In re Estate of Fitzner, 2001-CA-01898-SCT.

• Decision Date: 23 January 2003
• Docket Number: No. 2001-CA-01898-SCT.,2001-CA-01898-SCT.
• Citation: 881 So.2d 164
• Parties: In the Matter of the ESTATE OF George FITZNER, Deceased. Oliver L. Phillips v. Julie Fitzner Jurotich, Administratrix, C.T.A.
• Court: Mississippi Supreme Court

881 So.2d 164

In the Matter of the ESTATE OF George FITZNER, Deceased.

Oliver L. Phillips v. Julie Fitzner Jurotich, Administratrix, C.T.A.

No. 2001-CA-01898-SCT.

Supreme Court of Mississippi.

January 23, 2003.

David L. Sanders, Jeffrey Johnson Turnage, Columbus, attorneys for appellant.

James W. Craig, Jackson, J. Randolph Lipscomb, Columbus, attorneys for appellee.

Before PITTMAN, C.J., WALLER and CARLSON, JJ.

WALLER, J., for the Court:

¶ 1. This case involves an appeal from a judgment denying a probated claim filed by Oliver L. Phillips, one of the partners in a limited partnership, against the Estate of George E. Fitzner, the other partner. The chancellor found that advances made by Phillips for the benefit of Fitzner were subject to a written memorandum agreement which restricted Phillips' recovery to assets from the partnership. The chancellor further found that the parol evidence rule barred evidence of oral agreements made prior to the execution of the written agreement and that the statute of frauds barred evidence of alleged oral modifications made after the execution of the written agreement. We affirm.

FACTS

¶ 2. In 1995, Oliver L. Phillips and George E. Fitzner formed a Mississippi limited partnership, Plantation Pointe, L.P., to operate a retirement home in Columbus, Mississippi. Each owned fifty percent of the partnership, and each made equal contributions to the business until 1996, when Phillips' contributions began to exceed those made by Fitzner. According to Phillips, Fitzner, who was having cash flow problems, orally promised to repay Phillips fifty percent of his contributions plus interest. As the unequal contribution pattern continued, however, Phillips became concerned. He repeatedly asked Fitzner to reduce the promise to pay to writing, but Fitzner always put him off, saying that he promised to pay Phillips back with interest. In 1997, Phillips produced, and Fitzner signed, a memorandum agreement, which provided as follows:

These parties are the principal partners in Plantation Pointe, L.P. (the "Business") and desire to reduce their understanding with respect to financial advances to writing. The Business has considerable expenses and has needed and continues to need infusions of cash. Phillips has been and is in a position to inject cash into the business to a greater extent than Fitzner is able and willing to do. It is agreed that all cash advances made by Phillips to the business in excess of equal advances made by Fitzner shall accrue interest from the date of each such advance at the rate of one and one-half per cent (1½%) above New York prime, compounded monthly. In the event of the sale of all or a part of the business or the ability of the business to pay out income to its partners, Phillips will be repaid his disproportionate advances together with all such accrued interest prior to any other disbursements from the business to any partner.

¶ 3. Plantation Pointe's tax returns show that Phillips' ownership percentage in Plantation Pointe gradually rose from 50% in 1995 to 92.67% in 1999. Plantation Pointe's books credited every dollar Phillips contributed as a credit to Phillips' capital account.

¶ 4. Fitzner died in 1999, and estate proceedings were begun. Phillips probated a claim in the amount of $1,527.882.31 against the Estate based on the written memorandum agreement. The Estate filed a motion to disallow Phillips' claim, which the chancellor granted, finding, in effect, that Phillips' claim was against Plantation Pointe, not the Estate:

The [memorandum] agreement is not ambiguous. No evidentiary hearing is necessary to take parol evidence in order to interpret the agreement. The agreement between Phillips and Fitzner says that they "desire to reduce their understanding with respect to financial advances to writing." Therefore there is no need nor right to vary or add to the written agreement as the parties intended the written agreement to be complete and whole, the integration of their agreement to writing.

¶ 5. The chancellor¹ allowed Phillips to amend to add a claim that there was an oral contract between Phillips and Fitzner pertaining to the cash advances. The chancellor held:

[A] claim is sufficient if it indicates the nature and extent of the claim, and it may be amended if the amendment does not substantially change the original claim or introduce a new or different claim.... The written agreement does not establish an enforceable claim against the estate, and it may not be supplemented by oral agreements. The written agreement however may be modified by a subsequent oral agreement unless prohibited by the statute of frauds.

The amended claim filed by Phillips stated as follows:

To the extent the written agreement Dated December 15, 1997 was an attempt to reduce their agreement to writing, Fitzner and Phillips had a separate oral agreement that was never reduced to writing. Alternatively, Fitzner and Phillips orally modified their agreement of December 15, 1997 when Fitzner on many occasions orally promised Phillips if Phillips would infuse more of his personal cash into the business, Fitzner would personally repay Phillips for all unequal cash advances ever made by Phillips to the business with interest compounded monthly at a rate of 1 1/2 percent above New York prime.

The chancellor ruled that Phillips failed to prove by clear and convincing evidence that an oral contract was ever made between Phillips and Fitzner. Phillips appeals.

DISCUSSION

I. WHETHER THE MEMORANDUM AGREEMENT WAS AMBIGUOUS.

¶ 6. "In contract construction cases a court's focus is upon the objective fact — the language of the contract. [A reviewing court] is concerned with what the contracting parties have said to each other, not some secret thought of one not communicated to the other." Turner v. Terry, 799 So.2d 25, 32 (Miss.2001); Osborne v. Bullins, 549 So.2d 1337, 1339 (Miss.1989). Only if the contract is unclear or ambiguous can a court go beyond the text to determine the parties' true intent. "[T]he mere fact that the parties disagree about the meaning of a contract does not make the contract ambiguous as a matter of law." Turner, 799 So.2d at 32; Cherry v. Anthony, 501 So.2d 416, 419 (Miss.1987).

¶ 7. Questions concerning the construction of contracts are questions of law that are committed to the court rather than questions of fact committed to the fact finder. Parkerson v. Smith, 817 So.2d 529, 532 (Miss.2002); Miss. State Hwy. Comm'n v. Patterson Enters., Ltd., 627 So.2d 261, 263 (Miss.1993). The standard of review for questions of law is de novo. Parkerson, 817 So.2d at 532; Starcher v. Byrne, 687 So.2d 737, 739 (Miss.1997).

¶ 8. A reviewing court should seek the legal purpose and intent of the parties from an objective reading of the words employed in the contract to the exclusion of parol or extrinsic evidence. The reviewing court is not at liberty to infer intent contrary to that emanating from the text at issue. Cooper v. Crabb, 587 So.2d 236, 239 & 241 (Miss.1991). When construing a contract, we will read the contract as a whole, so as to give effect to all of its clauses. Brown v. Hartford Ins. Co., 606 So.2d 122, 126 (Miss.1992). We must look to the "four corners" of the contract whenever possible to determine how to interpret it. McKee v. McKee, 568 So.2d 262, 266 (Miss.1990). Our concern is not nearly so much with what the parties may have intended, but with what they said, since the words employed are by far the best resource for ascertaining the intent and assigning meaning with fairness and accuracy. Simmons v. Bank of Miss., 593 So.2d 40, 42-43 (Miss.1992).

¶ 9. The chancellor found as follows:

The agreement between Phillips and Fitzner says that they "desire to reduce their understanding with respect to financial advances to writing." Therefore there is no need nor right to vary or add to the written agreement as the parties intended the written agreement to be complete and whole, the integration of their agreement to writing. Prior negotiations and agreements were merged into the written agreement. The advances to be made by Phillips are to be made to the business, not to Fitzner. Nowhere in the agreement does Fitzner agree to repay the advances made by Phillips to the business. What Fitzner does agree is that the advances shall be repaid by the business "prior to any other disbursements from the business." Fitzner also does agree to the interest rate that the business shall pay Phillips for his loans to the business. Nowhere within the four corners of the agreement is there any language which can be interpreted as an agreement by Fitzner to repay Phillips for any advances which Phillips chooses to make to the business, including any disproportionate advances that Phillips may have made to the business in the past. Nowhere in the written agreement does Fitzner agree to be personally liable for principal and interest on any prior advances made by Phillips to the business. This written agreement would have been the logical and reasonable time and place for Fitzner to agree in writing to be liable personally for both previous and future advances by Phillips to the business and he did not. This written agreement was also the logical and reasonable manner in which Fitzner and Phillips would have memorialized any prior agreement between them that any prior advances by Phillips to the business were actually loans to Fitzner and advances by him to the business. No such memorialization was made notwithstanding the parties['] statement that the purpose of the writing was to reduce to writing their agreement on advances to the business. The written agreement evidences that Fitzner would not at that time advance more money to the business but if Phillips chose to do so, Phillips would be repaid by the business, as a creditor, any disproportionate advances in preference to any claims of Fitzner, as a partner.

¶ 10. The chancellor did not err in...