Justad v. Ward

• Citation: 147 Idaho 509,211 P.3d 118
• Decision Date: 18 June 2009
• Docket Number: No. 34793.,34793.
• Parties: Wilma Claire JUSTAD, Plaintiff-Respondent-Cross Appellant, v. Ronald WARD, person representative of the Phyllis A. Gasser Estate, Defendant-Appellant-Cross Respondent.
• Court: United States State Supreme Court of Idaho

211 P.3d 118

147 Idaho 509

Wilma Claire JUSTAD, Plaintiff-Respondent-Cross Appellant, v. Ronald WARD, person representative of the Phyllis A. Gasser Estate, Defendant-Appellant-Cross Respondent.

No. 34793.

Supreme Court of Idaho, Coeur d'Alene, April 2009 Term.

June 18, 2009.

William Appleton, Coeur d'Alene, for appellant.

Lukins & Annis, Coeur d'Alene, for respondent. Peter J. Smith IV argued.

HORTON, Justice.

This is an appeal from the district court's grant of specific performance of an option to purchase real property. Ronald Ward (Ward) appeals the district court's finding that Wilma Claire Justad (Justad) timely exercised an option to purchase real property from the estate of Phyllis Gasser (Gasser), for which he is the personal representative, and the district court's finding that the option is enforceable. Justad cross-appeals the district court's decision to deny her attorney fees and seeks an award of attorney fees on appeal. Because we reverse the district court's holding that Justad timely exercised the option and hold that she did not, we decline to address whether the option is enforceable. We also hold that Justad is not entitled to an award of attorney fees.

I. FACTUAL AND PROCEDURAL BACKGROUND

In 1978, Justad and her husband entered into two written agreements with Justad's sister, Gasser, and her husband. The first was a contract wherein the Gassers agreed to sell and the Justads agreed to purchase approximately 113 acres of real property in Harrison, Idaho. The second was an option contract whereby for $100 the Justads acquired an option to purchase property located adjacent to the 113 acres that was the subject of the first contract.

The purchase price of the property under the option was to be $97,000 "payable in equal annual installments from the date of exercise of said Option over a ten (10) year period of time, without interest upon the unpaid principal balance." The option could be:

[E]xercised upon the mutual consent of all parties to this Agreement, in writing, or the JUSTED'S [sic] may elect to exercise said Option upon the deaths of both JOHN W. GASSER and PHYLLIS A. GASSER. Provided, that said election shall be exercised within sixty days of the death of the last to die....

Id. John Gasser died in 1984, and Phyllis died on February 19, 2006.

Ward initiated a probate proceeding for Gasser's estate, and the court scheduled a hearing on the application for April 11, 2006. Upon receiving notice of the hearing, which was to take place in Kootenai County, Justad instructed her daughter, Jodi Justad-Hood (Justad-Hood), to travel from Boise to Coeur d'Alene and attend the hearing in order to convey Justad's intent to exercise the option. Justad-Hood attended the hearing and explained that she was there on Justad's behalf and that she held Justad's power of attorney. Justad-Hood also uttered the phrase "my mother owns a...." The magistrate judge mistakenly thought that Justad-Hood's purpose at the hearing was to object to the appointment of Ward as personal representative, and thus the judge interrupted Justad-Hood as she began to explain her purpose and ordered the hearing continued until June 15, 2006. At the June 15, 2006 hearing, Ward was appointed personal representative of Gasser's estate; earlier the same day Justad provided written notice to Ward's attorney of her intent to exercise the option.

Ward refused to recognize Justad's exercise of the option, and Justad filed a complaint on June 16, 2006, seeking specific performance of the option. After a court trial on October 15, 2007, the district court ruled that Justad was entitled to specific performance of the option. Specifically, the court held that the contract does not lack essential terms and is thus enforceable; that Justad timely exercised the option at the April 11, 2006 hearing; and, alternatively, that Justad timely exercised the option through her June 15, 2006 letter. The district court entered its judgment on November 16, 2007, from which Ward appeals. Justad cross-appeals the district court's decision not to award her attorney fees and requests an award of attorney fees on appeal.

II. STANDARD OF REVIEW

Imposition of an equitable remedy requires a balancing of the equities, which is inherently a factual determination; therefore, the district court's imposition of such a remedy should be reviewed for an abuse of discretion. West Wood Inv., Inc. v. Acord, 141 Idaho 75, 82, 106 P.3d 401, 408 (2005). A trial court does not abuse its discretion if it (1) correctly perceives the issue as discretionary, (2) acts within the bounds of discretion and applies the correct legal standards, and (3) reaches the decision through an exercise of reason. Id. (citing Sun Valley Potato Growers, Inc. v. Texas Refinery Corp., 139 Idaho 761, 768, 86 P.3d 475, 482 (2004)).

Review of a trial court's conclusions from a bench trial is limited to ascertaining whether the evidence supports the findings of fact, and whether the findings of fact support the conclusions of law. Benninger v. Derifield, 142 Idaho 486, 488-89, 129 P.3d 1235, 1237-38 (2006) (citing Alumet v. Bear Lake Grazing Co., 119 Idaho 946, 949, 812 P.2d 253, 256 (1991)). Since it is the province of the trial court to weigh conflicting evidence and testimony and to judge the credibility of the witnesses, this Court will liberally construe the trial court's findings of fact in favor of the judgment entered. Rowley v. Fuhrman, 133 Idaho 105, 107, 982 P.2d 940, 942 (1999). This Court will not set aside a trial court's findings of fact unless the findings are clearly erroneous. Ransom v. Topaz Mktg., L.P., 143 Idaho 641, 643, 152 P.3d 2, 4 (2006); I.R.C.P. 52(a). If the trial court based its findings on substantial evidence, even if the evidence is conflicting, this Court will not overturn those findings on appeal. Benninger, 142 Idaho at 489, 129 P.3d at 1238. This Court will not substitute its view of the facts for that of the trial court. Ransom, 143 Idaho at 643, 152 P.3d at 4. However, this Court exercises free review over matters of law. Bolger v. Lance, 137 Idaho 792, 794, 53 P.3d 1211, 1213 (2002) (citing Bouten Constr. Co. v. H.F. Magnuson Co., 133 Idaho 756, 760, 992 P.2d 751, 755 (1999)).

III. ANALYSIS

Because we find that Justad failed to timely exercise the option, either at the April 11, 2006 hearing or through her June 15, 2006 letter, we decline to address whether the option is sufficiently certain in its essential terms so as to be enforceable. Ward has not requested attorney fees, and because Justad is not the prevailing party, we decline her request for attorney fees below and on appeal.

A. The district court erred in finding that Justad exercised the option at the April 11, 2006 hearing.

Ward argues that although it was later established that Justad-Hood only attended the April 11, 2006 hearing in order to exercise the option on Justad's behalf, that purpose was not disclosed at the hearing and thus Justad did not successfully exercise the option. We agree.

Formation of a valid contract requires a meeting of the minds as evidenced by a manifestation of mutual intent to contract. Inland Title Co. v. Comstock, 116 Idaho 701, 703, 779 P.2d 15, 17 (1989). This manifestation takes the form of an offer followed by an acceptance. Id. An option contract is an offer that, upon sufficient consideration, may not be revoked for an agreed upon amount of time. See 17A Am.Jur.2d Contracts § 53 (2d ed.2008). An acceptance of an option is an expression by the offeree that accepts the offer in accordance with the terms of the offer. See IDJI 6.05.2. The acceptance is not complete until it has been communicated to the offeror. Id. Acceptance of an offer must be unequivocal. Huyett v. Idaho State Univ., 140 Idaho 904, 909, 104 P.3d 946, 951 (2004). Generally, silence and inaction does not constitute acceptance. 17A Am.Jur.2d Contracts § 98 (2d ed.2008). More specifically:

Because assent to an offer that is required for the formation of a contract is an act of the mind, it may either be expressed by words or evidenced by circumstances from which such assent may be inferred, such as the making of payments or the acceptance of benefits. Anything that amounts to a manifestation of a formed determination to accept, and is communicated or put in the proper way to be communicated to the party making the offer, completes a contract.

A response to an offer amounts to an acceptance if an objective, reasonable person is justified in understanding that a fully enforceable contract has been made, even if the offeree subjectively does not intend to be legally bound. This objective standard takes into account both what the offeree said, wrote, or did and the transactional context in which the offeree verbalized or acted.

17A Am.Jur.2d Contracts § 91 (2d ed.2008).

At the April 11, 2006 hearing on Ward's application for informal probate of the will and appointment as personal representative of the estate, Justad-Hood stated the following: "I'm here just to hear what I — I was not sure what this court date — what this court was — was about. And I flew up here from Boise last night. Um, my point is, is that my mother sold some — that my mother owns a —." The magistrate judge then interrupted her, stating that a hearing needed to be scheduled to address any objection to Ward's appointment and expressing concern as to Justad-Hood's standing to present such an objection. Justad-Hood responded: "I have my mother's power of attorney." The court responded that "a power of attorney doesn't allow someone to come to court and act as an attorney" and sua sponte ordered that the hearing be rescheduled. After a discussion regarding...