Bob Daniels and Sons v. Weaver

• Decision Date: 30 March 1984
• Docket Number: No. 14422,14422
• Citation: 681 P.2d 1010,106 Idaho 535
• Parties: BOB DANIELS AND SONS, a co-partnership consisting of Bob Daniels, Don Daniels and Merlin Daniels, Plaintiffs, Counter-defendants, Appellants, v. William H. WEAVER and Vicki L. Weaver, husband and wife, Defendants, Counter-plaintiffs, Respondents.
• Court: Idaho Court of Appeals

Page 1010

681 P.2d 1010

106 Idaho 535

BOB DANIELS AND SONS, a co-partnership consisting of Bob Daniels, Don Daniels and Merlin Daniels, Plaintiffs, Counter-defendants, Appellants, v. William H. WEAVER and Vicki L. Weaver, husband and wife, Defendants, Counter-plaintiffs, Respondents.

No. 14422.

Court of Appeals of Idaho.

March 30, 1984.

Rehearing Denied May 25, 1984.

Petition for Review Denied Aug. 8, 1984.

John K. Gatchel and Stephen C. Batt (Gatchel & Batt), Payette, for plaintiffs, counter-defendants, appellants.

James S. Underwood, Jr. and Dennis R. Petersen, Boise, for defendants, counter-plaintiffs, respondents.

BURNETT, Judge.

Few things are as certain as death, taxes and the legal entanglement that follows a sale of landlocked real estate. This case focuses upon such a sale. The property in question, part of a larger tract owned by Bob Daniels and Sons, was sold to William and Vicki Weaver under an installment contract. The property had no access of record, and the contract was silent regarding access. After paying two annual installments, the buyers directed an escrow agent not to deliver a third payment to the sellers until access had been furnished through the sellers' remaining land. The sellers sued for breach of contract. The buyers counterclaimed for access upon the alternate theories that the parties orally had agreed upon an easement across the sellers' land, or that such an easement should be implied in law. The district court, in a summary judgment, held that the buyers had not breached the contract and that they were entitled to an implied easement. The sellers have appealed.

We are asked to decide (1) whether the buyers could impose, as a condition of delivering payment, a demand that the sellers perform a duty not required by the installment contract; (2) whether the buyers have made a factual showing sufficient to create a genuine issue concerning existence of an oral agreement; and (3) whether the record is adequate to determine that the requirements for an implied easement have been met. For reasons explained below, we answer each question in the negative. Accordingly, we reverse the summary judgment and remand for further proceedings.

I

We first consider whether the buyers breached the contract by making access a condition to delivery of a payment. This condition was set forth by letter from the buyers' attorney to an escrow holder. The letter enclosed a payment but said "[t]his sum is being conveyed to you, in trust, so that the purchasers will not be in default in their payments." The letter asserted that the sellers had violated an unspecified agreement to provide access. It instructed the escrow holder not to deliver the payment to the sellers until the problem had been "worked out." The escrow holder complied, later informing the district court that it was holding the money in a trust account "until instructed by [the purchasers] as to what disposition to be made [sic] of said funds."

A

The district court decided that the buyers' conditional payment was permissible in view of the escrow instructions. Those instructions, contained in an instrument separate from the installment contract, stated that "as an inducement" for the escrow holder to accept the escrow, the holder would be entitled "in the event of a disagreement between the parties ... [to] make no delivery ... of any money ... and not be or become liable to the parties." In our view, the district court erred by relying upon the escrow instructions to determine whether the installment contract had been breached.

We believe the instructions in this case could not be construed to permit the buyers unilaterally to impose conditions upon installment payments, absent agreement by the parties themselves that conditional payments were acceptable. The instructions did not specifically authorize conditional payments. They established the escrow holder's rights and duties in relation to the other parties, not the rights and duties of the sellers and buyers between each other. The latter rights and duties were set forth in the installment sale contract. In contrast, the escrow instructions contained clauses defining the escrow holder's responsibilities and compensation. The quoted provision, permitting the escrow holder to refuse to act, was inserted for its own protection.

Moreover, one party to a real estate contract cannot make the escrow holder his agent exclusively, to the detriment of the other party. Foreman v. Todd, 83 Idaho 482, 364 P.2d 365 (1961). Here, the buyers' instruction to hold a payment "in trust" for them was inconsistent with the escrow holder's duties as a neutral depository under the escrow instructions. Both parties must consent if the escrow holder is to act contrary to prior instructions. Brinton v. Lewiston National Bank, 11 Idaho 92, 81 P. 112 (1905). Therefore, we hold that the escrow instructions in this case do not govern the question whether the conditional payment constituted a breach of the installment contract.

B

We turn instead to the contract itself. The buyers were required to make payments at specific annual intervals. Failure to perform when performance was due would constitute a breach of the contract. RESTATEMENT (SECOND) OF CONTRACTS § 235 (1981) (hereinafter cited as Restatement). Of course, the buyers' duty to pay was conditioned upon the lack of any uncured material failure by the sellers to render performance due at an earlier time. Restatement § 237. However, this condition would apply only to the sellers' performance of a duty under the contract. It would not apply to performance required under a separate agreement. Restatement § 237, comment e.

Thus, in Blinzler v. Andrews, 94 Idaho 215, 485 P.2d 957 (1971), the tender of a payment conditioned upon the delivery of title insurance was not treated as a breach, because the contract itself obligated the vendor to furnish title insurance. Conversely, in Barker v. McKellar, 50 Idaho 226, 296 P. 196 (1930), the seller deposited a deed into escrow with instructions to deliver the deed to the purchaser only upon payment of the contract price. The court held that such conditional tender of the deed was insufficient performance because there was no provision for an escrow in the underlying contract. See also Associated Developers Co. v. Infanger, 85 Idaho 158, 376 P.2d 496 (1962).

In this case, as noted, the installment sale contract was silent about access. It imposed upon the sellers no duty beyond conveying acceptable title, allowing quiet possession during the contract term, and providing title insurance. The sellers deposited in escrow a deed that said nothing about access or an easement. They furnished a title insurance commitment specifically noting the lack of access and excluding access from the coverage of the policy. The record discloses, without dispute, that the buyers made no objection to the sellers' performance. Accordingly, we deem it clear that the purchasers, by instructing the escrow agent to hold the payment until the access problem was resolved, conditioned their performance upon the sellers' performance of a duty not provided in the installment contract. The buyers' action would represent a breach, unless the installment contract represented only part of the total agreement between the parties and was supplemented by a prior or contemporaneous oral provision for access. We now turn to that question.

II

The district court made no determination that an oral agreement existed. Such agreement is not urged by the purchasers in their brief on appeal. Nevertheless, in summary judgment proceedings, an appellate court might affirm a decision of the lower court upon a theory different from that upon which the lower court relied. The appellate court can determine from the record whether there is a genuine issue as to any fact material to the application of the alternate theory. See 10 C. WRIGHT, A. MILLER & M. KANE, FEDERAL PRACTICE AND PROCEDURE: CIVIL 2D § 2716 (1983).

In this case, summary judgment was sought by both parties. Where the opposing parties have moved for summary judgment based upon the same evidentiary facts, and same theories and issues, they effectively have stipulated that there is no genuine issue of material fact. Riverside Development Co. v. Ritchie, 103 Idaho 515, 650 P.2d 657 (1982). The question then becomes whether the party seeking relief upon a particular theory has made a sufficient factual showing in support of that theory. Thus, our inquiry is whether the record before us discloses a genuine issue of material fact concerning the existence of an oral agreement. I.R.C.P. 56(c).

A

This question is framed by the pleadings and affidavits submitted by the parties. In an unverified counterclaim the buyers simply alleged that the sellers, at some time prior to the counterclaim, had agreed to grant ingress and egress over their retained land. Answering this general contention, the sellers filed detailed affidavits. The sellers stated that when they transacted the sale of the subject property, they dealt not with the Weavers but with a co-purchaser who--together with his spouse--subsequently assigned all interest in the property to the Weavers. This individual, declared the sellers, was fully informed that no access existed or was promised with respect to the subject property. The individual indicated that he would arrange access from an alternate source. Upon these particular facts, the sellers denied that an oral agreement concerning access had been reached when the sale was consummated. The sellers acknowledged that there had been contacts with the Weavers after the sale, but denied that these contacts had resulted in a subsequent oral agreement for access.

In response to these specific affidavits, the buyers submitted an affidavit which broadly recited that Mr. Weaver had "attempted to work out an easement" but that the sellers had refused to provide access. The affidavit also...