Win of Michigan, Inc. v. Yreka United, Inc.

• Decision Date: 07 June 2002
• Docket Number: No. 24129.,24129.
• Citation: 53 P.3d 330,137 Idaho 747
• Parties: WIN OF MICHIGAN, INC., a corporation, and Lowell S. Miller, Plaintiffs-Appellants, v. YREKA UNITED, INC., an Idaho corporation, & Edith M. Borjessan & Loyd J. Borjessan as officers of Yreka United, Inc., Defendants-Respondents.
• Court: Idaho Supreme Court

53 P.3d 330

137 Idaho 747

WIN OF MICHIGAN, INC., a corporation, and Lowell S. Miller, Plaintiffs-Appellants, v. YREKA UNITED, INC., an Idaho corporation, & Edith M. Borjessan & Loyd J. Borjessan as officers of Yreka United, Inc., Defendants-Respondents.

No. 24129.

Supreme Court of Idaho, Boise, April 2002 Term.

June 7, 2002.

Rehearing Denied August 13, 2002.

Stephen F. Smith, Sandpoint; David A. Kallman, Lansing; Michigan, and David B. Carter, Jr., Grand Ledge, Michigan, for appellants. David A. Kallman argued.

Scott W. Reed, Coeur d'Alene, argued for respondents.

WALTERS, Justice.

Lowell Miller and his solely owned corporation, Win of Michigan, Inc. (hereinafter referred to as Win/Miller), appeal from a summary judgment order and an order denying relief from judgment dismissing their complaint. For the reasons stated below, we affirm the district court.

FACTS AND PROCEDURAL BACKGROUND

On July 8, 1991, Win/Miller brought an action against Yreka United, Inc. (Yreka) and two of its former corporate officers, Loyd and Edith Borjessan, a married couple. Miller alleged that in August of 1989, Edith Borjessan as president of Yreka terminated an agency contract with him whereby Miller was to act on behalf of the Borjessans and Yreka to obtain the surface rights to land on which Yreka had subsurface rights in the form of unpatented mining claims.¹ Not only did Miller not obtain fee simple title for Yreka as promised, his efforts led to the termination of lease payments to Yreka that had been the corporation's only source of income, the validation proceedings on Yreka's unpatented claims by the Bureau of Land Management, and ultimately to Yreka's 1997 bankruptcy filing. Miller also alleged that his repeated requests to inspect Yreka's corporate records were improperly denied by Edith Borjessan in violation of I.C. § 30-1-52, thus entitling him to a statutory penalty.

In January of 1995, Yreka's motion for leave to file a counterclaim was granted by the district court. In its counterclaim, Yreka asserted a claim against Miller for damages for failure to negotiate the agreement pursuant to the agency contract such that Yreka did not obtain the surface rights in fee to its unpatented mining claims and damage for the loss of yearly assessment payments from 1991 through 1994 and in perpetuity per unpatented claim.

Win/Miller filed a summary judgment motion on May 13, 1997, seeking dismissal of the counterclaim, which the plaintiffs alleged was filed (a) beyond the time provided in the court rules, (b) as against the wrong party, and (c) sought damages that were not proximately caused by Win of Michigan, Inc. A second summary judgment motion was filed on the same date, seeking judgment against the defendants on the claim of breach of the agency contract (Count I of the original complaint). The Borjessans filed a motion for summary judgment on May 14, 1997, seeking dismissal of the plaintiffs' claims against them. On May 22, 1997, Win/Miller filed a cross-motion for summary judgment seeking judgment on their I.C. § 30-1-52 claim against the Borjessans (Count II of the original complaint). Counsel for Yreka withdrew, and on June 13, 1997, Yreka filed Chapter 7 bankruptcy in the Federal District Court of Idaho.

A hearing on the cross-motions for summary judgment was held on July 14, 1997. The district court expressed its findings on the record, holding that the defendants were entitled to summary judgment. The district court also awarded attorney fees and costs to the Borjessans upon a finding that the plaintiffs' suit was "frivolous, unreasonable, and without foundation in the contemplation of I.C. § 12-121 and Rule 54." The district court then issued a supplemental memorandum order regarding costs and fees on December 2, 1997. Win/Miller filed a Rule 60(b), I.R.C.P. motion for relief from judgment, which it amended several times and added attachments thereto as it acquired information through the bankruptcy proceeding. The 60(b) motion was resolved by order of the district court dated October 1, 1998, wherein the district court ruled in favor of the Borjessans and awarded costs and attorney fees. The judgment awarding costs was entered on January 12, 1999. Win/Miller appealed.

STANDARD OF REVIEW

When the Supreme Court reviews a district court's decision on summary judgment, it employs the same standard as that properly employed by the trial court when originally ruling on the motion. Kolln v. Saint Luke's Reg'l Med. Ctr., 130 Idaho 323, 940 P.2d 1142 (1997); Selkirk-Priest Basin Ass'n v. State ex rel. Batt, 128 Idaho 831, 919 P.2d 1032 (1996). Summary judgment is only proper where there is no genuine issue of material fact and the moving party is entitled to judgment as a matter of law. Selkirk-Priest Basin Ass'n, supra.

ANALYSIS

I ORDER STRIKING THE AMENDED COMPLAINT WAS NOT ERROR

The plaintiffs here filed a 159 page amended complaint, relying on the parties' May 1996, stipulation and order, and simply forwarding a copy of the amended complaint to the defendants Borjessan by mail. The amended complaint named new defendants and alleged additional claims that the plaintiffs asserted arose out of the conduct, transaction, or occurrence set forth in the original complaint; and it requested a jury trial. The defendants filed a motion to strike the amended complaint, arguing that the parties' stipulation² was directed only to reopening discovery and was never intended as a carte blanche opportunity for the plaintiffs to expand the scope of the lawsuit to the proportions evidenced by the proposed amended complaint. Moreover, the defendants objected to the amended complaint because the plaintiffs had failed to comply with the requirements of I.R.C.P. 15, governing amendments.

The district court granted the defendants' motion to strike the amended complaint and then instructed the plaintiffs to seek leave of the court to file their amendment. In the minutes of the October 16, 1996, hearing on the motions, the district court found that the stipulation at issue contained a latent ambiguity, in that it was subject to conflicting interpretation. Win/Miller argues that in light of the parties' stipulation, the district court erred in denying the filing of the amended complaint. Win/Miller does not explain why a later motion to file the amended complaint was never noticed for hearing.

Idaho Rule of Civil Procedure 15(a) provides that once a responsive pleading has been served, a party may amend a pleading only by leave of court or by written consent of the adverse party. I.R.C.P. 15(a). The decision to grant or refuse permission to amend a complaint is left to the sound discretion of the trial court when a party proposes to amend its complaint after a responsive pleading is served. Hines v. Hines, 129 Idaho 847, 934 P.2d 20 (1997). Because of the plaintiffs' contention that the amendment was presented pursuant to the parties' stipulation, we review the stipulation to determine whether it supports Win/Miller's attempt to amend their original complaint.

In order to ascertain the intention of the contracting parties, the contract must be considered as a whole and in its entirety. Canyon View Irrigation Co. v. Twin Falls Canal Co., 101 Idaho 604, 619 P.2d 122 (1980),cert. denied, 451 U.S. 912, 101 S.Ct. 1983, 68 L.Ed.2d 301 (1981). The primary objective in interpreting a contract is to discover the intent of the parties, Rutter v. McLaughlin, 101 Idaho 292, 293, 612 P.2d 135, 136 (1980), which should, if possible, be ascertained from the language of the document. Twin Lakes Village Property Ass'n, Inc. v. Aune, et al., 124 Idaho 132, 857 P.2d 611 (1993).

The determination of whether a document is ambiguous and subject to conflicting interpretations is a matter of free review. DeLancey v. DeLancey, 110 Idaho 63, 65, 714 P.2d 32, 34 (1986). If a contract is unambiguous, determination of the contract's meaning and legal effect is a question of law, and the meaning of the contract and the intent of the parties must be determined from the plain meaning of the contract's own words. Navarrete v. City of Caldwell, 130 Idaho 849, 949 P.2d 597 (Ct.App.1997). Interpretation of an ambiguous document presents a question of fact. DeLancey, supra, citing Pollard Oil Co. v. Christensen, 103 Idaho 110, 115, 645 P.2d 344, 349 (1982).

The parties' stipulation was entitled Stipulation to Reopen Discovery in consideration of the vacation of the scheduled trial date and because the attendant discovery deadlines would need to be reset once a new trial date was set. The contents of the brief stipulation, which was drafted by the plaintiffs' counsel, are as follows:

IT IS HEREBY STIPULATED AND AGREED, by and between counsel of record for the above named parties, that an Order be entered allowing discovery to be reopened through the 31st day of August, 1996.

IT IS FURTHER STIPULATED that the parties shall have until the 14th day of September, 1996, to amend their pleadings, witness lists, exhibit lists and related filings.

IT IS STILL FURTHER STIPULATED that depositions be scheduled for between July 15 and July 31, 1996.

We recognize that the stipulation is reasonably subject to conflicting interpretations, and we agree with the district court's finding of a latent ambiguity. A "latent ambiguity" is one that is not evident on the face of the instrument alone, but becomes apparent when applying the instrument to the facts as they exist. Matter of Estate of Kirk, 127 Idaho 817, 907 P.2d 794 (1995). Notwithstanding the ambiguity we perceive in the second paragraph of the stipulation that states that "the parties shall have until the 14th day of September to amend their pleadings," we construe the contract most strongly against the person who prepared the contract. See Walker v. American Cyanamid Co., 130 Idaho 824, 948 P.2d 1123 (1997). Win/Miller, therefore, must bear the responsibility for indefiniteness of the terms. Dale's Service Co.,...