Honeyman v. Clostermann, A8305-03267

• Decision Date: 20 April 1988
• Docket Number: No. A8305-03267,A8305-03267
• Citation: 90 Or.App. 615,753 P.2d 1384
• Parties: Stuart HONEYMAN, Respondent, v. Adelbert G. and Maxine B. CLOSTERMANN, Appellants, James Spassov, Defendant. ; CA A38251.
• Court: Oregon Court of Appeals

Page 1384

753 P.2d 1384

90 Or.App. 615

Stuart HONEYMAN, Respondent, v. Adelbert G. and Maxine B. CLOSTERMANN, Appellants James Spassov, Defendant.

No. A8305-03267; CA A38251.

Court of Appeals of Oregon.

Argued and Submitted Feb. 24, 1988.

Decided April 20, 1988.

Francis E. Harrington, Portland, argued the cause and filed the briefs for appellants.

Mildred J. Carmack, Portland, argued the cause for respondent. With her on the brief were Thomas V. Dulcich and Schwabe, Williamson & Wyatt, Portland.

Before WARDEN, P.J., and ROSSMAN and GRABER, JJ.

GRABER, Judge.

Plaintiff brought this action for specific performance of an earnest money agreement involving the sale of an undeveloped lot in Portland. The trial court granted specific performance on modified terms and dismissed defendants' ¹ counterclaims with prejudice. Defendants appeal, and we affirm.

Plaintiff, a building contractor, became interested in buying a lot owned by defendants. Defendants were represented in the transaction by Spassov, a real estate agent. The listing for the lot stated that it contained "approximately 5,000 square feet." Zoning regulations required a variance in order to build on a lot smaller than 7,000 square feet. If the lot were between 5,000 and 7,000 square feet an "administrative variance" could be obtained; but, if the lot were less than 5,000 square feet, it would require a "major variance," including notice to the neighbors and a hearing.

On March 10, 1983, plaintiff made the offer that is the subject of the current dispute. Defendants accepted the offer and signed an earnest money agreement. Handwritten in the agreement was this "special condition":

"Sale subject to receiving approval by city, state, and county concerning buildability of said lot. This transaction to close within 5 working days of satisfaction of contingency."

Further, defendants were to "pay all cost [sic ] concerning approval of buildability of lot," and the $1,000 earnest money was to be evidenced by a "promissory note payable on satisfaction of contingency." There also was a "time is of the essence" clause, which provided that the transaction was to close "on or before April 10." Separate paragraphs stated that defendants were to pay insurance and taxes on the property through April 10 and that they would deliver possession on April 10.

When the earnest money agreement was prepared, the parties did not know whether a "major" or "minor" variance was required, because they did not know the exact size of the lot. Although the agreement required defendants to pay the costs of obtaining "approval of buildability," they did not assist plaintiff, ² who, on March 28, employed a surveyor to measure the lot. Sometime between March 28 and April 1, the surveyor informed plaintiff that the lot contained only 4,870 square feet and that, therefore, the more extensive major variance procedure applied. On April 1, Quinlan, plaintiff's agent, obtained an application for a major variance, and plaintiff hired an architect to prepare a site plan, which the application required.

At some time after April 10, Spassov told Quinlan that, because April 10 had passed, the transaction would not be consummated. Quinlan then sent Spassov an addendum, which would have extended the closing date to May 20, 1983. Plaintiff signed the addendum on April 24, 1983. Two days later, Maxine Clostermann wrote the word "refused" on the proposed addendum and signed it on behalf of both defendants. Quinlan and plaintiff testified that they submitted the addendum to defendants because they were not certain that Spassov, defendant's agent, had kept defendants informed about the transaction.

On April 23, Spassov had offered to buy the property from defendants. He told plaintiff that "a third party" had made an offer for the lot and was going to build a house on it. Plaintiff testified that Spassov refused to forward plaintiff's variance application to defendants for their signatures, which were required. By May 10, 1983, plaintiff's variance application was complete except for defendants' signatures, and plaintiff and Quinlan took the application to the City Planning Commission office for a completeness review. They learned that Spassov had already filed an application for a variance on the same property. He had entered into an earnest money agreement with defendants on May 1 and had arranged for an architect to pursue the application for a variance on his behalf. A variance was granted in July 1983.

Before addressing the merits, we must resolve certain procedural issues. This case has a checkered history. Although the original complaint named the Clostermanns as the only defendants, plaintiff filed an amended complaint on March 16, 1984, adding Spassov as a defendant. A default order was entered against Spassov on May 9, 1984. On November 27, 1985, the trial court entered a judgment for plaintiff but against only the Clostermanns. The Clostermanns filed a notice of appeal on December 20, 1985. Plaintiff then asked us either to dismiss the appeal so a proper judgment (including Spassov) could be entered or to allow the trial court leave to enter a corrected judgment.

On March 3, 1986, we gave the trial court leave to enter a corrected judgment pursuant to ORS 19.033(4). The order provided in part that defendants "shall have 14 days from the date of entry [of the corrected judgment] to file an amended notice of appeal." Thereafter we granted extensions of time for defendants to comply with the order; the final "order granting extension of time" gave them 14 days from June 13, 1986, to file their amended notice of appeal. That is, defendants had until June 27, 1986, to appeal from a corrected judgment.

The corrected judgment was entered on May 29, 1986, disposing of all claims between plaintiff and all defendants, including Spassov. Defendants and Spassov filed a notice of appeal on July 1, 1986. ³ We entered an order dismissing Spassov's appeal for lack of jurisdiction. ⁴ Questions remain, however, as to the effect of defendants' filing their amended notice of appeal (1) more than 30 days after entry of the corrected judgment in the trial court and (2) beyond the time allowed by our order.

We conclude, first, that failure to file a notice of appeal within 30 days after entry of the corrected judgment does not deprive us of jurisdiction. We obtained jurisdiction when defendants timely appealed from the first judgment. Our remand to the trial court with leave to enter a corrected judgment pursuant to ORS 19.033(4) did not affect our jurisdiction. See Murray Well-Drilling v. Deisch, 75 Or.App. 1, 9, 704 P.2d 1159 (1985), rev. den. 300 Or. 546, 715 P.2d 93 (1986).

Although we have jurisdiction of the appeal, defendants filed their second notice several days after the June 27, 1986, deadline set by our order. We have discretion to dismiss the appeal for failure to comply with that order, ORS 19.033(3), but decline to do so. We turn to the merits. ⁵

Defendants assign two errors related to the action for specific performance. First, they argue that the agreement was not capable of specific performance, because it had expired by its terms on April 10. Second, defendants challenge the form of the judgment, which called for a contract of sale rather than a deed. We review de novo. ORS 19.125(3).

The trial court first held that the earnest money agreement was ambiguous:

"10. The earnest money agreement between plaintiff and defendants contained an ambiguity in that it identified an apparent closing date of April 10, 1983, and another closing date of five days after buildability was achieved."

We agree that it is ambiguous. The April 10 closing date in the "time is of the essence" clause conflicts directly with the "special condition" that the sale "close within 5 working days of satisfaction of [the buildability] contingency" and with the provision that the $1,000 in earnest money be "payable on satisfaction of contingency."

The trial court then resolved the ambiguity as follows:

"Based on the intent of the parties when the earnest money agreement was entered into that plaintiff would require a reasonable amount of time to obtain the variance, the court finds that the parties intended April 10, 1983 to be a target date only, and not an outside closing date. The parties intended and agreed that closing was not to occur until a variance had been obtained to make the property buildable."

Because the agreement was ambiguous, extrinsic evidence, including evidence of the intent of the parties when they entered the agreement, can be considered in resolving the ambiguity. Evenson Masonry, Inc. v. Eldred, 273 Or. 770, 772, 543 P.2d 663 (1975); see also ORS 42.230 and ORS 42.240. Quinlan testified that the April 10 closing date was used for two reasons. First, after doing some preliminary checking, he thought that only a minor variance would be required. Second, he believed that some date had to be specified as a closing date so that the contract would not be "open ended." Quinlan also testified that the buyer was willing to close on April 10 if the buildability contingency was satisfied at that time.

Quinlan's testimony is consistent with the words of the contract and with the circumstances under which it was made. ORS 42.220. The agreement was signed on March 10. Neither plaintiff nor defendants knew then whether a major or minor variance would be required, yet all parties involved were aware that a major variance might be needed. A minor...