L & K Realty Co. v. R. W. Farmer Const. Co., WD
| Decision Date | 27 April 1982 |
| Docket Number | No. WD,WD |
| Citation | 633 S.W.2d 274 |
| Court | Missouri Court of Appeals |
| Parties | L & K REALTY COMPANY, Appellant, v. R. W. FARMER CONSTRUCTION COMPANY, Respondent. 32419. |
George Schwegler, Jr., Jeffrey S. Henry, Kansas City, for appellant.
John W. Cowden, Elizabeth D. Badger, Kansas City, for respondent.
Before CLARK, P. J., and MANFORD and KENNEDY, JJ.
This suit between land owners was the consequence of dispute over performance of agreements for development of mobile home residence facilities on adjacent properties owned by L & K Realty Company and Farmer Construction Company. The court, after a bench trial, denied L & K relief on its claims for contract rescission and damages and L & K appeals. Affirmed.
This controversy stems from two agreements made by L & K and Farmer on February 1, 1974, a lease and an agreement to convey an easement. The agreements were the culmination of plans by Farmer to develop a mobile home park on some 47 acres of land along Valley View Road in Jackson County. From the record, an inference arises that access to the Little Blue River was essential to development of the trailer park as a means for disposing of sewage effluent discharge. L & K owned land along Valley View Road opposite the property Farmer intended to develop and offered Farmer a feasible route to the Little Blue.
Farmer's president submitted to L & K a proposal which was ultimately reduced to the agreements now at issue. Although the agreements were lengthy and complex, the broad outline of what the parties expected to accomplish may be concisely described.
By the lease agreement, Farmer undertook to develop a mobile home park on the L & K land complementing the project to be constructed by Farmer on its own land. A sewage disposal plant to serve both projects was to be constructed by Farmer on L & K land. Construction costs for the trailer parks and the sewage facilities were to be borne entirely by Farmer. Under the easement agreement, Farmer was granted the right to construct and permanently maintain the sewer plant and lines on L & K land. Once the trailer park on L & K land were completed and opened, Farmer agreed to operate it and pay L & K 12 percent of the gross receipts. In the event Farmer failed to develop the L & K trailer park, absent excuse of that obligation under other provisions of the agreement, L & K was entitled to recover a monthly rental and taxes.
At the date of the agreements, February 1, 1974, Farmer had already acquired a special use permit from Jackson County for a mobile home park on the Farmer tract effective for a ten-year period expiring in 1983. 1 The L & K property, however, was not zoned for operation of a trailer park and that fact was recognized in the lease agreement. As lessee, Farmer agreed to apply for appropriate zoning and, when obtained, to proceed diligently to construct the L & K trailer park. Two years were allotted to obtain the zoning, failing which, the lease automatically terminated. The lease agreement assumed that maintenance of the disposal plant on L & K land would survive termination of the lease. L & K reserved the privilege to connect to that facility for its own purposes if the trailer park were not built by Farmer on the L & K property. Alternatively, L & K was entitled to relinquish the connection rights and if L & K chose this course, Farmer was obligated to pay L & K $5000.00.
By their terms, the lease agreement and the easement agreement were neither interdependent nor conditioned on mutuality of performance. A failure by Farmer to obtain the zoning on the L & K land resulted only in provision to L & K of sewer connections or entitlement to payment of $5000.00. Failure by Farmer to construct the trailer park once zoning were obtained on L & K property resulted in an obligation on Farmer to pay rent and taxes. In neither situation was Farmer's right under the easement dedication reduced or impaired.
The primary condition which the lease agreement imposed as a prelude to accrual of any rights or liabilities under the lease agreement was the commencement of construction and development of the trailer park by Farmer on its own land by September 1, 1974. The critical language of the agreement was as follows:
The easement was executed by L & K August 7, 1974 and was recorded September 13, 1974. The sewage disposal plant and lines were constructed on L & K land within the boundaries of the easement and Farmer developed the trailer park on its own land. The trial court found, however, that no construction was commenced on the Farmer tract before September 1, 1974 and that the lease agreement therefore terminated in accordance with the above Section 6, on September 1, 1974.
The evidence was undisputed that no application to rezone the L & K land was ever filed and no construction of a trailer park on L & K property was ever commenced. From a practical view, the basis for L & K's complaint is that the agreements with Farmer produced no benefit to L & K but resulted in appropriation of L & K land for installation of the sewer plant and sewer lines. 2
In a three-count petition filed in 1980, L & K sought rescission of the lease agreement and the easement, a count which assumed linkage of the two agreements, or, alternatively, accrued rent and taxes due under the lease, or, alternatively damages for breach of the lease agreement to construct the L & K trailer park. The second and third counts were based on the assumption the lease agreement was not terminated by operation of Section 6. As to this last alternative, the measure of damages was contended to be the difference in value of the L & K property with and without the trailer park as bargained for in the agreement. The trial court found all issues in favor of Farmer on the ground that the lease agreement had terminated September 1, 1974 and that Farmer and L & K had neither benefits nor obligations under the lease thereafter.
In its first point on appeal, L & K contends the undisputed evidence showed the parties recognized the continued existence of the lease agreement after September 1, 1974 and that the court's judgment was in error for failing to accept the construction of the agreement the parties themselves had adopted. The evidence on which L & K relies included correspondence from L & K to Farmer between May 5, 1975 and May 1, 1979 demanding performance of the lease terms, an acknowledgment by counsel for Farmer in 1976 that the lease was still in force and a tender of payment by Farmer in the amount of $5000.00 for the unused sewer connections. This argument assumes Section 6 of the lease would otherwise have been effective to terminate the agreement upon failure by Farmer to commence construction by September 1, 1974 but relies on the proposition that interpretation which parties place on an agreement will be binding on them. Cited by L & K as authoritative for this rule are Lene v. M. F. A. Mutual Insurance Company, 301 S.W.2d 874 (Mo.App.1957) and Norman v. Durham, 380 S.W.2d 296 (Mo.1964).
The cases cited are not applicable here because each involved ambiguous contract terms which necessitated recourse to construction and interpretation. Section 6 of the subject lease has no such infirmity but is plain upon its face. The rule which binds parties to the construction they adopt in the practical recognition of an agreement's terms applies only when the proper construction of a contract is in doubt. Laughlin v. Terry, 110 S.W.2d 838 (Mo.App.1937); Ferguson Sewer District v. Emerson Electric Manufacturing Co., 187 S.W.2d 774 (Mo.App.1945). When the language of a contract is plain, there can be no construction because there is nothing to construct. In re Estate of Lewis, 492 S.W.2d 385 (Mo.App.1973).
Actions by the parties after execution of a contract tending to show an interpretation by them at variance with the plain terms of the contract will not control and the contract will be applied as written. Willman v. Beheler, 499 S.W.2d 770 (Mo.1973); Leggett v. Missouri State Life Insurance Company, 342 S.W.2d 833 (Mo. banc 1960). The courts will not overthrow the plain and unambiguous terms of a written contract because of an erroneous construction the parties have adopted. Leggett v. Missouri State Life Insurance Company, supra; Ferguson Sewer District v. Emerson Electric Manufacturing Co., supra.
Assuming for the purpose of resolving the first of L & K's points that the finding by the trial court rested on substantial evidence and was not against the weight of the evidence on fact issues, the failure by Farmer to commence construction by September 1, 1974 terminated the lease agreement in accordance with Section 6 and neither party had any rights, obligations or liabilities thereunder after that date. The court correctly applied the law in so holding.
In its second point, L & K reaches the heart of its complaint as summarized earlier in this opinion. L & K observes that the consideration to it under the lease agreement was the prospect that Farmer would secure rezoning, build the trailer park and pay rental to L & K, all of which benefits were lost because Farmer defaulted in commencing construction. L & K then argues that the critical Section 6 was a forfeiture provision established for its benefit. On this premise, L & K contends that the forfeiture on default by a party becomes operative only at the option of the party for whose benefit the covenant was inserted and who is injured by the default and that it was for...
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