Pov v. Loucks Family Irrevocable Trust

• Decision Date: 01 May 2007
• Docket Number: No. 32551.,32551.
• Citation: 144 Idaho 233,159 P.3d 870
• Court: Idaho Supreme Court
• Parties: P.O. VENTURES, INC., an Idaho corporation, Plaintiff-Respondent, v. The LOUCKS FAMILY IRREVOCABLE TRUST and George Loucks, individually, as Trustee of the Loucks Family Irrevocable Trust, Defendants-Appellants.

159 P.3d 870

144 Idaho 233

P.O. VENTURES, INC., an Idaho corporation, Plaintiff-Respondent, v. The LOUCKS FAMILY IRREVOCABLE TRUST and George Loucks, individually, as Trustee of the Loucks Family Irrevocable Trust, Defendants-Appellants.

No. 32551.

Supreme Court of Idaho, Boise, February 2007 Term.

May 1, 2007.

James R. Gillespie, P.A., Boise, for appellants.

Greener Banducci Shoemaker, P.A., Boise, for respondent. Shawn P. Bailey argued.

TROUT, Justice.

The Loucks Family Irrevocable Trust and its sole trustee, George Loucks (Loucks), appeal from the award granting P.O. Ventures (POV) summary judgment for specific performance of a land sale contract.

I. FACTUAL AND PROCEDURAL BACKGROUND

POV is the developer of Arbor Ridge, a residential subdivision in Eagle, Idaho. POV began developing Arbor Ridge approximately four years ago. POV sought to purchase from Loucks, acting as the trustee of the Loucks Family Irrevocable Trust, a 14.66 acre tract of land in order to include this land in the Arbor Ridge subdivision. Allegedly in reliance on an oral agreement with Loucks that POV would purchase Loucks's property, POV obtained a new zoning designation of Arbor Ridge and Loucks's property to allow residential development of both. On August 25, 2004, POV drafted a formal agreement reflecting a purchase price of $800,000 for Loucks's property. Loucks did not sign this agreement. Soon thereafter, Loucks received an offer to buy the same property from Rama Group, LLC (Rama), for $820,960, which Loucks rejected.

On November 6, 2004, Loucks and POV's representative, Floyd Patterson (Patterson), sat down at Patterson's mother's house to negotiate the sale of Loucks's land. Loucks's brother, John A. Loucks (Tony), was also present. Loucks came to the table with the two-page addendum (Addendum) that had been attached to Rama's earnest money agreement proposal, and the parties used that document as a template for their negotiation. Writing directly on the Addendum, Loucks and Patterson crossed out Rama's name and handwrote POV's name as the buyer; struck the printed purchase price and substituted the new, higher price of $900,000; provided for a $100,000 down payment; set a closing date of June 30, 2005, on which date payment would be due in full, together with interest at a rate of 6.5% on the unpaid balance until closing; and handwrote in that no prepayment penalty would apply. The parties left unchanged the typed provision listing the seller as "Loucks Family Irrevocable Trust, George A. Loucks, Trustee." Loucks and Patterson signed on the first page of the Addendum and wrote in the date of November 6, 2004. The handwriting next to Patterson's signature reads, "Buyer, P.O. Ventures Inc." Tony signed the document as a witness. The second page to the Addendum contained a number of typewritten terms relating to surveying and developing the property, but the only handwriting on the second page of the document is a stray checkmark of unknown origin.

On November 16, 2004, POV had an agreement (Purchase Agreement) drafted up by its attorney. The Purchase Agreement contained basically the same terms as appeared on the first page of the Addendum, but there was also a provision that all real property taxes and assessments would be prorated as of the date of closing and that the costs of closing would be split equally between the parties. Patterson signed the Purchase Agreement and sent it to Loucks for signature. Loucks refused to sign, claiming that the typed agreement did not represent the modified Addendum signed by the parties.

POV filed suit for specific performance or, alternatively, damages. While POV's first complaint attached the unsigned November 16, 2004, Purchase Agreement, POV subsequently amended its complaint with leave of court, to enforce the signed November 6, 2004, Addendum. POV filed a motion for summary judgment which was granted by the district court. The court ordered specific performance, concluding that the Addendum included the essential terms necessary to specifically enforce a contract for the sale of land. The district court concluded that all the material terms had been agreed to on November 6 and that any changes proposed in the November 16 Purchase Agreement were minimal and did not affect the fact that the parties had already agreed to the material terms. Applying Idaho Code section 12-120(3), the district court awarded mandatory costs and fees to POV, the prevailing party in a commercial transaction. POV then filed its memorandum of attorney fees and costs, to which Loucks objected. The district judge analyzed POV's various requests, made some deductions, and entered a decision. Loucks now appeals the award of summary judgment and the award of costs and fees.

II. STANDARD OF REVIEW

Specific performance is an extraordinary remedy that can provide relief when legal remedies are inadequate. Fullerton v. Griswold, 142 Idaho 820, 823, 136 P.3d 291, 294 (2006). The inadequacy of remedies at law is presumed in an action for breach of a real estate purchase and sale agreement due to the perceived uniqueness of land. Id. The decision to grant specific performance is a matter within the district court's discretion. Id. When making its decision the court must balance the equities between the parties to determine whether specific performance is appropriate. Id.

On appeal from the grant of a motion for summary judgment, this Court's standard of review is the same as the standard used by the district court originally ruling on the motion. Intermountain Forest Management v. Louisiana Pacific Corp., 136 Idaho 233, 235, 31 P.3d 921, 923 (2001). Summary judgment is appropriate "if the pleadings, depositions, and admissions on file, together with the affidavits, if any, show that there is no genuine issue of material fact and that the moving party is entitled to a judgment as a matter of law." I.R.C.P. 56(c).

The burden of proving the absence of material facts is upon the moving party. Thomson v. City of Lewiston, 137 Idaho 473, 476, 50 P.3d 488, 491 (2002); see also Petricevich v. Salmon River Canal Co., 92 Idaho 865, 452 P.2d 362 (1969). The adverse party, however, "may not rest upon the mere allegations or denials of his pleadings, but his response, by affidavits or as otherwise provided in this rule, must set forth specific facts showing that there is a genuine issue for trial." I.R.C.P. 56(e). The moving party is therefore entitled to a judgment when the nonmoving party fails to make a showing sufficient to establish the existence of an element essential to that party's case on which that party will bear the burden of proof at trial. See Thomson, 137 Idaho at 476, 50 P.3d at 491, Badell, 115 Idaho at 102, 765 P.2d at 127.

When an action, as here, will be tried before the court without a jury, the trial court as the trier of fact is entitled to arrive at the most probable inferences based upon the undisputed evidence properly before it and grant the summary judgment despite the possibility of conflicting inferences. Intermountain Forest Management, 136 Idaho at 235, 31 P.3d at 923. Resolution of the possible conflict between the inferences is within the responsibilities of the fact finder. Cameron v. Neal, 130 Idaho 898, 900, 950 P.2d 1237, 1239 (1997). This Court exercises free review over the entire record that was before the district judge to determine whether either side was entitled to judgment as a matter of law and reviews the inferences drawn by the district judge to determine whether the record reasonably supports those inferences. Intermountain Forest Management, 136 Idaho at 236, 31 P.3d at 924.

III. DISCUSSION

A. Award of summary judgment

The district court found that the Addendum evinced a valid, enforceable agreement covering all the material terms and bearing each party's signature. We conclude that the district court was correct and that the parties agreed to the material terms of this land sale agreement.

"Formation of a contract is generally a question of fact for the trier of fact to resolve." Inland Title Co. v. Comstock, 116 Idaho 701, 702, 779 P.2d 15, 16 (1989). "Formation of a valid contract requires that there be a meeting of the minds as evidenced by a manifestation of mutual intent to contract. This manifestation takes the form of an offer and acceptance." Id. at 703, 779 P.2d at 17. In addition, under Idaho's statute of frauds, an agreement for the sale of real property is invalid unless the agreement "or some note or memorandum thereof, be in writing and subscribed by the party charged, or by his agent." I.C. § 9-505(4); see also Hoffman v. SV Co., Inc., 102 Idaho 187, 190, 628 P.2d 218, 221 (1981). "In a dispute over contract formation it is incumbent upon the plaintiff to prove a distinct and common understanding between the parties." Inland, 116 Idaho at 703, 779 P.2d at 17.

For a land sale contract to be specifically enforced, the contract must typically contain the minimum provisions of the parties involved, the subject matter thereof, the price or consideration, a description of the property, and all the essential terms of the agreement. Hoffman v. S V Co., Inc., 102 Idaho 187, 190, 628 P.2d 218, 221 (1981); see also Snyder v. Miniver, 134 Idaho 585, 587, 6 P.3d 835, 837 (Ct.App.2000). The Addendum identifies Loucks and POV as the parties; identifies the land to be sold by address, acreage, tax parcel number, and a metes and bounds description; sets a purchase price of $900,000; requires $100,000 in earnest money, together with interest at 6.5%; provides a closing date, with the addition: "Balance due in Full"; and provides that no prepayment penalty shall apply. The document is signed by Patterson, Loucks, and Tony, and dated November 6, 2004. The Addendum therefore includes all of the minimum essential, material terms of a land sale contract.¹

Loucks argues that no meeting of the minds occurred based on the difference between the November 6, 2004,...