Dan Morikawa v. Ivan Ishii, Elijah Ragira, John Does 1-10, Jane Does 1-10, Doe Partnerships 1-10, Doe Corporations 1-10, Doe Entities 1-10 and Doe Governmental Entities 1-10--Appeal from 153rd District Court of Tarrant County

IN THE

TENTH COURT OF APPEALS

No. 10-05-00180-CV

Dan Morikawa,

Appellant

v.

Ivan Ishii, Elijah Ragira,

John Does 1-10, Jane Does 1-10,

Doe Partnerships 1-10,

Doe Corporations 1-10,

Doe Entities 1-10 and

Doe Governmental Entities 1-10,

Appellees

From the 153rd District Court

Tarrant County, Texas

Trial Court No. 153-196063-02

MEMORANDUM Opinion

Appellant, Dan Morikawa, brings this appeal contesting the trial court s judgment in favor of Appellees.

BACKGROUND

Morikawa alleged two contracts for the sale of the La Fonda Apartments in Fort Worth with Appellee Ivan Ishii. The first was not performed and is not at issue in this appeal. The second, in the form of a letter, stated that Ishii would agree to sell the property to Morikawa for $200,000 net, Morikawa could purchase the property for himself or locate another buyer, the transaction would be handled by an escrow company in the Fort Worth area, fees and expenses would be paid by the buyer, and the transaction must close by May 15, 2001. The letter states: If you are agreeable to this binding agreement, please sign and return [the] original document to me by mail and also fax a copy. Morikawa says he signed the original and mailed it to Ishii, who testified that he did not receive it. Morikawa, relying on the letter, attempted to locate other buyers. He met with Ragira about purchasing the property and notified Ishii of Ragira s interest in the property. Ishii and Ragira, without Morikawa, negotiated the sale of the property and entered into an agreement. Ragira purchased the property for $250,000. On May 10, 2001, Morikawa gave Ishii notice that he was ready, willing, and able to perform the contract and demanded that Ishii have the City of Fort Worth release a lien in its favor before closing. Ishii testified that he did not receive this letter.

Morikawa sued Ishii for breach of contract and sought specific performance of the contract. He named Ragira as a party because he held title to the property. After a bench trial, the trial court granted Ragira s motion for directed verdict and entered judgment in favor of Ishii. Morikawa presents ten issues for appeal. We will affirm the judgment.

Was the Contract Enforceable?

Whether an agreement is legally enforceable or binding is a question of law. America s Favorite Chicken Co. v. Samaras, 929 S.W.2d 617, 622 (Tex. App. San Antonio 1996, writ denied). To be enforceable, the parties must have agreed on the essential terms. T.O. Stanley Boot Co. v. Bank of El Paso, 847 S.W.2d 218, 221 (Tex. 1992). However, parties may agree upon some contractual terms, understanding them to be an agreement, and leave other contract terms to be made later. Id. It is only when an essential term is left open for future negotiation that there is nothing more than an unenforceable agreement to agree. Id. at 221.; Scott v. Ingle Bros. Pac., Inc., 489 S.W.2d 554, 555 (Tex. 1972); see also Texas Oil Co. v. Tenneco Inc., 917 S.W.2d 826, 830 (Tex. App. Houston [14th Dist.] 1994), rev d on other grounds, 958 S.W.2d 178 (Tex. 1997).

The rules regarding definiteness of essential terms in a contract are based on the concept that a party cannot accept an offer to form a contract unless the terms of that contract are reasonably certain. Id. (citing Restatement (Second) of Contracts 33(1) (1981)). In certain situations, a court may uphold an agreement by supplying missing terms. Id. To that end, Texas courts prefer to validate transactions rather than void them; but, courts may not create a contract where none exists and they generally may not interpolate or eliminate essential terms. Id.

Contract terms are reasonably certain if they provide a basis for determining the existence of a breach and for giving an appropriate remedy. Restatement (Second) of Contracts 33(2) (1981). This conforms to the policy that parties, and not the courts, should make contracts. Where the parties intended to make an agreement and there is a certain basis for granting a remedy, courts should find the contract terms definite enough to provide a remedy. Id. at cmt. b. Uncertainty of terms can, however, preclude one remedy without affecting others. For example, less certainty is necessary in a suit for damages than one for specific performance. See Kirkwood & Morgan, Inc. v. Roach, 360 S.W.2d 173, 176 (Tex. Civ. App. San Antonio, 1962, writ ref d n.r.e.). But see Bendalin v. Delgado, 406 S.W.2d 897, 900 (Tex. 1966) (holding that lack of an express agreement on price was not fatal to maintenance of a suit for specific performance of an oral agreement to purchase stock).

When essential terms are missing, courts often find no more than an agreement to agree. See Pine v. Gibraltar Sav. Ass n, 519 S.W.2d 238, 244 (Tex. Civ. App. Houston [1st Dist.] 1975, writ ref d n.r.e.). Courts have, however, implied terms when the surrounding circumstances left little doubt as to the parties' intentions. See Morgan v. Young, 203 S.W.2d 837, 846 (Tex. Civ. App. Beaumont 1947, writ ref d n.r.e.).

In his first issue, Morikawa complains of trial court finding eight which found that the letter left several terms for future negotiation. These include: (1) requisites of title; (2) how the transaction would be financed; and (3) obligations of the seller or buyer other than the transfer of $200,000 net at closing.[1] We agree with the trial court. The letter did not contain essential terms to create an enforceable contract. Accordingly, we overrule issue one.

In Morikawa s second issue, he asserts that this finding was waived by Ishii who failed to request an additional finding that the statute of frauds made the contract unenforceable. We do not agree that such a finding was necessary. At trial, Morikawa did not attempt to establish an oral agreement. Rather, he attempted to establish that the March 14, 2001 letter was an enforceable contract. Although this writing arguably satisfied the minimum requirements of the statute of frauds, the trial court properly found that it did not contain the essential terms for the sale of property. Therefore, a finding on the statute of frauds was not necessary. We overrule the second issue.

Because of our disposition of issues one and two, we need not address Morikawa s other issues.

Conclusion

We affirm the judgment.

BILL VANCE

Justice

Before Chief Justice Gray,

Justice Vance, and

Justice Reyna

Affirmed

Opinion delivered and filed July 26, 2006

[CV06]

[1] In finding 9, the trial court also found that the contract does not define what is meant by $200,000 net.