Reed v. Alvey, 16150
| Decision Date | 21 April 1980 |
| Docket Number | No. 16150,16150 |
| Citation | 610 P.2d 1374 |
| Parties | Alan C. REED, Plaintiff and Appellant, v. Vaughn ALVEY, C. Howard Alvey, and Michael Alvey, d/b/a C. Howard Alvey & Sons, Defendants and Respondents. |
| Court | Utah Supreme Court |
Thomas N. Crowther and John Parsons of Parsons & Crowther, Salt Lake City, for plaintiff and appellant.
Harold A. Hintze, Salt Lake City, for defendants and respondents.
The plaintiff appeals the District Court's order dismissing his equitable action for the specific performance of a realty sales contract. We reverse. All statutory references are to Utah Code Annotated, 1953, as amended. Costs to Appellant.
In April, 1976, the plaintiff, Alan C. Reed, hereinafter Reed, was contacted by Richard Lambert, hereinafter Lambert, concerning the purchase of a fourplex apartment building which the defendants, Vaughn Alvey, C. Howard Alvey and Michael Alvey, in their partnership capacity as C. Howard Alvey & Sons were planning to construct.
At the time of the initial interaction between Reed and Lambert, the partnership was negotiating for the purchase of four lots located at the intersection of Hillview Drive and Ninth East Street, Salt Lake City, Utah. The original plan involved the purchase of four lots at this location and the construction of a fourplex unit on each lot. Lambert, acting as an agent of the partnership, initially contacted Reed for the purpose of acquiring qualified buyers for the fourplex units to facilitate the acquisition of necessary construction loan financing. 1
On April 23, 1976, Lambert presented Reed with a standard form earnest money receipt and offer to purchase which provided in pertinent part for the sale of real property situated at the corner of Hillview and Ninth East, for a total purchase price of $70,000, to which a $500 paid deposit would apply. Reed signed the agreement and paid Lambert the required $500 deposit. Subsequently, Michael Alvey signed the agreement for the partnership and endorsed the deposit check over to Lambert as partial payment of his commission for the sale of the unit. 2
Subsequently, the partnership procured the necessary construction financing and commenced construction of fourplex units on three of the four lots. 3 Although Reed did not communicate further with the defendants for approximately eleven months, he did monitor the construction of the fourplex units at regular intervals during the following year and complained to Lambert about the dilatory efforts of the defendants in the construction.
On March 23, 1977, Reed received a letter from the partnership informing him the property would be available for closing in two or three weeks. The letter also required the plaintiff deposit $13,500 into an escrow account at Zions First National Bank. Although disputing the necessity of depositing this money under the terms of the sales contract, the plaintiff complied with the request and deposited the said amount on April 8, 1977. 4
However, construction progress was again stymied, and the plaintiff removed the money from the non-interest bearing escrow account on May 20, 1977. 5 During this period Reed tried repeatedly to communicate with one of the members of the partnership. These efforts were unsuccessful and the plaintiff eventually brought this action for specific performance of the sales contract.
Following the presentation of evidence at trial the court made Findings of Fact and Conclusions of Law. Under the latter, the District Court found the earnest money receipt and offer to purchase too vague, incomplete and ambiguous to be capable of enforcement by a decree of specific performance. The court also concluded the plaintiff failed to establish a legally enforceable contract, or alternatively, the plaintiff failed to establish he complied with the terms of the contract by performing or offering to perform his portion of the agreement. The District Court subsequently denied the relief sought by the plaintiff, and dismissed the case.
On appeal, the plaintiff contends these conclusions of law are erroneous and require reversal by this court. We agree.
In cases of equity this Court is authorized to exercise a broad scope of review encompassing both questions of law and questions of fact. 6 While we have recognized the trial court's advantageous position in relation to questions of fact, 7 when the trial court has based its rulings upon a misunderstanding and misapplication of the law, where a correct one would have produced a different result, the party adversely affected is entitled to have the error rectified in a proper adjudication under correct principles of law. 8
Before specific performance will be employed by the courts to enforce a contract the terms of the agreement must be reasonably certain so the parties know what is required of them, and definite enough that the courts can delineate the intent of the contracting parties. 9 In reviewing the written agreement evidencing the contract, and any ambiguity inherent in the language used, extrinsic evidence may be considered by the court to delineate the intent of the parties and the enforceability of the contract. 10 Thus, courts are provided a means by which they can look beyond the terms found in the written agreement to ascertain the intent of the contracting parties. If from this examination of the transaction the courts determine the actual contract is certain and the obligation and rights of the parties defined, then they may employ their equitable powers to enforce the contract via specific performance. 11
Application of this maxim to the present situation mandates a result contrary to that reached by the trial court. Although the written agreement's description of the property involved, i. e., "corner of Hillview and Ninth East," is concededly vague and incomplete on its face, the extrinsic evidence presented by the plaintiff concerning the transaction defines the subject matter in question in sufficient detail to support specific performance.
The evidence presented at trial established the acquisition by the defendants of three lots located generally at the intersection of Hillview and Ninth East. 12 After acquiring the lots, the defendants began the construction of a fourplex apartment unit on each lot. The construction financing was made available by Zions First National Bank, after the defendants acquired qualified buyers for each of the units. The agreement between Reed and the defendants fulfilled this condition precedent to the release of construction funds for use by the defendants.
Following the negotiations between Reed and Lambert and the signing of the agreement, Lambert was paid a commission by the defendants for the sale of the property. 13 During the construction of the units the plaintiff met with Lambert and the purchasers of the other two units to decide which specific unit the purchasers preferred. 14 After the subsequent agreement between the purchasers concerning the distribution of the specific units, the lots were denominated as belonging to the individual buyers. 15 According to the testimony of Lambert, who was acting as an agent of the partnership throughout the transactional period, the defendants made no objection to the purchasers choice of lots. Finally, the defendants contacted the plaintiff and requested the deposit of $13,500 in an escrow account to evidence his financial ability to close the deal. This communication occurred after the selection of the specific units by the purchasers and before what the defendants represented would be the closing date of the transaction.
Thus, everyone connected with the deal knew what land was involved 16 and the ambiguous nature of the terms used in the written agreement when viewed in light of the extraneous evidence presented at trial does not render the contract unenforceable or defeat an action for specific performance.
Neither does the "terms to be arranged" condition present in the initial agreement defeat the enforcement of the contract. The earnest money receipt and offer to purchase provided the total purchase price of the property would be $70,000 which would be payable upon "terms to be arranged." The trial court determined the inclusion of this language rendered the agreement subject to future negotiation and therefore unenforceable. We disagree.
There is no principle of equity that demands all the terms of the contract must be set forth in the written agreement. 17 Rather, although an agreement is uncertain or incomplete in some respects, its specific enforcement may nevertheless be decreed where the uncertainty relates to matters which the law makes certain or complete by presumption, rule or custom and usage. 18
Where there is no agreement concerning the terms of payment this Court will alleviate the uncertainty of this aspect of the contract by requiring full payment at the time of the tender of the conveyance. 19 When the major aspects of a contract are specified with requisite certainty, this Court will not allow incidental details such as the terms of payment in a contract for the sale of realty to deny specific performance. 20
Finally, we turn to the conclusion of the trial court that the plaintiff cannot maintain an action for specific performance because he has failed to perform or offered to perform his portion of the agreement. Generally, in a suit for specific performance of a contract for the sale of realty, the purchaser must show that he paid the purchase price, or tendered it, to the defendant prior to the commencement of the suit. However, an action for specific performance may also be maintained if the plaintiff presents an excuse for his failure to make such payment or tender and avers his ability, readiness and willingness to pay the contract amount. 21
In the present case the payment of the purchase price was contingent upon the completion of the construction of the fourplex unit. 22 Since, prior to the institution of this...
To continue reading
Request your trial
-
Marzano v. Proficio Mortg. Ventures, LLC
...928 P.2d at 373). Uncertainties within contract terms can be made complete or certain by presumption, rule, or custom. Reed v. Alvey, 610 P.2d 1374, 1378 (Utah 1980) (citing Shull v. Sexton, 154 Colo. 311, 390 P.2d 313, 316 (1964)). In the instant case, any matters of uncertainty in the Pro......
-
Hoffman v. Life Ins. Co. of North America
...different result, the adversely affected party is entitled to have the matter adjudicated under correct principles of law. Reed v. Alvey, Utah, 610 P.2d 1374 (1980). Accordingly, we remand to the trial court for further consideration of the record under both the objective and subjective sta......
-
Thatcher v. Lang
...his ability, readiness and willingness to pay the contract amount.’ " PDQ Lube Center, Inc. , 949 P.2d at 799 (quoting Reed v. Alvey , 610 P.2d 1374, 1379 (Utah 1980) ). Importantly, even if a party could hypothetically "surmount the no tender hurdle" to be granted specific performance, tha......
-
PDQ Lube Center, Inc. v. Huber
...his failure to make such payment or tender and avers his ability, readiness and willingness to pay the contract amount." Reed v. Alvey, 610 P.2d 1374, 1379 (Utah 1980); accord Tanner v. Baadsgaard, 612 P.2d 345, 347 (Utah 1980); Barker v. Francis, 741 P.2d 548, 553 (Utah Here, PDQ did not f......