G.H.H. Investments v. Chesterfield, ED 90778.

• Court: Court of Appeal of Missouri (US)
• Writing for the Court: Patricia L. Cohen
• Citation: 262 S.W.3d 687
• Parties: G.H.H. INVESTMENTS, L.L.C., Respondent, v. CHESTERFIELD MANAGEMENT ASSOCIATES, L.P., Appellant.
• Docket Number: No. ED 90778.,ED 90778.
• Decision Date: 09 September 2008

262 S.W.3d 687

G.H.H. INVESTMENTS, L.L.C., Respondent, v. CHESTERFIELD MANAGEMENT ASSOCIATES, L.P., Appellant.

No. ED 90778.

Missouri Court of Appeals, Eastern District, Division One.

September 9, 2008.

Joe D. Jacobson, Clayton, MO, for appellant.

Joy D. McMillen, Chesterfield, MO, for respondent.

PATRICIA L. COHEN, Judge.

Introduction

Chesterfield Management Associates, L.P. ("Seller") appeals the judgment of the Circuit Court of St. Louis County granting G.H.H. Investments, L.L.C.'s ("Purchaser") petition for specific performance of Seller's contract to sell real property to Purchaser ("Contract"). Section 7 of the Contract conditioned Purchaser's obligation to close on the property upon the satisfaction of certain zoning and approval contingencies. Section 11, the contractual provision governing the timing of closing, required the parties to close on the property thirty days after approval of Purchaser's development plan and record plats. Seller claims that the trial court erred in entering judgment for Purchaser because, by waiving the zoning and approval contingencies contained in Section 7, Purchaser concurrently waived those contingencies for purposes of triggering the timing of closing under Section 11. In the alternative, Seller argues that the trial court erred in enforcing the Contract because the Contract was properly terminated by Seller. Finding no error, we affirm.

Factual and Procedural Background

On April 21, 2004, Seller contracted to sell Purchaser 28.4 acres of real estate located at 14001 Olive Boulevard in Chesterfield, Missouri ("Property"). Purchaser is a limited liability company, co-managed by Michael Hejna and Brett Hardesty, that invests in commercial and residential real estate. Purchaser planned to develop 82 residential lots on the Property.

The Contract contained various contingencies that took into account the City of Chesterfield's ("City") "linear" zoning and development process. The City's zoning and development process consists of the following five steps: (1) rezoning the subject property; (2) approval of a final site development plan for the subject property; (3) approval of improvement plans for the subject property; (4) approval of the final record plat for the subject property; and (5) constructing improvements on the subject property. The City does not review any phase in this five-step process until the preceding step has been completed. Section 7 of the Contract, entitled "Zoning Contingency," conditioned Purchaser's obligation to close on the Property on: (1) the City rezoning the Property to a residential, R-3 PEU Zoning classification; and (2) the City and all other relevant authorities approving Purchaser's development plan and record plats.¹

Purchaser submitted its application for rezoning to the City, along with the preliminary development plan, on September 27, 2004. Although Mr. Hardesty informed Seller during contract negotiations that Purchaser would be able to move the project through "the zoning process" in nine to twelve months, it later became apparent that the zoning contingency would not be satisfied within the twelve-month period provided by the Contract. For this reason, the parties amended the Contract on December 29, 2004 ("Amendment"). Pursuant to the Amendment, Purchaser's time for satisfying the contingencies expired on December 27, 2005.² Both the Contract and Amendment were negotiated by Mr. Hardesty and Seller's attorney, Michael Kime.³

Significantly, nothing in the Amendment altered Section 11 of the Contract,⁴ which was the only contract provision that concerned the time of closing. Section 11 set the date of closing on the thirtieth day after the latter of: (1) approval of Purchaser's development plan and record plats "in accordance with Section 7," or (2) waiver or satisfaction of the Clean Water Act contingency contained in Section 8.

The City granted Purchaser's petition to rezone the Property on November 7, 2005. On December 19, 2005, Purchaser's attorney, Michael Doster, wrote a letter to Seller's attorney, William Sauerwein, confirming the status of the Contract and the timing of closing. In this letter, Mr. Doster informed Mr. Sauerwein that rezoning had been approved but the other contingencies, such as approval of the development plan and record plat, had not yet been satisfied. Mr. Doster also indicated that the closing would take place thirty days after the approval of Purchaser's development plan and record plat. Mr. Doster and Mr. Kime discussed Mr. Doster's letter in a telephone conversation the following day.⁵

On December 27, 2005, Mr. Doster wrote a letter to Mr. Sauerwein electing not to terminate the Contract under Paragraphs 7(b) or 8(b), thereby waiving the zoning, development plan, record plat, and Clean Water Act contingencies. This letter constituted timely waiver by Purchaser of the remaining contingencies under the Contract and Amendment, which effectively bound both parties to the Contract and obligated Purchaser to purchase the property.

On December 29, 2005, Mr. Kime wrote a letter to Mr. Doster declaring that Seller would not permit Purchaser to defer closing past the thirtieth day after December 27, 2005, the date on which Purchaser waived the Section 7(b) and 8(b) contingencies. In subsequent letters, dated January 4, 2006 and January 16, 2006, Mr. Kime asserted that Purchaser breached the Contract by failing to petition for development plan and plat approval as soon as "reasonably practicable" and that Seller would look for an alternative purchaser for the Property or develop the Property itself if Purchaser failed to close by January 27, 2006.

In response to Seller's threats to find another purchaser or self-develop the Property, Purchaser filed its Petition for Specific Enforcement, Declaratory Judgment and Injunctive Relief ("Petition") on January 23, 2006. Purchaser asked the trial court to: (1) declare that the Contract required the closing to occur on the thirtieth day after the City approved the record plat, the fourth stage in the City's development process; (2) to order Seller to specifically perform its obligations under the Contract; and (3) to enjoin Seller from selling the Property to another purchaser. Seller filed a counterclaim for damages, which the trial court dismissed with prejudice to the extent that it sought any damages in excess of the $250,000 provided by the Contract's liquidated damages clause.

After a four-day bench trial, the trial court entered judgment in favor of Purchaser and against Seller on all counts of the Petition and Counterclaim. In its Findings of Facts and Conclusions of Law, the trial court stated that Section 11 of the Contract did not require Purchaser to close on the Property on or before January 27, 2006 because Purchaser's development plan and record plats had not yet been approved. The trial court further found that Seller's threats to self-develop the Property and/or find an alternative buyer constituted anticipatory breach of the Contract and Amendment. Finally, the trial court concluded that Purchaser petitioned the City and relevant authorities for zoning and approvals as soon as reasonably practicable. Seller appeals.

Standard of Review

As this matter is an appeal from a court-tried case, the standard of review is governed by Murphy v. Carron, 536 S.W.2d 30, 32 (Mo.1976) (en banc). The judgment will be affirmed unless it is against the weight of the evidence, there is insufficient evidence to support it, or it erroneously declares or applies the law. Pelligreen v. Wood, 111 S.W.3d 446, 450 (Mo.App. E.D.2003). We defer to the factual findings of the trial court, which is in a superior position to assess credibility. Id. However, this Court independently evaluates the trial court's conclusions of law. Id. Contract interpretation and questions of contractual ambiguity are issues of law, which we review de novo on appeal. Monsanto Co. v. Syngenta Seeds, Inc., 226 S.W.3d 227, 230 (Mo.App.E.D.2007).

Discussion

1. Waiver of Contingency

In its first point, Seller argues that the trial court erred in holding that Purchaser's waiver of the approval contingencies provided for in Section 7 did not operate to waive those same contingencies for purposes of the Section 11 closing provision. Seller asserts that waiver of a contingency for one part of a contract necessarily waives that contingency as it relates to the entire contract. We disagree.

"The cardinal rule in the interpretation of a contract is to ascertain the intention of the parties and to give effect to that intention." J.E. Hathman, Inc. v. Sigma Alpha Epsilon Club, 491 S.W.2d 261, 264 (Mo. 1973) (en banc). If a contract contains no ambiguities, the intent of the parties is to be gathered from the contract alone.⁶ Id. Therefore, evidence of how the contract was understood or acted upon by the parties is only used when the contract or a contract term is unclear. Smith v. Taylor-Morley, Inc., 929 S.W.2d 918, 922 (Mo. App.E.D.1996).

We find the Contract to be unambiguous. "Where a contract speaks plainly and unequivocally, language used must be enforced as written." Kramer v. Fallert, 628 S.W.2d 671, 674 (Mo.App.E.D.1981). Section 11 of the Contract clearly and unambiguously states that the parties are to close on the Property on-the thirtieth day after the latter of (i) approval of Purchaser's development plan and record plats or (ii) waiver or satisfaction of the Clean Water Act contingency. The terms "approval," "waiver," and "satisfaction" are distinct legal terms to which we must attribute their plain meaning.⁷ Section 11(a)(i) clearly conditions the closing date on Chesterfield's approval of Purchaser's development plan and record plats. If the parties had intended waiver of the development plan and record plat approval to trigger the closing, they could have employed the language "waiver or satisfaction" in Section 11(a)(i) as they did in Section 11(a)(ii). Instead, the...