Glacier Land Co. v. Claudia Klawe & Assoc.

Citation154 P.3d 852,2006 UT App 516
Decision Date29 December 2006
Docket NumberNo. 20050265-CA.,20050265-CA.
PartiesGLACIER LAND CO., L.L.C., a Utah limited liability company; Glacier Land Development Co., L.L.C., a Utah limited liability company, Plaintiffs, Appellees, and Cross-appellants, v. CLAUDIA KLAWE & ASSOCIATES, L.L.C., a Utah limited liability company; and Claudia Klawe, an individual, Defendants, Counterclaimants, Third-party Plaintiffs, Appellants, and Cross-appellees, v. Glacier Land Co., L.L.C., a Utah limited liability company; Glacier Land Development Co. L.L.C., a Utah limited liability company; David Gough, an individual; Daniel L. Vranes, an individual; and Brent R. Shaw, an individual, Counter-defendants and Third-party Defendants.
CourtCourt of Appeals of Utah

Stephen P. Horvat and Thomas R. Karrenberg, Anderson & Karrenberg, Salt Lake City, for Appellants.

Bruce R. Baird, Hutchings Baird Curtis & Astill, Sandy, for Appellees.

Before BENCH, P.J., GREENWOOD, Associate P.J., and McHUGH, J.

McHUGH, Judge:

¶ 1 Appellants Claudia Klawe and Claudia Klawe & Associates, L.L.C. (collectively, Klawe) appeal the trial court's grant of partial summary judgment to Appellees Glacier Land Company and Glacier Land Development Company (collectively, Glacier). The court determined that a marketing agreement between Klawe and Glacier contained an indefinite term of duration and was therefore terminable at will. Klawe also seeks review of two of the trial court's rulings regarding witness testimony. First, Klawe challenges the trial court's exclusion of Claudia Klawe's testimony concerning the assignment of the duties under the exclusive marketing agreement. Second, Klawe asserts it was error for the trial court to allow a rebuttal witness for Glacier to testify when that witness was not listed in pretrial disclosures. Finally, Glacier cross-appeals the trial court's denial of a motion for attorney fees.1 We affirm in part and reverse and remand in part.

BACKGROUND

¶ 2 Because this is an appeal from a grant of summary judgment, we recite "the facts and all reasonable inferences drawn therefrom in the light most favorable to the nonmoving party." Ryan v. Dan's Food Stores, Inc., 972 P.2d 395, 399 (Utah 1998) (quotations and citation omitted). This suit arises out of a disagreement over the marketing and sale of high-end residential homes in the Monte Luca development (Monte Luca), located on Danish Road in Sandy, Utah. On August 4, 1999, Glacier entered into an oral agreement with Claudia Klawe (Claudia), an associate broker affiliated with Coldwell Banker Premier (Coldwell),2 regarding the exclusive right to market and sell the homes built within the Monte Luca subdivision. At the time of the agreement, the Monte Luca development plan provided for the construction of forty units that would be built to buyer specifications. However, construction had not yet begun on any units.

¶ 3 Under the agreement, Claudia was granted the exclusive right to act as the real-estate agent for the development until all forty of the planned units were sold. In exchange for that right, Claudia agreed to list and promote the project, contribute twenty-five percent of the marketing expenses, and accept a reduced commission on sales. Between the time of the initial oral agreement and the commencement of litigation, the parties memorialized certain aspects of their agreement, including Claudia's right to act as exclusive agent until all units were sold, in several different documents. One of those documents, entitled Marketing Agreement, was executed on August 4, 1999, and stated:

[Claudia] shall be the exclusive real estate agent for the aforementioned properties. Claudia .. . shall have the autonomy to implement a successful marketing campaign and to follow through with the listings, sales and closings of all properties.

(Emphases added.) Similarly, another document entitled Listing Agreement & Agency Disclosure form was executed on October 17, 2001, and generally provided that Claudia would be the exclusive listing agent for "40 stand alone residences [at] Monte Luca" until the sell out date.3

¶ 4 In the fall of 2000, Glacier began construction on Monte Luca and started to accept contracts for individual units. Klawe began performing under the agreement by initiating a marketing campaign which included a website, printed materials, and listings for the properties on the Wasatch Front Regional Listing Service (MLS). Klawe also started to secure contracts for the sale of the Monte Luca units.

¶ 5 In April 2001, Glacier expanded the Monte Luca project by acquiring the Steed Property—an adjoining parcel on Danish Road—that could accommodate an additional two or three units. During the transaction, Claudia acted as Glacier's agent and earned a $14,000 commission. Instead of collecting the commission, however, Klawe credited the $14,000 to Glacier in exchange for a modification of the oral Monte Luca exclusive marketing agreement. The modification provided that the additional two or three units planned on the Steed Property would be included within the terms of the exclusive marketing agreement. Glacier accepted the $14,000 and agreed to the modification, expanding Klawe's exclusive right to act as real estate agent for forty-two4 planned units in the Monte Luca development—forty from the development as originally planned plus two more units to be built on the Steed Property. On April 23, 2001, the parties memorialized aspects of the oral modification by executing an Addendum to the Real Estate Listing Agreement. And later, on January 7, 2002, the parties executed two additional Listing Agreement & Agency Disclosure forms that generally indicated that they covered "42 stand alone residences [at] Monte Luca," and would be in effect until the "sell out date."

¶ 6 In June 2002, the relationship between the parties began to deteriorate when David Gough, a Glacier principal, decided to purchase one of the forty-two units in Monte Luca covered by the exclusive marketing agreement. In the transaction, Gough challenged Klawe's right to receive a commission on the sale. When Claudia attempted to discuss the commission with Gough, he became threatening and verbally abusive. After the altercation, Klawe temporarily assigned Claudia's duties under the exclusive marketing agreement to another agent and sent a letter to Glacier stating that the reason for the reassignment was "unethical and improper business conduct" on the part of Glacier. On July 15, 2002, Glacier attempted to terminate its relationship with Klawe, citing poor sales performance as the reason for termination. Shortly after the attempted termination, on August 9, 2002, Glacier brought suit against Klawe seeking a temporary restraining order to compel Klawe to release control over the Monte Luca listings on the MLS.5 Klawe counterclaimed against Glacier and alleged causes of action for breach of contract, unjust enrichment, and fraudulent misrepresentation.

¶ 7 Glacier sought partial summary judgment with respect to Klawe's breach of contract claim. For purposes of that motion, Glacier stipulated to the fact that the parties had entered into the exclusive marketing agreement and that the agreed duration of the contract was until all forty-two of the Monte Luca units were sold. Glacier then argued that even assuming those facts, Klawe was not entitled to relief as a matter of law because the contract was for an indefinite duration and, therefore, terminable at will by either party. Klawe countered that the duration of the contract was definite because, although no calendar date or temporal term had been adopted, the parties had nonetheless agreed that the contract would terminate upon the happening of a defined event—the sale of all the Monte Luca units. The trial court agreed with Glacier, finding that, as a matter of fundamental contract principles, the parties' contract "lack[ed] definiteness, lack[ed] a period of duration that is certain and as a result can only be argued as, can only be determined as being at-will." Thus, the court granted Glacier partial summary judgment on Klawe's breach of contract claim.

¶ 8 Klawe's unjust enrichment and fraud-based claims proceeded to trial. At trial, Klawe attempted to introduce Claudia's testimony relating to the altercation between herself and Gough that led to the assignment of her duties under the exclusive marketing agreement. The trial court excluded the testimony under rule 403 of the Utah Rules of Evidence, finding that the evidence was not particularly probative of the issues raised by Klawe's unjust enrichment and fraud claims and had "a tremendous potential for being prejudicial."

¶ 9 However, Claudia was allowed to testify as to her reliance on the exclusive marketing agreement including the until-sold provision. During cross-examination, Glacier's counsel asked Claudia if, for the period of time she was at Coldwell, she believed that Coldwell would have accepted a listing agreement specifying a duration of until sold. Claudia answered in the affirmative indicating that she did believe Coldwell would have accepted such a listing. Following Claudia's testimony, Glacier called Dennis Marchant, managing broker for Coldwell, to testify that Coldwell would not have accepted an until-sold listing agreement. However, Marchant had not been designated in Glacier's pretrial disclosures under rule 26 of the Utah Rules of Civil Procedure. Klawe moved to exclude Marchant's testimony under rule 37(f) of the Utah Rules of Civil Procedure on the ground that he had not been previously disclosed. Glacier argued that Marchant's testimony was being offered merely to impeach Claudia's testimony that she believed that Coldwell would have accepted an until-sold listing agreement; and therefore, Glacier was not required to designate Marchant in its pretrial disclosures. Klawe disagreed, contending that because Claudia had only testified as to her belief, she could not be impeached...

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