Smith v. Osguthorpe

• Decision Date: 31 October 2002
• Docket Number: No. 20010530-CA.,20010530-CA.
• Citation: Smith v. Osguthorpe, 2002 UT App 361, 58 P.3d 854 (Utah App. 2002)
• Parties: Enoch Richard SMITH, as personal representative of the Estate of Enoch Smith Jr., Plaintiff and Appellee, v. D.A. OSGUTHORPE, an individual; and D.A. Osguthorpe Family Partnership, Defendants and Appellants.
• Court: Utah Court of Appeals

58 P.3d 854

2002 UT App 361

Enoch Richard SMITH, as personal representative of the Estate of Enoch Smith Jr., Plaintiff and Appellee, v. D.A. OSGUTHORPE, an individual; and D.A. Osguthorpe Family Partnership, Defendants and Appellants.

No. 20010530-CA.

Court of Appeals of Utah.

October 31, 2002.

David W. Scofield, Parsons Davies Kinghorn & Peters, Salt Lake City, for Appellants.

Hardin A. Whitney, Moyle & Draper, and Robert G. Wing, Prince Yeates & Geldzahler, Salt Lake City, for Appellee.

Before Judges JACKSON, BILLINGS, and THORNE.

OPINION

BILLINGS, Associate Presiding Judge:

¶ 1 D.A. Osguthorpe and the D.A. Osguthorpe Family Partnership (collectively the Osguthorpes) appeal the district court's grant of Enoch Richard Smith's motions for summary judgment and denial of the Osguthorpes' motions for summary judgment, to dismiss, and to amend. We affirm in part, and reverse and remand in part.

BACKGROUND

¶ 2 Prior to 1966, Enoch Smith Jr. (Smith)¹ and D.A. Osguthorpe (Osguthorpe) were partners in a cattle and sheep business (the partnership). In November 1966, Smith and Osguthorpe entered into an agreement (the dissolution agreement) "to settle all of the rights between them in the partnership businesses and affairs."

¶ 3 Under the dissolution agreement, Smith agreed to sell Osguthorpe his interest in the partnership assets, subject to a reservation by Smith of a share of proceeds derived from the sale or lease of property (the disputed property), which is the subject of this appeal. In return, Osguthorpe agreed to pay Smith $50,000 and to assume partnership obligations.

¶ 4 Smith and Osguthorpe signed the dissolution agreement. Additionally, Osguthorpe's wife signed under a clause providing that "I ... agree that any interest that I may have in and to the [disputed property] shall be subject to the provisions of said paragraph 1(g)" of the dissolution agreement. In January 1967, the dissolution agreement was recorded in the Summit County Recorder's Office.

¶ 5 Sometime after entering into the dissolution agreement, Osguthorpe conveyed part of the disputed property to the D.A. Osguthorpe Family Partnership (the family partnership). The family partnership included Osguthorpe's son Stephen.

¶ 6 On August 14, 1996, Osguthorpe and the family partnership entered into a twenty-eight-year agreement with Wolf Mountain Resorts, L.C. (Wolf Mountain) titled "Lease Agreement" (the lease). Under the lease, Wolf Mountain agreed to annually pay the Osguthorpes $100,000 to "lease[ ] ... specific portions" of the Osguthorpes' property, including the disputed property, "for use as a commercial recreation area, including the installation, maintenance and operation of two ski lifts, snow making and clearing of ski trails and such other related facilities, structures and roads as may be required." The lease also required Wolf Mountain to permit the Osguthorpes "to improve and to use" the property provided the Osguthorpes did "not interfere with ski lifts and similar structures and runs of" Wolf Mountain.

¶ 7 Sometime in 1997, American Skiing Company (the Canyons) succeeded to Wolf Mountain's interest in the lease. On July 28, 1997, the Canyons, Osguthorpe, the family partnership, and Stephen, as an individual, amended the lease. This first amendment granted the Canyons the right to construct a ski trail, and the right to repair and construct additional roads and relocate and upgrade lifts subject to the approval of Stephen and the Canyons' director. The amendment required the Canyons to "include the Osguthorpes in their master planning process." The amendment also increased the annual rent to $150,000.

¶ 8 On August 10, 1998, the lease was amended a second time. This second amendment gave the Canyons the right to have alpine skiing operations and to construct another road subject to the approval of Stephen and the Canyons' director. The Osguthorpes retained the right to use and improve all of the property for their sheep and cattle ranching operations, so long as the same did not damage the Canyons' facilities or unreasonably interfere with the Canyons' winter use of the property. The amendment increased the annual payment to $200,000.

¶ 9 In November 1998, Enoch Richard Smith, as representative of Enoch Smith Jr.'s estate, brought a breach of contract action against the Osguthorpes, seeking a share of the lease payments. Smith filed a motion for partial summary judgment, contending the dissolution agreement entitled him to a share of the lease payments. The Osguthorpes filed a cross-motion for summary judgment, contending the dissolution agreement was unenforceable. Following a hearing, the district court granted Smith's motion for partial summary judgment.

¶ 10 Thereafter, the Osguthorpes' counsel withdrew and newly associated counsel filed a motion to reconsider the grant of partial summary judgment to Smith, asserting the dissolution agreement was unenforceable for want of consideration and under the statute of frauds. The Osguthorpes' new counsel also filed a second motion to amend their answer to assert, inter alia, fraud defenses and counterclaims. The district court denied the Osguthorpes' motion to reconsider, ruling that the dissolution agreement was integrated and satisfied the statute of frauds. The district court did not address the Osguthorpes' motion to amend.

¶ 11 Smith filed a second motion for summary judgment seeking damages of one-half of the lease payments in excess of $1.60 per acre. In response, the Osguthorpes asserted the lease payments were mainly for services rendered by Osguthorpe and Stephen, thus a material issue of fact existed as to the allocation of payments due Smith. The district court granted Smith's requested damages, concluding the lease payments were entirely for use of the disputed property not for services.

¶ 12 The Osguthorpes then filed a motion to dismiss for failure to join Stephen and the Canyons as indispensable parties. The district court refused to grant or deny the motion. Instead, the court ruled that although the Canyons and Stephen did not have an interest in Smith's action generally, they had an interest with respect to its ruling that the lease payments were not for services. The court therefore invited the Canyons and Stephen to file memoranda in opposition to Smith's second motion for summary judgment.

¶ 13 The Osguthorpes now appeal the grant of Smith's motions for summary judgment and the denial of their motions for summary judgment, to dismiss, and to amend their answer.

ISSUES AND STANDARDS OF REVIEW

¶ 14 The Osguthorpes argue the district court erred in granting Smith's motions for summary judgment.

Summary judgment is appropriate only when there is no genuine issue as to any material fact and the moving party is entitled to judgment as a matter of law. In determining whether the [district] court correctly found that there was no genuine issue of material fact, we accept the facts and inferences in the light most favorable to the [nonmoving] party. In deciding whether the [district] court correctly granted judgment as a matter of law, we give no deference to the [district] court's view of the law; we review it for correctness.

SME Indus., Inc. v. Thompson, Ventulett, Stainback & Assocs., 2001 UT 54, ¶ 9, 28 P.3d 669 (second alteration in original) (quotations and citations omitted).

¶ 15 The Osguthorpes also argue the district court erred in not ordering joinder of Stephen and the Canyons. We review the district court's "rule 19 determination under an abuse of discretion standard." Grand County v. Rogers, 2002 UT 25, ¶ 27, 44 P.3d 734. However, the district court's "interpretation of ... rule [19] is a question of law that we review for correctness." Brown v. Glover, 2000 UT 89, ¶ 15, 16 P.3d 540.²

ANALYSIS

I. Is the Dissolution Agreement Enforceable?

¶ 16 The Osguthorpes raise a number of issues in contending the district court erred in enforcing the dissolution agreement. We consider each issue but conclude the district court did not err in concluding the dissolution agreement is enforceable.

A. Consideration of Parol Evidence in Determining the Dissolution Agreement is Integrated

¶ 17 The parol evidence rule "operates in the absence of fraud to exclude [prior and] contemporaneous conversations, statements, or representations offered for the purpose of varying or adding to the terms of an integrated contract." Union Bank v. Swenson, 707 P.2d 663, 665 (Utah 1985) (emphasis omitted). "An agreement is integrated where the parties thereto adopt a writing or writings as the final and complete expression of the agreement." Eie v. St. Benedict's Hosp., 638 P.2d 1190, 1194 (Utah 1981) (quotations and citation omitted).

¶ 18 "[A] court must first determine whether the writing was intended by the parties to be an integration. In resolving this preliminary question of fact, parol evidence, indeed any relevant evidence, is admissible." Union Bank, 707 P.2d at 665 (emphasis added). However, to preserve the integrity of written contracts, we apply "a rebuttable presumption that a writing which on its face appears to be an integrated agreement is what it appears to be." Id.; see also Terry's Sales, Inc. v. Vander Veur II, 618 P.2d 29, 32 (Utah 1980) ("Where parties have various claims and obligations to each other, and have had a discussion about resolving their disputes which results in a written agreement signed by them, it is generally to be assumed that their disputes were merged into the written agreement."). Further, a district court is not precluded from ruling that an agreement is integrated in granting a motion for summary judgment. If the "contract terms are complete, clear, and unambiguous[, they can] be interpreted by the judge on a motion for summary judgment." Webb v. R.O.A. Gen., Inc., 804 P.2d 547, 551 (Utah Ct.App.1991) (quotations and citation omitted). We cannot say the district court erred in determining from the unambiguous...