Manglona v. Baza

IN THE SUPREME COURT OF THE COMMONWEALTH OF THE NORTHERN MARIANA ISLANDS JOAQUIN M. MANGLONA, Plaintiff-Appellant, v. THERESITA B. BAZA, TRACY B. PANGELINAN, JOSEPHINE B. PANGELINAN, CATHERINE B. PANGELINAN, AND MELISSA P. MCCONNELL Defendant-Appellees. SUPREME COURT NO. 2009-SCC-0033-CIV SUPERIOR COURT NO. 08-0072 and 08-0153 OPINION Cite as: 2012 MP 4 Decided April 5, 2012 Douglas F. Cushnie, Saipan, MP for Plaintiff-Appellant. Ramon K. Quichocho, Saipan, MP for Defendant-Appellees. BEFORE: ALEXANDRO C. CASTRO, Acting Chief Justice; EDWARD MANIBUSAN, Justice Pro Tem; HERBERT D. SOLL, Justice Pro Tem CASTRO, A.C.J.: ¶1 Plaintiff-Appellant Joaquin Manglona (“Manglona”) appeals the trial court’s decision finding him liable for breach of contract. On appeal, Manglona argues that the trial court erred when it: (1) concluded he had breached the relevant contracts; (2) found that Defendant-Appellees Theresita Baza, Josephine Pangelinan, Catherine Pangelinan, Melissa McConnell, and Tracy Pangelinan (collectively “Defendants”) did not violate the covenant of good faith and fair dealing; (3) awarded Baza $79,806.45 in back rent; (4) found forfeiture of the property appropriate under the circumstances; and (5) chose not to grant Manglona equitable relief. For the reasons stated herein, we vacate the trial court’s damage award  pertaining to back rent and remand for a recalculation of back rent consistent with this opinion. We affirm the trial court’s judgment on the remaining issues. I ¶2 This case arises from a series of contracts concerning a lease and purchase of real property. On December 31, 1984, Herman Pangelinan (“Pangelinan”) – Appellee Theresita Baza’s husband – and Manglona entered into a twenty-five year lease agreement (“Lease Agreement”) for Lot E.A. 869-2 (“the Lot”). In November 1987, Manglona subleased the property to Lee Kum Joo (“Lee”) for a period of twenty two years. In October 1993, Pangelinan died and, in accordance with Chamorro intestacy law, the Lot was distributed as follows: Theresita Baza received a life estate and their children – Josephine Pangelinan, Catherine Pangelinan, Melissa McConnell, and Tracy Pangelinan – obtained a vested remainder in fee simple to the property. In 1995, Baza obtained a $120,000 loan (“CDA loan”) from the Commonwealth Development Authority (“CDA”), which was secured by a fee simple mortgage in a separate piece of property that was owned by Defendants. ¶3 Defendants subsequently agreed to sell the Lot to Manglona and the parties executed a Conditional Contract of Sale of Real Property (“Conditional Contract”) during June 1997. The Conditional Contract set the purchase price at $250,000, payable in three parts. First, $10,000 was due upon execution of the contract under Section 3(a).1 Second, under Section 3(b) Manglona agreed to make payments on certain outstanding portions of the $120,000 CDA loan. Finally, Section 3(c) required Manglona to make a second lump sum payment of $108,506.25 in June 2002. Thereafter, in October 1997, Defendants and Lee entered into an Attornment Agreement concerning the Lot, under which Lee would attorn as lessee to Defendants in the event of default by Manglona under the Lease Agreement.2 ¶4 Manglona began making CDA loan payments; however, he missed many payments between 1997 and 2004. In addition, as conceded by Manglona during his testimony at trial, he never paid the $108,506.25 due in June 2002. ¶5 In May 2004, Defendants sent a letter to Manglona through counsel informing him that he was in default and breach of the Conditional Contract because of missed payments. Defendants gave Manglona thirty days to cure the default by paying the CDA loan and the second lump sum payment. Ten days later, Manglona responded through counsel. He claimed that Manglona had complied with the Conditional Contract, but that because Defendants had refinanced the loan, the CDA loan payments differed from the payment amounts listed in the Conditional Contract. Manglona also requested details regarding the outstanding balance due on the CDA loan. Defendants sent a “second demand letter to cure [Manglona’s] 1 The parties agree that Manglona made this first payment, which was never at issue before the trial court. 2 An attornment agreement is “[a] tenant’s agreement to hold the land as the tenant of a new landlord.” Black’s Law Dictionary 148 (9th ed. 2009). 1  default” in July 2005. Excerpts of Record (“ER”) at 148. The record does not show whether Manglona responded to that second demand letter. Defendants also sent a third letter to cure default on February 13, 2008.3 Manglona responded on March 3, 2008. He reiterated that a refinancing issue had arisen and stated that, while he was prepared to make the CDA loan payments, he wanted to know the current balance on the CDA loan in order to ensure he did not overpay. On March 20, 2008, Defendants delivered a Notice of Termination to Manglona; however, Manglona remained in possession of the Lot and continued to collect rent from Lee.4 ¶6 Five days after receiving the Notice of Termination, Manglona filed a complaint asking the trial court to: order Defendants to disclose all records relating to the CDA loan; to enjoin any attempted foreclosure of Manglona’s interest in the Lot; to find Manglona had fully satisfied all contract obligations; and to confer title in the Lot to him. Defendants responded that Manglona had failed to make required payments and that Manglona should be afforded no relief. Defendants also filed a counterclaim for possession and breach of contract, and asserted that Manglona had interfered with the family’s right to collect rent from Lee. ¶7 The trial court conducted a bench trial and issued its Findings of Facts and Conclusions of Law in July 2009. At trial, Manglona’s accountant testified regarding payments made on the CDA loan between June 1997 and January 2005, and presented a report reflecting these purported payments. The trial court found several deficiencies in the report. Records prepared by CDA reflecting payments received on the loan were also presented at trial. After considering both sets of records, the trial court concluded that the CDA records – and not Manglona’s records – were more reliable, and accordingly found that Manglona had repeatedly failed to make payments on the CDA loan. This included missed payments in 1997 and 1998, and twenty-nine missed payments between 1999 and 2004. The trial court found that as a result of Manglona’s failure to make payments, Defendants’ CDA loan became delinquent and CDA insisted that the loan be refinanced. As a result “on October 22, 1998, Defendants refinanced the CDA Loan and incurred additional costs and damages.” Manglona v. Baza, Civ. No. 08-0072 (NMI Super. Ct. July 1, 2009) (Findings of Facts and Conclusions of Law at 4) (“Findings”). Relying on Manglona’s own testimony, the trial court also concluded that he did not remit the lump sum payment of $108,506.25, which was due by June 2002. ¶8 Relying on these findings and conclusions, the trial court ruled in favor of Defendants. The court ordered Manglona to immediately vacate the property and pay Defendants: (1) $79,806.45 in back rent; (2) all rent collected from subtenant Lee between March 20, 2008, when the Notice of Termination was 3 It is unclear from the record what, if any, action was taken between July 2005 and February 13, 2008. 4 On October 2, 2008 the trial court ordered rental payments from sub-tenant Lee to be deposited into the court registry. 2  sent, and October 2, 2008, when the funds were ordered deposited into the court registry; and (3) attorney fees pursuant to Section 7(e) of the Conditional Contract. The trial court also allowed Defendants to retain the payments made on the CDA loan. This appeal followed. II ¶9 The Supreme Court has appellate jurisdiction over judgments and orders of the Superior Court. 1 CMC § 3102(a). III ¶ 10 Manglona raises five issues on appeal: (1) whether Manglona defaulted under the Conditional Contract; (2) whether Defendants violated the implied covenant of good faith and fair dealing, thus excusing Manglona’s non-performance; (3) presuming the Conditional Contract was breached, whether the trial court miscalculated back rent due; (4) whether forfeiture is allowed as a matter of law; and (5) whether the trial court abused its discretion by failing to grant equitable relief. A. Breach of the Conditional Contract and Lease Agreement ¶ 11 Manglona argues that Section 4(a)(3) of the Conditional Contract conditions breach upon his failure to pay the monthly CDA Loan and either subsequent foreclosure or other adverse proceedings. Thus, according to Manglona, he could not have breached the Conditional Contract because CDA did not institute the requisite proceedings. We disagree.5 Whether an asserted condition is in fact a condition is a question of law and reviewed de novo. In re Bubble Up Delaware, Inc., 684 F.2d 1259, 1264 (9th Cir. 1982) (“Whether the contract, by its terms, contained such a condition is a matter of contract interpretation. The question of interpretation of a contract is a question of law subject to de novo review, and not a question of fact.”); see also Fusco v. Matsumoto, 2011 MP 17 ¶ 26 (“Interpretation of contract terms is a question of law that we review de novo.”). ¶ 12 It is important to first look at the terms that relate to payments within the Conditional Contract. “The intent of contracting parties is generally presumed to be encompassed by the plain language of contract terms.” Riley v. Pub. Sch. Sys., 4 NMI 85, 88 (1994). To purchase the Lot, Section 2 of the Conditional Contract required Manglona to pay Defendants $250,0006 in accordance with the schedule outlined in Section 3.7 Section 3(a) and (c) required Manglona to make lump sum payments and Section 5 Because we find breach occurred in other ways, we do not reach whether the trial court was correct when it found that adverse proceedings had occurred. Even then, we note that adverse proceedings may include alternative dispute resolution, such as arbitration, or other methods provided by contract that are enforceable against the parties. See Leslie v. Estate of Tavares, 994 P.2d 1047, 1050 (Haw. 2000) (“As ordinarily used, [the term proceeding] is broad enough to include all methods of invoking the action of courts and is generally applicable to any step taken to obtain the interposition or action of a court.”). 6 Section 2 of the Conditional Contract states: “The total purchase price is Two Hundred Fifty Thousand Dollars and 00/100 ($250,000.00).” ER at 46. 7 Section 3 of the Conditional Contract states, in relevant part: 3  3(b) required ninety-two monthly payments. In addition, Section 2 “automatically assume[d] the place of the rental payments” in the Lease Agreement. ER at 47.8 Accordingly, any breach of the Conditional Contract related to Section 2 or other payment provisions was a breach of Manglona’s duty to pay rent under the Lease Agreement. See Sablan Enters., Inc. v. New Century, Inc., 1997 MP 32 ¶ 8 (“A tenant has an obligation to pay rent . . . .” (citing Restatement (Second) of Property: Landlord and Tenant § 12.1 (1977))). ¶ 13 The trial court found that Manglona never tendered the lump sum payment due under Section 3(c) of the Conditional Contract. “Breach of a contract occurs upon the nonperformance of a contractual duty of immediate performance.” Manglona v. Commonwealth, 2005 MP 15 ¶ 15 (citing Del Rosario v. Camacho, 2001 MP 3 ¶ 96); see also Restatement (Second) of Contracts § 235(2) (1979) (“When performance of a duty under a contract is due any non-performance is a breach.”). Section 3(c) of the Conditional Contract imposed a duty on Manglona to pay $108,506.24 in June 2002.9 Manglona admitted Purchase price shall be paid in accordance with the following: (a) Upon execution of this Contract, BUYER shall pay SELLER the amount of Ten Thousand Dollars and 00/100 ($10,000.00); (b) BUYER shall assume making payment of certain outstanding portions of a loan obtained by SELLER-Theresita B. Pangelinan from the Commonwealth Development Authority (CDA) in the principal sum of One Hundred Twenty Thousand Dollars and 00/100 ($120,000.00) . . . . BUYER shall assume and pay until its full and complete satisfaction such portions of the [CDA] debt, in accordance with the following schedule: (1) One Thousand Six Hundred Ninety Six Dollars and 40/100 ($1,696.40) for the next 8 months commencing on June 14, 1997 and ending on January 14, 1998. (2) One Thousand Four Hundred Three Dollars and 84/100 ($1,403.84), for the next 84 months, commencing February 14, 1998 and ending on January 14, 2005 . . . . (c) On June __, [sic] 2002, five (5) years from the date of the execution of this Contract, BUYER shall pay SELLER the remaining balance in the sum of One Hundred Eight Thousand Five Hundred Six Dollars and 24/100 ($108,506.24) . . . . ER at 46-47 (emphasis omitted). 8 In relevant part, Section 4(a)(2) states that the “purchase price referred and described in Section 2 [of the Conditional Contract] shall automatically assume the place of the rental payments prescribed under the said Lease Agreement.” ER at 47. 9 Manglona superficially asserts that Baza waived his breach by accepting payments made to CDA on her behalf; however, he does not provide the appropriate legal rule, provide any legal analysis to support his claim, or develop this as a separate issue. We consider only those arguments sufficiently developed to be cognizable. Commonwealth v. Minto, 2011 MP 14 ¶ 46 n.8; People v. Freeman, 882 P.2d 249, 265 n.2 (Cal. 1994). Moreover, citing to a case without more is inadequate. Therefore, Manglona waived this argument. See In re Blankenship, 3 NMI 209, 216 (1992) (“[W]e generally will dismiss issues that are not discussed and supported in a party’s brief. . . . [A]ppellant does not discuss or analyze the issues he presents. For this reason, we treat those issues as being waived and no longer before the Court for decision.” (citing Lucky Dev. Co. v. Tokai, U.S.A., Inc., 3 NMI 79, 92 (1992))). 4  during trial that this payment was never tendered.10 Thus, failure to remit the required lump sum payment in June 2002 and continued failure to tender the amount due “constituted a breach upon which relief could be granted.” Reyes v. Ebeteur, 2 NMI 418, 429 (1992). ¶ 14 Manglona’s arguments are unpersuasive. First, Manglona argues that his non-payment was excused because he had made overpayments on the CDA loan and thus needed Defendants to tell him the overpayment amount so he could deduct it from the lump sum payment. Even if we were to believe Manglona’s loan repayment figures – which the trial court did not – he only paid $130,086.78 to CDA. This is less than the $131,493.76 in monthly payments due by January 2005 under the Conditional Contract. Accordingly, we do not see how there could have been an overpayment. ¶ 15 Second, Manglona only considers breach relative to Section 4(a)(3) of the Conditional Contract and neglects to recognize that breach may occur through other terms in the contract. Section 4(a)(3) only discusses breach in the context of missed monthly payments. It states: “[Manglona] shall be in default and breach of this Contract if [Manglona] fails to pay the monthly CDA Loan when due, and that such failure [will] le[a]d to the foreclosure of the chattel mortgage and/or other adverse proceedings pursuant to the CDA Agreement.” ER at 47 (emphasis added). In contrast, Section 5 of the Conditional Contract more broadly applies to all payments due under Section 3, including the lump sum and monthly payments. Section 5 states that “[u]pon the fulfillment of each of the conditions mentioned in Section 3 above and other applicable provisions herein, [Defendants] shall execute in favor of and deliver to [Manglona] a good and sufficiency Warranty Deed . . . .” ER at 48 (emphasis added). “[U]nless a contrary intent is evident, words used in one sense in one part of a contract are deemed of like significance in another part.” Thompson v. Amoco Oil Co., 903 F.2d 1118, 1121 (7th Cir. 1990) (quoting Cedar Park Cemetery Ass’n v. Vill. of Calumet Park, 75 N.E.2d 874, 880 (Ill. 1947)); see also Taracorp, Inc. v. NL Indus., 73 F.3d 738, 744-45 (7th Cir. 1996) (noting that this principle parallels the statutory interpretation principle that “we assume that the same words have the same meaning in a given act and that the choice of substantially different words to address analogous issues signifies a different approach.”). Thus interpreted, the default provision in Section 4(a)(3) of the Conditional Contract only applies when default is triggered by missed monthly payments related to the CDA Loan; this provision does not apply to other payments missed by Manglona to which default rules for determining breach apply. Therefore, because Manglona breached his duty to pay the $108,506.24 lump sum due under Section 3(c), we do not need to determine whether breach occurred under Section 4(a)(3). 10 On cross-examination, Baza’s attorney asked Manglona the following question: “Isn’t it true, Mr. Manglona, that you haven’t paid a penny of that $108,506.24 to Ms. Baza as required of you under Section 3(c) of this contract?” He answered: “I haven’t paid . . . .” ER at 119. 5  B. The Covenant of Good Faith and Fair Dealing ¶ 16 If non-performance of a contractual duty is justifiable, then there is no breach. Del Rosario, 2001 MP 3 ¶ 96. Manglona contends that Defendants failed to abide by the implied covenant of good faith and fair dealing and that his non-performance should thus be excused even if this Court concludes that he breached the Conditional Contract. “[E]very contract imposes upon each party a duty of good faith and fair dealing in its performance and its enforcement.” Id. ¶ 99 (quoting Restatement (Second) of Contracts § 205 (1981)). Failure to comply with this implied covenant can excuse non-performance. See, e.g., Fortune v. Nat’l Cash Register Co., 364 N.E.2d 1251, 1258-59 (Mass. 1977) (holding that breach of implied covenant of good faith and fair dealing excuses the other party from performance of conditions imposed upon him). ¶ 17 The trial court concluded that Defendants did not violate the covenant of good faith and fair dealing. It found that the “amount that [Manglona] was obligated to pay and the timing of said payments was specifically provided for in the Conditional Contract. No other information was necessary for [Manglona] to make the required payments. There were no uncertainties as to what [Manglona] was to pay.” Findings at 9. The court further reasoned that no provision in the Conditional Contract imposed a duty on Defendants to provide Manglona with CDA loan details, much less made provision of such information a condition to Manglona’s performance. Finally, the court stated that Manglona’s breach could not be excused on the basis of Defendants’ failure to provide loan information because Manglona’s first request for such information was made “seven years after [Manglona] had already breached the Conditional Contract by failing to make timely payments.” Findings at 10. The trial court’s decision on this matter is a mixed question of law and fact subject to de novo review; the trial court’s factual findings are reviewed for clear error. Santos v. Santos, 2000 MP 9 ¶ 3. ¶ 18 We agree with the trial court. The implied covenant of good faith and fair dealing only requires that neither party do anything that will injure the other party’s right to receive the benefits of the agreement. Del Rosario, 2001 MP 3 ¶ 99 (quoting Ellingstad v. Alaska Dep’t of Natural Res., 979 P.2d 1000, 1009 (Alaska 1999)). Here, “[t]here were no uncertainties as to what [Manglona] was to pay.” Findings at 9. The required CDA loan payments are explicitly and unambiguously laid out in Section 3(b) of the Conditional Contract, which details ninety-two payments that Manglona was required to pay CDA on Defendants’ behalf, and no additional information was needed to establish the payment amounts.11 Moreover, as conceded by Defendants, under the plain terms of the Conditional Contract, Manglona only 11 At any point during the term of the Conditional Contract, Manglona or his accountant could have easily recalculated how much was still owed under Section 3(b). The Conditional Contract did not contain any contingencies on the CDA Loan balance that would have altered the amount due from Manglona. Thus, the total amount due under the Conditional Contract was a fixed amount and computing the balance due did not call for complex analysis. 6  remained liable for the loan payments detailed in the Conditional Contract, and not liable for any of the late fees or increased payment amounts. Consequently, Manglona’s inability to keep accurate records did not excuse his failure to make the $108,506.24 payment in June 2002. Moreover, we agree with the trial court that the timing of Manglona’s requests for loan information occurred long after he missed payments and is further evidence that Defendants refusal to provide loan information is insufficient to discharge Manglona’s contractual obligations. Therefore, the trial court acted properly when it found Defendants had not violated the covenant of good faith and fair dealing and we affirm on this point. C. Remedies ¶ 19 After finding Manglona in breach, the trial court awarded Defendants: (1) possession of the Lot; (2) $79,806.45 in back rent; (3) all rentals collected from subtenant Lee from March 20, 2008 (the date the Letter of Termination was sent) to present, including all funds deposited with the court registry; and (4) reasonable attorney fees. While not specifically listed as granted relief, the trial court did not order Defendants to return to Manglona any of the payments previously made on the CDA loan. Manglona contests the relief award on three grounds. First, he argues the trial court miscalculated back rent. Second, he argues that forfeiture is inappropriate because, although he received the notice to terminate the Conditional Contract from Defendants, a separate notice was required concerning the original lease. He further argues that such notice was not sent, thus, the Lease Agreement remains in effect. Lastly, he argues the remedy was inequitable. 1. Back Rent Calculations ¶ 20 Manglona disputes the amount of back rent the trial court awarded Defendants. He asserts that the trial court incorrectly calculated that he owes $79,806.45 in back rent. “The amount of a party’s recoverable damages is a question of fact, and is reviewed under a clearly erroneous standard.” Saipan Achugao Resort Members’ Ass’n v. Wan Jin Yoon, 2011 MP 12 ¶ 61 (citing Manglona v. Commonwealth, 2005 MP 15 ¶ 66). Thus, “[t]he lower court’s damage award cannot be overturned unless its factual basis is clearly erroneous.” Manglona v. Commonwealth, 2005 MP 15 ¶ 66 (citing Davis v. United States, 375 F.3d 590, 592 (7th Cir. 2004)). ¶ 21 The trial court erred when it awarded Defendants $79,806.45 in back rent. The trial court reasoned that, “[a]s testified to by David Demapan [(“Demapan”)], Plaintiff owes $79,806.45 to Defendants in rental payments. See Exhibit 17 and 18.” Findings at 18. However, that amount is not found in Exhibit 17 or 18. To the contrary, Demapan repeatedly referred to another figure, $97,575.54, in 7  his testimony.12 Moreover, the trial court did not make an explicit finding of fact as to the amount Manglona had paid in monthly installments pursuant to Section 3(b), which is essential to determining back rent owed.13 On remand, the trial court will need to explicitly make this finding of fact to calculate damages. ¶ 22 Under the Restatement (Second) of Property, Baza is entitled to recover “the amount of the rent that is due.” Restatement (Second) of Prop.: Landlord and Tenant § 12.1(2) (1977) (“[I]f there is a breach of the tenant’s obligation to pay the rent reserved in the lease, the landlord may: (a) recover from the tenant the amount of the rent that is due . . . .”); see also Estate of Ogumoro v. Han Yoon Ko, 2011 MP 11 ¶ 64 (stating that Restatement (Second) of Prop.: Landlord and Tenant § 12.1 “provides [a landlord] with a right to terminate [a tenant] for non-payment of rent”). “Our primary concern in contract interpretation is to determine and give effect to the intentions of the parties as expressed in the instrument, and the intent of contracting parties is generally presumed to be encompassed by the plain language of contract terms.” Saipan Achugao, 2011 MP 12 ¶ 15 (quoting Commonwealth Ports Auth. v. Tinian Shipping Co., 2007 MP 22 ¶ 16). Moreover, our focus is on interpreting “what both parties agreed to and not what the contract may have devolved into.” Tinian Shipping, 2007 MP 22 ¶ 17. As discussed above, according to the plain terms of Section 4(a)(2), the purchase price identified in Section 2 of the Conditional Contract assumed the place of rental payments in the Lease Agreement. Moreover, the parties intended the Lease Agreement to survive even if Manglona breached the Conditional Contract. First, the Conditional Contract does not contain a clause that terminates or otherwise conflicts with the Lease Agreement’s expiration date. Second, Section 3 of the Conditional Contract states that the “[p]urchase price shall be paid in accordance with the following” schedule. ER at 46 (emphasis added). Compliance with the payment schedule was mandatory based on the parties’ original intent. N. Marianas Coll. v. Civil Serv. Comm’n, 2007 MP 8 ¶ 9 (“The word ‘shall’ is unambiguous and means ‘must.’” (citing Aquino v. Tinian Cockfighting Bd., 3 NMI 284, 292 (1992))). The payment schedule ended on January 14, 2005, more than five years before the expiration date of the Lease Agreement. Consequently, upon signing the Conditional 12 Demapan is an accountant who testified on behalf of Baza. He calculated the $97,575.54 figure using the outstanding balance amount provided by CDA in its February 2009 letter to Manglona. According to Demapan, this figure includes a combination of principal, interest, and penalties. During oral argument, Baza conceded that Manglona was only responsible for paying CDA according to the payment schedule in Section 3(b) of the Sales Contract. Furthermore, Baza conceded that she is directly responsible for the difference between the amounts due to CDA and Manglona’s obligations under the Conditional Contract, in addition to interest and penalties that accrued. Therefore, any reliance the trial court placed on Demapan’s figure is also clearly erroneous. 13 The trial court made findings with regard to how much was paid under Section 3(a) and (c). It found that Manglona “paid the initial $10,000” due under Section 3(a). Findings at 3. In addition, it found that Manglona did not pay any portion of the $108,506.24 due under Section 3(c). Thus, “[p]ursuant to Section 3(c) of the Conditional Contract [Manglona] still owes [Baza] the principle sum of $108,506.24 plus interest.” Findings at 7. 8  Contract on June 18, 1997, the total rent due during the remaining life of the Lease Agreement was $250,000, as identified in Section 2. ¶ 23 Therefore, the balance of rent due equals the total amount of rent due between June 18, 1997 and December 31, 2009 ($250,000) minus the amount paid under Section 3 of the Conditional Contract. As conceded by Defendants, Manglona is not liable for penalties or other costs associated with the CDA loan related to the refinance or Manglona’s tardiness in paying monthly installments when due. Moreover, due to the Attornment Agreement, Defendants’ damages were limited because Lee immediately took the place of Manglona as tenant. Thus, back rent awarded by the trial court should be prorated to reflect the mitigation of Defendants’ damages provided by the Attornment Agreement. In addition, courts may allow prejudgment interest as part of a damage award to compensate for detention of money or property even when interest is not stipulated for by contract or authorized by statute. Manglona v. Commonwealth, 2005 MP 15 ¶ 43 (citing United States v. North Carolina, 136 U.S. 211, 216 (1890)). Thus, Defendants may recover prejudgment interest on money due from the time her claim accrued upon termination of the lease until judgment is entered. Id. (quoting West Virginia v. United States, 479 U.S. 305, 310 n.2 (1987)). Consequently, we remand to the trial court for determination of the amount of back rent owed to Defendants consistent with this opinion.14 2. Forfeiture ¶ 24 Manglona contends that the trial court erred when it permitted forfeiture as a remedy for breach of the Conditional Contract. Specifically, Manglona argues that although he received Defendants’ notice of termination of the Conditional Contract, Defendants did not send a separate notice concerning the original lease. According to Manglona, Defendants were required to give him specific notice “delineating precisely what provision of the lease [had] been violated so that [Manglona] may cure the problem within the time permitted.” Appellant’s Opening Br. at 13 (citing Gallagher v. Borden, Inc., 616 N.E.2d 577 (Ohio Ct. App. 1992)). Interpretation of contract terms and whether notice is defective are questions of law that are reviewed de novo. Sablan Enters., 1997 MP 32 ¶ 10 (“Whether notice is defective is a question of law”); Fusco, 2011 MP 17 ¶ 26 (“Interpretation of contract terms is a question of law that we review de novo.”). a. Forfeiture at Law ¶ 25 Forfeitures of leased property are enforced at law only where the parties clearly intended forfeiture as a remedy. Blue Ridge Metal Mfg. Co. v. Proctor, 194 A. 559, 561 (Pa. 1937) (“Forfeitures are odious in law, and are enforced only where there is the clearest evidence that that was what was meant 14 Because we hold that Manglona breached the Conditional Contract, Baza is also entitled to the other monetary damages awarded by the trial court, including: (1) all rentals collected from subtenant Lee from March 20, 2008 to present including all funds deposited with the court registry; and (2) reasonable attorney fees. 9  by the stipulations of the parties.” (internal quotation marks omitted)). In this case, Section 17 of the Lease Agreement (“Section 17”) specifically provides for forfeiture as a remedy in the event Manglona breaches. In pertinent part, Section 17 states: Where lessee is in default, Lessor shall notify lessee in writing of such default and if lessee fails to cure the same within thirty (30) days of receipt of such notice, lessor may thereafter renenter and retake the premises, and declare the lease terminated. ER at 41 (emphasis added). ¶ 26 We must examine the relationship between the parties to determine whether the forfeiture provision in Section 17 also applies to Manglona under the Conditional Contract. When a tenant enters into an agreement to purchase land from their landlord, “the general rule is that execution of a contract of sale between landlord and tenant serves to merge the landlord-tenant relationship into the vendor-vendee relationship and thus effectively terminates the former, unless the parties clearly intend the contrary result.” Barbarita v. Shilling, 489 N.Y.S.2d 86, 87 (N.Y. App. Div. 1985); see also Marshall v. Bare, 687 P.2d 591, 594 (Idaho Ct. App. 1984) (“As a general rule, ‘the relationship between a vendor and a vendee in possession under a contract to purchase land is not . . . that of landlord and tenant.’” (quoting 77 Am. Jur. 2d Vendor and Purchaser § 322 (1975))). However, “the parties may ‘deviate from the general rule and avoid a merger’ by an express declaration in the agreement to this effect.” Hadlick v. DiGiantommaso, 545 N.Y.S.2d 816, 818 (N.Y. App. Div. 1989) (quoting Barbarita v. Shilling, 489 N.Y.S.2d at 87). Accordingly, while the general rule is that the landlord and tenant relationship will terminate and that of vendor and purchaser will arise, the two relationships will exist simultaneously if there is a clear intent to maintain a landlord-tenant relationship until the purchase amount is satisfied. See Sid Farber Hempstead Corp. v. Buckley, 317 N.Y.S.2d 30, 33-34 (N.Y. Sup. Ct. 1970) (noting that the general rule is to apply the rule of merger absent an express provision in the agreement or where the surrounding facts and circumstances exhibit an intent to the contrary). ¶ 27 In the instant case, the Conditional Contract evidences the parties’ clear intent for the relationship to remain landlord-tenant until payment of the purchase price. “The intent of contracting parties is generally presumed to be encompassed by the plain language of contract terms.” Riley, 4 NMI at 88. Specifically, Conditional Contract section 4(a)(1) states that for “the period prior to delivery of the Warranty Deed conveying title . . . Buyer’s status shall be that of a Lessee as defined under the said Lease Agreement, subject to the provisions therein.” ER at 47. Additionally, Section 4(a)(2) states that the “purchase price referred and described in Section 2 [of the Conditional Contract] shall automatically assume the place of the rental payments prescribed under the said Lease Agreement.” Id. ¶ 28 Moreover, Section 5 states that “[u]pon the fulfillment of each of the conditions mentioned in Section 3 above and other applicable provisions herein, [Defendants] shall execute in favor of and deliver to [Manglona] a good and sufficiency Warranty Deed . . . .” ER at 48 (emphasis added). “A condition is 10  an event, not certain to occur, [but] which must occur, unless its non-occurrence is excused, before performance under a contract becomes due.” Del Rosario, 2001 MP 3 ¶ 97 (quoting Restatement (Second) of Contracts § 224 (1981)).15 Although conditions are not favored in the law, we may construe a contract term as a condition if the parties unambiguously require such construction. Shovel Transfer & Storage v. Pa. Liquor Control Bd., 739 A.2d 133, 139 (Pa. 1999) (“Generally, an act or event designated in a contract will not be construed as a condition unless that clearly appears to be the intention of the parties.”); Victoria S.S. Co. v. W. Assurance Co. of Toronto, 139 P. 807, 810 (Cal. 1914) (“‘Courts are disinclined to construe the stipulations of a contract as conditions precedent, unless compelled by the language of the contract plainly expressed. The reason for this disinclination is that such a construction prevents the court from dealing out justice to the parties according to the equities of the case.’” (quoting Front St., Mission and Ocean R.R. v. Butler, 50 Cal. 574, 577 (1875))). ¶ 29 According to its plain language, full satisfaction of Section 3 is a condition for Defendants’ duty to convey title to Manglona. Section 5 expressly refers to payments due under Section 3 as the event that must occur. Although the parties’ use of the term “conditions” is not dispositive, it is persuasive within this context. See Bank of Brewton, Inc. v. Int’l Fid. Ins.