Court Opinion

ID: 9571733
Source: CourtListenerOpinion
Date Created: 2023-08-21 20:34:43.392481+00
Date Added: 2024-06-11T12:30:52.647792
License: Public Domain

HENDERSON, Justice
(dissenting).
Reliance upon Wiggins and O’Brien to uphold a legally binding “contract” in this case is unsound. In reading both of those decisions, it becomes apparent that in neither case was there a controlling provision as found in this set of facts, i.e., “This offer is contingent upon Buyers’ approval of Contract For Deed.” Therefore, this case is totally distinguishable.1 Based upon this crucial difference, I must respectfully dissent.
Three different Contracts For Deed (Exhibits 11, 12, and 13) were submitted to buyers (the Kaukers) by Attorney Rusch (representing himself and his wife as sellers); Kaukers refused to sign each one. *502Extensive negotiations were taking place during this period of time. An agreement to make a future contract is not binding when the terms and conditions are left to future negotiation. Professional Facilities Corp. v. Marks, 373 Mich. 673, 131 N.W.2d 60, 63 (1964).
In Conclusions of Law II, III, IV, V, and VII, the trial court expressed:
II. Defendant subsequent thereto, submitted a Contract for Deed (Plaintiffs’ Exhibit No. 11), which Defendants received on or about November 28, 1983, and which Defendants did not approve of and ultimately rejected.
III. Plaintiffs, Defendants, and the relator (sic) subsequent thereto held a meeting and attempted to resolve differences and difficulties which Defendants had with the Contract For Deed submitted, which meeting resulted in a redrafted Contract For Deed (Plaintiffs’ Exhibit No. 13) being submitted to the Defendants on or about December 3, 1983, however, this redrafted Contract For Deed did not incorporate all of the requested revisions of the Defendants and as such, did not constitute a meeting of the minds and a binding and enforceable agreement.
IV. Substantial negotiations occurred between the Plaintiffs and Defendants, in an attempt to resolve the disagreements and concerns which Defendants had with the last submitted Contract For Deed (Plaintiffs’ Exhibit No. 13) however, no subsequent Contract For Deed incorporating all of Defendants’ objections and requested provisions was prepared by the Plaintiffs or submitted to the Defendants, and as such, no binding enforceable agreement was reached between the Plaintiffs and the Defendants.
V. Given the substantial negotiations which occurred between the Plaintiffs and Defendants subsequent to the Offer and Agreement to Purchase initially entered into between the parties, it is clear that the parties did not intend the Offer and Agreement to Purchase to be a final or complete binding agreement on the terms and conditions of the sale of the subject property.
VII. No enforceable contract existed between the Plaintiffs and Defendants, and according to case authority, as well as the conduct of the parties herein, the Offer and Agreement to Purchase is not a contract upon which specific performance could (or should) be based as it rose to no greater level than an agreement to agree.
I agree with the trial court. Under Per-mann, these conclusions were not mistakes of law.
Why, if there was a legally binding contract — why if there were no ongoing negotiations attendant in the relationship, did Ruschs submit three different Contracts For Deed to Kaukers to sign? (Exhibits 11, 12, and 13). The answer is evident: there existed no binding agreement due to the above contingency and aggressive action and compromise was underway to get the Kaukers to sign. Kaukers’ sin is, apparently, that they refused to be bullied. It’s America! You cannot be forced into a contract. Our state law provides in SDCL 53-3-3: “Consent is not mutual unless the parties all agree upon the same thing in the same sense.” Here, the parties were of a different mind; this was spawning the negotiations; this was triggering the changes in three contracts of deed. If there is not a mutuality of consent upon any material matter, there is, quite simply, no contract. In Ward v. Melby, 82 S.D. 132, 137, 142 N.W.2d 526 (1966) we held:
This court has held that the correct rule in specific performance cases is that the contract with all of its material terms and conditions must be proved by evidence so clear and satisfactory to the mind of the trial as to leave no doubt as to the agreement. Ward v. Melby, 142 N.W.2d 526, 528 (S.D.1966)
Kaukers signed the initial “offer” (it was denominated an “offer” in the contingency provision) which expressed that possession was to be granted unto buyers on December 1, 1983. This never took place. Several times the Kaukers expressed their strong concerns that they wished to close the deal by the first of December so their *503family could be together by Christmas in Vermillion. This was extremely important to this family.
In the instant case, the Offer and Agreement to Purchase was drafted by Christensen, who was acting as Ruschs’ agent. One important crucial fact must not be overlooked, however, and that is that all of the language cited by Ruschs is the language and specific testimony of Christensen. As such, the language is hers and hers alone and further represents her interpretation and commentary on discussions she had with Mrs. Kauker. Thus, Kaukers contend that the entire source of Ruschs’ “form” over substance argument lies with their own agent, Christensen, and her improper or inappropriate interpretation of negotiations and discussions with the Kaukers. I agree. She is not the judge. Her characterizations are concluso-ry, through hearsay evidence.
Ruschs further cite a telephone conversation between Judith Kauker and Christensen, and maintain the contents of that conversation, which Ruschs contend is “uncon-tradicted testimony,” as controlling for the proposition that “the parties agreed that buyers had a right to have the ‘form’ of the contract reviewed and approved by their attorney.”
Findings of Fact VII and VIII, entered by the trial court, are not clearly erroneous:
VII. Plaintiffs admitted in testimony that a mortgage existed on the subject premises held by a Vermillion Bank, and that the bank would not give written assurance of not foreclosing if there was a sale of the property.
VIII. The testimony of the relator (sic) further indicated that the redrafted Contract For Deed (Plaintiffs’ Exhibit No. 13) contained three errors in that the redrafted instrument did not comply with Defendants’ objections to the original Contract For Deed (Plaintiffs’ Exhibit No. 11). These errors included a default time of thirty (30) days versus ninety (90) days as requested by the Defendants, the due-on-sale clause had not been revised according to Defendants’ request, and the redrafted Contract For Deed did not contain the escrow agreement for the Warranty Deed as requested by the Defendants. ...2
This Court should consider that the mortgage lien Plaintiffs intended to maintain on the property contained a “due on sale” clause. This Court is well aware that we have upheld enforceability of due on sale clauses. First Federal Savings and Loan Association of Rapid City v. Kelly, 312 N.W.2d 476 (S.D.1981); First Federal Savings and Loan Association of Storm Lake v. Lovett, 318 N.W.2d 133 (S.D.1982). This Court has further concluded that the signing of a contract for deed is a sufficient conveyance to entitle a mortgage holder to declare the entire mortgage debt to be immediately due and payable. First Federal Savings and Loan Association of Rapid City v. Kelly, 312 N.W.2d 476, 481 (S.D.1982). Per this writing, I have not called the “due on sale clause” a “defect.” Neither did Kelly. Mr. Chief Justice’s special concurrence, in this regard, somewhat mystifies me. My point is this: Why would the Kaukers, or anyone buying property under a contract for deed, want to be immediately faced with a foreclosure action on the property which they are buying?
During negotiations, Kauker offered to proceed to secure financing from the Veterans Administration and discharge all liens against the property. The Plaintiffs said that this was not acceptable.
A “Memorandum Decision After Trial” was incorporated into the Findings of Fact and Conclusions of Law by reference. In applying the clearly erroneous standard, our function is not to decide factual questions de novo. The question is not whether this Court would have made the same findings, but whether on the entire evidence we are left with a definite and firm conviction that a mistake has been made. In re Estate of Hobelsberger, 85 S.D. 282, 181 *504N.W.2d 455 (1970). Hereby, I set forth the trial court’s observations/findings; these are found on pages 175,176, and 177 of the settled record:
Plaintiffs admit that a mortgage exists on these premises, held by a bank in Vermillion, and that the said Bank would give no written assurance of not foreclosing if there was a sale but, orally, Bank indicated they would not so foreclose.
The realtor testified that she found in Exhibit No. 13 three errors. The instrument still contained a default time of 30 days, and Plaintiffs had agreed to 90 days for default to occur. The due-on-sale clause had not been taken care of according to the Plaintiffs’ wishes.
The realtor got Defendants’ permission to secure a title opinion which was furnished by Attorney Craig Thompson, see Defendants’ Exhibit “A”.
Additionally, realtor admitted that Exhibit No. 13, the re-draft of the Contract For Deed, also did not contain the escrow agreement for the warranty deed to be given as requested by the Plaintiffs, and did not contain any language concerning the Defendants’ right to any excess profits that might be realized from the sale of the premises if there was a foreclosure by default. The realtor attempted to justify the omission of the escrow arrangement from the Exhibit No. 13 because that was “standard” procedure even though it was not in the contract. Dr. Kauker testified that he was aware of a “loan” on the realty but was not aware of the “mortgage.” Dr. Kauker testified that he had received Exhibit No. 11 on November 28, 1983 at Vermillion, South Dakota, the same date on which he received the attorney’s opinion as to title. On November 29, 1983, Dr. Kauker submitted a list of objections that he made to Exhibit No. 11. He testified that he first knew of the mortgage by reading the attorney’s title opinion, the existence of the mortgage being listed by the attorney as a title “defect.”
Dr. Kauker also testified that he was concerned about this title defect; that he desired to protect his cash deposit as well as some $20,000 worth of improvements Defendants intended to initially make to the premises, in case of the Plaintiffs’ default on title failure; the premises were not in the good condition that he required; the foreclosure period should be extended to ninety days; he wanted a change made in the re-sale provisions; he wanted the Plaintiffs’ right of inspection of the premises to be limited; he wanted an escrow agreement for the deposit of the deed; and he wanted the payments to be amortized to include principle and interest.
Dr. Kauker also testified that the Plaintiffs had made no settlement of the title problem, that there was of record an assignment of rents and he asked the Plaintiffs to void the due-on-sale clause in the mortgage to the Bank.
As to Exhibit No. 13, Dr. Kauker felt that it did incorporate some objections that he had made but there was still rubbish in the yards, the garage area was one-fourth full of broken parts, and the appliances could not be inspected because of boxes and so forth. Dr. Kauker felt that Exhibit No. 13 did not provide for the 90-day default period that had been agreed to; that his requirements that his right to secure improvements made by him were not properly met and that the requirements for an escrow agreement were not met. Dr. Kauker agreed that the inspection right of the Plaintiffs was limited as he required as was the assignment of rents and the amortization of payments.
Dr. Kauker testified that he offered to pay off the bank mortgage, that the bank should-get written approval to the sale of the realty to Defendants; Dr. Kauker offered to take over the bank mortgage and offered to enter into a mortgage arrangement with Plaintiffs, all of which proposals were refused.
I conclude that Plaintiffs’s Exhibit No. 13, although a re-type job, simply did not conform to the agreements reached by the parties when discussing modifications to be made to Plaintiffs’ Exhibit No. 11. (emphasis supplied mine).
*505SDCL 21-9-2 provides: “The following obligations cannot be specifically enforced: (6) An agreement, the terms of which are not sufficiently certain, to make the precise act which is to be done clearly ascertainable.” In Wiggins, we held that the equitable remedy of specific performance is always addressed to the sound discretion of the trial court, according to the facts and circumstances in each case. In my opinion, the trial court did not abuse his equitable discretion.
Lastly, it behooves Plaintiffs, as expressed by the trial court, to sustain their burden of proof in establishing an enforceable contract; trial court concluded this had not been done. I agree. Trial court held that Defendants, on their counterclaim, could not uphold same for the same reason. See, Sabow v. Hall, 323 N.W.2d 861, 863 (S.D.1982) (offer and agreement to purchase not a contract where substantial negotiations between parties occurred after offer and agreement was signed). Kauk-ers are entitled to a return of their $500.00 deposit, now held for approximately eight years. After eight years, to require specific performance, requiring a couple to buy a home in Vermillion, South Dakota, is impractical, non-sensical, untimely, and without support in the Law. I note in the record, that during these eight years, Ruschs sold the house in question. Now, apparently, it is solely a damage case. Under my theory, damages would not be reached. Respectfully, do I call attention to my Brothers on this Court that Plaintiffs dropped their motion to supplement the record that specific performance was no longer sought. I do note, however, that Plaintiffs’ proposed findings of fact included a finding for approximately $13,000.00 in damages. Ruschs’ complaint also requested damages for an alleged breach of a contract. Again, this would not be reached under my thesis.
I am authorized to state that Justice WUEST joins in this dissent.

. Ruschs state in their brief, at page 32, "they have been unable to find any case authority identical to the type of contingency that we have in this case.”

. Each of these requests were reasonable; in retrospect, you, the reader now contemplate on the wisdom of the Kaukers’ inserting the provision: “This offer is contingent upon Buyers’ approval of a Contract for Deed."