“Section 233 of title 15 provides that a party may rescind a contract when consent was given by mistake. Rescission, not reformation, is the proper remedy when an apparent contract is made because of mutual mistake of fact even when the contract has been executed.”
How later courts described this case
- “Section 233 of title 15 provides that a party may rescind a contract when consent was given by mistake. Rescission, not reformation, is the proper remedy when an apparent contract is made because of mutual mistake of fact even when the contract has been executed.”
- “When there is a mutual mistake of fact as to a material element of the contract, a meeting of the minds is absent.”
- “If language of a contract is clear and free of ambiguity the court is to interpret it as a matter of law, giving effect to the mutual intent of the parties at the time of contracting.”
Written by the judges who cited it.
The opinion
IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF OKLAHOMA
JOHN L. MECOM, III, TRUSTEE OF THE )
KATHLEEN B. MULLENDORE TRUST, )
)
Plaintiff, )
)
v. ) Case No. 21-CV-00258-GKF-CDL
)
HUNTER MORRIS, )
)
Defendant.
OPINION AND ORDER
This matter comes before the court on the Motion for Summary Judgment [Doc. 23] of
plaintiff John L. Mecom, III, Trustee of the Kathleen B. Mullendore Trust and the Motion for
Partial Summary Judgment [Doc. 43] of defendant Hunter Morris. For the reasons set forth below,
the Trust’s motion for summary judgment is denied. Morris’s motion for partial summary
judgment is granted in part and denied in part.
I. Background and Procedural History
This is an interpleader action to determine entitlement to a $500,000.00 earnest money
deposit made with Musselman Abstract Company related to the sale of 19,200 acres in Osage
County and Washington County, Oklahoma (40 acres located in Chautauqua County, Kansas),
commonly referred to as the Mullendore Ranch (Ranch). On May 5, 2021, Musselman Abstract
Company filed a Petition and Interpleader in the District Court in and for Washington County,
State of Oklahoma, as both seller the Kathleen B. Mullendore Trust (the Trust) and buyer Hunter
Morris had claimed entitlement to the earnest money and demanded payment of the full sum. [Doc.
2-2]. Morris filed an Answer [Doc. 11], and the Trust filed an Answer [Doc. 6], as well as a
Crossclaim for breach of contract [Doc. 7].
Morris filed a motion to dismiss the Trust’s Crossclaim, which the court denied. [Doc. 29].
On December 6, 2021, Morris filed a Crossclaim against the Trust that included five counts: (1)
fraud; (2) rescission; (3) breach of contract; (4) declaratory judgment determination that Morris
was entitled to terminate the Purchase Agreement and to a return of the Earnest Money pursuant
to Section 23(A) of the Purchase Agreement; and (5) declaratory judgment determination that
Morris is excused from his closing obligations under the Purchase Agreement, and is entitled to a
return of the Earnest Money pursuant to Exhibit A of Section 16 to the Purchase Agreement. [Doc.
33, pp. 13-17].
On December 14, 2021, the court dismissed Musselman Abstract Company from the
proceedings and realigned the parties to show John L. Mecom, III, Trustee of the Kathleen B.
Mullendore Trust as plaintiff and Hunter Morris as defendant. [Doc. 35]. On December 20, 2021,
the Court Clerk’s Office received an interpleader deposit in the sum of $498,335.86.1 [Doc. 36].
The Trust filed the Motion for Summary Judgment [Doc. 23] seeking judgment as a matter
of law as to its breach of contract claim.2 [Doc. 23]. Morris responded in opposition [Doc. 24],
and the Trust filed a reply [Doc. 28].
On March 16, 2022, Morris filed a motion for partial summary judgment on his claims for
declaratory judgment, rescission, and breach of contract. [Doc. 43]. The Trust filed a response in
opposition [Doc. 49], and Morris filed a reply [Doc. 50]. Thus, both the Trust’s motion for
1 The interpleader deposit represents the $500,000.00 earnest money deposit by Musselman
Abstract Company with the Court Clerk of Washington County, State of Oklahoma less a
poundage charge of $300.00 and Musselman Abstract Company’s litigation expenses, totaling
$1,364.14. [Doc. 35].
2 Although originally denominated as a crossclaim, the Trust’s crossclaim is now, upon
realignment of the parties, more properly referred to as a claim.
summary judgment and Morris’s motion for partial summary judgment are ripe for the court’s
determination.
II. Summary Judgment Standard
A motion for summary judgment shall be granted “if the movant shows that there is no
genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.”
Fed. R. Civ. P. 56(a). Federal Rule of Civil Procedure 56(a) “mandates the entry of summary
judgment, after adequate time for discovery and upon motion, against a party who fails to make a
showing sufficient to establish the existence of an element essential to that party’s case, and on
which that party will bear the burden of proof at trial.” Celotex Corp. v. Catrett, 477 U.S. 317,
322 (1986); Adler v. Wal-Mart Stores, Inc., 144 F.3d 664, 670 (10th Cir. 1998). A court must
examine the factual record in the light most favorable to the party opposing summary judgment.
Wolf v. Prudential Ins. Co. of Am., 50 F.3d 793, 796 (10th Cir. 1995).
When the moving party has carried its burden, “its opponent must do more than simply
show that there is some metaphysical doubt as to the material facts . . . . Where the record taken
as a whole could not lead a rational trier of fact to find for the non-moving party, there is no
‘genuine issue for trial.’” Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586-
87 (1986) (citations omitted). In essence, the inquiry for the court is “whether the evidence
presents a sufficient disagreement to require submission to a jury or whether it is so one-sided that
one party must prevail as a matter of law.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 251-52
(1986). “Cross motions for summary judgment are to be treated separately; the denial of one does
not require the grant of another.” Christian Heritage Acad. v. Okla. Secondary Sch. Activities
Ass’n, 483 F.3d 1025, 1030 (10th Cir. 2007).
III. Undisputed Material Facts
The following material facts are undisputed for purposes of Morris’s motion for partial
summary judgment:
On February 10, 2021, Morris and real estate broker John Wildin of Hall and Hall in
Hutchinson, Kansas exchanged emails regarding Morris’s potential purchase of another ranch, not
the Mullendore Ranch. [Doc. 49, p. 8, ¶ 1; Doc. 50, p. 4, ¶ 1; Doc. 49, pp. 24-29]. In an email
time-stamped 12:59 p.m., Wildin stated:
There is a little known niche in the ranching world that actually does turn the rate
of return upside down – the Bureau of Land Management wild horse and burro
sanctuary program. The short story on this is to compare native grass ranching
operations between cattle and this program. In broad terms you can most likely net
around $25 - $30 per acre leasing a ranch for cattle grazing. With the BLM
program, you can net nearly $100 on the same ranch. You seem astute enough
about the ranch business that you may be aware of this. If not call me sometime
and we can talk about it.
[Doc. 49, p. 8, ¶ 1; Doc. 50, p. 4, ¶ 1; Doc. 49, pp. 25-26]. That same day, at 2:34 p.m., Morris
replied, in part, as follows:
Interesting that you mention the native horse program – the 3,100 acre ranch I just
bought was previously under contract and that buyer was planning to run native
horses. I am just now beginning to do some research on this program myself, and
it is extremely interesting to me. To be candid, if I could acquire good ranches with
a native horse contract from the government at $100 per acre, I could justify buying
big ranches all the way up to $3,000 per acre . . . and I could buy a bunch of them.
I’ve heard the process takes a couple of years to qualify a ranch for this program,
and I’d be willing to take that risk if I got comfortable with the mechanics of the
program. That being said, I’d be very interested in talking with you about this
native horse opportunity, and at some point I’d like to contract with a solid attorney
or consultant that knows how to navigate the legal side and register these properties.
[Doc. 49, pp. 8-9, ¶ 2; Doc. 50, pp. 4-5, ¶ 2; Doc. 49, p. 25]. Wildin replied within minutes, at
2:45 p.m., stating: “As I suspected . . . you do know your way around the ranch world, Hunter!
So we do need to talk whenever you have the time. I got a horse deal with the horses already in
place and ready to make a sale. Big ticket - $50M.” [Doc. 49, p. 9, ¶ 3; Doc. 50, p. 5, ¶ 3; Doc.
49, p. 24].
On February 11, 2021, Wildin, as the Trust’s broker, emailed Morris to provide an
“informal presentation” regarding the Ranch. [Doc. 43, p. 5, ¶ 1; Doc. 49, p. 2, ¶ 1; Doc. 43-1;
Doc. 49, p. 9, ¶ 4; Doc. 50, p. 5, ¶ 4]. The email included the following:
• BLM sanctuary horse program was renewed in January 2020 for a 10-year term
for what is referred to as a 2,500 head contract although it actually can max out at
around 2,700 head but they like to keep it at the 2,500 number for various reasons.
• They had just come off of 3 consecutive contracts of 5 years each, so this 10 year
deal is new and is considered to be more desirable from the BLM perspective.
[Doc. 43, p. 5, ¶¶ 2-3; Doc. 49, p. 2, ¶¶ 2-3; Doc. 43-1].
On February 12, 2021, Sloan Smith of Great Plains Land Company, Morris’s broker,
emailed Wildin attaching an initial draft of an offer—in the form of an Oklahoma Uniform
Contract of Sale of Real Estate Farm, Ranch, and Recreational Land—for purchase of the Ranch.
[Doc. 43, pp. 5-6, ¶ 5; Doc. 49, p. 2, ¶ 5; Doc. 43-2; Doc. 43-3, pp. 7-10; Doc. 49, pp. 9-10, ¶ 5;
Doc. 50, p. 5, ¶5]. The initial draft included the following:
11. GOVERNMENT PROGRAMS: The Property is subject to the
government programs listed below or on the attached exhibit:
BLM Sanctuary Horse Program renewed in January 2020 with a 10 year
term
Seller shall provide Buyer with copies of all governmental program
agreements. Any allocation or proration of payment under governmental
programs is made by separate agreement between the Parties which will
survive Closing.
[Doc. 43, p. 6, ¶ 6; Doc. 49, p. 3, ¶ 6; Doc. 43-2, p. 5]. Additionally, Exhibit A to the initial draft
stated:
This Exhibit A, which is attached to and is part of the Oklahoma Uniform Contract
of Sale of Real Estate between _____________ (“Seller”) and Hunter Morris and/or
assigns (“Buyer”) relating to the following described real estate located in Osage
County & Washington County, County, Oklahoma, at: (Legal Description or
Property Address) 3484 Mullendore Ranch Rd, Copan, OK 74022
Notwithstanding any provision in this Contract to the contrary, it shall be an express
condition of the Buyer’s closing obligations that Buyer assumes, with the Bureau
of Land Management’s (“BLM”) approval of Buyer, or Buyer’s applicable affiliate
at closing (as the case may be), the BLM Sanctuary Horse Program Agreement
(“BLM Agreement”) currently benefitting the Property (which was recently
renewed in January of 2020 for a 10 year term), upon (i) the existing terms and
conditions of the BLM Agreement, and (ii) terms reasonably acceptable to Buyer
upon Buyer’s receipt and review of the BLM Agreement. In addition to Seller’s
obligations to provide Buyer with a copy of the BLM Agreement as set forth in
Section 11 of the Contract, Seller shall provide Buyer copies or access to any
written communication from the BLM or other government entities applicable to
the BLM Agreement. Seller further agrees to make commercially reasonable
efforts, at no expense to Seller, in cooperating with Buyer and BLM to facilitate the
BLM Approval and all documents necessarily required in connection therewith.
[Doc. 43, p. 6, ¶ 7; Doc. 49, p. 3, ¶ 7; Doc. 43-2, p. 9]. Smith informed Wildin, “[t]he contract has
not been signed yet. We wanted to send it over for you to review, and add anything we need to in
the contract before finalizing . . . .” [Doc. 43, p. 6, ¶ 8; Doc. 49, p. 3, ¶ 8; Doc. 43-3, p. 7].
On February 16, 2021, Morris drafted and sent to Wildin an initial offer to purchase the
Ranch. [Doc. 43, p. 7, ¶ 12; Doc. 49, p. 3, ¶ 12; Doc. 43-3, p. 1; Doc. 43-4]. The initial offer also
contained the representation that “[t]he Property is subject to the . . . BLM Sanctuary Horse
Program renewed in January 2020 with a 10 year term,” as well as the Exhibit A set forth above
that was included in the February 12 initial draft. [Doc. 43, p. 7, ¶¶ 13-14; Doc. 49, p. 4, ¶¶ 13-
14; Doc. 43-3, p. 1; Doc. 43-4, pp. 5, 9].
The following material facts are undisputed for purposes of both the Trust’s summary
judgment motion and Morris’s motion for partial summary judgment:
On March 4, 2021, Wildin sent Morris and Smith an email to which Wildin attached an
addendum, titled Supplement to Oklahoma Uniform Contract of Sale of Real Estate drafted by the
Trust’s attorney to “cover[] various items that he and John Mecom III felt that needed to be
addressed so that there can be a successful closing of this sale to everyone’s benefit.” The Trust
presented the addendum as a “counter offer to [Morris’s] original purchase and sale agreement.”
[Doc. 43, p. 7, ¶ 15; Doc. 49, p. 4, ¶ 15; Doc. 43-5, pp. 3-4; Doc. 43-6; Doc. 24, p. 10, ¶ 2; Doc.
24-1, pp. 3-4; Doc. 24-2]. Paragraph 8 of the Supplement stated as follows:
8. Section D(4). This Section shall be modified as follows:
The following leases will be permitted exceptions to the Title Policy and will not
be a basis for objections to Title: Oil and gas leases; Supplemental Agreement with
Enbridge relating to post-construction usage of the Property; unexpired terms of
two hunting leases; and the Sanctuary Horse Program Agreement with the Bureau
of Land Management.
[Doc. 43-6, p. 4; Doc. 24-2, p. 4].
On March 5, 2021, Smith forwarded to Wildin a counteroffer from Morris, which included
changes to the proposed purchase price and price per acre, as well as “a request for documents
mentioned in #8 on the addendum.” [Doc. 43, p. 8, ¶ 18; Doc. 49, p. 4, ¶ 18; Doc. 43-5, p. 2; Doc.
43-7; Doc. 24, p. 10, ¶ 5; Doc. 24-1, p. 2; Doc. 24-3]. Morris executed his counteroffer and
initialed all the revisions therein on March 5, 2021. [Doc. 43, p. 8, ¶ 19; Doc. 49, p. 4, ¶ 19; Doc.
43-7; Doc. 24, p. 10, ¶ 6; Doc. 24-3].
On March 9, 2021, Wildin emailed Morris and Smith, stating: “Attached is the original
purchase agreement you put forward along with an addendum prepared by the seller’s legal counsel
that is directly related to that agreement. The addendum has been acknowledged and signed by
the seller, John Mecom III as Trustee of the Kathleen Mullendore Trust, agreeing to the sale price.”
[Doc. 43, pp. 8-9, ¶¶ 21-22; Doc. 49, p. 5, ¶¶ 21-22; Doc. 43-8; Doc. 43-9; Doc. 24, p. 11, ¶¶ 8-9;
Doc. 24-4; Doc. 24-5]. The email attached the executed the Oklahoma Uniform Contract of Sale
of Real Estate Farm, Ranch, and Recreational Land, including an Exhibit A and Supplemental
Agreement (collectively, “Contract”), for the sale of the Ranch, which identified Kathleen B.
Mullendore Trust, as “Seller,” and Hunter Morris, as “Buyer,” [Doc. 43, p. 9, ¶ 22; Doc. 49, p. 5,
¶ 22; Doc. 23, p. 2, ¶¶ 1-2; Doc. 24, pp. 2-3, ¶¶ 1-2; Doc. 2-2, pp. 3-18; Doc. 24-5]. The Contract
provides:
The Parties’ signatures at the end of the Contract, which includes any attachments
or documents incorporated by reference, with delivery to their respective Brokers,
if applicable, will create a valid and binding Contract, which sets forth their
complete understanding of the terms of the Contract. This agreement shall be
binding upon and inure to the benefit of the Parties hereto and their respective heirs,
successors and permitted assigns. . . . All prior verbal or written negotiations,
representations and agreements are superseded by the Contract, which may only be
modified or assigned by further written agreement of Buyer and Seller.
[Doc. 23, p. 2, ¶ 3; Doc. 24, p. 3, ¶ 3; Doc. 2-2, p. 3; Doc. 24-5, p. 6]. Pursuant to section 3 of the
Contract, the “Time Reference Date” was March 12, 2021. [Doc. 23, p. 4, ¶ 6; Doc. 24, p. 3, ¶ 6;
Doc. 2-2, p. 4, § 3; Doc. 24-5, p. 7, § 3].
Section 7 of the Contract, titled “Survey and Title Review,” provides, in part, as follows:
D. SURFACE LEASES. Seller shall provide Buyer with copies of existing
written leases and given written notice of oral leases within 3 days (three
[3] days if left blank) of the Time Reference Date. If there are NO existing
Leases this paragraph is not applicable.
1) If Seller does not provide copies of existing said written leases or give
written notice of oral leases within the three (3) days after the Time
Reference Date the provisions of Paragraph 20 shall apply. The Seller
shall be in default of this Agreement.
2) This Contract is subject to Buyer review, acceptance and approval of
said leases, if any, within five (5) days of the receipt of said leases.
3) If the Buyer fails to give notice of objection to the leases, as above,
the leases shall be deemed acceptable to the Buyer.
[Doc. 2-2, pp. 5-6, § 7(D); Doc. 24-5, pp. 8-9, § 7(D)]. The Supplement to Oklahoma Uniform
Contract of Sale of Real Estate (Supplement) modifies Section 7(D)(4) as follows:
8. Section D(4). This Section shall be modified as follows:
The following leases will be permitted exceptions to the Title Policy and will not
be a basis for objections to Title: Oil and gas leases; Supplemental Agreement with
Enbridge relating to post-construction usage of the Property; unexpired terms of
two hunting leases; and the Sanctuary Horse Program Agreement with the Bureau
of Land Management.
[Doc. 2-2, p. 17, ¶ 8; Doc. 24-5, p. 4, ¶ 8]. Additionally, the Supplement provides: “*all documents
pertaining to the Supplemental Agreement with Enbridge, unexpired terms of the hunting leases,
and the Sanctuary Horse Program to be delivered within 5 business days from mutually executed
contract.” [Doc. 2-2, p. 17; Doc. 24-5, p. 4; Doc. 43, p. 9, ¶ 28; Doc. 49, p. 6, ¶ 28].
Section 11 of the Agreement provides:
11. GOVERNMENT PROGRAMS: The Property is subject to the
government programs listed below or on the attached exhibit:
BLM Sanctuary Horse Program renewed in January 2020 with a 10 year
term.
Seller shall provide Buyer with copies of all governmental program
agreements. Any allocation or proration of payment under governmental
programs is made by separate agreement between the Parties will survive
Closing.
[Doc. 2-2, p. 7, § 11; Doc. 24-5, p. 10, § 11; Doc. 43, p. 9, ¶ 23; Doc. 49, p. 5, ¶ 23].
Section 16 of the Contract, titled “Special Provisions,” states: “See attached Exhibit A.”
[Doc. 2-2, p. 8, § 16; Doc. 24-5, p. 11, § 16]. The Oklahoma Real Estate Commission Farm,
Ranch, and Recreational Land – Exhibit A (Exhibit A) provides as follows:
This Exhibit A, which is attached to and is part of the Oklahoma Uniform Contract
of Sale of Real Estate between _____________ (“Seller”) and Hunter Morris and/or
assigns (“Buyer”) relating to the following described real estate located in Osage
County & Washington County, County, Oklahoma, at: (Legal Description or
Property Address) 3484 Mullendore Ranch Rd, Copan, OK 74022
Notwithstanding any provision in this Contract to the contrary, it shall be an express
condition of the Buyer’s closing obligations that Buyer assumes, with the Bureau
of Land Management’s (“BLM”) approval of Buyer, or Buyer’s applicable affiliate
at closing (as the case may be), the BLM Sanctuary Horse Program Agreement
(“BLM Agreement”) currently benefitting the Property (which was recently
renewed in January of 2020 for a 10 year term), upon (i) the existing terms and
conditions of the BLM Agreement, and (ii) terms reasonably acceptable to Buyer
upon Buyer’s receipt and review of the BLM Agreement. In addition to Seller’s
obligations to provide Buyer with a copy of the BLM Agreement as set forth in
Section 11 of the Contract, Seller shall provide Buyer copies or access to any
written communication from the BLM or other government entities applicable to
the BLM Agreement. Seller further agrees to make commercially reasonable
efforts, at no expense to Seller, in cooperating with Buyer and BLM to facilitate the
BLM Approval and all documents necessarily required in connection therewith.
[Doc. 2-2, p. 11; Doc. 24-5, p. 14; Doc. 43, p. 9, ¶¶ 24, 27; Doc. 49, pp. 5-6, ¶¶ 24, 27]. Finally,
Section 23 of the Contract states:
23. REPRESENTATIONS
A. Seller represents that as of the Closing Date: (a) there will be no
liens, assessments, or security interests against the Property which
will not be satisfied out of the sales proceeds unless securing
payment of any loans assumed by Buyer, and (b) assumed loans will
not be in default. If any representation of Seller in this Contract is
untrue on the Closing Date, Buyer may terminate this Contract and
the Earnest Money will be refunded to Buyer.
B. Buyer represents that they have NOT relied on any quoted acreage
and/or square footage from any source and have had the right to
measure the land or buildings on the Property to their satisfaction
prior to closing.
[Doc. 2-2, p. 9, § 23; Doc. 24-5, p. 12, § 23; Doc. 43, p. 9, ¶ 26; Doc. 49, p. 5, ¶ 26].
Per the terms of the Contract, Morris deposited with Musselman Abstract Company, the
escrow agent, the sum of $500,000.00 on March 12, 2021. [Doc. 23, p. 3, ¶ 5; Doc. 24, p. 4, ¶ 5].
On March 17, 2021, counsel for the Trust delivered to Morris contract documents relating to the
BLM Sanctuary Horse Program (BLM Agreement). [Doc. 23, p. 3, ¶ 8; Doc. 24, p. 4, ¶ 8; Doc.
23, pp. 35-38; Doc. 43, p. 10, ¶ 29; Doc. 49, p. 6, ¶ 29].
The BLM Agreement includes a base period of performance from January 1, 2020 through
December 31, 2020. The base period is followed by nine separate, year-long option periods from
January 1, 2021 to December 31, 2029. [Doc. 43, p. 10, ¶ 31; Doc. 49, p. 6, ¶ 31; Doc. 24, pp. 11,
¶ 14; Doc. 25, pp. 2-4]. The BLM Agreement incorporates by reference Federal Acquisition
Regulation contract clause 52.217-5, “Evaluation of Options,” and contract clause 52.217-9,
“Option to Extend the Term of the Contract.” [Doc. 25, p. 17]. Further, the BLM Agreement
incorporates by reference the clause at 52.202-1, “Definitions.” [Id. at p. 21]. Finally, the BLM
Agreement includes subparagraph (l), “Termination for the Government’s convenience,” which
states:
The Government reserves the right to terminate this contract, or any part hereof, for
its sole convenience. In the event of such termination, the Contractor shall
immediately stop all work hereunder and shall immediately cause any and all of its
suppliers and subcontractors to cease work. Subject to the terms of this contract,
the Contractor shall be paid a percentage of the contract price reflecting the
percentage of the work performed prior to the notice of termination, plus reasonable
charges the Contractor can demonstrate to the satisfaction of the Government using
its standard record keeping system, have resulted from the termination. The
Contractor shall not be required to comply with the cost accounting standards or
contract cost principles for this purpose. This paragraph does not give the
Government any right to audit the Contractor’s records. The Contractor shall not
be paid for any work performed or costs incurred which reasonably could have been
avoided.
[Doc. 43, p. 10, ¶ 32; Doc. 49, p. 6, ¶ 32; Doc. 25, pp. 24-25].
In correspondence to the Trust’s counsel dated April 20, 2021, counsel for Morris stated:
As counsel for Buyer, we request Seller’s execution of the attached proposed First
Amendment to the Contract for purposes of amending certain terms set forth
therein. Furthermore, this letter is to advise Seller that if Buyer does not receive
delivery of a Seller-executed counterpart of this amendment before 5:00 pm central
time on April 23, 2021 this letter constitutes Buyer’s notice of its termination of the
Contract pursuant to Section 9 of the Contact, and escrow agent is thereby
instructed to return the amount of $500,000.00 to Buyer in accordance with the
Contract.
[Doc. 23, p. 4, ¶ 11; Doc. 24, p. 6, ¶ 11; Doc. 23, pp. 39-42; Doc. 43, pp. 10-11, ¶ 34; Doc. 49, p.
7, ¶ 34; Doc. 43-12; Doc. 43-13]. On April 22, 2021, counsel for the Trust responded, stating in
part:
I hereby acknowledge receipt of your letter of April 20, 2021 by which you seek,
as counsel for Hunter Morris, to renegotiate the terms of the March 5, 2021 Contract
and give notice of Mr. Morris’ termination of the Contract in the event the proposed
First Amendment to the Contract is not executed and returned to Mr. Morris. You
are advised that my client (as “Seller”) contends that Mr. Morris (as “Buyer”) has
no right to terminate the Contract. Furthermore, you are advised that the Seller has
no intention of renegotiating the terms of Contract. You are also advised that the
Buyer’s stated intention to terminate the Contract effective at 5:00pm on April 23,
2021 will, unless withdrawn before 5:00pm tomorrow, constitute a default by the
Buyer and that the Seller will proceed to exercise its default remedies pursuant to
Section 20 of the Contract. Please advise me prior to 5:00pm Central Time on April
23, 2021 if the Buyer intends to withdraw its notice of termination; otherwise, the
Seller will consider the Buyer to be in default as of 5:01pm on April 23, 2021 and
will proceed accordingly.
[Doc. 23, p. 4, ¶ 12; Doc. 24, pp. 6-7, ¶ 12; Doc. 23, pp. 43-44; Doc. 49, p. 12, ¶ 12; Doc. 50, p. 6,
¶ 12]. On April 23, 2021, counsel for Morris responded by letter to the Trust’s counsel, stating, in
part:
Lastly, and as a separate issue from that discussed above, is the appraisal issue faced
due to the BLM Agreement (as defined in the Contract), containing language which
allows the Bureau of Land Management (“Government”) to terminate the BLM
Agreement for the Government’s convenience. Buyer entered into the Contract
based on representations that the BLM Agreement was ten (10) year agreement, as
would be reasonably interpreted in reliance of such. However, upon receipt and
review of the BLM Agreement, such termination rights granted to the Government
allows the BLM Agreement to essentially operate on a month-to-month basis,
resulting in appraisals of the Property to come in at valuations below the purchase
price (values consistent with our recently proposed amendment). As such, please
note that pursuant to Section 16 of the Contract, and as set forth on the referenced
Exhibit “A” thereto, it is “an express condition of Buyer’s closing obligations that
Buyer assumes, with the [Government’s] approval of Buyer, or Buyer’s applicable
affiliate at closing, the BLM Agreement . . . upon (i) the existing terms and
conditions of the BLM Agreement, and (ii) terms reasonably acceptable to Buyer
upon Buyer’s receipt and review of the BLM Agreement (emphasis added). The
existence of a provision allowing the Government a right to terminate for
convenience undoubtedly calls into question the reasonableness of the BLM
Agreement terms upon Buyer’s review, and is a position that is strengthened when
considering (i) Buyer’s reliance on what it assumed was a standard ten (10) year
contractual term, and (ii) Buyer’s receipt of multiple new appraisals discounting
the valuation of the Property due to the nature of the Government’s termination
right. . . .
Please allow this letter to serve as Buyer’s termination of the Contract effective as
of the date hereof, and receive a return of its Earnest Money.
[Doc. 24, p. 13, ¶ 24; Doc. 24-12; Doc. 43, pp. 11-12, ¶¶ 36-37; Doc. 49, p. 8, ¶¶ 36-37].
Both Morris and the Trust claim entitlement to the earnest money now on deposit with the
Court Clerk.
IV. Analysis of Morris’s Motion for Partial Summary Judgment
For ease of analysis, the court first considers Morris’s motion for partial summary
judgment. As previously stated, Morris seeks judgment as a matter of law as to his claims for
declaratory judgment, recission, and breach of contract. The court first turns to Morris’s request
for declaratory judgment.
A. Declaratory Judgment
Morris seeks a declaration that both Section 23(A) and Exhibit A of the Contract permitted
Morris to terminate the Contract once he determined that the terms of the BLM Agreement were
not as they had been represented to him and that they were not acceptable.
Looking first to Section 23(A) of the Contract, that section states, in relevant part, “[i]f any
representation of Seller in this Contract is untrue on the Closing Date, Buyer may terminate this
Contract and the Earnest Money will be refunded to Buyer.” [Doc. 2-2, p. 9, § 23; Doc. 24-5, p.
12, § 23; Doc. 43, p. 9, ¶ 26; Doc. 49, p. 5, ¶ 26]. Morris argues that the Trust’s representation
that the BLM Agreement was “renewed in January 2020 for a 10 year term” was demonstrably
false as the BLM Agreement does not have a ten-year term but, instead, includes a base period of
performance from January 1, 2020 through December 31, 2020, then nine one-year option periods.
As previously stated, it is undisputed that BLM Agreement includes a base period of
performance from January 1, 2020 through December 31, 2020. The base period is followed by
nine separate, year-long option periods from January 1, 2021 to December 31, 2029. [Doc. 43, p.
10, ¶ 31; Doc. 49, p. 6, ¶ 31; Doc. 25, pp. 2-4]. Further, the BLM Agreement incorporates by
reference Federal Acquisition Regulation contract clause 52.217-5, “Evaluation of Options,”
contract clause 52.217-9, “Option to Extend the Term of the Contract,” and the clause at 52.202-
1, “Definitions.” [Doc. 25 at pp. 17, 21].
Section 52.202-1 provides that “[w]hen a . . . contract clause uses a word or term that is
defined in the Federal Acquisition Regulation (FAR), the word or term has the same meaning as
the definition in FAR 2.101.” FAR § 52.202-1. FAR § 2.101 defines “option” as “a unilateral
right in a contract by which, for a specified time, the Government may elect to purchase additional
supplies or services called for by the contract, or may elect to extend the term of the contract.”
FAR § 52.202-1 (emphasis added). It is well-established “where a contract is renewable solely at
the option of the government, the government is under no obligation to exercise the option.” Mktg.
& Mgmt. Info., Inc. v. United States, 62 Fed. Cl. 126, 130 (Fed. Cl. 2004); see also Hi-Shear Tech.
Corp. v. United States, 356 F.3d 1372, 1380 (Fed. Cir. 2004) (quoting Gov’t Sys. Advisors, Inc. v.
United States, 847 F.2d 811, 813 (Fed. Cir. 1988)) (“[W]here a contract is renewable ‘at the option
of the Government,’ the government is under no obligation to exercise the option[.]”). The plain
language of the BLM Agreement imparts a unilateral right to the government to exercise its option
to extend the Contract on a year-to-year basis. That is, the Agreement imposes no obligation on
the government to continue the wild horse arrangement into the next option period.3
Under Oklahoma law, “[a]n option so long as it remains unaccepted, is a unilateral writing
lacking the mutual elements of a contract, but when it is accepted by the optionee an executory
contract arises, mutually binding upon the parties.” Crane-Rankin Dev. Co. v. Duke, 90 P.2d 883,
3 Further, the BLM Agreement includes a termination for convenience provision pursuant to which
the government reserved its right to terminate the Agreement “for its sole convenience.” [Doc.
25, p. 24]. “[I]t is well-settled that a termination for convenience does not breach the contract.”
Fields v. United States, 53 Fed. Cl. 412, 417 (Fed. Cl. 2002). Thus, the government could cancel
the BLM Agreement at any time and incur no liability toward the Trust and/or Morris.
884 (Okla. 1939); see also Davenport v. Doyle Petroleum Corp., 126 P.2d 57, 61 (Okla. 1942);
Bobo v. Bigbee, 548 P.2d 224, 229 (Okla. 1976) (collecting cases). Thus, until accepted by the
government, no contract exists as a matter of law for the remaining option periods. Accordingly,
the statement that the BLM Agreement was recently renewed in January of 2020 for a ten year
term is untrue under Oklahoma law.
The Trust argues that termination under Section 23(A) is not permitted as Morris, not the
Trust, placed the statement regarding the ten-year BLM Agreement in the Contract and therefore
the statement was not a “representation of Seller.” [Doc. 49, pp. 15-16]. However, the Trust
signed the Contract. [Doc. 43, pp. 8-9, ¶¶ 21-22; Doc. 49, p. 5, ¶¶ 21-22; Doc. 43-8; Doc. 43-9;
Doc. 24, p. 11, ¶¶ 8-9; Doc. 24-4; Doc. 24-5]. It is fundamental that one who signs the contract is
bound by the terms thereof. See Mayfield v. Fid. St. Bank of Cleveland, 249 P. 136, 136 (Okla.
1926); Franco v. State ex el. Bd. of Regents of the Univ. of Okla., 482 P.3d 1, 9 (Okla. Civ. App.
2020); see also Allis Chalmers Mfg. Co. v. Byers, 88 P.2d 368, 371 (Okla. 1939) (internal citations
omitted) (“[I]t is generally presumed that one who executes such an instrument has read it and
understands its contents. . . . It will not do for a man to enter into a contract, and, when called
upon to respond to its obligations, to say that he did not read it when he signed it, or did not know
what it contained. If this were permitted, contracts would not be worth the paper on which they
are written.”); 27 WILLISTON ON CONTRACTS § 70:114 (4th ed. Nov. 2021 update) (“One who signs
or accepts a written contract, in the absence of fraud or other wrongful act on the part of another
contracting party, is conclusively presumed to know its contents and to assent to them.”). The
Trust cannot now disclaim the statement having adopted it by its signature. And though Morris’s
broker placed the statement regarding the ten-year BLM Agreement in the Contract, the Contract
was signed before Morris and his broker were given the opportunity to review the terms of that
Agreement.
Finally, the Trust argues that Morris cannot establish a fraudulent misrepresentation for
various reasons. However, Subsection 23(A) does not require that the seller’s representation be
fraudulent. Rather, the section applies when the representation is untrue. For the reasons discussed
above, the representation that the BLM Agreement was recently renewed “for a 10 year term” is
untrue as a matter of law. Thus, the presence or absence of fraud is not dispositive.4
Because the representation that the BLM Agreement was renewed in January of 2020 for
a ten-year term was untrue, Morris was permitted to terminate the Contract pursuant to Section
23A thereof and is entitled to refund of the earnest money. Morris is entitled to a declaratory
judgment of same.5
Morris next seeks a declaration that he was permitted to terminate the Contract pursuant to
Exhibit A. As previously stated, Exhibit A to the Contract provides:
Notwithstanding any provision in this Contract to the contrary, it shall be an
express condition of the Buyer’s closing obligations that Buyer assumes, with the
Bureau of Land Management’s (“BLM”) approval of Buyer, or Buyer’s applicable
affiliate at closing (as the case may be), the BLM Sanctuary Horse Program
Agreement (“BLM Agreement”) currently benefitting the Property (which was
4 The Trust also raises the following arguments: (1) misrepresentations of law do not support a
claim for fraudulent misrepresentation, and (2) Morris is a sophisticated buyer who had the ability
to ascertain the truth about the BLM Agreement but failed to exercise due diligence. [Doc. 49, pp.
16-17]. These arguments are rooted in Oklahoma law rather than the language of the Contract and
therefore are best considered in the court’s discussion of rescission.
5 Additionally, it is undisputed that the Trust did not provide a copy of the BLM Agreement to
Morris until March 17, 2021—six business days after execution of the Contract. [Doc. 23, p. 3, ¶
8; Doc. 24, p. 4, ¶ 8; Doc. 23, pp. 35-38; Doc. 43, p. 10, ¶ 29; Doc. 49, p. 6, ¶ 29]. But the Contract
required the Trust to provide Morris the BLM Agreement within five business days of execution.
[Doc. 2-2, p. 17; Doc. 24-5, p. 4; Doc. 43, p. 9, ¶ 28; Doc. 49, p. 6, ¶ 28]. Thus, the Trust did not
timely provide the BLM Agreement and therefore technically breached the Contract. Though
Morris points out the technical breach, he does not rely on it in seeking partial summary judgment.
recently renewed in January of 2020 for a 10 year term), upon (i) the existing terms
and conditions of the BLM Agreement, and (ii) terms reasonably acceptable to
Buyer upon Buyer’s receipt and review of the BLM Agreement. In addition to
Seller’s obligations to provide Buyer with a copy of the BLM Agreement as set
forth in Section 11 of the Contract, Seller shall provide Buyer copies or access to
any written communication from the BLM or other government entities applicable
to the BLM Agreement. Seller further agrees to make commercially reasonable
efforts, at no expense to Seller, in cooperating with Buyer and BLM to facilitate the
BLM Approval and all documents necessarily required in connection therewith.
[Doc. 2-2, p. 11 (emphasis added); Doc. 24-5, p. 14; Doc. 43, p. 9, ¶¶ 24, 27; Doc. 49, pp. 5-6, ¶¶
24, 27]. Thus, Exhibit A makes it an explicit condition of the Contract that Morris assume the
BLM Agreement upon “terms reasonably acceptable to Buyer upon Buyer’s receipt and review of
the BLM Agreement.”
In opposition, the Trust argues that Section 7(D) of the Contract required Morris to notify
it of any objections to the BLM Agreement within five days of receipt. Morris did not do so and
the Trust contends the BLM Agreement was therefore deemed acceptable to Morris pursuant to
Section 7(D)(3).
Section 7(D) of the Contract required the Trust to provide Morris “copies of existing
written leases and give written notice of oral leases within 3 days . . . of the Time Reference Date.”
[Doc. 2-2, p. 5, § 7(D); Doc. 24-5, p. 8, § 7(D) (emphasis altered from original)]. It is undisputed
that, pursuant to subsection 7(D)(2), the Contract “[was] subject to Buyer review, acceptance and
approval of said leases, if any, within five (5) days of the receipt of said leases.” [Doc. 2-2, p. 6,
§ 7(D)(2); Doc. 24-5, p. 9, § 7(D)(2) (emphasis altered from original)]. Section 7(D)(3) then
provides that “[i]f the Buyer fails to give notice of objection to the leases, as above, the leases shall
be deemed acceptable to the Buyer.” [Doc. 2-2, p. 6, § 7(D)(3); Doc. 24-5, p. 9, § 7(D)(3)].
However, Exhibit A is specific to Morris’s receipt, review, and approval of the BLM
Agreement. It includes no provision through which the BLM Agreement “shall be deemed
acceptable to [Morris].” Nor does Exhibit A reference Section 7(D). Moreover, the provisions of
Exhibit A explicitly apply “[n]otwithstanding any provision in th[e] Contract to the contrary.”
[Id.]. “[W]here an agreement contains both general and specific paragraphs, differently defining
rights of the parties, a provision within a specific paragraph is controlled by it, though it is also
embraced in the general provision.” Occidental Life Ins. Co. of Cal. v. Marmaduke Corbyn
Agency, 187 F.2d 553, 555 (10th Cir. 1951) (applying Oklahoma law). Exhibit A requires Morris’s
acceptance of the BLM Agreement, but provides no timeframes for such approval or by which the
Agreement may be “deemed acceptable.” As the provision specific to Morris’s review and
approval of the BLM Agreement, Exhibit A controls.
Further, Section 7(D)(2) and Section 7(D)(3) apply to “leases.” The Contract does not
define “lease.” But
[a]ll contracts are formed to be construed in the light of the rules and principles of
law applicable to the subject-matter of the transaction, and those rules and
principles control the rights of the parties; the laws upon the subject of a contract
are read into it and become a part thereof to the same extent as though they were
written into its terms.
Baker v. Tulsa Bldg. & Loan Ass’n, 66 P.2d 45, 50 (Okla. 1936); see also Okla. Stat. tit. 15, § 161
(“Technical words are to be interpreted as usually understood by persons in the profession or
business to which they relate, unless clearly used in a different sense.”). Under Oklahoma law,
“[a] ‘lease is a contract between the lessor and lessee . . . [that] becomes a grant of an estate in real
property when it takes effect in possession.’” Material Serv. Corp. v. Town of Fitzhugh, 343 P.3d
624, 630 (Okla. Civ. App. 2014) (internal quotation omitted; emphasis added) (quoting Ferguson
v. Dist. Ct. of Okla. Cnty., 544 P.2d 498, 499 (Okla. 1975)). “During a lease, ‘the lessee holds an
outstanding leasehold in the premises which for all practical purposes is equivalent to absolute
ownership.’” Material Serv. Corp., 343 P.3d at 630 (quoting Ferguson, 544 P.2d at 499). Based
on the court’s review, the BLM Agreement does not provide to the government rights “which for
all practical purposes are equivalent to absolute ownership.” Unlike a traditional grazing lease
agreement, which grants the lessee the right to occupy and use for a specific purpose certain real
property, the BLM Agreement is couched in terms of a service contract—specifically, the
provision of services to care, handle, and provide humane treatment for wild horses. [Doc. 25, p.
6]. To that end, the BLM Agreement is titled and characterized as a “Statement of Work,” not as
a lease, and provides prices/costs for “supplies” and “services.” [Doc. 25, pp. 1-3]. Thus, despite
the reference in paragraph 8 of the Supplement to the BLM Agreement as a “lease,” the BLM
Agreement does not constitute a “lease” as a matter of Oklahoma law.
Exhibit A made an express condition of Morris’s closing obligations that he assume the
BLM Agreement upon “terms reasonably acceptable to [him] upon [his] receipt and review of the
BLM Agreement.” [Doc. 2-2, p. 11; Doc. 24-5, p. 14; Doc. 43, p. 9, ¶¶ 24, 27; Doc. 49, pp. 5-6,
¶¶ 24, 27]. Morris submits undisputed evidence that a one-year base period followed by nine
yearly option periods, as well as the “termination for the Government’s convenience” provision,
were not reasonably acceptable to him. See [Doc. 24-12, p. 2; Doc. 43-11, p. 1, ¶¶ 4-5; Doc. 43-
15, p. 2]. Because the terms of the BLM Agreement were unacceptable to Morris, Exhibit A to
the Contract permitted him to terminate the Contract and Morris is entitled to a declaratory
judgment as to same.
B. Rescission
In the alternative, Morris seeks a declaration that the Agreement is rescinded and void ab
initio. It is fundamental that “[i]n order to have a valid contract there must be mutual consent, or
a meeting of the minds.” Beck v. Reynolds, 903 P.2d 317, 319 (Okla. 1995) (citing Okla. Stat. tit.
15, §§ 2, 66). “The consent of the parties must be mutual, and consent is not mutual unless the
parties all agree upon the same thing in the same [sense].” Beck, 903 P.2d at 319; see also Hampton
v. Sur. Dev. Corp., 817 P.2d 1273, 1274 (Okla. 1991) (“When there is a mutual mistake of fact as
to a material element of the contract, a meeting of the minds is absent.”); Watkins v. Grady Cnty.
Soil & Water Conservation Dist., 438 P.2d 491, 494-95 (Okla. 1968). “When a contract is
executed under a mutual mistake of fact, a court can rescind the contract and restore the parties to
the same positions as when the contract was executed.” Hampton, 817 P.2d at 1274-75; see also
Beck, 903 P.2d at 319 (“Section 233 of title 15 provides that a party may rescind a contract when
consent was given by mistake. Rescission, not reformation, is the proper remedy when an apparent
contract is made because of mutual mistake of fact even when the contract has been executed.”).
The Oklahoma Supreme Court’s decision in Beck is instructive. There, the parties agreed
to settle a lawsuit for $201,000.00 under the mistaken belief that the applicable insurance policy
limits were $100,000.00 when the limits were, in fact, $1,000,000. The settlement agreement was
based on the mistaken belief as to the policy’s coverage limits. Beck, 903 P.2d at 319. The court
concluded that there was no meeting of the minds as “the parties did not ‘agree upon the same
thing in the same sense.’” Id. Thus, rescission was appropriate. Id.
Similarly, in Hampton, the Oklahoma Supreme Court affirmed a trial court’s decision to
rescind a contract for the sale and purchase of real estate where the selling price was based on
square footage and the contract was made contingent on rezoning by Oklahoma City. Hampton,
817 P.2d at 1274. The parties believed that the City required a seventeen foot easement as a
condition to rezoning and therefore reduced the selling price by nearly $14,000. The plaintiff
seller executed the deed conveying the property to the defendants, then the easement was conveyed
to the City. However, the City deeded the easement back to the plaintiff, noting “[t]he purpose of
this quit claim deed is to remove a cloud on the title to the above-described property created by
the invalid and void easement . . . .” Id. The court concluded a mutual mistake of fact existed as
to a material element of the contract, and there was no meeting of the minds. Id.
Morris submits undisputed evidence that he did not learn until after execution of the
Contract that the BLM Agreement that it had one base-year with nine one-year options, rather than
a ten-year term. [Doc. 43-11]. Further, the Trust has submitted evidence that it understood the
BLM Agreement to be a ten-year agreement. [Doc. 49, p. 22]. Morris submits evidence that the
term of the BLM Agreement was material to him. See [Doc. 43-11; Doc. 49, pp. 8-9, ¶ 2; Doc.
50, pp. 4-5, ¶ 2; Doc. 49, p. 25]. Like the mistake as to the applicable insurance policy limit in
Beck and the requirement for an easement in Hampton, the undisputed facts demonstrate that, here,
a mutual mistake of fact existed as to a material term of the BLM Agreement. That is, the parties
did not agree upon the term of the BLM Agreement in the same sense, there was no meeting of the
minds, and rescission is appropriate. See Hampton, 817 P.2d at 1274-75; see also Beck, 903 P.2d
at 319.
The Trust contends that any misunderstanding as to the terms of the BLM Agreement
constitutes a mistake of law, which cannot support a claim for fraudulent misrepresentation.
However, as discussed above, the mistake is best characterized as one of fact which prevented a
meeting of the minds—the court has not granted rescission based upon fraudulent
misrepresentation.6 Further, even if the mistake was one of law, Oklahoma courts have
6 Oklahoma statutes define a mistake of fact as “a mistake not caused by the neglect of a legal duty
on the part of the person making the mistake, and consisting in . . . [b]elief in the present existence
of a thing material to the contract, which does not exist, or in the past existence of such a thing,
which has not existed.” Okla. Stat. tit. 15, § 63(2). In contrast, a mistake of law arises only from
“[a] misapprehension of the law by all parties, all supposing that they knew and understood it, and
all making substantially the same mistake as to the law,” or “[a] misapprehension of the law by
one party, of which the others are aware at the time of contracting, but which they do not rectify.”
Okla. Stat. tit. 15, § 64.
consistently held “equity will grant relief where parties have made a mistake as to the legal
meaning and operation of the terms of language employed in a writing.” Crockett v. McKenzie,
867 P.2d 463, 468 (Okla. 1994). Thus, “if parties who mutually agree on the terms of a contract
choose and use legal phrases and terms in the contract, which, in legal effect, express a different
meaning from that agreed upon, a court of equity will reform or cancel the contract according to
the equities of the case.” Bagby v. Martin, 247 P. 404, 406 (Okla. 1926). Accordingly, because
the parties did not appreciate the legal effect of the phrase “10 year term,” equity warrants
rescission.
Finally, insofar as the Trust asserts that rescission is inappropriate because Morris had the
ability to ascertain the truth, but failed to do so, the court is not persuaded. First, Oklahoma courts
have declined to preclude a party from seeking a remedy “because of the fact that he had an
opportunity to investigate them and did not do so.” Greene v. Humphrey, 274 P.2d 535, 537 (Okla.
1954). Further, it is undisputed that the Trust did not provide Morris a copy of the BLM Agreement
until after execution of the Contract. [Doc. 23, p. 3, ¶ 8; Doc. 24, p. 4, ¶ 8; Doc. 23, pp. 35-38;
Doc. 43, p. 10, ¶ 29; Doc. 49, p. 6, ¶ 29]. Although the Trust speculates that Morris could “easily
have discovered how the contracts are structured through easily accessible online websites like the
Bureau of Land Management, or the Federal Acquisition Regulation, among others” [Doc. 49, p.
17], the Trust offers no evidence to substantiate its claim.7 And despite the Trust characterizing
Morris as “highly sophisticated in acquisitions of ranch property [with] prior experience and
interest in the government’s wild horse program contracts,” the undisputed evidence indicates that
7 In fact, the court has attempted to access similar contacts on public websites and was unable to
do so.
Morris “was just beginning to do some research on [the ] program.” [Doc. 49, pp. 8-9, ¶ 2; Doc.
50, pp. 4-5, ¶ 2; Doc. 49, p. 25]. Finally, Oklahoma law requires only that a party seek to rescind
promptly upon discovering facts that entitle him to rescind. See Burke v. Donnermeyer, 448 P.2d
446, 450 (Okla. 1968); Okla. Stat. tit. 15, § 235. Thus, for all of these reasons, Morris is not
precluded from seeking rescission by his asserted failure to ascertain the truth.
For the reasons discussed above, the court hereby rescinds the Contract and Morris is
entitled to summary judgment on this alternative ground. “[O]n rescission of a contract, it is
avoided ab initio, and the rights of the parties in reference to the subject matter of it are the same
as if no contract had ever been made.” Berland’s Inc. of Tulsa v. Northside Village Shopping Ctr.,
Inc., 447 P.2d 768, 772 (Okla. 1968). Thus, Morris is entitled to return of the escrow deposit.
C. Breach of Contract
Morris also seeks summary judgment as to his breach of contract claim. Under Oklahoma
law, the elements of a breach of contract claim are: “(1) the formation of a contract, (2) breach of
the contract, and (3) damages as a result of that breach.” Cates v. Integris Health, Inc., 412 P.3d
98, 103 (Okla. 2018). Because the court has rescinded the Contract, it is as if no contract existed.
Thus, Morris cannot establish the necessary elements of a breach of contract claim and Morris’s
motion for summary judgment as to the breach of contract claim must be denied. See Leone v.
Owsley, 810 F.3d 1149, 1153 (10th Cir. 2015) (citation omitted; emphasis altered from original))
(“[W]here the moving party has the burden [of proof]—the plaintiff on a claim for relief or the
defendant on an affirmative defense—his showing must be sufficient for the court to hold that no
reasonable trier of fact could find other than for the moving party.”).
V. Analysis of the Trust’s Motion for Summary Judgment
In the motion, the Trust explains its breach of contract theory as follows: Section 7(D) of
the Contract required Morris to notify the Trust of any objections to the BLM Agreement within
five days of receipt. Morris did not do so and therefore the BLM Agreement was deemed
acceptable to Morris pursuant to Section 7(D)(3). Thus, Morris’s subsequent efforts to renegotiate
the Contract, and his eventual termination of the Contract, based on the BLM Agreement constitute
a material breach. The Trust contends it is therefore entitled to recover the $500,000.00 earnest
money deposit as liquidated damages. [Doc. 23, pp. 13-14]. Based on the court’s review of the
briefing, whether or not Section 7(D) applies to the BLM Agreement is dispositive as to the Trust’s
motion for summary judgment.8 As discussed above, Sections 7(D)(2) and 7(D)(3) are
inapplicable to the BLM Agreement. Specifically, Exhibit A, as the more specific provision,
controls. Further, the BLM Agreement is not a lease. Thus, the BLM Agreement was not “deemed
acceptable” and Section 7(D) did not prohibit the BLM Agreement from serving as the basis for
Morris’s attempt to renegotiate and/or terminate the Contract. The Trust directs the court to no
other Contract provision that Morris allegedly violated in attempting to renegotiate the Contract.
Accordingly, the Trust has failed to establish that no genuine dispute of material fact exists as to
whether Morris violated the Contract and the Trust’s motion for summary judgment must be
denied. See Leone, 810 F.3d at 1153.
8 The parties agree that “the Contract terms are free of ambiguity or uncertainty” and therefore the
court may interpret its terms as a matter of law, without resort to extrinsic evidence. [Doc. 28, p.
1; Doc. 24, pp. 16-17]; see also Pitco Prod. Co. v. Chaparral Energy, Inc., 63 P.3d 541, 545 (Okla.
2003) (“If language of a contract is clear and free of ambiguity the court is to interpret it as a matter
of law, giving effect to the mutual intent of the parties at the time of contracting.”).
VI. Conclusion
WHEREFORE, the Motion for Partial Summary Judgment [Doc. 43] of defendant Hunter
Morris is denied as to Morris’s breach of contract claim. The motion is otherwise granted.
The Motion for Summary Judgment [Doc. 23] of plaintiff John L. Mecom, III, Trustee of
the Kathleen B. Mullendore Trust is denied.
DATED this 2nd day of May, 2022.