Stare v. Tate

21 Cal. App. 3d 432, 98 Cal. Rptr. 264 (1971)

 

RULE:

When, through a mistake of one party, which the other knew or suspected, a written contract does not truly express the intention of the parties, the contract which was intended by the party acting under unilateral mistake known or suspected by the other, is, as a matter of law, the contract of the parties.

FACTS:

Plaintiff ex-wife entered into a property settlement agreement with defendant ex-husband. Plaintiff's attorney prepared a proposal for settlement. Plaintiff’s counsel made obvious errors in arriving at the settlement number. Defendant's attorney was aware of the mistakes and prepared a counteroffer. A settlement agreement was eventually signed. Subsequently, plaintiff became aware of the mistake by her attorney and filed action for reformation, which the trial court refused to grant. The appellate court reversed the trial court's decision and granted reformation of the agreement to plaintiff.

ISSUE:

Did the trial court err in refusing to grant plaintiff ex-wife’s action for reformation of a property settlement with defendant ex-husband on grounds that a mistake was made in the agreement by her attorney that was known by defendant's attorney?

ANSWER:

Yes.

CONCLUSION:

Plaintiff ex-wife was entitled to reformation due to the mistake made by her attorney and the awareness of the mistake by defendant ex-husband's attorney. Defendant’s attorney was aware of the mistake made by plaintiff's attorney and attempted to prevent him from discovering the mistake. Therefore, plaintiff was entitled to reformation.

Click here to view the full text case and earn your Daily Research Points.