Rockefeller v. Grabow, 2003 Opinion No. 127 (Idaho 12/9/2003)
| Decision Date | 09 December 2003 |
| Docket Number | Docket No. 29031. |
| Citation | 2003 Opinion No. 127 |
| Court | Idaho Supreme Court |
| Parties | MARK S. ROCKEFELLER, dba ROCKEFELLER & ASSOCIATES, Plaintiff-Respondent, v. JOHN C. GRABOW and LAURA M. GRABOW, Defendants-Appellants. |
Appeal from the District Court of the Seventh Judicial District of the State of Idaho, in and for Teton County. The Hon. James C. Herndon, District Judge.
The judgment of the district court is affirmed.
John C. Grabow, Ketchum, for appellants. John C. Grabow argued.
Thomsen & Stephens, P.A., Idaho Falls, for respondents. James D. Holman argued.
This is an appeal after the case was remanded for the district court to determine whether a real estate developer-broker who breached his fiduciary duties to his principal should forfeit all or a portion of the development fee that the developer-broker earned before the breach. The district court awarded the developer-broker 87.5% of his development fee and attorney fees, and the landowners appealed. We affirm the award of the development fee and the award of attorney fees.
In January 1992, the appellants John and Laura Grabow and the respondent Mark Rockefeller entered into a written agreement entitled "Property Development and Agency Agreement" (Agreement). Under the Agreement, Rockefeller agreed to develop and subdivide certain real property owned by the Grabows and they appointed Rockefeller as their exclusive selling agent for a period of eight years. The development was to be known as the Shooting Star Ranch. Rockefeller was to be paid a development fee equal to two percent of the price obtained from the sale of any or all of the property and a sales commission that was a percentage of the selling price. The development commission was to be paid even if the contract was terminated. The sales commission was six percent if Rockefeller found the buyer and three percent if another brokerage firm found the buyer, with that firm also receiving a four percent commission. Rockefeller agreed to use his best efforts to subdivide and develop the property and to market and sell the subdivided parcels. If the Grabows determined in good faith that Rockefeller had breached the Agreement, they could give him written notice of their intent to terminate the Agreement, and he would have ten days to cure.
By letter dated November 8, 1993, the Grabows gave Rockefeller notice that he had breached the Agreement. The breaches listed in the letter were his failure to prepare a written Winter marketing plan, his failure to provide a monthly activity log listing the showings of the property to prospective purchasers, and his failure to list the property in the Jackson Hole multiple listing service. Rockefeller responded by a letter dated November 17, 1993, in which he asserted he had not breached the contract but did agree to comply with Grabows' requests.
On September 12, 1994, the Grabows sent Rockefeller a letter notifying him that they were terminating the Agreement in sixty days. They alleged that he was not using his best efforts to market the lots and had not provided them with monthly activity logs. They also claimed that Rockefeller breached the Agreement by taking a listing on adjoining real property owned by Jerry Linn, who claimed an easement across lot 44 of the Shooting Star Ranch. The Grabows contended that when they purchased their property Rockefeller, as agent for their seller, told them that Linn's easement was for logging only, but after taking the listing on Linn's property Rockefeller claimed he had merely said that Linn had only used the road for logging in the past. In their September 12, 1994 letter, the Grabows stated that Rockefeller had not complied with their request to put in writing the representations he had made to them about the scope of Linn's easement and that, as their agent, such refusal was untenable.
On June 16, 1995, Rockefeller sued the Grabows seeking his development fee and sales commissions, damages for defamation, and reinstatement as the Grabows' sales agent. The Grabows counterclaimed for breach of contract, breach of fiduciary duties, fraud, and tortious interference with prospective economic advantage. The Grabows moved to dismiss Rockefeller's claim for reinstatement as their sales agent, and on January 16, 1996, the district court entered a partial judgment dismissing that claim. Both parties filed motions for summary judgment. Rockefeller's motion for summary judgment was heard on April 30, 1996. On May 15, 1996, the district court entered an order for partial summary judgment holding that Rockefeller was entitled to the two percent development fee and dismissing the Grabows' counterclaim for tortious interference with prospective economic advantage. On May 24, 1996, the district court heard Grabows' motion for summary judgment. On June 14, 1996, the district court entered an order for partial summary judgment dismissing Rockefeller's claim for defamation. The district court denied the remaining parts of the parties' motions for summary judgment.
The remaining issues, other than the amount of Rockefeller's development fee, were tried to a jury in February 1996. The jury returned a special verdict finding that the Grabows did not breach the Agreement by wrongfully terminating Rockefeller and that Rockefeller breached his fiduciary duty to the Grabows. The jury awarded the Grabows $18,250 in damages and $36,500 in punitive damages. On March 12, 1997, the district court entered judgment in favor of Grabows in the sum of $54,750.
Rockefeller then filed a motion seeking a new trial or, alternatively, a judgment n.o.v. or remittitur, and a judgment for his two percent commission together with costs and attorney fees. In response, the Grabows moved for disgorgement of Rockefeller's development fee because of the breach of his fiduciary duty and for an award of costs and attorney fees. By order entered August 14, 1997, the district court denied the request to alter the jury verdict and held that Rockefeller was entitled to his development commission. On September 10, 1997, the district court entered an amended judgment, which provided that Rockefeller was entitled to recover $60,191 in development commissions and the Grabows were entitled to recover $54,750 on the jury verdict, for a net judgment in favor of Rockefeller in the sum of $5,441, plus interest from February 14, 1997.
On February 23, 1998, the district court entered an order regarding the parties' requests for attorney fees and costs. The court held that Rockefeller prevailed on his claim for the development commission, that such claim was a commercial transaction for which he was entitled to an award of attorney fees under Idaho Code § 12-120(3) and court costs, that the Grabows prevailed on their counterclaim for breach of fiduciary duty, that they were not entitled to an award of attorney fees on their counterclaim because the gravamen of the claim was a tort action, and that they were entitled to court costs on their counterclaim. After each party submitted a memorandum of costs, the court awarded Rockefeller a reasonable attorney fee in the sum of $8,500 plus court costs in the sum of $9,440.95, and it awarded the Grabows court costs in the sum of $2,336.69.
The Grabows appealed and Rockefeller cross-appealed. The opinion on that appeal is Rockefeller v. Grabow, 136 Idaho 637, 39 P.3d 577 (2001) (herein Rockefeller I). On appeal, we affirmed the district court with respect to all issues raised on appeal except the order granting Rockefeller a judgment for the amount of his development commissions. We remanded the case for a determination by the district court of whether Rockefeller should forfeit all or a portion of his development commission due to his breach of his fiduciary duties. Because we reversed the award to Rockefeller of his development commission, we also vacated his award of attorney fees.
On remand, the district court reduced Rockefeller's development commission by 12.5% to $52,667.13. Because Rockefeller was still awarded damages for his development fee, the district court also reinstated its original award of court costs and attorney fees. The Grabows then appealed.
A. Did the district court fail to comply with this Court's order on remand?
B. Did the district court abuse its discretion when determining the amount of Rockefeller's development commission that he should forfeit?
C. Did the district court err in awarding Rockefeller attorney fees on remand?
D. Is Rockefeller entitled to an award of attorney fees on appeal?
A. Did the District Court Fail to Comply with This Court's Order on Remand?
Grabow alleged that Rockefeller committed several breaches of his fiduciary duties, which we described in Rockefeller I as follows:
The evidence submitted at trial could lead a jury to conclude that while Rockefeller was the Grabows' agent, he misrepresented to them the commission typical to the marketplace; took on the representation of a piece of property, the sale of which eventually depended upon winning a lawsuit against the Grabows; helped set up a means whereby Linn could afford to sue the Grabows; and shared information about the Grabows' bargaining position with Staten and Linn while keeping all information from Linn and Staten confidential.
136 Idaho at 647, 39 P.3d 587. When we remanded the case to the district court for determination of the amount of the forfeiture of Rockefeller's development fee, we directed the district court to consider factors, including "the . . . timing of the violation" and "whether the agent completed a divisible portion of his contract duties before the breach occurred for which compensation can be determined." 136 Idaho at 643, 39 P.3d at 583. Those factors are significant in this case because the alleged breaches occurred at different times.
The Agreement between Rockefeller and the Grabows had...
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