Court Opinion

ID: 9852857
Source: CourtListenerOpinion
Date Created: 2023-09-24 05:37:59.470946+00
Date Added: 2024-06-11T09:22:35.882864
License: Public Domain

EDMONDS J.,
concurring.
I agree with the majority’s analysis of the issue of plaintiffs’ entitlement to judicial foreclosure of their construction and nurseryman’s liens. However, I question the correctness of the majority’s reasoning regarding plaintiffs’ claim for specific performance, although I agree with its result.
*600The majority’s analysis assumes that the parties had a “meeting of the minds,” but that the agreement they entered into was too indefinite to be enforced because it lacked essential terms, i.e., it did not address issues such as apportionment of property taxes, responsibility for deferred taxes in the event that the farm deferral was later lost, a septic tank permit, and easements. 134 Or App at 594. I do not agree with the majority’s initial assumption that the parties reached an agreement for the sale of the property. Moreover, the terms that the majority says are too indefinite to be enforced were nonessential terms.
The applicable rule of law is that a court cannot make a contract for the parties by supplying essential or material terms, but it can fill in the gaps in a valid agreement with subordinate or nonessential terms. Booras v. Uyeda, 295 Or 181, 191-92, 666 P2d 791 (1983). Necessarily, what is an essential term will depend on the nature of the parties’ agreement. The basic essential terms of an agreement to sell real property are:
“(1) the parties; (2) the subject matter; (3) the mutual promises; and (4) the price and consideration and terms of payment if the sale is not for cash.” Milton R. Friedman, Contracts and Conveyances of Real Property 95 (4th ed 1984).
Beyond those essentials, the particular circumstances of the property or the parties may make a term essential or nonessential. Responsibility for the apportionment of taxes, for taxes if the farm deferral is lost, for septic tank approval and for the obtaining of easements may or may not be material depending on the facts of each case.
Here, the parties signed a two-page handwritten document entitled “Memorandum” in September 1992, which identifies the parties to the memorandum, the description of the property, the price, terms of payment, and mutual promises concerning the care of livestock and the applications of logging proceeds from the property to the principle balance. In Southworth v. Oliver, 284 Or 361, 587 P2d 994 (1978), the court held an enclosure to a letter containing similar terms to be sufficiently definite and certain to be specifically enforceable. The court reasoned that the missing terms, on which the *601defendants based their argument on appeal that the agreement was too indefinite to be enforceable, were not what prompted them to withdraw from the sale. Id at 380.
In this case, plaintiffs first became interested in purchasing the property in August 1990. As a result of that interest, plaintiff Keith Miller obtained information on the tax deferred status of the property, an easement of record that could furnish access to the property, and that a prior septic approval had occurred. Then, the parties met on September 2,1990. At that time, they orally agreed to prorate the real property taxes on the closing date. The memorandum was signed some days later. Defendant agreed to extend the down payment due date until the property was surveyed and the 40 acres were partitioned from the 80 acres that defendant owned. Although the survey had not been completed at that time, defendant contacted plaintiffs in early June and requested the down payment. Plaintiffs refused, and at trial they testified that they refused because the partition was not complete.
From that point forward, the parties resorted to offers and counter-offers that varied the terms of the original memorandum. That evidence does not persuade me that the failure of the memorandum to specify responsibility for taxes and deferred taxes or to refer to septic tank permits or easements were terms considered by the parties to be essential to their agreement at the time that the memorandum was signed. There is no evidence that those terms were in dispute or material to either defendant or plaintiffs at the time the memorandum was signed. Rather, the effect of the missing terms relied on by the majority appears to have been raised by defendant after he saw his attorney and did not want to be bound by the memorandum. Because those other terms were not essential to the agreement at the time it was entered into, they cannot be the basis for denying specific performance.
Nonetheless, there is another reason why the majority’s result is correct. Defendant argues that the memorandum relied on by plaintiffs as an enforceable agreement was intended to be nothing more than an agreement to negotiate a binding agreement at a later date. Therefore, it is not enforceable. See Sunland Investment v. Bill Wolfe Ranches, 46 Or App 145, 150, 610 P2d 1253 (1980) (holding that an earnest *602money agreement was unenforceable because there was no meeting of the minds as to the essential terms of the contract and because the parties specifically provided in the agreement for the preparation and execution of a land sale contract). We review de novo, and there is persuasive evidence to support defendant’s argument.
As the majority points out, the parties signed an earlier memorandum dated “Sept. 2, 1990,” concerning the purchase of the same property for $42,000. It said, “The contract for sale of subject property will be negotiated at a later date between the parties. This is not an integrated contract.” The parties orally agreed that the method of payment would be discussed at a later date as well as other matters and that a deed would be eventually placed into escrow.
Later, they met again, at which time the memorandum on which plaintiffs’ claim is based was prepared. Defendant testified that he wanted to take the second memorandum to his attorney before he signed it, but was told by plaintiff Keith Miller,
“[Y]ou don’t need to, Ray. * * * This is just a memorandum of contract. We’re just getting something together here that we can always change at any later date to fit so either one of us would be happy with it.”1
The memorandum says, “Actual Contract to be typed and signed on delivery of $2,500 to Ray Odgen.”
In June 1991, the parties’ relationship broke down. Initially, neither took the position that the memorandum was a binding agreement. Defendant’s attorney asserted the contrary to plaintiffs and tendered an earnest money agreement with different terms. In response, plaintiffs did not assert the enforceability of the memorandum. Rather, they rejected defendant’s offer and counter-offered on terms that were also different from those in the memorandum. It was only when defendant did not accept plaintiffs’ counter-offer that plaintiffs asserted the enforceability of the memorandum by seeking specific performance of its terms. All of this evidence *603preponderates in favor of defendant’s positiop that the parties never intended the memorandum to be a binding agreement. Consequently, plaintiffs have not carried their burden of persuasion that they entered into a binding agreement to which they are entitled to specific performance.
For this reason, I concur in the majority’s result.

 According to the record, Keith Miller is a law school graduate. Defendant is a logger by occupation and has the equivalent of a high school diploma.