Emmert v. O'Brien
| Decision Date | 20 March 1985 |
| Citation | 72 Or.App. 752,697 P.2d 222 |
| Parties | Terry W. EMMERT, Appellant, v. Kevin O'BRIEN and Patricia O'Brien, husband and wife, Jerry Eastman, and Professionals "100", Inc., an Oregon corporation, Respondents. 82-0388C; CA A33809. |
| Court | Oregon Court of Appeals |
Timothy J. Murphy and Gary M. Bullock, Portland, filed the briefs for appellant.
E. Andrew Jordan and Bolliger, Hamptom & Tarlow, Portland, filed the brief for respondents Kevin and Patricia O'Brien.
Joel E. Grayson, Portland, filed the brief for respondents Jerry Eastman and Professionals "100", Inc.
Before BUTTLER, P.J., JOSEPH, C.J., and ROSSMAN, J ROSSMAN, Judge.
This is an action for damages for breach of contract against defendants O'Brien and for fraud and misrepresentation against the O'Briens and the other defendants arising out of an earnest money agreement for the sale of real property. 1 On defendants' motions, plaintiff's third, fourth and fifth amended complaints were dismissed, the last without leave to amend, for failing to state a claim on which relief can be granted. ORCP 21 A(8). A previous attempt to appeal the orders granting those motions was dismissed for want of an appealable judgment. Emmert v. O'Brien, 70 Or.App. 180, 688 P.2d 438 (1984). Judgment for defendants was then filed on October 29, 1984, and from that judgment plaintiff appeals. It now is submitted for our consideration on the basis of the previous briefs and oral arguments.
The only issue presented by this appeal is whether plaintiff's third, fourth or fifth amended complaints stated a claim for relief; the facts alleged in the complaint are considered true for the purpose of deciding that issue. See Musgrave et ux v. Lucas et ux, 193 Or. 401, 408, 238 P.2d 780 (1951). Although the parties base their arguments on facts contained in the numerous affidavits and exhibits which are included in the record, we consider only the facts alleged in the complaints when reviewing an order granting a motion to dismiss for failure to state a claim. We conclude that plaintiff has stated a claim for relief and reverse.
The earnest money agreement and an addendum dated September 20, 1981, both incorporated by reference in the complaints, provide that, for $18,000, defendants O'Brien would convey a lot "buildable now for duplex" and "with no deed restrictions" to plaintiff. At that time, the lot was not "buildable now for duplex" and was encumbered by deed restrictions. On October 5, 1981, the parties executed a second addendum, also incorporated by reference in the complaint, which provides, in part:
A conditional use permit was approved by the city but only conditionally. Plaintiff's fourth amended complaint alleges that the quoted provision obligated defendant to meet those conditions and alleges further that:
"Defendants O'Brien refused to procure the site drainage plan required by the city, and thereafter, through their attorney, on or about January 13, 1982, directed the escrow company that was to close the transaction, to not close the transaction, and directed the City of Tigard to not allow plaintiff to assist in obtaining the site drainage plan so that the real property could in fact be used conditionally as duplex property."
The O'Briens argue that they did not promise to obtain the conditional use permit but, rather, that obtaining the permit was a condition precedent to the fulfillment of the contract. They point out that, as a matter of fact, they did obtain a permit but they claim that they had no obligation to meet the conditions attached by the city to that permit. 2 Thus the issue, as framed by the parties, is whether obtaining the permit was a promise or a condition and, if a promise, whether the O'Briens' duty was performed by securing a conditional use permit that was subject to special conditions.
Defendants make much of the fact that the caption "Special Conditions" heads the space on the standard form agreement where a reference to the disputed provisions was written. It is elementary that printed captions do not control the handwritten expression of the parties' agreement, ORS 42.270, and, if we look to the language used, we do not find conditions being expressed. To the contrary, the first addendum, after a printed recitation stating "BUYER(S) AND SELLER(S) HEREBY AGREE TO THE FOLLOWING" reads:
Provisions in the second addendum include: "Seller agrees to allow purchaser to perform [excavation]" and "[u]pon execution of this document, purchaser to place 1000.00 in cash in escrow."
We do not think that those provisions describe conditions but, even if they do, plaintiff's fourth amended complaint states a claim for breach of contract. If, as alleged, the O'Briens promised to "obtain and perform any conditions necessary to a conditional use permit," then proof of their failure to do so would entitle plaintiff to damages for breach of contract. If, on the other hand, obtaining the permit was a condition precedent, then the O'Briens had an implied obligation to refrain from frustrating its occurrence, see generally Perkins v. Standard Oil Co., 235 Or. 7, 16, 383 P.2d 107, 383 P.2d 1002 (1963), and may have had an affirmative obligation to use reasonable efforts to bring it about. See Western Hills v. Pfau, 265 Or. 137, 142, 508 P.2d 201 (1973); Anaheim Co. v. Holcombe, 246 Or. 541, 547, 426 P.2d 743 (1967). One party or the other had a duty to use reasonable efforts to satisfy the conditions of the conditional use permits; plaintiff alleges that it was the O'Briens' duty. Even assuming that it was plaintiff's duty to meet the conditions, the allegation that the O'Briens frustrated plaintiff's effort to do so, if true, is actionable. Perkins v. Standard Oil Co., supra. Accordingly, that part of the order dismissing plaintiff's fourth amended complaint alleging breach of contract by the O'Briens must be reversed.
Defendants challenge both the claims of misrepresentation and fraud primarily on three grounds. First, they contend that the alleged misrepresentations were not representations at all, but were conditions precedent included in the earnest money agreement solely for plaintiff's protection. Plaintiff's fifth amended complaint alleges:
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