Booras v. Uyeda

• Decision Date: 02 August 1983
• Citation: 666 P.2d 791,295 Or. 181
• Parties: George J. BOORAS, Respondent on review and Petitioner on review, v. Tokiko UYEDA, Respondent on review, and Constance Fenwick, Petitioner on review and Respondent on review. CA 18375; SC 28634, 28663. . *
• Court: Oregon Supreme Court

Page 791

666 P.2d 791

295 Or. 181

George J. BOORAS, Respondent on review and Petitioner on review, v. Tokiko UYEDA, Respondent on review and Constance Fenwick, Petitioner on review and Respondent on review.

CA 18375; SC 28634, 28663.

Supreme Court of Oregon,

In Banc. ^*

Argued and Submitted Nov. 1, 1982.

Decided June 29, 1983.

Rehearing Denied Aug. 2, 1983.

[295 Or. 182-A] R. Bruce Dusterhoff of Case & Dusterhoff, Portland, argued the cause and filed briefs and petition for petitioner/respondent Booras on review.

Larry A. Dawson, Portland, argued the cause and filed briefs and petition for respondent/petitioner Fenwick on review.

Gerald R. Pullen, Portland, filed a brief for respondent Uyeda.

PETERSON, Justice.

This is a suit for specific performance of an earnest money agreement which provided for later execution of a land sale installment contract. We hold that if the buyer seeks to avoid the contractual indefiniteness which would prevent specific performance of the contract on an installment basis by paying the entire balance in cash, the buyer must allege, in the complaint, facts showing why such relief is appropriate and a prayer for such relief. The failure to do so bars specific performance in this case.

Plaintiff Booras sued defendants Uyeda and Fenwick for specific performance of a contract for the sale of a Portland apartment building. ¹ The trial court refused specific performance, but awarded Booras $20,000 as "equitable compensation." On plaintiff's appeal, the Court of Appeals reversed the trial court and ordered specific performance "upon receipt of the purchase price in full with interest" with ancillary relief. Booras v. Uyeda, 56 Or.App. 834, 839, 643 P.2d 413 (1982). We reverse the Court of Appeals and reinstate the trial court decree.

I

THE FACTS.

The relevant facts are complex but must be summarized. In July, 1976, Uyeda listed the property with a realtor. In August, 1976, plaintiff made an offer to Uyeda on a standard printed "Earnest Money Contract" with additional terms added. In September, 1976, after negotiations regarding additional terms, the parties signed the agreement. The earnest money agreement was certain as to the property being sold; the price to be paid, $120,000; the down payment, $34,500; and payment of the $85,500 unpaid balance--"on a land sales contract at not less than $625.00 per month at 8% interest per annum which includes principal and interest." A number of other provisions were not agreed upon. The contract included a handwritten second page entitled "Addendum" which in part contained these additional provisions:

"1. Seller to carry contract of $85,500.00 as a second contract and give buyer deed to said property. Buyer to apply for First Mortgage.

"2. * * *.

"3. * * *.

"4. * * *.

"5) Purchaser to provide security in other EQUITY in the amount of $50,000. [Emphasis in original.]

"6) Sellers Attorney to approve legality of contract.

"7) Release clause in contact [sic] to free property in the event of potential sale by Buyer-Gradual Release of property as contract balance is depleted."

Between September and December, 1976, plaintiff obtained a first mortgage commitment of $50,500 from a local savings and loan, and appraisals and photographs of the properties that he intended to use to secure the payment of the unpaid balance. Plaintiff then presented the photos, appraisals and proposed mortgage and security documents to Uyeda's lawyer, Mr. Schneider. Schneider eventually concluded that the security would protect Uyeda and went to the Uyeda home to discuss the transaction with them. The Uyedas either did not understand the somewhat complex proposed security arrangement or did not want to go through with the deal.

In January, 1977, without prior notice to plaintiff, Uyeda relisted the property with another realtor. Defendant Fenwick, herself a realtor, became interested in the property and prepared an earnest money offer on her own behalf for its purchase. Although the price was the same as the plaintiff-Uyeda agreement, the terms were different. Fenwick was aware of plaintiff's claim to the property. Her offer contained this handwritten addendum: "Transaction subject to obtaining release of prior sale."

Although a release from Booras had not been obtained, Uyeda accepted Fenwick's offer in February, 1977, and a land sale contract was executed between Uyeda and Fenwick in April, 1977. The contract made no reference to the prior sale. Fenwick took possession of the property, started receiving rent from the tenants, and, as time went on, made substantial improvements. In mid-1977, Booras and Uyeda entered into negotiations toward settlement of his claim against Uyeda. These negotiations finally collapsed and in March, 1978, plaintiff commenced this specific performance suit against Uyeda and Fenwick.

Plaintiff's complaint alleged that his earnest money agreement was a binding and enforceable contract for the sale of the property and that Uyeda breached the contract by refusing to convey to him and instead conveying to Fenwick. His amended complaint concluded with this prayer for relief:

"1. Ordering said defendant Uyeda to specifically perform said agreement;

"2. Requiring defendant Fenwick to execute all documents required to convey said property to plaintiff and to quiet any claim said defendant may have on said property;

"3. To appoint a receiver to whom plaintiff may make payments as they fall due, and order defendant Uyeda to furnish the title insurance called for in the agreement and convey the property when the final payment has been made by plaintiff;

"4. Declaring defendant Fenwick a constructive trustee of the rents and profits received from the operation of said real property from the time she took possession until the present;

"5. Requiring defendant Fenwick to make an accounting of said rents and profits and pay the same to the plaintiff.

"6. In the alternative if the court should find specific performance to be equitably impractical, the sum of at least $20,000 as equitable compensation; and

"7. For plaintiff's costs and disbursements incurred herein."

Defendants asserted affirmative defenses that plaintiff had not satisfied all of the conditions precedent to defendant Uyeda's obligation to convey, laches, estoppel, release, and lack of ability to understand the agreement.

After plaintiff rested, Uyeda moved for dismissal on the ground that the contract was too indefinite to be specifically performed. The motion was denied, and on June 23, 1980, the trial court signed a judgment which contained detailed findings of fact and conclusions of law, including the following:

"FINDINGS OF FACT

" * * *.

"9. Mr. Schneider objected to some of the language in the additional security and release documents, and demanded that it be stricken. Plaintiff agreed. Mr. Schneider said that he would draft the documents reflecting the changes, which he would recommend that his clients sign. This was during the month of December 1976. Nothing was heard from Mr. Schneider or the Uyedas until on or about January 21, 1977, when he informed Mr. Beres, the listing agent, that the Uyedas did not 'understand' and would not proceed with the sale. No reasons were given by Mr. Schneider for the Uyedas' failure to understand.

" * * *.

"14. At the time plaintiff discovered the Uyedas' unwillingness to consummate the transaction with him, the fair market value of the subject property was $140,000, as compared to the Uyeda-Booras contract price of $120,000. At the time of trial in this matter, the fair market value of the property was $220,000. * * *

"CONCLUSIONS OF LAW

" * * *.

"2. The Earnest Money Contract and Addendum between the plaintiff and the defendant Uyeda is a valid and legally-enforceable contract. It is sufficiently definite and certain to be capable of specific enforcement. It contains the basic elements of a contract as spelled out in many of the cases cited in counsel's legal memoranda. The contract identified the parties, contained a description of the real property involved, the amount and terms of payment of the purchase price, the rate of interest to be charged on the unpaid balance during the life of the contract, the type of securities to be given by the plaintiff to the defendant to insure payment of the balance due (a second mortgage on the property itself and a pledge of plaintiff's equity in additional property in a specified amount), and a general provision for a release of the additional securities as the balance of money due on the contract was reduced. The only details omitted were of a subordinate nature concerning the specific property plaintiff would offer as additional security and the timing of their corresponding release as security upon the occurrence of later events. These details were later supplied and agreed to.

" * * *."

With regard to the remedy, the court concluded:

"5. Because of the changed position of the parties and the events which have occurred subsequent to the execution of the Uyedas' agreement with plaintiff, including the death of Mr. Uyeda, investments made by defendant Fenwick in the subject property, the settlement negotiation between plaintiff and defendant Uyeda, the subsequent disposition by plaintiff of some of the property which was to be used as additional security, and the lapse of time, the court is of the opinion that it would be quite impractical, difficult, and time-consuming to specifically enforce the Earnest Money Contract and Addendum, and that equitable compensation would be a more just and equitable disposition of the case.

"In determining the amount of compensation that would be fair and just, the court believes that the difference between the value of the property at the time that the contract was repudiated and the price the parties agreed that he would pay for it would be a just and equitable measure of the compensation to be allowed the plaintiff. That amount...