ROYER HOMES OF MS., INC. v. Chandeleur Homes, Inc.

• Decision Date: 23 October 2003
• Docket Number: No. 2001-CA-01574-SCT.,2001-CA-01574-SCT.
• Citation: 857 So.2d 748
• Parties: ROYER HOMES OF MISSISSIPPI, INC. v. CHANDELEUR HOMES, INC.
• Court: Mississippi Supreme Court

857 So.2d 748

ROYER HOMES OF MISSISSIPPI, INC. v. CHANDELEUR HOMES, INC.

No. 2001-CA-01574-SCT.

Supreme Court of Mississippi.

October 23, 2003.

Jack G. Price, Mccomb, Attorney for Appellant.

Ronald L. Whittington, Mccomb, Attorney for Appellee.

EN BANC.

SMITH, Presiding Justice, for the Court:

¶ 1. Royer Homes of Mississippi, Inc., appeals to this Court from the final judgment of the Circuit Court of Pike County dismissing Royer's 1992 lawsuit against Chandeleur Homes, Inc., for unpaid warranty work and receivable accounts. The court below ruled that a 1998 Release Agreement between the Royer and Champion Enterprises, Inc., which acquired Chandeleur, was unambiguous and released Royer's present claim. We hold that the trial court properly dismissed all claims against Chandeleur including the 1992 Pike County lawsuit. Accord and satisfaction of all of Royer's claims was properly found based on the December 1998 Confidential Settlement, Release and Indemnity Agreement which released Royer's present claim. We find no merit to Royer's appeal and affirm the trial court.

FACTS

¶ 2. In 1986, Royer Homes of Mississippi, Inc. (Royer), a manufactured home dealer, entered into sales and distribution contracts with Chandeleur Homes, Inc. (Chandeleur), a manufactured home manufacturer. Under Mississippi law, Royer was required to perform any warranty work on the Chandeleur homes it sold. In 1992, Royer filed suit against Chandeleur in the Pike County Circuit Court for unpaid warranty service and unpaid accounts receivable. The suit remained dormant for several years. In 1995 Chandeleur was acquired by Champion Enterprises, Inc. (Champion). And in 1997, Royer sued Champion in Hinds County Circuit Court alleging, inter alia, that Champion had engaged in a scheme devised to put Royer out of business. Specifically, the Hinds County complaint alleged breach of contract, tortious interference, common law fraud, and violations of anti-monopoly and unfair trade law.

¶ 3. The parties never went to trial on the Hinds County lawsuit. Instead, they entered into a "Confidential Settlement, Release, and Indemnity Agreement" (Release). But after the parties entered this Release in 1998, Royer resurrected the 1992 Pike County claim. Champion argued that the Pike County claim was released by the 1998 Release. The Pike County Circuit Court agreed. It found the Release unambiguous and inclusive of the Pike County claim and dismissed the case.

STANDARD OF REVIEW

¶ 4. This Court has stated that questions concerning the construction and interpretation of contracts are questions of law. Warwick v. Gautier Utility Dist., 738 So.2d 212, 214 (Miss.1999); Miss. State Highway Comm'n v. Patterson Enters., Ltd., 627 So.2d 261, 263 (Miss.1993). We review questions of law de novo. Id.

DISCUSSION

I. DID THE TRIAL COURT ERR IN RULING THAT THE RELEASE AGREEMENT WAS UNAMBIGUOUS, AND THEREFORE RELEASED THE PIKE COUNTY CLAIM?

¶ 5. At issue here is whether the trial court erred in dismissing this litigation as a matter of law holding that the Release Agreement was not ambiguous, therefore Accord and Satisfaction of Royer's Pike County claim was applicable.

¶ 6. As a preliminary issue, Royer filed suit in Pike County Circuit Court against Chandeleur Homes in September 1992. Chandeleur was acquired by Champion Enterprises in 1995. This fact was acknowledged by Royer in its brief. Royer alleges that Chandeleur owes bonus incentives for past sales and debt for past warranty work.

¶ 7. The question of law/question of fact dichotomy requires a two-step inquiry in contract law. Neider v. Franklin, 844 So.2d 433, 436 (Miss.2003) First of all, it is a question of law for the court to determine whether a contract is ambiguous and, if not, enforce the contract as written. Miss. Transp. Comm'n v. Ronald Adams Contractor, Inc., 753 So.2d 1077, 1087 (Miss.2000); Universal Underwriters Ins. Co. v. Ford, 734 So.2d 173, 176 (Miss.1999); IP Timberlands Operating Co. v. Denmiss Corp., 726 So.2d 96, 106 (Miss.1998). Questions concerning the construction of contracts are questions of law that are committed to the court rather than questions of fact committed to the fact finder. Parkerson v. Smith, 817 So.2d 529, 532 (Miss.2002); Miss. State Highway Comm'n v. Patterson Enters., Ltd., 627 So.2d 261, 263 (Miss.1993). Appellate courts review questions of law de novo. Parkerson, 817 So.2d at 532; Starcher v. Byrne, 687 So.2d 737, 739 (Miss.1997).

¶ 8. In the event of an ambiguity, the subsequent interpretation presents a question of fact for the jury which we review under a substantial evidence/manifest error standard. Clark v. State Farm Mut. Auto. Ins. Co., 725 So.2d 779, 781 (Miss.1998); Lamb Constr. Co. v. Town of Renova, 573 So.2d 1378, 1383 (Miss.1990) (citing Bryant v. Cameron, 473 So.2d 174, 179 (Miss.1985)). If the terms of a contract are subject to more than one reasonable interpretation, it is a question properly submitted to the jury. Mississippi Transp. Comm'n v. Ronald Adams Contractor, Inc., 753 So.2d at 1087; Garner v. Hickman, 733 So.2d 191, 195 (Miss.1999).

¶ 9. The primary purpose of all contract construction principles and methods is to determine and record the intent of the contracting parties. Kight v. Sheppard Bldg. Supply, Inc., 537 So.2d 1355, 1358 (Miss.1989). "In contract construction cases a court's focus is upon the objective fact—the language of the contract. [A reviewing court] is concerned with what the contracting parties have said to each other, not some secret thought of one not communicated to the other." Turner v. Terry, 799 So.2d 25, 32 (Miss.2001); Osborne v. Bullins, 549 So.2d 1337, 1339 (Miss.1989). A reviewing court should seek the legal purpose and intent of the parties from an objective reading of the words employed in the contract to the exclusion of parol or extrinsic evidence. The reviewing court is not at liberty to infer intent contrary to that emanating from the text at issue. Cooper v. Crabb, 587 So.2d 236, 239 & 241 (Miss.1991).

¶ 10. This Court has set out a three-tiered approach to contract interpretation. Pursue Energy Corp. v. Perkins, 558 So.2d 349, 351-53 (Miss.1990). Legal purpose or intent should first be sought in an objective reading of the words employed in the contract to the exclusion of parol or extrinsic evidence. Cooper v. Crabb, 587 So.2d at 241; City of Grenada v. Whitten Aviation, Inc., 755 So.2d 1208, 1214 (Miss.Ct.App.1999). First, the "four corners" test is applied, wherein the reviewing court looks to the language that the parties used in expressing their agreement. Pursue Energy Corp.,558 So.2d at 352 (citing Pfisterer v. Noble, 320 So.2d 383, 384 (Miss.1975)). We must look to the "four corners" of the contract whenever possible to determine how to interpret it. McKee v. McKee, 568 So.2d 262, 266 (Miss.1990). When construing a contract, we will read the contract as a whole, so as to give effect to all of its clauses. Brown v. Hartford Ins. Co., 606 So.2d 122, 126 (Miss.1992). Our concern is not nearly so much with what the parties may have intended, but with what they said, since the words employed are by far the best resource for ascertaining the intent and assigning meaning with fairness and accuracy. Simmons v. Bank of Miss., 593 So.2d 40, 42-43 (Miss.1992). Thus, the courts are not at liberty to infer intent contrary to that emanating from the text at issue. Id. (citing Cooper, 587 So.2d at 241). On the other hand, if the contract is unclear or ambiguous, the court should attempt to "harmonize the provisions in accord with the parties' apparent intent." Pursue Energy Corp.,558 So.2d at 352. Only if the contract is unclear or ambiguous can a court go beyond the text to determine the parties' true intent. Id. "[T]he mere fact that the parties disagree about the meaning of a contract does not make the contract ambiguous as a matter of law." Turner, 799 So.2d at 32; Cherry v. Anthony, 501 So.2d 416, 419 (Miss.1987).

¶ 11. Secondly, if the court is unable to translate a clear understanding of the parties' intent, the court should apply the discretionary "canons" of contract construction. Pursue Energy Corp., 558 So.2d at 352. Where the language of an otherwise enforceable contract is subject to more than one fair reading, the reading applied will be the one most favorable to the non-drafting party. Leach v. Tingle, 586 So.2d 799, 801-02 (Miss.1991) (citing Stampley v. Gilbert, 332 So.2d 61, 63 (Miss.1976)). Finally, if the contract continues to evade clarity as to the parties' intent, the court should consider extrinsic or parol evidence. Id. It is only when the review of a contract reaches this point that prior negotiation, agreements and conversations might be considered in determining the parties' intentions in the construction of the contract. "Of course, the so-called three-tiered process is not recognized as a rigid `step-by-step' process. Indeed, overlapping of steps is not inconceivable." Id. at 351 n. 6.

¶ 12. Here, the language of the Release specifically states that it is "in settlement of any and all claims, demands, losses, costs, damages and expenses" including "but not limited to" those specified in the agreement. The Release Introduction includes the relevant language "including but not limited to." The Release Clause releases "any claim of any type in any way related to the business dealings on or before the date of [the] agreement between Royer, the Whites and Releasees." Champion argues that the release settles "any and all claims that exist(ed) as of the date of the agreement, December 22, 1998." The scope of the Release is unlimited to the release of claims arising before the execution.

¶ 13. There is no ambiguity in the relief created by the references to the "Hinds County Lawsuit" or the "lawsuit." Royer offers no explanation of the provisions of the contract which affirm without restriction the agreement constituted the settlement of all matters and "any...