Reiner v. Reiner

Excerpt

The plaintiff sought, inter alia, a declaratory judgment from the trial court determining the manner in which the plaintiff's buy out of the defendant's interest in certain parcels of real property pursuant to their settlement agreement was to be calculated. The settlement agreement provided that the buyout amount would be based on the fair market value of each property multiplied by the defendant's interest in each property. The parties disagreed as to whether ''interest,'' as used in the settlement agreement, meant equitable interest or a percentage of the fair market value of the property, without taking into account any existing mort- gages. This court, in a prior action between the parties, had determined that the settlement agreement was ambiguous with respect to the calcu- lation of the buyout amount. In the present case, the trial court, noting that it was bound by this court's prior decision, determined that the term ''interest'' meant ''equitable interest'' and, accordingly, that the calculation of the buyout amount required consideration of the existing mortgages on the properties. On the defendant's appeal to this court, held that the trial court properly determined that the buyout amount for the defendant's interests in the properties was to be calculated by multiplying his percentage interest in each property by the difference of its fair market value minus any outstanding mortgage debt: contrary to the defendant's claim, the trial court's reliance on § 201 of the Restatement (Second) of Contracts in resolving the underlying action, rather than § 220 of the Restatement (Second) of Contracts, was not improper because § 220 was not applicable, as the word ''interest'' as used in the settlement agreement had no habitual or customary meaning, § 201 was applicable because the parties attached different meanings to the term ''interest,'' and there was ample evidence to support the trial court's determination that the defendant had reason to know that the pla