Oak Tree Partners, LLC v. Williams

• Decision Date: 26 November 2018
• Docket Number: Case No. 115,853
• Citation: 458 P.3d 626
• Parties: OAK TREE PARTNERS, LLC, an Oklahoma Limited Liability Company, Plaintiff/Counterclaim Defendant/Appellee/Counter Appellant, v. Tracy WILLIAMS, Defendant/Counterclaim Plaintiff/Appellant/Counter Appellee, and Jeffrey O. Bolding, Third-Party Defendant/Appellee.
• Court: United States State Court of Criminal Appeals of Oklahoma. Court of Civil Appeals of Oklahoma

458 P.3d 626

OAK TREE PARTNERS, LLC, an Oklahoma Limited Liability Company, Plaintiff/Counterclaim Defendant/Appellee/Counter Appellant,

v. Tracy WILLIAMS, Defendant/Counterclaim Plaintiff/Appellant/Counter Appellee,andJeffrey O. Bolding, Third-Party Defendant/Appellee.

Case No. 115,853

Court of Civil Appeals of Oklahoma, Division No. 2.

FILED NOVEMBER 26, 2018

Rehearing Denied: January 11, 2019

Mandate Issued: February 13, 2020

William A. Johnson, Matthew W. Brockman, Michael A. Furlong, Hartzog Conger Cason & Neville, Oklahoma City, Oklahoma, For Plaintiff/Counterclaim Defendant/Appellee/Counter Appellant and Third-Party Defendant/Appellee

Kiran A. Phansalkar, Conner & Winters, LLP, Oklahoma City, Oklahoma, and Matthew L. Warren, Warren Law Office PLLC, Tulsa, Oklahoma, For Defendant/Counterclaim Plaintiff/Appellant/Counter Appellee

OPINION BY P. THOMAS THORNBRUGH, CHIEF JUDGE:

¶1 Tracy Williams appeals a combination of summary judgments, directed verdicts, and a jury verdict in this case that arose from a failed land deal. Oak Tree Partners, LLC (OTP), also appeals two judgments of the district court. On review, we reach the following conclusions:

1. Williams was not entitled to the remedy of "specific performance with abatement" in this case, and the district court did not err in granting summary judgment against him.

2. The status of the contractual disclaimer of warranty in this case is not determined by the question of whether this was a "per acre" sale, nor is it determined by case law involving residential real estate sales. The district court did not err in granting summary judgment against Williams' contract claims.

3. Williams' fraud claims failed to demonstrate the element of detrimental reliance, and the district court did not err in granting summary judgment against Williams' fraud claims.

4. In this case, the relevant section of the Oklahoma Real Estate License Code (ORELC), 59 O.S.2011 §§ 858-101 through 858-515.2, creates no heightened duty or independent cause of action separate from common law fraud, and the district court did not err in granting summary judgment against Williams' ORELC claims.

5. OTP's slander of title cause of action failed as a matter of law because the filing of a petition and lis pendens in these circumstances is privileged, and the district court erred in submitting this claim to the jury.

6. As a result, OTP was not entitled to damages for slander of title.

7. OTP was, therefore, not entitled to fees as prevailing party in a slander of title action; in addition, the quiet title judgment was not fee-bearing because the provisions of the Nonjudicial Marketable Title Procedures Act were not followed.

8. The district court did not err in granting judgment against OTP's claim of fraudulent inducement by Williams.

9. The district court did not err in granting judgment against OTP's claim of "breach of warranty" by Williams.

BACKGROUND

¶2 An abbreviated history of this case is as follows: On April 1, 2014, Williams and OTP entered into a "uniform purchase contract," which Williams drafted with the following terms:

Uniform Purchase Contract

I, or we, the undersigned hereby agree to purchase hereinafter described, to-wit:

All Property owned by Oak Tree Partners LLC located on the west side of Kelly within Oak Tree as described by the Oklahoma County Assessor R168590155, R168590150, additional acreage "A" in the NW corner of the Paddocks. See legal and map attached on Oklahoma County Assessor Real Property Detail Sheet.

Subject, however, and on condition that seller thereof has good and valid title, in fee simple, and agrees to furnish abstract to date of payoff and convey said premises by special warranty deed. On the following terms:

The total price to be Five Million One Hundred Fifty Thousand and NO/100 Dollars ($5,150,000.00), of Which Fifty Thousand and NO/100 Dollars ($50,000.00) is to be paid in cash in accordance with the terms of this agreement, the balance to be on the following terms, to-wit:

$50,000.00 hereby acknowledged. The remaining principal balance of $5,100,000.00 to be paid in cash by Friday August 1, 2014.

"All Property" includes ALL Land known as Tract G 44.l2ac, Paddocks NW/C 16.8 acres, Paddocks Lots (2) 4.82 acres, FF 16.23 acres, FN 17.74 acres. – Refer to attached 2 page email from Jeff Bolding on 3/21/14.

Seller to pay for a boundary and alta survey for the above parcels.

Seller to pay Doc Stamps and abstracting. Buyer to pay for title insurance. All other closing costs to be split equally by buyer and seller.

Buyer has been granted a due diligence period until May 30, 2014. The $50,000 earnest money is to go "hard" and non-refundable after May 30, 2014.

Buyer is a licensed realtor. No commission will be paid.

¶3 Among the documents Williams attached to the purchase contract were two printouts from the county assessor's website,¹ two rough hand-drawn diagrams, and an extract from an email to Williams from Third-party Defendant Jeffrey Bolding, as follows:

On Mar 21, 2014, at 9:43 AM, Jeff Bolding

" < jbolding@blantonproperty.com wrote:

                  G            44.12     $70,000.00     $3,088,400.00
                  (Kelly)
                  Paddocks     16.8      $70,000.00     $1,175,000.00
                  NW/C
                  Paddocks     4.82      $250,000       $500,000.00
                  Lots (2)               ea
                  FF           16.23     $70,000.00     $1,085,700.00
                  FN           17.74     $70,000.00     $1,241,800.00
                

Adding the totals, this attachment appeared to identify 99.71 acres of property. However, a part of the tracts identified in the contract had, in fact, already been sold by OTP to a third party. The stated purchase prices add up to $7,090,900, not the $5,150,000 + $50,000 earnest money stated in the purchase contract.

¶4 OTP also drafted an addendum that was made a part of the contract and included the following language:

PURCHASER ACKNOWLEDGES AND AGREES THAT SELLER HAS NOT MADE, AND SPECIFICALLY NEGATES AND DISCLAIMS, ANY REPRESENTATIONS, WARRANTIES, COVENANTS OR AGREEMENTS OF ANY KIND OR CHARACTER, ORAL OR WRITTEN PAST, PRESENT OR IN THE FUTURE, REGARDING ANY ASPECT OF ANY OF THE PARCELS BEING SOLD (THE "PROPERTY").

ADDITIONALLY, NO PERSON ACTING ON BEHALF OF SELLER IS AUTHORIZED TO MAKE, AND BY EXECUTION HEREOF PURCHASER ACKNOWLEDGES THAT NO PERSON HAS MADE, ANY REPRESENTATION, WARRANTY. COVENANT OR AGREEMENT REGARDING THE PROPERTY OR THE TRANSACTIONS CONTEMPLATED IN THE AGREEMENT. PURCHASER ACKNOWLEDGES THAT, HAVING BEEN GIVEN THE OPPORTUNITY TO INSPECT THE PROPERTY, PURCHASER IS RELYING SOLELY ON ITS OWN INVESTIGATIONS AND NOT ON ANY INFORMATION PROVIDED OR TO BE PROVIDED BY SELLER.

¶5 The contract provided for a 60-day due diligence period.

¶6 On July 21, 2014, after the due diligence period had expired, but before the August 1, 2014 payment date, Williams, through counsel, sent a letter to OTP alleging the following:

1. The 44.12 acre tract contained only 39.69 acres;

2. The 17.74 acre tract contained only 15.79 acres;

3. The 16.8 acre tract actually contained 17.43 acres.

Williams alleged a shortfall of 6.47 acres, and requested a reduction of $335,205 (i.e., $51,500 per acre) in the purchase price. OTP responded that the shortfall was only 4.28 acres,² and invoked the warranty disclaimer and the end of the due diligence period. On that basis, OTP stated that Williams was not entitled to a price reduction or to rescind the contract.

¶7 On July 28, Williams responded with a settlement offer that claimed fraud by OTP and Bolding, and offered to settle for performance of the contract and a credit of $483,000. The latter amount apparently consisted of $380,000 for a lot known as Paddock 16 that was included in the original contract but not owned by OTP, and damages to compensate Williams for the "benefit of the bargain." OTP rejected this offer. On August 11, 2014, OTP filed a petition for declaratory judgment, quiet title, and money damages. On August 12, Williams filed a petition against OTP and Bolding seeking "specific performance with abatement," lost profit damages for breach of contract and/or for fraud, and damages for "breach of real estate license obligations" by Bolding. Williams also filed a lis pendens against the property. OTP moved to dismiss Williams' petition, or in the alternative, to consolidate the cases filed by OTP and Williams. The court denied the motion to dismiss and consolidated the two cases.

¶8 On November 14, 2014, OTP moved for summary judgment on Williams' claims against OTP. On January 6, 2015, the district court granted this motion. A prolonged and contentious exchange among counsel followed regarding the details of a journal entry.³ A journal entry was eventually filed on March 6. Meanwhile, OTP filed a motion to amend its petition to add new claims against Williams, including fraudulent inducement, tortious interference, and slander of title. These claims were based on the argument that Williams had intentionally signed, then reneged, on the warranty disclaimer, and had deliberately brought meritless claims and filed a lis pendens to block the sale of the property to a willing third-party buyer. The court allowed the amendment. On March 16, 2015, OTP filed a motion for partial summary judgment on several issues, including whether Williams was entitled to "specific performance with abatement." The court denied this motion on March 30.

¶9 On May 26, 2015, Bolding filed a motion for summary judgment on Williams' claims against him. This motion was eventually granted in August 2016.⁴ In January 2016, OTP filed a motion for partial summary judgment on Williams' affirmative defense of fraud, which the court granted. In January 2016, Williams filed a motion to reconsider the January 2015 summary judgment disposing of his claims against OTP. He also filed a motion seeking summary judgment against OTP's claims for breach of warranty, fraudulent inducement, and slander of title. The court granted summary judgment against OTP's claims for fraudulent inducement. It denied the motion to reconsider.

¶10 In August 2016, OTP...