Opinion
Jan. 22, 1974.
Editorial Note:
This case has been marked 'not for publication' by the court.
Page 849
Overton, Dittemore & Nutt, Richard D. Dittemore, Englewood, for plaintiff-appellant.
Hindry & Meyer, Robert E. Temmer, Denver, for defendant-appellee.
SMITH, Judge.
In 1969, appellant Miller and appellee Crew entered into a partnership agreement for the purpose of construction and ultimate sale of condominium apartments on 3.6 acres of property owned by Crew near Breckenridge, Colorado. The terms of the partnership were set forth in two documents, referred to here as Exhibits 'A' and 'B', executed on March 8th and 10th of 1969 respectively. Under the agreements, Crew's role in the partnership was limited to providing the 3.6 acres of land as a construction site and providing 'front end' financing in the amount of 10 percent of the estimated gross sales price of the completed units. Crew was to receive for his land 10 percent of the gross sales price of the condominium units sold, and would receive seven percent of the gross sales price as a developer's profit share. Miller was to receive the remaining 83 percent of the gross sales price--66% As general contractor, 10% As sales manager, and 7% As developer's profit.
At the time of these agreements, the land owned by Crew was in an undeveloped state, having neither the appropriate zoning, necessary sewer and water connection, nor access roads. Subsequently, pursuant to the agreement and through Miller's efforts, the 3.6 acre parcel was included in a nearby water and sanitation district, road easements were acquired, high density zoning was obtained, and the acreage was platted, graded, and partially cleared. The cost of these improvements was borne by Crew.
Following construction and sale of two buildings on the land, for which an accounting was made pursuant to the agreements, Crew refused to permit further construction on the remaining land, and terminated the partnership. Miller commenced this action against Crew, claiming breach of the partnership agreement, and seeking damages for the breach. He also alleged that the partnership was vested with an equitable interest in the remainder of the land which interest should be included in the distribution of partnership property. Crew counterclaimed, seeking to have title in the remaining portion of the 3.6 acres quieted in him. Following presentation of plaintiff's case to the court, the trial court dismissed Miller's various claims for recovery and quieted title to the land in Crew.
The primary issue on appeal concerns construction of the termination provision contained in Exhibit 'B', which provides:
'This joint venture agreement is based on the construction of one building or one group of buildings. It may be terminated only on the completion of construction and sales of The project then under way and after the accounting described in paragraph 12 above. There is no obligation whatsoever to embark on any additional project after the termination of the existing project.' (emphasis added).
Appellant contends that the term 'project' refers to development of the entire 3.6 acre tract, and that termination by Crew after construction of just two buildings constituted breach of contract. At trial, appellant maintained that the termination provision was ambiguous, and, as indicative of the parties intention with regard to the meaning of the work 'project' appellant sought to introduce evidence concerning the conduct of the parties subsequent to the execution of the agreement, but prior to the dispute. Although some of this evidence was admitted without objection, the balance was refused based upon the trial court's finding that, 'Exhibits 'A' and 'B', which (together) form the agreement between the Plaintiff and the Defendant are not ambiguous and will not be disturbed or changed by parol evidence.' The trial court, in dismissing the complaint at the conclusion of plaintiff's case, ruled that termination of the partnership agreement after completion of two buildings on one portion of the land did not constitute a breach of the agreements.
After a careful examination of Exhibits 'A' and 'B', which we, like the trial court, construe as a single agreement, See Aronoff v. Western Federal Savings and Loan Ass'n, 28 Colo.App. 151, 470 P.2d 889, we conclude that the trial court erred in determining that the termination provision was unambiguous. The tendered evidence should have been considered in determining the parties' intention in using the term 'project.'
The termination provision does not, of itself, indicate whether its terms refer to construction of one or more buildings or to development of the entire tract. Moreover, other provisions of the agreement manifest conflicting intentions regarding the scope of the partnership. Paragraph 7 of Exhibit 'A' suggests that the partnership was created for the purpose of developing the entire tract as one 'project'. That provision states:
'The company shall option approximately four acres of land near Breckenridge, Colorado, such land now being owned by CREW. Such land shall be planned and surveyed into an overall development . . .. As each site is built upon by the company, CREW will subordinate such site to the construction loan of the building to be erected thereon. CREW shall be paid 10% Of the estimated gross sale price of the building to be erected on such site.'
On the other hand, paragraph 12 of Exhibit 'B', referred to in the termination provision, provides that a total accounting and profit distribution shall be made as each building is completely sold out, suggesting that a building or a set of buildings constitutes a project. In light of the conflict in terms apparent on the face of the agreements, the trial court should have considered the conduct of the parties following execution of the agreements and prior to the dispute in determining the intent and meaning of the termination provision contained therein. Gardner v. City of Englewood, 131 Colo. 210, 282 P.2d 1084; Hinkle v. Blinn, 92 Colo. 302, 19 P.2d 1038.
The trial court's judgment of dismissal is therefore reversed, and the case is remanded for a new trial on all issues, consistent with this opinion.
SILVERSTEIN, C.J., and RULAND, J., concur.