Kish v. Kustura

79 P.3d 337, 190 Or. App. 458, 2003 Ore. App. LEXIS 1542
CourtCourt of Appeals of Oregon
DecidedNovember 13, 2003
Docket99-2205; A113094
StatusPublished
Cited by4 cases

This text of 79 P.3d 337 (Kish v. Kustura) is published on Counsel Stack Legal Research, covering Court of Appeals of Oregon primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Kish v. Kustura, 79 P.3d 337, 190 Or. App. 458, 2003 Ore. App. LEXIS 1542 (Or. Ct. App. 2003).

Opinion

ARMSTRONG, J.

Plaintiff appeals from a judgment that reformed a contract for the sale of an apartment complex and awarded relief to defendant on the reformed contract. Plaintiff assigns error to the trial court’s reformation of the contract and its award of damages, attorney fees, and costs, arguing that defendant did not prove her reformation claim by clear and convincing evidence. We conclude that defendant did prove her claim and therefore affirm the trial court judgment.

We review a grant of reformation de novo. Krueger v. Ropp, 282 Or 473, 478-79, 579 P2d 847 (1978). Although we are not bound by the trial court’s findings, "we give substantial weight to [its] findings where, as here, those findings hinge on the resolution of conflicting testimony and the credibility of the witnesses.” Pioneer Resources, LLC v. D.R. Johnson Lumber Co., 187 Or App 341, 343, 68 P3d 233, rev den, 336 Or 16 (2003) (citation omitted).

The trial court’s findings can be summarized as follows: Defendant Nustura is the personal representative of the estate of her father, Laszlo Szender. Plaintiff and Szender became friends in the late 1980s. By early 1990, Szender’s health was failing. His health problems led him to seek a buyer for a 24-unit apartment complex that he and his wife lived in and managed. Although Szender, a native Hungarian, never learned to read or write English, he successfully operated a small business for more than 20 years.

Plaintiff was interested in buying the apartments and began to negotiate with Szender in 1990 to purchase them. Plaintiff eventually agreed to buy the apartments from Szender for $600,000. Most aspects of their initial agreement were memorialized in a letter that plaintiff wrote to Szender. The letter, after it was modified by the parties, provided that plaintiff was to pay Szender a down payment of $40,000, monthly payments of $2,000 for ten years, and a final payment of $90,000. The letter also provided that plaintiff was to assume a $230,000 mortgage on the apartments. After further negotiations, plaintiff agreed to several additional provisions that Szender requested. They included plaintiffs acceptance of the apartments “as is” and a provision that [461]*461entitled Szender and his wife to live in their apartment rent free for ten years after the sale. Plaintiff also agreed to prepare a written contract that accurately reflected her and Szender’s letter and oral agreement. She later arranged for an attorney to prepare the contract for the parties. Both plaintiff and Szender signed the contract on January 29, 1991.

The written contract did not, however, accurately reflect the parties’ oral agreement. It gave only Szender — not Szender and his wife — the right to live in their apartment rent free for ten years. It also provided that the interest payments that plaintiff made on the mortgage would apply to the $600,000 purchase price for the apartments. That change meant that the amount that plaintiff paid to Szender would not equal the agreed amount of $370,000. The change was never discussed with Szender. Plaintiff did not present Szender with the contract until the day that the parties signed it, and she did not translate it for him. Plaintiff continued to represent to Szender that the written contract accurately reflected their agreement.

Over the next seven years, plaintiff made payments to Szender and the mortgage holder that totaled approximately $630,000. During that period, the Szenders lived in their apartment rent free. Szender died on July 31, 1998. After his death, plaintiff demanded in a May 1999 letter that Mrs. Szender pay rent if she continued to live in the apartment. Plaintiff also claimed in the letter that she had fulfilled her obligations under the contract and was entitled to receive a deed to the property. Mrs. Szender refused to transfer the deed or pay rent and subsequently moved out of her apartment. Plaintiff then brought an action for specific performance of the contract. Defendant alleged several counterclaims, including a claim for reformation of the contract. The trial court denied plaintiffs claims and granted defendant’s counterclaim for reformation. The court reformed the contract to include Mrs. Szender as a beneficiary of the ten-year, rent-free period on the apartment and to provide that the interest payments on the mortgage were not to be counted as payments toward the $600,000 purchase price. The court also found that plaintiff had constructively evicted Mrs. Szender from the apartment. The court ordered a separate trial on the [462]*462damages caused by the constructive eviction. At that trial, the trial court found that the rental value of the apartment was $600 a month and that plaintiff had constructively evicted Mrs. Szender from the apartment for a period of 19 months.

To obtain reformation of a contract, a party must prove by clear and convincing evidence

“(1) that there was an antecedent agreement to which the contract can be reformed; (2) that there was a mutual mistake or a unilateral mistake on the part of the party seeking reformation and inequitable conduct on the part of the other party; and (3) that the party seeking reformation was not guilty of gross negligence.”

Jensen v. Miller, 280 Or 225, 228-29, 570 P2d 375 (1977) (citations omitted). Clear and convincing evidence is evidence that makes a fact in issue highly probable. Riley Hill General Contractor, Inc. v. Tandy Corp., 303 Or 390, 402, 737 P2d 595 (1987). “ ‘[CJlear’ describes the character of unambiguous evidence, whether true or false; ‘convincing’ describes the effect of evidence on an observer.” Id at 397.

“Although reformation requires sufficient proof of an antecedent agreement, there ‘need not be a binding agreement prior to the writing of which reformation is sought.’ ” Pioneer Resources, 187 Or App at 367 (quoting DeTweede v. Barnett Estate, 160 Or 406, 411, 85 P2d 361 (1939)). Here, the letter that plaintiff sent to Szender and testimony by witnesses at trial about the agreement constitute clear and convincing evidence that the parties did, in fact, have an agreement antecedent to the written contract. The pertinent details of the antecedent agreement are set out above. Although plaintiffs testimony would, if believed, raise doubt about the antecedent agreement, we defer to the trial court’s express and implied findings that plaintiff was not a credible witness. The trial court found, and the record reflects, that plaintiffs trial testimony conflicted substantially on several important issues with the testimony that she gave at her deposition. The remaining testimony on the issue of the parties’ initial agreement comes from several sources, including Mrs. Szender and Betty Stuhr, a friend of plaintiff and the Szenders. That testimony indicates that the parties agreed [463]*463that the interest payments on the assumed mortgage were not to be included in the $370,000 that plaintiff was to pay Szender for the apartments and that Szender and Mrs. Szender were to have the right to live in their apartment rent free for ten years.

“[T]he range of misconduct termed ‘inequitable’ is quite broad, varying from the most egregious and concrete, such as fraud, to more amorphous and somewhat less egregious misconduct, sometimes described as ‘overreaching’ or ‘sharp practice.’ ” Murray v. Laugsand, 179 Or App 291, 302, 39 P3d 241 (2002).

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Cite This Page — Counsel Stack

Bluebook (online)
79 P.3d 337, 190 Or. App. 458, 2003 Ore. App. LEXIS 1542, Counsel Stack Legal Research, https://law.counselstack.com/opinion/kish-v-kustura-orctapp-2003.