Sewell v. Neilsen, Monroe, Inc., 15386

• Decision Date: 29 August 1985
• Docket Number: No. 15386,15386
• Citation: 109 Idaho 192,706 P.2d 81
• Parties: Max F. (Rip) SEWELL dba Warm Springs Realty, Plaintiff-Respondent, v. NEILSEN, MONROE, INC. an Idaho corporation, Defendant-Appellant.
• Court: Idaho Court of Appeals

Page 81

706 P.2d 81

109 Idaho 192

Max F. (Rip) SEWELL dba Warm Springs Realty, Plaintiff-Respondent, v. NEILSEN, MONROE, INC. an Idaho corporation, Defendant-Appellant.

No. 15386.

Court of Appeals of Idaho.

Aug. 29, 1985.

Rehearing Denied Oct. 9, 1985.

Petition for Review Dec. 13, 1985.

Jeffrey A. Strother, Thomas C. Morris, of Moffatt, Thomas, Barrett & Blanton, Boise, for defendant-appellant.

E. Lee Schlender, Ketchum, for plaintiff-respondent.

WALTERS, Chief Judge.

This is an appeal from a summary judgment granted to the plaintiff, Max Sewell, in an action to collect on a promissory note. We are presented with three questions. First, should the appeal be dismissed for mootness because of partial satisfaction of the judgment through an execution sale and because the appellant agreed to entry of a charging order against a partnership interest held by the appellant, to secure the balance owed on the judgment? Second, was there any unresolved genuine issue of material fact which would preclude summary judgment? Finally, did the district court err by awarding costs and attorney fees to the plaintiff? We hold the appeal is not mooted by the plaintiff's attempts to collect on the judgment; that summary judgment should not have been granted; and that the judgment, including the award of attorney fees and costs, must be set aside.

In 1978, the appellant, Neilsen-Monroe, Inc., acting through its president David Sellgren, executed a promissory note for a real estate commission owed to Max Sewell, doing business as Warm Springs Realty. The note was for $75,000 with interest at ten percent per annum, and had a due date of September 12, 1983. The note also recited: "Two fully paid for lots may be substituted for the above amount." Sewell filed suit against Neilsen-Monroe, Inc. alleging Neilsen had failed to pay the note when it became due. Neilsen answered, alleging that conveyance of "two fully paid for lots" had been tendered to Sewell to pay the note and accrued interest, prior to the due date of the note. On Sewell's motion, summary judgment was entered against Neilsen for $130,867.25, representing the principal and interest due on the note and an award of attorney fees and costs incurred by Sewell. Neilsen appeals.

We turn first to Sewell's motion to dismiss this appeal on grounds of mootness. While this appeal was pending, Sewell obtained $50,000 toward satisfaction of the judgment through an execution sale of certain real property owned by Neilsen. Then, to prevent further executions, Neilsen agreed to the entry of a charging order to secure the balance of the judgment. The charging order was directed against an interest Neilsen has as a general partner in another, limited partnership business. Sewell argues that these events preclude Neilsen from contesting the validity of the summary judgment. In opposition, Neilsen contends the execution sale was not a voluntary partial satisfaction of the judgment on Neilsen's part and that Neilsen agreed to the charging order so as to prevent further executions and disruptions of its business. Neilsen cites our decision in International Business Machines Corp. v. Lawhorn, 106 Idaho 194, 677 P.2d 507 (Ct.App.1984) for the proposition that where a party is compelled to pay a judgment in order to prevent his property from being sold at an execution sale, the payment is involuntary and does not render moot an appeal from the judgment. Neilsen asserts, by analogy and parity of reasoning, that the execution sale and the entry of the charging order do not render its appeal from the summary judgment moot. We agree. We deny Sewell's motion to dismiss this appeal.

We turn next to the primary issue on appeal, viz., whether the district court erred by granting summary judgment in favor of Sewell. Summary judgment is appropriate where the pleadings, depositions and admissions on file, together with affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law. I.R.C.P. 56(c). In ruling on a summary judgment motion, the facts are to be liberally construed in favor of the party opposing the motion, and that party is to be accorded the benefit of all favorable inferences which might reasonably be drawn from the evidence. Reis v. Cox, 104 Idaho 434, 660 P.2d 46 (1982). If a genuine issue of material fact remains unresolved, or if the record contains conflicting inferences and if reasonable minds might reach different conclusions from the facts and inferences presented, then summary judgment should not be granted. Id. ¹

The ultimate issue presented to the district court, as framed by the pleadings of the parties, was whether Neilsen was obligated on the promissory note after its due date. Neilsen alleged that it had tendered performance of its obligation by offering to convey two lots to Sewell in satisfaction of the debt before the note's due date. In the summary judgment proceeding, Sewell disagreed with Neilsen's position. Sewell disputed that Neilsen had any option to substitute lots for cash payment on the note; that even if Neilsen had such an option, it was not timely exercised before the note came due; that the reference in the note to "two fully paid for lots" was vague and unenforceable and violated the statute of frauds; and that, in the manner Neilsen presented its tender, Neilsen's tender was conditional as an offer of a new contract.

Neilsen presented evidence to the court by way of affidavits. David Sellgren, the person who had signed the note, essentially stated that the language concerning substitution of the two lots reflected an understanding and agreement reached between him and Max Sewell; that the language was placed on the note by either Sewell or an agent of Sewell; that Sellgren provided Sewell with a letter dated the same day as the note, more fully expressing their agreement concerning the two lots, indicating that two lots, fully paid for, having a combined retail value of $75,000 plus interest at ten percent, would be conveyed to Warm Springs Realty; that "[i]t was always the understanding of Mr. Sewell and...