Winegar v. Froerer Corp.

• Decision Date: 17 May 1991
• Docket Number: No. 890160,890160
• Citation: 813 P.2d 104
• Parties: A. Wayne WINEGAR and Mary Winegar, his wife, Plaintiffs and Appellees, v. FROERER CORP., a Utah corporation; P.F. Investments, a Utah limited partnership; and Fredrick Froerer, III, Zane Froerer, and Phyllis Froerer, individuals, Defendants and Appellants.
• Court: Utah Supreme Court

Page 104

813 P.2d 104

A. Wayne WINEGAR and Mary Winegar, his wife, Plaintiffs and Appellees, v. FROERER CORP., a Utah corporation; P.F. Investments, a Utah

limited partnership; and Fredrick Froerer, III,

Zane Froerer, and Phyllis Froerer,

individuals, Defendants and Appellants.

No. 890160.

Supreme Court of Utah.

May 17, 1991.

David R. Olsen, Paul M. Simmons, Salt Lake City, for Froerer Corp.

Joseph S. Knowlton, Salt Lake City, for Winegars.

DURHAM, Justice:

Plaintiffs Wayne and Mary Winegar brought this action against the assignee of an executory land sale contract of which they were purchasers. They sought to rescind the contract and to receive a judgment for the amount they had paid under the purchase agreement. The district court granted their motion for summary judgment. We reverse.

In 1979, the Winegars entered into an agreement to purchase property in Duchesne County, Utah. The agreement provided that upon payment in full of the purchase price, Ranch Liquidators of Utah, Inc. ("Ranch Liquidators"), the sellers of the property, would deliver to the Winegars a warranty deed and a title insurance policy. In 1980, Ranch Liquidators assigned that contract to Froerer Corporation ("the Froerers") as part of a larger transaction in which the Froerers purchased twenty-three executory land sale contracts from Ranch Liquidators in the same area. At the time of the assignment, Ranch Liquidators also gave the Froerers a warranty deed to the property named in the Winegars' agreement. The Froerers did not then record the deed, but kept it in their office.

The Froerers and Ranch Liquidators first signed an agreement in April 1980, giving the Froerers limited recourse against Ranch Liquidators for claims by the real estate buyers for any consideration that was not Ranch Liquidators' responsibility under the original land sale contracts. The assignment agreement, executed in June 1980 between Ranch Liquidators and the Froerers, transferred Ranch Liquidators' "right, title, interest and equity" in the purchase agreement between Ranch Liquidators and the Winegars. The Froerers accepted the assignment "subject to the covenants and conditions contained in the [original land sale agreement]." No mention was made of whether the parties intended to assign Ranch Liquidators' obligations and liabilities under the contract. Similarly, the agreement failed to mention what the parties intended when Ranch Liquidators gave the Froerers the warranty deed.

The Winegars paid all remaining payments on the purchase agreement to the Froerers and completed paying on the contract in May 1984. When the Winegars demanded a warranty deed for the property from the Froerers, the Froerers instructed them to request the deed from Ranch Liquidators. Ranch Liquidators was unable to convey the property to the Winegars, however, because it had conveyed the property to a third party by quitclaim deed in 1982. Because the Winegars had never recorded their interest under the purchase agreement and the Froerers had never recorded the warranty deed, Ranch Liquidators' 1982 quitclaim conveyance was valid. In an unsuccessful effort to resolve the dispute, the Froerers gave the Winegars the unrecorded warranty deed the Froerers had received from Ranch Liquidators. The Winegars recorded this deed together with a quitclaim deed executed by the Froerers to them.

In August 1987, the Winegars brought this action against the Froerers, alleging that the Froerers (1) negligently failed to record the warranty deed, allowing the property to be deeded to third parties, (2) negligently failed to make payments to the fee owner, allowing the property to be foreclosed, (3) were unjustly enriched by the amounts it had received under the purchase agreement, and (4) breached the purchase agreement by failing to provide the Winegars In their motion for summary judgment, the Winegars sought to rescind the purchase agreement they had originally entered into with Ranch Liquidators ¹ and requested a judgment for the amount they had paid under the purchase agreement.

with a warranty deed and title insurance.

In response to the Winegars' motion, the Froerers submitted the affidavit of Fredrick Froerer, III, which stated that (1) the assignment to the Froerers was an assignment only of the rights to receive payments due under the purchase agreement, (2) the Froerers never agreed to assume Ranch Liquidators' liabilities under the purchase agreement, and (3) the Froerers did not intend acceptance of the assignment to constitute an assumption of Ranch Liquidators' liabilities. The Winegars did not submit any affidavits disputing Mr. Froerer's testimony, relying instead on the documents appended to their brief.

By a minute entry dated January 31, 1989, the trial court granted the Winegars' summary judgment motion "as prayed" based on "the rationale submitted and argued by the plaintiff" in support of the motion, which the court found to be "the more reasonable under the facts and ... more in support of the apparent intent of the parties."

On appeal, the Froerers argue that because they were not parties to the original purchase agreement between Ranch Liquidators and the Winegars, they had no obligation to convey clear title to the Winegars under that agreement unless they specifically assumed such an obligation. The Froerers argue that the agreements between Ranch Liquidators and themselves show no intent to assign liabilities, or at least are ambiguous as to whether such an assumption was intended. The Froerers also argue that the trial court erred in concluding, without considering the parties' intent, that there was an unconditional delivery of the warranty deed to them, conveying title. The Froerers assert that the trial court should have allowed parol evidence as to the intent of the parties on both issues.

The issues we must address on appeal are (1) whether the assignment between Ranch Liquidators and the Froerers clearly assigned the duties as well as the benefits of the executory contract, and (2) whether giving the Froerers the warranty deed, as a matter of law, conveyed title to the property.

Summary judgment is appropriate only when there is no genuine issue of material fact and the moving party is entitled to judgment as a matter of law. Utah R.Civ.P. 56(c); Allen v. Ortez, 802 P.2d 1307, 1309 (Utah 1990). In reviewing the trial court's ruling, we accept the facts and inferences in the light most favorable to the losing party. Because summary judgment is granted as a matter of law, we may reconsider the trial court's legal conclusions. Farmers New World Life Ins. Co. v. Bountiful City, 803 P.2d 1241, 1243 (Utah 1990).

We first address whether the trial court properly concluded, as a matter of law, that the Froerers assumed Ranch Liquidators' liabilities under the purchase agreement when they accepted an assignment of the agreement. We begin our analysis by reviewing applicable assignment principles.

An assignment is the transfer of rights; a delegation is the transfer of duties. First American Commerce v. Washington Mut. Sav., 743 P.2d 1193, 1194 (Utah 1987) (citing J. Calamari & J. Perillo, Contracts § 18-24 (2d ed. 1977)). Generally, all beneficial rights under an executory contract are assignable. Wohlschlegel v. Uhlmann-Kihei, Inc., 4 Hawaii App. 123, 662 P.2d 505, 514 (1983) (citing 6 Am.Jur.2d Assignments § 9 (1963)). Absent an assumption of liability, however, the assignment of a contract does not impose on the assignee the assignor's duties or liabilities under the contract. See Murr v. Selag Corp., 113 Idaho 773, 747 P.2d 1302, 1309 (Ct.App.1987); Wohlschlegel v. Uhlmann-Kihei, Inc., 662 P.2d at 514; see also Higgenbotham v. Topel, 9 In Radley v. Smith, 6 Utah 2d 314, 313 P.2d 465, 466-67 (1957), we stated that whether an assignment of the entire contract includes an assumption of liabilities depends on the terms of the assignment and the parties' intent. We noted that whenever uncertainty or ambiguity exists with respect to the assumption, "it is proper for the court to consider all of the facts and circumstances, including the words and actions of the parties forming the background of the transaction." Id. The burden of proof is on the party who asserts that there has been an assumption of the assignor's liabilities to show assumption by "clear and unequivocal" evidence. Murr, 747 P.2d at 1309 (citations omitted).

Wash.App. 254, 511 P.2d 1365, 1368 (1973) (requiring assignee to expressly assume assignor's obligations); Cuchine v. H.O. Bell, Inc., 210 Mont. 312, 682 P.2d 723, 725 (1984) (assignee liable only if it is "clearly shown that the assignee ... expressly or impliedly assumed the assignor's liability").

An assignment is interpreted according to the rules of contract construction. See Farr v. Link, 746 P.2d 431, 433 (Wyo.1987). In interpreting a contract, the intentions of the parties are controlling. John Call Eng'g, Inc. v. Manti City Corp., 743 P.2d 1205, 1207 (Utah 1987). If the contract is in writing and the language is not ambiguous, the intention of the parties must be determined from the words of the agreement. See Atlas Corp. v. Clovis Nat'l Bank, 737 P.2d 225, 229 (Utah 1987); Oberhansly v. Earle, 572 P.2d 1384, 1386 (Utah 1977). A court may only consider extrinsic evidence if, after careful consideration, the contract language is ambiguous or uncertain. Faulkner v. Farnsworth, 665 P.2d 1292, 1293 (Utah 1983). A contract provision is ambiguous if it is capable of more than one reasonable interpretation because of "uncertain meanings of terms, missing terms, or other facial deficiencies." Id.; see also Mann v. Wetter, 100 Or.App. 184, 785 P.2d 1064, 1067 (1990). Whether ambiguity exists in a contract is a question of law. Faulkner, 665 P.2d at 1293.

In this case, the trial court granted the Winegars' motion for summary judgment. The only parol evidence offered came from the Froerers and wholly supported their position. We...