Delmar Crawford, Inc. v. Russell Oil Co., Inc.

• Decision Date: 10 April 1991
• Parties: DELMAR CRAWFORD, INC., an Oregon corporation, Respondent, v. RUSSELL OIL COMPANY, INC., an Oregon corporation, Appellant. CV 88 0187; CA A60088.
• Court: Oregon Court of Appeals

Page 1021

808 P.2d 1021

106 Or.App. 524

DELMAR CRAWFORD, INC., an Oregon corporation, Respondent, v. RUSSELL OIL COMPANY, INC., an Oregon corporation, Appellant.

CV 88 0187; CA A60088.

Court of Appeals of Oregon.

Argued and Submitted Oct. 29, 1990.

Decided April 10, 1991.

Gregory A. Chaimov, Portland, argued the cause for appellant. With him on the brief were Victoria L. Rudometkin and Miller, Nash, Wiener, Hager & Carlsen, Portland.

David S. Shannon, Portland, argued the cause for respondent. With him on the brief were Karen R. Tashima and Shannon and Johnson, P.C., Portland.

Before WARREN, P.J., and NEWMAN and DEITS, JJ.

WARREN, Presiding Judge.

Defendant appeals from a judgment requiring it to specifically perform a contract to purchase a bulk petroleum plant, service station and other property. We affirm.

Plaintiff owned a bulk oil plant in Hermiston and a service station in Pendleton. Crawford, plaintiff's principal, wanted to sell the business. On November 4, 1987, Crawford met with defendant's principal, Russell, to discuss defendant's interest in buying the company. Russell rejected Crawford's asking price as too high. Russell was concerned about possible contaminants on the property and liability for clean-up costs. On November 12, Russell delivered a written offer to purchase to Crawford. The offer listed, among other things, the bulk plant in Hermiston, including the land, improvements and "Misc. Equipment," and the service station in Pendleton. The offer also included an unexplained phrase, "Indemnification against pollution." The total offer was $151,590, plus a price for inventory to be determined on the date of closing. The offer did not specify any payment terms, nor did it specifically list the equipment to be included in the sale.

Plaintiff accepted the offer on November 16, without its principal ever discussing it with defendant, and defendant immediately took possession and began to operate the business. On December 4, Russell had the property inspected for pollution problems. When he received the report of the contamination inspector, which showed serious pollution problems, he discussed those problems with Crawford, who offered what Russell concluded was inadequate assistance in the clean-up. On December 8, Russell notified Crawford that he was rescinding the agreement, and he returned the keys and inventory to Crawford the next day. Plaintiff has not attempted to sell the property to anyone else.

Defendant first asserts that the trial court erred in denying its motion for directed verdict. ¹ It contends that the agreement was not definite enough to allow specific enforcement. Specifically, it claims that the agreement is indefinite in its subject matter, because the "Misc. Equipment" is not specified; in its payment terms, because the offer did not specify terms; and in the "[i]ndemnification against pollution" phrase. Plaintiff asserts that each of those terms is definite and that the contract should be specifically enforced. We review de novo. Ford v. Blinn, 50 Or.App. 515, 519, 623 P.2d 1110, rev. den. 290 Or. 853 (1981). ²

In an action for specific performance, the contract must be definite enough to form the foundation for a specific judgment. Van v. Fox, 278 Or. 439, 445, 564 P.2d 695 (1977).

"The essential terms of a contract to sell real property are:

" '(1) the parties; (2) the subject matter; (3) the mutual promises; and (4) the price and consideration and terms of payment if the sale is not for cash.' M. Friedman, Contracts and Conveyances of Real Property 69 (3d ed. 1975)." Shipler Logging v. Ponderosa Inv., 45 Or.App. 325, 329, 608 P2d 211, rev. den. 289 Or. 587 (1980).

The law

" 'leans against * * * the destruction of contracts because of uncertainty; and it will, if feasible, so construe agreements as to carry into effect the reasonable intentions of the parties if that can be ascertained.' " Van v. Fox, supra, 278 Or. at 445, 564 P.2d 695 (quoting 11 Williston, Contracts 813, § 1424 (3d ed 1968)).

Defendant first asserts that the contract is unenforceable, because the "Misc. Equipment" is not specifically described in the offer to purchase. Defendant did not move for directed verdict on the ground that the subject matter was indefinite and raised the issue for the first time in its motion for judgment notwithstanding the verdict. The trial court would not have had the authority to enter a judgment notwithstanding the verdict on a basis not raised by a directed verdict motion. Ailes v. Portland Meadows, Inc., 104 Or.App. 115, 799 P.2d 203 (1990), rev. allowed 311 Or. 87, 804 P.2d 1169 (1991). Because defendant did not timely raise the issue in the trial court, we will not consider it. ORAP 5.45.

Defendant next argues that the payment terms are too indefinite. "Uncertainty in the terms of payment is held to be a defect in an essential provision and renders a contract unenforceable." Ford v. Blinn, supra, 50 Or.App. at 519, 623 P.2d 1110. However, terms...