Belk v. Martin

• Decision Date: 28 December 2001
• Docket Number: No. 25259.,25259.
• Parties: Gary BELK and Carole Cannon, Plaintiffs-Respondents, v. Allen MARTIN and Meliah Martin, husband and wife, Defendants-Appellants.
• Court: Idaho Supreme Court

39 P.3d 592

136 Idaho 652

Gary BELK and Carole Cannon, Plaintiffs-Respondents, v. Allen MARTIN and Meliah Martin, husband and wife, Defendants-Appellants.

No. 25259.

Supreme Court of Idaho, Boise, September 2001 Term.

December 28, 2001.

Greg S. Silvey, Boise, for appellants.

Alexanderson, Davis, Rainey & Whitney, Caldwell for respondents. WALTERS, Justice.

This is an appeal following a trial without a jury where the district court determined a farm lease contained a unilateral mistake regarding the rental amount. As a result, the district court reformed the lease to provide that the dollar amount of the lease should be $14,768.00 rather than $1,476.80. We affirm.

FACTUAL AND PROCEDURAL BACKGROUND

Howard and Lois Belk owned farmland located in Canyon County, Idaho. The farm consisted of seven fields totaling 113.6 acres, which had been rented to various tenants for many years. In October of 1995, William Ekberg, brother of Lois Belk, advertised the land for rent in the newspaper. Defendants Allen and Meliah Martin ("Martin") responded to the advertisement. A meeting to discuss the leasing of the farmland was attended by Mr. Martin, Mr. Ekberg, Plaintiffs Gary Belk and Carole Cannon ("Plaintiffs" or "Respondents"), who were the son and daughter of the Belks, and Carole's husband, Warren Cannon.

At the meeting, the parties agreed upon the fields that were to be leased; that the lease was a cash lease; that the payment of rent would be due after harvest; that the payment of rent would be secured by a crop lien; and that the lessors would pay real property and water assessments on the property. Martin took possession of the land immediately thereafter and began preparation work for the upcoming farm season.

A written lease was prepared by Ms. Cannon's attorney in December 1995 but not signed until the parties met again in late February or March of 1996. In between the negotiation of the lease and the signing, both Howard and Lois Belk passed away; Ms. Cannon was appointed personal representative of their estates and signed the lease in that capacity. At no time prior to the signing of the lease did the Plaintiffs review the lease. Before signing the lease, Martin requested that the date of termination be changed from August 15, 1996 to November 15, 1996. Both Mr. Martin and Ms. Cannon initialed the change. No other changes were made to the lease. The lease, as written, provided for rent in the amount of $1,476.80. A farm products financing statement for security of the payment of rent was also signed and subsequently filed. On November 15, 1996, Martin did not pay the rent but retained possession of the farmland; two fields of unharvested corn remained. By letter dated November 27, 1996, Plaintiffs demanded payment of the rent, an accounting and requested that Martin not reenter the property without permission. A second demand letter was sent to Martin's attorney on December 2, 1996. On December 4, 1996, the parties entered into an interim agreement allowing the harvesting of the corn to be completed. The agreement stated that the amount of rent was disputed and provided that the proceeds from the sale of the crops on the farmland would be placed in an interest bearing trust account up to the disputed amount. For a variety of reasons, including weather and mechanical breakdowns, by December 19, 1996, Martin had not yet completed the harvest of the corn. Respondents engaged Sam Hall to combine one of the corn fields. On January 8, 1997, Martin engaged Sam Hall to combine the second field. The Cannons paid Sam Hall $1,191.30 for combining the two corn fields.

A complaint was filed April 17, 1997, whereby Plaintiffs sought reformation of the lease, payment of rent, reimbursement for the corn-harvesting expenses, recovery of interest and for attorney fees and costs. Martin filed an amended answer and counterclaim requesting specific performance of the lease and recovery of his attorney fees and costs. The case was tried without a jury on July 15 and 16, 1998. On the first day of trial, the district court heard and denied Martin's motion in limine seeking to prevent extrinsic evidence from being presented.

Following the trial, the district court issued its Memorandum Decision and Order finding that a valid lease, with a termination date of November 15, 1996, existed. The trial court also determined that the parties had agreed to a rental fee of $130 per acre for 113.6 acres, thereby totaling $14,768.00 rather than the $1,476.80 stated in the rental provision of the lease. The basis for the district court's conclusion was that the lease contained a unilateral mistake made by the Plaintiffs of which Martin had knowledge. The court therefore reformed the rental provision of the lease to $14,768.00. Further, the district court awarded the corn-harvesting expenses paid by the Cannons. Attorney fees were not awarded by the district court because the Plaintiffs had not identified the statute authorizing an award of fees.

A hearing was held to reconsider the denial of attorney fees and costs and to determine if prejudgment interest should have been awarded. On October 22, 1998, the district court entered an order granting attorney fees and costs to Plaintiffs pursuant to Idaho Code § 12-120(3), and awarded prejudgment interest from November 15, 1996 together with discretionary costs. Following the hearing the parties stipulated to $7,500 as the amount of attorney fees to which the Plaintiffs were entitled. On November 23, 1998, the district court filed its amended judgment awarding rent, prejudgment interest, harvest costs, discretionary costs, attorney fees and court costs to the Plaintiffs. The Martins then pursued this appeal.

ISSUES ON APPEAL

1. Is the district court's finding that the Martin knew of the Respondents' unilateral mistake supported by substantial and competent evidence in the record?

2. Did the district court err by awarding prejudgment interest to the Respondents when the funds were not placed in an interest bearing account?

3. Are either of the parties entitled to attorney fees on appeal?

DISCUSSION

I.

Appellant Martin asserts that the district court erred by finding the lease contained a unilateral mistake made by the Respondents. Martin argues specifically that the district court 1) erred by allowing extrinsic evidence to vary the terms of an integrated and complete contract and by denying Martin's motion in limine which sought to prevent extrinsic evidence; 2) erred by reforming the lease; and 3) erred by summarily dismissing Martin's defense of quasi-estoppel. Martin's appeal asks this Court to second-guess the findings of the district court. Martin contends that the district court's findings of fact should be reviewed with the same "clear and satisfactory" standard utilized by the trial court. The scope of review by this Court when the sufficiency of the evidence is challenged, however, is clear. The trier of fact has the primary responsibility for weighing the evidence and determining whether the required burden of proof on an issue has been met. Sowards v. Rathbun, 134 Idaho 702, 706, 8 P.3d 1245, 1249 (2000). This Court determines whether the findings of fact by the trial court are supported by substantial, competent evidence. Id.

Review of the lower court's decision is limited to ascertaining whether the evidence supports the findings of fact, and whether the findings of fact support the conclusions of law. A trial court's findings of fact in a court tried case will be liberally construed on appeal in favor of the judgment entered, in view of the trial court's role as trier of fact. It is the province of the district judge acting as trier of fact to weigh conflicting evidence and testimony and to judge the credibility of the witnesses. If the findings of fact are based on substantial evidence, even if the evidence is conflicting, they will not be overturned on appeal. However, we exercise free review over the lower court's conclusions of law to determine whether the court correctly stated the applicable law, and whether the legal conclusions are sustained by the facts found.

Conley v. Whittlesey, 133 Idaho 265, 985 P.2d 1127 (1999) (citations omitted).

This Court relies on the trial court to weigh the evidence on the issue of mistake as that issue is a factual question, and the trial court's determination will not be reversed unless the finding of mistake is clearly erroneous. Moore v. Mullen, 123 Idaho 985, 987, 855 P.2d 70, 72 (Ct.App.1993) (citing Cline v. Hoyle & Assoc. Ins., Inc., 108 Idaho 162, 164, 697 P.2d 1176, 1178 (1985)). "[A] mistake is an unintentional act or omission arising from ignorance, surprise, or misplaced confidence. The mistake must be material, that is, so substantial and fundamental as to defeat the object of the parties. A unilateral mistake usually does not offer grounds for relief, although it may in certain circumstances." Leydet v. City of Mountain Home, 119 Idaho 1041, 1044, 812 P.2d 755, 758 (Ct.App.1991) (citations omitted). A contract containing a unilateral mistake may be rescinded or modified if there has been a misrepresentation or knowledge of the mistake by the other party. Dennett v. Kuenzli, 130 Idaho 21, 28, 936 P.2d 219, 226 (Ct.App. 1997); Cline v. Hoyle & Assoc. Insur., Inc., 108 Idaho 162, 164, 697 P.2d 1176, 1178 (1985).

A) Extrinsic Evidence

Martin argues the district court erred by allowing extrinsic evidence to be presented at trial because the farm lease was a complete, integrated and unambiguous contract. Further, Martin asserts that extrinsic evidence is only admissible when a mutual mistake is alleged rather than when the mistake was unilateral. Respondents counterargue that extrinsic evidence is allowed to determine the intentions of the parties when the written instrument does not memorialize the true intent of the parties.

The parol evidence rule provides:

If the written agreement is a complete upon its face and

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