Holdner v. Holdner

• Decision Date: 15 August 2001
• Citation: 176 Or. App. 111,29 P.3d 1199
• Court: Oregon Court of Appeals
• Parties: Randal W. HOLDNER, Appellant, v. William F. HOLDNER and Patricia Holdner, Respondents. Patricia Holdner, Counterclaim-Plaintiff, v. Randal W. Holdner, Counterclaim-Defendant.

29 P.3d 1199

176 Or. App. 111

Randal W. HOLDNER, Appellant, v. William F. HOLDNER and Patricia Holdner, Respondents.

Patricia Holdner, Counterclaim-Plaintiff, v. Randal W. Holdner, Counterclaim-Defendant.

97-2188; A104337

Court of Appeals of Oregon.

Argued and Submitted April 9, 2001.

Decided August 15, 2001.

David B. Markowitz argued the cause for appellant. With him on the briefs were Lynn R. Stafford and Markowitz, Herbold, Glade & Mehlhaf, P.C., Portland.

Thomas A. Bittner argued the cause for respondent Patricia Holdner. With him on the brief was Schulte, Anderson, Downes, Aronson & Bittner, P.C., Portland.

No appearance by respondent William Holdner.

Before LANDAU, Presiding Judge, and LINDER and BREWER, Judges.

BREWER, J.

Plaintiff Randal Holdner appeals from a judgment in favor of defendants William and Patricia Holdner.¹ Randal is the son of William and Patricia. Shortly before the trial of his parents' marital dissolution action, Randal brought this action against both of them, seeking a judicial declaration recognizing and enforcing an oral contract between himself and his parents. Randal alleged that he agreed to work for the family's cattle ranching business (Holdner Farms) in exchange for a one-half ownership interest in the business—including real property—during his parents' life and complete ownership upon William's death, subject only to Patricia's life estate in the family residence property. Randal requested that the court "immediately enforce defendants' promise to pass the farm to plaintiff because of Patricia Holdner's anticipatory repudiation of the agreement." According to Randal, Patricia repudiated the agreement by asserting in the dissolution action that the business and associated real property constituted marital assets in which she was entitled to share.² After a bench trial, the court entered judgment against Randal and in favor of Patricia and William. On appeal, Randal argues that the trial court erred by not declaring valid and enforcing the alleged contract against both defendants or, at least, between Randal and William. We affirm.

The parties disagree as to the applicable standard of review. Randal contends that, because this is an equity action, we review de novo. ORS 19.415(3); see also McWhirter v. McWhirter, 54 Or.App. 409, 413, 635 P.2d 12,

rev. den. 292 Or.334, 644 P.2d 1127 (1981) (on de novo review, appellate court defers to factual findings of the trial court regarding only disputes of material fact that turn on the credibility of witnesses). Patricia responds that declaratory actions to construe a contract are legal in nature, and the findings of the trier of fact are binding on appeal if there is evidence in the record to support them. See L & E Farms v. Leonard, 170 Or.App. 528, 533-34, 13 P.3d 527 (2000); Wadsworth v. WWDM, Ltd., 162 Or.App. 622, 628 n. 4, 986 P.2d 1197 (1999),

rev. den. 330 Or. 71, 994 P.2d 133 (2000).

The following facts were undisputed at trial, except where conflicts are noted. At the time of trial, William and Patricia had been married 45 years. During the marriage, William worked primarily as a partner in a small accounting firm. Patricia was a homemaker. In 1968, William purchased a house located on a four-acre parcel of land near Scappoose, known to the family as "the home place." Although it was the family residence, only William's name was shown on the title to the home place. Over the course of the next several years, William purchased two other larger parcels of land, the "Chapman" property—approximately 17 acres—and the "Dutch Canyon" farm-approximately 100 acres. As before, the titles to those properties were held only in William's name. Over time, William and Patricia purchased cattle as gifts to their children, Laurie and Randal. The children began showing the cattle at 4-H and FFA livestock shows. Eventually, the children's hobby grew into an enterprise known as Holdner Farms. In about 1975, Laurie decided to attend college and no longer wished to participate in the family business. She gave her cattle to Randal.

In 1977, Randal chose to forgo attending college and instead remained at home to help on the farm. Randal testified that he had worked on the farm since 1977 pursuant to an oral agreement that he made with both of his parents. According to Randal, William and Patricia agreed in 1977 that he would receive a 50 percent ownership interest in Holdner Farms, including all three parcels of real property, with William retaining ownership of the remaining 50 percent. William's 50 percent interest was to pass to Randal on William's death.

Since 1977, William and Randal both have contributed to the operation of Holdner Farms. They have jointly purchased three more parcels of property—the 185-acre "Sattler" property in 1984, the 204-acre "Johnson's Landing" property in 1989, and the 7.5-acre "Hays" property in 1992—bringing the total area of the enterprise to more than 500 acres. The three parcels purchased after 1977 are owned by William and Randal as tenants in common. The land sale contract for the Sattler property and the deed for the Hays property are silent with regard to the form of co-ownership between them. The deed to the Johnson's Landing property expressly conveyed that parcel to William and Randal as tenants in common.

From the outset, William has handled most of the accounting and business affairs for Holdner Farms, and he also has provided some labor on evenings and weekends. Randal works long hours doing various jobs associated with running the physical operations of Holdner Farms. By all accounts, Patricia has had very little to do with the day-to-day operation of Holdner Farms.

In 1996, Patricia filed a marital dissolution action against William. Initially, she asserted no claim to Holdner Farms. However, when settlement negotiations failed, Patricia amended her petition to assert an interest in Holdner Farms. On the eve of trial, Randal filed this action against his parents, and the dissolution action has been held in abeyance pending its final adjudication.

At trial, William did not dispute the existence of the agreement alleged by Randal. Patricia, however, argued that there was no enforceable agreement among any of the parties. Alternatively, she argued that, if such an agreement did exist, she was not a party to it and, therefore, was not bound by it. On direct examination, Randal characterized the agreement as follows:

"Q I'd like you to tell the judge what you were promised.

"A My parents told me that if I stayed and worked the farm, the farm would be mine.

"Q Was there a discussion during that time period about whether you would have any current ownership interest in the farm?

"A Yes, there were.

"Q And what was discussed about the current ownership interest?

"A That we would take the cattle that I had and I would put them into a—we have basically a joint venture, put them into— together and run the farm as a 50/50 partnership.

"Q And you'd be one of the 50s?

"A And my father would be the other.

"Q Okay. Was there discussion as to when the whole farm would go to you?

"A Yes, there was.

"Q What were you told?

"A I was told that it would be upon my father's death, as it was the best way to come to me for tax purposes."

On cross-examination, Randal again testified that William "promised that if I worked the farm the farm would be mine," and that his parents promised him that he "would receive the farm." He also testified that "the original agreement was that if I worked the farm the farm would be mine."

Randal testified that, at the time of trial, he owned "100 percent [of the farm] because of the promise" his parents made to him. Additionally, Randal testified that he was "paid $1,500 every two weeks" and that he paid $500 "rent to [his] father every month" to live in a house on one of the Holdner Farms' properties. He also testified that William made the mortgage payments on the real properties out of Holdner Farms' checking account, which also contained funds derived from William's CPA partnership. Finally, Randal testified that there was no agreement between himself and William as to how profits and losses would be shared.

William also testified about the purported agreement:

"A The agreement was that Randy would get the—we would have a 50 percent owner, myself and him. He exchanged the cattle for his interest in the cattle after Laurie had transferred the cattle, her shares to him, for the 50 percent equity in the farm properties which is real estate and equipment.

"Q Okay. Let me just make sure that was clear. Randy would transfer his ownership of his cattle and the cattle that had been Laurie's?

"A That is correct.

"Q In exchange for a 50 percent ownership in what?

"A In the real properties that were in effect in my name.

"Q And was there further agreement as to how the farm would be operated?

"A The farm would be operated like a partnership. We'd call it a joint venture just because of the fact it's less formal in the filing in federal and state tax documents.

"Q Was there also an agreement as to whether Randy would have some further greater interest in the farm at a later time?

"A That is correct. He would, at my demise, would receive any remaining interest that I would have in the properties. "* * * * *

"Q During your life you and Randy would have a 50/50 arrangement on the farm?

"A That is correct.

"Q And on your death it would all go to him?

"A That is correct."

William testified that selling off part of the farm or borrowing against the farm for purposes unrelated to the business would violate the agreement with Randal. On cross-examination, William reiterated that "our agreement was that [Randal would] get the property at my demise, any remaining interest that I'd have."

Other evidence was presented concerning the ownership and operation of Holdner Farms and William's involvement in the operation. In 1995 and 1996, William prepared individual financial statements for...