Daniel v. O'Dell
| Decision Date | 12 June 1996 |
| Docket Number | No. 21928,21928 |
| Parties | Tom L. DANIEL and Doris D. Daniel, husband and wife, Plaintiffs-Counter-Defendants-Appellants, v. Daniel E. O'DELL and Delores A. O'Dell, husband and wife, Defendants-Counter-Claimants-Respondents. |
| Court | Idaho Court of Appeals |
Marcus, Merrick & Montgomery, Boise, for appellants. Gale M. Merrick argued.
Eismann Law Offices, Nampa, for respondents. Richard B. Eismann argued.
Tom and Doris Daniel appeal from an order of the district court awarding attorney fees to Daniel and Dolores O'Dell in a forfeiture action. The award was made pursuant to a land purchase contract between the parties which provided for attorney fees to the "prevailing party" should litigation arise. For the reasons expressed herein, we affirm.
In 1988, the Daniels sold a residence to the O'Dells. At the time of the sale, the Daniels's mortgage payments were in arrears in an amount of approximately $7,500 and they were facing the loss of the property through foreclosure. Pursuant to the sale, the Daniels and O'Dells executed an earnest money agreement which called for the O'Dells to pay off the arrearages, to assume the Daniels's mortgage and to pay the Daniels $3,000 in cash.
On August 14, 1990, the parties entered into a written sales agreement (the Agreement) which memorialized the 1988 sale. Paragraphs XII, XVII and XIX of the Agreement set forth the default procedure. Paragraph XII provided that if the O'Dells failed to perform pursuant to the Agreement, the escrow holder (West One Bank) would surrender and deliver the documents in escrow to the Daniels, unless the O'Dells cured the default within thirty days.
Paragraph XVII provided that if the O'Dells failed to make any payment of principal or interest under the Agreement, the Daniels could serve on the O'Dells a written notice "specifying such default or defaults." Like paragraph XII, this paragraph also stated that the O'Dells had thirty days in which to cure a default. Paragraph XIX provided,
In 1991, the O'Dells failed to make three payments. On March 26, 1992, the O'Dells filed for Chapter 13 relief in the United States Bankruptcy Court for the District of Idaho. The O'Dells's amended Chapter 13 plan was confirmed upon the recommendation of the trustee. Under the provisions of the confirmed plan, the O'Dells were to pay to the trustee in installments the $4,370 in arrearages owing to the Daniels, and the trustee would make monthly payments to the Daniels. The current house payments due under the Agreement were not included in the plan and were to made by the O'Dells directly to the Daniels through West One Bank pursuant to the Agreement.
On February 5, 1993, West One forwarded to the O'Dells a notice of default executed by the Daniels on the same date, entitled "Notice of Forfeiture Under Contract and Demand for Possession of Premises." The notice did not specify particular payments which were in default, but simply advised the O'Dells that:
... [You] have failed, refused and neglected to pay the following:
1. Payments in arrears in the sum of approximately $7,104.43; which the [Daniels] have to advance in order to avoid an acceleration of the entire unpaid balance by the lender; in addition, any interest accrued and accruing thereon and other penalties and attorney fees of approximately $1,230.00 and fees now being incurred.
The notice also stated that the Agreement would be forfeited unless the O'Dells paid the amounts due under the Agreement within On February 8, 1993, the O'Dells made the January and February 1993 payments to West One in the sum of $1,995, and West One notified the Daniels of these payments. 1 By letter dated February 10, 1993, the Daniels advised West One that such amount did not cure the amount of default declared by the Daniels in the February 5, 1993, notice.
thirty days, and that the Daniels could take immediate possession of the premises. The O'Dells were further notified that if the forfeiture became final, the Daniels would make demand upon West One for return of all documents in escrow.
In a letter dated February 16, 1993, the O'Dells requested that the Daniels provide "a breakdown of the payments you contend are in default pursuant to the [notice of default]." There is no indication in the record that the Daniels provided the requested information to the O'Dells prior to the filing of the Daniels's complaint.
On April 23, 1993, the Daniels filed a complaint against the O'Dells, which alleged a right to possession of the property and stated that the Daniels had recovered the quitclaim deed to the property from the escrow and had recorded the deed, thereby quitclaiming the property back to the Daniels. The O'Dells denied being in default and counterclaimed, seeking reinstatement of the escrow established under the Agreement.
On January 30, 1995, the district court entered judgment in favor of the O'Dells, holding that the Daniels's notice of default was insufficient because it demanded attorney fees greater than that permitted by the Agreement and included in its calculation of amount due a monthly payment not yet in default. Therefore, the court dismissed the Daniels's complaint and ordered reinstatement of the escrow.
The court also awarded attorney fees to the O'Dells in the amount of $13,500, pursuant to paragraph XXII of the Agreement, which provided for the award of reasonable attorney fees to the prevailing party in litigation arising out of any term of the Agreement. The Daniels appeal from the award of attorney fees, arguing that the district court erred in determining that the notice of default was deficient and that therefore the O'Dells were not the prevailing party under the Agreement. 2
The district court's award of attorney fees in this case was made pursuant to paragraph XXII of the Agreement which states, "In the event of litigation arising out of any term or provision contained herein, the prevailing party will be entitled to recover all costs and a reasonable attorney's fee." In determining a reasonable attorney fee, the court applied the factors set forth in I.R.C.P. 54(d). The Daniels do not argue that the court improperly applied Rule 54(d). Rather, they assert that the court erred in concluding that the notice of default was deficient and in dismissing the Daniels's complaint and reinstating the escrow. Thus, the Daniels contend, the O'Dells were not prevailing party and not entitled to attorney fees under the Agreement.
The district court held that the notice of default was deficient in that the amount alleged to be in arrears, $7,104.43, included a payment of $896, which was not due until March 1, 1993. In addition, the notice requested attorney fees in the amount of $1,230, contrary to paragraph XIX of the Agreement which limited legal fees and costs incurred in preparing a notice of default to $150. Resolution of this case therefore centers Interpretation of an ambiguous document presents a question of fact. DeLancey v. DeLancey, 110 Idaho 63, 65, 714 P.2d 32, 34 (1986); see also Pollard Oil Co. v. Christensen, 103 Idaho 110, 115, 645 P.2d 344, 349 (1982). On the other hand, interpretation of an unambiguous document is a question of law over which this Court exercises free review. DeLancey, supra; see also Treasure Valley Plumbing v. Earth Res., 115 Idaho 373, 375-76, 766 P.2d 1254, 1256-57 (Ct.App.1988). The determination of whether a document is ambiguous is itself a question of law, reviewed de novo. DeLancey, supra; see also Pocatello Industrial Park, Co. v. Steel West, Inc., 101 Idaho 783, 789, 621 P.2d 399, 405 (1980). Because we conclude that the Agreement in this case is unambiguous, we exercise free review in interpreting its terms and in determining whether the notice of default complied with those terms.
on the interpretation of the parties' Agreement.
In reviewing the notice of default in this case, we also recognize the general principle that "forfeitures are abhorrent to the law and all intendments are against them." Stockmen's Supply Co. v. Jenne, 72 Idaho 57, 63, 237 P.2d 613, 617 (1951); see also Thompson v. Fairchild, 93 Idaho 584, 586, 468 P.2d 316, 318 (1970); Dohrman v. Tomlinson, 88 Idaho 313, 319, 399 P.2d 255, 259 (1965). Any forfeiture must strictly follow the terms of the contract, and the terms of a notice of default or termination. Keesee v. Fetzek, 106 Idaho 507, 512, 681 P.2d 600, 605 (Ct.App.1984).
The Agreement in this case provided that if the O'Dells failed to comply with its terms, the Daniels could declare the Agreement terminated or forfeited by sending the O'Dells a notice "specifying such default or defaults." Further, the Agreement provided that the O'Dells had thirty days in which to cure a specified default.
The parties' Agreement is similar to that found in Marks v. Strohm, 65 Idaho 623, 150 P.2d 134 (1944). In Marks, the sellers of a parcel of land sent a notice to the buyers stating that the buyers had defaulted by failing "to pay all delinquent taxes on the sellers' lands, those herein described, and other lands for the years 1934, 1936, 1938 and 1939." 65 Idaho at 626, 150 P.2d at 135. This notice complied with the land purchase contract, which provided that if the sellers wished to terminate the contract, they were required to send the purchaser a notice of termination which "set forth 'such default.' " 65 Idaho at 628, 150 P.2d at 136. On appeal, the our Supreme Court stated: ...
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