Peet v. Randolph

33 S.W.3d 614, 2000 Mo. App. LEXIS 1669, 2000 WL 1721058

• Court: Missouri Court of Appeals
• Decided: November 7, 2000
• Docket: ED 77184
• Status: Published

Opinions

LAWRENCE E. MOONEY, Judge.

The question we must decide is whether a real estate contract lacked such definiteness and finality that it was incapable of specific performance, thereby justifying summary judgment. Because we conclude the issue is fairly disputable, we reverse summary judgment and remand for a trial on the merits.

Frederick J. Peet (Peet), for himself and as assignee of co-plaintiff Judith S. Keen (Keen) (collectively referred to as Purchasers), appeals from summary judgment entered in favor of George Randolph (Mr. Randolph) and Cecelia Randolph (Mrs. Randolph) (collectively referred to as Sellers) in Purchasers’ suit against Sellers for specific performance of a real estate sales contract. Purchasers argue that the trial court erred in granting summary judgment because: (1) Rule 74.04(c) was not followed; (2) there was a genuine issue of material fact concerning the realty in the real estate sale contract such that the identification of the realty to be conveyed was certain; and (3) the real estate sale contract did include all of the essential terms necessary to the parties’ agreement on the right of first refusal and the fact that a document needed to be executed by the parties for recording purposes at the time of the closing was not fatal to a claim for specific performance.

Facts

Purchasers and Sellers entered into a real estate sales contract involving Sellers’ 140-acre farm in Franklin County. The petition asserts the contract included: (1) Exhibit A, the Residential Sale Contract dated May 23, 1996; (2) Exhibit B, the Supplemental Agreement to Contract dated May 23, 1996; (3) Exhibit C, an aerial photo with the 120-acre property outlined and the approximate boundaries for the 20-acre parcel; and (4) Seller’s Disclosure Statement. Sellers planned to retain a 20-acre parcel adjoining their son’s property.

The Residential Sale Contract described the property to be sold as follows: “120 ± acres and All Improvements as per MLS Listing #532264, 3547 Hwy EE, Beaufort, Mo. Legal to govern.” The handwritten terms of the Supplemental Agreement included, inter alia:

-Survey: Buyer acknowledges orig. tract is 140 ± A. Seller, with P & Z approval, is retaining no more than 20 A. Seller agrees to have corners of 20 A. tract marked at his expense. Excepting the prior mentioned 20 A tract, Buyer accepts the property lines as per existing plat.

JBuyers to have first right of refusal to any offer on the above mentioned 20 A tract if said tract is ever sold, wholly or in part, written first right of refusal to be executed at the time of closing of this contract.

Purchasers agreed to buy from Sellers approximately 120 acres for $270,000. Purchasers were ready, willing, and able to close although Sellers failed to appear at closing. Mr. Randolph claimed he could prevent closing by neglecting his duty to have the property surveyed.

Purchasers filed suit seeking specific performance, and after substantial discovery on both sides, Sellers filed a motion for judgment on the pleadings against Peet and a motion to dismiss against Keen. In both motions, Sellers claimed the contract was not enforceable because (1) it fails to identify with sufficient particularity the realty to be conveyed; and (2) it is contingent upon the parties’ future agreement on an instrument yet to come into existence, the right of first refusal. Purchasers filed a response including excerpted deposition testimony of Sellers’ real estate agent.

Thereafter, the trial court conducted a hearing on the motions at which Sellers presented several evidentiary items. The evidence included Sellers’ partial deposition testimony, Peet’s partial deposition testimony, a 182-acre plat map of the farm, and the photo contained in Exhibit C. The court advised the parties that pursuant to Rule 55.27(b), it would consider the Sellers’ motions as motions for summary judgment and set a further briefing schedule.

After receiving briefs from both parties and additional evidence from Purchasers, the trial court entered summary judgment in favor of Seller. It found that “the purported contract on which Plaintiffs’ suit is based fails to adequately describe the subject realty,” and further that “the purported contract is dependent upon a document yet to come into evidence, as to the contents of which the parties have no agreement whatsoever.” Peet filed “Separate Plaintiff Frederick J. Peet’s Motion for Reconsideration and to Amend Judgment” with attached affidavits of Sellers’ agent and a registered land surveyor. The motion was heard and denied by the court. This timely appeal follows.¹

Analysis

We review the trial court’s grant of summary judgment in favor of Sellers de novo. ITT Commercial Finance Corp., et al. v. Mid-America Marine Supply Corp., 854 S.W.2d 371, 376 (Mo.banc 1993). To succeed on a motion for summary judgment, the movant must show there is no genuine issue of material fact and that movant is entitled to judgment as a matter of law. Id. at 380. The record is viewed in the light most favorable to the non-movant, who is given the benefit of all reasonable inferences. Id. at 382. “Therefore, it is not the ‘truth’ of the facts upon which the court focuses, but whether those facts are disputed.” Id. Because our disposition of Points II and III require a remand, we need not address Purchasers’ claim on Point I that the trial court failed to follow proper summary-judgment procedure.

I: Insufficient Description of Land

Purchasers allege the trial court erred when it determined that the real estate contract failed to adequately describe the subject realty. To obtain specific performance, a contract must not be indefinite, uncertain, or incomplete. Biggs v. Moll, 463 S.W.2d 881, 887 (Mo. banc 1971). It must provide the essential terms and be enforceable without adding to its terms for a court will not make a contract for the parties. Assemblies of God v. Hendricks, 807 S.W.2d 141, 146 (Mo.App. S.D. 1991). A sufficient description of real property is one of the essential terms of a contract for the sale of real property. Id. However, “[t]he land does not need to be fully and actually described in the paper; but the writing must afford the means whereby the identification may be made perfect and certain through parol evidence.” Herzog v. Ross, 355 Mo. 406, 196 S.W.2d 268, 270 (1946).

Applying these principles to this case, we find a genuine issue of material fact exists as to whether the subject realty was adequately described. Sellers’ and Buyers’ agents and Peet testified that the contract included Exhibits A, B, and C and that the Sellers not only knew the lines on Exhibit C represented the retained 20-acre parcel, but also that Sellers participated in drawing those lines.

Sellers dispute that they had ever discussed where the 20-acre parcel would be located or that they had any part in drawing the lines on Exhibit C. Furthermore, Mr. Randolph stated he believed the “existing plat” referred to the 182-acre plat map that no one else had ever seen or even knew about. However, at another deposition, Mr. Randolph testified that at around the time of signing, he and a surveyor marked on an aerial map where the 20 acres would be located.

Viewing the record in the light most favorable to Purchasers, there is a genuine issue of material fact as to whether Exhibit C was part of the contract and whether the lines on it provide a sufficient description of the real estate for specific performance.

II: Right of First Refusal

Purchasers allege the trial court erred when it entered summary judgment for Sellers since the right-of-first-refusal clause was specific enough to enforce and the parties agreed on that clause. Purchasers argue the clause is enforceable because only a formality remained of executing a document for recordation and the real estate contract contained all the essential terms necessary to the parties’ agreement on the right of first refusal. Furthermore, Purchasers dispute the trial court’s finding that there was no meeting of the minds regarding the right of first refusal.

First, we address the issue of enforceability. Other jurisdictions have held clauses similar to the one in this case are specific enough to be enforced. Winberg v. Cimfel, 248 Neb. 71, 532 N.W.2d 35 (1995); Briggs v. Sylvestri, 49 Conn.App. 297, 714 A.2d 56 (1998). Right-of-first-refusal clauses are often stated in general terms because the right may be exercised at some remote time in the future. Auerbach v. County of Hanover, 252 Va. 410, 478 S.E.2d 100 (1996). Missing terms such as the price of the land or the duration of the right does not render the clause unenforceable. Kellner v.. Bartman, 250 Ill.App.3d 1030, 189 IllDec. 639, 620 N.E.2d 607, 611-612 (1993). Moreover, in upholding a general right-of-first-refusal clause, the Supreme Court of Montana declared that the terms of the agreement would be sufficiently clear and enforceable “at such time as the owner forms a specific intention to sell the property for a definite price on definite terms.” Weintz v. Bumgarner, 150 Mont. 306, 434 P.2d 712, 716 (1967). The Iowa Supreme Court also upheld a right of first refusal clause that did not state price or duration. Myers v. Lovetinsky, 189 N.W.2d 571, 574-575 (Iowa 1971). See also Berry-Iverson Co. of North Dakota Inc. v. Johnson, 242 N.W.2d 126, 131 (1976) (adopting the reasoning of both the Montana and Iowa Supreme Courts from Weintz and Myers ). Further, the statute of frauds does not defeat a right of first refusal stated in general language because the terms become definite when the owner fixes a price at which he is willing to sell. Brenner v. Duncan, 318 Mich. 1, 27 N.W.2d 320, 322 (1947). Here, although lacking specific terms as to price and duration, the clause may still be valid. The terms will become clear when Sellers have an offer from a third party that they are willing to accept.

Next, we look to determine if the parties had an agreement regarding the right of first refusal. In this case, the record shows that Peet believed the clause meant that Sellers would have to offer him the property if they chose to dispose of it in any way, including sale, devise, bequest, or gift. Sellers claim that because Peet’s mistaken belief did not conform to the true nature of a right of first refusal, there was no meeting of the minds necessary for a binding contract.

Missouri, however, has applied the objective theory of contracts since 1892. Computer Network, Ltd. v. Purcell Tire & Rubber Co., 747 S.W.2d 669, 675 (Mo.App. E.D.1988); Brewington v. Mesker, 51 Mo.App. 348, 356 (1892). “The objective theory lays stress on the outward manifestation of assent made to the other party in contrast to the older idea that a contract was a true ‘meeting of the minds.’” Computer Network Ltd., 747 S.W.2d at 675. (citing J. Calamari and J. Perillo, Contracts, § 2-13, at 23 (2nd ed.1977)). It is presumed the parties’ intent is expressed by the natural and ordinary meaning of the language in the contract. Parker v. Pulitzer Pub. Co., 882 S.W.2d 245, 249 (Mo.App. E.D.1994). Disregarding either party’s secret surmise or undisclosed assumption, the court must ascertain the parties’ meaning and intent as expressed in the language used and give effect to that intent. Computer Network, 747 S.W.2d at 675; Needles v. Kansas City, 371 S.W.2d 300 (Mo.1963).

Thus, Sellers’ contention affords them no relief. The objective test demands that a court focus on the language of the agreement to determine the parties’ intent. Here, the right of first refusal was to any offer “if said tract is ever sold, wholly or in part.” By its unambiguous terms the right of first refusal applies to a future sale, but not to other possible transfers. Therefore, the court erred in entering summary judgment because the right of first refusal clause was specific enough to enforce, and under the objective theory of contracts, the parties agreed on the clause.

Ill: The Statute of Frauds

The dissent interposes the Statute of Frauds in defense of the grant of summary judgment. Although the trial court did not rely upon the Statute of Frauds in its judgment, it is true that we will uphold summary judgment if it could have been properly granted on grounds other than those relied upon. Chancellor Dev. Co. v. Brand, 896 S.W.2d 672, 675 (Mo.App. E.D. 1995).

Again, in reviewing the grant of summary judgment, we must determine whether a genuine issue of material fact exists. ITT Commercial Finance, 854 S.W.2d at 382. “[A] ‘genuine issue’ exists where the record contains competent materials that evidence two plausible, but contradictory, accounts of the essential facts.” Id. If the movant submits inconsistent evidence on the material facts, the prima facie showing required for summary judgment is defeated. Id. In deciding whether a genuine issue of material fact exists, we are bound to view the record in the light most favorable to the party against whom judgment was entered. We also make all reasonable inferences from the record in favor of the non-movant. Id., at 376.

The Statute of Frauds exists to avoid fraud, not to facilitate it. A writing satisfies the Statute of Frauds memorandum requirement if it sets forth the essential terms of the contract. In re Estate of Looney, 975 S.W.2d 508, 515 (Mo.App. S.D.1998). A real estate sales contract must include: the parties, the subject matter, the consideration, the price, and promises on both sides. Id. When these essential terms are present in a real estate sales contract, the contract is specifically performable even if it is not perfectly drafted or somewhat vague. Id. If the substance of the agreement appears from the writing, the writing need not be an explicit or complete contract and the terms need not be definite. Id. Extrinsic evidence may be used to clarify the terms. Id. Moreover, the writing need not be a single document; rather, the agreement may be contained in separate writings that when taken together, satisfy the Statute of Frauds. In re Estate of Looney, 975 S.W.2d at 515. “The documents need only be connected either by express reference to one another or by clear implication established through their respective contents.” Id.

The dissent accuses us, under the facts of our case, of allowing the standard of review in summary judgment to “trump” the Statute of Frauds. Indeed we are. It is the standard of review that must frame our assumptions and govern our consideration of issues on appeal. Under the universally accepted guidance of ITT Commercial Finance, supra, we must view all contradictory facts in favor of the non-movant and make all reasonable inferences in the non-movant’s favor.

In applying the standard of review, we are faced with the following summary judgment facts:

1) Sellers and Purchasers signed a real estate sales contract.²

2) On the same date, Sellers and Purchasers signed a supplemental agreement providing for the Seller’s right to retain 20 acres; it provides, “Excepting the prior 20 A tract, Buyer accepts the property as per existing plat.”³

3) A plat of the farm with 20 acres marked off was attached to the sales contract.⁴

4) The Sellers had previously participated in the demarcation of the 20 acres on the attachment.⁵

Here, the documents are not only “connected either by express reference or clear implication,” but also they are physically attached! The dissent’s characterization of Exhibit C, the plat attached to the sales contract, as a “separate document” is mistaken. A connection, even without the attachment present here, is sufficient to satisfy the statute of frauds.⁶ Further, the dissent seeks to impugn the credibility and motives of Purchasers and the real estate agents despite the long-standing rule that, on a summary judgment motion, credibility is not for the trial or appellate court to decide. Nolte v. Wittmaier, 977 S.W.2d 52, 59-60 (Mo.App. E.D.1998). Our standard of review in summary judgment must frame our assumptions on appeal. The summary judgment facts provide the Sellers no escape from their contract obligations.

We reverse and remand for further proceedings consistent with this opinion.

RICHARD B. TEITELMAN, P.J., dissents in separate dissenting opinion. AHRENS, J., concurs in opinion of Judge Mooney.

1 . Sellers challenge appellate court jurisdiction and have filed a motion to dismiss the appeal, arguing that the judgment became final on September 19, 1999, since only one of the Purchasers filed a post-judgment motion that would delay finality of judgment. The motion to dismiss is without merit and is denied.

2 . Exhibit A; George Randolph deposition pp. 43-44; Frederick Peet deposition p. 86.

3 . Exhibit B; George Randolph deposition pp. 43-44.

4 . Exhibit C; Paul Pier deposition p. 93; Frederick Peet deposition p. 88.

5 . Frederick Peet deposition pp. 106-107.

6 . 10 Samuel Williston, Williston on Contracts § 29:30 (4th ed.1999). 4 Corbin on Contracts § 23.3 (rev. ed.1997).