Svalina v. Split Rock Land and Cattle Co., 91-48

• Decision Date: 28 August 1991
• Docket Number: No. 91-48,91-48
• Citation: 816 P.2d 878
• Parties: Jack SVALINA, Appellant (Defendant), v. SPLIT ROCK LAND AND CATTLE COMPANY, a Wyoming Partnership, Appellee (Plaintiff).
• Court: Wyoming Supreme Court

Page 878

816 P.2d 878

Jack SVALINA, Appellant (Defendant), v. SPLIT ROCK LAND AND CATTLE COMPANY, a Wyoming Partnership, Appellee (Plaintiff).

No. 91-48.

Supreme Court of Wyoming.

Aug. 28, 1991.

Georg Jensen of Law Offices of Georg Jensen, Cheyenne, for appellant.

Peter J. McNiff and Sherrill A. Veal of McNiff & Patton, Cheyenne, for appellee.

Before URBIGKIT, C.J., and THOMAS, CARDINE, MACY and GOLDEN, JJ.

OPINION

MACY, Justice.

Appellant Jack Svalina seeks review of a summary judgment which determined the lease and option-to-purchase agreement he entered into with Appellee Split Rock Land and Cattle Company was unambiguous and not unenforceable by reason of unconscionability.

We affirm.

Svalina presents these issues for our disposition:

1. Did the district court err in granting summary judgment on the complaint and counterclaim herein ruling that the contract between the parties was not ambiguous?

2. Did the district court err in determining that the contract was enforceable and denying the defendant's claims of unconscionability?

On December 16, 1988, Svalina and Split Rock Land and Cattle Company entered into a "Ranch Lease Agreement With Option to Purchase." As consideration for the agreement, Split Rock Land and Cattle Company paid $91,852.97 to Svalina ($81,852.97 for a five-year lease of the property and $10,000 for the option to purchase). Svalina used this payment to retire a third mortgage on his land, which was in foreclosure, and to retire other debts. The agreement, warranty deed to the land owned by Svalina, assignments of state and federal leases held by Svalina, and escrow instructions were placed in an escrow file with the First State Bank of Wheatland.

The option-to-purchase portion of the agreement provided Split Rock Land and Cattle Company could exercise its option to purchase if Svalina defaulted in his obligations under the agreement. It also provided the purchase price to be paid by Split Rock Land and Cattle Company, if the option to purchase were exercised, would be the assumption of liability for the first and second mortgages on the property, with Svalina retaining any sums Split Rock Land and Cattle Company had paid to him for any unexpired lease term. The agreement also provided Svalina with the right to repurchase the option to purchase upon giving notice to Split Rock Land and Cattle Company and upon tendering, within thirty days, the amount which Split Rock Land and Cattle Company had paid to Svalina for the lease and option to purchase, as well as any other sums Split Rock Land and Cattle Company had paid on behalf of Svalina during the lease term.

On December 26, 1989, Svalina gave notice to Split Rock Land and Cattle Company that he intended to exercise his right to repurchase the option. However, he did not tender the sum of money (approximately $100,000) which was required by the agreement. By a letter dated January 26, 1990, Split Rock Land and Cattle Company informed Svalina it would exercise its option to purchase because Svalina had defaulted in meeting his obligations.

On January 29, 1990, Svalina filed a petition for relief in the United States Bankruptcy Court for the District of Wyoming, thus precluding Split Rock Land and Cattle Company from taking any further action with regard to establishing its possessory and ownership interests in the Svalina property. Orders of the bankruptcy court dated May 17, 1990, released the Svalina land warranty deed to Split Rock Land and Cattle Company and lifted the automatic stay which had prevented Split Rock Land and Cattle Company from attempting to adjudicate its rights to the land in a state court.

Split Rock Land and Cattle Company initiated this case by filing a complaint for a preliminary and permanent injunction and for declaratory relief. On June 15, 1990, the parties stipulated to the entry of a preliminary injunction which permitted Split Rock Land and Cattle Company to exercise dominion over the Svalina land and allowed Svalina to remain on the land and to use it for certain limited purposes. Svalina answered the complaint on June 26, 1990, and on July 5, 1990, he filed a counterclaim. Split Rock Land and Cattle Company filed a motion for summary judgment and, by an order entered on January 7, 1991, the district court determined that (1) the agreement was clear and unambiguous; (2) Split Rock Land and Cattle Company exercised the option to purchase in sufficient compliance with the agreement to create an obligation by Svalina to convey the property to Split Rock Land and Cattle Company; (3) Svalina's affidavit filed in opposition to the motion for summary judgment contained opinions and violated the parol evidence rule and, potentially, the statute of frauds; and (4) Svalina's allegations of fraud were not pleaded with sufficient particularity and were conclusory in nature. As a result, the district court granted a summary judgment in favor of Split Rock Land and Cattle Company and ordered specific performance of the agreement.

Svalina asserts the district court erred in finding the contract was not ambiguous. To support this claim, Svalina points to his affidavit wherein he affirmed that he approached one of the partners in Split Rock Land and Cattle Company and that he proposed an agreement allowing Split Rock Land and Cattle Company to graze cattle on his ranch for five years. In exchange for those grazing rights, Svalina was to receive $100,000 and one-third of the calf crop. The agreement he signed, however, provided less cash for him than he had proposed. Svalina claimed that, when he signed the agreement, he did not realize he would not get one-third of the calf crop during the first year of the lease. Svalina also claimed he had an opportunity to sell his ranch at a profit in 1989, but he did not pursue it because he found out that, even if he repurchased and then sold the ranch, it would still be subject to the five-year lease. Svalina also claimed Split Rock Land and Cattle Company breached the agreement by failing to pay any compensation for the first year of the lease.

In addition, Svalina argues this case was not appropriate for summary judgment because of the complex and extensive factual questions involved, because terms of the agreement were in conflict, and because terms of the agreement were subject to oral supplementation. The alleged ambiguities are that the agreement makes no provision for compensation to Svalina for the first year of the lease and that the agreement is not clear as to who will pay husbandry expenses prior to December 1989. Svalina also claims there are ambiguities in the portions of the agreement pertaining to the exercise of the option to purchase. Finally, Svalina contends the agreement results in a forfeiture or penalty and should not be enforced.

We approach this case by employing our well established principles for reviewing summary judgments. Baros v. Wells, 780 P.2d 341 (Wyo.1989).

In analyzing Svalina's contention that the agreement was ambiguous, we are guided by our precedent that, if an agreement is in writing and the language is clear and unambiguous, the intention of the parties is to be secured from the words of the agreement without resorting to extrinsic evidence. Mad River Boat Trips, Inc. v. Jackson Hole Whitewater, Inc., 803 P.2d 366 (Wyo.1990). Rules of contract construction are utilized only when, without their aid, the meaning of a contract is doubtful or uncertain. Kimball v. DeYoe, 583 P.2d 1274 (Wyo.1978). An ambiguity justifying the use of extrinsic evidence...