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Savre v. Santoyo

Supreme Court of North Dakota

July 1, 2015

Darwin Savre, d/b/a Savre's Heavy Truck & Auto Repair, Plaintiff and Appellee
v.
Jose Santoyo, Defendant and Appellant

Page 420

Appeal from the District Court of Cass County, East Central Judicial District, the Honorable Norman G. Anderson, Judge.

Ann E. Miller, Fargo, N.D., for plaintiff and appellee.

Andrew D. Cook, West Fargo, N.D., for defendant and Appellant.

Lisa Fair McEvers, Daniel J. Crothers, Dale V. Sandstrom, Carol Ronning Kapsner, Gerald W. VandeWalle, C.J.

OPINION

Page 421

McEvers, Justice.

[¶1] Jose Santoyo appeals from a judgment awarding damages to Darwin Savre for overpayments under the parties' lease and purchase option agreement and dismissing Santoyo's counterclaim for damages to the leased property. We conclude the district court did not clearly err in finding that Santoyo had breached the agreement and that Santoyo had waived strict compliance with the option agreement's terms when he accepted Savre's late lease payments. We further conclude that the court failed to make sufficient findings of fact to explain dismissal of Santoyo's counterclaim for damages. We affirm in part, reverse in part, and remand for further proceedings.

I

[¶2] Savre owns and operates Savre's Heavy Truck & Auto Repair, an auto repair business in Fargo. Santoyo owns the two parcels of real property and building that are the subject of the leases and option agreement in this case. In June 2008, Savre and Santoyo entered into a lease agreement for a portion of the property including commercial building space. The original lease term was from June 15, 2008, to June 15, 2010, with Savre paying rent of $2,300 per month until June 15, 2009, at which time the rent would increase to $2,708.33.

[¶3] About the time of the rent increase, Savre and Santoyo entered into a " Lease to Purchase Option Agreement." Under this new agreement, Savre would lease Santoyo's two parcels of property for a period of time, after which Savre could exercise the option to purchase the property if certain terms and conditions were met. On July 15, 2009, Savre and Santoyo executed the option agreement which provided in part:

Page 422

1. OPTION TERM. The option to purchase period commences either on April 1, 2013, and expires at 11:59 PM April 30th, 2013, or will commence at such time that [Savre] has made & been given receipt of not less than $180,000 in consideration toward the purchase of the subject property.
2. NOTICE REQUIRED TO EXERCISE OPTION. To exercise the Option to Purchase, [Savre] must give a minimum of 60 days notice, & deliver to [Santoyo] written notice of [Savre's] intent to purchase. In addition, the written notice must specify a valid closing date. The closing date must occur before the original expiration date of the Lease Agreement, or the date of the expiration of the Option to Purchase Agreement designated in paragraph 1, whichever occurs later.
. . . .
4. PURCHASE PRICE. The total purchase price for the [Building] is $550,000. Provided that [Savre] timely executes the option to purchase, is not in default of the Lease Agreement, & closes the conveyance of the [Building], [Santoyo] shall credit towards the purchase price at closing . . . the total sum of $4,000 for every monthly lease payment that [Savre] timely made, beginning from the date of the fully accepted Option to Purchase Agreement. In addition to the lease payments; [Santoyo] will credit any additional payments or mutually agreed upon consideration that [Savre] may make from time to time throughout the duration of the lease(s) and/or this Option to Purchase contract. . . . [Savre] shall receive no credit at closing for any monthly lease payment that [Santoyo] received after the due date specified in the Lease Agreement(s). Receipts of additional payments, consideration & [Santoyo] allowed delinquent lease payments are to be kept & maintained by both parties and copies will be freely given to one another upon written request.
5. EXCLUSIVITY OF OPTION. This Option to Purchase Agreement is exclusive & non-assignable & exists solely for the benefit of the named parties above. Should [Savre] attempt to assign, convey, delegate, or transfer this option to purchase without [Santoyo's] express written permission, any such attempt shall be deemed null & void.
. . . .
8. FINANCING DISCLAIMER. The parties acknowledge that it is impossible to predict the availability of obtaining financing towards the purchase of this Property. Obtaining financing shall not be held as a condition of performance of this Option to Purchase Agreement. The parties further agree that this Option to Purchase Agreement is not entered into in reliance upon any representation or warranty made by either party.
9. REMEDIES UPON DEFAULT. If [Savre] defaults under this Option to Purchase Agreement or the Lease Agreement, then in addition to any other remedies available to [Santoyo] at law or in equity, [Santoyo] may terminate this Option to Purchase by giving written notice of the termination. If terminated, [Savre] shall lose entitlement to any refund of rent or option consideration. For this Option to Purchase Agreement to be enforceable & effective, [Savre] must comply with all terms & conditions of the Lease Agreements.
. . . .
16. ENTIRE AGREEMENT; MODIFICATION. This document sets forth the entire agreement & understanding between the parties relating to the subject matter herein & supersedes all prior discussions between the parties. No

Page 423

modification of or amendment to this Option to Purchase Agreement, nor any waiver of any rights under this Option to Purchase Agreement, will be effective unless in ...

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