White v. Rehn

• Decision Date: 15 April 1982
• Docket Number: No. 13416,13416
• Citation: 103 Idaho 1,644 P.2d 323
• Parties: L. Junior WHITE and Levora White, Plaintiffs-Appellants, v. Vernon REHN, Karen Rehn, William Rehn and June Rehn, Defendants-Respondents.
• Court: Idaho Supreme Court

Page 323

644 P.2d 323

103 Idaho 1

L. Junior WHITE and Levora White, Plaintiffs-Appellants, v. Vernon REHN, Karen Rehn, William Rehn and June Rehn, Defendants-Respondents.

No. 13416.

Supreme Court of Idaho.

April 15, 1982.

Lowell N. Hawkes and Dalon Esplin of Lowell N. Hawkes, Chartered, Pocatello, for plaintiffs-appellants.

Thomas H. Church and Steven A. Tuft of Church, Church, Snow & Tuft, Burley, for defendants-respondents.

McFADDEN, Justice.

This action involves some 960 acres of a 9,000 acre dry farm in Cassia County. The 9,000 acres were, until 1975; owned by Conrad and Anna Rehn. Their son, Vernon Rehn, leased the acreage from them and ran the farm. The lease gave him a right of first refusal to purchase the land if Conrad and Anna decided to sell. In February 1975 Conrad Rehn died. Vernon Rehn wanted to purchase the farm from the estate and his mother. Both parties were amenable to the sale. The executors petitioned the court to authorize the sale and this petition was granted; Vernon also apparently obtained his mother's verbal consent. All arrangements had been made and the contract drafted by March of 1976.

Vernon Rehn did not, however, have the necessary $211,000 down payment. Vernon consulted with Robert Hilliard of Idaho Bank & Trust Company and they decided that Vernon should sell 960 of the 9,000 acres in order to come up with the down payment. Both anticipated a cash sale, purportedly due to the estate's need for cash to pay administrative costs and taxes. Hilliard subsequently contacted Warren King, an agent for Sierra West Real Estate of Logan, Utah. King visited Vernon Rehn and Rehn drove King around the 960 acre parcel. King then contacted Hilliard who told him the terms of the sale. King contacted L. Junior White upon returning to Logan; White expressed an interest in the property. King took White to view the property, at which time he showed the perimeters of the parcel as Vernon Rehn had described them to him, and told White that the purchase price was approximately $243 an acre, cash. White told King to set up an appointment to work out the terms of purchase.

On March 30, 1976, Junior White, LaVora White and two agents from Sierra West, David Nielson and Warren King, drove up from Utah and viewed the property. They checked the dimensions using an automobile odometer. White told King that if the property could be irrigated, he would buy it. ¹ They then drove to the Ramada Inn in Burley, where they met with Hilliard and together they filled out an "Earnest Money Receipt and Offer to Purchase" form. The earnest money receipt called for payment of the entire purchase price in exchange for a deed to the property. No land sale contract was contemplated. White stated that the purchase had to be conditioned on obtaining well permits and financing. The well permits condition was written into the agreement, but the financing condition was not. They agreed on a closing date of July 1, 1976, in order to give White time to obtain financing. This was written into the agreement. White gave Nielson a check for $5,000 and Hilliard took the offer to Vernon and Karen Rehn. The Rehns wanted the price increased by $20,000 to cover the value of crops growing on the land. After some negotiations, the Rehns and Whites agreed, on April 1, 1976, to a $12,000 increase to cover crops. Hilliard, who had the earnest money agreement, added the $12,000 to it and had the Rehns initial it. He kept one copy for the Rehns and returned the rest to King. At this point King added a "subject to financing" term and signed the agreement on behalf of the Whites. Junior White began looking for financing and claimed to have obtained commitments for financing within a short time after the earnest money agreement was signed by the Rehns. White also arranged to have Vernon Rehn accompany him to the office of the Department of Water Resources in Burley to obtain well permits. On April 9, the Whites drove to the Rehns' farm, viewed and discussed the property with the Rehns, then drove to the Department of Water Resources where Vernon Rehn used his own maps to spot well locations.

On April 12 Vernon Rehn called the Whites and told them he could not sell them the 960 acres. His mother refused to sell this acreage to him, apparently because William Rehn (Vernon's brother) now wanted to purchase the property. White went ahead with financing and obtained a commitment. On May 12 White instructed King to close the transaction. On May 14 William and June Rehn purchased 937 of the 960 acres. On the same date the remainder of the 9,000 acres was sold to Vernon Rehn. The Whites subsequently filed a complaint seeking specific performance or damages. The complaint also sought relief against William and June Rehn for interference with contract. ² Respondents filed an answer in which they counterclaimed for attorney fees. After depositions were taken, respondents moved for summary judgment. The court granted summary judgment in favor of respondents on the original action and on the counterclaim for attorney fees. The Whites appeal from the order granting the motion for summary judgment. We affirm.

This court has set forth the rule that ambiguous earnest money agreements will not support an award of specific performance or damages. Luke v. Conrad, 96 Idaho 221, 526 P.2d 181 (1974), Matheson v. Harris, 96 Idaho 759, 536 P.2d 754 (1975). The description of the land as stated in the earnest money receipt is "all land west of road running south to the Rehn farmstead containing 960 acres Exact acreage to be determined by survey. Price to be adjusted up or down at the rate of $243.00 per acre Cassia County, State of Idaho." There is nothing in the description with which to pinpoint exactly which 960 acres was to be transferred. As such, this description is ambiguous on its face and will not support an award for specific performance or damages. Appellant invites us to apply the standard here which we apply to other ambiguous contracts and allow extrinsic or parol evidence to clarify the terms of the written agreement. We decline to do so. Although this court has never adopted a highly defined standard for determining the sufficiency of a description of land we have adopted a general standard which was set forth in Allen v. Kitchen, 16 Idaho 133, 142, 100 P. 1052, 1061 (1909), quoting Craig v. Zelian, 137 Cal. 105, 69 P. 853 (1902).

"An agreement for the sale of real property must not only be in writing and subscribed by the party to be charged, but the writing must also contain such a description of the property agreed to be sold, either in terms or by reference, that it can be ascertained without resort to parol evidence. Parol evidence may be resorted to for the purpose of identifying the description contained in the writing, with its location upon the ground, but not for the purpose of ascertaining and locating the land about which the particular parties negotiated, and supplying a description thereof which may have been omitted from the writing."

See also, Luke v. Conrad and Matheson v. Harris, both supra. The description involved here is so inadequate that to allow parol evidence and the surrounding circumstances to be considered would be to supply a description of the property which was omitted from the writing in order to ascertain and locate the land about which the parties negotiated. As such, the earnest money receipt is unenforceable.

The trial court also awarded attorney fees to respondents. I.R.C.P. 54(e), which states that attorney fees may be awarded only when the court finds that the case is frivolous, only applies to actions filed after March 1, 1979. At the time this action was filed, November 1976, I.C. § 12-121 provided that: "In any civil action, the judge may award reasonable attorney fees to the prevailing party ..." The award of attorney fees was within the discretion of the trial court and appellant has failed to show an abuse of that discretion.

The judgment of the trial court is affirmed. Costs to respondents.

BAKES, C. J., and DONALDSON, J., concur.

SHEPARD, J., concurs in the result.

BISTLINE, Justice, dissenting.

For reasons which I cannot fathom, it seems that the other members of the Court have heretofore taken a firm stance against earnest money agreements, which are for certain the main instrumentality by which the real estate profession operates-not that earnest money agreements are not utilized where real estate brokers and salesmen are not involved. See Hoffman v. S. V. Company, Inc., 102 Idaho 187, 628 P.2d 218 (1981). Today the Court takes its furthest step yet towards making all earnest money agreements per se unenforceable in Idaho.

Although I strongly disagree with the reasoning, or rather the lack of reasoning, in the Court's opinion, my primary concern is with those unfortunate people who enter into earnest money agreements thinking that so long as the conditions of the agreement are met, they have a contractual right to purchase the property which is the subject of the agreement. Such is apparently not the law in Idaho. Yet it seems beyond dispute that most, if not all, other jurisdictions hold otherwise.

I.

SPECIFIC PERFORMANCE

A.

Before turning to the merits of the issues presented, it is proper to emphasize the nature of the contract which plaintiffs seek to enforce. Earnest money agreements may be divided very generally into two categories-those which contemplate a sale pursuant to a future land sale contract between the buyer and the seller-see Luke v. Conrad, 96 Idaho 221, 526 P.2d 181 (1974)-and those which contemplate closing a sale for cash. See Pittman v. Thompson, 45 Or.App. 627, 608 P.2d 1223, 1225 (1980) ("(a)n earnest money agreement may represent the completed agreement of the parties or it may only represent a rough form of what is intended to be followed by a final contract"). The latter category presents fewer problems to courts in which specific performance is...