Snyder v. Lovercheck

• Decision Date: 13 December 1999
• Docket Number: No. 98-186, No. 98-203.
• Citation: 992 P.2d 1079
• Parties: Loren SNYDER, Appellant (Plaintiff), v. Ron LOVERCHECK, d/b/a Bear Mountain Land Company; O.W. Lovercheck and Margaret O. Lovercheck, husband and wife, Appellees (Defendants). Loren Snyder, Appellant (Plaintiff), v. Jeremy Hayek and ERA The Property Exchange Inc., a Wyoming corporation, Appellees (Defendants).
• Court: Wyoming Supreme Court

992 P.2d 1079

Loren SNYDER, Appellant (Plaintiff), v. Ron LOVERCHECK, d/b/a Bear Mountain Land Company; O.W. Lovercheck and Margaret O. Lovercheck, husband and wife, Appellees (Defendants).

Loren Snyder, Appellant (Plaintiff), v. Jeremy Hayek and ERA The Property Exchange Inc., a Wyoming corporation, Appellees (Defendants).

Nos. 98-186, 98-203.

Supreme Court of Wyoming.

December 13, 1999.

Representing Appellant: Micheal K. Shoumaker, Sheridan, Wyoming; and James N. Wolfe, Cheyenne, Wyoming.

Representing Appellee Ron Lovercheck, d/b/a Bear Mountain Land Co.: Nancy D. Freudenthal of Davis & Cannon, Cheyenne, Wyoming.

Representing Appellees O.W. Lovercheck and Margaret O. Lovercheck: John J. Maier of John J. Maier Law Offices, Torrington, Wyoming.

Representing Appellees Jeremy Hayek and ERA The Property Exchange, Inc.: Stephen N. Sherard of Sherard, Sherard & Johnson, Wheatland, Wyoming.

Before LEHMAN, C.J., and THOMAS, MACY, GOLDEN, and TAYLOR,¹ JJ.

TAYLOR, Justice, Retired.

Believing himself to have been shortchanged in the purchase of a wheat farm, appellant filed suit against the sellers, both real estate agents, and his agent's employer. The district court granted summary judgment in favor of all defendants on all of appellant's claims. The district court awarded costs to all defendants, and awarded attorney's fees to the sellers. Finding the district court's disposition on the motions for summary judgment to be correct, we affirm. However, we remand the award of attorney's fees and costs, and vacate the award of costs for Westlaw research.

I. ISSUES

Appellant, Loren Snyder (Snyder), presents three issues for review that pertain to the Lovercheck appellees:

A. Did the district court err in granting summary judgment to the Loverchecks?

B. Did the district court err in granting attorney fees to O.W. Lovercheck and Margaret Lovercheck?

C. Did the district court err in granting costs to the Loverchecks?

The Lovercheck appellees (Ron, O.W., and Margaret Lovercheck) reorganize and rephrase the issues as:

1. Is there evidence that Ron Lovercheck, or O.W. and Margaret Lovercheck violated any provision of the contract to sell a wheat farm to Loren Snyder?

2. After disclaiming reliance on any representation of the Loverchecks to consummate a sale of the wheat farm, is Snyder barred from claiming justifiable reliance for an action based on negligent misrepresentation or fraudulent misrepresentation?

3. Did the district court err in awarding costs to the sellers and their agent, and fees to the sellers?

As to Jeremy Hayek (Hayek) and ERA The Property Exchange, Inc. (The Property Exchange), Snyder presents two issues for review:

1. Did Jeremy Hayek adequately discharge his obligation as a realtor to Loren Snyder?

2. Is Loren Snyder precluded from his claim against Mr. Hayek's malpractice by ratification and waiver?

Hayek and The Property Exchange respond simply with the question:

Did the district court err in granting the motion for summary judgment of Jeremy Hayek and ERA The Property Exchange, Inc. * * *?

II. FACTS

In the fall of 1995, Snyder began searching for a suitable wheat farm. To facilitate his search, he contacted and employed Hayek, a real estate agent employed by The Property Exchange. Hayek contacted Ron Lovercheck of Bear Mountain Land Company (Ron) and discussed O.W. and Margaret Lovercheck's (the Loverchecks) farm in Goshen County. Hayek, Ron, and Snyder toured the farm on November 5, 1995. The crops were planted but not growing when they toured the farm. Ron did mention that there had been some problems with rye in the past, expressing his belief that the problem was minor. Snyder left the meeting with the understanding that the problem was confined to about 100 of the 1,960 acres.

The following day, Ron, through Hayek, informed Snyder that he had spoken with the former owner of the farm, Ray Headrick (Headrick). Headrick stated that the acreage in question had always produced more wheat than the county average. Headrick also showed Ron the areas where the rye problem was at its worst. Those areas comprised about 100 acres total, and Headrick said that those areas could grow as much as twenty to twenty-five percent rye. Snyder returned to view the property on ten to twelve occasions after the initial tour.

Eventually, Snyder made an offer on the property, and negotiations ensued. On February 16, 1996, Snyder and the Loverchecks entered into a contract for sale of the farm. The contract, drafted by Hayek on Wyoming Real Estate Commission Forms, expressly provided that:

Purchaser is not relying upon any representations of the Seller or Seller's agents or sub-agents as to any condition which Purchaser deems to be material to Purchaser's decision to purchase this property[.]

This language mirrors the language in a statement of condition of the property completed by the Loverchecks at Snyder's request. The contract also contained an "as is" clause, a merger clause, a liberal inspection clause, and a specific objection procedure. Snyder stated in his deposition that he read parts of the contract, but not the above-quoted language.

The purchase price for the farm was $526,500.00, and the parties closed on May 10, 1996. According to Snyder, when the crops came up the rye problem was not minor, but rather he estimates that there is rye on 1,800 acres, over a third of which was 100% infected. The affidavit of Snyder's expert stated that the extensive rye problem decreased the value of the farm to only $392,000.00.

Snyder filed suit alleging that the Loverchecks breached the contract for sale, that Ron and the Loverchecks negligently and fraudulently misrepresented the extent of the rye problem, that Ron's fraudulent misrepresentations entitled Snyder to punitive damages, and that Hayek and The Property Exchange breached their duty to delete and/or explain the waiver language quoted above. The district court granted summary judgment in favor of all appellees. The district court awarded the Loverchecks $12,811.09 in attorney's fees and $819.90 in costs, and awarded $8,746.12 in costs to Ron. This timely appeal followed.

III. STANDARDS OF REVIEW

A. SUMMARY JUDGMENTS

We will uphold a summary judgment when there is no genuine issue as to any material fact, and the moving party is entitled to judgment as a matter of law. W.R.C.P. 56(c).

"`We review a summary judgment in the same light as the district court, using the same materials and following the same standards. We examine the record from the vantage point most favorable to the party opposing the motion, and we give that party the benefit of all favorable inferences which may fairly be drawn from the record. A material fact is one which, if proved, would have the effect of establishing or refuting an essential element of the cause of action or defense asserted by the parties.'"

40 North Corp. v. Morrell, 964 P.2d 423, 426 (Wyo.1998) (quoting Raymond v. Steen, 882 P.2d 852, 856 (Wyo.1994); Kilmer v. Citicorp Mortg. Inc., 860 P.2d 1165, 1167 (Wyo.1993); and Wagner v. First Wyoming Bank, N.A. Laramie, 784 P.2d 224, 226 (Wyo.1989)).

We have held that summary judgment is appropriate in cases involving contracts when the language of the agreement is plain and unequivocal. 40 North Corp., 964 P.2d at 426; Flying J, Inc. v. Booth, 773 P.2d 144, 148 (Wyo.1989). The interpretation of an unambiguous contract is a question of law and, for that reason, summary judgment is appropriate with respect to disputes relating to unambiguous contracts. 40 North Corp., 964 P.2d at 426; Lincoln v. Wackenhut Corp., 867 P.2d 701, 703 (Wyo.1994).

B. ATTORNEY'S FEES AND COSTS

We review an award of attorney's fees and costs under an abuse of discretion standard. Johnston v. Stephenson, 938 P.2d 861, 862 (Wyo.1997) (attorney's fees); Coulthard v. Cossairt, 803 P.2d 86, 93 (Wyo.1990) (costs). "A court abuses its discretion only when it acts in a manner which exceeds the bounds of reason under the circumstances." Johnston, 938 P.2d at 862. "The burden is placed upon the party who is attacking the trial court's ruling to establish an abuse of discretion, and the ultimate issue is whether the court could reasonably conclude as it did." Id.

IV. DISCUSSION

A. SUMMARY JUDGMENT—LOVERCHECK APPELLEES

The district court found that neither Ron nor the Loverchecks had breached the contract, and that the punitive damages claim fell with the underlying claims. Snyder makes no argument to this Court that such determinations were erroneous; rather, he relies solely on the contention that the Loverchecks, through Ron, negligently and fraudulently represented to Snyder that the rye problem was minor and manageable. The Loverchecks respond that the disclaimer clause in the contract for sale precludes Snyder from asserting such claims. The district court considered the common elements of both causes of action,² and held that Snyder could not assert reliance upon the representations of either Ron or the Loverchecks. We, however, find the two causes of action sufficiently distinguishable to merit independent analysis.

1. FRAUDULENT MISREPRESENTATION

The effect of merger and disclaimer clauses on pre-contractual misrepresentations poses significant questions of public policy. There are two prevailing views on the subject. One school of thought focuses on the sanctity of the right to contract, and holds that a party is bound by a specific disclaimer even if the contract was fraudulently obtained. The other school of thought latches on to the age-old proposition that fraud vitiates all contracts, and holds that a party to a contract is not bound by a disclaimer if it was fraudulently obtained. Wyoming subscribes to the latter view.

The Loverchecks ask us to adopt the reasoning of Danann Realty Corp. v. Harris, 184 N.Y.S.2d 599, 5 N.Y.2d 317, 157 N.E.2d 597, 598 (1959), where the New York Court of Appeals considered "whether the plaintiff can possibly establish from the facts...