July 08, 2010 – Fred A. Dantonio v. Charles L. Crowder, Philip M. Crowder, Charles Lorne Crowder, Orlando Cervantes, and Bernard R. Given, No. 27,800

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IN THE COURT OF APPEALS OF THE STATE OF NEW MEXICO
Opinion Number:

Filing Date: _ July 8, 2010

NO. 27,800

FRED A. DANTONIO,

Plaintiff-A ppellant,
V.
CHARLES L. CROWDER, PHILIP M. CROWDER,
CHARLES LORNE CROWDER, ORLANDO
CERVANTES, and BERNARD R. GIVEN,

Defendants-A ppellees.

APPEAL FROM THE DISTRICT COURT OF DONA ANA COUNTY
Robert E. Robles, District Judge

Jane B. Yohalem
Santa Fe, NM

for Appellant
Cervantes Law Firm, P.C.

K. Joseph Cervantes
Las Cruces, NM

L. Helen Bennett, P.C.
L. Helen Bennett

Albuquerque, NM

for Appellees

OPINION
CASTILLO, Judge.
{1} 	In this case we consider the effect of a reversionary clause in a deed which is
the subject of a settlement agreement. We hold that the grantee failed to comply with
the requirements of the clause and, thus, reversion was warranted. Accordingly, we
affirm.
I. 	BACKGROUND
{2} 	Appellant Fred A. Dantonio appeals entry of an order granting title to a 52.8-
acre tract (the Fifty-two Acres) in favor of Appellee Orlando Cervantes. The case
began in January 1992 when Charles and Phyllis Crowder (the Crowders) conveyed
the Fifty-two Acres to the nonprofit organization Southwest Regional High School,
Inc. (SWRHS). The deed contained a reversionary condition that limited the use of
the property to educational facilities only and required that SWRHS commence
construction of the educational facilities prior to January 16, 1994.
{3} 	In 1994, questions arose regarding whether SWRHS complied with the
condition and whether SWRHS’s alleged non-compliance effected an automatic
reversion of the Fifty-two Acres to the Crowders. 	To resolve these questions,
SWRHS 	filed 	a 	quiet 	title 	action 	in 	district 	court 	and 	the 	Crowders 	filed
counterclaims.

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{4} 	In March 1995, the Crowders and SWRHS executed a written settlement
agreement resolving all claims arising from the 1994 quiet title action. The terms of
that settlement agreement established a schedule for the construction of the
educational facilities that set forth specific dates for the commencement and
completion of construction of the ninth, tenth, eleventh, and twelfth-grade classroom
buildings as well as the dates by which those classrooms would open with students.
The settlement agreement directed that the Fifty-two Acres would automatically revert
to the Crowders if SWRHS: 	(1) failed to operate a high school on the land after
August 1996 or (2) failed to obtain accreditation for the high school and maintain that
accreditation after the twelfth grade was constructed and twelfth-grade students
matriculated. Finally, the settlement agreement provided that once the “requirements”
of the construction schedule were satisfied and “accreditation of the high school” was
initially secured, the Crowders would execute a waiver of “those requirements.”
{5} 	SWRHS completed construction of the ninth-grade classroom building,
matriculated students for the ninth grade, and obtained accreditation for the ninth-
grade class within the time required under the settlement agreement. The ninth-grade
classroom, however, operated for only a single year. 	SWRHS failed to construct
classrooms for the tenth, eleventh, and twelfth grades. 	SWRHS never received
accreditation as a high school and abandoned all but twelve acres of the parcel (the

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Twelve Acres).
{6} 	As a result of bankruptcy and other proceedings immaterial to this appeal, the
Crowders’ interest in the Fifty-two Acres was transferred to Cervantes. In July 2002,
SWRHS attempted to convey its interest in the Twelve Acres to Dantonio by
quitclaim deed. Dantonio is a former member of SWRHS’s board of directors and
contributed money to SWRHS.
{7} 	On January 15, 2003, Dantonio filed suit to quiet title to the Twelve Acres. In
response, Cervantes filed an answer, counterclaim, and cross-claim asking that the
court quiet title in his favor to the full Fifty-two Acres. Three months later, Cervantes
filed a motion for partial summary judgment on the basis that Dantonio had no interest
in the property because the Twelve Acres, which is part of the Fifty-two Acres, had
already automatically reverted pursuant to the terms of the settlement agreement.
{8} 	The district court originally denied Cervantes’ motion. In concluding that the
reversionary condition had been terminated as to the Twelve Acres, the district court
determined the following: 	forfeiture provisions are not favored, the settlement
agreement created a divisible condition subsequent, and partial reversion was
preferable. However, the court concluded that the remainder of the Fifty-two Acres
remained subject to the reversionary clause and reverted.
{9} 	In 	January 	2007, 	Cervantes 	filed 	a 	timely 	motion 	for 	reconsideration

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challenging the district court’s conclusion that the settlement agreement created a
divisible condition subsequent. 	Cervantes argued that the terms of the settlement
agreement required SWRHS to construct and continuously operate a four- year high
school and that Dantonio was not entitled to a waiver of the reversionary condition
merely because SWRHS constructed a ninth-grade classroom and operated a ninth-
grade class for a single year. Finally, Cervantes asserted that the doctrine of partial
reversion was inapplicable.
{10} 	Reversing its previous ruling, the court granted the motion to reconsider. 	It
concluded that the doctrine of partial reversion was not applicable; that the Fifty-two
Acres reverted; and, consequently, that it erred in quieting title to the Twelve Acres
in favor of Dantonio. The district court quieted title to the Fifty-two Acres as to any
and all adverse claims in favor of Cervantes. Dantonio appeals from this decision.
II. 	DISCUSSION
{11} 	Dantonio makes four arguments in support of reversal. He first asserts that the
settlement agreement superseded the deed. Alternatively, he contends that a reversion
was not triggered. Second, Dantonio argues that the settlement agreement established
a divisible contract. 	Third, Dantonio claims the doctrine of partial reversion is
applicable in this matter. Fourth, Dantonio claims that principles of equity prohibit
reversion. We address each in turn.

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A. 	Standard of Review
{12} 	This case comes to us from the district court’s order granting Cervantes’ motion
for partial summary judgment. “Summary judgment is proper if there are no genuine
issues of material fact and the movant is entitled to judgment as a matter of law.”
Roth v. Thompson, 113 N.M. 331, 334, 825 P.2d 1241, 1244 (1992). “The applicable
standard of review of an appeal on summary judgment is de novo, and this Court need
not defer to the trial court’s analysis of the record and its conclusions of law.” Vill.
of Wagon Mound v. Mora Trust, 2003-NMCA-035, ¶ 57, 133 N.M. 373, 62 P.3d 1255
(filed 2002). To the extent that the issues on review require an expanded discussion
of the standard of review, we do so in the context of each issue addressed.
B. 	Deed and Settlement Agreement
{13} 	Dantonio does little to explain the significance of his contention that the
settlement agreement “superseded” the deed. The settlement agreement arose out of
the Crowders’ and SWRHS’s dispute as to whether the reversionary condition in the
deed had been violated. In our view and under these circumstances, the settlement
agreement effected a forbearance of the reversionary condition in the deed. 	That
forbearance was conditioned upon SWRHS’s compliance with the terms of the
settlement 	agreement. 	Accordingly, 	Dantonio’s 	assertion 	that 	the 	settlement
agreement superseded the deed is accurate but only in the sense that the terms of the

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settlement agreement now take primacy as to the conditions under which automatic
reversion is triggered. The settlement agreement did not, however, render the deed
a nullity. Title to the property is effected by both documents.
{14} 	In the alternative, Dantonio contends that a reversion was not triggered. To
address the party’s argument, we examine both the reversionary language in the deed
and the pertinent provisions of the settlement agreement.
{15} 	The 1992 deed states as follows:
[The Crowders] for consideration paid, quitclaim to [SWRHS] . . . the
[Fifty-two Acres] . . .
Provided, however, this property shall be used only for
educational facilities. 	This restriction shall apply to the
Grantee, its successors or assigns, and shall run with land.
The [Fifty-two acre parcel] shall revert to Grantors if not
used for educational facilities. Grantee, its successors or
assigns, shall commence construction of these educational
facilities prior to January 16, 1994[,] or title to this property
shall automatically and without exception revert to the
Grantors or their successors or assigns.
There are three pertinent provisions in the settlement agreement. 	Paragraph two
establishes a specific construction schedule:
2. 	SWRHS further agrees that it will at a minimum complete the
actual physical construction of the following permanent classroom
buildings:
A. 	Ninth grade: will commence actual physical construction
by October 2, 1995, and will complete construction (issuance of
a Certificate of Occupancy) by July 30, 1996[,] and will open

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ninth grade with students in August 1996.
B. 	Tenth grade: will commence actual physical construction
by October 2, 1996, and will complete construction (issuance of
a Certificate of Occupancy) by July 30, 1997[,] and will open
tenth grade with students in August 1997.
C. 	Eleventh 	grade: 	will 	commence 	actual 	physical
construction by October 2, 1997, and will complete construction
(issuance of a Certificate of Occupancy) by July 30, 1998[,] and
will open eleventh grade with students in August 1998.
D. 	Twelfth grade: will commence actual physical construction
by October 2, 1998, and will complete construction (issuance of
a Certificate of Occupancy) by July 30, 1999[,] and will open
twelfth grade with students in August 1999.
Paragraph five of the settlement agreement establishes the conditions under which an
automatic reversion is triggered and under what circumstances SWRHS was entitled
to a waiver.
SWRHS agrees that should the Land fail to be used for the continuous
operation after August 1996 of a co-educational high school . . . or fail
to be accredited without delay after the matriculation and start of the first
twelfth-grade class, and to remain accredited thereafter, the title to the
Land shall automatically revert back to [the Crowders] or to their order.
However, upon the satisfaction of the requirements of ¶ 2 . . . of this
Agreement by SWRHS and upon obtaining of accreditation of the high
school, the Crowders . . . agree to execute a recordable waiver of those
requirements, and deliver such to SWRHS for recordation. Conversely,
. . . should the Land ever fail to be used as set forth in this paragraph, or,
after having become accredited, cease to be accredited, SWRHS shall
execute a recordable instrument acknowledging that the Land has
reverted to [the Crowders].
Paragraph six is similar in many respects to paragraph five.

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SWRHS agrees that if any of the deadlines set forth in paragraphs 1 and
2 . . . are not met, or the terms and conditions described in paragraphs 3
through 5 herein are not met, title to the Land shall revert automatically
back to [the Crowders]. . . . However, upon the satisfaction of the
requirements of [paragraph] 2 . . . of this Agreement by SWRHS and
upon the obtaining of accreditation of the high school, the Crowders . . .
agree to execute a recordable waiver of those requirements, and deliver
such to SWRHS for recordation. Conversely, . . . should the deadlines
set forth in paragraphs 1 and 2 . . . and conditions set forth in paragraphs
3 through 5 herein not be met, SWRHS shall execute a recordable
instrument acknowledging that the Land has reverted to [the Crowders.]
{16} 	As described above, the settlement agreement controls as to the conditions
under which an automatic reversion is triggered. 	Paragraphs five and six of the
settlement agreement set out those conditions. The first sentence of paragraph five
states that the Fifty-two Acres automatically revert to the Crowders (1) if SWRHS
fails to continuously operate a coeducational high school after August 1996 or (2) if
SWRHS fails to obtain accreditation of a high school and maintain that accreditation
after 	the 	twelfth-grade 	classroom 	is 	constructed 	and 	twelfth-grade 	students
matriculate.
{17} 	The second sentence of paragraph five provides the conditions under which
SWRHS was entitled to a waiver of the automatic reversionary condition and the
scope of that waiver. In its initial order, the district court found this sentence unclear
and ambiguous. We disagree. SWRHS was entitled to a waiver upon satisfaction of
the requirements of paragraph two, i.e., full compliance with the construction schedule

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of all building for grades ninth through twelfth, and upon obtaining accreditation of
the high school. Neither of these requirements were satisfied. Accordingly, SWRHS
was not entitled to a waiver. As such, we need not address the issue of the scope of
that waiver.
{18} 	The effect of paragraph five under the present circumstances is clear. SWRHS
was required to build and operate a four-year high school. 	It was also required to
obtain and maintain accreditation for that high school. Neither of these requirements
were fulfilled. 	The consequence of nonoccurrence was automatic reversion of the
Fifty-two Acres to the Crowders.
C. 	Divisible Contract
{19} 	Dantonio claims that the settlement agreement established a divisible contract
and, therefore, the reversionary clause was waived as to the ninth-grade classroom
building and the Twelve Acres. Whether a contract is entire or divisible depends upon
its language and subject matter. Walters v. United States Fid. & Guar. Co., 35 N.M.
4, 7, 288 P. 1044, 1046 (1930). “It is largely a question of construction in each case.”
Id. “Interpretation of an unambiguous contract is a question of law which we review
de novo.” Campbell v. Millennium Ventures, LLC, 2002-NMCA-101, ¶ 15, 132 N.M.
733, 55 P.3d 429 (internal quotation marks and citation omitted).
{20} 	Dantonio does not argue that the terms of the settlement agreement are

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ambiguous. Accordingly, we need not consider the extrinsic evidence Dantonio cites
to support his claim that the parties intended a divisible contract. See City of Sunland
Park v. Harris News, Inc., 2005-NMCA-128, ¶ 13, 138 N.M. 588, 124 P.3d 566 (“If
the district court determines that the contract is not ambiguous, it need not admit the
extrinsic evidence to aid it in its interpretation.”). We rely solely on the terms of the
agreement itself. See Heimann v. Kinder-Morgan CO2 Co., 2006-NMCA-127, ¶ 13,
140 N.M. 552, 144 P.3d 111 (“We give effect to the intent of the parties, and when the
terms of the agreement are clear and unambiguous, courts try to ascertain the intent
of the parties from the ordinary meaning of the language in the agreement.” (internal
quotation marks and citation omitted)).
{21} 	The law governing divisible contracts is well settled. “A severable or divisible
contract has been defined as one under which the whole performance is divided into
two sets of partial performances, each part of each set being the agreed exchange for
a corresponding part of the set of performances to be rendered by the other promisor.”
Arrow Gas Co. of Dell City, Tex. v. Lewis, 71 N.M. 232, 239, 377 P.2d 655, 659
(1963).
In determining whether or not a contract is divisible, the governing
principle is the manifested intention of the parties in view of the nature
of the contract, that is, their intention to have performance of the contract
in parts and have the performance of a part on one side the price or
exchange of a corresponding part on the other.

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Id. “There is a presumption against finding a contract divisible, unless divisibility is
expressly stated in the contract itself, or the intent of the parties to treat the contract
as divisible is otherwise clearly manifested.” 	15 Richard A. Lord, Williston On
Contracts § 45:4, at 275 (4th ed. 2000).
{22} 	Dantonio claims that the settlement agreement pairs the completion of the
building requirements of paragraph two with waiver of the reversionary condition.
As evidence of this claim, he cites language from paragraph five of the settlement
agreement. 	We discussed paragraph five at length in the preceding section of this
opinion.
{23} 	Under the terms of paragraph five, reversion is automatically triggered if
SWRHS fails to use the Fifty-two Acres for a high school after 1996 or if SWRHS
fails to obtain and maintain accreditation of a high school after matriculation of the
initial twelfth-grade class. SWRHS was entitled to a waiver upon construction of all
four grades together with obtaining accreditation of the high school. 	Reversion
remained automatic if SWRHS thereafter failed to maintain accreditation.
{24} 	We find nothing in the language of paragraph five which indicates the parties
intended a divisible contract which would provide for a complete waiver of the
reversionary condition upon the completion of the construction and accreditation of
each of the four grades. 	Indeed, in his brief-in-chief, Dantonio appears to all but

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concede that the language of the settlement agreement does not support this argument.
There, he acknowledges that the settlement agreement does not explicitly provide for
separate waivers of the reversionary conditions for each building.
{25} 	The remainder of Dantonio’s arguments regarding divisibility are equally
unpersuasive. Dantonio asserts that because separate deadlines were assigned for the
construction of each classroom building, this suggests the parties intended a divisible
contract. 	This assertion ignores the fact that paragraph five requires SWRHS to
complete all four of the classroom buildings and obtain accreditation before an
entitlement to a waiver is triggered.
{26} 	Dantonio next emphasizes the parties’ decision to use of the word “land” in the
settlement agreement as evidence that the parties intended divisibility. According to
Dantonio, the parties use of the term “land” indicates that they did not intend for any
buildings constructed to revert. 	We disagree with this assessment. 	The parties’
decision to use the broadest term to specify the interest subject to the reversion proves
that the land and any improvements on it would automatically revert.
{27} 	Dantonio cites the Restatement (Second) of Contracts § 240 (1981), as authority
for the assertion that the intent of the parties as represented in the contract is not the
key factor in deciding whether a contract is divisible. This claim is inconsistent with
our law. 	As discussed above, the governing principle in determining whether a

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contract is divisible is the manifested intention of the parties. Arrow Gas Co. of Dell
City, Tex., 71 N.M. at 239, 377 P.2d at 659.
{28} 	Nevertheless, after reviewing the section of the Restatement cited by Dantonio,
we see nothing in it which calls into question our conclusion that the settlement
agreement is not divisible. The Restatement indicates that “[w]hether it is proper to
regard the parts of each pair as agreed equivalents will usually depend on
considerations of fairness.” Restatement, supra, cmt. e. We see no basis in fairness
to conclude that the settlement agreement is divisible where the unambiguous
language of the agreement in no way reflects intended divisibility of the parties. See
United Props. Ltd. v. Walgreen Props., Inc., 2003-NMCA-140, ¶ 10, 134 N.M. 725,
82 P.3d 535 (“[C]ourts may not rewrite obligations that the parties have freely
bargained for themselves . . . [i]n the absence of fraud, unconscionability, or other
grossly inequitable conduct.” (alteration in original) (internal quotation marks and
citation omitted)).
D. 	Partial Reversion
{29} 	Dantonio argues that the doctrine of partial reversion should have been applied
in this case to prevent SWRHS from having to completely forfeit its interest in the
Fifty-two Acres. The doctrine of partial reversion, however, is not applicable under

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the circumstances of this case. There are two cases in New Mexico discussing the
doctrine of partial reversion, Thomas v. City of Santa Fe, 112 N.M. 456, 816 P.2d 525
(Ct. App. 1991), and Maloof v. Prieskorn, 2004-NMCA-126, 136 N.M. 516, 101 P.3d
327. We first adopted the doctrine in Thomas where we explained that “[t]he doctrine
of partial reversion is based on the court’s desire to avoid forfeiture whenever possible
and should only be applied when no other means of avoiding a forfeiture are
possible.” Thomas, 112 N.M. at 460, 816 P.2d at 529 (alteration in original) (internal
quotation marks and citation omitted); Maloof, 2004-NMCA-126, ¶ 8 (“The guiding
force behind the doctrine is the principle that reversionary language will be strictly
construed so as to avoid forfeiture.”). 	We further explained in Maloof that our
discussion of partial reversion in Thomas supported the conclusion that “where there
is a partial failure to comply with a reversionary clause, the judicial desire to avoid
forfeiture will either lead to no forfeiture or will limit reversion to the affected
property only.” Maloof, 2004-NMCA-126, ¶ 10. Crucially, however, we concluded
in both cases that a partial reversion is only permissible where “the intent underlying
the reversionary language” indicates that the parties intended to allow a partial
reversion. Id. ¶ 8; Thomas, 112 N.M. at 461, 816 P.2d at 530.
{30} 	Dantonio conflates the doctrines of divisibility and partial reversion and appears
to be arguing that we may deem a contract divisible in order to avoid a complete

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forfeiture and to effect a partial reversion. 	As previously discussed, whether a
contract is divisible is a question of contract law. 	Walters, 35 N.M. at 7, 288 P. at
1046. We have concluded, under principles of contract, that the settlement agreement
in the present matter did not create a divisible contract. 	Whether the doctrine of
partial reversion is applicable in this matter is a wholly separate inquiry. For the two
reasons explained below, we disagree the doctrine is applicable here.
{31} 	First, Dantonio acknowledges that whether the parties expressed an intent to
allow a partial reversion is the controlling inquiry to determine whether the doctrine
is applicable. Maloof, 2004-NMCA-126, ¶ 8; Thomas, 112 N.M. at 461, 816 P.2d at
530. 	Yet, he has failed to demonstrate that the parties expressed such an intent.
Dantonio instead relies primarily on the presumption that “partial reversion is
favored” and then argues that this presumption shall prevail absent “a clear statement
of intent to prohibit [a partial reversion].” Dantonio misreads the law.
{32} 	Dantonio’s contention that partial reversion is applicable here because the
parties did not express an intent to prohibit it is the converse of our law. The doctrine
of partial reversion is applicable where the parties intended for it to apply. Maloof,
2004-NMCA-126, ¶ 8; Thomas, 112 N.M. at 461, 816 P.2d at 530. 	Furthermore,
while it is settled law that conditions which work complete forfeitures are disfavored,
it is equally settled that “[e]ach party to a contract has a duty to read and familiarize

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himself with its contents before he signs and delivers it, and if the contract is plain and
unequivocal in its terms, each is ordinarily bound thereby.” 	Smith v. Price’s
Creameries, 98 N.M. 541, 545, 650 P.2d 825, 829 (1982). Accordingly, our Supreme
Court said in Berger v. Santa Fe College, 28 N.M. 545, 549, 215 P. 825, 826 (1923),
that while “[i]t may be said that conditions which, if enforced, work a forfeiture of the
estate are not favored in the law, and are to be construed strictly and most strongly
against the grantor[,] . . . where the language is plain, the condition will ordinarily be
enforced.” (Citation omitted.) We find nothing which indicates a partial reversion is
allowable under the settlement agreement. 	To the contrary, allowing a partial
reversion in this case would frustrate the plain terms of that agreement.
{33} 	Second, both Thomas and Maloof are distinguishable from the present matter.
In both Thomas and Maloof, a partial reversion was sought by the grantors. Maloof,
2004-NMCA-126, ¶¶ 2-7; Thomas, 112 N.M. at 458, 816 P.2d at 527. In both cases,
the allegation was that the grantees were only partially complying with the
reversionary conditions at issue in those cases. 	Maloof, 2004-NMCA-126, ¶¶ 10-12;
Thomas, 112 N.M. at 458, 816 P.2d at 527. In both cases, portions of the land subject
to the reversionary condition were being used in compliance with the condition.
Maloof, 2004-NMCA-126, ¶ 11; Thomas, 112 N.M. at 458, 816 P.2d at 527.
{34} 	The present matter is nothing like these cases. Dantonio, the grantee, is seeking

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to apply the doctrine of partial reversion. There is no dispute that the reversionary
condition has been violated in toto. 	No portion of the land is being used in
compliance with the condition. 	In fact, the majority of the land subject to the
reversionary condition was previously abandoned. 	Thus, what we said in Maloof,
2004-NMCA-126, ¶ 10—the judicial desire to avoid forfeiture will lead to either no
forfeiture or partial forfeiture where there is only partial compliance with the
reversionary condition—is inapplicable here where partial compliance has not been
shown and the grantee completely failed to abide by the condition. These distinctions
are significant and serve as a basis to conclude that the doctrine of partial reversion,
as it has been developed and applied in Maloof and Thomas, is inapplicable here.
V. 	Equity
{35} 	Finally, Dantonio argues that principles of equity apply and prevent the
forfeiture of the Twelve Acres. 	“Equity denotes a spirit of fairness and justness
between parties whose rights or claims are in conflict.” Albuquerque Nat’l Bank v.
Albuquerque Ranch Estates, Inc., 99 N.M. 95, 654 P.2d 548 (1982), rejected on other
grounds by J.R. Hale Contracting Co., Inc. v. United N.M. Bank, 110 N.M. 712, 717
n.1, 799 P.2d 581, 586 n.1 (1990). “Although equity abhors forfeitures, the decision
whether under the existing facts and equitable factors present before the court a
forfeiture or termination should be permitted is a matter for determination by the trial

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judge.” 	Id. 	The district court’s determination to grant equitable relief is reviewed
only for an abuse of discretion. Nearburg v. Yates Petroleum Corp., 1997-NMCA-
069, ¶ 9, 123 N.M. 526, 943 P.2d 560.
{36} 	The district court considered Dantonio’s equitable arguments and nevertheless
quieted title in favor of Cervantes. We cannot say this was an abuse of discretion.
The 	terms 	of 	the 	settlement 	agreement 	included 	reversion 	as 	an 	automatic
consequence for non-compliance.
CONCLUSION
{37} 	For the foregoing reasons, the district court’s decision is affirmed.
{38} 	IT IS SO ORDERED.
________________________________
CELIA FOY CASTILLO, Judge

WE CONCUR:

JONATHANB. SUTIN, Judge

RODERICK T. KENNEDY, J udge

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