Court Opinion

ID: 9588171
Source: CourtListenerOpinion
Date Created: 2023-08-21 23:31:09.155104+00
Date Added: 2024-06-11T14:56:26.241871
License: Public Domain

*361DISSENTING OPINION OF
LEVINSON, J.
I dissent.
The present controversy arises out of a written agreement between Nick F. Czar, assignor of plaintiff-appellant, Golf Carts, Inc., and Mid-Pacific Country Club, defendantappellee, relating to the furnishing of golf carts by Czar to Mid-Pacific’s members. The agreement, which provided for an equal division of the cart rental proceeds between the parties after the first three years, was modified orally so as to give the appellant 70% of the proceeds. The circuit court concluded that the modifications remained in effect “only during the period that the parties actually complied with them, and that either party had the right to terminate the modifications and revert to the original terms of the written agreement.” The circuit court also concluded that, upon Mid-Pacific’s reverting to the terms of the original agreement, the appellant’s non-compliance with the requirement for an equal division of the cart rental proceeds “resulted in a breach of contract on its part which justified the Defendant [Mid-Pacific] in terminating the contract.” As I understand the majority opinion, the fact of the breach is not questioned. Rather, the issue is framed in terms of whether the appellant’s breach was sufficiently material to justify rescission or termination of the contract by Mid-Pacific. I cannot accept the majority’s conclusion that the appellant’s unilateral retention of a disputed 20% of the rental proceeds amounted to a mere immaterial breach of that portion of the contract which the majority elects to describe as a “business-like realization.”
The contract, in pertinent part, provided as follows:
1. Czar agrees to furnish Mid-Pacific at least twenty-five (25) golf carts suitable for use at Mid-Pacific without cost to Mid-Pacific; it is understood and agreed by the parties that delivery of said carts is subject to availability of factory delivery, shipping conditions and adequate storage facilities.
*3626. Czar agrees to rent said golf carts to Mid-Pacific’s members and the public for not less than SIX DOLLARS ($6.00), plus gross income tax per cart for eighteen (18) holes and THREE DOLLARS ($3.00), plus tax per cart for nine (9) holes.
8. The gross rental shall be divided between Czar and Mid-Pacific as follows:
(a) During the first three (3) years of this contract Czar shall receive 60 per cent (60%) of the gross rental after payment of gross income taxes and Mid-Pacific shall receive 40 per cent (40%).
(b) During the fourth and fifth years Czar shall receive 50 per cent (50%) of the gross rental after payment of gross income taxes and Mid-Pacific shall receive 50 per cent (50%).
PROVIDED, HOWEVER, that during the entire term of this agreement Czar guarantees Mid-Pacific a minimum of SIX HUNDRED DOLLARS ($600.00) per month. If Mid-Pacific’s share of the rental is less than SIX HUNDRED DOLLARS ($600.00) per month, Czar within ten (10) days thereafter shall pay over the difference between said rental received by Mid-Pacific and SIX HUNDRED DOLLARS ($600.00).
9. Czar shall pay Mid-Pacific its share of the gross rental on the fifth day of each and every successive month.
The contract, on its face, reflects two objectives: 1) providing golf cart service to Mid-Pacific’s members; and 2) providing an income payable monthly to Mid-Pacific. The majority picks out of thin air its determination that the service was the primary objective and that the revenue was merely a subordinate “business-like realization.”
It is true that before a party to a contract is justified in rescinding because of a breach by the other party, the breach must be so material or substantial as to tend to defeat the object of the parties in entering into the contract. It *363is apparent to me from the quoted paragraphs of the contract that the provisions for golf cart service and the generation of revenue were both vital to the existence of the contract as far as Mid-Pacific was concerned. The majority refers to Walker v. Shasta Minerals & Chemical Co., 352 F.2d 634, 638 (10th Cir. 1965), for the proposition that a good faith offer to perform made in accordance with a party’s interpretation of the contract “is not such a clear refusal to perform as to constitute an anticipatory breach.” This is not relevant, since we are not dealing here with an anticipatory breach. The appellant had a present duty to pay Mid-Pacific monthly 50% of the rental proceeds, and its breach of this present obligation justified Mid-Pacific in treating the contract as at an end. See New York Life Ins. Co. v. Viglas, 297 U.S. 672, 679-82 (1936).
I would affirm the judgment of the circuit court.