Red River v. Cranmer
1 CA-CV 15-0821
| Ariz. Ct. App. | Oct 4, 2016Background
- In 2007 Cranmer leased a 40-acre parcel from Sprawls Island Development for $1/year, with a 15-year term ending in 2022 or on his death; lease contained a clause stating the lease "shall not be recorded" and that if recorded the lease "shall be automatically terminated."
- In 2014 Sprawls Island sold the parcel to Red River Land Company, LLC (RRLC) subject to the lease.
- In August 2015 RRLC recorded the lease, which RRLC contends triggered the termination clause; RRLC then notified Cranmer to vacate but Cranmer remained.
- RRLC sued for forcible detainer; at bench trial RRLC argued the recording terminated the lease and Cranmer was wrongfully in possession; Cranmer testified he was told the lease would not be recorded (no claim the recording did not trigger termination).
- Trial court found the recording clause ambiguous, considered extrinsic testimony about intent, found Cranmer not guilty of forcible detainer, and awarded him costs.
- RRLC appealed, arguing the clause is unambiguous and the lease terminated upon recording; the Court of Appeals reversed and instructed entry of judgment for RRLC.
Issues
| Issue | Plaintiff's Argument (RRLC) | Defendant's Argument (Cranmer) | Held |
|---|---|---|---|
| Whether the recording clause is ambiguous | Clause is clear: recording causes automatic termination; trial court should enforce it as written | Clause ambiguous; extrinsic evidence shows intent it would not be recorded and thus should not terminate lease | Court held clause is unambiguous; recording terminated the lease and trial court erred in finding ambiguity |
| Whether extrinsic evidence may defeat an unambiguous term | Not applicable — plain language governs; no extrinsic inquiry needed | Relied on testimony about representations that lease would not be recorded | Court rejected extrinsic evidence to vary clear written term; oral promises unenforceable to modify a writing requiring writing |
| Whether an alleged oral promise not to record can bind successor owner | RRLC: sale and recording followed written lease; oral promises not part of the written agreement | Cranmer: testified he was told lease would not be recorded | Court held any alleged oral agreement to modify a written agreement requiring writing is unenforceable |
| Whether arguments raised first on appeal (privacy clause / bad faith) are considered | RRLC did not need to address these new arguments | Cranmer raised alternate interpretations and good-faith claim on appeal | Court deemed those arguments waived for being raised first on appeal |
Key Cases Cited
- Andrews v. Blake, 205 Ariz. 236 (contract interpretation reviewed de novo)
- In re Estate of Lamparella, 210 Ariz. 246 (mere disagreement does not create ambiguity; intent must be clear from writing)
- Mining Inv. Grp., LLC v. Roberts, 217 Ariz. 635 (clear contract terms must be given effect)
- Best v. Edwards, 217 Ariz. 497 (material modifications to written agreements must be in writing)
- Aztar Corp. v. U.S. Fire Ins. Co., 223 Ariz. 463 (contracts should be construed to give every part effect)
- ELM Ret. Ctr., LP v. Callaway, 226 Ariz. 287 (read contract parts together to harmonize provisions)
- In re MH 2008-002659, 224 Ariz. 25 (appellate courts generally do not consider issues raised for first time on appeal)