McCartney v. Malm

• Decision Date: 16 April 1981
• Docket Number: No. 5412,5412
• Citation: 627 P.2d 1014
• Parties: Robert D. McCARTNEY, d/b/a McCartney Realty, and Van LeMaster, Agent for McCartney Realty, Appellants (Plaintiffs), v. Kent W. MALM and Linda L. Malm, Appellees (Defendants).
• Court: Wyoming Supreme Court

Page 1014

627 P.2d 1014

Robert D. McCARTNEY, d/b/a McCartney Realty, and Van LeMaster, Agent for McCartney Realty, Appellants (Plaintiffs), v. Kent W. MALM and Linda L. Malm, Appellees (Defendants).

No. 5412.

Supreme Court of Wyoming.

April 16, 1981.

Rehearing Denied May 6, 1981.

Franklin D. Bayless, of Trierweiler, Bayless, Barrett & McCartney, Cheyenne, signed the brief and appeared in oral argument on behalf of appellants.

James L. Applegate and Alan B. Minier, of Hirst & Applegate, Cheyenne, signed the brief and appeared in oral argument on behalf of appellees.

Before ROSE, C. J., RAPER, THOMAS and ROONEY, JJ., and O'BRIEN, District Judge.

ROONEY, Justice.

This appeal is from a judgment which denied the appellants-plaintiffs recovery of a real estate commission on the sale of appellees-defendants' 245-acre farm near Pine Bluffs. Appellant McCartney is a licensed real estate broker in Cheyenne. Appellant Van LeMaster is McCartney's sales agent. Appellee Kent Malm executed an agreement with appellant McCartney on December 15, 1978, which gave appellant McCartney the exclusive right to sell the farm during a six-month period. The farm was sold on December 3, 1979. This action was instituted to recover a commission under such agreement. The district court held that the agreement had expired by its own terms, and that a purported "extension clause" in it was meaningless and unenforceable.

Appellants present two arguments. They contend that the "extension clause" in the agreement should have been interpreted to require payment of the commission and that the commission was properly payable even without an "extension clause."

We affirm.

After the listing agreement was executed ¹, appellants advertised the property as being for sale. Michael W. Kelly of Kelly Ranch Corporation (hereinafter referred to as Kelly) made inquiry as a result of a newspaper advertisement, and he indicated a desire to purchase. A price of $275,000.00 was agreed upon, but, for tax and other purposes, Kelly wanted to trade a ranch near Iron Mountain for appellees' property. Appellees had a need for cash to pay existing debts and could not accept the trade. Therefore, Kelly, through his broker, initiated an effort to find a buyer for the Kelly property and, thus, make possible a three-way transaction.

In June 1979, Kelly's broker located a potential buyer for the Kelly property. The buyer eventually refused to execute a purchase agreement, but in anticipation of such purchase, Kelly and appellees executed an option agreement which outlined the proposed three-way transaction. The option agreement was signed July 11, 1979, twenty-six days after expiration of the listing agreement. The option was to expire on September 1, 1979. Appellants were designated escrow agents under it. As part of the escrow, Kelly's note for $10,000.00, payable October 1, 1979 to appellees, was deposited with appellants.

After the three-way transaction failed and after the option expired, appellees, as lessors, and Kelly, as lessee, agreed to a lease of appellees' farm. Appellants were not advised of the lease but were told by appellees that the farm was being taken off the market. Appellee Kent Malm testified that at the time he did not believe a sale to Kelly was possible. The consideration for a one-year term of the lease was $28,000.00. The escrowed note for $10,000.00 was accepted by appellees as part payment. When appellees removed the note from appellants' possession, appellees offered to pay appellants 7 percent of the amount of the note. Appellants refused the offer inasmuch as there had not been a sale. The lease provided that Kelly would have the right of first refusal upon the sale of the property by appellees.

Without knowledge of appellants or appellees, Kelly continued efforts to find a party with whom an exchange transaction could be arranged. Such was done with the help of other real estate brokers. On November 5, 1980, an agreement was executed under which appellees would exchange their property for Kelly's Iron Mountain property and then exchange the Iron Mountain property for Colorado property of a third party. The Colorado property would be sold to a fourth party, resulting in appellees receiving $275,000.00 in cash. The transaction was completed in December 1979. The warranty deed transferring appellees' Pine Bluffs property to Kelly was signed on December 3, 1979 and recorded December 10, 1979.

Upon learning of the transfer, appellants demanded payment of a commission on the sale of the Pine Bluffs property, contending that the listing agreement contained a six-month "extension clause" which would not expire until December 15, 1979, and that the commission was due under such clause. The request was refused, and this action was initiated. ²

APPLICABILITY OF THE "EXTENSION CLAUSE"

The trial court found that the agreement was adopted by the parties as a completely integrated agreement; that any ambiguity must be construed against the party who drafted it, and that:

" * * * The plaintiff's claimed right to a commission in this case is based upon the third paragraph of this printed material on the reverse side of the listing agreement. In reading the third paragraph, it is obvious that the same is not a complete sentence, contains no operative verb nor does it impose any obligation on a party or provide for any result to flow from the conditions recited in the dependent clause."

The agreement was on a preprinted form prepared by appellant McCartney without assistance of legal counsel. Our discussion of this issue will be simplified by setting out the agreement in full. Front page:

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

Back page:

"EXCLUSIVE RIGHT TO SELL LISTING

"In consideration of your efforts to sell and re-list with McCartney Realty in accordance with their rules and regulations, Owner(s) hereby give and grant to the listing REALTOR named on the reverse side hereof the exclusive right and authority to sell and offer for sale, including the inspection and showing thereof, terms and possession thereon specified, for a period of six (6) months from date hereof; providing, however, that the Owner(s) may cancel this listing by giving a 10 day written notice of such cancellation to the listing Broker at any time from and after sixty (60) days from date hereof.

"McCartney Realty regulations provide that all listings must terminate within six months from date, which regulation will automatically cancel this listing six (6) months after date of execution.

"Whether such sale be made by the listing REALTOR or by any other Real Estate office, or by themselves, or by any other person acting in their behalf, or if the property is afterwards sold within six (6) months from the termination of this agency to a purchaser to whom it was submitted by listing REALTOR or any other REALTOR, and whose name has been disclosed to them.

"In event of such sale Owner(s) agree to furnish Buyer either an Abstract of title extended to date of Buyers Offer of Purchase, showing merchantable title in them or a title insurance policy in full amount of the sale price, and to convey said property by Warranty Deed. Owner(s) further agree to prorate the payment of general taxes for the current year as of the date of closing of the encumbrances, rents and insurance premiums be likewise prorated.

"Plural pronouns shall be read as singular when this agreement is signed by one person."

Clearly, the district court was correct in holding that the third paragraph on the back page of the agreement (hereinafter and heretofore referred to as "extension clause") is devoid of meaning. ³ It does not direct the payment of a commission upon the existence of its circumstances.

Whether or not the "extension clause" is so devoid of meaning as to not even qualify as ambiguous need not be determined. It is only part of a contract, and we must look at the contract as a whole in an effort to ascertain whether it reflects a meeting of the minds of the parties and whether or not their intent can be ascertained therein.

" * * * Whether ambiguity exists is a question of law. Redding Foods, Inc. v. Berry, Tex.Civ.App., 361 S.W.2d 467 (1962); Bosler v. Coble, 14 Wyo. 423, 84 P. 895 (1906). We are, therefore, at liberty to make a determination as to the existence of ambiguity whether or not the parties here agree thereto one way or the other, and whether or not the trial court has reached a conclusion thereon one way or the other.

" * * * Even if there be an ambiguous term or portion of the contract, extrinsic evidence is not considered if the meaning of the ambiguous term or portion of the contract can be ascertained from other language of the contract, i. e., from the contract as a whole. * * * " Amoco Production Company v. Stauffer Chemical Company of Wyoming, Wyo., 612 P.2d 463, 465-466 (1980). See Restatement of Contracts Second, Tentative Draft No. 5, § 238 Comment d ; 17A C.J.S. Contracts § 617.

"While the court will not ignore the grammatical construction of the language used, such construction of a contract will not be followed if a different construction will better give effect to the parties' intention." 17A C.J.S. Contracts § 305, p. 158. 17 Am.Jur.2d Contracts § 278.

Appellants point to the language on the front page of the agreement and to the bold print heading on the back page of it, both of which refer to the "exclusive right to sell," and they suggest that such words should be incorporated into the "extension clause." It may be possible to shuffle the paragraphs and words of the agreement and produce the language desired by appellants. Additionally, one with knowledge of the general practice in the industry could anticipate the clause to be an effort to protect appellants from losing the fruits of their labors on a sale which resulted from their having procured a ready, able and willing buyer, but which sale was not consummated until after...