To find an antecedent agreement, the Court must conclude the original lessors and lessees, prior to executing the final, written version of the Ground Lease, "reached a complete mutual understanding with respect to all of the essential terms of their agreement, for otherwise there would be no standard by which the writing could be reformed." See Manning Lumber Co. v. Voget, 188 Or. 486, 500 (1950). B. Mutual Mistake or Unilateral Mistake.
โThe mistake cannot be mutual if the minds of the parties to the instrument did not meet in a common intent.โ Manning Lumber Co. v. Voget, 188 Or. 486, 499, 216 P.2d 674, 680 (1950). The clear and convincing standard of proof applies to claims for reformation.
Although reformation requires sufficient proof of an antecedent agreement, there "need not be a binding agreement prior to the writing of which reformation is sought." De Tweede v.Barnett Estate, 85 P.2d 361, 363 (Or. 1939). It is required, however, that the parties had previously reached a complete mutual understanding with respect to all of the essential terms of their agreement, otherwise there would be no standard by which the writing could be reformed, Manning Lumber Co. v. Voget, 216 P.2d 674, 680 (Or. 1950). The parties' conduct after entering into a contract can be used to support the existence of an antecedent agreement.
" 273 Or at 643.Manning Lumber Co. v. Voget, 188 Or. 486, 216 P.2d 674 (1950), set out the general principles for reformation based on mutual mistake: "The purpose of reformation by a court of equity is to make an erroneous instrument express correctly the real agreement between the parties; no court can make a new contract for them. Where a written instrument is merely intended to record a prior, definite, and specific oral understanding of the parties, but, because of a mutual mistake, that instrument fails to set out the prior agreement correctly in some material respect, a court of equity will ordinarily reform it.
The parties must, however, "have previously reached a complete mutual understanding with respect to all of the essential terms of their agreement." Manning Lumber Co. v. Voget, 188 Or. 486, 500 (1950). Plaintiff's primary theory is based on allegations of mutual mistake and that the shorter repayment term was the result of scrivener's error.
Reformation is an equitable remedy that allows a court to correct a contract that does not accurately reflect the parties' agreement. Manning Lumber Co., v. Voget, 188 Or. 486, 500 (1950). In order to establish that it is entitled to relief, a party seeking reformation of a written contract must establish that:
For that matter, the evidence is that both Central and the plaintiff believed that the exclusion was contained in the policy. The requirements that the evidence must show a definite antecedent agreement upon which the minds of the parties actually met, Manning Lbr. Co. v. Voget, 188 Or. 486, 216 P.2d 674 (1950); Williams v. Swartz, 222 Or. 223, 350 P.2d 1079 (1960), and that the evidence must be clear, definite, cogent and unequivocal, Williams v. Swartz, supra; Lundgren v. Freeman, 307 F.2d 104 (9th Cir. 1962) have been met by Central. Even if the mistake was one of law, I would find and hold that the refusal of equitable relief would, under the facts of this case, lead to a wholly inequitable result within the doctrine stated in Northwestern Ice Cold Storage Co. v. Wemme, 159 Or. 415, 80 P.2d 881 (1938).
It is the settled rule that a party requesting reformation must prove the existence of an antecedent agreement to which the erroneous subsequent instrument should be made to conform. Frick v. Hoag, 277 Or. 135, 559 P.2d 879 (1977); Mayer/Kleinknecht v. Bassett, 263 Or. 334, 501 P.2d 782 (1972); Manning Lumber Co. v. Voget, 188 Or. 486, 216 P.2d 674 (1950). Once such agreement is proved, equity may give it effect by making the instrument express correctly the real agreement between the parties.
2, 3. It is axiomatic that a party requesting reformation must prove the existence of a definite and complete agreement which reflects the intent of the parties and to which the subsequent instrument can be made to conform. Manning Lumber Co. v. Voget, 188 Or. 486, 216 P.2d 674 (1950). Defendant claims that the exchange agreement is such a model.
It does not follow, however, that Home Federal is entitled to a reformation of the trust deed. As stated in Manning Lumber Co. v. Voget, 188 Or. 486, 500, 216 P.2d 674 (1950): "The purpose of reformation by a court of equity is to make an erroneous instrument express correctly the real agreement between the parties; no court can make a new contract for them. Where a written instrument is merely intended to record a prior, definite, and specific oral understanding of the parties, but, because of a mutual mistake, that instrument fails to set out the prior agreement correctly in some material respect, a court of equity will ordinarily reform it. * * * `It is not enough to justify reformation that the court is satisfied that the parties would have come to a certain agreement had they been aware of the actual facts,' 5 Williston on Contracts, Rev. Ed., ยง 1548, at p. 4341."