Taylor v. Browning, 22427
| Decision Date | 25 October 1996 |
| Docket Number | No. 22427,22427 |
| Citation | 927 P.2d 873,129 Idaho 483 |
| Parties | Stanley R. TAYLOR, an individual, Plaintiff-Appellant, v. Donald R. BROWNING, an individual, sometimes doing business as Browning Trucking, Defendant-Respondent. Boise, September 1996 Term |
| Court | Idaho Supreme Court |
Nyman & Thomas, Boise, for plaintiff-appellant. Kenneth D. Nyman argued.
Ambrose, Fitzgerald & Crookston, Meridian, for defendant-respondent. Wayne Crookston, Jr., argued.
This is a breach of contract case involving two lease-option agreements, one for a semi-truck and one for a trailer, both executed in 1989, and two lease-back agreements for the truck and trailer (the equipment), one executed in 1989 and the other in 1991. Appellant Stanley R. Taylor (Taylor) sued Respondent Donald R. Browning (Browning) in district court, which granted partial summary judgment and decided the remaining issues after a bench trial. The district court issued an initial decision that Taylor owed Browning $62.56 more than Browning owed Taylor under the respective agreements, and that Taylor had forfeited his option to purchase the equipment. After Browning filed a motion for reconsideration, the district court awarded further damages to Browning and held that Browning had not failed to mitigate his damages. Taylor appeals.
On June 1, 1989, Taylor and Browning entered into two lease-option (or lease-purchase) agreements, one for a semi-truck and one for a trailer. Under those agreements, Taylor was to pay Browning $1,240 per month to lease the equipment from Browning. The lease-option agreements also contained a "Rental Termination Adjustment Agreement" which estimated the combined value of the equipment at the end of the lease as $3600. When the leases automatically terminated in May 1992, Browning was to obtain bids in order to establish the fair market or "realized" value. If the realized value exceeded the estimated value, the excess was to go to Taylor. If the reverse was true, Taylor was required to pay that difference to Browning. If the realized value was not established through the bidding process, the estimated value would be used. Finally, the lease-option agreements gave Browning the right to declare a default by written notice to Taylor upon material breach, although Browning did not do so until several months after Taylor filed the lawsuit in this case.
When the parties executed the lease-option agreements, they also executed a lease-back agreement [the 1989 agreement], under which Taylor leased the equipment back to Browning. Browning would find loads for Taylor to haul, and would pay Taylor at regular intervals. The parties later terminated the initial lease-back agreement and executed another on June 1, 1991. Under the 1989 agreement, Browning was required to pay Taylor within 45 days of receiving the paperwork for loads Taylor hauled, while under the 1991 agreement payment was to be made on the fifth and twentieth of each month. Both agreements provided that Taylor was to pay worker's compensation, insurance Over the course of the contracts, Browning paid worker's compensation and other insurance, fuel, taxes and other charges, and deducted those charges from the settlement amounts he owed Taylor. When Taylor fell behind in his lease-option payments, he requested that those amounts be deducted from the settlement checks as well. At the time the agreements ended, Taylor was still behind by four payments.
payments, taxes, licensing fees and fuel and maintenance costs. However, Browning could also deduct any advances he made from the settlement checks, and under the 1991 agreement could also deduct ten percent of gross revenue or $1000 per month, whichever was greater, as lease revenue.
On June 1, 1992, Scott Rose (Rose), Taylor's attorney at the time, went to Browning's office with a check for $3600, the option price amount. Joyce Matlock (Matlock), Browning's office manager, refused to accept the check, and the parties dispute whether she ever had it in her physical possession. Several days later, Rose and Taylor returned with a check and spoke to Browning. Although Rose stated that he had the check, and offered to tender it, Browning never actually saw it. Because Browning felt that Taylor owed him money in addition to the $3600 option price, the parties agreed that Browning would determine what each side owed the other. On June 15, 1992, Browning's attorney sent a letter and accounting to Taylor's attorney (the June 15 accounting), which showed that Browning owed Taylor $13,826.81 and Taylor owed Browning $15,108.31, for a difference of $1,281.50. The amount Taylor owed Browning included the $3600 purchase price. Taylor disputed that accounting and therefore never paid the difference. On December 31, 1992, Browning repossessed the equipment from Taylor's driveway and presented Mrs. Taylor with a note (the December 31 accounting), showing that Taylor owed Browning back payments, the purchase price and interest.
On June 29, 1992, Taylor filed suit, claiming that Browning had withheld excess amounts from settlement checks, did not transfer titles to the equipment even though he had retained full payment for them, violated federal regulations regarding account settlements, violated Idaho law regarding employer and employee relations, and breached the implied covenant of good faith and fair dealing. Browning answered and counterclaimed, alleging that Taylor defaulted on the lease-option agreements, that there was a failure of consideration, that the federal regulations did not apply to this particular situation, and that the indemnity clause in the agreements barred any recovery by Taylor against Browning.
Browning also filed a motion for summary judgment on the claim and counterclaim. The trial court denied the motion for summary judgment on some of the claims and denied summary judgment on all of Browning's counterclaims. However, contrary to Browning's assertions, the district court found that the agreements' indemnity provisions did not bar recovery by Taylor. Instead, the court ruled that those provisions applied to third-party negligence situations, and were simply a recitation of agency law. The court also determined that the relationship between Taylor and Browning was that of an owner and independent contractor, and that Taylor was not entitled to punitive damages.
Taylor had argued that federal regulations required that Browning pay him within fifteen days of receiving the necessary paperwork, and that Browning violated those regulations by withholding the final settlement payment. The district court found that the course of conduct between the parties indicated that an agreed-upon system of set-offs had orally modified the contract, and that Browning withheld the final settlement because Taylor owed Browning more than Browning owed Taylor. Therefore, the court ruled, Taylor was not harmed by the conduct.
Just prior to trial, Browning prepared yet another accounting (the pre-trial accounting) which indicated that the fuel and taxes charge in the June 15 accounting had been too high, but that also included $4,283.83 in worker's compensation settlements over the previous two and one-half years. Most of those charges were under the 1989 lease- Browning filed a Motion for Reconsideration of the decision, and Taylor filed a Motion to File an Amended Answer to Counterclaim to include the affirmative defense of failure to mitigate. The district court found that there was no evidence at trial regarding Browning's failure to mitigate, and that Taylor had failed to affirmatively plead mitigation. Therefore, the court denied Taylor's motion to file an amended answer, and granted Browning's motion for reconsideration on the mitigation issue. It also stated that "[t]he only damages asserted by counter-claimant [Browning] which are not supported by the evidence are the $100 per day for not returning the equipment."
back agreement. After a bench trial on the matter, the district court filed findings of fact, conclusions of law, and a judgment in June 1994. The court found that Taylor elected not to purchase the equipment when he refused to pay the $1,281.50 Browning calculated Taylor owed him. Therefore, Taylor could only recover the $11,943.23 Browning owed to him. Further, Browning's damages were limited due to failure to mitigate by not repossessing the truck and trailer earlier. However, Browning was permitted to retain the equipment and recover the $12,005.79 Taylor owed to him when the agreements ended. Judgment was entered for Browning for $62.56.
The district court requested proposed findings of fact, conclusions of law and judgment from the parties. The findings, conclusions and judgment as set forth by Browning did not conform to the district court's actual decision. Browning's version awarded himself increased damages, reversed the court's summary judgment decision regarding indemnity, and gave Taylor no credit for the amounts he was owed for his work. Taylor objected to the proposed forms, and on August 2, 1995, Browning admitted that they did not comport with the district court's decision. However, the district court had already signed the judgment, although it had rejected the proposed findings of fact and conclusions of law. Therefore, while the record contains a final judgment dated August 2, 1995, the only findings of fact and conclusions of law in the record are those which were originally filed in June 1994.
1. Having withheld the balance of the purchase price and the $3600 option payment from his last settlement with Taylor, can Browning deny that Taylor made those payments?
2. Was Browning entitled to refuse to turn over the title to the truck and trailer by adjusting past "settlements"?
3. Was Browning entitled to include in a settlement under the June 1, 1991 lease-back agreement charges that ...
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