Opinion
111,114.
01-23-2015
Wanda MEAIRS and Mitchell Watson, as Trustee of the Joy Ann Watson Trust, Appellees, v. Grant WEBBER and Rhesa Webber, Appellants.
Gary L. Ayers, of Foulston Siefken, LLP, of Wichita, and Johnathan A. Rhodes, of same firm, of Topeka, for appellants. Wayne R. Tate, of Tate & Kitzke, L.L.C., of Hugoton, for appellees.
Gary L. Ayers, of Foulston Siefken, LLP, of Wichita, and Johnathan A. Rhodes, of same firm, of Topeka, for appellants.
Wayne R. Tate, of Tate & Kitzke, L.L.C., of Hugoton, for appellees.
Before HILL, P.J., McANANY, J., and BURGESS, S.J.
MEMORANDUM OPINION
PER CURIAM.
In this appeal from a judgment granting an entire wheat crop to the landlords instead of the farmer who planted and harvested it, the district court was asked to interpret a cash lease. When it made its judgment, the court failed to enforce a provision of the lease permitting the renter peaceable possession of the ground where crops were growing in the year of the lease's termination, including the harvest of the crop. By ruling as it did, the court rewrote the contract by eliminating that provision, which it cannot legally do. We reverse that judgment and hold the farmer is entitled to keep his crop. But, we see no error in the district court's implicit finding that there was no oral extension of this lease. Therefore, we deny any relief to the appellants on that point.
This matter was submitted to the court on stipulated facts.
Grant Webber and his wife Rhesa Webber signed a farm lease on some irrigated and dry crop ground in Haskell County. Leland Meairs signed the lease for the landowners, himself, his wife Wanda Meairs, and a trust which owned part of the land. The Webbers paid $70 per acre annually as cash rent. One-half was due after wheat harvest or by July 15, and the second half was due on or before December 15 of each year during the term of the lease. The lease started on May 2, 2006, and was to expire on December 31, 2011.
About 2 years later, in 2008, Grant Webber made a 5–year contract with Pioneer Electric Cooperative, Inc. to extend electricity in order to power the irrigation well on the ground. Thereafter, Webber made monthly payments to the cooperative for the electric line extension.
Leland Meairs died in 2010. Webber had worked only with Leland on issues regarding the leased land. After Leland's death, Webber approached his widow, Wanda Meairs, about participating in a federal conservation stewardship program. A month after Leland's death, Wanda and Grant cooperatively entered into a conservation stewardship program with the United States Department of Agriculture. Webber received government payments for stewardship practices he had employed on the ground.
Wanda gave written notice that she wanted to end the cash lease to the Webbers via certified mail in March 2011. She wanted to terminate the cash lease agreement on December 31, 2011. Included in the notice was the following:
“It is acknowledged and understood by the landlords, that no fall-seeded crop has been planted as of this date on the above described real estate as of the date of this notice. If so, this notice shall serve as owners' demand that you not plant any fall-seeded crop on the above described real estate after the date of this notice.”
The Webbers received the notice and responded by sending a “Notice of Declared Farm Tenancy” to Wanda in September 2011. Wanda sent a second termination notice to the Webbers along with a letter from her counsel explaining the Webbers' notice “was of no legal consequence.” The Webbers planted a wheat crop anyway in September 2011 and harvested this crop in June 2012.
Wanda filed suit asking the court to: (1) find the lease terminated on December 31, 2011; (2) evict the Webbers from the premises effective December 31, 2011; and (3) find the crops growing on the premises after December 31, 2011, belonged solely to Wanda and Mitchell Watson, as trustee.
The Webbers counterclaimed, alleging: (1) Wanda and Watson breached the contract by attempting to terminate the lease early; (2) Wanda and Watson breached the August 2008 oral contract between Leland and Grant; (3) the Webbers were entitled to the proceeds from the fall crop; and (4) the Webbers suffered damages in excess of $25,000.
Eventually, the parties submitted the matter to the court through a joint stipulation of facts.
The district court held the lease ended on December 31, 2011. The court also found the wheat crop harvested in 2012 belonged to Wanda and Watson. The district court denied the Webbers any relief.
We list the pertinent lease terms.
“LEASE TERM: To have and to hold unto TENANTS for a term commencing on the date hereof and terminating on the 31st day of December 2011 ....
“POSSESSION: TENANTS shall be entitled to possession of the leased premises immediately upon the execution of the Lease Agreement and TENANTS' rights of possession shall continue for the term hereinabove stated, unless extended or earlier terminated as hereinafter provided.
“LAND PRODUCTION: TENANTS, in the exercise of their complete and independent discretion, shall have the right to plant the leased land to any crop they determine advantages [sic] and to pasture any crops or crop residue, and shall be entitled to all crops produced and the proceeds from the sale of all such crops or income from the pasture of livestock, together with all government payments attributable to such farm production or land use and in support of the price thereof.
“OWNERS' COVENANTS: OWNERS covenant that they will secure TENANTS in the peaceable possession of the premises for the term of this lease, or any extended term, including peaceable possession of any land upon which crops are growing in the year of termination through and including the harvest thereof by TENANTS ....“
We must enforce the contract as written.
The primary rule for courts interpreting written contracts is to ascertain the parties' intent. If the terms of the contract are clear, the intent of the parties is to be determined from the contract language without applying any rules of construction. Stechschulte v. Jennings, 297 Kan. 2, 15, 298 P.3d 1083 (2013). An interpretation of a contractual provision should not be reached merely by isolating one particular sentence or provision, but by construing and considering the entire instrument from its four corners. The law favors reasonable interpretations, and results which vitiate the purpose of the terms of the agreement to an absurdity should be avoided. Waste Connections of Kansas, Inc. v. Ritchie Corp., 296 Kan. 943, 963, 298 P.3d 250 (2013). We are not bound by a lower court's interpretation of a contract. See Prairie Land Elec. Co-op v. Kansas Elec. Power Co-op, 299 Kan. 360, Syl. ¶ 2, 323 P.3d 1270 (2014).
Four facets of this agreement arise after reading the lease passages listed above:
• The lease ended on December 31, 2011, unless extended by the parties.
• The tenants were entitled to immediate possession of the land upon signing and throughout the term of the lease.
• The tenants had total discretion to plant whatever crops they deemed advantageous.
• The owners granted the tenants possession of the ground upon which crops were growing during the year of termination through and including the harvest of those crops.
Simply put, while this lease was in effect, the tenants had discretion to plant and harvest what they saw fit to plant. Obviously, the section of this lease that permitted the harvest of fall planted crops in the spring, after the year of termination was included by the parties to prevent the harsh result of a farmer doing all the work, making all of the expenditures to plant a crop, harvest it, and then lose the fruit of his labors. Even the district court conceded this loss was harsh.
With its ruling, the district court ignored the clause of the lease granting the tenants discretion to plant whatever crops they wanted and gave no consideration whatsoever to the clause about harvesting fall planted crops. Under the district court's view, these clauses were interpreted to mean that “the parties' intent was for the property to be back in the complete enjoyment of the [owners] at the end of the calendar year.” By this ruling, the court cut off the tenants' access to the land at the end of the calendar year and not the end of the crop year. A court could only conclude so if it ignored the plain language of the contract. A court should not interpret a contract in a manner which renders a term of the contract meaningless. Guss v. Fort Hays State Univ., 38 Kan.App.2d 912, Syl. ¶ 8, 173 P.3d 1159 (2008). We choose to enforce the entire contract.
Nevertheless, we agree with the district court that the lease expired at the end of 2011. Obviously, the written notice given by the owners in March advised the Webbers that the lease was coming to an end, but it could not rewrite the lease by denying the Webbers the opportunity to harvest their crop. Once the lease term expired, by its own language, the only matter left to finish was the Webbers' harvest of the wheat in the spring.
We deny the Webbers' oral lease claim.
We now turn to the Webbers' claim of an oral extension of the lease. Grant Webber contends that he and Leland Meairs had orally agreed to extend the lease. This agreement was allegedly made near the time of Webber's deal with the electric cooperative for electric service to the irrigation pump. Webber's deposition is not too clear on this point, but it appears that he claims the cash lease would then be extended into 2013. The lease, by its terms, does allow for an oral extension. The lease provides:
“Nothing herein shall be interpreted as preventing the parties from extending the term of this lease for such a period of time and under such terms and provisions as the parties may negotiate prior to the termination date. Any extension of this lease shall be valid; however, if the terms of such extension differ from the terms herein stated, the terms of such extension shall be reduced to writing and signed by the parties. ” (Emphasis added.)
The burden of proof was on the Webbers to show us in the stipulations that there was a valid extension of this lease. We are not convinced that there was an enforceable oral extension of this lease. We have the same stipulations before us as the district court and the district court's implicit conclusion of no oral extension is supported by the record Other than Grant Webber's self-serving statements, no other evidence supports this claim. Grant Webber's contract with the power company obviously benefited the crop production on the land and reduced costs by replacing diesel fuel to run the pump with cheaper electricity, but it does not mean that it was made in order to extend the farm lease. In their lease arrangement, the landowners did not share in the costs of production. Those were totally controlled by the Webbers as tenants. Thus, with lower production costs, the Webbers' profits would increase. Nothing in the stipulations indicated that the running of electricity to the irrigation pump was tied to an extension of the lease.
Further along this line, Grant Webber's participation in the federal land stewardship program with Wanda does not necessarily prove that Leland Meairs had orally agreed to an extension of the lease. Webber received government payments for his practices, and Wanda simply cooperated with that endeavor. We cannot stretch the stipulations of the parties to mean there was an oral lease extension made by Leland. The Webbers agreed to the stipulated facts, and they failed to include any information regarding an oral extension. Generally, parties are bound to their stipulated facts, and both district and appellate courts must render judgment based on those facts. Double M Constr. v. Kansas Corporation Comm'n, 288 Kan. 268, 269, 202 P.3d 7 (2009). The Webbers failed to ask the district court to determine whether there was an oral extension; instead, they stipulated to the facts. Upon review of the stipulated facts, it is clear there was not an oral extension.
The Webbers made no objection to inadequate findings by the district court. When no objection is made to a district court's inadequate findings of fact or conclusions of law, an appellate court can presume the district court found all facts necessary to support its judgment. See O'Brien v. Leegin Creative Leather Products, Inc., 294 Kan. 318, 361, 277 P.3d 1062 (2012).
Also, the stipulations do not disclose that Webber had proffered cash payments for the second half of 2011 and the 2 additional years on the lease. Such conduct is inconsistent with his position.
All of this evidence is insufficient to vary the terms of a written lease. The contracting parties obviously knew how to make a written contract and did not extend it in writing. We find no error here.
For the first time on appeal, the Webbers argue the oral extension should be enforced because the Webbers' detrimental reliance was foreseeable and reasonable. The Webbers claim they should be granted relief under either a theory of promissory estoppel or equitable estoppel.
Generally, issues not raised before the district court cannot be raised on appeal. Wolfe Electric, Inc. v. Duckworth, 293 Kan. 375, 403, 266 P.3d 516 (2011). There are several exceptions to the general rule that a new legal theory may not be asserted for the first time on appeal, including the following: (1) The newly asserted theory involves only a question of law arising on proved or admitted facts and is finally determinative of the case; (2) consideration of the theory is necessary to serve the ends of justice or to prevent a denial of fundamental rights; and (3) the judgment of the district court may be upheld on appeal despite its reliance on the wrong ground or having assigned a wrong reason for its decision. In re Estate of Broderick, 286 Kan. 1071, 1082, 191 P.3d 284 (2008), cert. denied 555 U.S. 778 (2009). Supreme Court Rule 6.02(a)(5) (2014 Kan. Ct. R. Annot. 40) requires an appellant to explain why an issue that was not raised below should be considered for the first time on appeal. Litigants who fail to comply with this rule risk a ruling that the issue is improperly briefed and will be deemed waived or abandoned. State v. Williams, 298 Kan. 1075, 1085, 319 P.3d 528 (2014).
The Webbers failed to comply with Rule 6.02. The Webbers assert the theories of promissory estoppel and equitable estoppel without arguing an exception to the rule applies. These issues are not properly before this court, and we will not consider them.
The remaining issues raised by the Webbers are moot in light of our reversal of the district court's judgment about the wheat crop and our affirming its conclusion that the lease ended.
The judgment of the district court awarding the wheat crop harvested by the Webbers in 2012 to Wanda Meairs and Mitchell Watson, as Trustee of the Joy Ann Watson Trust, is reversed.
Affirmed in part and reversed in part.