William Sears and Patricia Sears v. Robert Alan Minick and Robert Alan Minick, Jr.; the Estate of Leona P. Minick, Deceased

ARKANSAS COURT OF APPEALS
NOT DESIGNATED FOR PUBLICATION

DIVISION II

WILLIAM SEARS and PATRICIA SEARS

APPELLANTS

v.

ROBERT ALAN MINICK and ROBERT ALAN MINICK, JR.; THE ESTATE OF LEAONA P. MINICK, deceased

APPELLEES

CA05-715

FEBRUARY 22, 2006

APPEAL FROM THE CRAWFORD COUNTY CIRCUIT COURT

[CIV-02-235]

HONORABLE MICHAEL MEDLOCK, CIRCUIT JUDGE

AFFIRMED

Karen R. Baker, Judge

Appellants appeal the decision of the Crawford County Circuit Court regarding a real estate contract, alleging two points of error: (1) The trial court erred as a matter of law in not adjusting the purchase option price, based on testimony of the value of the land alone at the time the option was granted, and ordering specific performance based on that value; (2) In the alternative, the trial court erred as a matter of law in not enforcing the liquidated damage clause of the contract based on the evidence of the listing price of the property when it was placed on the market for sale with a realtor. We find no error and affirm.

In January of 1995, Leona Minick, now deceased, granted an exclusive option to purchase her home to her next door neighbors, appellants William and Patricia Sears.

The terms of the option provided that the option could be exercised when Leona Minick left the property as her principal residence. Paragraph five states that in the event that Ms. Minick as the seller transferred or conveyed or sold the property without the written consent of the Sears as buyers, Ms. Minick would pay the Sears twenty percent (20%) ofthe appraised value, selling price, or the asked selling price, whichever would be the highest.

In October of 2001, Ms. Minick executed a quitclaim deed of the property, reserving a life estate, to her son and grandson, appellees Robert Alan Minick, Sr. and Robert Alan Minick, Jr. The deed states that the conveyance is for and in consideration of love and affection and other valuable consideration given to her by appellees. In March of 2002, appellants' attorney wrote a letter to Mr. Minick, Sr. stating that "you obtained a quit claim deed from your mother to you and your grandson, without payment of any consideration for the property." The letter further explained that the Sears were prepared to close on the purchase of the property pursuant to the option agreement.

In May of 2002, appellants filed a complaint for specific performance against Ms. Minick, her son and grandson. In November of 2004, appellants filed an amendment to the complaint incorporating the allegations of the original complaint and adding that the property had been destroyed by fire, that appellees had received insurance benefits, and that appellants had an equitable interest in the proceeds from the insurance and an equitable interest in the improvements in the property made after the fire.

Appellees counterclaimed alleging fraudulent conduct in the circumstances surrounding the real estate dealings as well as attempts by appellants to control other assets of Ms. Minick. Prior to the final hearing, Leona Minick died, and the trial court appointed her son, appellee Robert Minick, Sr., special administrator of her estate for purposes of the trial.

The trial court found that the Ms. Minick and appellants had entered into a legally binding contract for the sale of a house with acreage, but the contract could not be specifically enforced because the home burned subsequent to the filing of the action andwas in the process of being razed or destroyed. Nevertheless, the court held that the October of 2001 deeding of the property triggered the provision in paragraph five of the contract, providing that seller would pay twenty percent of the appraised value, selling price, or asked sales price whichever was highest.

Despite the fact that the liquidated damages provision was triggered, the trial court found that the provision could not be enforced because that paragraph was made in anticipation that the property as transferred would consist of the home as well as the acreage. The burned home structure had no value in its present condition for appraisal or asked sales price. No funds were transferred between the appellees for the conveyance of the real estate to provide a basis for damages based upon an actual sales price. The court further acknowledged that there was no evidence at trial concerning recovery of insurance proceeds or the value of any insurance on the home, which prevented the trial court from determining whether or not evidence of the insurance amount would be an appropriate measure of damages. Therefore, the burning of the home rendered paragraph five impossible to implement.

Pursuant to these findings, the trial court entered judgment for appellants in the amount of five hundred dollars. This amount represented the amount paid to Leona Minick for the original option agreement, plus interest at the rate of six-percent per annum from and since the deeding of the property, and awarded attorney fees and costs with interest at the legal rate until paid. The trial court dismissed the counterclaim of appellees for want of proof.

At trial, appellants asked the trial court to value the approximately ten acres at $5000, about $500 an acre, at the time the option was entered and then enforce the purchase option, allowing them to buy the land based upon that value with credit for the $500 paid for the option. On appeal, appellants first argue that the trial court erred as a matter of law in not adjusting the purchase-option price, based on testimony of the value of the land alone at the time the option was granted, and in ordering specific performance based on that value. We find no error in the trial court's refusal to reform the parties' contract.

Although appellants' complaint sought specific performance based upon the price of $54,000, at trial appellants did not request that the court order the appellees to convey the property in its present condition for the originally agreed purchase price of $54,000. Testimony at trial included the current valuation of the property by a real estate agent as between $4500 and $6500 an acre. That value per acre would place the contract price of $54,000 in the mid-range of the acreage's current value without the home. The same real estate agent also testified that the original price of the contract was a low price for the property at the time the agreement was entered, but she did not set a value of the acreage alone at the time of the agreement. Appellant William Sears rebutted the agent's current valuation saying that he had recently purchased 1.6 acres of land adjacent to his and Minick's property for $1500.

In Arkansas, courts of equity have some latitude of discretion in granting or withholding specific performance depending on the inequities in a particular case. Langston v. Langston, 3 Ark. App. 286, 625 S.W.2d 554 (1981). The Arkansas Supreme Court has described specific performance as an equitable remedy which compels the performance of a contract on the precise terms agreed upon. It is a means of compelling a contracting party to do precisely what he should have done without being coerced by a court. McCoy Farms, Inc. v. J & M McKee, 263 Ark. 20, 563 S.W.2d 409 (1978).

Specific performance will not lie where performance is impossible. Heifner v. Hendricks, 13 Ark. App. 217, 682 S.W.2d 459 (1985). Impossibility of performance of a contract sufficient to excuse the nonperformance upon the part of either party means an impossibility consisting in the nature of the thing to be done, and not in the inability of the party to do it, and it must be shown that the thing required under the contract cannot be accomplished, and the burden of showing this is upon the defendant. Whipple v. Driver, 140 Ark. 393, 215 S.W. 669 (1919).

A party seeking the reformation of a written contract and a specific performance of the contract as reformed has the burden of proving the contract claimed by clear, unequivocal, and decisive evidence. Tri-State Constr. Co. v. Watts, 152 Ark. 110, 237 S.W. 690 (1922). In Tri-State, a defendant asked for a reformation of the contract suedon to supply omissions of matters essential to a specific performance of the contract, but his evidence as to the agreement between the parties on the omitted provisions differed not only from plaintiff's evidence, but also from his own pleading. Therefore, the evidence was insufficient to authorize the reformation. Id.

The facts of this case present a similar situation. The option agreement contained a specific selling price for the property, but was silent as to a value of the acreage if sold alone, without the dwelling. The complaint, as well as the amended complaint filed after the fire destroyed the house, asked the court to order conveyance at the full purchase price as set forth in the option agreement. At trial, appellants asked the court to provide a value for the acreage alone at the time the agreement was entered, and then order specific performance based upon the supplied provision, apparently abandoning the relief requested in their complaint and amended complaint to order conveyance of the property for $54,000. Evidence of the value of the property at the time the agreement was entered and its current value differed.

Under these circumstances, we cannot say that appellants met their burden of proving by clear, unequivocal, and decisive evidence that the option agreement provided for the conveyance of the land without the dwelling in the amount of $500 an acre, for a total price of $5000. Accordingly, we find no error in the trial court's refusal to adjust the purchase option price and its refusal to order specific performance based on that value.

Neither can we find that the trial court erred as a matter of law in not enforcing the liquidated damage clause of the contract based on the evidence of the listing price of the property when it was placed on the market for sale with a realtor by the younger Minicks. While the trial court found that the conveyance of the property from Leona Minick to her son and grandson triggered the damages provision of the contract, the evidence clearlyshowed that no funds were transferred as consideration for that conveyance and there was no asking price for the property. No evidence was presented as to the appraised value of the property at the time it was conveyed by Leona Minick. The younger Minicks were never parties to the purchase option agreement. Given the evidence before the judge, the trial court did not err by refusing to adopt the listing price asked by the younger Minicks after Leona Minick transferred the property to them.

Appellees do not challenge the trial court's judgment.

Accordingly, we affirm.

Vaught, J., agrees.

Griffen , J., concurs.