Pamida, Inc. v. Meide

• Decision Date: 19 January 1995
• Docket Number: No. 940210,940210
• Citation: 526 N.W.2d 487
• Parties: PAMIDA, INC., a Delaware Corporation; and South Park Associates, a Pennsylvania Limited Partnership, Plaintiffs and Appellants v. Jerry L. MEIDE, Defendant and Appellee. Civ.
• Court: North Dakota Supreme Court

Page 487

526 N.W.2d 487

PAMIDA, INC., a Delaware Corporation; and South Park

Associates, a Pennsylvania Limited Partnership, Plaintiffs and Appellants v. Jerry L. MEIDE, Defendant and Appellee.

Civ. No. 940210.

Supreme Court of North Dakota.

Jan. 19, 1995.

John Bullis (argued) of Lies, Bullis, Grosz & Lindberg, Wahpeton, for plaintiffs and appellants. Appearance by Tracy Lindberg.

Fred Strege (argued) of Smith & Strege, Wahpeton, for defendant and appellee.

LEVINE, Justice.

Pamida, Inc., and South Park Associates appeal from a judgment awarding them damages of $14,246.98 from Jerry L. Meide, and from an order denying their motion to amend the judgment. We affirm in part, reverse in part, and remand for further proceedings.

In 1986, South Park Associates owned a tract of land in Wahpeton. Part of the tract was occupied by a store building leased to Pamida, Inc. ¹ Intending to develop a strip mall extending along the north side of the Pamida store and ending along a nearby Econofoods store, Meide purchased two parcels of land from South Park. One parcel extended along the north and east sides of the Pamida store. The other parcel was southwest of the Pamida store and was to become part of what was designated as "12th Street" in an exhibit, Exhibit D, attached to and referred to in the parties' purchase agreement.

The purchase agreement says:

"20. CONDITIONS. The parties' agreement herein is subject to the following conditions:

"a. In the event a street vacation Petition, a copy of which all parties acknowledge is in their possession, is not approved by the City Council for the City of Wahpeton, North Dakota, involving a part of Industrial Avenue, all of Third Avenue South, and all of Twelfth Street, this Agreement shall be null and void.

"b. All parties signing this Agreement, including the Tenant, Pamida, Inc., agree to the general development of the Southwood Center as is generally laid out on Exhibit D.

* * * * * *

"24. TWELFTH STREET ASSESSMENTS. When Twelfth Street is developed, Purchaser shall hold Seller and Tenant harmless from any special assessments or other costs connected with the construction of Twelfth Street, and any assessments that are assessed to the Seller or the Tenant shall be paid by the Purchaser. Seller and Tenant agree to cooperate with Purchaser to ensure that an unreasonable assessment is not attributed to the Seller's property."

Southwood Center, as shown on Exhibit D ² referred to in Paragraph 20(b) of the purchase agreement, is an area of land bordered on the north by a railroad track and right of way between Southwood Center and North Dakota Highway 13 (Dakota Avenue), on the east by North Dakota Highway 127 (11th Street South), on the south by Old Highway 13 (4th Avenue South), and on the west primarily by what the parties denominated as "12th Street," the north end of which was to end in a strip mall parking area. The "12th Street" depicted in Exhibit D did not yet physically exist, and when it was built in 1989, it came to be denominated by the City of Wahpeton as 13th Street. The City of Wahpeton had a 12th Street north of Highway 13. At the center of the Southwood Center area are the Pamida store and the Econofoods store, which were proposed to be connected with a strip mall. The street vacation petition referred to in Paragraph 20(a) of the purchase agreement and necessary for development of the proposed mall called for the vacation of Industrial Avenue within Southwood Center as it extended along the north side of the Pamida store, 3rd Avenue South running east and west on the north side of the Econofoods store, and 12th Street running north and south north of the Econofoods store.

The contemplated street vacation was completed, but the proposed strip mall was never built. A medical clinic was developed north of the Econofoods store. A Comfort Inn motel was built northwest of the Pamida store. In 1989, Wahpeton created "Street Improvement District 2-3-89 (Southwood Center)." ³ This involved constructing 12th Street from the intersection of 12th Street and North Dakota Highway 13 across the railroad right of way and railroad track to the north edge of the previously-contemplated Southwood Center project, constructing a storm sewer and 1st Avenue South parallel to the railroad track west to the new Comfort Inn site, construction of 13th Street along the east side of the Comfort Inn site south to the intersection with Industrial Avenue, and construction of 13th Street from the intersection with Industrial Avenue south to Old Highway 13. Wahpeton also installed sanitary sewer and water lines along 13th Street to Old Highway 13.

South Park's property in the street improvement area was assessed $51,340.67 in special assessments as a result of the street improvement project, including the sewer and water lines. When Meide failed to pay the special assessments, South Park sued Meide for the amount of the special assessments. South Park moved for summary judgment, alleging that Meide was obligated to pay for all special assessments incurred under Street Improvement District 2-3-89. The court determined that Meide was required to pay special assessments only for street construction of 13th Street between Old Highway 13 and Industrial Avenue (12th Street on Exhibit D). The court determined that Meide was not responsible for any special assessments for the rest of the street construction done under Street Improvement District 2-3-89, or any special assessments for water and sewer installation. Judgment was entered in favor of South Park for $14,246.98.

South Park appealed, contending that Paragraph 24 of the parties' purchase agreement requires Meide to pay all special assessments incurred in the construction of 12th Street between Old Highway 13 at the south edge of the Southwood Center site and the point where 12th Street meets North Dakota Highway 13 (Dakota Avenue) north of the railroad right of way along the north edge of the Southwood Center site. South Park contends that Meide is also required by Paragraph 24 to pay the special assessments imposed for the installation of sewer and water lines "connected with the construction of Twelfth Street." ⁴

The construction of a written contract to determine its legal effect is a question of law. Red River Human Services Found. v. Department of Human Services, 477 N.W.2d 225 (N.D.1991); Production Credit Ass'n v. Foss, 391 N.W.2d 622 (N.D.1986); Sorlie v. Ness, 323 N.W.2d 841 (N.D.1982). A contract is to be interpreted to give effect to the mutual intention of the parties at the time of contracting. Section 9-07-03, N.D.C.C. Under Sec. 9-07-04, N.D.C.C., the intention of the parties to a written contract is to be ascertained from the writing alone, if possible. If executed documents are unambiguous, parol evidence is not admissible to contradict the terms of the written agreement. Production Credit Ass'n v. Foss, supra. If a written contract is ambiguous, extrinsic evidence can be considered to clarify the parties' intent. First Nat'l Bank & Trust Co. v. Scherr, 435 N.W.2d 704 (N.D.1989). "[W]here the contract is clear and unambiguous there is no reason to go further." Hoge v. Burleigh County Water Management Dist., 311 N.W.2d 23, 27 (N.D.1981). Whether or not a contract is ambiguous is a question of law. Vanderhoof v. Gravel Products, Inc., 404 N.W.2d 485 (N.D.1987); First Nat'l Bank & Trust Co. v. Scherr, supra. "An ambiguity exists when rational arguments can be made in support of contrary positions as to the meaning of the term, phrase, or clause in question." Vanderhoof v. Gravel Products, Inc., supra, 404 N.W.2d at 491. If the parties' intentions can be ascertained from the writing alone, then the interpretation of the contract is entirely a question of law, and we will independently examine and construe the contract to determine if the district court erred in its interpretation of it. Sorlie v. Ness, supra. "A contract may be explained by reference to the circumstances under which it was made and the matter to which it relates." Section 9-07-12, N.D.C.C. "However broad may be the terms of a contract, it extends only to those things concerning which it appears that the parties intended to contract." Section 9-07-13, N.D.C.C.

Construing Paragraph 20(b) and Paragraph 24 of the purchase agreement together in light of Exhibit D, which was attached to the purchase agreement and referred to in Paragraph 20(b), we conclude that the purchase agreement is unambiguous with regard to the extent of Meide's responsibility for street construction assessments, but is ambiguous with regard to assessments for other construction expenses, specifically, the installation of water and sewer lines. We conclude that Meide's responsibility under Paragraph 24 to pay "special assessments or other costs connected with the construction of Twelfth Street" extends only to the construction of 12th Street, now denominated as 13th Street, between Old Highway 13 and Industrial Avenue, as depicted in Exhibit D attached to and referred to in the purchase agreement, and does not extend to paying special assessments for installation of a storm sewer, construction of 13th Street along the east side of the Comfort Inn site, construction of 1st Avenue South parallel to the railroad tracks, or construction of 12th Street from the previously-existing intersection of 12th Street and North Dakota Highway 13 across the railroad right of way and track to the north edge of the previously contemplated Southwood Center site. With respect to the question of Meide's responsibility to pay assessments for the cost of installing water and sewer lines on 12th Street, now denominated as 13th Street, between Old Highway 13 and Industrial Avenue, we conclude that the phrase "any special assessments" in Paragraph 24 of the purchase agreement is ambiguous.

The purpose of Paragraph 20(b) of the purchase agreement and its reference to Exhibit D was to show what...