Tuesday, July 03, 2007

Summary 2007 WY 104

Summary of Decision issued June 29, 2007

[SPECIAL NOTE: This opinion uses "Universal Citation" and was given an "official" citation when issued. You should use this citation whenever you cite the opinion, with a P.3d parallel citation. You will note that all of the paragraphs are numbered. When you need to provide a pinpoint citation, the universal portion of the citation will use that paragraph number. The pinpoint citation in the P.3d portion should include the reporter page number. If you need assistance, please contact the Wyoming State Law Library.]

Summaries are prepared by Law Librarians and are not official statements of the Wyoming Supreme Court

Case Name: Reynolds v. Milatzo

Citation: 2007 WY 104

Docket Number: 06-217

Appeal from the District Court of Laramie County, Honorable Edward L. Grant, Judge

Representing Appellant (Plaintiffs): Lisa M. Barrett of Buchhammer & Kehl, Cheyenne, Wyoming.

Representing Appellee (Defendants): Steven F. Freudenthal of Freudenthal, Salzburg & Bonds, Cheyenne, Wyoming.

Date of Decision: June 29, 2007

Issues: Whether the district court erred by determining a waiver of Appellants' ability to enforce their rights pursuant to the default provisions of a Contract for Deed. Whether the notice of default to Appellees was sufficient under the terms of the Contract for Deed and, as such, the Appellees failed to cure the default thus triggering the default provisions.

Discussion/Facts: The general rule is that courts interpret contracts to effectuate the parties' intention, as expressed in the language of the agreement. As long as the contract language is clear and unambiguous, a court's obligation on appeal is to interpret it as a matter of law. Additionally, courts do not favor forfeiture of contractual rights. Before a party can declare a forfeiture, he must establish he has a clear right to terminate the contract and he must be free from blame. Moreover, provisions for forfeiture may be waived. In order to establish a prima facie case of waiver, the buyer must establish that the seller has condoned or assented to previous defaults and has not given notice of his intention to insist on strict compliance in the future.
In the present action, the record shows that Appellants waived strict compliance with some of the terms of the contract for deed. Beginning early in the contract, Appellees made some late payments and failed to secure hazard insurance, provide proof of insurance when it was in place, and, on a couple of occasions, pay the property taxes. The parties also even discussed amending the contract to have Appellants pay for the insurance and taxes on the property and have an amount added to the monthly payment in order to reimburse them for those costs. The record does not indicate Appellants took any further action, at that time, to address Appellees' failure to comply with their tax and insurance obligations. Instead, the contract continued under its original terms and Appellant's obtained their own insurance on the property.
In addition, Appellees made numerous late payments over the years and, apparently, paid the late fees on some occasions, but not on others. The parties communicated about the late payment issue, but there is no indication Appellants made any effort to declare a default under the terms of the contract or the escrow instructions. Thus, the evidence supports the conclusion that Appellants waived strict compliance with the contract for deed and, in order to enforce the contractual terms as written, Appellants were required to give appropriate notice of their intention.
The contract for deed called for Appellants to provide Appellees with notice of default by certified mail and Appellees would then have thirty days to cure the defect. The escrow instructions added to the notification obligation by requiring the notice of default to be given through the escrow agent. The contract for deed also provided that, in the event there was any conflict between the terms of the contract and the escrow instructions, the escrow instructions controlled. Under the plain language of the parties' agreement, in order to declare a default, Appellants were required to give Appellees notice through the escrow agent. It is undisputed that Appellants issued the notices of default directly to Appellees, without going through the escrow agent. Consequently, the default notice did not comply with the clear language of the parties' agreement and was not effective to trigger the default or cure provisions of the contract for deed. Failing appropriate notice of default, Appellees were entitled to rely on the provisions of the contract which allowed them to prepay the contract amount to the escrow agent and receive, in return, full title to the property.

The district court's findings that Appellants waived strict compliance with some of the contract requirements and that the default notices did not comply with the contractual terms were not clearly erroneous. Consequently, the district court did not err by refusing to declare that the contract had terminated or order the property to be returned to Appellants.


J. Kite delivered the opinion for the court.

Link: http://tinyurl.com/yrntxq .

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