Diamond v. Kenner

683 P.2d 323, 140 Ariz. 524, 1984 Ariz. App. LEXIS 394
CourtCourt of Appeals of Arizona
DecidedMay 24, 1984
DocketNo. 2 CA-CIV 5033
StatusPublished

This text of 683 P.2d 323 (Diamond v. Kenner) is published on Counsel Stack Legal Research, covering Court of Appeals of Arizona primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Diamond v. Kenner, 683 P.2d 323, 140 Ariz. 524, 1984 Ariz. App. LEXIS 394 (Ark. Ct. App. 1984).

Opinion

OPINION

HOWARD, Judge.

This appeal requires us to write yet another chapter in the continuing saga of a parcel of real property located in Pima County known as the Rocking K Ranch. In our last episode, Rosen v. Rae, 132 Ariz. 509, 647 P.2d 640 (App.1982), we dismissed the appeal of the vendors of the ranch from [525]*525the judgment of the trial court ordering specific performance of a contract for the sale of the property and appointing a receiver to take control of the property. The present appeal arises from the summary judgment granted by the trial court, in an action commenced by the receiver and the vendees under the contract for sale, quieting title to the ranch in them as against appellant Lakesites, Inc. and numerous other defendants not parties to this appeal. For ease of reference, the vendors under the contract for sale will be referred to as “the Rae group” and the vendees will be referred to as “the Estes group.”

The chronology of events leading up to the present action is as follows. On August 24, 1978, Joseph Rae as “Spokesman” 1 for Minnesota Title Company Trust Nos. 10,104, 10,106 and 10,123, and David T. Pritchard entered into an agreement pursuant to which Pritchard was granted an option to purchase approximately 750 acres of the Rocking K Ranch property. Neither this agreement nor any memorandum thereof was ever recorded.

In the spring of 1979, the Rae group (which included the three trusts which were parties to the Pritchard option agreement) began negotiating with the Estes group for the sale of the ranch. It is undisputed that the Estes group was originally interested in purchasing all 5,200 acres of the ranch, but that they were apprised of the existence of the Pritchard option by Joseph Rae and decided to revise their plans to purchase only the remaining 4,500 acres not covered by the option. It is also undisputed that the description of the property in the final agreement included approximately 90 acres in the southwest quarter of Section 21, T. 15 S., R. 16 E., G. & S.R.M., which was subject to the Pritchard option.2 The agreement executed by the Rae group and the Estes group was dated effective June 8, 1979, and a memorandum thereof was recorded on June 12, 1979. An ancillary agreement between the parties was executed on June 19, 1979, and a memorandum recorded the same day.

By letter dated July 6, 1979, Rae advised Pritchard of the agreement between the Rae group and the Estes group, and that some of the option land was included in the sale agreement. He then urged Pritchard to “surrender” some of his land so that the sale could close, the Estes group could proceed with development of its part of the ranch, and Pritchard’s remaining option land would thereby become more valuable.

Pritchard responded to Rae’s request by letter dated September 7, 1979, in which he agreed to release approximately 240 acres in Section 27, T. 15 S., R. 16 E., G. & S.R.M. and an unspecified amount of acreage in Section 22, in return for Rae’s agreement to postpone the due dates of payments owed under the option agreement. The letter agreement was executed by Rae.

Appellant Lakesites, Inc. was incorporated on August 10, 1979. Its incorporators were two employees of Joseph Rae who, along with Rae, also served as the initial board of directors. Stephen Rae, son of Joseph, was the corporation’s vice president.

On December 5, 1979, Joseph Rae, again as “Spokesman” for Minnesota Title Company Trust Nos. 10,104, 10,106, 10,123 and also Trust Nos. 10,223 and 10,245, and as president of Rocking K Water Company, entered into an Agreement for Purchase [526]*526and Sale of Real Estate with Lakesites. Pursuant to this agreement, Lakesites was to purchase approximately 455 acres of the Rocking K Ranch, including the 90-acre parcel which was also subject to the Pritch-ard option and the Rae-Estes agreements.3 Pritchard also executed the agreement, which as to him provided as follows:

“26. David T. Pritchard joins in the execution of this Agreement solely for the purpose of consenting thereto, said David T. Pritchard holding an Option, in his sole and separate right, to purchase a portion of the subject property.
30. Notwithstanding any other terms or provisions contained in this Agreement, or any possible implications therefrom, David T. Pritchard shall receive 75 per cent (75%) of all sums required to be paid and which are paid under paragraphs l.A and l.B, the same being in consideration of the said Pritchard having released from his Option 220 acres in exchange for 80 acres. In addition, David T. Pritchard shall receive approximately 34 per cent (34%) of the purchase money mortgage referred to in paragraph l.C, the same being in consideration of said Pritchard’s Option covering a portion of the subject property.”

The agreement does not describe either the 220 acres to be released or the 80 acres to be exchanged therefor, nor does the agreement set forth to whom the land is to be released, who is to convey the 80 acres, or who is to pay the monetary consideration.

By agreement dated June 15, 1980, Lak-esites agreed to sell to Matt LePree and Frances LePree, husband and wife, a portion of the property subject to the Rae-Lak-esites agreement, including the 90-acre parcel which was also subject to the Pritchard option and the Rae-Estes agreement.

The Rae-Estes agreement had not closed as of the summer of 1980, and the Estes group instituted an action in superior court sometime during this period seeking specific performance of the agreement and the appointment of a receiver for the property. Neither Lakesites, nor Pritchard, nor the LePrees were parties to the litigation.

On July 1, 1980, Rae4 and Pritchard entered into a “Second Modification of Option Agreement.” The agreement recites that on June 1, 1980, the parties had modified the original option by agreement under the terms of which Pritchard agreed to release 220 acres from his option “which Seller advised was necessary in order that he be able to close [the sale to the Estes group].” In return, Pritchard was to have received a deed to 80 acres together with $147,500 over a ten-year period out of the proceeds of the sale to the Estes group. This second modification also recites that “at the time said Modification was entered into, [Pritch-ard] exercised his option to purchase the property subject to the Option as modified, including the modified legal description. ...” The agreement then notes Rae’s inability to close the Estes sale because of pending litigation, and proceeds to set forth the parties’ agreement to rescind the original modification with respect to the release of 220 acres and the transfer of $147,500, and to reinstate the original option agreement of August 24, 1978. Other unde-scribed modifications are specifically stated to remain in effect, and Pritchard expressly exercises his option to purchase the 750 acres subject to the original Option agree[527]*527ment, as modified. Neither the first modification agreement nor the memorandum thereof, which was recorded, was made a part of the record before us.

On July 11, 1980, a deed to the 750 acres of the option property, dated August 24, 1978 and executed by Joe Rae as spokesman for the three trusts in favor of Pritch-ard, was recorded.

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Related

Rosen v. Rae
647 P.2d 640 (Court of Appeals of Arizona, 1982)
LeBaron v. Crismon
412 P.2d 705 (Arizona Supreme Court, 1966)
MacConnell v. Mitten
638 P.2d 689 (Arizona Supreme Court, 1981)

Cite This Page — Counsel Stack

Bluebook (online)
683 P.2d 323, 140 Ariz. 524, 1984 Ariz. App. LEXIS 394, Counsel Stack Legal Research, https://law.counselstack.com/opinion/diamond-v-kenner-arizctapp-1984.