Clark Grain Co. v. Clark (In re Clark)
| Decision Date | 09 August 2022 |
| Docket Number | A-21-803 |
| Parties | In re Estate of Steven G. Clark, deceased. v. JELAYNE CLARK, APPELLEE AND CROSS-APPELLANT Clark Grain Company, a Nebraska corporation, and Brian D. Clark, appellants and CROSS-APPELLEES, |
| Court | Nebraska Court of Appeals |
1. Contracts. The interpretation of a contract and whether the contract is ambiguous are questions of law subject to independent review.
2. Jurisdiction: Appeal and Error. It is the power and duty of an appellate court to determine whether it has jurisdiction over the matter before it, irrespective of whether the issue is raised by the parties.
3. Jurisdiction: Final Orders: Appeal and Error. For an appellate court to acquire jurisdiction of an appeal, there must be a final order entered by the court from which the appeal is taken.
4. Final Orders: Appeal and Error. Under Neb Rev. Stat. § 25-1902 (Cum. Supp. 2020), the three types of final orders that an appellate court may review are (1) an order that affects a substantial right and that determines the action and prevents a judgment, (2) an order that affects a substantial right made during a special proceeding, and (3) an order that affects a substantial right made on summary application in an action after a judgment is rendered.
5. Decedents' Estates. A proceeding under the Nebraska Probate Code is a special proceeding. 6. Final Orders: Appeal and Error. A substantial right is affected if an order affects the subject matter of the litigation, such as diminishing a claim or defense that was available to an appellant before the order from which an appeal is taken.
7. A substantial right is not affected when that right can be effectively vindicated in an appeal from the final judgment.
8. Contracts. A contract written in clear and unambiguous language is not subject to interpretation or construction and must be enforced according to its terms.
9. The fact that the parties have suggested opposite meanings of a disputed instrument does not necessarily compel the conclusion that the instrument is ambiguous.
10. A court is not free to rewrite a contract or to speculate as to terms of the contract which the parties have not seen fit to include.
11. Extrinsic evidence is not permitted to explain the terms of a contract that is unambiguous.
12. A latent ambiguity exists when collateral facts make the meaning of the contract uncertain.
13. A contract must receive a reasonable construction, and a court must construe it as a whole and, if possible, give effect to every part of the contract.
14. A contract is viewed as a whole in order to construe it.
15. Whatever the construction of a particular clause of a contract, standing alone, may be, it must be read in connection with other clauses.
Appeal from the County Court for Nemaha County: Curtis L. Maschman Judge. Reversed and remanded with directions.
Louie M. Ligouri, of Ligouri Law Office, for appellants.
Charles M. Bressman, Jr., of Bressman, Hoffman & Jacobs, for appellee.
Brian D. Clark and Clark Grain Company (the Company) appeal, and Jelayne Clark cross-appeals, the order of the county court for Nemaha County which determined that a term defined in a contract was ambiguous and, therefore, utilized extrinsic evidence to ascertain the intent of the parties. We conclude that the court erred in finding ambiguity in the contract and reverse the court's order and remand the cause with directions.
The Company is a closely held Nebraska corporation. Its four shareholders were Steven G. Clark; his brother, Brian; and their parents, William Clark and Marilyn Clark. In January 2005, the shareholders entered into a Restricted Stock Purchase Agreement (RSPA). The RSPA provided that in the event of the death of Steven or Brian, the Company had "the right to purchase the deceased's shares of stock from his estate at fair market value." Paragraph 3 of the RSPA further provided, '"Fair market value' for the stock shall be determined by the amount of the previous year-end corporate balance sheet, wherein assets, less liabilities, divided by the number of outstanding shares of stock shall be the value."
Steven died in July 2017. In August, his widow, Jelayne, filed an application for informal appointment of personal representative in intestacy. Within the action, the Company and its shareholders filed a petition to adjudicate and settle stock shares. They asked that pursuant to the RSPA, the county court value Steven's shares of stock according to the formula set forth in the RSPA and facilitate the right granted to the Company to purchase his shares.
The court therefore concluded that there was a latent ambiguity in the RSPA as to the meaning of the term "fair market value." Accordingly, it held that extrinsic evidence was necessary to resolve the ambiguity as to whether the formula was one for fair market value or book value.
A trial was held in July 2021, and on September 9, the county court entered a written order. After reviewing the evidence presented at trial, the court reaffirmed its previous finding that the RSPA's definition of fair market value was ambiguous because no evidence was presented that would make the RSPA's formula anything other than book value. The court therefore looked to extrinsic evidence of the intent of the parties to resolve the ambiguity.
In reviewing the language of the RSPA and the evidence submitted at trial, the court determined that the primary intent of the RSPA was to provide a fair and straightforward way for the continuation of the Company in the event of the death of Steven or Brian. Of the competing goals of fairness and straightforwardness, the court held that fairness "must be the lodestar." Accordingly, the court utilized the formula set forth in the RSPA, but substituted expert opinion of the fair market value of real estate for the value of certain real estate listed on the balance sheet to reach a total value for Steven's shares of $1,016,853.75. The court required that the Company elect to purchase Steven's shares within 45 days of the date of the order. This appeal followed.
The appellants assign that the county court erred in (1) determining that the RSPA contained a latent ambiguity; (2) rewriting the RSPA to reflect its view of a fairer bargain; (3) admitting extrinsic evidence to vary, change, add to, and render meaningless terms of the RSPA, including admitting inadmissible opinion evidence; (4) rejecting what the parties to the RSPA intended by their agreement, including the meaning given to the agreement by the parties themselves while engaged in their performance of the agreement before any controversy arose; and (5) failing to consider or account for the discounts for the minority interest and lack of marketability of the shares of stock valued by the court and in totally disregarding the testimony and expert opinions of a certain expert witness. They further assign that the county court's decision is contrary to the evidence and the law and constitutes an abuse of discretion.
On cross-appeal, Jelayne assigns that the county court erred when it did not resolve the ambiguity in the RSPA by utilizing the fair market value established by her experts.
The interpretation of a contract and whether the contract is ambiguous are questions of law subject to independent review. Bierman v. Benjamin, 305 Neb. 860, 943 N.W.2d 269 (2020).
Before we reach the merits of the appeal, we pause to address whether the order from which the appeal was taken is a final appealable order. We asked the parties to address this issue when briefing the case. After our review, we conclude that the September 9, 2021, order is final and appealable, and thus, we have jurisdiction over the appeal.
It is the power and duty of an appellate court to determine whether it has jurisdiction over the matter before it, irrespective of whether the issue is raised by the parties. In re Estate of McKillip, 284 Neb. 367, 820 N.W.2d 868 (2012). Generally, for an appellate court to acquire jurisdiction of an appeal, there must be a final order entered by the court from which the appeal is taken. Id.
Under Neb. Rev. Stat. § 25-1902 (Cum. Supp. 2020), the three types of final orders that an appellate court may review are (1) an order that affects a substantial right and that determines the action and prevents a judgment, (2) an order that affects a substantial right made during a special proceeding, and (3) an order that affects a substantial right made on summary...
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