Holley v. Allen Drilling Co.

• Court: Kansas Supreme Court
• Writing for the Court: HERD
• Citation: Holley v. Allen Drilling Co., 740 P.2d 1077, 241 Kan. 707 (Kan. 1987)
• Decision Date: 17 July 1987
• Docket Number: No. 59714,59714
• Parties: James R. HOLLEY, a/k/a Bob Holley, Appellee, v. ALLEN DRILLING COMPANY, Appellant.

Page 1077

740 P.2d 1077

241 Kan. 707

James R. HOLLEY, a/k/a Bob Holley, Appellee, v. ALLEN DRILLING COMPANY, Appellant.

No. 59714.

Supreme Court of Kansas.

July 17, 1987.

Syllabus by the Court

1. In ruling on a motion for a directed verdict, the court is required to resolve all facts and inferences reasonably to be drawn from the evidence in favor of the party against whom the ruling is sought and where reasonable minds could reach different conclusions based on the evidence the motion must be denied and the matter submitted to the jury. This rule is also applicable when appellate review is sought on a motion for directed verdict. Further, the same test is applicable to a motion for judgment notwithstanding the verdict.

2. As a general rule, in order for a written agreement to be binding it must be sufficiently definite in its terms and requirements as to enable a court to determine what acts are to be performed and when performance is complete. This rule, however, cannot be blindly followed as a measuring stick for determining the sufficiency and definiteness of the terms of a contract. Where a purported contract is so vague and indefinite that the intention of the parties cannot be ascertained therefrom it is unenforceable; but absolute certainty is not required--only reasonable certainty is necessary. A contract may contain some formal imperfections or be lacking in detail, but it will not fail for uncertainty if the court can ascertain the terms and conditions by which the parties intended to be bound, and thus carry their intentions into effect. The fact that the exact meaning of language used can be ascertained only by consideration of extrinsic evidence does not render the agreement unenforceable for indefiniteness or uncertainty.

3. The trial court has wide discretion in allowing the testimony of expert witnesses and the use of such testimony ordinarily goes to the weight of the evidence and not its admissibility.

4. Equitable estoppel is the effect of the voluntary conduct of a person whereby he is precluded, both at law and in equity, from asserting rights against another person relying on such conduct. A party asserting equitable estoppel must show that another party, by its acts, representations, admissions, or silence when it had a duty to speak, induced it to believe certain facts existed. It must also show it rightfully relied and acted upon such belief and would now be prejudiced if the other party were permitted to deny the existence of such facts.

5. The knowledge obtained by an agent acting within the scope of his authority is, in law, the knowledge of the principal.

Lee Turner, of Turner and Boisseau, Chartered, Great Bend, argued the cause, and Casey R. Law, Great Bend, was on the briefs for appellant.

Michael S. Holland, Russell, argued the cause and was on the brief for appellee.

HERD, Justice:

This case involves an alleged oral contract between defendant/appellant, Allen Drilling Company, and plaintiff/appellee, James Robert (Bob) Holley. Allen Drilling Company appeals from the trial court's grant of judgment in favor of Holley.

In 1977, Bob Holley was hired by Earl Allen, who was then president and sole stockholder of Allen Drilling Company, as an oil well driller and tool pusher for the company. Holley worked for Allen Drilling until December of 1980, when he quit over a bonus dispute. He then went to work for Kaw Drilling Company.

About a month after Holley began working for Kaw, he met with Earl Allen at Allen's request at Sambo's Restaurant in Great Bend. Allen told Holley that if he would come back to work for Allen Drilling, he would give him a $10,000 bonus (for the prior year) and "15% off the top of what the rig (rig No. 5) made." At trial, Holley explained this agreement as follows:

"He told me he would give me that $10,000 bonus and that Rig 5 was mine and I would have 15 percent of it and rig it up like I wanted it and take it to the field the way I wanted it and I said okay."

Holley returned to work for Allen Drilling on January 26, 1981. In March he received a check drawn on Allen Oil Company for $10,000. Earl Allen died in a plane crash in September of 1982. At the time of Earl Allen's death, Holley had not received his claimed 15% share of the rig because Earl had "put it into production."

Holley continued to work for Allen Drilling until August 30, 1983, when he quit because of a vacation dispute he had with the company's new president, Dixon Allen (Earl Allen's son). Holley then went to work for WesTech Energy. Holley filed this action on June 4, 1984, seeking specific performance of the alleged oral agreement.

By stipulation of the parties, the trial of this case was bifurcated. The first part of the trial pertained to whether an oral contract existed between Holley and Allen Drilling and, if so, its terms. In addition to his own testimony, Holley presented the testimony of Lyle Jurgensen, his former employer. Jurgensen testified that Holley told him he went back to work for Allen Drilling in exchange for a "substantial bonus and/or a percentage of the rig." Jurgensen didn't remember exactly what percentage of the rig Holley was to receive, only that it was "considerable."

Keith Huddleston, an electrical worker for Allen Drilling, also testified at trial. Huddleston testified that Earl Allen twice told him that Bob Holley came back to work for Allen Drilling in exchange for a "percentage of the rig." Huddleston, like Jurgensen, could not remember the percentage of the rig Holley was to receive.

Two other Allen Drilling employees, John Johnson and Joe Levingston, testified that Bob Holley had told them about his oral agreement with Earl Allen. However, both Johnson and Levingston testified that Holley made inconsistent statements regarding the percentage of the rig he was to receive.

After hearing the evidence, the jury determined Bob Holley agreed to return to work for Allen Drilling in exchange for a $10,000 bonus and "15% of all income earned for Rig No. 5."

The second portion of the case was tried to the court and pertained to the damages sustained by Holley. The trial court heard evidence which included the meaning of "off the top" or "off the top of what the rig made"; and the appellant's affirmative defenses of estoppel, laches, and waiver. The trial court ruled that "off the top" referred to "the charge that was made by the company for drilling on a per foot basis." The court then determined the total drilling charge by the company for the operative period was $3,136,012.00 and 15% of that amount, or $470,401.80, was the amount owed to Holley. The court then reduced this sum by the amount of salary paid Holley for that period, leaving a net award to plaintiff of $356,475.25.

Allen Drilling Company appealed.

The appellant first contends the trial court erred in denying defendant's motion for directed verdict and for judgment notwithstanding the verdict because the alleged oral contract was too indefinite and uncertain in its terms to constitute an enforceable agreement.

In ruling on a motion for a directed verdict, the court is required to resolve all facts and inferences reasonably to be drawn from the evidence in favor of the party against whom the ruling is sought and where reasonable minds could reach different conclusions based on the evidence the motion must be denied and the matter submitted to the jury. This rule is also applicable when appellate review is sought on a motion for directed verdict. Further, the same test is applicable to a motion for judgment notwithstanding the verdict. Turner v. Halliburton Co., 240 Kan. 1, 6-7, 722 P.2d 1106 (1986).

Appellant claims the plaintiff's statements that he was to receive "15% of what the rig made" or 15% "off the top" are simply too indefinite to be enforceable and neither the jury nor the court was presented with a definite and certain basis for the calculation of the 15% figure.

In Richards Aircraft Sales, Inc. v. Vaughn, 203 Kan. 967, 971, 457 P.2d 691 (1969), this court held:

"As a general rule, in order for a written agreement to be binding it must be sufficiently definite in its terms and requirements as to enable a court to determine what acts are to be performed and when performance is complete. This rule, however, cannot be blindly followed as a measuring stick for determining the sufficiency and definiteness of the terms of a contract. Where a purported contract is so vague and indefinite that the intention of the parties cannot be ascertained therefrom it is unenforceable; but absolute certainty is not required--only reasonable certainty is necessary. A contract may contain some formal imperfections or be lacking in detail, but it will not fail for uncertainty if the court can ascertain the terms and conditions by which the parties intended to be bound, and thus carry their intentions into effect. The fact that the exact meaning of language used can be ascertained only by consideration of extrinsic evidence does not render the agreement unenforceable for indefiniteness or uncertainty." (Emphasis added.)

See Brown v. Foulks, 232 Kan. 424, 434, 657 P.2d 501 (1983).

Moreover, in Hays v. Underwood, Administrator, 196 Kan. 265, 268, 411 P.2d 717 (1966), we held the law favors upholding a contract against a claim of uncertainty where one of the parties has performed his part of the contract.

In the instant case, an exception to the general rule requiring definiteness and certainty in contracts is applicable because the appellant had partially performed the agreement by paying Holley $10,000 and Holley had gone back to work for Allen Drilling Company. Further, the agreement is not unenforceable merely because the language of the contract was ambiguous or...