Larson Latham Huettl LLP v. Burckhard

• Decision Date: 22 December 2022
• Docket Number: 20220187
• Citation: 983 N.W.2d 169
• Parties: LARSON LATHAM HUETTL LLP, Plaintiff and Appellee v. Thomas J. BURCKHARD, Defendant and Appellant
• Court: North Dakota Supreme Court

983 N.W.2d 169

LARSON LATHAM HUETTL LLP, Plaintiff and Appellee

v.Thomas J. BURCKHARD, Defendant and Appellant

No. 20220187

Supreme Court of North Dakota.

Filed December 22, 2022

Samuel G. Larson (argued) and Gregory C. Larson (on brief), Bismarck, ND, plaintiff and appellee.

Thomas J. Burckhard, self-represented, Minot, ND, defendant and appellant.

Jensen, Chief Justice.

[¶1] Thomas Burckhard appeals from a judgment entered following consideration of Larson Latham Huettl LLP's motion for summary judgment. Burckhard argues there are genuine issues of material fact as to each of his affirmative defenses and the district court abused its discretion in denying Burckhard additional time to conduct discovery. We affirm.

I

[¶2] Burckhard began employment with Larson Latham Huettl LLP (hereinafter LLH) in January 2019. In May 2019 Burckhard signed an employment contract, under which Burckhard agreed he would receive compensation based upon projected hours billed. Any overpayment resulting from a deficiency between the projected hours he would bill and the actual hours he billed would be considered a debt owed by Burckhard to LLH. The relevant portions of the contract are as follows:

1. Salary. Associate will be paid a base salary pursuant to agreement with LLH and an incentive commission as shown on the attached Schedule A. Associate will be required to bill out the average number of hours per week as shown on Schedule A commensurate with the Associate's base salary.

....

3. Billed Hours Credited. Associate will be credited with hours that are billed out to clients that are approved by a partner of LLH. Associate may be credited for billable hours, administration hours, or client relation hours.

It is possible, at the discretion of the partners of LLH, that some of Associate's hours may be eliminated if it is determined that the hours are not appropriate to be billed and Associate will not receive any credit for these hours. If Associate is asked to do certain work for the firm that cannot be billed to a client, then this work will be billed as administration hours or client relations hours. All administration and client relations hours must be pre-approved by a partner of LLH.

....

6. Hours Billed Discrepancy. In the event that Associate bills out less than the base quota for a three month period, the Associate's salary will be reduced appropriately at the discretion of LLH in order to make up for any discrepancy. Any discrepancy where the actual hours billed is less than the base hours required will be considered a debt owed by Associate to LLH at the end of the calendar year or at the termination of employment.

[¶3] Burckhard's employment with LLH ended on August 15, 2020. At that time, Burckhard was paid for 697.88 projected billable hours more than his actual billable hours resulting in an overpayment of compensation in the amount of $29,885.38. LLH filed suit alleging breach of contract seeking to recover the excess compensation of $29,885.38, plus pre-judgment interest.

[¶4] LLH moved for summary judgment. The district court granted LLH's motion finding there were no issues of material fact and LLH was entitled to judgment as a matter of law. Burckhard appealed, arguing summary judgment was improper because the contract's purpose was frustrated, the contract is unconscionable, the contract fails for lack of consideration, LLH waived its right to obtain payment, there is a genuine dispute as to the amount of the damages, and the district court abused its discretion in denying Burckhard additional time for discovery.

II

[¶5] Burckhard argues the district court abused its discretion in denying him additional time to complete discovery. Rule 56(f), N.D.R.Civ.P., allows for additional discovery before summary judgment is granted and we have noted the following:

Should it appear from the affidavits of a party opposing the motion that the party cannot for reasons stated present by affidavit facts essential to justify the party's opposition, the court may refuse the application for judgment or may order a continuance to permit affidavits to be obtained or depositions to be taken or discovery to be had or may make such other order as is just.

Choice Fin. Grp. v. Schellpfeffer , 2006 ND 87, ¶ 9, 712 N.W.2d 855. A decision to grant or deny a request under Rule 56(f) is within the discretion of the district court and will not be reversed unless the court abuses its discretion. Id. "A court abuses its discretion if it acts in an arbitrary, unreasonable, or unconscionable manner, or if it misinterprets or misapplies the law." Id. (quoting Sec. Nat'l Bank v. Wald , 536 N.W.2d 924, 928 (N.D. 1995) ).

[¶6] Burckhard did not move for additional time to conduct discovery, did not reference Rule 56(f) in his response to the motion for summary judgment, and conceded he did not dispute the discrepancy of 697.88 hours between his projected hours and his actual billable hours as asserted by LLH. Burckhard did allege in his response to the motion for summary judgment that he did not have sufficient records to dispute how the actual billed hours were computed, whether any hours he worked were excluded, or how much LLH collected from clients.

[¶7] The district court addressed Burckhard's assertion he needed to complete discovery to determine how much LLH collected from clients for the work he performed by finding the discovery was not relevant to determining LLH's damages, because how much LLH collected did not change the contract's calculation of damages based on the payment for projected hours exceeding what Burckhard was owed for his actual billed hours. Even if LLH realized a profit from Burckhard's services, it could have realized a greater profit had he met the billable hour requirement set in the contract.

[¶8] The district court addressed Burckhard's assertion additional discovery was needed to determine whether LLH properly credited him with hours he had worked. The court found "Burckhard received notice every month of the billable hours he made, so he did have notice he was deficient ... [t]o prevent summary judgment, Burckhard must do more than just say he thinks there are issues with how LLH came up with the accounting." Despite having access to the monthly notices, Burckhard did not provide any evidence LLH failed to credit him for billable hours.

[¶9] We have previously affirmed a district court's denial of a request for additional discovery where the moving party failed to adequately explain what information was sought, why it was not obtained beforehand, and how it would preclude summary judgment. Swanson v. Larson , 2021 ND 216, ¶ 9, 967 N.W.2d 778. Additionally, N.D.R.Civ.P. 56(f) "requires that the party, preferably by affidavit, identify with specificity what particular information is sought, and explain how that information would preclude summary judgment and why it has not previously been obtained." Vicknair v. Phelps Dodge Indus., Inc. , 2011 ND 39, ¶ 19, 794 N.W.2d 746. Here, Burckhard did not reference the applicable rule, failed to submit affidavits supporting his request for additional discovery, failed to identify what information he would seek through discovery, failed to explain why he was unable to obtain the information before the motion for summary judgment, and failed to explain how the information would preclude summary judgment. The court's decision to deny the request for additional discovery was not arbitrary, unreasonable, or rendered in an unconscionable manner, and the court did not misinterpret or misapply the law. We conclude the district court did not abuse its discretion by denying Burckhard's request for additional discovery.

III

[¶10] The district court granted summary judgment in favor of LLH, awarding LLH a recovery for the excess compensation and rejecting Burckhard's affirmative defenses. The standard for reviewing summary judgment is well established.

Summary judgment is a procedural device for the prompt resolution of a controversy on the merits without a trial if there are no genuine issues of material fact or inferences that can reasonably be drawn from undisputed facts, or if the only issues to be resolved are questions of law. A party moving for summary judgment has the burden of showing there are no genuine issues of material fact and the moving party is entitled to judgment as a matter of law. In determining whether summary judgment was appropriately granted, we must view the evidence in the light most favorable to the party opposing the motion, and that party will be given the benefit of all favorable inferences which can reasonably be drawn from the record. On appeal, this Court decides whether the information available to the district court precluded the existence of a genuine issue of material fact and entitled the moving party to judgment as a matter of law. Whether the district court properly granted summary judgment is a question of law which we review de novo on the entire record.

Poppe v. Stockert , 2015 ND 252, ¶ 4, 870 N.W.2d 187 (citations omitted) (quoting Johnson v. Shield , 2015 ND 200, ¶ 6, 868 N.W.2d 368 ).

A

[¶11] Burckhard argues the employment contract's purpose was frustrated because a basic assumption of the contract was that LLH would provide Burckhard with an adequate case load to meet his billable hour requirements. Frustration of purpose occurs when "after a contract is made, a party's principal purpose is substantially frustrated without his fault by the occurrence of an event the non-occurrence of which was a basic assumption on which the contract was made." WFND, LLC v. Fargo Marc, LLC , 2007 ND 67, ¶ 18, 730 N.W.2d 841 (quoting Restatement (Second) of Contracts § 285 (Tent. Draft No. 9) (1974)); see also Restatement (Second) of Contracts § 265 (1981) (adopted version). Determining whether there has been frustration of purpose with regard to a contract requires consideration of "whether events have occurred after formation of the contract to frustrate the principal...