Amdahl v. Lowe, 17204

• Citation: 471 N.W.2d 770
• Decision Date: 20 March 1991
• Docket Number: No. 17204,17204
• Parties: Allen AMDAHL, Plaintiff and Appellant, v. Mary I. LOWE, a widow, and David W. Lowe, individually and as co-trustees, Defendants and Appellees. . Considered on Briefs
• Court: Supreme Court of South Dakota

Page 770

471 N.W.2d 770

Allen AMDAHL, Plaintiff and Appellant, v. Mary I. LOWE, a widow, and David W. Lowe, individually and as co-trustees, Defendants and Appellees.

No. 17204.

Supreme Court of South Dakota.

Considered on Briefs March 20, 1991.

Decided June 5, 1991.

Rehearing Denied July 8, 1991.

William E. Coester, Milbank, for plaintiff and appellant.

Max Gruenwald, Milbank, for defendants and appellees.

AMUNDSON, Justice.

Allen Amdahl (Amdahl) appeals from a trial court judgment denying specific performance on an alleged contract for the sale of real property. We affirm.

FACTS

This dispute involves two parcels of farmland in Grant County, South Dakota. Parcel 1 is comprised of 400 acres, and Parcel 2 is comprised of 480 acres. These 880 acres comprised the farm of John and Mary Lowe, who owned the property as joint tenants with the right of survivorship. Shortly before his death, John Lowe (John) and his wife, Mary Lowe (Mary), executed a deed terminating the joint tenancy, and creating a tenancy in common, with each owning an undivided one-half interest in the farmland. This deed was signed February 13, 1981, and recorded on February 17, 1981. Following his death, a trust was created under the Final Decree of Distribution in the estate of John Lowe, naming his widow Mary and son David as co-trustees of the undivided one-half interest of John in the farmland.

After her husband's death, Mary continued to live in the family farm home, while son David carried on the farming operation and lived in a second house located on the farm. In early January, 1987, Mary told friend Isabelle Lupinek (Lupinek) that she wanted to sell some of the farmland. Lupinek knew Amdahl was interested in buying farmland so she informed him of her conversation with Mary. Amdahl then phoned Mary to tell her he was interested in purchasing the farmland. After this initial contact, Mary informed him that she was interested in selling only the 400 acres contained in Parcel 1, and did not want to sell the 480 acres of Parcel 2 where both her home and David's home were located.

The parties disputed the remaining facts, particularly how much land was actually for sale. Amdahl contended that in later discussions Mary was willing to sell all 880 acres; Mary and David maintained that they had never wanted to sell all 880 acres, only the 400 acres of Parcel 1. David also testified that he told Amdahl that he and his mother were co-trustees of the undivided one-half interest in the farmland, however, Amdahl denied any knowledge of the existence of the trust affecting the title to the land.

There were a number of contacts between the parties regarding the possible sale of the farmland. In discussions with Mary and David, Amdahl stated he would negotiate only as long as no other bidders were involved. On the morning of January 26, 1987, Amdahl came to Mary's residence to discuss the sale. He told Mary and David they would have to either accept or reject his offer that morning before he left. After the parties negotiated for some time, Amdahl dictated and Mary wrote down the following:

January 26, 1987

I Mary Lowe in the presence of David Lowe received from Allen Amdahl $1.00 in cash binding the sale of my farm (of 880 Acres) for the amount of $210,000 with final payment due Nov. 1, 1989[.] Terms of Agreement have been mutually agreed to by both parties. Contract drawn up as soon as possible.

Amdahl then directed Mary to sign the memorandum and asked David to witness her signature by signing his own name. Amdahl then took the memorandum and, in the presence of Mary and David, wrote on the back of the sheet of paper the following:

                Jan. 26     $1
                May 2, 87
                  20,000                8% Int. starts
                Nov. 1, 87
                  20,000
                Nov. 1, 88
                  30,000                house can be moved when 50,000 principle [sic] paid
                Nov. 1, 89
                 140,000
                ----------
                

Amdahl did not sign either side of the memorandum. Amdahl then gave Mary $1.00. Before leaving, Amdahl told Mary and David he would bring a contract for deed to Mary for her signature, similar to a contract for deed that he had with him on that day.

Amdahl returned three days later and delivered to Mary a proposed Contract for Deed which set forth the legal description for all 880 acres of land and restated the purchase price of $210,000. The Contract for Deed, which Amdahl had signed, also added a number of provisions that the parties had not discussed, including a refinancing clause. That clause read:

However, if the Buyer is unable to secure financing under reasonable terms and conditions as they exist on November 1, 1989, from the Federal Land Bank Association of Omaha, Buyer and Seller understand and agree that Seller will negotiate a refinancing of the sums due and payable by Buyer to Seller on November 1, 1989, which refinancing will be done under reasonable terms and conditions as of that date.

Mary did not want to sign the proposal until she had conferred with her attorney. After doing so, she refused to sign the Contract for Deed, and Amdahl then sued for specific performance based on the memorandum of the oral contract. The trial court denied specific performance, and Amdahl appealed.

ISSUE

Did the trial court abuse its discretion in not ordering specific performance of an oral contract to sell real property?

ANALYSIS

The remedy for a breach of an agreement to sell real property is specific performance. SDCL 21-9-9. Specific performance is an equitable remedy and this court's standard of review addresses whether there has been an abuse of discretion by the trial court after reviewing the facts and circumstances of each case. Wiggins v. Shewmake, 374 N.W.2d 111 (S.D.1985); Dolan v. Hudson, 83 S.D. 144, 156 N.W.2d 78, aff'd on rehearing, 83 S.D. 331, 159 N.W.2d 128 (1968).

Amdahl contends that it was an abuse of the trial court's discretion to refuse to grant specific performance because the court found that a contract was made, and because there was a writing sufficient to satisfy the statute of frauds, SDCL 53-8-2. ¹ To resolve this dispute we must determine whether there was a contract for the sale of land, whether there was a writing sufficient to satisfy the statute of frauds, and whether the contract was enforceable. Once we ascertain whether a valid, enforceable contract existed, we can then determine whether the trial court's decision to deny specific performance was within the bounds of its discretion.

The trial court made several conflicting conclusions with regard to whether there was a contract. ² The relevant conclusions state:

B. That there was an oral contract [for] the sale of real estate between the parties hereto.

C. That the essential elements of the oral contract were not contained in the written memorandum, and, the oral contract cannot be proved by parol evidence.

D. That the memorandum is lacking a significant number of the essential elements of a binding contract for the sale of land.

E. That the memorandum language "contract drawn up as soon as possible" was an indication that the memorandum was only part of preliminary negotiations and that the actual contract would follow later.

F. That the typed Contract for Deed provided by [Amdahl] to ... Mary Lowe included substantially different legal terms than the memorandum contained.

G. That a contract for the sale of land must include, among other elements, an offer and acceptance. That Mary Lowe's offer was never accepted by [Amdahl]. That [Amdahl's] tender of the Contract for Deed was a counter offer to Mary Lowe, which was not accepted by her.

H. That because the memorandum was lacking in sufficiency of detail, and, because of the substantial variants between the memorandum and the subsequent Contract for Deed, there was no meeting of the minds of the parties hereto.

. . . . .

K. That specific performance is also denied on the issue of whether Mary Lowe individually had the power to sell the farm land held by her and David Lowe as Co-Trustees under the terms of a trust.

Without a doubt, the trial court's conclusion that there was an oral contract is contradicted by the other conclusions quoted above.

The trial court concluded that the parties had made an oral contract for a sale of real property. (Conclusion of Law B.) The essential elements of a contract are set out in SDCL 53-1-2, and three of the elements, parties capable of contracting, a lawful object, and sufficient cause or consideration, are not at issue. The final element, that of consent, is a question of law and is to be judged on the objective facts of the particular case. Federal Land Bank v. Houck, 68 S.D. 449, 4 N.W.2d 213 (1942); McPherson v. Fargo, 10 S.D. 611, 74 N.W. 1057 (1898).

A party's intentional conduct which constitutes a manifestation of assent will bind a party even though the party's conduct does not truly express his or her state of mind. Houck, 68 S.D. 449, 4 N.W.2d 213. Although Mary may have desired to sell only the 400 acres contained in Parcel 1, she signed a statement that she was selling her farm of 880 acres. Amdahl was entitled to rely on her signature to the statement that she was binding herself to sell all 880 acres. Admittedly, Mary had first discussed selling only Parcel 1. However, Amdahl told Mary he wanted to buy the entire 880 acres, and the parties negotiated back and forth over the matter. Under the circumstances, Amdahl could reasonably conclude that Mary had indeed decided to sell both Parcel 1 and 2.

Although both Mary and David testified that they were confused, and Mary contended that she was only acting as a scrivener at Amdahl's direction, the trial court did not find any duress, undue influence, or overreaching. Mary also argues that there was no mutual assent because there was a mistake of fact as to the amount of land to be sold. However, to warrant cancellation of a contract, "[t]he mistake must not have arisen from want of such care as would be exercised by a person of reasonable prudence where the...