdity than might appear at

first blush to the notion that U.S. Cellular could accept an offer to renew a

contract and potentially breach that renewal contract through nonpayment at

the same time. Sometimes payment requires the payee’s cooperation. This case

illustrates that point, as did Steele and Figge.

      Before U.S. Cellular could pay the rent for the renewal term to William and

Lynn, the company had to obtain a completed Form W-9 to make sure the couple

was not subject to backup withholding. William did not respond, despite

receiving the form long before the deadline for exercise of the option. As a result,

even though U.S. Cellular knew that it wanted to renew the lease, it remained

uncertain whether to pay the full amount of the rent or that amount minus 24%

backup withholding. See 26 U.S.C. § 3406(a)(1)(A) (requiring payor to do backup

withholding if the payee fails to furnish their tax identification number). In short,

there was a legitimate reason for the parties to treat written notice as the means

of acceptance and payment as a matter of performance.

      D. William and Lynn’s Authorities Are Not Persuasive. William and

Lynn cite a number of authorities; most if not all are distinguishable. In Ingram

v. Kasey’s Associates, the South Carolina Supreme Court determined that the

lessee had to make payment as well as give notice in order to exercise a purchase

option. 531 S.E.2d 287, 293 (S.C. 2000). But the agreement said only that the

“Lessee shall have the right to purchase the premises at any time during the

term hereof.” Id. at 289. It was silent as to how the option was to be exercised;

therefore, the court was filling a gap in the agreement. See id.
                                         17

      Similarly, in Hofmann v. Sullivan, the Supreme Court of Utah stated that

a first right of refusal in a lease that was silent as to manner of exercise, “[i]n

general, . . . calls for a payment of cash at the time of the exercise of the option.”

599 P.2d 505, 508 (Utah 1979). Those are not the facts here.

      In Peebler v. Seawell, the option-to-purchase paragraph itself required the

lessee to pay “at least one-third of the purchase price down.” 265 P.2d 109, 110

(Cal. Ct. App. 1954). The court found that this was “a condition to the exercise

of the option.” Id. at 112.

      In Burns v. Reves, the lessees’ notice of exercise failed because it was

qualified—i.e., it was “conditioned on obtaining necessary financing.” 457 S.E.2d

178, 180 (Ga. Ct. App. 1995).

      Shellhart v. Axford, 485 P.2d 1031 (Wyo. 1971), is William and Lynn’s best

case, but even it appears to be distinguishable. There the relevant lease provision

stated,

            This extension shall also incorporate an option on the part of
      the LESSEE to purchase the above described property at any time
      during the term of this lease or its extension for the sum of
      $12,000.00. This option may be exercised at any time prior to
      December 1, 1969 by giving the LESSORS at least 30 days notice in
      writing of LESSEE’S intention to so exercise said option.

485 P.2d at 1032. The Wyoming Supreme Court rejected the lessee’s contention

that it had duly exercised the option and concluded that “it is to be impliedly

understood that an option such as the one considered cannot be exercised

without the requisite notice and without payment of the purchase price.” Id. at

1034. Yet it is noteworthy that the lessee’s attorney was “making a counter offer

for his client and attempting to set up a different deal, with a down payment and
                                          18

the rest payable later.” Id. at 1033. That is not the situation here; U.S. Cellular

was not trying to renegotiate the terms of the lease renewal.

      V. Conclusion.

      For the foregoing reasons, we affirm the decision of the court of appeals

and the judgment of the district court.

      DECISION OF THE COURT OF APPEALS AND DISTRICT COURT

JUDGMENT AFFIRMED.