ATC Co. v. Myatt

389 S.W.3d 732, 2013 WL 71819, 2013 Mo. App. LEXIS 12
CourtMissouri Court of Appeals
DecidedJanuary 8, 2013
DocketNo. ED 97871
StatusPublished
Cited by10 cases

This text of 389 S.W.3d 732 (ATC Co. v. Myatt) is published on Counsel Stack Legal Research, covering Missouri Court of Appeals primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
ATC Co. v. Myatt, 389 S.W.3d 732, 2013 WL 71819, 2013 Mo. App. LEXIS 12 (Mo. Ct. App. 2013).

Opinion

ROBERT G. DOWD, JR., Presiding Judge.

Pinewoods Investments, LLC (“Purchaser”) appeals from the judgment of the trial court awarding earnest money, deposited pursuant to a real estate contract, to Steven and Jeanne Myatt (“Seller”).1 This appeal rests on our interpretation of an extension agreement signed by the parties and its effect on the original contract. We reverse and remand.

Purchaser and Seller entered into a Sale Contract on July 18, 2003, under which Seller agreed to sell four tracts of land to Purchaser. The Sale Contract provided that the sale would involve two closings. Tracts one and two would be part of the first closing, scheduled to occur on March 15, 2004. Tracts three and four would be part of a second closing five years later as Sellers lived on those tracts of land.

The Sale Contract required Purchaser to deposit $40,000 in earnest money, to be retained by the title company until the second closing. The Sale Contract also contained a number of contingencies that would allow Purchaser to avoid closing on the property and to recover the earnest money in full.

One such contingency was a feasibility study regarding Purchaser’s contemplated development. Acceptance of the feasibility study was to be within Purchaser’s sole discretion. If Purchaser rejected the feasibility study, it could cancel the Sale Contract without breach and would be entitled to a full return of the earnest money, plus accrued interest.

[735]*735Purchaser had difficulty securing required zoning approval for the first closing and requested an extension, moving the date of the first closing from March 15, 2004 to April 15, 2004. The parties therefore entered into a Real Estate Sale Contract Extension Agreement (“Extension Agreement”). In consideration for the change in date, Purchaser paid Seller an additional $15,000 as a “non refundable earnest deposit” and the parties agreed, in pertinent part, as follows:

1. Purchaser agrees that the Contract is no longer contingent, and is binding on Purchaser and Seller, and in the event the property does not close for any reason, Sellers will be entitled to the full FORTY THOUSAND AND NO/ 100THS DOLLARS ($40,000) earnest money without any claim thereto by Purchaser.

The terms “Contract” and “property” were not defined in the Extension Agreement. The closing for tracts one and two occurred thereafter without dispute.

In 2008, Purchaser completed a feasibility study for tracts three and four. After reviewing the study, Purchaser declined acceptance for the second closing and decided to void its obligations under the Sale Contract based on the feasibility contingency. Purchaser then requested that ATC return the earnest money based on the original terms of the Sale Contract. In response, Seller requested that ATC return the earnest money based on the terms of the Sale Contract as modified by the Extension Agreement. Based on these competing claims, ATC filed its in-terpleader action.

At trial, Purchaser argued the Extension Agreement eliminated contingencies for the first closing, but not for the second closing. Seller argued the Extension Agreement eliminated all contingencies from the Sale Contract and thus applied to both closings. The trial court agreed with Seller and entered judgment in their favor. This appeal follows.

In its sole point on appeal, Purchaser argues that the trial court erred in ruling that the Extension Agreement modified the Sale Contract to waive all contingencies for the second closing. We agree.

In a court-tried case, we will sustain the trial court’s judgment unless it is not supported by substantial evidence, is against the weight of the evidence, or erroneously declares or applies the law. Murphy v. Carron, 536 S.W.2d 30, 32 (Mo. banc 1976).

The cardinal rule in contract interpretation is to ascertain the intention of the parties and to give effect to that intention. Renco Group, Inc. v. Certain Underwriters at Lloyd’s, 362 S.W.3d 472, 477 (Mo.App. E.D.2012). If the contract is not ambiguous, the intent of the parties is determined based on the contract alone. Id.

Whether a contract is ambiguous is a question of law that we review de novo. Klonoski v. Cardiovascular Consultants of Cape Girardeau, Inc., 171 S.W.3d 70, 73 (Mo.App. E.D.2005). The test to determine whether there is an ambiguity is whether, in the context of the entire agreement, the disputed language “is reasonably susceptible of more than one construction giving the words their plain and ordinary meaning as understood by a reasonable, average person.” Id. An ambiguity must come from within the four corners of the contract; extrinsic evidence cannot be used to create an ambiguity. Teets v. American Family Mutual Ins. Co., 272 S.W.3d 455, 462 (Mo.App. E.D.2008).

Once an ambiguity has been found, the parties’ intent can be determined through the use of extrinsic evi[736]*736dence. Id. Resolution of an ambiguity through extrinsic evidence is a question of fact to be determined by the finder of fact. Id. Only where there is no evidence showing the parties’ intent will we construe an ambiguity against the party who drafted it. Graham v. Goodman, 850 S.W.2d 351, 355-56 (Mo. banc 1993).

Before reviewing the contract language in dispute, we examine the rest of the Extension Agreement to determine the purpose of this document. To understand the parties’ reason for executing the Extension Agreement, we need not look further than the WHEREAS clauses in the first half of the Agreement. These clauses state as follows:

WHEREAS, the Parties entered into a SALE CONTRACT dated July 18, 2003; and
WHEREAS, the last date for closing on the aforesaid Contract was March 15,2004; and
WHEREAS, Purchaser wishes to extend the Contract until April 15,2004.
NOW THEREFORE, in consideration of the agreements herein made and Sellers agreeing to extend the time of closing, the Parties do hereby agree as follows:

(emphasis added).

The parties use the word “Contract” with a capital “C” in the second and third WHEREAS clauses and include the word in the phrase “aforesaid Contract” in the second clause. “[A]foresaid” requires us to look earlier in the document and must refer to the “SALE CONTRACT” mentioned in the first WHEREAS clause. Therefore, it is reasonable that “Contract” refers to the Sale Contract as a whole.

However, the context of these clauses suggests a different meaning for the word “Contract.” The emphasized language in the third WHEREAS clause and the NOW THEREFORE clause is nearly identical. It is reasonable to read these clauses together to mean that Sellers agree to extend the time of the first closing (originally set for March 15, 2004) until April 15, 2004. Under that reading, “Contract” refers to the first closing alone.

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Bluebook (online)
389 S.W.3d 732, 2013 WL 71819, 2013 Mo. App. LEXIS 12, Counsel Stack Legal Research, https://law.counselstack.com/opinion/atc-co-v-myatt-moctapp-2013.