Hill-Shafer Partnership v. Chilson Family Trust

• Decision Date: 27 July 1979
• Docket Number: HILL-SHAFER
• Citation: Hill-Shafer Partnership v. Chilson Family Trust, 165 Ariz. 469, 799 P.2d 810 (Ariz. 1979)
• Parties: ThePARTNERSHIP, an Arizona general partnership; Daniel W. Hill and Craig Shafer, Plaintiffs Counter-defendants, Appellants Cross-Appellees, v. The CHILSON FAMILY TRUST, dated
• Court: Arizona Supreme Court

Page 810

799 P.2d 810

165 Ariz. 469

The HILL-SHAFER PARTNERSHIP, an Arizona general partnership; Daniel W. Hill and Craig Shafer, PlaintiffsCounter-defendants, AppellantsCross-Appellees, v.The CHILSON FAMILY TRUST, dated July 27, 1979 and amended April 22, 1985, Ernest Chilson and Evelyn B. Chilson, Trustees; First American Title Insurance Agency of Coconino, Inc., an Arizona corporation, DefendantsCounter-claimants, AppelleesCross-Appellants.

No. CV-89-0342-PR.

Supreme Court of Arizona, In Banc.

Sept. 18, 1990.

Reconsideration Denied Nov. 6, 1990.

[165 Ariz. 470] Lewis and Roca by John P. Frank and Dioguardi, Poli & Ball, Ltd. by Michael N. Poli, Phoenix, for The Hill-Shafer Partnership, Daniel W. Hill and Craig Shafer.

Fennemore Craig, P.C. by James Powers, Nancy L. Rowen and Loral L. Deatherage, Phoenix, for The Chilson Family Trust, Ernest Chilson and Evelyn B. Chilson.

OPINION

MOELLER, Justice.

JURISDICTION

A buyer ¹ sued for specific performance of a contract for the sale of land.The seller counterclaimed, seeking rescission of the contract.The trial court held there was a lack of mutual assent and granted summary judgment to the seller.The court of appeals reversed, holding that the facts did not present an issue of lack of mutual assent, but remanded for further proceedings on a theory of unilateral mistake.We granted seller's petition for review and have jurisdiction pursuant to A.R.S. § 12-120.24andAriz. Const. art. 6, § 5(3).

ISSUES

1.Whether, under the facts of this case, rescission of a real estate purchase contract on grounds of lack of mutual assent is precluded because the misunderstanding relates to a legal description of land.

2.Whether the trial court, on the particular facts before it, correctly granted summary judgment rescinding the real estate purchase contract on the grounds of lack of mutual assent.

FACTS

Ernest Chilson and Evelyn Chilson, trustees of the Chilson Family Trust, own approximately twenty acres of land south of Flagstaff on Butler Avenue.The tract, although contiguous, can be divided into three distinct units, as shown in the diagram below.The large parcel, containing about 17.3 acres, is bisected by Butler Avenue into "Butler North" and "Butler South."The smaller parcel, called the "Triangle," is a 2.4 acre triangular piece of land north of the larger parcel.

NOTE: OPINION CONTAINS TABLE OR OTHER DATA THAT IS NOT VIEWABLE

The Chilsons originally acquired the property in two separate transactions.Later, they directed a title agency to prepare one deed to include the property north of Butler and another deed to include the property south of Butler.The Chilsons used these two deeds to convey the property to themselves as trustees of a family trust.

In December 1984, the Chilsons listed the Triangle and Butler North with a broker, seeking a tenant for a long-term lease.Daniel Hill and Craig Shafer, general partners in the Hill-Shafer Partnership(buyer), saw a sign posted on the north side of Butler Avenue and became interested.Buyer contacted seller's broker and obtained a copy of the appraisal which listed the property as "15 acres of vacant land on the north side of Butler Avenue, one-quarter mile west of the Butler Interstate 40 interchange."The appraisal valued the property at $620,500.

Buyer inspected the land, and submitted a letter of intent proposing terms to purchase the listed property for the appraised value of $620,500.Buyer's letter of intent described the Triangle and Butler North plots of land, as had the listing and the appraisal.Buyer proposed that the final price of $620,500 be subject to an adjustment, depending on the actual acreage to be determined by a survey.The offer also contained certain proposed representations and warranties by seller as to location and size.

Seller rejected the proposal and, instead, directed its attorney to prepare a "take it or leave it" counter-offer at the same purchase price.Seller refused throughout negotiations to include a map as a part of the contract, and also refused to indicate the size of the parcel of land or to describe its location in lay terms or by reference to nearby landmarks.Seller also refused to agree to a price-per-acre adjustment mechanism or to make price in any way contingent upon an acreage figure to be determined by survey.Instead, seller insisted that the price be fixed at $620,500, and that the land be identified by legal description alone.Seller also proposed to make close of escrow contingent upon buyer's satisfaction with an economic and feasibility study that buyer would perform at its expense after receipt of a survey from seller.

The legal description contained in seller's counter-offer did not, in fact, describe the Triangle and Butler North.Rather, it described Butler North and Butler South. Buyer "accepted" seller's counter-offer and the parties entered into a contract.Escrow instructions were signed on July 5, 1985.When seller reviewed the escrow instructions in mid-July, he discovered the error in the legal description.Seller has consistently contended it always intended to sell Butler North and the Triangle, and that the use of the legal description which instead described Butler North and Butler South was due to an error.Seller contends the error originated in one of the two earlier deeds prepared by the title company by which the Chilsons transferred the property to the trust.Seller borrowed the description from one of the earlier deeds on the mistaken assumption that it described the Triangle and Butler North.

Upon discovery of the error, seller prepared an amendment to correct the legal description.Buyer refused to accept the amendment and contended it was entitled to a conveyance of the property included in the legal description.As a result of the dispute, seller cancelled the escrow, and buyer sued for specific performance.Seller counterclaimed, alleging fraudulent concealment and racketeering, and also sought rescission and a decree quieting title in it.The trial court granted summary judgment against seller on the fraud and racketeering claims, which are not involved in this appeal.The trial court also granted summary judgment against buyer on the specific performance claim and for seller on the quiet title claim, rescinding the contract for lack of mutual assent.

Buyer appealed from the summary judgment, and seller cross-appealed from what it considered to be an inadequate award of attorney's fees.The court of appeals reversed the summary judgment, holding that because the legal description in the contract was not ambiguous or vague, no misunderstanding concerning it could be the basis for relief on a theory of lack of mutual assent.The court of appeals remanded for further proceedings on a theory of unilateral mistake.The Hill-Shafer Partnership v. The Chilson Family Trust, 162 Ariz. 485, 492-93, 784 P.2d 691, 698-99(App.1989).We granted seller's petition for review.We conclude the trial court properly granted summary judgment on a theory of lack of mutual assent.

DISCUSSION

In reviewing summary judgment, we view the evidence in a light most favorable to the party opposing it.Such party must be given the benefit of all favorable inferences that may reasonably be drawn from the evidence.Wisener v. State, 123 Ariz. 148, 149, 598 P.2d 511, 512(1979).Summary judgment is appropriate when there is no substantial evidence to support an alleged factual dispute, either because the tendered evidence is too incredible to be accepted by reasonable minds, or because, even conceding its truth, it leads to an inevitable legal conclusion against its proponent.Compton v. National Metals Co., 10 Ariz.App. 366, 371, 459 P.2d 93, 98(1969);see alsoBarnes v. Arden Mayfair, Inc., 759 F.2d 676, 680-81(9th Cir.1985).The inquiry in summary judgment cases, as in directed verdict cases, is whether reasonable jurors applying the law to the facts could reach but one conclusion.SeeDombey v. Phoenix Newspapers, Inc., 150 Ariz. 476, 486, 724 P.2d 562, 572(1986);City of Phoenix v. Great Western Bank, 148 Ariz. 53, 61, 712 P.2d 966, 974(App.1985).

In the case before us, assuming all inferences in favor of buyer, we are convinced, as was the trial judge, that reasonable minds could only conclude that there was no mutual assent by the parties.All parties agree that initially all negotiations were directed towards Butler North and the Triangle.Both the appraisal and the letter of intent described and set a price only for the property north of Butler.Buyer's essential contention is that once seller made a counter-offer, the entire posture of the deal changed.Buyer argues that, although it offered to buy only the property north of Butler, once the seller insisted the property be identified by legal description alone, buyer's intent shifted (although uncommunicated to seller) and it thereafter intended to purchase whatever was contained in the legal description, regardless of what it was or where it was.

To fully explain why summary judgment was appropriate under the highly particu larized facts of this case, a full understanding of the respective factual positions of each party is necessary.To that end, it is helpful to examine in detail the deposition testimony that was submitted to the trial court.Accordingly, we set it forth at length in the Appendix to this opinion.

A careful examination of the deposition testimony demonstrates that no testimony or reasonable inference rebuts seller's testimony that seller only intended to convey the property north of Butler.Absent any such testimony or inference, buyer relies solely on the fact that seller insisted that a legal description govern.Our review of the evidence leads us to hold that, under these particular facts, the only reasonable conclusion to be drawn from the evidence is that seller insisted on use of a legal description to avoid a price adjustment based on the...