Opinion
No. 106,432.
2012-10-12
Michael J. ANDRA, Appellant, and Robert J. Quinn, Jr., Intervening Plaintiff/Appellee, v. LENA P. PEEBLER REVOCABLE TRUST; Colleen M. Basil, also known as Colleen Peebler Basil; and Ramond Eugene Tyson, also known as Raymond Eugene Tyson, Defendant/Third-party Plaintiff/Appellees, v. Jeff Lange Real Estate, a division of Jeff Lange Homes, Inc., Third-party Defendant/Appellee.
Appeal from Sumner District Court; William R. Mott, Judge. Martin J. Peck, of Wellington, for appellant. H. Douglas Pfalzgraf, of Pfalzgraf Law Offices, of Wellington, and Chad M. Renn, of Cobean and Renn, of Wellington, for appellees.
Appeal from Sumner District Court; William R. Mott, Judge.
Martin J. Peck, of Wellington, for appellant. H. Douglas Pfalzgraf, of Pfalzgraf Law Offices, of Wellington, and Chad M. Renn, of Cobean and Renn, of Wellington, for appellees.
Before GREENE, C.J., MALONE and ATCHESON, JJ.
MEMORANDUM OPINION
PER CURIAM.
Plaintiff Michael J. Andra sued in Sumner County District Court for specific performance of a contract to buy land and argued the defendants attempted to deed to him less acreage than their agreement required. The district court granted summary judgment to the defendants on their argument the parties failed to agree on essential terms, so there never was an enforceable contract. The district court erred. Andra and the defendants had a binding contract. The disputed contract language was free of ambiguity, and the defendants' tendered performance conformed to that language. As a result, in a distinctly peculiar twist, neither Andra nor the defendants have advanced a valid theory for relief. The district court's judgment is reversed, and the case is remanded for further proceedings.
Factual Background and Procedural History
In late 2009, Defendants Lena P. Peebler Trust, Colleen M. Basil, and Raymond Eugene Tyson arranged to auction several tracts of land in rural Sumner County. Those defendants held various ownership rights in the land and are united in interest in this litigation. We refer to them simply as the defendants. The property at issue here consisted of two tracts carved from a quarter section. In materials distributed before the auction, Tract I was described as about 81 acres and Tract II was described as about 74 acres. The materials included an aerial photograph on which had been drawn a zigzagging line indicating a division of the parcels within the quarter section. The line generally ran north to south with a noticeable deviation to the west so that the tracts were of roughly equal width on north, but Tract I was considerably wider toward the south.
Before the bidding began on November 6, 2009, the auctioneer announced that Tract I would be surveyed to contain 80 “taxable acres” for zoning purposes. Robert J. Quinn acquired Tract I. Quinn intervened in this case at the district court level but is not a party to the appeal. Andra successfully bid for Tract II. The contract for sale between Andra and the defendants, in pertinent part, provides:
“The Seller does hereby agree to sell and convey to the Buyer by a good and sufficient warranty deed the following described real property situated in Sumner County, Kansas, to-wit: Tract II in the NE 1/4 32–30–IE consisting of 74 +/acres outlined in Attachment A, to be surveyed prior to closing.”
Attachment A was another copy of the photograph with the same division between the tracts. The sale contract with Quinn had parallel language describing Tract I as “consisting of 81 +/acres” and included the photograph.
The auction company hired Chad Abbott to survey the specific boundary line between Tract I and Tract II before the closing. Abbott knew Tract I, which Quinn had agreed to buy, was encumbered by a right-of-way deed and right-of-way easement in favor of the Kansas Department of Transportation. He also understood that Tract I had to contain 80 taxable acres to retain its zoning as agricultural land. The auction company instructed Abbott to exclude the highway right-of-way from that acreage, so Tract I would contain at least 80 acres plus the land subject to the right-of-way. To satisfy that directive, Abbott deviated from a portion of the line drawn on the photograph when he surveyed the boundary between Tract I and Tract II. As we understand the record, Abbott's survey generally followed the line on the aerial photograph except that it initiated the westward deviation more to the north, effectively enlarging Tract I. Everybody seems to agree Abbott's survey left Tract II with about 75.59 acres.
Because the survey boundary between Tract I and Tract II differed from the dividing line shown on the photograph included in both the auction materials and the contract for sale, Andra declined to close until he could commission a survey. He hired Greg Frederick to survey the property based on the division shown in the photograph. Frederick's survey placed 77.97 acres in Tract II—nearly 2.4 acres more than the Abbott survey. Frederick apparently gave no special consideration to the land in Tract I subject to the highway right-of-way. Andra refused to proceed with the sale based on the Abbott survey because of the reduced acreage in Tract II and because that boundary purportedly impaired his contemplated use of Tract II.
Andra then sued the defendants seeking specific performance of the sale contract based on the Frederick survey and the division of Tract I and Tract II shown on the photograph. He also sought damages resulting from the delay in closing and his inability to farm the land. The defendants answered and denied liability to Andra. The defendants brought a third-party claim against their auctioneer that has since been resolved and is not before this court.
The district court denied a round of summary judgment motions from Andra, Quinn, and the auctioneer because it found the sale contract to be ambiguous as to the acreage to be included in Tract II. The court considered various sources of extrinsic evidence that might be used to resolve the perceived ambiguity and concluded that there were disputed issues of material fact as to that proof.
The defendants later filed a motion for summary judgment arguing there had been no “meeting of the minds” as to the essential terms of the sale contract. That is, neither Andra nor the defendants demonstrated an objective manifestation of intent to be bound to the sale contract as written. The defendants argued that without a meeting of the minds, no contract was ever formed, so there were no enforceable legal rights and obligation between them and Andra. The district court granted judgment to the defendants on that basis. The defendants, accordingly, still own Tract II. Andra has timely appealed.
Legal Analysis
Introduction
This case rests on the sufficiency and meaning of the terms in the contract of sale between Andra and the defendants. After outlining the standard of review, we consider principles governing the interpretation of contract language. In light of those principles, we first look at the district court's determination that the sale contract was ambiguous. We then look at its later determination that Andra and the defendants failed to enter into a binding agreement at all.
The standards for weighing summary judgment are well settled. A party seeking summary judgment has the obligation to show, based on appropriate evidentiary materials, there are no disputed issues of material fact and judgment may, therefore, be entered in its favor as a matter of law. Shamberg, Johnson & Bergman, Chtd. v. Oliver, 289 Kan. 891, 900, 220 P.3d 333 (2009); Korytkowski v. City of Ottawa, 283 Kan. 122, Syl. ¶ 1, 152 P.3d 53 (2007). In essence, the movant argues there is nothing for a jury or a trial judge sitting as fact-finder to decide that would make any difference. The party opposing summary judgment must then point to evidence calling into question a material factual representation made in support of the motion. Shamberg, 289 Kan. at 900;Korytkowski, 283 Kan. 122, Syl. ¶ 1. If the opposing party does so, the motion should be denied so a fact-finder may resolve that dispute. In addressing a request for summary judgment, the trial court must view the evidence most favorably to the party opposing the motion and give that party the benefit of every reasonable inference that might be drawn from the evidentiary record. Shamberg, 289 Kan. at 900.
An appellate court applies the same standards in reviewing the entry of a summary judgment. Because granting summary judgment entails no fact-finding, it reflects the determination of a question of law. So the appellate court owes no deference to the judgment and reviews the matter anew.
A contract is unambiguous “if the language ... is clear and can be carried out as written.” Simon v. National Farmers Organization, Inc., 250 Kan. 676, Syl. ¶ 2, 829 P.2d 884 (1992). Conversely, an ambiguous contract “must contain provisions or language of doubtful or conflicting meaning.” 250 Kan. 676, Syl. ¶ 2. Ambiguity arises only if “the face of the instrument leaves it genuinely uncertain which one of two or more meanings is the proper meaning.” Catholic Diocese of Dodge City v. Raymer, 251 Kan. 689, 693, 840 P.2d 456 (1992); Antrim, Piper, Wenger v. Lowe, Inc., 37 Kan.App.2d 932, 937–38, 159 P.3d 215 (2007). A contract, therefore, is not ambiguous simply because the parties disagree about its meaning. 37 Kan.App.2d at 938.
If a contract or another document is unambiguous, it may be construed as a matter of law. Osterhaus v. Toth, 291 Kan. 759, 768, 249 P.3d 888 (2011); Levin v. Maw Oil & Gas, 290 Kan. 928, Syl. ¶ 2, 234 P.3d 805 (2010) (“The interpretation and legal effect of a written instrument are matters of law....”). Likewise, a court may discern the parties' intent from the clear language of the document. Levin, 290 Kan. 928, Syl. ¶ 2;Liggatt v. Employers Mut. Casualty Co., 273 Kan. 915, 921, 46 P.3d 1120 (2002) (“If the terms of the contract are clear, there is no room for rules of construction, and the intent of the parties is determined from the contract itself.”); Iron Mound v. Nueterra Healthcare Management, 44 Kan.App.2d 104, Syl. ¶ 2, 234 P.3d 39 (2010). The District Court Erred in Finding the Sale Contract to be Ambiguous
By those measures, the material terms of contract of sale were clear and unambiguous. The language stated the agreement of the parties in a comprehensible way that was not open to reasonable alternative meanings. The contract, however, presented a superficial paradox in that the operative language unambiguously set forth a contract term that defines and requires an inexact performance from the defendants. The defendants agreed to sell Andra Tract II, clearly defined in the contract as consisting of “74 +/-acres” in the identified quarter section. And Andra agreed to buy that acreage for $180,560. Nobody contends the symbols used—74 +/acres—could reasonably be construed to mean something other than “74 acres more or less.” So the parties' rights and obligations were clear. They agreed to the sale of an approximate quantity of land, not a precise quantity. Kansas law conforms to that understanding of the contract language. Pickering v. Hollabaugh, 194 Kan. 804, 807, 401 P.2d 891 (1965); Brewer v. Schammerhorn, 183 Kan. 739, 745, 332 P.2d 526 (1958) (The term “ ‘more or less' “ used to describe real property “relieve[s] a stated distance or quantity of the attribute of exactness” and reflects “a mere approximation.”). There is nothing ambiguous about that term from a contractual standpoint. In that respect, it could not reasonably be construed to mean exactly 74 acres, about 93 .5 acres, or an original Picasso and a trip to Disneyland.
Whether that is a wise way to buy and sell land might be debatable. But parties in an arm's-length transaction may set the terms of their contractual bargain as they please, so long as they violate no public policies and break no laws. Some types of contracts contain comparable sorts of imprecision. An output contract, for example, obligates the buyer to take all the widgets the seller may produce during the term of the agreement without stating a numerical quantity. See, e.g., Simmons Foods, Inc. v. Hill's Pet Nutrition, Inc., 270 F.3d 723, 724 (8th Cir.2001); O.N. Jonas Co., Inc. v. Badische Corp., 706 F.2d 1161, 1164 (11th Cir.1983). Construction contracts may set the final price as the incurred costs plus a given percentage of those costs or as an amount not to exceed a fixed dollar limit. See, e.g., Buchanan v. Overley, 39 Kan.App.2d 171, 174, 178 P.3d 53 (2008) (cost-plus contract); Hardaway Const. Co., Inc. v. United States, 852 F.2d 174, 176 (6th Cir.1988) (not-to-exceed contract); Shook v. Walden, 368 S.W.3d 604, 607–08 (Tex.App.2012) (both). In short, parties may contract for something imprecise. That sort of agreed-upon imprecision is not ambiguous so long as the rights and obligations are stated in a way that can be legally enforced. See Lessley v. Hardage, 240 Kan. 72, Syl. ¶ 4, 727 P.2d 440 (1986).
By those standards, the contract term setting forth the amount of land to be included in Tract II and sold to Andra was not itself legally ambiguous. Moreover, based on the Abbott survey and what the defendants tendered at closing, Andra would have gotten in excess of 75 acres of land. That would be 74 acres more or less, as called for in the contract. The contract identified the quarter section, referred to the area “outlined” in the aerial photographs, and stated that the tract would be surveyed before closing. The contract of sale did not contain a precise legal description of Tract II that would indirectly identify an exact quantity of land. It could not, since the boundary between Tract I and Tract II had not been surveyed or established. The survey and actual division reflected a condition subsequent to the contract. The contract language clearly noted that a survey would be done. The condition was, thus, unambiguous. Andra's complaint really turns on how the condition was performed, not on the meaning of the contractual provision establishing the acreage or the condition.
The aerial photograph appended to the sale contract showing a division of Tract I and Tract II did not create an ambiguity. The photograph, as marked, indicated a generic descriptor of the two parcels within the quarter section, subject to the contract term for an actual survey to be performed later. The parties, therefore, had no reason to believe or assume the demarcation on the photograph represented an exact, fixed, or final boundary. If an exact boundary or a precise acreage were essential to Andra, he should not have bid on Tract II as it was described in the materials presented before the auction. Nor should he have signed the contract of sale after the auction. Rather, Andra should have endeavored to negotiate those requirements as terms applicable either in the auction or in a separate, private purchase of Tract II. He didn't make those efforts. But Andra was under no compulsion to acquire the land on terms he considered unacceptable. See Albers v. Nelson, 248 Kan. 575, 578–79, 809 P.2d 1194 (1991) (“[P]arties have a duty to learn the contents of a written contract before signing it ... [that] includes ... obtaining an explanation of its terms.”).
As we have indicated, in suing for specific performance based on the Frederick survey, Andra actually disputes the legal adequacy of the defendants' performance and, thus, argues the tender of 75.59 acres based on the Abbott survey amounted to a material breach of the agreement. Or, put another way, the defendants failed to materially perform their part of the bargain, including the condition subsequent for a survey establishing the boundary between the tracts.
The law typically requires that parties substantially perform their contractual obligations. Substantial performance constitutes satisfaction of the contract by fulfilling its essential purpose. Dexter v. Brake, 46 Kan.App.2d 1020, 1033, 269 P.3d 846 (2012); Almena State Bank v. Enfield, 24 Kan.App.2d 834, 838–40, 954 P.2d 724 (1998). Conversely, a material breach renders something “substantially less [than] or different [from]” what the parties bargained for. Dexter, 46 Kan.App.2d at 1034. Substantial performance, then, stands “in direct contrast to ... material breach.” 46 Kan.App.2d at 1034. Substantial performance overlooks minor deviations or irregularities in the promised exchange if what the parties actually provide materially matches the contractual obligations. Almena State Bank, 24 Kan.App.2d at 839; see Harrison v. Family Home Builders, LLC, 84 So .3d 879, 889 (Ala.App.2011); Pack 2000, Inc. v. Cushman, 126 Conn.App. 339, 349, 11 A.3d 181 (2011).
The courts commonly characterize substantial performance as a fact question. Almena State Bank, 24 Kan.App.2d at 838. But, as with other fact-based issues, a court may determine if a party has substantially performed a contract when the relevant circumstances are undisputed. See St. Clair v. Denny, 245 Kan. 414, 420, 781 P.2d 1043 (1989) (proximate cause decided as matter of law on undisputed facts); Lay v. Kansas Dept. of Transportation, 23 Kan.App.2d 211, 215, 928 P.2d 920 (1996) (same), rev, denied 261 Kan. 1085 (1997); Harrison, 84 So.3d at 890. This is such a case. There is no dispute about the words and symbols embodying the relevant terms of the sale contract or about how the two surveys divided Tract I and Tract II.
The defendants substantially performed their obligations under the sale contract. Tract II, as bounded with the Abbott survey, provided Andra with 75.59 acres, thereby satisfying the defendants' duty to sell 74 acres “more or less.” We needn't consider how much of a deviation would amount to a material breach or, at least, give rise to a colorable claim of breach. Tendering too much land generally wouldn't unless the additional acreage carried with it some arguable detriment—a wildlife habitat subject to federal regulation or a decaying building annoying to zoning and land use officers. Too little would at some point. Half an acre short might not, but 7.5 acres (a 10 percent deviation) has the look of an actionable claim. Andra's argument that he would have received another 2.4 acres under the Frederick survey doesn't establish a material breach when the defendants were already prepared to sell him more than 74 acres.
The other piece of the performance here entailed the actual boundary the survey established. As we have noted, the photograph presented an irregular line generally dividing the parcels from north to south, thus creating Tract II as the westerly portion of the quarter section and Tract I as the easterly portion. A postcontract survey essentially dividing the quarter section from east to west and creating north and south tracts might not be substantial performance unless each acre of the quarter section were fungible. That might be true if the entire quarter section were grassland used to pasture cattle. We suppose such a gross change in this case could well be argued as a material breach. But the difference between the boundaries the two surveys created isn't striking in that way. The Abbott survey adheres to the general division depicted in the aerial photograph and differs only in beginning an east-west zigzag at a point a little more to the north. The change slices 2.4 acres off Tract II but creates a boundary quite similar in overall appearance to the line in the photograph.
In short, the district court erred in finding the sale contract to be ambiguous and denying Andra's motion for summary judgment for that reason. The contract was enforceable as written without resort to extrinsic evidence. But that doesn't mean Andra's motion should have been granted. He sued for specific performance of the sale contract incorporating the Frederick survey because, in his view, the defendants' use of the Abbott survey amounted to a material breach. In that respect, Andra was wrong. He, therefore, failed to advance a legal position warranting the relief he sought. The defendants, however, did not file a counterpoint motion seeking specific performance of the contract using the Abbott survey. The District Court Erred in Finding No Meeting of the Minds and No Contract
The defendants did file a motion for summary judgment arguing no contract had been formed in the absence of a meeting of the minds of the contracting parties. Their motion should have fared no better than Andra's. The district court erred in granting it.
The phrase “meeting of the minds” is somewhat misleading shorthand for the requirement that parties to a contract objectively manifest their intent to be bound by the terms of a proposed agreement and that they share an understanding of those terms. Sidwell Oil & Gas Co. v. Loyd, 230 Kan. 77, Syl. ¶ 6, 630 P.2d 1107 (1981); Southwest & Assocs., Inc. v. Steven Enterprises, 32 Kan.App.2d 778, Syl. ¶ 2, 88 P.3d 1246 (2004). The term denotes that “the minds of the parties met upon the same matter and agreed upon the terms of the contract.” Sidwell Oil & Gas Co., 230 Kan. 77, Syl. ¶ 6. And it concerns “the manifestation of the parties' intentions, rather than their actual but unstated and unwritten intentions.” Southwest & Assocs., 32 Kan.App.2d 778, Syl. ¶ 2. Whether the parties have agreed focuses on “their outward expression of assent” and its sufficiency “to form a contract.” 32 Kan.App.2d 778, Syl. ¶ 2. Meeting of the minds, then, encompasses the conduct of the parties demonstrating their acceptance of and willingness to abide by the rights and obligations created in the contract. Narrowly, the phrase may refer to words or conduct reflecting acceptance of the offer. More broadly, it refers to the parties' assent to the contractual terms—what has been offered and accepted.
A court may consider evidence outside the contract itself—parol evidence—to determine if the parties have arrived at the requisite understandings to form a contract. Sidwell Oil & Gas Co. 230 Kan. 77, Syl. ¶ 3. A contract may be declared void for lack of assent upon clear and convincing evidence. 230 Kan. at 86.
The law measures acceptance through outward appearances, not what a contracting party actually may have been thinking. Southwest & Assocs., 32 Kan.App.2d 778, Syl. ¶ 2. Thus, a party signing a written contract thereby manifests acceptance of its terms, even if that party believes he or she may later renounce the agreement with impunity or harbors an unstated intent not to be bound. 1 Corbin on Contracts § 4.10, 619 (rev. ed.1993). Acceptance may be found in other, less direct, conduct. For example, an oral proposal might be accepted with a nod of the head. Beginning the required contractual performance often may be reasonably understood as acceptance. Here, Andra signed the contract of sale. He objectively manifested his intent to be bound to the terms of the agreement. Accordingly, there was acceptance and, to that extent, a meeting of the minds.
But the defendants focus their argument on the actual terms of the contract and whether the parties had a meeting of the minds as to those rights and obligations. The defendants assert the parties never arrived at a shared understanding of where the boundary between Tract I and Tract II would lie and, thus, had no meeting of the minds on that point. The defendants want to defeat the contract based on a mistake of fact about its meaning. In some circumstances, a party mistaken about the meaning of a substantive term of a contract may be entitled to legal relief. But the doctrine doesn't apply here.
The Kansas courts recognize that mutual mistake as to one or more essential terms will prevent the formation of a contract. Alters, 248 Kan. at 580. Mutual mistake requires that both parties harbor misunderstandings about the duties and obligations. Otherwise, the mistake is unilateral or that of only one party. Absent fraud, Kansas courts generally have not granted relief from unilateral or one-sided mistakes about contracts. 248 Kan. at 580;Midwest Land Investment Co. v. Veach, 35 Kan.App.2d 883, 887, 135 P.3d 1263 (2006). Nobody has asserted fraudulent conduct in this case.
The Albers case illustrates the distinction between mutual and unilateral mistake. There, the parties entered into a written contract conveying land and farm machinery. The plaintiff buyers contended the contract was an outright sale with a right to repurchase. The reviewing courts found that to be the correct interpretation and understanding of the contract. The defendant sellers claimed they understood the contract to be a loan secured by collateral. The defendants argued there had been no meeting of the minds. The court rejected that argument because there was no mutual mistake about the contract, only a unilateral one on the defendants' part. Albers, 248 Kan. 580–81; see Handle Const. Co., Inc. v. Norcon, Inc., 264 P.3d 367, 372 (Alaska 2011) (unilateral mistake occurs when one party makes a mistake about a basic assumption in entering into a contract); Faivre v. DEX Corp. Northeast, 182 Ohio App.3d 563, 571, 913 N.E.2d 1029 (2009) (“ ‘A unilateral mistake occurs when one party recognizes the true effect of an agreement while the other does not[.]’ ”) (quoting Gen. Tire, Inc. v. Mehlfeldt, 118 Ohio App.3d 109, 115, 691 N.E.2d 1132 [1997] ); 7 Corbin on Contracts § 28.39, 225 (rev. ed. 2002) (A party seeking relief from a unilateral mistake properly may be rebuffed when the evidence “proves no more than that the party's own action was induced by an erroneous thought or expectation.”).
This case conforms to the pattern outlined in Albers, at least insofar as there was no mutual mistake. The defendants argue that they and Andra had different understandings about the contract. But the defendants never presented any evidence that their understanding differed from the actual terms and conditions of the sale contract. In other words, the defendants do not assert—and have not shown—they failed to understand the contract language. Nor do they say they failed to comply with that language in tendering the performance due Andra. They say only that Andra didn't share the meaning they correctly gave to the contract language.
As evidence supporting their claim of mistake, the defendants offered a response to a request for admission from Andra to the effect he believed the survey dividing Tract I and Tract II after the auction would conform to the line drawn on the aerial photograph. As in Albers, that, at most, amounts to a unilateral mistake on Andra's part.
As a leading commentator on contract law has noted, when the parties enter into a written contract “using the words that each of them consciously intends to use,” their agreement generally should not be considered void because they later “gave different meanings to the agreed language, or even that they gave different meanings thereto at the time the agreement was expressed.” 1 Corbin on Contracts § 4.10, 617 (rev. ed.1993). Thus, if the meaning one party attaches to the words reflects “the only reasonable one under the existing circumstances,” as the other party should know, then they are “bound by that meaning and there is a contract accordingly .” 1 Corbin on Contracts § 4.10, 617 (rev. ed.1993).
This case fits that rule, as well. As we have discussed, the pertinent contract language itself is unambiguous. Andra contracted for 74 acres more or less, and the defendants tendered the required quantity. The acreage was situated as described in the contract language. The boundary drawn in the Abbott survey generally conformed to the aerial photograph with a limited deviation. Nothing in the contract, however, suggested or required the division between Tract I and Tract II would be exactly as depicted in the aerial photograph. The contract provided the boundary would be determined by a survey made as a condition subsequent to the agreement but performed before the closing. A reasonable person in Andra's position would not have objectively understood the contract language to be otherwise. So there could not have been a mistake that would have prevented the formation of a contract on that basis.
The defendants invoke the textbook case of Raffles v. Wichelhaus, 2 H. & C. 906, 159 Eng. Rep. 375 (Ex. 1864), to support their claim that minds never met regarding the sale of Tract II. But their effort comes up short. In that classic case, the parties entered into a contract for the sale of cotton to be transported from Bombay to Liverpool on the ship Peerless. Unbeknownst to the parties, there were two ships named Peerless carrying cotton from India—one arriving in October, to which the buyer thought the contract referred, and one arriving in December, to which the seller intended to refer. Neither party knew of the other's understanding. When the seller tendered the cotton in December, the buyer was no longer interested, apparently having secured a supply elsewhere. The British court found no contract and ruled for the buyer.
But the Peerless case dealt with a “latent ambiguity” in the contract because two ships shared the same name, something neither party knew or had reason to know. Shoels v. Klebold, 375 F.3d 1054, 1067 (10th Cir.2004). Both parties to that contract attached equally reasonable, though different, meanings to the words of the agreement. One party was no more blameworthy or responsible for the failure of the agreement than the other. See 7 Corbin on Contracts § 28.39, 226 (rev. ed.2002); Colfax Envelope Corp. v. Local No. 458–3M, 20 F.3d 750, 753–54 (7th Cir.1994) (analyzing the Peerless case). In assessing the Peerless case for guiding legal principles, Judge Posner explained: “[A] contract ought to be terminable without liability and the parties thus allowed to go their own ways when there is ‘no sensible basis for choosing between conflicting understandings' of the contractual language.” 20 F.3d at 753.
In that circumstance, the British court reached a fair result in finding no mutual understanding and, hence, no contract. But, as we have found, Andra was not similarly situated to either party in the Peerless case because he placed an unreasonable meaning on contract language that had no legal ambiguity, latent or otherwise. Judge Posner made precisely that counterpoint in Colfax Envelope, as well. A party should not be permitted to avoid a contract because he or she entertains an “idiosyncratic idea of its meaning” and, thus, might argue there had been no meeting of the minds. 20 F.3d at 753. That would unfairly allow a party claiming an unreasonable or demonstrably less reasonable meaning to escape his or her contractual obligations on that basis. 20 F.3d at 753; 7 Corbin on Contracts § 28.39, 227 (rev. ed. 2002) (“[R]eformation should be denied if the understanding of one party was reasonable and that of the other party was not.”).
In some limited circumstances, one party's mistaken belief about the meaning of a material term may prevent the formation of a contract or permit reformation of the terms of the agreement. Jones v. Reliable Security, Inc., 29 Kan.App.2d 617, 633, 28 P.3d 1051 (2001); 7 Corbin on Contracts § 28.41, 255 (rev. ed.2002). Relief may be permitted when the other party to the contract is aware of the mistaken belief and goes forward with the agreement despite that knowledge. In those circumstances, one of the parties knows the other is mistaken about the terms of the contract, takes no steps to rectify the misunderstanding, and proceeds nonetheless. The law permits the party laboring under the mistaken belief to avoid the contractual obligations or reform the contract to match that belief. 7 Corbin on Contracts § 28.39, 261 (rev. ed.2002). The reason rests primarily on notions of fairness and blameworthiness. The party knowing of the other's mistake may be considered less than fair and, thus, blameworthy for not speaking up to clarify the situation but, rather, seeking to gain some advantage from the confusion. Imposing that sort of burden or penalty encourages parties to a contract to raise and resolve potential misunderstandings or mistakes during the negotiation process before finalizing any agreement. And it heads off disputes that would otherwise arise only after the parties had begun performing the contract, when litigation likely would be disruptive and remedies potentially incomplete.
Relief from unilateral mistake doesn't come into play on the facts presented here. Even assuming Kansas were to permit relief from a unilateral mistake where one party knew of the other's mistake—an assumption that is hardly self-evident—the right to relief would belong to the mistaken party, not the knowledgeable party. Andra, as the mistaken party, would be entitled to assert the failure of the contract—not the defendants, since they perfectly well understood the agreement. In addition, there is no evidence the defendants were aware of Andra's purportedly mistaken belief about the contract. If they had known and proceeded anyway, they would be cast as the blameworthy side. And they now would be seeking to benefit from their own blameworthiness by voiding the contract. The law, however, does not permit wrongdoers to benefit from their wrongs. See McCaffree Financial Corp. v. Nunnick, 18 Kan.App.2d 40, 55, 847 P.2d 1321 (1993) (party may not gain an advantage through his or her own wrong); Estate of Amaro v. City of Oakland, 653 F.3d 808, 813 (9th Cir.2011) (noting the principle that a person “ ‘should not be allowed to benefit from [his or her] own wrongdoing’ ”).
Conclusion
To sum up, Andra's claim for specific performance based on the Frederick survey fails as a matter of law. The defendants' tendered performance based on the Abbott survey conformed to the unambiguous terms of the contract. But the defendants' claim that no contract was formed also fails. The district court erred in entering summary judgment for the defendants on that basis. Neither party has advanced alternative grounds for relief on appeal. As a result, on this record, the parties presented no claim to the district court on which relief could be granted.
We, therefore, reverse the judgment for the defendants and remand the case for further proceedings consistent with this opinion. In its discretion, the district court may invite the parties to address other grounds for resolving this dispute raised below and supported in the record, allow the parties to amend their pleadings to offer new theories, or reopen discovery. Given the passage of time, the parties may have other views on how best to resolve this litigation. The district court should afford them the opportunity to present those suggestions.
Reversed and remanded.