I. INTRODUCTION
This case involves a contract dispute. Following a bench trial, the trial court entered a final order granting judgment for plaintiff, Harbor Park Market, Inc., and ordering specific performance of a
II. FACTS AND PROCEDURAL HISTORY
The material facts presented at trial are essentially undisputed. William and Linda Gronda owned a party store and land along with fixtures, equipment, and a liquor license. On October 11, 2004, Harbor Park Market submitted a $55,000 offer to the Grondas for the purchase of their liquor license and fixtures. On October 14, 2004, the Grondas accepted Harbor Park Market’s offer to purchase the liquor license and fixtures; the acceptance, however, was expressly conditioned (and agreed to by Harbor Park Market) on their attorney’s approval of the purchase agreement. The specific language within the agreement was: “This Purchase Agreement is subject to review & approval of attorney Lynn Stedman, on or before Oct 22, 2004.” Before their attorney had an opportunity to review the purchase agreement, the Grondas conditionally accepted a second offer, this one from Carleton Enterprises, to purchase the real property, along with the business, liquor license, and fixtures, for $250,000. That acceptance, too, was expressly conditioned on the approval of the purchase agreement by the Grondas’ attorney.
Lynn Stedman, the Grondas’ attorney, reviewed the competing agreements together when he returned from a vacation. He approved the Carleton agreement. The Grondas thereafter refused to complete the sale to Harbor Park Market, and, instead, attempted to close their sale with Carleton. However, Harbor Park Market filed suit for breach of contract against the Grondas and Carleton and requested specific performance of the contract.
After a one-day bench trial, the trial court concluded that, by soliciting and submitting a competing purchase agreement to Stedman for review, the Grondas placed an obstacle in the way of Stedman’s approval of Harbor Park Market’s agreement and hindered the fulfillment of the condition precedent:
Here the Grondas violated their implied agreement by placing an obstacle in the way of attorney Stedman’s approval of the Plaintiffs Agreement. The testimony of attorney Stedman establishes beyond dispute that it was the more favorable terms of the Carleton Agreement, procured by the Grondas after they made their Agreement with Plaintiff, that caused him to approve the Carleton Agreement and disapprove the Plaintiffs Agreement.
It was the improper action of the Grondas, in procuring a competing Agreement for sale of the same liquor license, which, at a minimum hindered fulfillment of the condition precedent for approval of the Plaintiffs Agreement by attorney Stedman.
Thus, the trial court ordered specific performance of the purchase agreement between Harbor Park Market and the Grondas.
The dispositive issue on appeal is whether the Grondas interfered with, and therefore waived, the condition precedent by simultaneously submitting to Stedman a second conditional agreement. We review the trial court’s factual findings after a bench trial and in an equitable action for clear error, and its legal conclusions de novo.
Villadsen v Mason Co Rd Comm,
The goal of contract interpretation is to first determine, and then enforce, the intent of the parties based on the plain language of the agreement.
St Clair Medical, PC v Borgiel,
The parties agree, and the trial court found, that the attorney-approval clause was a condition precedent. A condition precedent, like the one at issue in this case, “ ‘is a fact or event that the parties intend must take place before there is a right to performance.’”
Mikonczyk v Detroit Newspapers, Inc,
Our caselaw generally reflects that a party must prevent the condition from occurring by either taking some affirmative action, or by refusing to take action required under the contract, before a court will find a waiver of a condition precedent. For example, in
Mehling, supra
at 352, the Court concluded that the plaintiffs waived the condition precedent that the parties agree on the appraiser’s compensation before the property was appraised, because the plaintiffs refused to meet with the defendant and two other appraisers to discuss compensation. In
Stanton v Dachille,
Here, the language of the contract was clear and unambiguous, and therefore its meaning could be determined as a matter of law. Quite simply, the agreement stated that the Grondas’ acceptance of Harbor Park Market’s offer was subject to their attorney’s review and approval of “this agreement.” Thus, because there was no limitation on what aspects of the agreement were subject to Stedman’s approval, Stedman was authorized to review and approve (or disapprove) any part of the contract, or the entire contract as a whole. Since the parties failed to include an express limitation in the language of the condition precedent that restricted Stedman’s approval authority, we will not judicially impose one ourselves. Upjohn Co, supra at 207. Certainly, language limiting the scope of Stedman’s approval could have been included by the parties, but it was not. Hence, because the contract language giving the Grondas’ attorney complete discretion to approve or disapprove the agreement for whatever reason was clear and unambiguous, 3 it has to be accepted and enforced as written. Rory, supra.
Additionally, there was no finding by the trial court that the Grondas otherwise actively interfered with Stedman’s approval, such as instructing the attorney to disapprove
In similar situations, courts have routinely held that submitting a second, competing agreement for review when not precluded by the contract does not constitute a waiver of the condition precedent. Several of our sister states have provided some insightful cases on this precise point. In
Ulrich v Daly,
It is clear that in comparing the various terms of the other offer with the corresponding terms of the parties’ contract, defendants’ attorney considered the contract. That the attorney’s review of the matter included consideration of the other offer does not establish had faith, for the attorney approval clause does not prohibit consideration of extrinsic matters.
Likewise, in
Stevens v Manchester,
128 Ohio App 3d 305;
In short, the evidence does not support the trial court’s finding that the sellers or their attorneys acted in bad faith in disapproving Stevens’s offer. The attorney-approval clause gave the sellers’ attorneys the right to disapprove Stevens’s offer for any reason. Stevens did not object to the language contained in the clause. The sellers’ attorneys testified that they disapproved the contract based on potential tax problems for their clients associated with the purchase-price-allocation clause and the architect, inspection, and financing contingencies contained in Stevens’s offer. Even assuming, as the trial court did, that the attorneys rejected Stevens’s offer solely to accept the more favorable EZRA offer, such action does not constitute bad faith. [Id. at 314.]
See also
Flynn v Hanna,
Finally, as we have noted previously, “ [w]here “dickering” as we know the term in our system is going on there is nothing legally impermissible in trying to better an offer that has had conditional acceptance only.’ ”
Weitting v McFeeters,
Reversed and remanded for entry of judgment in defendants’ favor. We do not retain jurisdiction.
Notes
There is some authority for the proposition that little or no deference is due a trial court’s findings of fact when they are based solely on transcripts and exhibits. See
People v Zahn,
We note at the outset that although we “ ‘ “are not inclined to construe stipulations of a contract as conditions precedent” ’ ” we will do so where, as here, the clear language of the contract compels it.
Able Demolition, Inc v City of Pontiac,
In light of the clear and unambiguous language in the contract, we cannot consider what John Zaremski’s understanding was regarding the scope of the condition. One reason for this conclusion is that the parties’ disagreement regarding the meaning of contract language does not, by itself, create an ambiguity.
Gortney v Norfolk & W R Co,
Indeed, Harbor Park Market did not present evidence or even claim that the Grondas told Stedman to disapprove Harbor Park Market’s agreement. William Gronda testified that he did not speak with Stedman regarding either purchase agreement, and Stedman concurred that he did not speak with either the Grondas or their real estate agent before he reviewed the purchase agreements.
Our reading of the plain language of the contract, as well as the foregoing caselaw, are consistent with a well-known treatise that similarly indicates that when the conduct that is alleged to have prevented performance is permitted by either the express or the implied terms of the contract, the doctrine of prevention does not apply and the condition precedent is not waived by the conduct. 13 Williston on Contracts (4th ed), § 39:11, pp 545-546.