Frederick's Estate, Matter of

• Citation: 599 P.2d 550
• Decision Date: 15 August 1979
• Docket Number: 5117,Nos. 5029,s. 5029
• Parties: In the Matter of the ESTATE OF Uber FREDERICK, Deceased. W. T. FULKERSON, Appellant (Petitioner below), v. Mrs. Charles V. REESE, Appellee (Respondent below). W. T. FULKERSON, Appellant (Plaintiff below), v. Cherie REESE, a/k/a Mrs. Charles V. Reese, Individually and as Administratrix of the Estate of Uber Frederick, a/k/a Uber H. Frederick, Deceased, Bettye Yusievicz, Douglas Frederick, Marie Jewett, Charles Frederick, Gay Baalhorn, Alan Lou Frederick, Roger R. Frederick, and Mildred F. Piovarcsik, Appellees (Defendants below).
• Court: United States State Supreme Court of Wyoming

Page 550

599 P.2d 550

In the Matter of the ESTATE OF Uber FREDERICK, Deceased.

W. T. FULKERSON, Appellant (Petitioner below), v. Mrs. Charles V. REESE, Appellee (Respondent below).

W. T. FULKERSON, Appellant (Plaintiff below), v. Cherie REESE, a/k/a Mrs. Charles V. Reese, Individually and as Administratrix of the Estate of Uber Frederick, a/k/a Uber H. Frederick, Deceased, Bettye Yusievicz, Douglas Frederick, Marie Jewett, Charles Frederick, Gay Baalhorn, Alan Lou Frederick, Roger R. Frederick, and Mildred F. Piovarcsik, Appellees (Defendants below).

Nos. 5029, 5117.

Supreme Court of Wyoming.

Aug. 15, 1979.

Daniel J. Morgan, of Morgan & Brorby, Gillette, and Tom. C. Toner, of Redle, Yonkee & Arney, Sheridan, for appellant.

Thomas E. Lubnau, Gillette, and Wm. R. Jones and W. H. Vines, of Jones, Jones, Vines & Hunkins, Wheatland, for appellees.

Before RAPER, C. J., and McCLINTOCK, THOMAS, ROSE and ROONEY, JJ.

THOMAS, Justice.

OPINION OF THE COURT IN CASE NO. 5029

In the Probate Court in and for Campbell County the appellant, W. F. Fulkerson, sought specific performance of his right to purchase a filling station pursuant to an option contained in a lease of the premises which lease had been assigned to him. The probate court held that the lease, and specifically the option to purchase, were unconscionable, and accordingly it denied the remedy that Fulkerson sought. The sole issue for resolution is whether as a matter of law the lease, and particularly the option, are unconscionable. We conclude that they are not, and we will reverse the probate court with instructions to enter the appropriate order authorizing and directing the administratrix to execute a conveyance of the property to Fulkerson.

In March of 1957 Mildred T. Frederick and Uber H. Frederick executed a lease of property, the record title to which then was in Mildred T. Frederick, to Standard Oil Company. The lease was on a form which was the standard agreement in wide use by Standard Oil Company at that time, and which was entered into by more than 2,000 individuals, in separate instances, with Standard Oil Company. Prior to executing the lease the Fredericks sought and received the advice of an attorney concerning the execution of the agreement.

Pursuant to the lease the Fredericks agreed to construct and equip a service station building to cost not less than $22,400. This was done and the ten-year initial term of the lease commenced to run in August of 1957. The lease provided that upon 60 days' written notice prior to the expiration of the original term or any extension the lessee could extend the lease but for not more two successive five-year periods. The rental during the initial term and any extensions of the lease was to be $250 per month. Standard Oil Company, which later became Amoco Oil Company, did exercise its right to extend the lease for the two successive five-year extensions.

During the period of the lease as extended the Fredericks executed a warranty deed which created a tenancy by the entireties between them in the filling station property. Upon the death of Mildred Frederick, Uber Frederick became the sole owner of the property by recording an affidavit to establish rights of survivorship in the office of the County Clerk of Campbell County. In the same year Amoco Oil Company sold, assigned and transferred to W. T. Fulkerson all of its rights in the lease. On or about June 16, 1977, Fulkerson sent to Uber H. Frederick notification of his desire to exercise the option to purchase the premises. On July 8, 1977, Uber Frederick died, and Mrs. Charles V. Reese was appointed administratrix of his estate. Relying upon § 2-166, W.S.1957 (now § 2-5-801, W.S.1977) ¹, Fulkerson petitioned for specific performance of the right to purchase the property as set forth in the lease. The paragraph in question provides as follows:

"9. Lessee shall have, and is hereby given, the option of purchasing said premises, buildings, fixtures, equipment, machinery and appliances included in this lease, for the sum of Forty Five Thousand 00/100 DOLLARS ($45,000.00), provided Lessee shall give Lessor notice in writing of its election to exercise said option of purchase at least thirty (30) days prior to the expiration of this lease, or at least thirty (30) days prior to the expiration of any extension period, if this lease be extended, it being understood that in no event may this option be exercised prior to 31st March 1967. If any part of the demised premises shall be taken by right of eminent domain or by any conveyance in lieu thereof or in connection therewith, the purchase price set forth herein, if the purchase option is exercised, shall be reduced in the same proportion that the area immediately prior to such taking is reduced by the taking. It is further understood that if the Lessor or the Lessor's heirs, executors, grantees, or assigns, or successors, or assigns at any time during the term of this lease or any extension thereof, receives a bona fide offer to purchase said premises or any property which includes the premises, and said buildings, fixtures, equipment, machinery and appliances and desires to sell said premises, buildings, fixtures, equipment, machinery and appliances, or any part thereof under the terms of said offer, Lessor agrees to give Lessee thirty (30) days notice in writing of such bona fide offer, setting forth the name and address of the proposed purchaser who has made the offer, the amount of the proposed purchase price, and all other terms and conditions of such offer, and the Lessee shall have the first option to purchase the demised premises by giving written notice to the Lessor of its intention to purchase within said thirty (30) day period at the same price and on the same terms of any such proposal, it being understood that in the event Lessee does not give notice of its intention to exercise its option to purchase said premises within said period, this Lease and all of its terms and conditions shall nevertheless remain in full force and effect and the Lessor and any purchaser or purchasers of the demised premises shall be bound thereby, and in the event said premises are not sold for any reason pursuant to the bona fide offer set forth in the notice, the Lessee shall have, upon the same conditions of notice, the continuing first option to purchase the said premises upon the terms of any subsequent bona fide offer or offers to purchase.

"UBER H. FREDERICK, husband of Lessor, joins in these options of purchase and agrees, in the event of the exercise of either of said options by Lessee, to join said Lessor in the execution of a proper deed of conveyance; and Lessor agrees that if either of said options is exercised, he will convey a merchantable title to said real estate by good and sufficient warranty deed, with release of dower, homestead and other rights of his wife, and free from all incumbrances whatsoever, and will furnish a merchantable abstract showing merchantable title of record to said land in said Lessor, free from all liens and incumbrances, brought down to the date of conveyance. The Lessee shall have a reasonable time after receipt of said abstract in which to complete an examination thereof, and if such examination discloses objections to the title, the Lessor shall have a reasonable time in which to cure such defects."

The petition was contested by objections in writing in accordance with the procedure now found in §§ 2-5-802 and 2-5-803, W.S.1977. The grounds set forth in the objection which was filed are that the lease was unconscionable, and furthermore that it had been terminated and converted into a month-to-month tenancy because of the failure of the lessee strictly to comply with the provisions of the option agreement.

The matter then was heard by the probate court upon a stipulation of facts. In addition a second stipulation was filed to the effect that the estate and all of the heirs had appeared and were represented by counsel so that the matter could be determined to actually have been tried in the district court with an escape clause authorizing 30 days for Fulkerson to file an action in the district court if the agreed disposition were interpreted as an attempt to confer jurisdiction and held for naught. There then was entered an Order and Judgment purporting to be a disposition in the probate court and also a final judgment of a civil action in the district court in which the court denied specific performance upon the ground that the contract relied upon was unconscionable. The court specifically found that there had been no failure by the lessee to comply with the terms of the lease and that any slight deviation still amounted to substantial compliance. In addition the court made the following finding with respect to unconscionability:

"(7) The Court finds that the lease and option in question herein was unconscionable when considered as a whole due to the following reasons:

"(a) That the lease was for a period of ten (10) years with two five (5) year options at a fixed rental of Two Hundred Fifty ($250.00) Dollars a month for the entire twenty (20) year period;

"(b) That the entire period of time covered by the lease was in an inflationary economy;

"(c) That by the terms of the lease, the Lessors were required during the entire twenty (20) year period to keep the lease to (sic) premises in good repair;

"(d) The Lessors were required to pay all taxes and assessments on the property during the twenty (20) year period;

"(e) That the Lessee could assign the lease and option to buy at any time during the twenty (20) year period without consent of the Lessor;

"(f) That the Lessee was entitled to erect any fixtures or other items they deemed necessary;

"(g) That the Lessee could withdraw and cancel the lease with ten (10) days notice in the event that the Lessee or its assignees or sub-lessees were unable to obtain from the municipal or public authorities any permit or...