Metropolitan Mortg. & Securities Co., Inc. v. Belgarde

• Decision Date: 27 August 1991
• Docket Number: No. 89-253,89-253
• Citation: 816 P.2d 868
• Parties: METROPOLITAN MORTGAGE & SECURITIES CO., INC., Appellant (Plaintiff), v. Charles P. BELGARDE, d/b/a Belgarde Enterprises, Appellee (Defendant).
• Court: Wyoming Supreme Court

Page 868

816 P.2d 868

METROPOLITAN MORTGAGE & SECURITIES CO., INC., Appellant (Plaintiff), v. Charles P. BELGARDE, d/b/a Belgarde Enterprises, Appellee (Defendant).

No. 89-253.

Supreme Court of Wyoming.

Aug. 27, 1991.

Julie Nye Tiedeken, McDaniel & Tiedeken Law Offices, Cheyenne, for appellant.

Donald J. Rissler, Brown, Raymond & Rissler, P.C., Casper, for appellee.

Before CARDINE, C.J., ^* and THOMAS, URBIGKIT, MACY and GOLDEN, JJ.

THOMAS, Justice.

The problem posed in this case is whether the parties to an installment land contract intended to enter into a bilateral or a unilateral agreement. The trial court examined the instrument, found it to be unambiguous, and concluded that it reflected an offer that could be accepted only by making the payments required by the instrument. The buyer, Charles P. Belgarde (Belgarde), then was awarded a summary judgment because the trial court ruled that the only remedy available to the seller upon the failure of the buyer to make payments under the instrument was to retake the property. The seller's assignee, Metropolitan Mortgage and Securities Co., Inc., (Metropolitan) had sought specific performance of the installment land contract as well as damages for past due payments. Given the language of the instrument and potential varying interpretations of that language, we conclude that the instrument was ambiguous and reverse the summary judgment because a genuine issue of material fact exists as to the intention of the parties. We remand the case to the trial court to resolve that issue of fact at a trial on the merits.

Metropolitan, in its Brief of Appellant, states the issues to be:

"1. Did the trial court err in ruling that specific performance was not an appropriate seller's remedy in this case?

"2. Did the trial court err in ruling that the seller was limited to the remedy of forfeiting the contract and taking the property back?"

In his Appellee's Brief, Belgarde adopts the issues as stated by Metropolitan.

In May of 1982, Dale and Carolyn Schilling entered into an "Agreement for Warranty Deed" to transfer ownership of some property in Gillette to Belgarde for $495,000. That instrument provides in part:

"IN CONSIDERATION of the sum of $5,000.00 paid by Buyers to Sellers, the receipt and sufficiency of which is hereby acknowledged as part of the purchase money for the premises hereinafter described, the Sellers hereby agree, promise, and covenant to convey a fee simple title to Buyers, by a good and sufficient Warranty Deed, the following described land situate in Campbell County, State of Wyoming * * * under the following terms and conditions:

"I.

"PURCHASE PRICE

"The total sale price shall be the sum of $495,000.00, including all improvements now on said property, and any other such improvements as may hereinafter be placed on said premises by Buyers, the latter to be held as additional security in case of failure to fulfill the covenants of this contract.

"Buyers shall pay to Sellers the sum of $6,041.81 down payment as follows: $5,000.00 presently held by Sellers and $1,041.81 to be paid on the signing of this agreement. Buyers will assume a note in the amount of $94,000 from Sellers to Herbert R. Stollorz and Carol A. Stollorz, * * *. This note shall be assumed and payable prior to May 15, 1982.

"The remaining $394,958.19 shall be paid as follows: An additional $50,000.00 cash plus 14% interest per annum from May 1, 1982, shall be paid on July 1, 1983. The Buyers also agree to assume the payments under the existing Agreement for Deed in the amount of $144,958.19 payable at the rate of $2,312.71 per month, including interest at 10% per annum, with the entire balance due in approximately 7 1/2 years.

"The balance in the amount of $200,000.00 shall be due and payable in monthly payments of $2,500.00 per month, including interest at 14% per annum from May 1, 1982, with the entire balance due in ten (10) years."

The deed was to be held in escrow until Belgarde performed all the conditions of the contract. The agreement also listed those occurrences that would constitute a default on the buyers' part and stated:

"In the event of such a default Sellers, at their option, may declare this agreement null and void and may, with or without process of law, take immediate possession of the said premises and regard any persons thereon as guilty of forcible detainer; hold and retain all monies paid hereunder as liquidated damages, rent, and compensation for the use and benefit of the property. Sellers shall be entitled to any additional damages incurred as a result of Buyers' holding over.

"In the event Sellers declare this agreement null and void in accordance with the terms hereof, the escrow agent shall deliver all of said instruments to Sellers upon the receipt of an affidavit of default for reasons hereinabove provided." (Emphasis added.)

The Schillings assigned their interests in the land and the "Agreement for Warranty Deed" to Metropolitan in 1986. At the time of the assignment, approximately $190,761 remained due from Belgarde to complete the transaction. In August of 1988, Belgarde stopped making the monthly payments. In February of 1989, Metropolitan's counsel sent notice to Belgarde that he was in default, owing at that time about $18,000 and, in March of 1989, Metropolitan filed suit alleging that Belgarde was in default. Metropolitan claimed that it had no speedy and adequate remedy at law and was entitled to specific performance of the "Agreement for Warranty Deed" as well as damages for past due payments.

Both parties subsequently filed motions for summary judgment. Metropolitan argued that forfeiture was not its only remedy for default and that it should be able to avail itself of specific performance of the contract and seek damages for past due payments. Belgarde argued that Metropolitan was limited to pursuing the remedy specifically provided in the agreement and that Metropolitan should close out the escrow, retain all payments as liquidated damages, and retake the land.

The trial court denied Metropolitan's motion on the specific performance issue, but requested additional briefing before considering Belgarde's motion and Metropolitan's damage claim. Belgarde filed a second motion for summary judgment asking for a declaration that Metropolitan's remedies were limited to those under the agreement, an action in ejectment, or an action in strict foreclosure. A hearing followed in which the court granted Belgarde's motion for summary judgment, stating that "taking the property is [Metropolitan's] only remedy." The court subsequently issued an order reflecting this determination.

In announcing his decision from the bench, the judge said:

"Having cleared those two things up, I want to turn to my analysis. Before I start, I want to tell you that, and I guess it's merely pointing out the obvious, I'm not free to do what I think is fair and I'm not free to do what I would like. I'm bound to follow the law. In this case, I think what the parties intended was that the buyers were going to buy this property and they promised to pay the money, and the sellers were satisfied with those promises. I think what would be fair under the circumstances is to make Belgarde live with what probably everyone thought their obligations were at the time. However, I have to deal not with what I think the parties probably intended but what they, in fact, said.

"I'm looking at the agreement for warranty deed, and what it says is that the buyers--or, I mean, the sellers promise to convey the real property under the following terms and conditions. Then it goes into the recital of the purchase price and says what the buyers' obligations are. What that says to me is that the sellers agree to perform if the buyers perform. They--the buyers have not undertaken, at least by a plain reading of the language of the statute (sic) [instrument], an obligation to do that, to an independent obligation, an independent promise to pay. They have an obligation if they want the land conveyed to them, so it's a conditional sales contract.

"Looking at the remedies, it does provide for default, and it provides a remedy in event of default. Now, the sellers, at their option, can declare the agreement null and void. They've elected not to do that, and if they elect not to declare it null and void, unless there's an independent promise by the buyers to do something, I don't know what their remedy is. It's not clear within the terms of the contract, and I think under existing law there's no independent obligation on the part of the buyers to do anything. They simply don't have the right to have the real property conveyed to them if they fail to keep up their end of the bargain.

"So that is my legal interpretation of that instrument. Necessarily, from that interpretation flows the conclusion that the seller's remedy is to take the property back, period. So while I'm somewhat dismayed that that's--that's the result because I don't think it's a fair one, nevertheless, that is, I think, what the parties agreed to and the extent of their obligation."

The question of the intention of the original parties, as in all property disputes involving contracts, is critical to the resolution of this dispute. Johnson Storage and Moving Co. v. Victory, Inc., 774 P.2d 636 (Wyo.1989); True Oil Co. v. Sinclair Oil Corp., 771 P.2d 781 (Wyo.1989). See U.S. through Farmers Home Admin. v. Redland, 695 P.2d 1031 (Wyo.1985). In considering the issues presented by these parties, we recall that we have analyzed the rights of parties to transactions involving sales of land in this way:

"A further and more basic question, however, is presented by this case. The question, which was neither reached by the district court nor directly briefed by the parties, is whether the transaction at issue represents an installment land contract or a conveyance with a mortgage back. The significance of this determination can readily be...