Ron Jones & Co. v. Jaquith

GILLETTE, J. This is a suit for specific performance of a land sale contract. Plaintiff purchaser alleged that defendants, sellers, failed to convey the property in question upon demand and after full performance by plaintiff. Both sides moved for summary judgment. The trial court granted summary judgment for the defendants. Plaintiff appeals from this order and, in addition, assigns the award of attorney fees to defendants as error. Defendants cross appeal on the ground that the award of attorney fees is inadequate. We reverse and remand. The marriage of defendants was dissolved on August 26, 1977. In that proceeding, Mrs. Jaquith was awarded the real property which is the subject of this suit. Mr. Jaquith appealed that decision, contending that the trial court erred in its evaluation of the marital property. The final appellate decision was not rendered until July 25, 1978. Jaquith and Jaquith, 33 Or App 489, 578 P2d 508 (1978). On January 25, 1978, Mrs. Jaquith entered into an samest money agreement for the sale of the property to the plaintiff. As initially prepared, the agreement provided for a closing date of April 1, 1978, and made the sale contingent upon the plaintiff’s obtaining satisfactory financing. Mrs. Jaquith’s attorney in the lissolution proceeding was concerned that the pending appeal would not be decided by April 1, 1978. Therefore, an addendum was added to the earnest money agreement, contemporaneous with its execution, to provide for an extension of the closing date if necessary. It provided, in part, that: "Sale subject to appellate court’s affirmation of decree awarding seller fee title to the property. This agreement shall be automatically extended for a period of 30 days if the final appellate decision is not rendered by April 1, 1978” A second addendum to the agreement was prepared )y the plaintiff and executed on March 21, 1978. It stated: [730] "[A second contingency not pertinent to this case] is hereby removed by the purchaser. The purchaser is ready to proceed with the closing of the sale on April 1, 1978, or as soon thereafter as the seller is able to close the sale.” On May 1, 1978, the plaintiff wrote to the defendant stating that he had deposited $5,000 in an escrow account on April 28 to close the agreement. He indicated that he was ready to close and might be willing to accept the property subject to the contingency that the trial court’s award to Mrs. Jaquith be upheld on appeal. Mrs. Jaquith considered the earnest money agreement to be null and void because more than 30 days had passed since the original April 1 closing date without a final appellate decision being rendered. She refused to proceed and also refused a subsequent offer on May 12,1978, by the plaintiff to increase the price. This lawsuit followed. The issue to be determined is whether the first addendum means, as defendant maintains, that the closing date was extended only thirty days beyond April 1 or, as the plaintiff maintains, it extended the closing date to thirty days beyond the final appellate court decision, whenever that might occur. As a general rule, the construction of a contract is a question of law for the court to decide, except where the language of the contract is ambiguous. Timberline Equip, v. St. Paul Fire and Mar. Ins., 281 Or 639, 643, 576 P2d 1244 (1978). When the language of a contract is ambiguous, extrinsic evidence may be received to resolve the ambiguity and the interpretation of the contract becomes a question for the trier of fact. Evenson Masonry, Inc. v. Eldred, 273 Or 770, 772, 543 P2d 663 (1975). Whether a contract is ambiguous or not is a question of law for the court to decide. Ibid. We conclude that the language of the addendum is ambiguous. The sentences, [731] "Sale subject to appellate court’s affirmation of decree awarding seller fee title to the property. This agreement shall be automatically extended for a period of thirty days if the final appellate decision is not rendered by April 1, 1978.” are subject to at least two interpretations: (1) in the event no final appellate decision is rendered by April 1, 1978, the agreement is extended for thirty days from April 1, i.e., to May 1, 1978; or (2) in the event no final appellate decision is rendered by April 1, 1978, the agreement is extended for thirty days from the day that the final appellate decision is rendered. We do not suggest that these two interpretations are equally plausible; both are, however, sufficiently plausible to create an ambiguity which requires a reviewing court to resort to extrinsic evidence. Evenson Masonry, Inc. v. Eldred, supra. In the posture in which this case comes to us, a review of the extrinsic evidence does not resolve the case. The matter was decided on cross motions for summary judgment. Affidavits and depositions on file in connection with those motions indicate, not surprisingly, that the parties disagree as to what they intended by the addendum. The seller adopts suggested interpretation number (1), supra; the buyer agrees with number (2). Resolution of the pivotal issue requires, among other things, assessment of the credibility of witnesses — precisely the sort of evaluation not permitted in a summary judgment proceeding. This case must be tried. The trial court erred in entering summary judgment for defendant. Reversed and remanded for trial.1 Footnotes [1] In view of the disposition we made of this case, we do not reach plaintiffs second assignment of error concerning attorney’s fees.