Court Opinion

ID: 2680205
Source: CourtListenerOpinion
Date Created: 2014-06-24 14:03:54.155001+00
Date Added: 2024-06-11T11:15:58.014300
License: Public Domain

In the Missouri Court of Appeals
                    Eastern District
                                          DIVISION III

DONALD ROSENFELD, and                         )
LYNNE ROSENFELD                               )              No. ED100165
                                              )
               Respondent,                    )              Appeal from the Circuit Court
                                              )              of St. Louis County
vs.                                           )
                                              )              Honorable Steven H. Goldman
DEBORAH J. BONISKE,                           )
                                              )
               Appellant.                     )              FILED:     June 24, 2014

                                           Introduction

       Appellant Deborah Boniske (“Boniske”) appeals from the trial court’s judgment in favor

of Respondents Donald and Lynne Rosenfeld (“the Rosenfelds”) on their Petition for Declaratory

Judgment and Refund of Earnest Money Deposit and against Boniske on her counterclaim for

breach of contract. Boniske alleges the trial court erred when it considered terms of an oral

agreement between herself and the Rosenfelds that either added to or varied the terms of the fully

integrated written agreement entered into by the parties. Boniske further claims the trial court

erred in entering an alternative finding that the contract might be voidable under the doctrine of

mutual mistake. Because mutual mistake was not presented to the trial court as a theory of

recovery, mutual mistake may not form the basis of any judgment allowing rescission of the

contract by the Rosenfelds. Because the trial court misapplied the law by considering evidence

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of an oral agreement in violation of the parol evidence rule, we reverse the judgment of the trial

court, enter judgment in favor of Boniske on both Rosenfelds’ claims and on Boniske’s

counterclaim, and remand this matter to the trial court for a determination of Boniske’s damages.

                                      Factual and Procedural History

        Viewed in the light most favorable to the judgment, the following evidence was adduced

at trial: In 2011, Boniske listed her home at #30 Westwood Country Club Grounds for sale. The

Rosenfelds, who lived in the same neighborhood, saw the for sale sign in Boniske’s yard and

expressed interest in purchasing her home. Because Lynne Rosenfeld suffered from lymphoma,

the Rosenfelds wished for their interest in Boniske’s home to remain confidential. Donald

Rosenfeld feared that if their interest in selling their home and buying Boniske’s home became

public, people might speculate about Lynne Rosenfeld’s health. Before submitting an offer,

Donald Rosenfeld asked Boniske for her word that no one would know the Rosenfelds were

attempting to buy her house and sell theirs. Boniske assured Donald Rosenfeld that he had

nothing to worry about.

        Donald Rosenfeld drafted the sale contract that he submitted to Boniske.1 The proposed

sale contract, signed by the Rosenfelds on October 22, 2011, provided a total sale price of

$675,000 for the home at #30 Westwood Country Club Grounds. The sale contract further

provided that the Rosenfelds would pay $10,000 as an earnest money deposit and that the closing

date would be February 17, 2012. A section of the sale contract titled “General Closing

Conditions and Sales Practices” included a provision stating: “This is the entire contract and

neither party shall be bound by representation as to value or otherwise unless set forth in [the]

contract.”

1
Donald Rosenfeld has worked off and on as licensed real estate broker for more than 40 years, while Lynne
Rosenfeld is a licensed real estate agent.
                                                       2
         The proposed sale contract also included a page titled “Special Agreements for the

Purchase of #30 Westwood Country Club Grounds,” which included four special agreements.

Special Agreement No. 1 stated that the $10,000 earnest money deposit shall be conveyed to the

title company within 24 hours of the Rosenfelds’ receipt of the fully executed contract. Special

Agreements No. 2 through No. 4 provided for a feasibility contingency. Under those special

agreements, the Rosenfelds had until January 25, 2012, to conduct a feasibility study of the

property. If they were dissatisfied with the feasibility study and notified Boniske by January 25,

2012, the contract would be null and void and they would be entitled to a return of their $10,000

earnest money deposit.

         Boniske did not accept the Rosenfelds’ offer and instead submitted Counteroffer No. 1.

Counteroffer No. 1 stated that it was a counteroffer “To Sales Contract dated Oct. 22, 2011, by

Donald Rosenfeld and Lynne Rosenfeld, His wife for property at 30 Westwood Country Club.”

Counteroffer No. 1 changed the sale price to $760,000 and replaced the feasibility contingency in

Special Agreements No. 2 through No. 4 with a provision that the contract was contingent upon

the Rosenfelds entering into a contract for the sale of their current residence on or before January

25, 2012. If no contract was entered into by that date, the Rosenfelds had the option to notify

Boniske that the contract was null and void. If the Rosenfelds notified Boniske that the contract

was null and void, Boniske was to notify the title company to return the Rosenfelds’ earnest

money.

         The Rosenfelds did not accept Counteroffer No. 1 but rather submitted Counteroffer No.

2. The only change between Counteroffer No. 2 and Counteroffer No. 1 was the sale price,

which was decreased to $730,000. Boniske did not accept Counteroffer No. 2, but submitted

Counteroffer No. 3, which increased the sale price to $740,000. The Rosenfelds accepted

Counteroffer No. 3 on November 10, 2011. Upon their acceptance of Counteroffer No. 3, the
                                                 3
Rosenfelds gave Boniske the $10,000 earnest deposit to convey to the title company pursuant to

Special Agreement No. 1.

        Prior to signing the sales contract, Donald Rosenfeld told Boniske that he and his wife

could not and would not sign the contract unless they had her assurance that no one would know

they were attempting to buy her house and sell their house. Boniske said she would comply and

that the Rosenfelds had nothing to worry about. Donald Rosenfeld also told Boniske that he was

aware of one person who wanted to buy his home. The parties’ agreement to keep the

transaction quiet was not reduced to writing.

       After signing the sales contract, Donald Rosenfeld personally contacted Richard Fisher

(“Fisher”) about purchasing the Rosenfelds’ home. The Rosenfelds did not speak to Fisher prior

to signing the sales contract with Bonikse, but had heard from a third party that Fisher was very

interested in their home. However, Fisher was not interested in purchasing the Rosenfelds’

residence at that time. Donald Rosenfeld next contacted Kevin Manning (“Manning”) about

purchasing his home. Manning previously had expressed interest in the Rosenfelds’ home, but

had no current interest in buying the property. Donald Rosenfeld then approached Jeffrey

Steinback (“Steinback”), who had previously built two houses in the same neighborhood.

Steinback told Donald Rosenfeld that he was no longer in the real estate business but gave

Donald Rosenfeld’s phone number to one of his contacts. No contract resulted from Donald

Rosenfeld’s discussions with Steinback. The Rosenfelds also considered subdividing their

property into two lots in order to enhance marketability; however, an ordinance prohibited them

from doing so. Finally, the Rosenfelds contacted Trish Kolbrener (“Kolbrener”), a real estate

agent, to see if she knew of anyone who might be interested in their home. Kolbrener told Lynne

Rosenfeld that the market was weak at that time and she did not know how much interest she

could generate in the home. The Rosenfelds did not list their home with Kolbrener, and
                                                4
Kolbrener did not find a buyer for the Rosenfelds’ home. The Rosenfelds also never listed their

home on the MLS or put a for sale sign in their yard.

       In January 2012, the Rosenfelds informed Boniske that they had not entered into a

contract for the sale of their residence and, therefore, pursuant to the contingency provision, the

contract was null and void. In response, Boniske argued that the Rosenfelds failed to make a

reasonable effort to market their property and, thus, were in breach of contract by refusing to go

forward with the sale. As a result, Boniske noted she was entitled to keep the earnest money

deposit.

       On January 26, 2012, the Rosenfelds filed a Petition for Declaratory Judgment and

Refund of Earnest Money Deposit. The Rosenfelds alleged that the contract was silent as to any

effort or activity to be undertaken by them in marketing their home, and that Boniske understood

the Rosenfelds intended to contact only people who had previously expressed an interest in

purchasing their home. Despite the Rosenfelds’ efforts, the contingency was unable to be

satisfied. The petition alleged that, at that point, the contract became null and void, and the

Rosenfelds were entitled to an immediate refund of their earnest money deposit.

       Boniske filed a counterclaim for breach of contract claiming, inter alia, that the

contingency in the contract created an implied obligation on the part of the Rosenfelds to use

reasonable efforts to attempt to obtain a contract for the sale of their home. Boniske alleged that

the Rosenfelds’ failure to use reasonable efforts to sell their home constituted a waiver of the

contingency. Boniske sought damages for breach of contract as well as costs.

       Prior to trial, Boniske filed a motion for partial summary judgment, which was granted by

the trial court. The trial court held that the contingency in the contract imposed upon the

Rosenfelds an obligation to use reasonable efforts to obtain a contract on their residence if they

wished to declare the contract null and void.
                                                  5
       A bench trial was held on the matter on May 6 and May 7, 2013. In its Findings of Fact,

Conclusions of Law, and Judgment, the trial court stated the following: (1) the parties entered

into a binding contract for the purchase and sale of #30 Westwood Country Club Grounds, which

was contingent upon the Rosenfelds entering into a contract for the sale of their current

residence; (2) the Rosenfelds were credible with respect to their testimony that the transaction

was to be considered confidential; (3) the testimony of Boniske was not credible when she

denied there was an agreement to keep the transaction confidential; (4) Boniske “may not have

understood that the agreement was part of the contract, but she accepted the term. Therefore,

there may be a mutual mistake which renders the contract voidable”; (5) the Rosenfelds were

required to make reasonable efforts to market their home, which implies a duty of good faith and

fair dealing; (6) the Rosenfelds met this requirement only because of the extrinsic agreement that

the transaction remain confidential (emphasis added). In considering the extrinsic oral

agreement that the transaction was to remain confidential, the trial court noted that parol

evidence could be considered where a written agreement omits a consistent additional term. The

trial court then concluded that the parties’ agreement to keep the transaction confidential was not

inconsistent with the contract, and would be considered by the court as part of the sales contract

because there was no language in the contract regarding the efforts required by the Rosenfelds to

satisfy the contingency.

       Because the contract was properly terminated in accordance with the contingency, the

trial court found that the Rosenfelds were entitled to a refund of their earnest money deposit and

Boniske was not entitled to damages. Judgment was entered in favor of the Rosenfelds on their

petition for declaratory judgment and against Boniske on her counterclaim for breach of contract.

       This appeal follows.

                                                 6
                                          Points on Appeal

       In her first point on appeal, Boniske argues that the trial court erred in entering judgment

for the Rosenfelds on their claim for declaratory judgment and on Boniske’s counterclaim for

breach of contract. Specifically, Boniske reasons that the trial court erred in considering parol

evidence relating to a separate oral agreement to maintain the confidential nature of the

transaction because the parties had a fully integrated written agreement. In her second point on

appeal, Boniske avers that the trial court erred in entering its alternative finding that the contract

might be voidable under the doctrine of mutual mistake. Boniske contends that mutual mistake

was never presented as a cause of action to the trial court and, even had it been, the theory of

mutual mistake does not apply to the facts of this case.

                                         Standard of Review

       Our standard of review in a court-tried case is governed by Murphy v. Carron, 536
S.W.2d 30 (Mo. banc 1976). We will affirm the judgment of the trial court unless there is no

substantial evidence to support it, it is against the weight of the evidence, or it erroneously

declares or applies the law. Id. We accept as true the evidence and reasonable inferences

therefrom that may be drawn in the light most favorable to the judgment, disregarding contrary

evidence and inferences. Cooper v. Murphy, 276 S.W.3d 380, 383 (Mo. App. E.D. 2009).

                                             Discussion

I.     The trial court erred in considering evidence of the parties’ alleged oral agreement.

       Boniske’s first point on appeal focuses on the trial court’s decision to consider testimony

regarding an alleged oral agreement by the parties to keep the transaction confidential. Boniske

argues that the written sales contract between the parties was a fully integrated contract and,

therefore, the trial court erred when it considered evidence of an oral agreement to add to or vary

the terms of the written agreement. We agree.
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       “In the absence of fraud, accident, mistake, or duress, the parol evidence rule prohibits

evidence of prior or contemporaneous oral agreements that vary or contradict the terms of an

unambiguous, final, and complete writing.” Poelker v. Jamison, 4 S.W.3d 611, 613 (Mo. App.

E.D. 1999). The parol evidence rule is based on the premise that a written document is more

reliable and accurate than fallible human memory. Id. The parol evidence rule is “not a rule of

evidence focusing on the probative reliability and trustworthiness of proffered oral evidence,”

but rather “a substantive rule that limits the evidence from which inferences may be drawn . . . .”

Id. If extrinsic evidence is received in spite of a final and complete contract, with or without

objection, it violates the parol evidence rule and may not be considered. Id.

       It is not disputed that the parties entered into a written agreement for the sale and

purchase of #30 Westwood Country Club Grounds. The Rosenfelds allege an additional oral

promise existed to maintain the confidentiality of the transaction. Whether the trial court

properly included the additional oral promise as part of the sales agreement between the parties

depends upon whether the parol evidence rule applies.

       Before applying the parol evidence rule, a court first must determine whether a contract is

integrated. State ex rel. Missouri Highway & Transp. Comm'n v. Maryville Land P'ship, 62
S.W.3d 485, 489 (Mo. App. E.D. 2001). “A written agreement is integrated if it represents a

final expression of one or more terms of the agreement.” Id. To determine whether a writing is

integrated, we look to the face of the document itself without considering the surrounding facts

and circumstances. Id. at 489. If the document appears to be a complete agreement on its face, it

is conclusively presumed to be the final and complete agreement between the parties. Jake C.

Byers, Inc. v. J.B.C. Investments, 834 S.W.2d 806, 812 (Mo. App. E.D. 1992). When a written

contract is a completely integrated agreement, the parol evidence rule precludes even consistent

additional terms within its scope from consideration. Maryville Land P'ship, 62 S.W.3d at 489
                                                 8
(citing Centerre Bank of Kansas City v. Distributors, 705 S.W.2d 42, 51 (Mo. App. W.D. 1985);

Restatement (Second) Contracts, § 209); see also Mid Rivers Mall, L.L.C. v. McManmon, 37
S.W.3d 253, 255 (Mo. App. E.D. 2000) (“Where the parties have expressed their final agreement

in writing and there is no ambiguity in the contract, the parol evidence rule requires that the court

determine the intent of the parties solely from the ‘four corners’ of the contract itself.”).

        The parol evidence rule is particularly applicable where the writing contains a merger or

integration clause. Union Elec. Co. v. Fundways, Ltd., 886 S.W.2d 169, 170-71 (Mo. App. E.D.

1994). “Merger clauses are express statements of the merger doctrine and are intended to

prevent extrinsic evidence of other agreements from influencing the interpretation of a final

written contract, preserving the sanctity of written contracts.” Johnson ex rel. Johnson v. JF

Enterprises, LLC, 400 S.W.3d 763, 768-69 (Mo. banc 2013). Where the contract contains an

integration or merger clause, the “law conclusively presumes all prior and contemporaneous

agreements have been merged into a written contract.” Jennings v. SSM Health Care St. Louis,

355 S.W.3d 526, 532 (Mo. App. E.D. 2011) (citation omitted). The presence of a merger clause

in a contract “announces and demonstrates the all-inclusive nature of the written instrument and

furnishes additional reason for applying the parol evidence rule.” Union Elec. Co., 886 S.W.2d

at 171 (citation omitted).

        Upon reviewing the written sales agreement at issue, we find a plain and clear intention

of the parties to create a complete and final expression of their agreement. This intent is

evidenced by the writing displayed on the face of the document. The contract unambiguously

identifies the parties; gives a description of the property; states the sale price; states the special

agreement that the Rosenfelds would pay a $10,000 earnest money deposit; and states that the

contract was contingent upon the Rosenfelds entering a contract for the sale of their current

residence. Moreover, critical to our finding that the sales contract is a fully integrated agreement
                                                   9
is the presence of an express merger clause stating that the writing “is the entire contract and

neither party shall be bound by representation as to value or otherwise unless set forth in [the]

contract.” Because the contract contains a merger clause, we must presume that all prior and

contemporaneous agreements between the Rosenfelds and Boniske were merged into the written

contract and that the written contract is the final memorial of the parties’ agreement. See

Jennings, 355 S.W.3d at 532. The written contract is void of any terms relating to maintaining

the confidentiality of the transaction.

       Because the written contract was completely integrated, the trial court erred when it

considered evidence of the alleged prior oral agreement between the parties to maintain the

confidentiality of the transaction, even if the trial court deemed the oral agreement to be an

additional consistent term. Maryville Land P’ship, 62 S.W.3d at 489. The trial court is correct

that, in some circumstances, a written agreement may be considered partially integrated if the

agreement omits a consistent additional term that might naturally have been omitted. Holbert v

Whitaker, 87 S.W.3d 360 (Mo. App. E.D. 2002). In such cases, the trial court may consider

parol evidence because the agreement is not fully integrated. However, the trial court’s reliance

on Holbert is misguided because, unlike here, the Purchase Agreements in that case were

incomplete on their face. Id. at 363. Here, the contract, on its face, is a complete, fully

integrated document. Therefore, Holbert is inapposite and provided no guidance to the

resolution of this case. The trial court’s error is undeniable as the trial court expressly states in

its judgment that the Rosenfelds met their requirement of good faith and fair dealing only

because of the extrinsic agreement that the transaction remain confidential. The trial court

misapplied the law when, despite the existence of a completely integrated written contract, it

relied upon parol evidence of the alleged prior oral agreement to enter judgment in favor of the

Rosenfelds. See Murphy, 536 S.W.2d at 32.
                                                  10
        Point One is granted.

II.     The trial court erred in entering the alternative finding that the contract might be
        voidable under the doctrine of mutual mistake.

        In her second point on appeal, Boniske claims that the trial court erred in making an

alternative finding that the contract might be voidable under the doctrine of mutual mistake

because mutual mistake was never presented as a cause of action to the trial court and the

doctrine of mutual mistake does not apply to the facts of this case.

        In its Findings of Fact, Conclusions of Law, and Judgment, the trial court found that the

parties agreed to keep the transaction confidential. The trial court then stated that Boniske “may

not have understood that the agreement was part of the contract, but she accepted the term.

Therefore, there may be a mutual mistake which renders the contract voidable.”

        “A trial court may not enter judgment on a cause of action that a plaintiff did not plead.”

Lonero v. Dillick, 208 S.W.3d 323, 329 (Mo. App. E.D. 2006). “The purpose of pleadings is to

‘present, define, and isolate the issues, so that the trial court and all parties have notice of the

issues.’” The Medve Grp. v. Sombright, 163 S.W.3d 453, 456 (Mo. App. E.D. 2005) (quoting

Norman v. Wright, 100 S.W.3d 783, 786 (Mo. banc 2003)). It is well settled that a party “‘may

not plead one state of facts and theory and to the unprepared surprise of his adversary recover on

another and different theory and state of facts.’” Id. (quoting Faught v. St. Louis-San Francisco

Ry. Co., 325 S.W.2d 776, 781 (Mo.1959)); see also Browning-Ferris Indus. of St. Louis, Inc. v.

Landmark Sys., Inc., 822 S.W.2d 569, 571 (Mo. App. E.D. 1992) (“It is hornbook law that a

party cannot recover for a cause of action not pleaded.”).

        Here, the Rosenfelds did not plead that the contract was voidable because of mutual

mistake. The Rosenfelds sought a judgment declaring the contract null and void because they

were unable to satisfy the contingency set forth in the contract. The Rosenfelds also did not raise

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