Thomas M. Peace v. Bonnie Jean Riggins

ca02-248

NOT DESIGNATED FOR PUBLICATION

ARKANSAS COURT OF APPEALS

JOSEPHINE LINKER HART, JUDGE

THOMAS M. PEACE

APPELLANT

V.

BONNIE JEAN RIGGINS

APPELLEE

CA02-248

November 6, 2002

APPEAL FROM THE COLUMBIA COUNTY CIRCUIT COURT

[NO. CIV-2000-154-5]

HONORABLE LARRY CHANDLER,

CIRCUIT JUDGE

AFFIRMED

Appellant appeals from an order enforcing a pre-divorce agreement that provided for him to pay appellee a real-estate commission for her services in the sale of the parties' marital home. For reversal, appellant argues that the trial court erred by failing to find that the October 24, 1997 real-estate commission agreement merged with the property- settlement agreement (labeled "partition agreement" in accordance with Louisiana law) entered into by the parties on April 3, 1998. We disagree and affirm.

Prior to filing any pleading seeking a divorce, appellant and appellee entered into a written agreement stating that appellant agreed to pay appellee two-and-one-half percent (2.5%) of the sale price of the parties' home in consideration of appellee's negotiating the sale. Subsequently, the parties entered into a property-settlement agreement on April 3, 1998, which divided their property and apportioned their debt repayment.

On November 8, 2000, appellee filed suit seeking to require appellant to pay her the agreed real-estate commission for the sale of the parties' marital home. The trial court awarded appellee $6,325, which represented two-and-one-half percent of the sale price of the marital home. From that order comes this appeal.

The standard of review in a bench trial is whether the trial judge's findings were clearly erroneous. Schueck v. Burris, 330 Ark. 780, 957 S.W.2d 702 (1997). A finding is clearly erroneous when, although there is evidence to support it, the reviewing court is left with a definite and firm conviction that a mistake has been made. Wade v. Arkansas Dep't of Human Servs., 337 Ark. 353, 990 S.W.2d 509 (1999).

Appellant contends that the 1997 real-estate fee agreement merged into the property settlement subsequently signed by the parties in 1998. The 1997 agreement states that appellant

agree[d] to pay a realtor fee of three percent (3%) to an real estate agent or two and one half percent (2.5%) to Bonnie J. Peace [appellee], other owner of said property, for the negotiating of the sale of [the marital home]. This agreement relieves [appellant] of all responsibility to show the home, help to maintain it for showing, or being present for showing.

Appellant argues that the language of the 1998 agreement unequivocally states that its purpose was to "voluntarily partition ... acquets1 and gains which formerly existed between the parties" and that each party releases the other from "any further accounting,expressly stating that they both are satisfied with the voluntary partition." Further, appellant notes that the agreement provides that the net proceeds of the sale of the marital home would be divided equally. Appellant contends that the language of the 1998 agreement that addresses the marital home and disbursement of profits from the sale, taken together with the language that appellee takes as her full share the property described in exhibit A, encompasses the subject matter of the 1997 agreement, and thus, the two should not be read as separate agreements.

The 1998 agreement states that appellee takes as her full share of all the property, the property described in exhibit A, and appellant takes as his full share the property described in exhibit B. Specifically, exhibit A states that the marital home was under contract for sale and the parties had agreed to divide the net proceeds on an equal basis. However, exhibit B also describes the sale of the marital home but specifically states that "[a]fter deducting the cost of the sale, the taxes and insurance" and after deducting certain listed debts, the proceeds are to be divided equally between the parties.

In reaching our conclusion, we apply principles of contract law. See Sutton v. Sutton, 28 Ark. App. 165, 771 S.W.2d 791 (1989). When the terms of a contract are ambiguous and capable of having more than one meaning, extrinsic evidence is permitted to establish intent of the parties, and the meaning of the contract then becomes a question of fact. However, when a contract is free of ambiguity, its construction is a matter of law for the court to determine. Dodson v. Dodson, 37 Ark. App. 86, 825 S.W.2d 608 (1992).

"Merger refers to the absorption of one contract into another subsequent contract andis largely a matter of intention of the parties.... [M]erger happens when the same parties to an earlier agreement later enter into a written integrated agreement covering the same subject matter." Farm Bureau Policy Holders & Members v. Farm Bureau Mut. Ins. Co. of Ark., Inc., 335 Ark. 285, 297, 984 S.W.2d 6, 12 (1998). "In the absence of fraud, accident, or mistake, a written contract merges, and thereby extinguishes, all prior and contemporaneous negotiations, understandings, and verbal agreements." Tyson Foods, Inc. v. Davis, 347 Ark. 566, 66 S.W.3d 568 (2002); Ultracuts Ltd. v. Wal-Mart Stores, Inc., 343 Ark. 224, 332, 33 S.W.3d 128, 134 (2000). "Where agreement of parties is embraced in two or more instruments, all instruments must be considered together to determine intent of parties." Lindell Square Ltd. P'ship v. Savers Fed. Sav. & Loan Ass'n, 33 Ark. App. 5, 799 S.W.2d 569 (1990).

Appellee testified that the real-estate fee agreement was separate from the property settlement agreement. Furthermore, she stated that according to the real-estate fee agreement, appellant would pay her for handling all of the negotiations and business transactions that are traditionally performed by a realtor. According to appellee, the agreed upon two-and-one-half percent was cheaper than obtaining the services of a realtor, which commonly cost six percent or more in the New Orleans area. Specifically, appellee testified that she advertised the house for sale by owner, posted signs outside the house, received and screened all calls concerning the house, maintained the house for showing, held an open-house showing, prepared and entertained all of the offers, prepared a counter-offer, worked directly with the title company, and handled discussions with the buyer.

Appellant acknowledged that he signed the real-estate fee agreement but testified that he understood the property-settlement agreement of 1998 included "everything ... as far as the realty agreement went." Appellant argues that the property-settlement agreement was a more comprehensive agreement concerning the same subject matter as the 1997 agreement, which did not incorporate, mention, or make a provision for the payment of the real-estate commission fee. Therefore, he contends, it was the intention of the parties for the 1997 agreement to merge into the property-settlement agreement. Also, appellant notes that the closing statement did not include the real-estate commission fee. Appellant testified that the realty fee was not mentioned to him either before or during the closing.2 Appellant testified that he and appellee received $34,157.24 for the sale of the house and that he was to receive $17,078.62 as his half of the profits. However, appellee only paid appellant $12,000 and retained the remainder to pay for other debts. We do not find appellant's arguments persuasive.

Under the facts of this case, we hold that there were two separate agreements, and there was no merger of the 1997 agreement into the property-dissolution agreement. The1997 agreement was a separate contract and provided for separate consideration. By the terms of the second agreement entered into in 1998, the "cost of sale" was included as a charge against appellant's half of the profits. Further, we note that an identical provision was not included in exhibit A and was not a part of appellee's agreement. The exclusion of this provision supports the proposition that the parties intended for appellee to perform under the 1997 agreement and for appellant to pay the realty fee. Further, we note, as did the trial judge, that appellant accepted without protest substantially less than one-half of the profits at the closing of the real-estate sale. He acknowledged that the difference was being held to pay other debts. This acceptance together with his acquiescence in allowing appellee to sell the marital home is inconsistent with his argument that the real-estate fee agreement merged with the parties' property-settlement agreement. Furthermore, the two agreements can be read together and each given the full benefit of the clear language set out in each agreement. Therefore, we affirm.

Affirmed.

Stroud, C.J. and Roaf, J., agree.

1 "In the civil law, property which has been acquired by purchase, gift, or otherwise than by succession.... Profits or gains of property, as between husband and wife." Black's Law Dictionary 23 (6th ed. 1990).

2 Likewise, appellant asserts that after the divorce, the realty-commission fee was not mentioned to him until appellee filed an amended complaint. Appellant's incorrect assertion could be because the addendum of his brief lacked such documents; however, the complaint is made a part of appellee's addendum and states in paragraph eight:

Also set out in the parties' agreement and in a separate written contract ... [appellant] promised to pay [appellee] for the costs of sale of the property ... attached as Exhibit B ... [appellant] has failed and refused to pay these costs which total $6,325.