Parol Evidence Admissible to Prove Intent Where Contract is Ambiguous

Brogan & Anensen LLC v. Lamphiear, — P.3d —- (Wash. Mar 12, 2009) (NO. 81825-8)

Lamphiear owned 64 acres just outside of McCleary, Washington. He frequented the Next Door Café, a local restaurant, as did Garry Anensen, one of the sellers. According to the excluded evidence, several patrons overheard the negotiations. Lamphiear wanted to be allowed one year to move his manufactured home to the new property. Anensen told Lamphiear that he and Brogan were interested in only the land, so Lamphiear could continue to live on the property for a year while he dismantled the buildings and moved them to his new property.

After the sale closed, Anensen then told Lamphiear to get off the property and leave the buildings behind. When Lamphiear insisted that he had one year to move his house, Anensen and Brogan filed suit to enforce possession under the sales agreement.

The trial court granted summary judgment to Brogan and Anensen, concluding that that agreement was fully integrated and thus extrinsic evidence was inadmissible to modify the agreement’s terms. The court awarded attorney fees to Anensen and Brogan under the agreement. The Court of Appeals affirmed, holding that the affidavits were not admissible to modify the terms of the fully integrated agreement.

The Supreme Court reversed because the term “possession date” was ambiguous. The sale form agreement stated that the “possession date” was on closing, any number of days after closing, or at any other agreed time. Next to each of these choices was a box. But the parties did not check any of the boxes. The “possession date” was therefore undefined. It does not clearly follow from the fact that the seller had to deliver the keys on the earlier of the closing date or the possession date that the “possession date” was the same as the closing date. Under the contract terms, the “possession date” could have been any number of days after closing.

Therefore, extrinsic evidence can be presented to determine the parties’ intent in defining a contract term. Since the right to possession under the contract depends on the “possession date” and since that term is otherwise undefined, using extrinsic evidence to define the date of possession does not alter, modify, or contradict any clear contract term or show intent independent of the agreement. The extrinsic evidence is thus admissible to help define the “possession date.”

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