Garcia v. Sonoma Ranch East II, L.L.C.

I attest to the accuracy and
integrity of this document
New Mexico Compilation
Commission, Santa Fe, NM
'00'04- 14:00:55 2013.03.13
IN THE COURT OF APPEALS OF THE STATE OF NEW MEXICO
Opinion Number: 2013-NMCA-042
Filing Date: January 28, 2013
Docket No. 30,920
WILLIE GARCIA and VIOLA GARCIA,
husband and wife,
Plaintiffs-Appellants,
v.
SONOMA RANCH EAST II, LLC,
Defendant-Appellee.
APPEAL FROM THE DISTRICT COURT OF DOÑA ANA COUNTY
James T. Martin, District Judge
Joseph M. Holmes, P.A.
Joseph M. Holmes
Las Cruces, NM
for Appellants
Miller Stratvert, P.A.
Joshua L. Smith
Lawrence R. White
Las Cruces, NM
for Appellee
OPINION
WECHSLER, Judge.
{1} In this contract dispute, Plaintiffs Willie and Viola Garcia (the Garcias) executed an
Option Agreement granting Defendant Sonoma Ranch East II, LLC or its designee (Sonoma
Ranch) the option to purchase real property. When Sonoma Ranch failed to make a payment
under the Option Agreement, the Garcias filed a breach of contract action seeking full
payment of the sales price. The district court held that the failure of Sonoma Ranch to make
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a payment under the Option Agreement ended its obligations and any rights it possessed.
The district court granted summary judgment to Sonoma Ranch. We affirm.
FACTUAL AND PROCEDURAL BACKGROUND
{2} The complaint and the undisputed facts upon which the district court entered
summary judgment indicate that the parties entered into the Option Agreement on or about
April 26, 2006. Under the Option Agreement, Sonoma Ranch acquired an option to
purchase a 25.121 acre tract of the Garcias’ real property. The term of the option was from
April 26, 2006 until May 31, 2015. The consideration for the grant of the option was
$750,000, with $150,000 payable within fifteen days and annual payments of $100,000 plus
six percent interest on the unpaid sum due. All principal sums paid were to be applied to the
purchase price. The parties signed an escrow agreement and placed exchanged deeds with
the escrow agent. Sonoma Ranch made the annual payment called for in the Option
Agreement to the escrow agent in April 2007. On April 8, 2008, the escrow agent informed
Sonoma Ranch of its annual payment due April 26, 2008. Sonoma Ranch did not make the
payment.
{3} The Option Agreement contained other terms pertinent to the parties’ arguments.
During the term of the Option Agreement, it required Sonoma Ranch to pay ad valorem real
estate taxes and assessments and the Garcias to remove any liens or encumbrances as
requested by Sonoma Ranch; to cooperate with Sonoma Ranch in its actions to obtain
annexation and subdivision approval; and to provide Sonoma Ranch access to the property.
{4} The district court granted Sonoma Ranch’s motion for summary judgment. It
determined that the terms of the Option Agreement were clear and unambiguous, that the
Option Agreement “was for an option to purchase real estate and was terminated upon
default by” Sonoma Ranch, and that by “not making the payment,” Sonoma Ranch ended
its rights under the Option Agreement. The Garcias moved for reconsideration, alleging that
Sonoma Ranch owed them the full amount of the consideration to acquire the option to
purchase the real property because the Option Agreement did not provide for a different
consideration if Sonoma Ranch elected to terminate the Option Agreement. The district
court denied the motion for reconsideration.
{5} The Garcias appeal, making arguments that we recast as follows: (1) that summary
judgment was not proper because there is a genuine issue of material fact as to whether the
parties’ agreement was an option; (2) that the district court erred in determining that the
Option Agreement terminated upon Sonoma Ranch’s non-payment; (3) that there are other
genuine issues of fact remaining that preclude summary judgment; (4) that if the terms of the
Option Agreement are clear and unambiguous, Sonoma Ranch owes them $750,000 for the
grant of the option; and (5) that estoppel bars any claim that there are no bilateral obligations
under the Option Agreement.
THE AGREEMENT IN THIS CASE
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{6} We initially discuss the agreement that underlies this appeal. The Garcias asserted
in discovery and in their response in opposition to the motion for summary judgment that
they believed that they were selling their property to Sonoma Ranch under an installment
purchase agreement, and they assert in their brief in chief that they “continue to be under the
impression that they sold the property to Sonoma Ranch.”
{7} According to the Garcias, when they entered negotiations with Sonoma Ranch, David
Steinborn, Sonoma Ranch’s representative, “insisted on preparing a written agreement to
confirm” the offer he had made for the Garcias’ property. The parties then signed a
document entitled Realtors Association of New Mexico Purchase Agreement - Vacant Land
on February 7, 2006, by which the Garcias were to sell the real property to Sonoma Ranch
for $750,000 with a down payment of $150,000 and a loan for $600,000. The Option
Agreement and other documents were executed on or about April 26, 2006. The district
court determined that “[t]he agreement between the parties was for an option to purchase real
estate.”
{8} The Garcias contend that the district court erred in this determination and that
questions of fact remain concerning whether the transaction was a purchase and sale instead
of an option. They assert that the requirements of the agreement of establishing an escrow
account and procuring title insurance are more consistent with a purchase and sale than an
option and that inconsistencies in the document appear to indicate that the documents are
incomplete. The Garcias have thus raised the issue of whether the parties intended a contract
to purchase or an option to purchase.
{9} “Summary judgment is appropriate where there are no genuine issues of material fact
and the movant is entitled to judgment as a matter of law.” Self v. United Parcel Serv., Inc.,
1998-NMSC-046, ¶ 6, 126 N.M. 396, 970 P.2d 582. A court may consider evidence
concerning the making of a contract in order to determine whether the contract before it is
unclear or ambiguous. C.R. Anthony Co. v. Loretto Mall Partners, 112 N.M. 504, 508-09,
817 P.2d 238, 242-43 (1991). Generally, if a contract is ambiguous, resolution of the
ambiguity in the contractual interpretation is a factual question. See id. at 507, 817 P.2d at
241. However, in determining whether “the parties’ expressions of mutual assent lack
clarity” so as to present an ambiguity, “[i]f the evidence presented is so plain that no
reasonable person could hold any way but one, then the court may interpret the meaning as
a matter of law.” Mark V, Inc. v. Mellekas, 114 N.M. 778, 781, 845 P.2d 1232, 1235 (1993).
{10} The details of the agreements before us lead to the conclusion that there is no
ambiguity and that we may interpret their meaning as a matter of law. We first elaborate on
these details. In February 2006, the parties entered into an agreement by using a Realtors
Association of New Mexico purchase agreement form. The agreement refers to the parties
as “buyer” and “seller,” and, among other things, states the purchase price, establishes the
terms for closing, allocates closing costs, requires a survey/improvement location report and
title insurance, and provides for an escrow account. Under the heading CASH OR
FINANCING CONDITIONS AND OBLIGATIONS, the document states, “Real Estate
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Option. For terms, see attached addendum.” We are unable to locate an addendum in the
record on appeal. The only other reference to an option in the documents signed on February
7, 2006 is the hand-written word “Option” written after the title “Realtors[] Association of
New Mexico Purchase Agreement—Vacant Land” on the real estate licensee disclosure
document. Additionally, in addressing the date Sonoma Ranch would take possession, the
parties marked a box entitled “Other,” rather than selecting the date of closing or the date
of disbursement of the proceeds. No further explanation was included.
{11} The Option Agreement, on the other hand, expressly states that it involves the grant
of an option to purchase the property and uses the term “option” throughout. The parties are
exclusively referred to as “Optionors” and “Optionee.” The Option Agreement, among other
things, states the consideration for the grant of the option and the term of the option, restates
the purchase price as $30,000 per acre, addresses liens and taxes that arise during the option
period, and provides for an escrow account, title insurance, and allocation of costs. It
provides for closing “within [twenty-five] days of the time that Optionee provides written
notice of its intent to exercise the option granted by [the Option] Agreement.” It states that
it “contains the complete and integrated agreement of the parties hereto and all previous
agreements made by them are merged herein.”
{12} The parties’ February 2006 agreement expressed their original intent to enter the
transaction. This intent was embodied in a purchase and sale agreement that also included
evidence of an intent to create an option. At this point, the documentation of the parties’
intent was ambiguous. The parties then clarified their intent with the Option Agreement.
The Option Agreement clearly states that it is the grant of an option. By necessity, the terms
of the purchase and sale are included within the Option Agreement. See Ritchie v. Cordray,
461 N.E.2d 325, 327 (Ohio Ct. App. 1983) (stating that an option and a contract to sell are
separate and independent, even though contained in a single document and that “the option
is collateral to the main offer to sell”). Although the Garcias argue that the provisions for
escrow and title insurance are more consistent with a purchase and sale, they do not explain
the manner in which these provisions are so inconsistent with an option as to vitiate the
creation of the option under the Option Agreement.
{13} The Garcias’ strongest argument attacking the Option Agreement is its silence
concerning the mechanism by which Sonoma Ranch could terminate its option. The Option
Agreement provided only that Sonoma Ranch would pay $750,000 for the grant of the
option, $150,000 within fifteen days of the execution of the Option Agreement and $100,000
plus interest in annual payments. To be sure, the Option Agreement could have more clearly
stated the manner in which Sonoma Ranch would provide notice of its intent to not exercise
the option. However, as a matter of law, this silence is overcome by the nature of an option
agreement.
{14} “Defined at its most basic level, an option is simply a contract to keep an offer open.”
1 Samuel Williston, A Treatise on the Law of Contracts § 5:15, at 1013 (Richard A. Lord
ed., 4th ed. 2007). An option contract is unilateral in its character. Id. § 5:15, at 1016; Lake
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Shore Country Club v. Brand, 171 N.E. 494, 501 (Ill. 1930). It is an irrevocable offer on the
part of the optionor, which the optionee has the right to exercise in accordance with the
terms of the option. Lake Shore Country Club, 171 N.E. at 501; 1 Williston, supra, § 5:16,
at 1022. It does not bind the optionee. 1 Williston, supra, § 5:15, at 1016 (stating that an
option binds the optionor, “but leav[es] the optionee free to either accept or not, at his or her
whim”). By virtue of its unilateral character, an option to purchase is not a contract to
purchase. Lake Shore Country Club, 171 N.E. at 501; 1 Williston, supra, § 5:16, at 1024-26.
{15} Based on the unilateral nature of an option, Sonoma Ranch could either continue to
make the annual payments and exercise the option or cease making the payments and thereby
not exercise the option. The Option Agreement would not be an agreement granting an
option if Sonoma Ranch did not have the ability to decide to not exercise the option.
Moreover, we do not consider the failure to specifically designate the time within which
Sonoma Ranch had to act in order to elect not to exercise the option to be problematic. As
a general rule, if no time is specified as to the duration of an option, the option is open for
a reasonable time. 1 Williston, supra, § 5:15, at 1016.
{16} The integration clause of the Option Agreement eliminates any doubt as to the
evolution of the transaction. The expressions in the Option Agreement make it clear that the
original lack of clarity indicated in the February 2006 agreement was resolved in favor of
the grant of an option. Sonoma Ranch was given the time to decide if it wanted to fully
commit to the transaction without fear that it would lose the offer.
{17} The Option Agreement’s integration clause further expressed the parties’ intent that
the Option Agreement, not any prior agreement, was their final intent. Although a party may
rely on extrinsic evidence to demonstrate the intended interpretation of an integration clause
in a contract, see Nellis v. Farmers Ins. Co. of Ariz., 2012-NMCA-020, ¶¶ 48-53, 272 P.3d
143, cert. denied, 2011-NMCERT-011, ___ P.3d ___, other than to state that they
understood the transaction to be one of a purchase and sale, the Garcias have not argued that
the integration clause in the Option Agreement should not be given effect. The essence of
the formation of a contract is the objective, mutual assent of the parties, not an individual’s
private belief. See Pope v. Gap, Inc., 1998-NMCA-103, ¶ 13, 125 N.M. 376, 961 P.2d 1283(“Mutual assent is based on objective evidence, not the private, undisclosed thoughts of the
parties.”). The purpose of extrinsic evidence in order to determine the scope and nature of
a contract is to develop the circumstances surrounding the formation of the contract so as to
ascertain the objective manifestation of intent. See Nellis, 2012-NMCA-020, ¶ 49 (stating
that “the introduction of extrinsic evidence [is] designed to determine the circumstances
under which the parties contracted and the purpose of the contract.” (internal quotation
marks and citation omitted)). The district court did not err in determining that the parties’
agreement was an option to purchase real estate.
TERMINATION OF THE OPTION AGREEMENT ON NON-PAYMENT
{18} The Garcias contend that the district court erred in its ruling that Sonoma Ranch’s
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non-payment ended its obligations under the Option Agreement. We view the propriety of
the district court’s determination to depend on the nature of the Option Agreement. Because
the Option Agreement granted Sonoma Ranch an option, unilateral in nature, Sonoma Ranch
had the option to purchase the Garcias’ property under the terms of the option. See Lake
Shore Country Club, 171 N.E. at 501 (“An option contract is unilateral.”). The terms
included the payment of $30,000 per acre for the approximately twenty-five acres. They
further included an initial payment of $150,000 and annual payments of $100,000. By
failing to make an annual payment, Sonoma Ranch placed itself in a position in which it had
not complied with the terms of the option and would not be able to exercise its option rights.
See Master Builders, Inc. v. Cabbell, 95 N.M. 371, 374, 622 P.2d 276, 279 (Ct. App. 1980)
(“Failure to exercise an option results in its loss.”).
{19} The question for the district court was whether the Option Agreement obligated
Sonoma Ranch to make the annual payments under the Option Agreement. Stated
alternatively, the question is: if Sonoma Ranch as optionee does not exercise its option, can
it nevertheless be required to pay for it? The question is unique because our courts have
only considered the question in its reverse form, i.e., when an optionee has sought to exercise
an option. See, e.g., Cillessen v. Kona Co., 73 N.M. 297, 301-02, 387 P.2d 867, 870 (1964)
(affirming the denial of specific performance to optionee in an option contract); Master
Builders, Inc., 95 N.M. at 374, 622 P.2d at 279 (same). In those circumstances, the questions
have revolved around whether an optionee seeking to exercise an option has complied with
its terms. Master Builders, Inc., 95 N.M. at 374, 622 P.2d at 279. The Garcias, as the
optionors, are not seeking to enforce the option by making Sonoma Ranch complete the
purchase, but they do want to receive payment for the option.
{20} Because of the unilateral nature of an option, we answer the question before us as a
matter of law and determine that Sonoma Ranch is not required to pay for the option it does
not exercise. The difficulty in this case arises because the Option Agreement is silent as to
termination or notice of intent not to exercise the option. Indeed, if it provided such
provisions, any issue would be directed to compliance with such provisions. The only
provision concerning both notice and exercise of the option required Sonoma Ranch to notify
the Garcias if it intended to exercise the option.
{21} However, in the context of an option, payment of the consideration for the option is
inextricably connected to the option itself. If Sonoma Ranch did not pay an annual payment,
the option would terminate. The payments were thus required for Sonoma Ranch to continue
the option from year to year.
{22} The unilateral nature of an option explains the nature of this relationship. Although
the agreement to provide an option for consideration is bilateral in that the optionor agrees
to the terms of the option in exchange for the optionee’s payment for the option, the bilateral
nature of the agreement ends at that point. See Dacy v. Vill. of Ruidoso, 114 N.M. 699, 702,
845 P.2d 793, 796 (1992) (stating that a “bilateral contract involves reciprocal promises”
while a unilateral contract “consists of a promise by only one of the contracting parties”).
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Sonoma Ranch had the unilateral option to make the purchase and thereby complete the
contractual relationship between the parties. See 1 Williston, supra, § 5:15, at 1016. If
Sonoma Ranch were obligated to continue to make annual payments even if it had elected
not to purchase the property, the option would no longer be unilateral. If that were the case,
Sonoma Ranch would be required to pay $750,000 for an option to purchase the property for
$750,000, even if it immediately elected not to purchase the property. The effect of such a
requirement would be tantamount to requiring Sonoma Ranch to purchase the property
because, under the terms of the Option Agreement, it would pay $750,000 for the purchase.
This effect is contrary to the notions of an option contract, the terms of the Option
Agreement, and the parties’ intent as presented in this appeal.
{23} The same reasoning applies to the Garcias’ argument that they are entitled to the
April 26, 2008 annual payment and accrued interest because Sonoma Ranch did not provide
them with notice that it intended to terminate the Option Agreement. As we have discussed,
Sonoma Ranch had the discretion to continue the option by virtue of the unilateral nature of
the option. The Option Agreement required the annual payment but did not specify any
notice in the event that Sonoma Ranch did not wish to exercise the option. Although
Sonoma Ranch could have clarified its actions by providing notice, none was required. The
annual payments were tied to the option. By not making the payment, Sonoma Ranch
abandoned its rights and thereby terminated the Option Agreement.
THE PRESENCE OF OTHER GENUINE ISSUES OF MATERIAL FACT
{24} The Garcias also argue that various provisions of the Option Agreement extend
beyond those of a typical option agreement so as to indicate the bilateral, rather than
unilateral, nature of the Option Agreement. They point to provisions by which they were
required to cooperate with Sonoma Ranch in its effort to obtain annexation, development,
or rezoning of the property; to grant Sonoma Ranch an easement for ingress and egress and
for construction purposes; to permit Sonoma Ranch to move dirt within and from the
property; and to allow Sonoma Ranch to inspect the property.
{25} An option contract is considered unilateral because the optionee solely has the right
to exercise the option. Lake Shore Country Club, 171 N.E. at 501. That is not to say that
there are no bilateral aspects to an option agreement. There must be mutual consideration
underlying the agreement. Sisneros v. Citadel Broad. Co., 2006-NMCA-102, ¶ 31, 140
N.M. 266, 142 P.3d 34 (“A valid contract must possess mutuality of obligation.” (internal
quotation marks and citation omitted)). The provisions specified by the Garcias appear to
be incidental to the grant of the option and do not appear to include any consideration apart
from that pertaining to the grant of the option. As a result, these provisions do not alter the
unilateral nature of the option that is the subject of the Option Agreement or raise genuine
issues of material fact as to the nature of the transaction.
{26} The Garcias also make additional arguments addressing the district court’s ruling
concerning Sonoma Ranch’s rights under the Option Agreement. They contend that the
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district court ignored the provisions of the Option Agreement relating to notice and that time
was of the essence. They assert, in this regard, that, even if the Option Agreement is
unilateral, Sonoma Ranch did not give them appropriate notice under the Option Agreement
to excuse non-payment of the April 26, 2008 annual payment, which included interest. This
argument, however, misapprehends the district court’s ruling.
{27} As we have stated, the unilateral nature of an option is such that the optionee has the
discretion to exercise the option according to the terms of the option. Lake Shore Country
Club, 171 N.E. at 501. Time is of the essence because if the terms for exercise of the option
are not strictly enforced, the optionor will be subject to greater burdens than were the subject
of the bargain. See Best v. Edwards, 176 P.3d 695, 698 (Ariz. Ct. App. 2008) (“[A]n option
must be exercised in strict accordance with its terms because any relaxation of terms would
substantively extend the option contract to subject one party to greater obligations than he
bargained for.” (internal quotation marks and citation omitted)). The Option Agreement did
not address termination, and the district court determined that Sonoma Ranch’s non-payment
ended its obligations under the Option Agreement. This ruling is not affected by the notice
provision of the Option Agreement. Although the annual payments included interest, by
virtue of the unilateral nature of the option, Sonoma Ranch was not obligated to make the
payment if it elected to end its obligation by non-payment. The Garcias’s argument would
have more force if the annual payment could somehow be construed to represent payment
for option time passed—but it cannot. The annual payments required in the Option
Agreement are clearly designed to keep the option open for the following year.
THE AMOUNT OWED FOR THE OPTION
{28} The Garcias alternatively argue that, under the language of the Option Agreement,
Sonoma Ranch owes them $750,000 for the grant of the option. The Option Agreement
states: “As consideration for the grant of this Option, Optionee shall pay Optionors the sum
of $750,000.” In addition, the Option Agreement provides that the property is approximately
twenty-five acres and the option price is $30,000 per acre. Thus, the total price for the
purchase of the property, subject to adjustment as stated in the Option Agreement, is
approximately $750,000. Notwithstanding this language, the Garcias argue that the Option
Agreement is actually a contract to purchase rather than an option.
{29} In essence, the Garcias contend that Sonoma Ranch was required to pay them
$750,000 for an option to purchase property for $750,000. In other words, Sonoma Ranch
had to pay the full amount of the purchase price even though it acquired only an option to
purchase the property; an option that permitted Sonoma Ranch to elect not to purchase the
property. The Garcias ask that we interpret the Option Agreement to reach a conclusion that
is not commercially reasonable, and we decline to do so. See Smith v. Tinley, 100 N.M. 663,
665, 674 P.2d 1123, 1125 (1984) (observing that “an interpretation rendering a contract such
that reasonable men would not enter into it is disfavored”); see also C.R. Anthony Co., 112
N.M. at 510 n.5, 817 P.2d at 244 n.5 (“A court may employ the many rules of contract
interpretation that do not depend on evidence extrinsic to the contract.”).
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{30} With regard to the rules of contract interpretation, the Garcias also argue that this
Court should construe questions concerning the uncertainty of the Option Agreement against
Sonoma Ranch because its attorney drafted the documents stating that “Sonoma Ranch is
paying the Garcias the sum of $750,000.00, plus interest, for the grant of the option.” While,
as a general rule, we construe uncertainties in contracts most strongly against the party
drafting the documents, our purpose in construing a contract is to give effect to the intent of
the parties. Smith, 100 N.M. at 664-65, 674 P.2d at 1124-25; Campos v. Homes by Joe
Boyden, L.L.C., 2006-NMCA-086, ¶ 9, 140 N.M. 122, 140 P.3d 543. However, despite the
Option Agreement’s language concerning Sonoma Ranch’s payment of $750,000 as
consideration for the grant of the option, for the reasons we have discussed, we cannot agree
with the Garcias that the Option Agreement is uncertain. Although the total consideration
for the option was $750,000, the only understanding that comports with the unilateral nature
of an option and is commercially reasonable is that the $750,000 consideration is the full
consideration for the option if Sonoma Ranch were to elect to permit the option to run its full
term.
ESTOPPEL
{31} The Garcias further contend that Sonoma Ranch should be estopped from arguing
that the Option Agreement is a unilateral contract for a variety of reasons: (1) there are
bilateral aspects to the Option Agreement; (2) Sonoma Ranch took actions in April and May
2008 that were contrary to an intent to terminate the Option Agreement; and (3) Sonoma
Ranch has not caused a notice of the Option Agreement to be removed from the files of the
county clerk. The Garcias raise the first and third contentions in their brief on appeal
without having raised them in the district court. We thus do not address them on appeal. See
Crutchfield v. N.M. Dep’t of Taxation & Revenue, 2005-NMCA-022, ¶ 14, 137 N.M. 26, 106
P.3d 1273 (“To preserve error for review, a party must fairly invoke a ruling of the district
court on the same grounds argued in this Court.”).
{32} As to the second contention, the summary judgment record establishes that, in April
2008, Sonoma Ranch paid property taxes on the property to the county. In early May 2008,
the Garcias signed an easement over the property with El Paso Electric Company after Willie
Garcia was informed by the project manager for Sonoma Ranch that Sonoma Ranch did not
have any objection to the Garcias doing so.
{33} The focus of the doctrine of equitable estoppel is “preventing a party from benefitting
from deception or misleading conduct.” Mannick v. Wakeland, 2005-NMCA-098, ¶ 28, 138
N.M. 113, 117 P.3d 919, aff’d by Coppler & Mannick P.C. v. Wakeland, 2005-NMSC-022,
138 N.M. 108, 117 P.3d 914. It requires (1) a false representation or concealment of
material facts, (2) knowledge of true facts, and (3) an intention or expectation that an
innocent party would rely on those facts. Mem’l Med. Ctr., Inc. v. Tatsch Constr., Inc.,
2000-NMSC-030, ¶ 9, 129 N.M. 677, 12 P.3d 431. The required reliance must be to the
innocent party’s detriment. Id.; see also Mannick, 2005-NMCA-098, ¶ 29 (stating that, in
order for a court to provide equitable relief for equitable estoppel, the court must establish
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facts that include a prejudicial change of position).
{34} Sonoma Ranch’s payment of the taxes due could not give rise to equitable estoppel.
Sonoma Ranch paid the taxes on April 14, 2008, twelve days before the annual payment
became due. At that time, the Option Agreement was still in effect, and it required Sonoma
Ranch to make the tax payment. The Garcias do not support their opposition to summary
judgment with material facts that set forth an equitable estoppel issue concerning Sonoma
Ranch’s tax payment.
{35} As to the easement, although the development of the facts in this case could result
in facts supporting the first two requirements of an equitable estoppel claim, the Garcias
have not indicated the manner in which they have detrimentally relied on any representation
stemming from Sonoma Ranch’s action in connection with the easement. They have
asserted that they have suffered damages because Sonoma Ranch has not made payments
under the Option Agreement, but they have not linked the easement to the damages they
have claimed. Nor have they asserted any argument that they were prejudiced or took any
action, or failed to take any action, to their detriment because of Sonoma Ranch’s action in
connection with the easement. The doctrine of equitable estoppel does not apply in these
circumstances.
CONCLUSION
{36} The district court did not err in concluding on summary judgment that Sonoma
Ranch’s failure to make the April 26, 2008 annual payment ended its obligations under the
Option Agreement. The Garcias, as optionors, are not entitled to enforce the Option
Agreement, which, by its nature as an option, gives Sonoma Ranch, as optionee, the right
to fail to exercise its right to purchase the property. See Cillessen, 73 N.M. at 301, 387 P.2d
at 870 (stating that the terms of an option contract must be “fully and completely accepted
in all its parts” before becoming an executory contract). We affirm the district court’s grant
of summary judgment.
{37} IT IS SO ORDERED.
____________________________________
JAMES J. WECHSLER, Judge
WE CONCUR:
____________________________________
MICHAEL D. BUSTAMANTE, Judge
____________________________________
LINDA M. VANZI, Judge
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Topic Index for Garcia v. Sonoma Ranch East II, L.L.C., No. 30,920
CIVIL PROCEDURE
Summary Judgment
CONTRACTS
Breach
Estoppel
Option Agreement
PROPERTY
Purchase Agreement
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