Hanson v. Boeder

Decision Date06 February 2007
Docket NumberNo. 20060114.,20060114.
Citation727 N.W.2d 280,2007 ND 20
PartiesPaul K. HANSON, Plaintiff and Appellee v. Donald BOEDER, Defendant and Appellant.
CourtNorth Dakota Supreme Court

Roger J. Minch, Serkland Law Firm, Fargo, ND, for plaintiff and appellee.

Bruce H. Carlson, McNair, Larson & Carlson, Ltd., Fargo, ND, for defendant and appellant.

MARING, Justice.

[¶ 1] Donald Boeder appeals a judgment awarding Paul Hanson $315,194.26 in damages and costs for breach of a farm lease. We conclude the district court's award of damages is not clearly erroneous and we affirm.

I

[¶ 2] In 1998, Hanson signed a five-year lease to farm approximately 1,350 tillable acres of Boeder's farmland in Steele County for $50 per acre beginning with the 1999 crop year. The lease also allowed Hanson use of grain bins with a capacity of 93,000 bushels and two machine sheds located on the property. The lease addressed reimbursement for fall tillage and the requirement that Hanson farm the land in a good and farmerlike manner:

[Hanson] has reimbursed previous renter ... for fall tillage on 1173.1 acres. [Boeder] agrees that [Hanson] also will be reimbursed for fall tillage if [Hanson] doesn't farm the land.

[Hanson] agrees to farm the land in a good and farmerlike manner and also agrees to leave the land tilled in the same manner as when he received it.

Hanson was required to pay cash rent of $67,515 per year, with half due on April 1st, and the balance due on November 1st. In 2003, Boeder and Hanson renewed the lease for another five-year period ending in 2008.

[¶ 3] During the leases, Boeder and Hanson disagreed about Hanson's farming practices, but in 2004 and 2005 their disagreements escalated. On August 2, 2005, Boeder told Hanson he had enough of Hanson's farming practices, the lease was over, and he had leased the land to someone else. Boeder also told Hanson not to do the fall tillage because the new tenant wanted to do the work himself.

[¶ 4] Hanson sued Boeder, alleging Boeder intended to breach the contract by leasing the land to a third party. Hanson sought to enforce the contract, or alternatively requested all damages caused by Boeder's breach of the lease. Boeder counterclaimed alleging Hanson breached the lease by failing to farm the land in a "good and farmerlike manner." On September 26, 2005, Boeder moved for an injunction to stop Hanson from farming the land. On October 7, 2005, Hanson moved for a temporary restraining order to prohibit Boeder from terminating or interfering with the lease. On October 11, 2005, the court granted the temporary restraining order to maintain the status quo until a hearing could be held on the parties' motions. The court held a hearing and on November 4, 2005, entered an order denying Hanson's request for an injunction, concluding Hanson had an adequate remedy at law and equitable relief would not be available. During this time, Hanson continued to farm the land and completed the 2005 fall tillage before November 4, 2005 when the court held specific performance was not an available remedy.

[¶ 5] After a February 2006 bench trial, the district court found Boeder's statement to Hanson that the lease was over and he had found a new tenant constituted an anticipatory repudiation of the lease. The court dismissed Boeder's counterclaim, finding Boeder's repudiation was not justified because Hanson had farmed the land in a "good and farmerlike manner," and had not breached the lease. The court awarded Hanson $315,194.26 in damages and costs for lost profits, lost use of the grain bins and machine sheds, and the value of the fall tillage.

II

[¶ 6] Boeder argues the district court misapplied the law by failing to apply the doctrine of avoidable consequences to reduce Hanson's damages. He claims Hanson did not mitigate his damages because Hanson had an opportunity to continue farming the Boeder land, which would have substantially reduced his damages, and chose not to.

[¶ 7] "A [district] court's determination of the amount of damages caused by a breach of contract is a finding of fact subject to the clearly erroneous standard of review." Keller v. Bolding, 2004 ND 80, ¶ 22, 678 N.W.2d 578. A finding is clearly erroneous if it is induced by an erroneous view of the law, if there is no evidence to support it, or if, on the entire record, we are left with a definite and firm conviction a mistake has been made. Id. at ¶ 15.

[¶ 8] Section 32-03-09, N.D.C.C., addresses damages for breach of contract:

For the breach of an obligation arising from contract, the measure of damages, except when otherwise expressly provided by the laws of this state, is the amount which will compensate the party aggrieved for all the detriment proximately caused thereby or which in the ordinary course of things would be likely to result therefrom. No damages can be recovered for a breach of contract if they are not clearly ascertainable in both their nature and origin.

A person injured by the wrongful acts of another has a duty to mitigate or minimize the damages and must "`protect himself if he can do so with reasonable exertion or at trifling expense, and can recover from the delinquent party only such damages as he could not, with reasonable effort, have avoided.'" Lochthowe v. C.F. Peterson Estate, 2005 ND 40, ¶ 21, 692 N.W.2d 120 (quoting Schneidt v. Absey Motors, Inc., 248 N.W.2d 792, 797 (N.D.1976)). The duty to mitigate damages is sometimes referred to as the doctrine of avoidable consequences. See Forster v. West Dakota Veterinary Clinic, Inc., 2004 ND 207, ¶¶ 37-38, 689 N.W.2d 366.

[¶ 9] The district court found that Hanson tried to mitigate his damages by looking for other farmland to rent, but was unsuccessful. The court also found that Hanson was farming 4,000 acres including the land he leased from Boeder, but had the manpower and equipment to farm up to 5,000 acres. The court concluded that even if Hanson was able to find other farmland to rent, it would not have been replacement land but land to expand his farming operation, and therefore it would not have reduced his damages.

[¶ 10] The evidence presented at trial supports the court's findings. Hanson testified that he was not aware of any farmland available for rent and he ran advertisements in the local newspapers looking for farmland to rent. He also testified that during the course of the lease, he was farming a total of 4,000 acres but he had the ability to farm 5,000 acres, and he was always looking for more land to rent to expand his farming operation.

[¶ 11] Boeder agrees that Hanson attempted to find other farmland to rent and admits he did not present any evidence to rebut Hanson's claim that he was unable to find any other land available to rent. However, Boeder argues Hanson did not mitigate his damages because he had the opportunity to continue farming Boeder's land for the remaining three years of the lease, after Boeder attempted to retract his repudiation during the trial. Boeder claims his land was an appropriate substitute to mitigate Hanson's damages because it was a good fit for Hanson's farming operation, it was available, and Hanson still had time to prepare for the 2006 crop year.

[¶ 12] We have said, "[a] retraction of an anticipatory repudiation after the injured party sues for enforcement or damages comes too late." Glatt v. Bank of Kirkwood Plaza, 383 N.W.2d 473, 478 (N.D. 1986). Adopting Boeder's argument would circumvent the law concerning retraction, because the repudiating party would be allowed to retract after a lawsuit has been commenced. Boeder's argument would encourage parties to repudiate a contract when they think they could get better terms in an effort to force the other party to renegotiate the contract.

[¶ 13] Boeder did not attempt to retract his anticipatory repudiation before Hanson commenced this action. Rather, Boeder continued to assert that the lease was terminated until trial, and he then changed his argument and asked the court to order specific performance or find that Hanson did not mitigate his damages because he did not continue leasing Boeder's land. The district court had already found specific performance was not an appropriate remedy because money damages were adequate to redress any injury Hanson had suffered. A court's decision whether to grant specific performance is discretionary. Livinggood v. Balsdon, 2006 ND 11, ¶ 6, 709 N.W.2d 723. We conclude the district court did not abuse its discretion in deciding specific performance was not available. We further conclude the district court did not misapply the law in finding Hanson attempted to mitigate his damages. The evidence supports the court's findings on lost profits, and we are not left with a definite and firm conviction the court made a mistake in awarding Hanson damages for lost profits.

III

[¶ 14] Boeder argues the district court erred in awarding Hanson damages for the lost use of the grain bins and machine sheds because it resulted in a double recovery. He claims the damages for lost profits necessarily include the loss of use of the grain bins and machine sheds.

[¶ 15] This Court generally will not consider issues a party failed to raise in the district court:

One of the touchstones for an effective appeal on any proper issue is that the matter was appropriately raised in the [district] court so it could intelligently rule on it. The purpose of an appeal is to review the actions of the [district] court, not to grant the appellant an opportunity to develop and expound upon new strategies or theories.

Heng v. Rotech Medical Corp., 2006 ND 176, ¶ 9, 720 N.W.2d 54 (quoting Chapman v. Chapman, 2004 ND 22, ¶ 7, 673 N.W.2d 920).

[¶ 16] During trial, Hanson presented evidence of the damages he incurred due to Boeder's anticipatory repudiation, including expert testimony on the lost profits, and the loss of use of the grain bins and the machine sheds. Boeder failed to argue at trial that awarding Hanson damages for lost...

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