MILFORD LOWE v. SANDY RAKES
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RENDERED:
NOVEMBER 30, 2001; 2:00 p.m.
NOT TO BE PUBLISHED
C ommonwealth O f K entucky
C ourt O f A ppeals
NO.
2000-CA-002597-MR
MILFORD LOWE
APPELLANT
APPEAL FROM TAYLOR CIRCUIT COURT
HONORABLE ALLAN RAY BERTRAM, JUDGE
ACTION NO. 98-CI-396
v.
SANDY RAKES
APPELLEE
OPINION
REVERSING AND REMANDING
** ** ** ** **
BEFORE:
BUCKINGHAM, COMBS, and DYCHE, Judges.
COMBS, JUDGE:
Milford Lowe, pro se, appeals the summary judgment
of the Taylor Circuit Court which interpreted the parties’
written contract as a lease and dismissed his counterclaim for
breach of contract for the sale of real property.
We reverse and
remand.
On August 2, 1990, Lowe and the appellee, Sandy Rakes,
executed a rather roughly drawn hand-written agreement entitled
“Renter’s Contract,” which reads as follows:
I, Sandy Rakes, will not be responsible in
case of any accident. I, Milford Lowe, agree
to pa[y] [$]100.00 a month start[ing] Aug.
1[,] 1990 for rent on the property at
Merrimac and I will take the [$]100.00 that I
pay Sandy Rakes off of the amount that I pay
to Sandy Rakes off the [$]15,000[ ] for the
property and I will pay by the 10[th] of the
month[;] not to do any thing that would
[illegible] cost Sandy Rakes any money[;] the
electric bill will be in Milford Lowe[’s]
name and Milford Lowe has the right to do any
thing that he want[s] to improve it at his
own expense. Date Aug 2 1990.
In addition to the signature of both Lowe and Rakes, the contract
was witnessed by Evelyn Graham.
For nearly eight years, the parties abided by this
agreement without incident.
Lowe had possession of the property
and paid Rakes $100 each month; he made improvements to the
property, including:
connecting the property to city water,
painting the house inside and out, and replacing the flooring in
four of the rooms.
In March 1998, Rakes gave Lowe notice to vacate the
premises.
When Lowe refused to leave, Rakes filed an action for
forcible detainer in the Taylor District Court.
Lowe filed a
counterclaim alleging that Rakes had breached the agreement,
which Lowe characterized as a contract for deed.
Lowe moved to
have the controversy transferred to the Taylor Circuit Court.
That motion was granted on September 23, 1998.
A trial was scheduled to commence in the circuit court
on May 27, 2000.
Prior to trial, Rakes moved the court to
interpret the contract, seeking a ruling that the writing
constituted a renter’s contract and not a contract for the
purchase of real estate.
The trial court treated the motion as
one for summary judgment.
In its judgment of May 12, 2000, the
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trial court concluded that the agreement was a “renter’s
contract” -- not a contract or option to purchase the realty.
The judgment contained no analysis of the terms of the agreement.
Judgment was awarded in favor of Rakes solely on the basis that
the agreement failed to comply with the Statute of Frauds,
Kentucky Revised Statutes (KRS) 371.010(6).
Specifically, the
trial court found that the writing failed to describe the
property “with sufficient accuracy.”
On October 5, 2000, the
trial court entered an amended judgment, awarding Rakes the sum
of $2,300 -- the amount allegedly owed during the pendency of the
action -- and denying Lowe an equitable lien for his improvements
to the property.
This appeal followed.
Lowe challenges the trial court’s interpretation of the
contract and its summary dismissal of his counterclaim.
He
contends that there are factual issues that render summary
judgment inappropriate.
However, he concurs that the issue of
the proper interpretation of the contract involves a question of
law for the court to resolve.
Morganfield National Bank v.
Damien Elder & Sons, Ky., 836 S.W.3d 893, 895 (1992); Hibbitts v.
Cumberland Valley National Bank & Trust Company, Ky.App., 977
S.W.2d 252, 254 (1998).
We review the trial court’s legal
conclusions de novo.
The cardinal rule in interpreting a written document is
to give the words employed their plain and ordinary meaning.
O’Bryan v. Massey-Ferguson, Inc., Ky., 413 S.W.2d 891 (1966).
the language used renders it susceptible of two constructions,
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If
the court must adopt the interpretation that will result in a
fair and reasonable contract rather than construing it in such a
manner that would render it inequitable or oppressive.
Harding, Ky., 860 S.W.2d 280, 287 (1993).
Ward v.
Furthermore,
regardless of the title or heading employed by the parties, it is
the “purpose, rather than the name given a contract” which
controls.
Greater Louisville First Federal Savings and Loan
Association v. Etzler, Ky.App., 659 S.W.2d 209, 212 (1983),
quoting Trinity Temple Charities v. City of Louisville, 300 Ky.
172, 188 S.W.2d 91 (1945).
These principles apply with equal force to contracts
which fall within the Statute of Frauds.
The court must divine
the parties’ intent from the writing itself rather than by
reference to the formal requisites set forth in KRS 371.010.
Bennett v. Horton, Ky., 592 S.W.2d 460 (1979).
Consequently,
Rakes was not instantly entitled to summary judgment merely
because the contract was not wholly congruent to the Statute of
Frauds.
Guided by the settled principles of contract
interpretation, we believe that despite the “title” given to the
contract, a sale of the property was the result intended by the
parties as opposed to a lease.
Although a small portion of the
contract is illegible and the contract contains many grammatical
and linguistic pitfalls, it is apparent from its provisions that
Rakes agreed to sell her property on Merrimac to Lowe for the sum
of $15,000 and that the consideration was to be paid at the rate
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of $100 per month.
Consistent with the conduct involved in a
contract for deed, Lowe was given possession of the property; he
was responsible for providing liability insurance, paying for the
utilities, and maintaining the property.
Other than the contract’s alleged failure to comply
perfectly with the Statute of Frauds, Rakes offers no
justification in support of the trial court’s interpretation of
the contract as a lease.
In addition to the argument that it
fails to describe the property in sufficient detail, Rakes
contends that the amount of consideration is also unclear because
of an extra “0"; however, any interpretation of the consideration
intended as other than $15,000 would be baseless when reviewed in
context.
Nonetheless, regardless of the alleged lack of clarity,
the arguable purchase price evinces an intent to sell rather than
to lease.
Rakes offers no explanation as to why she and Lowe
agreed to reduce the stated purchase price of $15,000 “for the
property” by the monthly payment of $100 if their intent was
merely to contract for the rental of the property.
We believe
that the trial court erred in concluding that the agreement
constituted a lease.
We also believe that the trial court erred as a matter
of law in holding that the contract is not enforceable.
The
trial court did not cite any authority in concluding that the
agreement failed to satisfy the Statute of Frauds.
This contract
fulfills the most basic of that statute’s requirements:
be in writing.
that it
With respect to the description which the trial
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court found insufficient, all that is minimally necessary is
“that the writing identify the land or afford means of
identification.”
Mahaffey v. Wilson, Ky., 317 S.W.2d 888 (1958)
(emphasis added), citing Campbell v. Preece, 133 Ky. 572, 118
S.W. 373 (1909); see also, McNamara v. Marcum, 290 Ky. 625, 162
S.W.2d 205, 208 (1942), which holds as follows:
But where the description in the writing is
sufficient to determine what tract of land
was meant by the parties to the contract,
specific performance will be enforced
although it may be necessary to resort to
parol or documentary evidence to determine
the metes and bounds of the tract. (Emphasis
in text.)
The agreement at issue identified the property only as
Rakes’s “property at Merrimac.”
Rakes does not allege to have
any other property on Merrimac in addition to that which she has
allowed Lowe to possess for eight years.
By their course of
dealing and conduct, the parties identified the property
adequately enough to satisfy the Statute of Frauds.
The essence
of this agreement reveals the true intention of these parties,
and any other determination would result in unjust enrichment to
Rakes as well as a gross injustice to Lowe.
The judgment of the Taylor Circuit Court is reversed,
and this matter is remanded for further proceedings on Lowe’s
counterclaim for breach of contract.
ALL CONCUR.
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BRIEF FOR APPELLANT PRO SE:
BRIEF FOR APPELLEE:
Milford Lowe
Bradfordsville, KY
Philip S. George, Jr.
Lebanon, KY
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