Rowley v. Fuhrman

• Decision Date: 05 August 1999
• Docket Number: No. 23664.,23664.
• Citation: 133 Idaho 105,982 P.2d 940
• Parties: Helen Faye ROWLEY, Plaintiff-Respondent, v. James A. FUHRMAN, Personal Representative of the Estate of Kent A. Fuhrman, deceased, and James A. Fuhrman and Diane Fuhrman, husband and wife, Defendants-Appellants.
• Court: Idaho Supreme Court

982 P.2d 940

133 Idaho 105

Helen Faye ROWLEY, Plaintiff-Respondent, v. James A. FUHRMAN, Personal Representative of the Estate of Kent A. Fuhrman, deceased, and James A. Fuhrman and Diane Fuhrman, husband and wife, Defendants-Appellants.

No. 23664.

Supreme Court of Idaho.

August 5, 1999.

Daniel L. Hawkley, Boise, for appellants.

Cosho, Humphrey, Greener & Welsh, P.A., Boise and Phil E. De Angeli, Boise, for respondent. Phil E. De Angeli argued.

SCHROEDER, Justice.

This is a dissolution of a joint venture case. James A. Fuhrman, acting on his own behalf and as the personal representative of the estate of Kent A. Fuhrman, who is deceased, (the Fuhrmans) and Diane Fuhrman, James Fuhrman's wife, appeal the trial court's findings that: (1) they and Mohammad Alidjani (Alidjani), intended to be bound to a joint venture agreement absent a writing; (2) they waived their statute of frauds defense by not pleading it or trying the issue with the express or implied consent of the plaintiff; and (3) Alidjani did not consent to a termination of the joint venture.

I. BACKGROUND AND PRIOR PROCEEDINGS

Prior to February 1994, Alidjani and Kent Fuhrman discovered a piece of real property (property) owned by the State of Idaho that was going to be sold at public auction on February 24, 1994. They discussed the possibility of buying the property with Kent's brother, James Fuhrman. Alidjani and the Fuhrmans agreed to bid on the property. Each of them would contribute $3,000 to be used for the down payment. The parties planned to acquire the property for investment purposes, hoping to sell it later for a profit.

On February 24, 1994, Kent Fuhrman successfully bid $50,000 on behalf of the parties and paid the down payment of $7,901. He also signed a document entitled "Memorandum of Sale of Real Property" agreeing to purchase the property from the State. Alidjani gave Kent Fuhrman a check in the sum of $3,000 on which he had written "Eagle Rd. 1/3 ownership 2½ ac." Kent Fuhrman negotiated that check and retained the funds. James Fuhrman likewise gave his brother $3,000. These sums were paid in accordance with the agreement that each would initially contribute $3,000 to be used to make the down payment with the balance being put into an account from which taxes and expenses would be paid. At the time of the purchase Alidjani and the Fuhrmans each believed that they were one-third owners of the property.

On March, 16, 1994, Alidjani's wife, Helen Faye Rowley (Rowley), raised the subject of divorce with Alidjani. When the Fuhrmans learned that Rowley was contemplating a divorce from Alidjani, they decided that Alidjani would no longer have an interest in the property.

On May 20, 1994, James Fuhrman gave Alidjani a letter from his brother and him, seeking to return Alidjani's $3,000 and terminate his interest in the transaction. Alidjani declined to accept the $3,000, and no transaction was ever effected whereby Alidjani's interest in the property was transferred to the Fuhrmans.

Alidjani and Rowley were divorced on March 6, 1996. The divorce decree awarded Alidjani's interest in the property to Rowley. On April 5, 1996, the Fuhrmans sold the property to a third party for $250,000, which was stipulated as its fair market value on that date. On April 29, 1996, Rowley commenced this action for an accounting regarding the property. The Fuhrmans denied that she had any interest in the property.

A bench trial was held, and the trial court issued a memorandum decision and order finding in favor of Rowley and ordering an accounting. The trial court found that: (1) the Fuhrmans and Alidjani entered into a joint venture to purchase the property as an investment for resale; (2) the parties intended to be bound in a joint venture even though the terms of the joint venture had not been reduced to writing; (3) the Fuhrmans did not plead the statute of frauds as a defense, nor was the issue tried with the express or implied consent of Rowley and thus the defense was waived; (4) the sale of the property did not breach the joint venture agreement because the parties purchased the property with the intention of selling it, the sale price equaled the fair market value, and the Fuhrmans, representing the majority of the joint venture, had the authority to sell it; and (5) after the divorce, Rowley had a one-third interest in the property, and when the Fuhrmans sold the property, they were required to account to Rowley for her interest.

The Fuhrmans appealed on February 26, 1997. Another bench trial was held on June 17, 1997, with respect to the accounting among the parties. The trial court entered judgment in favor of Rowley on June 24, 1997. The Fuhrmans moved for reconsideration and to amend the judgment. The trial court denied the motion. The Fuhrmans filed an amended notice of appeal.

II. STANDARD OF REVIEW

Rule 52(a) of the Idaho Rules of Civil Procedure (I.R.C.P.) provides in pertinent part:

In all actions tried upon the facts without a jury or with an advisory jury, the court shall find the facts specially and state separately its conclusions of law thereon and direct the entry of the appropriate judgment .... Findings of fact shall not be set aside unless clearly erroneous. In the application of this principle regard shall be given to the special opportunity of the trial court to judge the credibility of those witnesses who appear personally before it.

"Findings of fact cannot be set aside on appeal unless they are clearly erroneous, i.e. not supported by substantial, competent evidence." Savage Lateral Ditch Water Users Ass'n v. Pulley, 125 Idaho 237, 241-42, 869 P.2d 554, 558-59 (1993). Likewise, the "[t]rial court's findings and conclusions which are based on substantial although conflicting evidence will not be disturbed on appeal." Sun Valley Shamrock Resources, Inc. v. Travelers Leasing Corp., 118 Idaho 116, 118, 794 P.2d 1389, 1391 (1990). Since it is the province of the trial court to weigh conflicting evidence and testimony and to judge the credibility of the witnesses, "the trial court's findings of fact will be liberally construed in favor of the judgment entered." Id.

III.

THERE IS SUBSTANTIAL EVIDENCE TO SUPPORT THE TRIAL COURT'S FINDING THAT THE PARTIES INTENDED TO BE BOUND IN A JOINT VENTURE EVEN THOUGH THE TERMS OF THE JOINT VENTURE HAD NOT BEEN REDUCED TO WRITING.

The trial court specifically found "that the parties intended to be bound even though the terms of their joint venture had not been reduced to writing." The Fuhrmans argue that the court erred and direct this Court to facts in the record which they assert support their position. The Fuhrmans rely on Mitchell v. Siqueiros, 99 Idaho 396, 400, 582 P.2d 1074, 1078 (1978), for the following statement: "Where it is clear that one party has agreed that an oral agreement must be reduced to writing before it shall be binding, there is no contract until a formal document is executed." However, Mitchell also states: "Whether a contract exists when contracting parties agree to reduce their agreement to writing, is a question of the parties' intent." Id.

The ultimate question of whether the parties intended to be bound to the joint venture even though the terms of their joint venture had not been reduced to writing is a question of fact to be resolved by the fact-finder. See Murgoitio v. Murgoitio, 111 Idaho 573, 576, 726 P.2d 685, 688 (1986) ("The question of the parties' intent was a question of fact for the trial court."); Miller Constr. Co. v. Stresstek, a Div. of L.R. Yegge, Co., 108 Idaho 187, 189, 697 P.2d 1201, 1203 (Ct. App.1985) ("[D]etermining intent is ... the responsibility of the trier of fact."). The Court will not disturb the trial court's finding if there is substantial though conflicting evidence to support it. Sun Valley Shamrock, 118 Idaho at 118, 794 P.2d at 1391.

There is substantial evidence to support the finding of the trial court that the parties intended to be bound to the joint venture even absent a writing: (1) Alidjani wrote a $3,000 check to Kent Fuhrman with a notation on the "for" line indicating that he was a one-third owner of the property at the time the check was made; (2) Kent Fuhrman testified that it was his understanding that the check was for Alidjani's percentage ownership of the property; (3) Kent Fuhrman cashed the $3,000 check manifesting his assent to the one-third ownership arrangement; (4) Alidjani testified that his belief when he returned from the auction was that he was a one-third owner of the property; (5) James Fuhrman brought offers to Rowley and Alidjani not long after the property had been purchased at the auction; (6) there were several conversations between the parties which gave Rowley the understanding that she was a partner; and (7) Rowley acted as a participant in the joint venture by checking to make sure that unauthorized users were not parking their cars on the property and by attempting to sell the property, even soliciting a purchase offer.

IV.

THE TRIAL COURT DID NOT ERR IN DISMISSING THE STATUTE OF FRAUDS DEFENSE.

The statute of frauds is an affirmative defense that must be pled pursuant to I.R.C.P. 8(c). The trial court determined that "[t]he defendants did not plead the statute of frauds as a defense, nor was that issue tried with the express or implied consent of the plaintiff." Notwithstanding this determination by the trial court, the Fuhrmans argue that because their joint venture was going to be in excess of a year, the agreement was invalid because it was not in writing in violation of section 9-505 of the Idaho Code (I.C.). The Fuhrmans maintain that they did not waive this issue because I.R.C.P. 15(b) allows an amendment of the pleadings if the issue is tried by express or implied consent of the parties.

The Fuhrmans did not list the threshold issue of waiver with respect to their statute of frauds defense as an issue on appeal pursuant to Idaho Appellate Rule 35(a)(4) or...