Veys v. Applequist

• Decision Date: 13 April 2007
• Docket Number: No. 06-161.,06-161.
• Citation: 2007 WY 60,155 P.3d 1044
• Parties: Alan J. VEYS, individually and d/b/a Lone Eagle Resorts, Inc., an Alaska corporation, and d/b/a Pybus Point Lodge, LLC, a Washington limited liability company; and Alan J. Veys Properties, LLC, a Washington limited liability company, Appellants (Defendants), v. Marvin N. APPLEQUIST; Val B. Jones; Bruce F. Reed; and Pybus Alaska Resorts, LLC, a Wyoming limited liability company, Appellees (Plaintiffs).
• Court: Wyoming Supreme Court

155 P.3d 1044

2007 WY 60

Alan J. VEYS, individually and d/b/a Lone Eagle Resorts, Inc., an Alaska corporation, and d/b/a Pybus Point Lodge, LLC, a Washington limited liability company; and Alan J. Veys Properties, LLC, a Washington limited liability company, Appellants (Defendants), v. Marvin N. APPLEQUIST; Val B. Jones; Bruce F. Reed; and Pybus Alaska Resorts, LLC, a Wyoming limited liability company, Appellees (Plaintiffs).

No. 06-161.

Supreme Court of Wyoming.

April 13, 2007.

Representing Appellants: Larry B. Jones of Simpson Kepler & Edwards, LLC, a division of Burg Simpson Eldredge Hersh & Jardine, P.C., Cody, Wyoming; Diane Vaksdal Smith of Burg Simpson Eldredge Hersh & Jardine, P.C., Englewood, Colorado. Argument by Ms. Smith.

Representing Appellees: Mark W. Gifford, Casper, Wyoming; Darin B. Scheer of Bjork Lindley Little, P.C., Lander, Wyoming. Argument by Mr. Gifford.

Before VOIGT, C.J., and GOLDEN, HILL, KITE, and BURKE, JJ.

KITE, Justice.

[¶ 1] Marvin N. Applequist, Val B. Jones, Bruce F. Reed, and Pybus Alaska Resorts, LLC (collectively referred to as Buyers) filed suit against Alan J. Veys, individually and d/b/a Lone Eagle Resorts, Inc., Pybus Point Lodge, LLC, and Alan J. Veys Properties, LLC (collectively referred to as Sellers) for breach of an agreement to sell a fishing lodge business in Alaska. After a trial, the jury determined Sellers had breached the agreement and awarded Buyers a total of $3,000,000 in damages, including $471,676 in past damages and $2,528,324 in future damages. Sellers appeal alleging several errors with respect to the future damages award. Finding no error, we affirm.

ISSUES

[¶ 2] Sellers present the following issues for our review:

1. The trial court improperly denied Appellants' motion for a directed verdict at the close of Appellees' case-in-chief, because Appellees did not proffer any admissible or relevant evidence in support of the claim for "future damages."

2. The trial court erred in permitting the jury to determine the claims for "future damages" because of a lack of sufficient, competent evidence.

3. The jury's verdict awarding $2,528,324.00 in future damages is not supported by sufficient, competent evidence.

4. The trial court erred in denying the Appellants' post-trial motions, seeking to set aside the jury's verdict for "future damages."

Buyers phrase the issues differently:

1. Were the trial court's decisions to (i) deny Appellants' motion for a directed verdict regarding future damages, (ii) allow the jury to determine Appellees' claim for future damages, and (iii) deny Appellants' post-trial motions seeking to set aside the jury's verdict for future damages, supported by substantial evidence where unrefuted evidence regarding gross profits, expenses, and net revenues established mathematical parameters that reasonably permitted the jury to find as they did, particularly where Appellants' misconduct prevented the ascertainment of future damages with additional precision?

2. Did a reasonable basis exist for the jury's award of future damages based upon testimony by a prior prospective purchaser and by Appellee Reed regarding future profits, together with documentary evidence and testimony from Appellant Veys himself regarding future profits, particularly where Appellants' misconduct prevented the ascertainment of future damages with additional precision?

FACTS

[¶ 3] Sellers own a fishing lodge business called the Pybus Point Lodge, located on Admiralty Island in Alaska. The business includes both real and personal property. Mr. Applequist and Mr. Veys had been friends for some time, and in 2002, Mr. Veys told Mr. Applequist he was considering selling the lodge. Mr. Applequist had previously visited the lodge and expressed an interest in purchasing it. Mr. Applequist approached various people, including Mr. Reed, who had extensive business experience and owned considerable property, and Mr. Jones, who had experience as a hunting guide, about joining him in purchasing the lodge. The individual buyers were residents of Wyoming, and their limited liability company was formed in Wyoming prior to commencement of this action.

[¶ 4] In early 2004, the parties began in earnest to negotiate a sales agreement. They were represented by counsel and the negotiations were conducted in person, through e-mail and on the telephone. Mr. Applequist, who was employed as the executive vice-president of the Wyoming Farm Bureau Federation (Farm Bureau), told Mr. Veys that, if the transaction was going to occur, the parties needed to reach an agreement by June 3, 2004, because he was meeting with the Farm Bureau board of directors on that day and planned to either resign to run the lodge or recommit to his position. While Mr. Applequist was at that meeting, Mr. Veys agreed to the terms of the sales agreement. Mr. Applequist's attorney notified him of Mr. Veys' acceptance, and he resigned from his job.

[¶ 5] The purchase and sale agreement (PSA) was a lengthy, detailed document, incorporating various deadlines and contingencies. The agreed sales price was $2,650,000 in cash. The parties specifically chose Wyoming as the forum for any dispute arising from the agreement, but elected to apply Alaska procedural and substantive law to any such dispute.

[¶ 6] The PSA contemplated incorporation of numerous exhibits and schedules, including a legal description of the real property to be conveyed, lists of assets to be retained by Sellers and to be conveyed to Buyers, and an allocation of the purchase price between real and personal property for tax purposes. The parties were unable to reach an agreement on all of the exhibits prior to signing the PSA, so it included a provision allowing the parties until June 18, 2004, to do so. The exhibit deadline was subsequently extended to July 23, 2004, but that date also passed without agreement as to the exhibits. The PSA stated, in the event the parties were unable to agree on replacement exhibits, Buyers could remit a $50,000 deposit and elect to be bound by the exhibits the parties had originally agreed upon.

[¶ 7] In addition, the PSA included contingencies which had to be met or Buyers would be allowed to terminate the agreement without penalty. One of those contingencies pertained to the profitability of the business. Because Buyers did not have a clear understanding of the finances of the business prior to signing the agreement, the PSA included a contingency allowing Buyers to assess the financial health of the business during the 2004 fishing season. If the 2004 net profits, as calculated using a specific definition in the PSA, did not exceed $331,000, then Buyers had the option of terminating the agreement. Under the terms of the PSA, should Buyers agree the contingencies had been satisfied or to waive them, they could, at any time on or before October 1, 2004, elect to continue with the contract, in which case closing would occur as soon as possible after October 1, 2004, but no later than December 31, 2004. If the transaction closed, the effective date of the contract would be May 1, 2004, and Buyers would be entitled to retain the net profits for the 2004 season.

[¶ 8] Mr. Veys also agreed not to compete with the lodge business and to act as a consultant to Buyers for a period of time after closing. Mr. Applequist and Mr. Jones planned to spend the 2004 summer at the lodge, learning the business and finalizing the exhibits to the PSA. However, very soon after the parties signed the PSA, Mr. Veys began expressing seller's remorse. Over the summer, the relationship between the parties deteriorated. On August 27, 2004, Buyers' attorney sent a letter to Sellers' attorney electing for Buyers to be bound by the initial exhibits because the parties had been unable to agree on replacement exhibits; asking for wire transfer instructions so they could tender the $50,000 deposit; giving notice of Mr. Veys' noncompliance with the PSA because he failed to allow Buyers access to information about the lodge business; and demanding Sellers cure their noncompliance. Sellers' attorney responded with a letter on September 1, 2004, asserting the parties did not have an enforceable agreement and demanding that Mr. Applequist and Mr. Jones leave the lodge. They complied with that demand.

[¶ 9] After returning to Wyoming, Buyers gave Sellers notice of their election to proceed with the purchase and tendered the $50,000 deposit by check because Sellers did not provide wire transfer instructions. Mr. Veys refused the deposit and again asserted the parties had not entered into an enforceable agreement. Buyers filed suit, advancing claims for breach of contract, breach of the implied covenant of good faith and fair dealing, promissory estoppel, anticipatory repudiation and specific performance (although Buyers eventually dropped that claim). Consistent with their earlier position, Sellers defended by arguing the parties' agreement was not sufficiently definite to be enforceable.

[¶ 10] The district court conducted a jury trial from December 5 through December 12, 2005. At the close of Buyers' case-in-chief, Sellers moved for a directed verdict and the district court denied their motion.¹ During the trial, Mr. Veys unexpectedly admitted the parties had entered into an agreement. The jury determined the parties had entered into an enforceable contract; Sellers breached the contract; and Buyers were entitled to past damages of $471,676 and future damages of $2,528,324.

[¶ 11] Sellers filed motions to set aside the jury's verdict, for a new trial and for remittitur. They argued the evidence was insufficient to support the damages awarded by the jury and the jury had acted under the influence of prejudice and passion. The district court denied Sellers' post-trial motions, and they appealed to this Court.

STANDARDS OF REVIEW AND PROCEDURAL LAW

[¶ 12] Under Alaska law,² claims of error in denial of a motion for a directed verdict or...