Bennington v. Inland Investments Co.

• Decision Date: 01 April 1998
• Citation: 956 P.2d 1028,153 Or.App. 209
• Parties: James BENNINGTON and Cynthia Bennington, Respondents, v. INLAND INVESTMENTS CO., INC., an Oregon corporation, Diamond-A Corporation, an Oregon corporation, Appellants, and Mukhtiar S. Dhillon, Respondent. CCV9310376; CA A88183.
• Court: Oregon Court of Appeals

Page 1028

956 P.2d 1028

153 Or.App. 209

James BENNINGTON and Cynthia Bennington, Respondents, v. INLAND INVESTMENTS CO., INC., an Oregon corporation Diamond-A Corporation, an Oregon corporation, Appellants and Mukhtiar S. Dhillon, Respondent.

CCV9310376; CA A88183.

Court of Appeals of Oregon.

Argued and Submitted Sept. 22, 1997.

Decided April 1, 1998.

Richard W. Todd, Leo M. Schuman and Saxon, Marquoit, Bertoni & Todd, Portland, filed the briefs for appellants.

Katherine O'Neill argued the cause and filed the brief for respondents James Bennington and Cynthia Bennington.

Arie C. DeGroot, Klamath Falls, waived appearance for respondent Mukhtiar S. Dhillon.

Before WARREN, P.J., and EDMONDS and ARMSTRONG, JJ.

WARREN, Presiding Justice.

In this case, James and Cynthia Bennington (Benningtons) were awarded specific performance of a land sale contract with Inland Investment Company, Inc. (Inland). ¹ Inland appeals various aspects of the judgment. We affirm.

On June 1, 1990, Inland contracted to sell approximately 20 acres of unimproved property to Benningtons for $39,500, including an option on an adjoining strip. Benningtons paid $10,000 down and contracted to pay $300 per month beginning in July 1990. In the contract, Inland promised to grade the access road to the property and provide a survey of the property by August 1, 1990. Inland agreed that if these were not done the Benningtons could deduct $1,800 for the failure to grade and $1,500 for failure to provide the survey from their monthly payments.

Inland failed to grade the road by August 1, 1990; however, at the request of Benningtons, the grading was completed in October 1990. The survey required by the contract was not completed by August 1, 1990, but was provided to Benningtons during the summer of 1991. Believing that Inland had violated both contract provisions, Benningtons began withholding payments in October 1990 and did not resume their monthly payments.

Before entering into the contract with Benningtons, Inland had deeded ownership of the standing and downed timber on the property to Clear Lumber Manufacturing Corp. (Clear Lumber) with the right to remove standing and downed timber until December 29, 1991. Benningtons were aware of Clear Lumber's timber deed. Inland, however, warranted to Benningtons that before closing, Inland would repurchase the standing timber and transfer that ownership interest as part of the contract. Inland assured Benningtons that the standing timber would not be cut. In fact, Inland's owner mistakenly believed that he had reacquired his interest in the timber and did purport to convey the standing timber to Benningtons. After Benningtons entered into the contract, Clear Lumber continued to cut standing timber on the property. The trial court valued the removed timber at $11,319.

Benningtons attempted to exercise their option to purchase the adjoining strip of land in November 1990. Inland refused to honor the option agreement, because, believing that Benningtons were in breach of the contract for failing to make their monthly payments, it had sold the property to Mukhtiar Dhillon.

On August 31, 1993, Inland mailed to Benningtons' attorney a notice of default and forfeiture pursuant to ORS 93.915(4). Inland claimed that Benningtons were in default for failure to make their $300 monthly payments after August 1, 1990. ² The notice provided that, unless the default was cured within 60 days of the date of the notice, the contract would be canceled and deemed null and void. As a sixth affirmative defense and first counterclaim, Inland asserted at trial that, because Benningtons did not cure the default within 60 days, their interest in the property was forfeited. Benningtons, in their seventh claim for relief, requested an order of the court enjoining Inland from declaring a forfeiture of their interest in the property. Benningtons asserted that Inland had failed to comply with the forfeiture requirements of ORS 93.905 et seq. and that Inland was in breach of the contract at the time of the attempted forfeiture.

After a trial to the court, the court held that Inland's failure to complete the survey required pursuant to the contract was a substantial and material breach and that Benningtons properly withheld five consecutive monthly payments from October 1990 through February 1991, or the total sum of $1,500. The court also held that Inland's failure to complete the grading was a technical breach of the contract but that that breach was cured by Benningtons directing Inland's workers to finish the grading in October 1990. Additionally, the court held that Benningtons were excused from resuming their monthly payments after February 1991, for: (1) Inland's failure to honor the exercise of Benningtons' option; (2) Inland's "selling" of the option property to Dhillon; (3) Inland's failure to preserve the standing timber promised to Benningtons; and (4) Inland's failure to perform its survey, grading and cleanup within the time promised in the agreement.

Before trial, Benningtons deposited with the court $41,000 as evidence of their ability to perform the contract fully. In its judgment, the trial court granted Benningtons specific performance and made the following setoffs and adjustments to the contract price. The original contract price was $39,500. At signing, Benningtons paid a down payment of $10,000, which left an unpaid balance as of June 1, 1990, of $29,500. The court valued the improperly harvested trees at $11,319 and subtracted that amount from the contract price, leaving $18,181. Benningtons made two monthly payments of $300, of which $297.44 was credited toward the principal amount. The court also allowed a $1,500 setoff for Inland's failure to timely complete the survey, leaving a total of $16,383.56 due on the contract plus $7,590.30 in interest from August 1, 1990. Benningtons were awarded attorney fees of $20,417.12 and costs of $1,222.91. After setting off the contract amount, plus interest, against the attorney fees and costs, Benningtons owed Inland $2,333.83.

Dhillon, in his cross-claim against Inland, was awarded $10,150.06, which represented $1,350.65 for his loss of the option property and $8,799.50 in attorney fees and costs. The court ordered that the $2,333.83 then owing from Benningtons to Inland would be taken out of the money the Benningtons had tendered to the court and ordered it paid to Dhillon in partial satisfaction of his judgment against Inland. The remaining amount tendered to the court was given back to Benningtons as a consequence of the credits against the purchase price described above. Dhillon received a judgment for the remaining amount, $7,816.32, against Inland.

Inland makes various assignments of error. First, Inland asserts that its forfeiture of the contract, pursuant to ORS 93.915, was not stayed during these proceedings and that Benningtons lost any claim of ownership to the property 60 days after the notice of forfeiture was sent. Second, Inland argues that the court erred by setting off the amount Benningtons owed Inland on the contract against Benningtons' attorney fees judgment against Inland, effectively giving Benningtons an unfair priority over the funds. Third, Inland argues that its attorneys' lien, which was filed before the judgment, has priority over the funds that were owed to Inland on the contract price. Fourth, Inland argues that the court erred by measuring the damages for the wrongfully removed timber in terms of stumpage value rather than the change in the retail market value of the land. In response to all assignments of error, Benningtons assert that Inland waived its right to appeal.

Benningtons contend that Inland has waived its right to appeal by accepting the benefits of the judgment. The general rule is that a party cannot claim the benefit of a judgment and at the same time appeal from it. Pac. Gen. Contrs. v. Slate Const. Co., 196 Or. 608, 611, 251 P.2d 454 (1952). Additionally, the same rule has been held applicable, in limited circumstances, to a party who acquiesces in part of a judgment while attempting to appeal from the remainder. Id. The rule is predicated on the theory that the law will not allow an appellant to occupy an inconsistent position with regard to an appeal by accepting part of a judgment that the appellant seeks to overturn. See Schlecht v. Bliss, 271 Or. 304, 308, 532 P.2d 1 (1975).

Benningtons assert that Inland accepted the benefits of the judgment when it allowed partial payment of its judgment debt to Dhillon to be made from the money they deposited into court. They argue that Inland did not appeal the judgment in favor of Dhillon and "did not object to paying Dhillon from the deposited funds and did not file a supersedeas bond to keep the funds from being distributed." See former ORS 19.038 and former ORS 19.040 (repealed by Or Laws 1997 ch 71, § 20) (replaced with ORS 19.335). Therefore, Benningtons further assert, the partial satisfaction of Inland's debt to Dhillon out of the funds they tendered into court is a benefit to Inland that it accepted, or at least acquiesced in, thus waiving its right to this appeal. The question is whether Inland waived its right to appeal by allowing the setoff ordered in the judgment to be executed. We hold that it did not.

In Nickerson and Nickerson, 296 Or. 516, 678 P.2d 730 (1984), the court attempted to clarify the law of waiver by acquiescence. It stated:

"We have often held that a litigant may waive the right to appeal if he or she 'acquiesces' in the underlying judgment or decree from which appeal is taken. The acts and circumstances that constitute 'acquiescence' so as to foreclose an appeal, however, deserve more differentiated analysis. Our cases on waiver by acquiescence are numerous and cover the spectrum of civil matters, including dissolutions. The underlying premise of these cases is that a party should not be able to attack the decree while at...