Satellite Development Co. v. Bernt

• Decision Date: 16 September 1988
• Docket Number: No. 86-970,86-970
• Citation: 429 N.W.2d 334,229 Neb. 778
• Parties: SATELLITE DEVELOPMENT COMPANY, a Partnership, Appellee, v. Ivan BERNT and Edna Bernt, Appellants.
• Court: Nebraska Supreme Court

Page 334

429 N.W.2d 334

229 Neb. 778

SATELLITE DEVELOPMENT COMPANY, a Partnership, Appellee, v. Ivan BERNT and Edna Bernt, Appellants.

No. 86-970.

Supreme Court of Nebraska.

Sept. 16, 1988.

Syllabus by the Court

1. Contracts: Specific Performance: Proof. Before a court may compel specific performance, there must be a showing that a valid, legally enforceable contract exists. The burden of proving a contract is on the party who seeks to compel specific performance.

2. Contracts: Specific Performance: Proof. To establish a contract capable of specific enforcement it must be shown that there was a definite offer and an unconditional acceptance.

3. Contracts: Specific Performance: Proof. A party attempting to enforce a contract has the burden of proving there was a definite offer and an unconditional acceptance. Furthermore, for a binding contract to result from an offer and acceptance, it is essential that the minds of the parties meet at every point. Nothing can be left open for further arrangement.

4. Specific Performance: Equity: Appeal and Error. On appeal, an action for specific performance is an equitable matter, triable de novo to the Supreme Court.

5. Contracts: Specific Performance: Real Estate. A contract for the transfer of real property is valid and enforceable if the agreement contains the essential elements of a contract with sufficient certainty and definiteness as to the parties, property, consideration, terms, and time of performance.

6. Contracts: Specific Performance: Proof. The party seeking specific performance must show that he has substantially complied with the terms of the contract, including proof that he is ready, able, and willing to perform his obligations under the contract.

Warren S. Zweiback and, on brief, Scott H. Rasmussen, of Zweiback, Flaherty, Betterman & Lamberty, P.C., Omaha, for appellants.

Michele M. Frost, of Nelson & Harding, Omaha, for appellee.

HASTINGS, C.J., and WHITE, SHANAHAN, and FAHRNBRUCH, JJ., and WARREN, District Judge.

FAHRNBRUCH, Justice.

On appeal, Edna Bernt claims that the Douglas County District Court should not have ordered her to complete the sale of the Bernt home to the appellee. We affirm in part but modify the trial court's decision, reverse it in part, and remand the cause for further proceedings.

Through Eileen Chance, one of its partners, Satellite Development Company, by written contract, purchased Ivan and Edna Bernts' home. The Bernts refused to proceed with the sale. Ivan, Edna's husband, became ill before the scheduled closing and died on April 30, 1986.

Satellite, a partnership, by amended petition, brought an action for specific performance of contract, and Edna was ordered to complete the sale within 45 days of the entry of the judgment.

On appeal, Edna claims the district court erred in (1) holding that the purchase agreement was a completed contract; (2) holding that a land contract prepared by a proposed buyer of real estate and never accepted by the vendor is sufficient to satisfy the statute of frauds; and (3) rendering a judgment against a personal representative when the action has not been revived as to the deceased party.

The Bernts' real estate agent, her associate, and the Bernts' adult daughter assisted the Bernts in 3 hours of negotiation and sale of their home. Both the Bernts and Chance, on behalf of Satellite, signed the purchase agreement. One real estate agent witnessed the Bernts' signatures and the second agent took their acknowledgment and notarized the Bernts' signatures. The signature of Chance was also witnessed by one of the agents.

The purchase agreement was on an "Omaha Area Board of Realtors Uniform Purchase Agreement" form. The top line of the form states: "This is a legally binding contract. If not understood, seek legal advice."

The parties agreed that the purchaser was to pay $57,000 for the home. Paragraph 5 of the agreement provides:

$3,000.00 cash at closing; balance of loan on furnace to be taken over by buyer ($3,115.00) est. Approx $50,385.00 bal to [be] paid in monthly installments of $700.00 until Dec 1, 1985. Balloon payment of $28,000.00 to be paid on December 1, 1985. Seller to carry bal of approx $22,385.00 as 2nd mtg for 20 yrs. All amts carried at 11%.

On the back of the agreement where the signatures appear, it is stated: "The seller accepts the foregoing proposition on the terms stated and agrees to convey title of the Property, deliver possession, and perform all the terms and conditions set forth." The Bernts added, "We accept the above stated except $3,000.00 @ cash closing to be increased to add $500.00. All other figures to be adjusted accordingly. Buyer to pay all closing costs except brokerage fee." Chance accepted the Bernts' counteroffer on behalf of Satellite by printing at the bottom of the agreement, "I accept the offer as countered." Chance then executed the acceptance. Chance's acceptance of the offer as countered was witnessed by one of the Bernts' agents. Chance deposited $500 earnest money with the Bernts' real estate agent.

Closing on the house was scheduled for April 1, 1985. Due to Ivan's illness, the closing date was continued to April 21, 1985, and then to May 3. The Bernts refused to proceed with the sale. On May 3, 1985, Satellite was notified that the Bernts were "no longer interested in a closing date, that they would not be selling their property."

Sometime before April 1, 1985, a document entitled "Contract for Installment Sale of Property" was sent to Edna Bernt. The parties refer to the document as the "land contract." It was prepared by Satellite and forwarded to the Bernts through their real estate agents. Edna Bernt testified she did not read the land contract. Upon receipt of it, she forwarded it to her attorney. That document was never executed by the Bernts.

After trial, the district court found that the uniform purchase agreement contained sufficient terms and conditions so as not to be an "agreement to make an agreement." The court found the proposed land contract was in substantial compliance with the purchase agreement. It did not evidence an irreversible unwillingness on the part of the appellee to complete the purchase in accordance with the terms and conditions of the purchase agreement, the trial judge held.

Before a court may compel specific performance, there must be a showing that a valid, legally enforceable contract exists. The burden of proving a contract is on the party who seeks to compel specific performance. Pluhacek v. Nebraska Lutheran Outdoor Ministries, 227 Neb. 778, 420 N.W.2d 286 (1988); Rybin Investment Co., Inc. v. Wade, 210 Neb. 707, 316 N.W.2d 744 (1982). To establish a contract capable of specific enforcement it must be shown that there was a definite offer and an unconditional acceptance. Horn v. Stuckey, 146 Neb. 625, 20 N.W.2d 692 (1945).

A party attempting to enforce a contract, therefore, has the burden of proving there was a definite offer and an unconditional acceptance. Furthermore, for a binding contract to result from an offer and acceptance, it is essential that the minds of the parties meet at every point. Nothing can be left open for further arrangement. See Farmers Union Fidelity Ins. Co. v. Farmers Union Co-op. Ins. Co., 147 Neb. 1093, 26 N.W.2d 122 (1947).

On appeal, an action for specific performance is an equitable matter triable de novo to the Supreme Court. See, Pluhacek, supra; III Lounge, Inc. v. Gaines, 227 Neb. 585, 419 N.W.2d 143 (1988); III Lounge, Inc. v. Gaines, 217 Neb. 466, 348 N.W.2d 903 (1984).

Edna Bernt first claims the purchase agreement was not a completed contract but, rather, an agreement to make an agreement. She asserts that paragraph 5 of the purchase agreement contemplates that another agreement is to be executed, that agreement being the land contract.

The Restatement (Second) of Contracts § 24 at 71 (1981) defines an offer as "the manifestation of willingness to enter into a bargain, so made as to justify another person in understanding that his assent to that bargain is invited and will conclude it."

In the present case, the terms of the purchase agreement constituted a valid offer as defined by the restatement. The offer was countered by the Bernts, and the counteroffer was accepted by Chance on behalf of Satellite. Therefore, structurally, the contract is sound.

A contract for the transfer of real property is valid and enforceable if the agreement contains the essential elements of a contract with sufficient certainty and definiteness as to the parties, property, consideration, terms, and time of performance. In re Day Estate, 70 Mich.App. 242, 245 N.W.2d 582 (1976).

The purchase agreement before us contains all the essential elements with sufficient definiteness and certainty. The parties are identified in the agreement, including the...