Glenn v. Reese

2009 UT 80
This opinion is subject to revision before final
publication in the Pacific Reporter.
IN THE SUPREME COURT OF THE STATE OF UTAH
----oo0oo----
Endre’ Glenn and Margret Glenn, No. 20080861
Plaintiffs and Appellants,
v.
F I L E D
Robin Reese and Judith Reese,
Defendants and Appellees. December 11, 2009
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Fourth District, Provo Dep’t
The Honorable Samuel D. McVey
No. 080400977
Attorneys: Jason K. Nelsen, Salt Lake City, for plaintiffs
Karra J. Porter, Salt Lake City, for defendants
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DURHAM, Chief Justice:
INTRODUCTION
¶1 This action stems from a Real Estate Purchase Contract
(REPC) executed between Robin and Judith Reese (Buyers) and Endré
and Margret Glenn (Sellers) in December 2007. We are asked to
determine if the district court erred in refusing to grant
summary judgment for the Sellers because the REPC is ambiguous
and cannot be interpreted as a matter of law. Specifically, we
must decide whether the REPC affords Buyers a means to cancel the
REPC because of an appraisal below the purchase price listed in
the REPC. Sellers argue that, though the REPC is unambiguous, it
only permits cancellation based on an appraisal obtained by a
lender. Buyers argue that the REPC allows them to request and
obtain their own appraisal and cancel the REPC based on their
dissatisfaction with that appraisal.
¶2 We hold that the REPC is unambiguous and is broad
enough to allow cancellation based on an unsatisfactory appraisal
obtained by Buyers. Because of this holding, we must also decide
if Buyers complied with the REPC’s cancellation procedure when
they submitted to Sellers two addenda to the REPC. We conclude
that Buyers did not breach the REPC and are entitled to summary
judgment. We therefore remand to the district court for entry of
summary judgment and an award of attorney fees in favor of
Buyers.

No. 20080861 2
BACKGROUND
¶3 On December 19, 2007, Buyers offered to purchase
Sellers’ home (the Property) for $540,000. After some
negotiation, the parties executed a REPC. The REPC indicates
that Buyers would finance the purchase with $410,000 in cash and
$130,000 in a conventional loan from a lender. The REPC also
includes two provisions regarding conditions based on an
appraisal or evaluation of the Property. First, Section 2.4 of
the REPC containes an “Appraisal Condition” that allows Buyers to
cancel the REPC if the Property appraises for less than the
purchase price. Section 2.4 reads:
2.4 Appraisal Condition. Buyer’s obligation
to purchase the Property is conditioned upon
the Property appraising for not less than the
Purchase Price. This condition is referred
to as the “Appraisal Condition.” If the
Appraisal Condition applies and the Buyer
receives written notice from the Lender that
the Property has appraised for less than the
Purchase Price (a “Notice of Appraised
Value”), Buyer may cancel this contract by
providing a copy of such written notice to
Seller no later than three days after Buyer’s
receipt of such written notice.
Second, Section 8 conditions Buyers’ obligation to purchase the
Property upon approval of certain evaluations, including a
physical condition inspection and the availability of homeowner’s
insurance. Specifically, Section 8(e) conditions purchase upon
“[a]ny other [test or evaluation] deemed necessary by buyers.”
In the event that Buyers are dissatisfied with one of these
evaluations, Section 8.2 provides that Buyers may submit to
Sellers either a notice of intent to cancel or a written notice
of objections. If Buyers submit a notice of objections, Section
8.4 grants the parties seven calendar days (the Response Period)
to resolve these objections. If the parties fail to agree on a
method to resolve these objections, Buyer may then cancel the
REPC within three days after the Response Period expires.
¶4 On December 27, 2007, Buyers’ agent engaged JMS Group
Appraising to conduct an appraisal of the Property. The
appraisal placed the value of the Property at $80,000 below the
purchase price. Because Buyers estimated they could pay cash for
the Property if priced at this lower value, they neither applied
nor received a loan from a lender. After receiving the appraisal
on December 28, 2007, Buyers, through their agent, sent Addendum
No. 3 to Sellers on the same day. Addendum No. 3 stated:

3 No. 20080861
1. Purchase price to be $460,000 per
appraised value.
2. If seller does not agree to the new
purchase price contract will be
canceled.
[3]. Earnest Money to be returned to
Buyers.
The Addendum gave Sellers until 6:00 p.m. on the following day to
accept. Sellers did nothing. After the deadline passed without
an answer from Sellers, Buyers submitted Addendum No. 4 on
December 31, 2007, which stated:
1. Seller has failed to respond to
addendum #3. Buyers are canceling
this contract based upon the
appraised value coming in at
460,000 and the seller not
accepting the value as the purchase
price.
2. Earnest money of $5000.00 to be
released to Buyers.
Though Sellers did not sign Addendum No. 4, Sellers’ broker
placed the Property back on the market on January 2, 2008 and
sent an Earnest Money Release Form to Buyers’ agent on January 4,
2008.
¶5 In March 2008, Sellers filed a complaint against
Buyers, which was later amended. In the amended complaint,
Sellers asserted causes of action for breach of contract and
breach of the implied covenant of good faith and fair dealing,
and sought specific performance of the REPC as their sole remedy.
Both parties filed motions for summary judgment. The district
court, at oral argument, denied both motions on the ground that
the REPC was ambiguous. Sellers filed a petition for permission
to appeal from an interlocutory order, pursuant to Rule 5 of the
Utah Rules of Appellate Procedure, contesting the district
court’s denial of their motion for summary judgment. We granted
the petition and have jurisdiction over this interlocutory appeal
pursuant to Utah Code section 78A-3-102(3)(j) (2008).
STANDARD OF REVIEW
¶6 The propriety of a grant or denial of summary judgment
is a question of law, which we review for correctness. R&R
Indus. Park, L.L.C. v. Utah Prop. & Cas. Ins. Guar. Ass’n, 2008
UT 80, ¶ 18, 199 P.3d 917. In doing so, we view “the facts and
all reasonable inferences drawn therefrom in the light most

No. 20080861 4
favorable to the nonmoving party.” Id. (quoting Orvis v.
Johnson, 2008 UT 2, ¶ 6, 177 P.3d 600).
ANALYSIS
¶7 The issue presented in this case is whether the
district court erred in denying summary judgment on the basis
that the REPC is ambiguous. If we conclude the REPC is
unambiguous, we may interpret it as a matter of law and then must
determine if Section 2.4 of the REPC contains Buyers’ only means
of cancellation for an appraisal below the purchase price or if
Section 8’s “other evaluations” is broad enough to allow such a
cancellation. Furthermore, we must determine how or if Addendum
No. 3 and Addendum No. 4 effected either of these sections.
Sellers concede that if the REPC can be interpreted as a matter
of law it may be interpreted in favor of Buyers.
¶8 We hold that the REPC is unambiguous and can be
interpreted as a matter of law because “other evaluations” under
Section 8 includes an appraisal procured by a buyer. We also
hold that Addendum No. 3 to the REPC is an offer to modify the
REPC, which became a nullity upon Sellers’ refusal to accept.
Thus, Buyers’ Addendum No. 4 successfully cancelled the REPC.
I. THE REPC IS UNAMBIGUOUS AND CAN BE
INTERPRETED AS A MATTER OF LAW
¶9 Both Sellers and Buyers argue that the REPC is
unambiguous. Specifically, Sellers contend that Section 2.4
contains Buyers’ only avenue for cancellation upon receipt of the
appraisal below the purchase price and that Section 8 cannot be
read to allow cancellation for the unfavorable appraisal. In
contrast, Buyers assert that Section 2.4 and Section 8 are
mutually exclusive. They argue that Section 2.4 applies only to
cancellations based on an appraisal obtained by a lender and
Section 8 applies to cancellations based on appraisal obtained by
a self-financed buyer.
¶10 Well-accepted rules of contract interpretation require
that we examine the language of a contract to determine meaning
and intent. Café Rio, Inc. v. Larkin-Gifford-Overton, LLC, 2009
UT 27, ¶ 25, 207 P.3d 1235. Where the language is unambiguous,
“the parties’ intentions are determined from the plain meaning of
the contractual language, and the contract may be interpreted as
a matter of law.” Id. (internal quotation marks omitted). We
will also “consider each contract provision . . . in relation to
all of the others, with a view toward giving effect to all and
ignoring none.” Id. (ellipses in original) (internal quotation
marks omitted). The court considers extrinsic evidence of the
parties’ intent only if the language of the contract is

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ambiguous. Id. A contractual term or provision is ambiguous “if
it is capable of more than one reasonable interpretation because
of uncertain meanings of terms, missing terms, or other facial
deficiencies.” Id. (internal quotation marks omitted). When
determining whether the plain language is ambiguous, “we attempt
to harmonize all of the contract’s provisions and all of its
terms.” Cent. Fla. Invs., Inc. v. Parkwest Assocs., 2002 UT 3,
¶ 12, 40 P.3d 599.
¶11 Though Sellers argue that Section 2.4 provides Buyers’
only means of cancellation due to an appraisal less than the
purchase price, a plain reading of the language in Section 2.4
and Section 8 indicates otherwise. Section 2.4 clearly
delineates the method for cancellation based on an unsatisfactory
appraisal obtained by a lender. First, a lender must request an
appraisal and provide a written notice to the buyer indicating
that the property appraised for less than the purchase price.
Then, if the buyer wishes to cancel, she must provide a copy of
the written appraisal notice to the seller within three days.
Thus, it is clear that a party without a lender cannot comply
with this provision because it cannot obtain the requisite
appraisal notice.
¶12 In this case, Buyers did not comply with Section 2.4
because they did not have a lender. After the home appraised at
$80,000 below the purchase price, Buyers felt they could afford
to pay the lower appraised value of the home without resorting to
a lender. Therefore, they did not apply for a loan, and no
lender requested an appraisal on their behalf. Sellers would
have us hold that because Buyers did not comply with Section 2.4,
no other section of the REPC grants them the right to cancel the
contract upon receipt of the unfavorable appraisal. We disagree.
¶13 We hold that the evaluation provision in Section 8 is
broad enough to encompass an appraisal obtained by a self-
financed buyer. Section 8 reads:
Buyer’s obligation to purchase under this
Contract:
(a) IS conditioned upon Buyer’s approval
of the content of all the Seller Disclosures
referenced in Section 7;
(b) IS conditioned upon Buyer’s approval
of a physical condition inspection of the
Property;
. . .
(d) IS conditioned upon Buyer’s approval
of the cost, terms and availability of

1 To contradict this plain language, Sellers would have us
apply two rules of construction; neither changes the outcome.
Sellers argue that the rule of ejusdem generis alters the
analysis because the general term “evaluations” must be
interpreted to refer to evaluations and inspections similar to
those types specifically listed in Section 8. See Café Rio, Inc.
v. Larkin-Gifford-Overton, LLC, 2009 UT 27, ¶ 25, 207 P.3d 1235.
But application of this rule shows that an appraisal, as an
“evaluation,” is similar to the evaluations and inspections
specifically enumerated, namely, “a physical condition inspection
of the Property” and “a survey of the Property.” Therefore, this
rule of construction bolsters our conclusion. Nor are we
convinced by Sellers’ argument that the specific provision of
Section 2.4 governs the general provision of Section 8. Even if
the appraisal condition of Section 2.4 is more specific than the
appraisal condition of Section 8, Section 2.4 states that
“[c]ancellation pursuant to the provisions of any other section
of this Contract shall be governed by such other provisions.”
Consequently, Section 2.4 allows other provisions, regardless of
specificity, to govern.
No. 20080861 6
homeowner’s insurance coverage for the
Property;
(e) IS conditioned upon Buyer’s approval
of the following tests and evaluations of the
Property: (specify) Any other deemed
necessary by buyers.
Under this language, the question is whether an appraisal
qualifies as a type of “test” or “evaluation” deemed necessary by
the buyer. In its common and ordinary usage, “appraise” means
“[t]o determine the value of” or “[t]o estimate the worth or
features of.” Webster’s II New College Dictionary 55 (1995).
Additionally, “evaluate” means “[t]o determine or fix the value
of” or “[t]o examine carefully.” Id. at 388. Furthermore,
“appraise” is a synonym in the definition of “evaluate.” Id. It
is clear that the plain meanings of these terms are so similar as
to be used interchangeably without confusion. Thus, an appraisal
is an evaluation under Section 8.
¶14 Accordingly, because Section 8 gives a buyer the
contractual right to obtain an appraisal, a buyer also has the
corresponding right to cancel the REPC upon dissatisfaction with
the appraised value. The language in Section 8 is clearly
sufficient to treat an appraisal as an evaluation and to allow a
cancellation based on the unsatisfactory appraisal.1
¶15 Despite this reasonable interpretation, Sellers
maintain that an appraisal is not a type of evaluation

2 We note that this debate about cancellation based on an
appraisal has largely been resolved by the newly revised, state
approved REPC form. The revision eliminates Section 2.4 and
provides an appraisal condition in Section 8 that allows the
buyer to cancel the REPC upon notice from a lender or directly
from an appraiser that the property has appraised for less than
the purchase price.
7 No. 20080861
contemplated by Section 8. But Sellers’ interpretation would
compel us to ignore the plain language of the contract. We
decline to do this. As such, under Section 8, the Buyers had the
right to request an appraisal and cancel the REPC upon
dissatisfaction with that appraisal. Any other interpretation
would require a strained reading and judicial contortion
exceeding the bounds of reason. Furthermore, this interpretation
allows each provision to have effect and does not produce absurd
or harsh results.
¶16 Because the plain language of the contract allows no
other reasonable interpretation, we hold that the REPC is
unambiguous and can be interpreted as a matter of law.
Furthermore, we hold that the REPC affords Buyers two
opportunities to cancel the contract based on an unfavorable
appraisal: (1) when the appraisal is obtained by a third-party
lender as described in Section 2.4; or (2) when the appraisal is
obtained by the buyer as described in Section 8. Because Section
2.4 does not govern the appraisal here, Buyers were not required
to submit a written notice of appraisal value to Sellers to
cancel the contract.2
II. ADDENDUM NO. 3 OPERATED AS AN OFFER TO MODIFY
THE CONTRACT AND BECAME A NULLITY UPON
EXPIRATION OF THE TIME PERIOD LISTED
¶17 Sellers argue that even if Section 8 of the REPC allows
Buyers to cancel upon receipt of an unsatisfactory appraisal,
Buyers failed to comply with the requirements of Section 8.
Specifically, Sellers assert that Buyers had only two options if
they found any inspection or evaluation unacceptable: (1) cancel
the REPC through a written notice of cancellation; or (2) provide
Sellers with a written notice of objections, which would have
triggered a seven-day period that allowed Sellers to respond
before Buyers could cancel. Sellers further claim that Addendum
No. 3 cannot operate as a cancellation because it is not clear
and unequivocal. Therefore, according to Sellers, Addendum No. 3
could operate only as a notice of objections and there was
consequently a breach of the REPC when Buyers prematurely
submitted the unequivocal cancellation in Addendum No. 4. In
contrast, Buyers argue that Addendum No. 3 was an offer to

No. 20080861 8
renegotiate that became inoperable upon Sellers’ failure to
assent.
¶18 We agree with Buyers; Addendum No. 3 operated as
neither a cancellation nor a written notice of objections.
Instead, it was an offer to modify the contract and became a
nullity upon refusal. Hence, the original terms of the contract
remained in force until Buyers cancelled the REPC by submitting
Addendum No. 4 to Sellers.
¶19 It is generally accepted that a notice of termination
or cancellation of a contract must be clear and unequivocal. 17B
C.J.S. Contracts § 446 (2009); see Gray v. Bicknell, 86 F.3d
1472, 1479 (8th Cir. 1996) (applying Missouri law); Morris
Silverman Mgmt. Corp. v. W. Union Fin. ServS., Inc., 284 F. Supp.
2d 964, 974 (N.D. Ill. 2003); In re Greater Se. Cmty. Hosp.
Found., Inc., 267 B.R. 7, 18 (Bankr. D.C. 2001); Stovall v.
Publishers Paper Co., 584 P.2d 1375, 1377-78 (Or. 1978); Accu-
Weather, Inc. v. Prospect Commc’ns, Inc., 644 A.2d 1251, 1254
(Pa. Super. Ct. 1994). Furthermore, “a notice of rescission must
be not only unequivocal but unconditional.” Stovall, 584 P.2d at
1378. The focus of any inquiry into the adequacy of cancellation
“is on whether the notice is sufficiently clear to apprise the
other party of the action being taken.” LA-Nevada Transit Co. v.
Marathon Oil Co., 985 F.2d 797, 800 (5th Cir. 1993).
Furthermore, conduct of the parties may be considered to
determine if a clear and unequivocal cancellation has occurred.
Morris Silverman, 284 F. Supp. 2d at 974. “Ambiguous conduct and
language intended to signal contract termination will be deemed
not to have terminated the contract.” Accu-Weather, 644 A.2d at
1254 (internal quotation marks omitted). Though we have yet to
recognize these principles, neither we nor the parties have found
any case law indicating that Utah should not follow these general
rules.
¶20 The inclusion of negotiation language in Addendum No. 3
and the conduct of the parties following its delivery illustrate
that Addendum No. 3 was not a clear and unequivocal cancellation
of the REPC. First, in Addendum No. 3, Buyers communicated their
willingness to negotiate as well as their interest in
cancellation. The commingling of a wish to cancel with a desire
to negotiate and save the contract cannot be seen as an
unequivocal notice of cancellation. Stovall, 584 P.2d at 1380
(“By mixing words of termination with words of compromise,
negotiations, and present obligation, the . . . [written
instrument], when read as a whole, was ambiguous, and as a matter
of law did not meet the requirements which must be satisfied for
a legally effective notice of the termination of the contract.”).
If Sellers had chosen to engage in such negotiations, Addendum
No. 3 would not have operated to cancel the contract.

9 No. 20080861
¶21 Moreover, Buyers’ submission of Addendum No. 4 and
Sellers’ release of the earnest money after receipt of Addendum
No. 4 illustrate that neither party considered the REPC cancelled
after Addendum No. 3. If Sellers had considered the contract
cancelled after Addendum No. 3 the earnest money should have been
returned following the expiration of the negotiation period
specified in Addendum No. 3. Similarly, if Buyers had considered
Addendum No. 3 sufficient to cancel the REPC as well as their
obligations under it, they would not have felt the need to
transmit Addendum No. 4. Both parties’ conduct after the
submission of Addendum No. 3 illustrates that neither considered
Addendum No. 3 sufficient to cancel the REPC. Accordingly, we
agree with Sellers that Addendum No. 3 is not a clear and
unequivocal intent to cancel.
¶22 However, we do not agree with Sellers’ argument that
Addendum No. 3, if not a cancellation, must be a notice of
objections. While Section 8.2 gives Buyers the right to cancel
or submit a notice of objections upon an unsatisfactory
evaluation, nothing in the contract prevented Buyers from taking
an altogether different course of action. In this case, Buyers
attempted to renegotiate.
¶23 Parties to a written contract have the right to modify,
waive, or make new contractual terms. Softsolutions, Inc. v.
Brigham Young Univ., 2000 UT 46, ¶ 34, 1 P.3d 1095. This is true
even despite the presence of “express contractual language to the
contrary.” Id.; see also Rapp v. Mountain States Tel. & Tel.
Co., 606 P.2d 1189, 1191 (Utah 1980) (“It is well-settled law
that the parties to a contract may, by mutual consent, alter all
or any portion of that contract by agreeing upon a modification
thereof.”); Cheney v. Rucker, 381 P.2d 86, 89 (Utah 1963) (“It is
fundamental that where parties have rights under an existing
contract they have exactly the same power to renegotiate terms
. . . as they had to make the contract in the first place.”).
This right to renegotiate was illustrated in an analogous case,
Scott v. Majors, 1999 UT App 139, 980 P.2d 214.
¶24 In Scott, the trial court ordered the seller to sell
her property according to the terms of a REPC, but deferred
ruling on attorney fees, costs and damages. Id. ¶ 2. In an
attempt to negotiate these costs and fees, the buyer asked the
seller to sign a mutual release agreement providing for $5,000 to
the buyer as costs, damages, and attorney fees. Id. ¶ 3. The
seller refused to agree and, in a subsequent appeal, argued that
the buyer repudiated the contract by conditioning his performance
of the REPC on her consent to the mutual release agreement. Id.
¶ 17. The court held that the proposal “was an offer to modify

No. 20080861 10
the original contract which [the seller] rejected, leaving the
original contract in full force.” Id. ¶ 18.
¶25 We agree with this reasoning. Rather than a written
notice of objections, Addendum No. 3 was an offer to modify and
thus an attempt to renegotiate a contract term. This is
evidenced by the language of Addendum No. 3, which reads, in
part:
Seller shall have until 6:00 PM Mountain Time
on December 29, 2007 to accept the terms of
this ADDENDUM in accordance with the
provisions of Section 23 of the REPC. Unless
so accepted, the offer as set forth in this
ADDENDUM shall lapse.
Section 23 of the REPC reads:
ACCEPTANCE. “Acceptance” occurs when Seller
or Buyer, responding to an offer or
counteroffer of the other: (a) signs the
offer or counteroffer where noted to indicate
acceptance; and (b) communicates to the other
party or to the other party’s agent that the
offer or counteroffer has been signed as
required.
Because Sellers did not sign the addendum, they failed to accept
the offer to modify. Consequently, the offer lapsed and never
became part of the contract.
¶26 We hold that Addendum No. 3 was neither a cancellation
nor a written notice of objections, but an offer to modify that
became a nullity. Buyers therefore retained the right to cancel
based on an unsatisfactory evaluation under the REPC until
January 5, 2008, the Evaluations & Inspections Deadline. Buyers’
submission of Addendum No. 4, an unequivocal notice of intent to
cancel, to Sellers on December 31, 2007, complied with Section
8.2 and thus cancelled the REPC and all Buyers’ obligations
thereunder.
CONCLUSION
¶27 We conclude that the REPC is unambiguous and can be
interpreted as a matter of law. Furthermore, we hold that
Section 8 of the REPC is broad enough to include an appraisal
obtained by a self-financed buyer. Also, we hold that Addendum
No. 3 was an offer to modify the contract that became a nullity
upon Seller’s refusal to accept. Addendum No. 4 was sufficient
to cancel the REPC. We therefore remand to the district court

11 No. 20080861
for entry of summary judgment and an award of attorney fees in
favor of Buyers.
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¶28 Justice Wilkins, Justice Parrish, and Justice Nehring
concur in Chief Justice Durham’s opinion.
¶29 Having disqualified himself, Associate Chief Justice
Durrant does not participate herein.