Stamenich v. Markovic

• Decision Date: 13 June 1983
• Docket Number: No. 81-1194.,81-1194.
• Citation: 462 A.2d 452
• Parties: Zlatan STAMENICH, et al., Appellants, v. Mirjana MARKOVIC, et al., Appellees.
• Court: D.C. Court of Appeals

462 A.2d 452

Zlatan STAMENICH, et al., Appellants, v. Mirjana MARKOVIC, et al., Appellees.

No. 81-1194.

District of Columbia Court of Appeals.

Submitted September 16, 1982.

Decided June 13, 1983.

Elbert R. Shore, Rockville, Md., was on brief for appellants.

Donald Cefaratti, Jr., Washington, D.C., was on brief for appellees.

Before NEBEKER, BELSON and TERRY, Associate Judges.

TERRY, Associate Judge:

The trial court granted appellees' motion for a preliminary injunction and entered an order directing appellants to assign a lease to appellees. We hold that the trial court erred in two respects and reverse the order granting the injunction.¹

I

On September 7, 1979, appellant Zlatan Stamenich entered into a contract with appellee Alexander Markovic for the sale of Mr. Stamenich's thirty shares of stock in Serbian Crown, Inc., the corporate owner of the Serbian Crown Restaurant in Northwest Washington, for $175,000.² On September 29 and December 14 they executed addenda to the September 7 agreement. Specifically, the December 14 addendum provided that the purchase price "include[d] also one-half (40 shares) of the corporation FRENCH DELICATESSEN — JOUR ET NUIT, INC., owned by the seller Mr. Zlatan Stamenich."

On January 24, 1980, Stamenich and Alexander Markovic signed a document entitled "Final Settlement." This document stated that there was a balance of $92,159 to be paid on the purchase price of the stock and specified the mode of payment. It also provided that half the shares of the Serbian Crown and the French Delicatessen were to be transferred that day to appellee Mirjana Markovic.³ There was no provision in either the September 7 contract, the two addenda, or the January 24 "Final Settlement" for any assignment of the lease to the premises where the restaurant was located.

On March 11, 1980, Mr. Markovic entered into a contract with appellant Renato Bertagna for the purchase of Mr. Bertagna's interest in the Serbian Crown (twenty shares of stock) and the French Delicatessen (forty shares of stock) for the sum of $140,000. The record is not entirely clear, but it appears that Mr. Bertagna delivered all of the stock to Mr. Markovic when he was tendered the full purchase price. direct Mr. Stamenich to process the government papers.

On June 17, 1981, appellees filed a motion for a preliminary injunction asking the court, inter alia, to enter an order directing Stamenich and Bertagna to assign the lease to them.⁴ At the hearing which followed, the trial court expressed some concern at the outset over the fact that there was no verified complaint or affidavit in support of the motion. Upon reassurances from all the parties that they were ready to proceed, however, the court went ahead with the taking of testimony.⁵

Mr. Markovic testified that before he signed the September 7 contract, he had entered into verbal agreements with appellant Stamenich concerning the assignment of the lease to the property. Mr. Stamenich, on the other hand, testified that Mr. Markovic had never asked him to include a provision in the contract to cover the assignment of the lease. Stamenich added, however, that despite the absence of any contractual provision, he was willing to assign the lease as soon as he was paid in full for his shares of stock in the two corporations.

Branko M. Peselj, an attorney who represented both Markovic and Stamenich during the contract negotiations, testified that "[e]verything was specified in the contract." Some of his other testimony, however, was inconsistent with this assertion. For example when asked why no provision had been made in the contract for assignment of the lease, Mr. Peselj replied, "[B]ecause it was understanding [sic] that he [Mr. Markovic] would take over everything, including the lease."

Benjamin Chaplin, the chief investigator for the District of Columbia Office of Alcoholic Beverage Control, testified that before his office would issue a liquor license, the party requesting it had to have a lease to the premises for which the license was sought. Mr. Chaplin added, however, that if the applicant did not have a lease, a license would still be issued if "there was a letter of intent from the landlord, stating that he would issue the lease after settlement." The license for the premises involved in the instant case had been issued to French Delicatessen — Jour et Nuit, Inc.

At the conclusion of the hearing, the trial court orally ruled that the lease would have to be assigned to the appellees and asked their counsel to prepare an order to that effect. On August 12, 1981, the court filed written findings of fact and conclusions of law, stating that "[e]ither implicitly or expressly . . . [appellants] agreed to have the lease assigned to Jour et Nuit . . . ." Concluding that appellants had breached their agreement, the court ordered them to "execute an assignment of the lease to French Delicatessen — Jour et Nuit, Inc., within 24 hours of the presentation of an assignment of the lease to them by [appellees' attorney] . . . ."⁶

II

Appellants' attack on the trial court's ruling is twofold. First, they contend that the trial court erred when it permitted appellees to introduce parol evidence to establish the existence of an alleged agreement to assign the lease for the building in which the restaurant was located. Second, even assuming arguendo that the use of parol evidence was proper, appellants maintain that the trial court erred in granting appellees' motion for a preliminary injunction because the requirements for obtaining this form of equitable relief were not met. We agree with both contentions.

In general, "when the parties to a contract have reduced their entire agreement to writing, the court will disregard and treat as legally inoperative parol evidence of the prior negotiations and oral agreements." Giotis v. Lampkin, 145 A.2d 779, 781 (D.C.Mun.App. 1958); accord, Carr v. Haynes, 374 A.2d 868, 870 (D.C.App. 1977). More precisely, "[e]xtrinsic or parol evidence which tends to contradict, vary, add to, or subtract from the terms of [the] written contract must be excluded." Fistere, Inc. v. Helz, 226 A.2d 578, 580 (D.C. App. 1967) (citations omitted); see Dixon v. Wilson, 192 A.2d 289, 291 (D.C.App. 1963). Like most rules, however, the parol evidence rule has its exceptions. For example, when fraud, mistake, or duress is alleged, the admission of parol evidence to vary the express terms of a contract may be proper. See Rice v. Rice, 415 A.2d 1378, 1382 (D.C. App. 1980); Giotis v. Lampkin, supra, 145 A.2d at 781. Parol evidence may also be admitted to explain ambiguous language in a contract, Dixon v. Wilson, supra, 192 A.2d at 291, or to show "a contemporaneous agreement in addition to and not inconsistent with or a variation of the written agreement between the same parties, which was an essential inducement of the written contract, or where the parties did not adopt the writing as a statement of their whole agreement." Boomhower, Inc. v. Lavine, 151 F.Supp. 563, 567 (D.D.C. 1957) (citation omitted). Appellees did not allege fraud or any form of improper inducement to enter into the contract. We must therefore determine whether the written contract was in any way ambiguous or incomplete so as to render admissible the challenged parol evidence⁷

Whether the written contract in this case represented a complete integration of the understanding between the parties depends on their intent at the time of the execution of the contract. Mitchell v. David, 51 A.2d 375, 378 (D.C.Mun.App. 1947). The litmus test for measuring intent requires that we look to "the written contract, the conduct and language of the parties and the surrounding circumstances." Standley v. Egbert, 267 A.2d 365, 367 (D.C. App. 1970) (citations omitted).

"Contracts are not rendered ambiguous by the mere fact that the parties do not agree upon their proper construction." Friedman v. Thomas J. Fisher & Co., 88 A.2d 321, 323 (D.C.Mun.App. 1952), quoted in Scrimgeour v. Magazine, 429 A.2d 187, 189 (D.C.App. 1981); see Dixon v. Wilson, supra, 192 A.2d at 291. Although inartfully drawn, the contract in the instant case was not ambiguous. It was comprehensive as to the subjects it discussed, namely, the sale of stock in the two corporations and the immigration of Mrs. Markovic (see note 2, supra). Viewing the contract as a whole, the circumstances surrounding its execution, and the comparative experience of all concerned, we are satisfied that the written contract embodied the complete agreement between the parties. In particular, we deem it significant that the original written contract was modified on three occasions as a result of continuing negotiations.⁸ Had the parties intended to include a provision regarding the lease, it would have been a simple matter for them to draw up another addendum. Their failure to do so makes clear that an assignment of the lease was not within the scope of the contract. We therefore hold that the trial court erred in admitting parol evidence of the alleged oral agreement to assign the lease⁹

III

But even assuming arguendo that appellees had been able to establish by proper proof the existence of the oral agreement, the trial court's decision to issue the preliminary injunction did not have an adequate foundation in the evidence. Accordingly, it cannot stand.

The decision to grant or deny preliminary injunctive relief is committed to the sound discretion of the trial court. In re Antioch University, 418 A.2d 105, 109 (D.C.App. 1980); District Unemployment Compensation Board v. Security Storage Co., 365 A.2d 785, 786-787 (D.C. 1976), cert. denied, 431 U.S. 939, 97 S.Ct. 2651, 53 L.Ed.2d 256 (1977). This court has made clear, however, that "[a] proper exercise of discretion requires the trial court to consider whether the moving party has clearly demonstrated (1) that there is a substantial likelihood he will prevail on the merits; (2) that he is in danger of...