Balboa Const. Co., Inc. v. Golden

• Decision Date: 31 December 1981
• Docket Number: No. 5153,5153
• Citation: 639 P.2d 586,1981 NMCA 157,97 N.M. 299
• Parties: BALBOA CONSTRUCTION CO., INC., a California corporation, Plaintiff-Appellant, v. Peter GOLDEN, a/k/a Pete Golden and P. Golden, and Golden Land and Cattle, a New Mexico corporation, Defendants-Appellees.
• Court: Court of Appeals of New Mexico

Page 586

639 P.2d 586

97 N.M. 299

BALBOA CONSTRUCTION CO., INC., a California corporation, Plaintiff-Appellant, v. Peter GOLDEN, a/k/a Pete Golden and P. Golden, and Golden

Land and Cattle, a New Mexico corporation,

Defendants-Appellees.

No. 5153.

Court of Appeals of New Mexico.

Dec. 31, 1981.

Richard L. Lastrapes, Jr., Lastrapes, White & Merl, Albuquerque, for plaintiff-appellant

David E. Martin, Martin & Hilton, Albuquerque, for defendants-appellees.

OPINION

DONNELLY, Judge.

Plaintiff, Balboa Construction Co., Inc., (Balboa), brought this action against defendants Peter Golden and Golden Land and Cattle, Inc., seeking specific performance of an alleged agreement to sell certain real estate, or in the alternative, seeking damages for breach of contract. Defendants specifically denied the formation of any valid contract between the parties and also pled the statute of frauds as an affirmative defense. Balboa appeals from a judgment of the district court and a denial of its motion for a new trial. We affirm the trial court.

Balboa has challenged as error (1) the trial court's finding that no contract existed between the parties for the sale of real estate, (2) the trial court's failure to hold that defendants were equitably estopped to deny existence of an agreement to sell such real estate, and (3) the trial court's finding that Balboa had failed to prove liability or resulting damage by any acts of defendants.

I. Was There a Contract ?

As developed at trial, Balboa became interested in certain real estate owned by defendants, located in the City of Albuquerque, referred to as "Four Hills Self Storage." It consisted of two separate parcels of property upon which a total of 443 storage units were located.

Balboa officials were shown the properties by Brown Realty Company realtors on behalf of defendants and negotiations commenced between the parties. A series of offers and counter-proposals were made. On May 9, 1979, Balboa submitted an initial written offer to defendants to purchase the real estate in question. Defendants declined to accept, but responded on May 24, 1979 by making a written counter-offer for the sale of the properties. The counter-offer was not accepted.

On June 21, 1979, defendants tendered to Balboa another written counter-offer for the sale of such real estate for the sum of $1,100,000.00. It required Balboa to pay as a down payment the amount of "$100,000.00 net to seller," to pay the two existing mortgages on the property in the amount of $723,000.00, and to release defendants from liability thereon. This counter-offer further required that Balboa pay the remaining $277,000.00 of the purchase price to defendants by making certain specified monthly payments and a final balloon payment in full, five years from date of closing.

On June 21, 1979, the counter-offer of defendants was signed by Pete Golden, President of Golden Land and Cattle Corporation and Pete Golden, individually. On June 29, 1979, Olga May, an agent for Balboa, wrote to defendant Pete Golden purporting to accept an alleged oral agreement (based on defendants' said counter-offer and certain modifications thereto), entered into by telephone on June 27, 1979. Balboa submitted a written "addendum" bearing a typewritten date of June 27, 1979 and a written date of July 1, 1979, to evidence this oral agreement. The addendum recited that it was to be made a part of the purchase agreement dated June 21, 1979, and that the total purchase price of the property was to be the sum of $1,050,000.00.

Defendants refused to sign the written addendum agreement, and on July 2, 1979, responded with another proposed sale agreement. This July 2, 1979, written proposal specified that certain provisions in Balboa's written proposal were agreeable, but it proposed changes in several features of Balboa's written addendum. This written proposal stated at the bottom: "Expiration : This counter-offer shall expire unless a copy hereof with purchaser's written acceptance is delivered to seller or his agent within 5 days from date." This counter-offer recited and altered certain conditions for dealing with existing mortgages on the property and for securing the balance of the unpaid purchase price, as follows:

2. If mortgagees do not release seller, then seller will use a New Mexico Real Estate contract to sell, and not accept corporate notes. Purchaser must apply for mortgage transfer & sellers complete release, and accept mortgagee's transfer fees, prior to closing.

3. Equity-adjusted at closing-(sale price, less loans-)-

4. Down payment $100,000 net to seller, less title insurance policy only, balance as described in # 2 above.

6. (sic)-1st yr., interest of 10% only, payable monthly, 1st payment 30 days from closing date, then a 7 year amortization on the balance of approximately $277,000.00, 10% int., ($3,195.86 Approximately) commencing with 13th month, & continuing each and every month thereafter until the entire unpaid principle balance and interest shall have been paid in full, the note shall be guaranteed personally by Michael Goland (Emphasis supplied.)

On June 29, 1979, Balboa's agent Olga May sent the June 21, 1979 counter-offer of defendant and Balboa's addendum of June 27, 1979 to defendants' agent, Sam Brown. Brown answered this communication by typing on the same letter of transmittal, under the date of July 3, 1979, that he had taken the papers to Pete Golden and that, "He agreed to all with about four things that he thought were agreed in his office-10 year term instead of 11 years-close here with the Title Co.-pro-rations adjusted in the corporate notes so Pete nets $100,000.00 less cost of title insurance only. If assumption of mortgages with release of liability to Pete is not possible before closing, he offers to make the same with a real estate contract instead of corporate notes."

Defendants' July 2, 1979 counter-offer was signed and purportedly accepted by Balboa's president and dated July 10, 1979. On July 12, 1979, Balboa's agent wrote to defendants' realtor, stating that the parties were in complete accord. They enclosed signed copies of defendants' counter-offer. Several weeks later, agents of Balboa flew to Albuquerque seeking to close the sale, but defendants refused to execute any formal sales agreement or to acknowledge that the parties had reached a final agreement.

On August 7, 1979, defendants entered into, and subsequently consummated, a written agreement to sell the real estate in question to another party for $1,125,000.00. Upon ascertaining that defendants had already sold the properties, Balboa filed this action.

At the close of plaintiff's case in chief, the trial court ruled in favor of defendants. On a motion to dismiss made at the close of a plaintiff's case in chief, the trial court has the right to weigh the evidence presented and determine whether a prima facie case had been made. Armijo v. Via Development Corp., 81 N.M. 262, 466 P.2d 108 (1970). On appeal, review of such a dismissal is limited to whether the trial court's findings are supported by substantial evidence. Worthey v. Sedillo Title Guaranty, Inc., 85 N.M. 339, 512 P.2d 667 (1973).

In its decision, the court made the following relevant findings of fact.

15. Defendants' counter-offer of July 2, 1979 provided for definite and stated terms and was limited for a period of five (5) days and unless the offer was returned and accepted without modification, the counter-offer would lapse.

16. Plaintiff failed to accept the terms of the counter-offer of July 2, 1979, and therefore the counter-offer lapsed and there was no agreement between the parties regarding the sale of the subject property.

17. Plaintiff provided a response to the limited counter-offer of July 2, 1979, from defendants, but this counter-offer was submitted after the deadline and it contained materially different terms from the defendants' counter-offer and therefore there was no agreement between the parties.

18. The parties did not enter into an agreement regarding the essential and material aspects of the sale of the subject property and there not having been a meeting of the minds, there is no enforceable contract between plaintiff and defendants.

Balboa asserts that the parties had reached a meeting of the minds on all material terms of an agreement for the sale and purchase of the real estate, but the trial court in its ruling failed to distinguish between an oral contract for sale of realty evidenced by a written document and a written contract consisting of one or more documents. In his ruling on defendant's motion for a directed verdict, the trial judge stated:

The issues presented in this case are rather numerous, but not necessarily all that complicated, and in the State of New Mexico, as in most states, a purported, or alleged contract for the sale and purchase of real estate, must be in writing, and must be signed by all of the parties to the transaction. That does not mean, however, and counsel is correct, that this must all be contained in one writing.

Balboa contends that the court misinterpreted the law in New Mexico in arriving at its ruling by failing to perceive that an oral contract evidenced by an appropriate writing is sufficient to remove an agreement for the sale of realty from the bar of the statute of frauds.

Balboa submits that the memorandum dated July 3, 1979, signed by Sam Brown as defendants' agent, acknowledging receipt of the June 29, 1979 letter and addendum from Olga May as Balboa's agent, constituted a written document sufficient to satisfy the statute of frauds. This memorandum, Balboa contends, confirms that the parties had reached agreement on the essential terms of the proposed sale.

Nevertheless, Balboa subsequently forwarded to defendants the "acceptance of counter-offer" dated July 10, 1979, signed by Michael Goland as Balboa president, which stated:

Acceptance of counter-offer dated July 2nd, 1979, made...