Lyle v. Koubourlis

• Decision Date: 21 March 1988
• Docket Number: 16308,Nos. 16167,s. 16167
• Citation: 771 P.2d 907,115 Idaho 889
• Parties: Richard W. LYLE, Plaintiff-Respondent, and Robert William Akers, Plaintiff, v. Demetrius J. KOUBOURLIS and Toni J. Koubourlis, Defendants-Appellants.
• Court: Idaho Supreme Court

Page 907

771 P.2d 907

115 Idaho 889

Richard W. LYLE, Plaintiff-Respondent and Robert William Akers, Plaintiff, v. Demetrius J. KOUBOURLIS and Toni J. Koubourlis, Defendants-Appellants.

Nos. 16167, 16308.

Supreme Court of Idaho.

March 21, 1988.

On Rehearing April 14, 1989.

Schwam & Schwam, Moscow, for defendants-appellants. Andrew M. Schwam (argued).

Keeton, Tait & Petrie, and Smith & Cannon, Lewiston, and Giattina & Winberry, Sacramento, Cal., for plaintiff-respondent. Messrs. Paul C. Keeton, Jerry V. Smith, and Lanny T. Winberry (argued).

BISTLINE, Justice.

I. AKERS v. KOUBOURLIS

Appellants, Demetrius J. Koubourlis and Toni J. Koubourlis (Koubourlis), appeal the district court's holding that an enforceable settlement agreement existed between Robert William Akers (Akers) and Koubourlis and that no actionable fraud existed in the contract between Richard W. Lyle (Lyle) and the Koubourlises.

During the months of January and February of 1983, Koubourlis entered into negotiations with Akers over the purchase of a property known as Moscow Mall. Also in February of 1983, Koubourlis discussed the possible purchase of the Akers Department Store, Inc., a business in the Moscow Mall, from Akers and Lyle. Akers Department Store was a corporation owned largely by Akers with Lyle holding a small interest in the stock and acting as store manager. During these discussions, statements were made by both Lyle and Akers concerning the condition, performance, and profitability of the store. Documentary evidence was produced and given to Koubourlis showing that the store had made a profit in November and December of 1982. In fact, the store was losing money at a rate of about $15,000 per month. After reviewing the books and the records of the store, Koubourlis agreed to buy Akers' shares of stock in the store for the sum of $305,000. The purchase was to be evidenced by a note payable over the period February 1983 to March 15, 1994.

Koubourlis offered to purchase Lyle's shares for the sum of $19,000. This sum was due and payable upon the completion of the transfer of the stock. In April of 1983, a sales agreement and escrow instructions were executed with Koubourlis taking possession of the store. In an effort to reduce costs, the parties agreed to change escrow companies; these new escrow instructions were not completed. After discovering the true financial position of the store, Koubourlis refused to continue payment on the note to Akers and Lyle.

Following the default by Koubourlis, Akers and Lyle filed suit to recover the purchase price of the stock. Akers additionally sought recovery on another note, the Sound West note, executed by Koubourlis which had been assigned to Akers. Lyle also sought to recover wages for his time spent as manager of the store. Koubourlis filed a counterclaim for damages in which he alleged the tort action of fraud and deceit charging that Akers and Lyle were guilty of material misrepresentations in connection with the sale of the Akers Department Store stock.

On May 25, 1984, at the conclusion of a deposition of Koubourlis, the parties entered into settlement discussions. These discussions are alleged by Akers to have resulted in an oral settlement agreement resolving their disputes as pleaded. A letter dated May 29, 1984, was drafted by Akers' attorney setting forth the terms of the settlement agreement. These terms were confirmed in a phone conversation between the attorneys for Akers and Koubourlis. A second letter dated June 8, 1984, confirmed this phone conversation and the agreement of terms. The letter also detailed a $50,000 partial payment to be made under the settlement by Koubourlis.

No objection to the content of these "confirmatory" letters was made by Koubourlis or his attorney prior to Koubourlis making the $50,000 payment by check, to Akers. On the check was the notation "towards settlement of Akers Dept. Store, Sound West and Moscow Mall." Koubourlis contends that the check was merely a good faith demonstration in negotiations towards a settlement.

On January 8, 1985, Akers moved for a summary judgment enforcing the settlement agreement. The motion was denied on the grounds that there existed triable issues of fact, and such a trial was held on May 23 and 24, 1985. On June 26, 1985, the trial court issued its memorandum opinion ruling that the parties had entered into a valid and enforceable settlement agreement resolving the disputes between Akers and Koubourlis. The court entered a judgment for a sum in excess of $300,000 against Koubourlis.

The issues raised on appeal are: (1) did the district court err in finding that Akers and Koubourlis entered into an enforceable settlement agreement; and, (2) did the district court abuse its discretion by imposing a sanction denying a jury trial?

The standard of review for alleged trial court error is that the trial court's findings of fact will not be overturned unless the findings are clearly erroneous or not supported by substantial and competent evidence. I.R.C.P. 52(a). Jensen v. Bledsoe, 100 Idaho 84, 593 P.2d 988 (1979); Rueth v. State, 103 Idaho 74, 644 P.2d 1333 (1982). Due regard must also be given the opportunity of the trial court to determine the credibility of the witnesses and weigh conflicting testimony. Roemer v. Green Pastures Farms, Inc., 97 Idaho 591, 548 P.2d 857 (1976); Javernick v. Smith, 101 Idaho 104, 609 P.2d 171 (1980).

The district court's amended Finding No. VII reads in pertinent part:

After weighing the conflicting testimony on this point, I find by a preponderance of clear and convincing evidence that the letter of May 29, 1984, correctly sets forth the oral agreement of the parties of May 25, 1984, that the security must be acceptable to Plaintiff Akers in that: (a) At all times after May 25, 1984, the parties conducted themselves as if a settlement agreement existed and each side took action toward the performance and consummation of that settlement and, in fact, gave up a trial date; .... The language of the May 29, 1984, letter was thus accepted by the parties as the primary evidence of the existence and terms of the May 25, 1984 settlement agreement.

R., p. 217.

Koubourlis first attacks the validity of the district court holding regarding the settlement agreement on the basis of its oral nature. We are not persuaded. A settlement agreement is not required to be in writing to be enforceable. South Carolina Insurance v. Fisher, 698 P.2d 1369 (Colo.App.1984). Settlement agreements are a form of contract and they must comply with the requirements normally required of contracts. See Olson v. Idaho Department of Water Resources, 105 Idaho 98, 666 P.2d 188 (1983).

When enforcing an oral contract, the subject matter must not be within the proscription of the statute of frauds, or if within the statute of frauds, it may be taken out by part performance. Sims v. Purcell, 74 Idaho 109, 257 P.2d 242 (1953). The subject matter of the settlement agreement was the ongoing litigation between Akers and Koubourlis arising out of the sale of stock for Akers Department Store, Inc.--not a sale of an interest in real property. While an argument may exist as to the status of the leasehold interest which Akers Department Store, Inc., has in the Moscow Mall, as an assignment of an existing lease agreement, it is not required to be in writing. Hunt v. Hunt, 110 Idaho 649, 718 P.2d 560 (Ct.App.1985). The agreement cannot be said to be within the provisions of the statute of frauds on any other basis.

Koubourlis' second contention is that insufficient evidence existed to support the finding that the parties understood that a settlement had been reached. Koubourlis argues that the oral agreement was not intended as a final settlement but instead the parties agreed that a writing was required.

In the district court's amended Findings of Fact and Conclusions of Law No. V, it stated:

At the close of settlement discussions, the parties agreed to a detailed settlement of the suit between them and agreed that Plaintiff Akers' attorney would reduce the main points of the settlement agreement to a writing and that, when the settlement had been consummated, the parties would execute a mutual release.

In Finding No. VII, the court stated: "The letter, as shown by the evidence at the trial, accurately and appropriately summarized and memorialized the oral agreement of the parties."

Finding No. VIII states: "I find that Defendant Demetrius Koubourlis specifically agreed to a method of consummation of the settlement whereby he agreed to forward $50,000 to Plaintiff in part payment of the amount due under the terms of the settlement."

The district court concluded in its opinion that: "The proofs clearly show that after a considerable amount of discussions, the parties arrived at what they believed to be a settlement and departed with the understanding that the terms of the settlement would be reduced to writing." R., p. 185. The district court concluded that the May 29 letter satisfied that requirement of a writing as stated in Finding No. VII.

This ruling is amply supported by the evidence. The evidence includes the depositions of the attorneys for both parties, Mr. Winberry and Mr. Bengtson; the May 29, 1984, letter which sets out the terms of the agreement, R., pp. 113-17; the June 8, 1984, letter confirming the call from Koubourlis' attorney to Akers' attorney agreeing to the May 29 letter's terms, R., p. 118; the $50,000 check from Koubourlis to Akers, R., p. 119; testimony from both parties; confirmation letters pertaining to CAM (Common Area Maintenance) charges in the agreement between the attorneys for both parties dated July 11, 1984, and July 20, 1984, R., pp. 133-34. Koubourlis' other arguments on this issue have been considered but are without merit. We hold that substantial competent evidence supports the trial court finding of an enforceable settlement agreement.

II. LYLE v. KOUBOURLIS

Lyle was...