Court Opinion

ID: 9791153
Source: CourtListenerOpinion
Date Created: 2023-08-31 02:06:45.188563+00
Date Added: 2024-06-11T07:37:34.046388
License: Public Domain

MAUGHAN, Justice
(concurring and dissenting):
The judgment of the trial court should be affirmed in this action. I disagree with the *1253majority opinion that paragraph 11B must be deemed ambiguous; and, therefore, evidence must be taken to determine the intent of the parties at the time they entered into the contract.
Paragraph 11B provides:
“At any time, and for whatever length of time, the contract may be delinquent or in default by Buyer, for any reason the interest rate on all amounts unpaid under this contract shall increase to eighteen percent (18%) per annum. The Seller further covenants and agrees that he will not default in the payment of his obligations against said property.” [Emphasis supplied]
The trial court interpreted this paragraph as meaning that interest should increase to 18% on all amounts unpaid and which are currently due under the provisions of the contract and not the entire unpaid contract balance which is referred to in paragraph 8. The trial court ruled that plaintiff was entitled to assess the penalty provision of 18% interest per annum on all amounts due and unpaid on the contract during the period there was a default thereunder.
Both parties contend the phrase “on all amounts unpaid under this contract” is unambiguous, the disagreement focuses on a question of law: should the phrase be interpreted to mean delinquent installments or the outstanding contract balance?
It is a question of law for the trial court as to whether an ambiguity exists in a written instrument so as to authorize the admission of extrinsic evidence to explain it. Generally, an ambiguity arises when the meaning or application of words in a written agreement is doubtful and uncertain.1 The meaning and effect to be given a contract depends upon the intent of the parties, which is to be ascertained by reviewing the entire contract and all of its parts in their relationship to each other.2
When the disputed phrase is construed in conjunction with other provisions in the contract, the meaning is clear that it has reference to the monthly installment payments. Paragraph 3 provides for monthly installments until the balance is paid in full; it further specifies:
“... Said payments are to commence on December 1, 1977, and each subsequent month to be due and payable on the first day of each month.”
In paragraph 4, the Buyer is given the option to pay “amounts in excess of the monthly payments upon the unpaid balance, “but the Buyer must make an election as to the application “at the time the excess payment is made.”
Repeatedly throughout the contract there is a clear distinction made between the terms “unpaid contract balance” and “regular monthly installments.” Under the agreement, only the monthly installment is due and payable; and, therefore, it is the only amount that can be delinquent and in default by being unpaid and thus subject to the 18% interest.3
Finally, under paragraph 16C, the Seller has the option if the Buyer fails to make any payment “to declare the entire unpaid balance hereunder at once due and payable” and treat the contract as a note and mortgage and foreclose the same. Since the seller did not elect to exercise this option, the only amounts due and payable under the specific terms of the agreement were the monthly installment payments. The trial court did not err in its interpretation of the disputed phrase.

. Winegar v. Smith Investment Company, Utah, 590 P.2d 348, 350 (1979).

. Thomas J. Peck & Sons, Inc. v. Lee Rock Products, Inc., 30 Utah 2d 187, 191, 515 P.2d 446 (1973); Big Butte Ranch, Inc. v. Holm, Utah, 570 P.2d 690, 691 (1977).

. Paragraph 14 provides for interest if the Buyer defaults in payment of taxes, insurance, etc., and the Seller elects to pay them.