Wakelam v. Hagood
| Decision Date | 28 October 2011 |
| Docket Number | No. 36940.,36940. |
| Citation | 151 Idaho 688,263 P.3d 742 |
| Parties | Jon WAKELAM, an individual; and Mike Ressler, an individual doing business as M & M RE Holdings, Plaintiffs–Appellants, v. Thomas A. HAGOOD, an unmarried man, Defendant–Third Party Plaintiff–Respondent, and Bullock and Company Realtors L.L.C., an Idaho limited liability company, Scott Bullock, an individual, Bill Downs Auction Service Inc., an Idaho corporation, and Larry Downs, an individual, Defendants–Third Party Defendants. |
| Court | Idaho Supreme Court |
Givens Pursley LLP, Boise, for appellants. Thomas E. Dvorak argued.
Davison, Copple, Copple & Copple, Boise, for respondent. Alexander P. McLaughlin argued.
Jon Wakelam and Mike Ressler attended an auction of three parcels of property owned by Thomas Hagood that was conducted by Bullock and Company Realtors (Bullock) on August 6, 2008. The auction was advertised as an absolute auction with a variety of terms and conditions for bidders. Wakelam and Ressler offered the high bids, totaling $973,035 for the three parcels. When Hagood was approached with the purchase and sale agreements, he refused to sign them. He claimed he had no intention to sell the properties for less than $2,000,000.
Wakelam and Ressler brought suit against Hagood, arguing that the auction sale was enforceable. They later amended the complaint to include a claim that Hagood violated the Idaho Consumer Protection Act (ICPA) and attempted to further amend the complaint to seek a declaratory judgment that Bullock, as agent for Hagood, had authority to sign the purchase agreements. The district court granted Hagood's motion for summary judgment and dismissed Wakelam's and Ressler's claims. The district court denied Wakelam's and Ressler's second motion to amend their complaint, finding that even if their claims were proven, they would not have been entitled to relief. Wakelam and Ressler now appeal. We reverse.
Thomas Hagood is the owner of three pieces of property in Nampa, Idaho. On June 9, 2008, Hagood signed an Exclusive Seller Representation Agreement with Bullock. The agreement between Hagood and Bullock specified that the three parcels would be sold at an absolute auction on August 6, 2008, and authorized Bullock to organize and advertise the auction. Hagood admits that his understanding of an absolute auction was that "[y]ou had to sell it." Hagood additionally claims that he never intended to sell the property for less than $2,000,000, although this does not appear in the Representation Agreement. The auction was advertised as an absolute auction and the advertisements included a list of terms and conditions for potential bidders. The terms and conditions specified the down payment required for the parcels, described the financing terms, the closing date, and the procedure for the transfer of title.
Hagood states that he attempted to place a reserve on the auction and, in speaking with Larry Downs of Bill Downs Auction Service (Bill Downs), decided that he did not want to go through with the auction and told Mr. Downs as much. He reports that he was talked out of canceling the auction. Hagood also reports that he again attempted to add a reserve the day before the auction in another meeting with Larry Downs. Hagood states that Downs "went ballistic" when Hagood tried to add a reserve but that Hagood did not revoke Downs' authority to proceed with the auction.
The auction took place as advertised on August 6, 2008. The auctioneer recorded the various bids. Ressler was the high bidder for the first two parcels at $278,250.00 and $241,500.00. Wakelam was the high bidder for the third parcel at $453,285.00. Following the auction, Bullock drafted Purchase and Sales Agreements for each of the parcels. Wakelam and Ressler signed the Purchase and Sale Agreements. However, Hagood refused to sign and left the auction site.
Wakelam and Ressler filed suit, seeking specific performance and damages arising from Hagood's failure to abide by the results of the auction. Hagood, in turn, raised third-party claims against Bullock, Scott Bullock, Bill Downs, and Larry Downs (collectively the auctioneers). Wakelam and Ressler subsequently sought to amend their complaint to include a count alleging violations of the ICPA by all of the defendants, and the court granted this motion to amend. Both parties moved for summary judgment. On May 21, 2009, the district court heard oral argument and ruled in favor of Hagood, finding that none of the writings satisfied the statute of frauds and, therefore, the contract was unenforceable. The district court further found that the part performance and mutual acknowledgement exceptions to the statute of frauds did not apply to the facts alleged by Wakelam and Ressler.
On July 23, 2009, the district court again heard argument, this time regarding Wakelam's and Ressler's Second Motion to Amend, which sought to add a count to the complaint for a declaratory judgment allowing the auctioneer to sign a memorandum conforming to the statute of frauds and a second count alleging that the auctioneers were negligent in conducting the auction. The district court also heard argument on Wakelam's and Ressler's ICPA claim. The court dismissed the ICPA claim, finding that the claim was fundamentally part of their contract claim and that they had alleged no damages as required by the statute. The court further denied the motion to amend,1 finding that the declaratory judgment sought would infringe the powers of the legislature.
On August 6, 2009, the district court entered judgment against Wakelam and Ressler and dismissed the claims against Hagood. Wakelam and Ressler timely appealed.
"When reviewing a motion for summary judgment, this Court uses the same standard employed by the trial court when deciding such a motion." Stoddart v. Pocatello Sch. Dist. No. 25,
149 Idaho 679, 683, 239 P.3d 784, 788 (2010) (quoting Kolln v. Saint Luke's Reg'l Med. Ctr., 130 Idaho 323, 327, 940 P.2d 1142, 1146 (1997) ). Summary judgment is proper "if the pleadings, depositions, and admissions on file, together with the 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). Vavold v. State, 148 Idaho 44, 45, 218 P.3d 388, 389 (2009) (quoting Armstrong v. Farmers Ins. Co. of Idaho, 147 Idaho 67, 69, 205 P.3d 1203, 1205 (2009) ).
Idaho Code § 9–503, Idaho's codification of the statute of frauds for real estate transactions, states:
No estate or interest in real property, other than for leases for a term not exceeding one (1) year, nor any trust or power over or concerning it, or in any manner relating thereto, can be created, granted, assigned, surrendered, or declared, otherwise than by operation of law, or a conveyance or other instrument in writing, subscribed by the party creating, granting, assigning, surrendering or declaring the same, or by his lawful agent thereunto authorized by writing.
"Failure to comply with the statute of frauds renders an oral agreement unenforceable both in an action at law for damages and in a suit in equity for specific performance." Hoffman v. SV Co., Inc., 102 Idaho 187, 190, 628 P.2d 218, 221 (1981). It is uncontested that this suit involves an interest in property.
Against this are the legal principles regarding without reserve or absolute auctions.
In an auction held without reserve, the opening of bids by the auctioneer constitutes a firm offer, as opposed to an invitation to make an offer. The seller, in such instances, promises to sell to the highest bidder and such promise is irrevocable after one bid has been made. The term "without reserve" are words [sic] of art and mean that, in making such an announcement, the owner enters into a collateral contract with all persons bidding at the auction that he or she will not withdraw the property from the sale, regardless of how low the highest bid may be.
7A C.J.S. Auctions and Auctioneers § 29. As discussed below, courts have reached different conclusions with regard to the relationship between the statute of frauds and without reserve auctions.
Wakelam's and Ressler's core argument is that Idaho Code § 9–503 does not apply to an absolute auction of real property because the definitions of an absolute auction preclude the events that transpired here. However, that argument effectively ignores the statutory requirements of the statute of frauds. There is no basis, on the face of the statute, for ignoring the statute of frauds in an auction context. The cases from other jurisdictions upon which Wakelam and Ressler rely include Pillsbury v. McNabb, 37 Pa. D. & C.2d 283, 1965 WL 8189 (Pa.Ct.Comm.Pl.1965) ; Pyles v. Goller, 109 Md.App. 71, 674 A.2d 35 (1996) ; and Zuhak v. Rose, 264 Wis. 286, 58 N.W.2d 693 (1953). None of these suggest a strong reason for ignoring the statute of frauds beyond the general maxim, adopted by this Court as well, that "equity will not permit the statute [of frauds] to be used as an instrument or means of effecting that which it was designed to prevent." Anselmo v. Beardmore, 70 Idaho 392, 396, 219 P.2d 946, 949 (1950).
The analysis in these cases does not generally specify that the parties had executed an enforceable contract. Rather, they hold that equity will not preclude a court from ordering that the seller be required to sign a memorandum that would satisfy the statute of frauds. For example, in Pyles, the Maryland court stated that:
in an auction held "without reserve," mutual assents...
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Wakelam v. Hagood
...151 Idaho 688263 P.3d 742Jon WAKELAM, an individual; and Mike Ressler, an individual doing business as M & M RE Holdings, Plaintiffs–Appellants,v.Thomas A. HAGOOD, an unmarried man, Defendant–Third Party Plaintiff–Respondent,andBullock and Company Realtors L.L.C., an Idaho limited liability......