Estate of Russell L Veldkamp v. Donald Ribble ( 2024 )

If this opinion indicates that it is “FOR PUBLICATION,” it is subject to
revision until final publication in the Michigan Appeals Reports.
STATE OF MICHIGAN
COURT OF APPEALS
ESTATE OF RUSSELL L. VELDKAMP, by UNPUBLISHED
ROXANNE VELDKAMP, Personal Representative, May 23, 2024
and ROXANNE VELDKAMP
Plaintiffs/Counter-Defendants-
Appellees,
v No. 365398
Barry Circuit Court
DONALD RIBBLE and DONNA RIBBLE, LC No. 22-000041-CZ
Defendants/Counter-Plaintiffs-
Appellants.
Before: YATES, P.J., and CAVANAGH and BOONSTRA, JJ.
PER CURIAM.
Defendants/Counter-Plaintiffs Donald Ribble (Donald) and Donna Ribble (Donna)
(collectively, defendants) appeal by right the judgment entered by the trial court after a bench trial.
The judgment orders defendants to provide to Plaintiffs/Counter-Defendants Roxanne Veldkamp
(Roxanne) and the Estate of Russell L. Veldkamp (the estate) (collectively, plaintiffs) clear title to
the home and property located at 11575 Winchester Drive in Shelbyville, Michigan (the property),
and also enters a judgment of no cause of action on defendants’ counterclaim to quiet title in favor
of defendants. We reverse and remand for entry of a judgment in favor of defendants.
I. PERTINENT FACTS AND PROCEDURAL HISTORY
In October 2007, defendants and Russell Veldkamp executed a document entitled “Lease
with Purchase Option” (the Lease with Option) regarding the property. The Lease with Option
identifies defendants as the lessor and Russell as the lessee, and states that “Lessor leases to Lessee
the premises situated at 11575 Winchester Dr., in the City of Shelbyville, County of Barry, State
of Mich [sic] 49344 . . . for a term of Two year[s] to commence on Sept [sic] 1, 2007, and to end
on Sept [sic] 1, 2009, at midnight.” The Lease with Option, which is a printed form with
handwritten additions, contains several provisions relevant to this appeal. Paragraph 1 states in
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relevant part that the lessee agrees to pay “rent for the demised[1] premises” in the amount of “Nine
Hundred Seventy Five Dollars ($975.00) per month,” “of which Nine Hundred Seventy Five
Dollars ($975.00) shall be applied to Lessee’s downpayment [sic] to purchase the premises.”
Paragraph 5 states in relevant part: “Security Deposit. On execution of this lease, Lessee deposits
with Lessor $2,000.00 Down payment [sic] Dollars, receipt of which is acknowledged by the
Lessor, as security for the faithful performance by Lessee of the terms thereof . . . .” Paragraph 26
states:
26. Holdover by Lessee. Should Lessee remain in possession of the demised
premises with the consent of Lessor after the natural expiration of this lease, a new
month-to-month tenancy shall be created between Lessor and Lessee, which shall
be subject in all the terms and conditions hereof but shall be terminated on 3 days’
written notice served by either Lessor or Lessee on the other party.
Paragraphs 36 and 37 contain the most handwritten additions, and provide:
36. Purchase Option. It is agreed that Lessee shall have the option to purchase
real estate known as: 11575 Winchester Dr, Shelbyville, Mi [sic] 49344 for the
purchase price of One Hundred & Eighteen Thousand Dollars ($118,000.00) with
a down payment of Two Thousand Dollars ($2,000.00) payable upon exercise of
said purchase option, and with a closing date no later than Aug 1, 2009 days
thereafter [sic]. This purchase option must be exercised in writing no later than
[portion of the document left blank], 20[portion of the document left blank], but
shall not be effective should the Lessee be in default under any terms of this lease
or upon any termination of this lease.
37. Other Terms. 375.00 A Month go’s [sic] to Down Payment from The
$975.00 Rent Payment From Sept. [sic] 1, 2007 thru [sic] Aug. [sic] 1, 2008. The
total of $4125.00 OR Sept [sic] 1, 2007 Thru [sic] Aug. [sic] 1, 2009 Total of
$8,625.00 with 5% [an illegible word follows.]
It is undisputed that Roxanne and Russell did not purchase the property from defendants on or
before August 1, 2009. Roxanne and Russell resided on the property and paid defendants $975
per month from September 2009 through February 2022, when the trial court granted plaintiffs’
motion to have future payments placed in escrow. In January 2022, plaintiffs filed suit against
defendants, alleging that they had purchased the property on a land contract and requesting that
the trial court order defendants to deliver clear title to the property to plaintiffs. Russell passed
away in March 2022, and his estate was substituted as a party. Plaintiffs filed an amended
complaint in September 2022. Plaintiffs alleged that
under the terms of the Lease with Option to Purchase, a Land Contract was to have
been entered into on August 1, 2009. Plaintiffs believe that the parties agreed to
simply continue with the payments, agreeing that a Land Contract was signed or
1
“Demised” property is property owned by a leaseholder and rented to a tenant under a lease
agreement. See Black’s Law Dictionary (9th ed), pp 497, 1300.
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that that formality waived [sic] so the Plaintiffs continue [sic] to pay $975.00
expecting and believing that it would be treated as a Land Contract at 5%
interest . . . . [Plaintiffs’ first amended complaint, ¶ 6, p 2.]
In addition to the Lease with Option, plaintiffs attached two handwritten documents signed
by Donald. The documents, dated October 9, 2012 and September 1, 2013, are both entitled “Land
Contract” and recite the property’s address. The documents additionally list a “Total Price” of
$118,000, provide the amount of principal paid to date, and state the balance remaining on the
price. Plaintiffs argued that these documents showed that both plaintiffs and defendants “believed
or were working under the assumption that the Land Contract had been signed and/or that the terms
and conditions of the Lease With Option were sufficient to show a Land Contract existed.”
A bench trial was held in December 2022. In addition to addressing the matters raised in
their complaint, plaintiffs noted that defendants had filed for bankruptcy, and plaintiffs argued that
defendants had represented to the bankruptcy court that the property had been sold to plaintiffs on
a land contract. Roxanne testified that she and Russell had intended to purchase the home on a
land contract, and that despite its title, plaintiffs “were always told” that the Lease with Option
was a land contract. Regarding the handwritten documents signed by Donald, she testified that
those were provided by Donald and showed what payments had been made on a land contract and
the balance still owed. She also testified that plaintiffs were unable to exercise the option to
purchase in 2009. Donald testified that the handwritten documents were an attempt to “renew” a
contract for the property by establishing a land contract.
At the close of proofs, the trial court held that the parties were bound by a valid land
contract. The majority of the trial court’s reasoning was based on extrinsic evidence, such as its
conclusion that Donald had represented to the bankruptcy court that the property had been sold on
a land contract, or the fact that improvements had been made to the property by Russell and
Roxanne. The trial court stated that there were “contradictions” in the Lease With Option, such as
a $2,000 security deposit being also listed as a down payment. The trial court also noted that the
jurat signed by a notary referred to the document as a land contract. The trial court concluded that
defendants were obligated to provide clear title to the property to plaintiffs. The trial court
subsequently entered a judgment to that effect as described. This appeal followed.
II. STANDARD OF REVIEW
We review for clear error a trial court’s findings of fact at a bench trial; we review de novo
its conclusions of law. Knight Enterprises, Inc v RPF, 299 Mich 275, 279; 829 NW2d 345 (2013).
The interpretation of contractual language is a question of law we review de novo, DeFrain v State
Farm Mut Auto Ins Co, 491 Mich 359, 366-367; 817 NW2d 504 (2012), as is the determination
whether contractual language is ambiguous, Casey v Auto Owners Ins Co, 273 Mich App 388,
394; 729 NW2d 277 (2006).
III. ANALYSIS
Defendants argue that the trial court erred by finding that the parties entered into a valid
land contract for the sale of the property. We agree.
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The primary goal in the interpretation of contractual language is to honor the intent of the
parties. Klapp v United Ins Group Agency, Inc, 468 Mich 459, 473; 663 NW2d 447 (2003).
Therefore, when presented with a dispute involving a contract, a court must determine what the
parties’ agreement is and enforce it. Shefman v Auto Owners Ins Co, 262 Mich App 631, 637; 687
NW2d 300 (2004). The interpretation process begins with analysis of the language of the contract
itself. Wiggins v City of Burton, 291 Mich App 532, 551; 805 NW2d 571 (2011). Clear,
unambiguous contract language must be enforced as written unless it conflicts with the law. Rory
v Continental Ins Co, 473 Mich 457, 468; 703 NW2d 23 (2005). When the language of a contract
is unambiguous, interpretation is limited to the actual words of the agreement, and parol evidence
may not be used to establish a parties’ intent. Burkhardt v Bailey, 260 Mich App 636, 657; 680
NW2d 453 (2004). “The judiciary may not rewrite contracts on the basis of discerned reasonable
expectations of the parties because to do so is contrary to the bedrock principle of American
contract law that parties are free to contract as they see fit, and the courts are to enforce the
agreement as written absent some highly unusual circumstance, such as a contract in violation of
law or public policy.” Id. (quotation marks and citation omitted). Moreover, “the unilateral
subjective intent of one party cannot control the terms of a contract.” Id. “It is beyond doubt that
the actual mental processes of the contracting parties are wholly irrelevant to the construction of
contractual terms. Rather, the law presumes that the parties understand the import of a written
contract and had the intention manifested by its terms.” Id. (quotation marks and citations
omitted).
A contract is ambiguous if, after reading the entire contract, its language can reasonably be
understood in differing ways, such as when a term is equally susceptible to multiple definitions or
provisions of the contract conflict with each other. Dancey v Travelers Prop Cas Co, 288 Mich
App 1, 8; 792 NW2d 372 (2010); Vushaj v Farm Bureau Gen Ins Co, 284 Mich App 513, 515;
773 NW2d 758 (2009). If a contract is ambiguous, the factfinder may consider extrinsic evidence
of the parties’ intent, such as the parties’ conduct and past practice. Klapp, 468 Mich at 470. If
all conventional methods of contract interpretation have failed to establish the meaning of the
contract, the ambiguities are to be construed against the drafter of the contract. Wilkie v Auto-
Owners Ins Co, 469 Mich 41, 60; 664 NW2d 776 (2003).
A land contract is a contract for the sale of land “in which the purchase price is to be paid
in installments (other than an earnest money deposit and a lump-sum payment at closing) and no
promissory note or mortgage is involved between the seller and the buyer.” Zurcher v Herveat,
238 Mich App 267, 291; 605 NW2d 329 (1999) (citation omitted). A valid land contract must be
definite as to “parties, property, consideration, terms[,] and time of performance.” Rathburn v
Herche, 323 Mich 160, 165; 35 NW2d 230 (1948) (quotation marks and citation omitted). Further,
the purchase price, number and amount of installment payments, and the rate of interest are
material terms of a land contract. Zurcher, 238 Mich App at 291. A land contract must satisfy
Michigan’s statute of frauds. See MCL 566.108.
In this case, the Lease With Option is deficient in several key ways to be considered a valid
land contract. The contract does not explicitly provide a total number of payments over a definite
term of years. Further, and more importantly, while Section 36 provides a purchase price, it only
does so in the context of an option to purchase with a closing date no later than August 1, 2009. It
is undisputed that Russell did not exercise his option to purchase and close on the property on or
before that date. No other provision of the document provides a purchase price to be paid over a
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term of years. And even if Section 37 is interpreted as providing a five-percent interest rate, it at
best provides such a rate until August 1, 2009.
Additionally, the handwritten documents provided to plaintiffs by Donald in 2012 and 2013
do not establish that the parties entered into a valid land contract in 2007. While they do appear
to list a purchase price for the subject property that includes credit for payments made under the
Lease With Option, there is no indication whether these documents represent statements of the
progress plaintiffs had made in paying off a land contract, or merely offers to enter into such a
contract. Nor is there any indication that these documents are incorporated with the original
agreement. Nothing in the Lease With Option indicates that the handwritten documents provided
by Donald in 2012 and 2013 are incorporated by reference, and nothing in the handwritten
documents indicates an incorporation of the Lease with Option. See Whittlesey v Herbrand Co,
217 Mich 625, 627; 187 NW2d 279 (1922) (stating that where “one writing refers to another, the
intention of the parties is to be gathered from the two instruments taken together.”). Further,
Donald testified that these documents were attempts to establish a land contract after Russell did
not exercise his purchase option in 2009. Although the trial court makes much of Donald’s use of
the word “renew,” it is clear from context that Donald believed that the Lease with Option had
terminated without the purchase option being exercised. Roxanne appears to have believed that
these documents represented payments made under an existing agreement made in 2007. In the
absence of any language indicating that the handwritten documents were incorporated with,
modified, or replaced the Lease with Option, and the absence of any indication that Russell
accepted either document as an offer to enter into a land contract, see Kloian v Domino’s Pizza,
LLC, 273 Mich App 449, 452-453; 733 NW2d 766 (2006), the trial court erred to the extent it
considered these documents along with the Lease with Option itself.
As noted, the Lease With Option lacks several of the required elements for a land contract.
Further, the contract is not ambiguous, and the trial court therefore was not permitted to rely on
extrinsic evidence to determine the parties’ intent under the agreement. Klapp, 468 Mich at 470.
Read as a whole, the Lease with Option is clearly a two-year lease with an option to purchase the
property for a certain price by a certain date. The document repeatedly refers to “rent” payments,
provides for late fees, limits the use of the premises by the lessee, prohibits assignment and
subletting without the lessor’s consent, and other features typical of a leased residence. It further
provides that upon the lease’s expiration in 2009, a month-to-month tenancy would be created,
terminable by either party with 3 days’ notice—a provision at odds with the idea that the agreement
was a land contract that remained valid until 2021. Further, as stated, the references to a “down
payment” or an interest rate only refer to payments made until August 1, 2009. In context, these
references refer to some manner of crediting these payments against the down payment required
to purchase the property if that purchase occurred; there is no indication from the document that
the monthly rent payments would otherwise be credited against the purchase price. Read as a
whole, the Lease With Option cannot reasonably be understood in different ways, and does not
contain irrevocably conflicting provisions. See Dancey, 288 Mich App at 8; Vushaj, 284 Mich
App at 515. The trial court therefore erred by considering extrinsic evidence, such as documents
from defendants’ bankruptcy proceedings and testimony about improvements to the property, and
by concluding that the parties had entered into a valid land contract.
We conclude that the trial court erred by determining that a valid land contract existed, and
by ordering defendants to provide clear title to the property to plaintiffs. We therefore reverse the
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trial court and remand for entry of a judgment in favor of defendants. Because we reverse on these
grounds, we need not consider defendants’ arguments concerning the trial court’s alleged
evidentiary errors.
Reversed and remanded for entry of judgment in favor of defendants. We do not retain
jurisdiction.
/s/ Christopher P. Yates
/s/ Mark J. Cavanagh
/s/ Mark T. Boonstra
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