Larson v. Burton Construction, Inc.

421 P.3d 538 (2018)

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Nature of the Case

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Facts

P and D entered into a contract for the sale of a new Skyline mobile home. They used a form contract. The form contract was designed for the sale of a used motor home. As such, it required P to execute and deliver a Wyoming title at closing. Despite the Contract's clear language, P testified that it was not his custom to deliver a Wyoming title to purchasers of new mobile homes at closing. As a reseller, Burton did not take the title himself. Burton would purchase the mobile home from the manufacturer with borrowed funds, and the manufacturer would deliver the mobile home with a Manufacturer's Certificate of Origin (MCO). The lender held the MCO until the mobile home was sold. P would use the purchaser's funds to repay the lender, and the lender would return the MCO. P would collect sales tax from the purchaser, submit it to the state, and record the taxes as paid on the Bill of Sale. Under his reseller's tax exemption, P would pay no sales tax on his initial purchase from the manufacturer so long as he resold the mobile home directly to the consumer. After closing, P or the purchaser would bring the MCO and the Bill of Sale to the County Treasurer to issue a Wyoming title in the purchaser's name as the first assignee of the mobile home. P never intended to deliver a Wyoming title to D at closing because that's not how you do it.' If done by P’s way P would pay no sales tax and the manufacturer’s warranty would cover D. P’s realtor had no clue as to what was going on and thought the MCO was a Wyoming title. The escrow officer took the realtor’s assurances that title would be delivered and prepared a closing where D paid no sales tax. The realtor delivered the MCO which added $1,806 in sales tax to D's purchase. D refused to complete the sale. P sued D for breach of contract. The circuit court found that the parties made a mutual mistake, canceled the Contract, and ordered P to return D's earnest money. The district court reversed, ruling that the circuit court erroneously applied the doctrine of mutual mistake, that it was 'factually unknown' whether P delivered a Wyoming title at closing, and that D breached the Contract when he refused to attend closing and to pay sales tax. D appealed.