Court Opinion

ID: 9729106
Source: CourtListenerOpinion
Date Created: 2023-08-26 14:26:35.680657+00
Date Added: 2024-06-11T18:25:55.416105
License: Public Domain

Karen R. Baker, Judge, dissenting. The majority places undue emphasis on the lack of ambiguity of paragraph 6(f), which is hardly in dispute; erroneously makes its own factual finding that the contract was not fully performed; and then compounds this error by not giving paragraph 7(d) of the contract due consideration. I believe that this case was properly submitted to the jury and that the jury’s verdict was supported by substantial evidence. I therefore dissent. Lying within the real-estate sales contract prepared by RE/MAX was a provision not ordinarily found in such documents. This provision, paragraph 6(f), can be likened to a time bomb that began “ticking” upon the parties’ execution of the contract and would “blow up” the contract should a certain contingency occur, namely, Huntco’s failure to pay. Although it is unnerving to contemplate being a party to such a contract with this type of clause, I make no comment on its propriety; the Ivys freely entered into this contract and admitted at trial that they were aware of the presence of paragraph 6(f). Moreover, I do not question the meaning of paragraph 6(f). I agree with our statement in Byme I that the paragraph “clearly states that RE/MAX will be released from its obligations under the contract of sale should the employer fail to perform its duties.” Byme, Inc. v. Ivy, 84 Ark. App. 406, 410, 141 S.W.3d at 915. However, the question in this case is not whether 6(f) is ambiguous; the question is, did it stop ticking before Huntco’s default? To continue the metaphor, was it “disarmed” by the parties’ completion of their contract? I believe that the answer to this question cannot be ascertained as a matter of law and was properly submitted to the jury. As the trial judge correctly noted in denying RE/MAX’s motion for a directed verdict, the “contract as a whole” must be considered in deciding this case. The contract contains not only paragraph 6(f) but paragraph 7(d), which provides that the provisions of the contract, “unless fully performed, shall survive the execution and delivery of the deed and shall not be merged therein.” The Ivys contended at trial that, under this clause, paragraph 6(f) did not survive the closing of their real-estate sale. Thus, the fact-finder was presented with three issues to resolve: 1) the nature of the parties’ contract; 2) whether the contract was fully performed by both parties; 3) whether paragraph 7(d) can be interpreted to mean that, upon completion of the parties’ contract, paragraph 6(f) no longer applied. When the proof is viewed in a light most favorable to the Ivys, as our standard of review requires, there is substantial evidence to support a finding in their favor on each of these matters. See, e.g., Dorton v. Francisco, 309 Ark. 472, 833 S.W.2d 362 (1992). First, the Ivys contend that the nature of their transaction with RE/MAX was a real-estate sale. Given the facts of this case, I hardly see how RE/MAX can claim otherwise. While the Ivys were in the process of relocating, they were solicited by RE/MAX and told that they would receive an offer on their home. Thereafter, they received a large packet of documents, all prepared by RE/MAX, in which RE/MAX unequivocally offered to purchase their home for $612,500. They went through all of the normal processes that accompany the selling of a home, such as executing a deed, warranting a lack of encumbrances, transferring possession to the purchaser, and receiving their equity. Further, they executed a power of attorney, which provided that delivery of the deed to RE/MAX operated as a valid conveyance of the property. Under these circumstances, it was perfectly reasonable for the Ivys to conclude that their contract with RE/MAX was a real-estate sale. Moreover, a jury’s determination that RE/MAX bought the house from the Ivys would be supported by substantial, even ample, evidence. The next question is, when was the sale of the house completed? There is conflicting evidence on this point, but, again, our standard of review requires us to view the evidence in the light most favorable to the Ivys. When doing so, there is proof that, at the latest, the contract was complete when the Ivys received their final equity payment in November 2001. By that point, they had signed the offer and acceptance, transferred possession of the home to RE/MAX, conveyed the property to RE/MAX by virtue of the power-of-attorney, and received all monies that they were due from the sale. RE/MAX, by that point, had acquired possession of the home, had paid the Ivys their equity, and had begun making payments to the mortgagee, Regions Bank. Further, Paula Bogle testified that both parties had fully performed the contract on or about October 9, 2001, when possession was transferred. Any fact-finder with this proof before it would be perfectly justified in concluding that the parties’ contract was fully executed by late 2001.1  Finally, we turn to what I perceive as the key issue in this case — did paragraph 6(f) survive the full performance of the parties’ contract? An interpretation of paragraph 7 (d) is crucial to this issue. It states that “the provisions of this Contract, unless fully performed, shall survive the execution and delivery of the deed and shall not be merged therein.” The meaning of this clause is ambiguous. And, when the terms of a written contract are ambiguous, the meaning of the contract becomes a question of fact. Carver v. Allstate Ins. Co., 77 Ark. App. 296, 76 S.W.3d 901 (2002). Thus, it was the jury’s job in this case to interpret paragraph 7(d). Certainly, a jury could reasonably construe the clause to say that, once the contract is “fully performed,” its provisions do not survive. In other words, when the home sale was completed, the fully performed contract merged with the deed, and the contract, including paragraph 6(f), was no more. The logic of this interpretation is apparent when one considers what would have happened if Huntco, instead of defaulting just two months after the sale was complete, had defaulted two years later. Surely the parties’ contract would not still be in the executory phase at that point, and surely paragraph 6(f) would not still be ticking, ready to “blow up” a home sale that had occurred two years previously. This is a case replete with factual questions, and it was the jury’s province to look at the contract as a whole and reach a resolution. I simply cannot agree with the majority that the jury’s verdict was not supported by substantial evidence. I therefore dissent. Gladwin, Griffen and Glover, JJ., join.   I disagree with the majority’s placing any significance on the Ivys’ pursuing a claim for specific performance. They were simply seeking an order requiring RE/MAX to do what they thought RE/MAX had already done under the completed contract • — • make the mortgage payments to Regions Bank. I also note that the Ivys also asserted in their complaint that the sale of their home to RE/MAX was “complete.”