Case Title: EKBERG v. SHARP

Citation: 

Docket Number: 

State: wyoming

Court: Wyoming Supreme Court

Date: 2003-09-30T00:00:00Z

Document:
EKBERG v. SHARP2003 WY 12376 P.3d 1250Case Number: 02-227Decided: 09/30/2003
April 
Term, A.D. 2003

 

 

CHARLES 
A. EKBERG,

 

Appellant(Plaintiff) 
,

 

v.

 

EDWARD 
C. SHARP,

 

Appellee(Defendant) 
.

 

 

 

Appeal 
from the District Court of Sheridan County

The 
Honorable John C. Brackley, Judge

 

Representing 
Appellant:

Donald 
E. Miller of Graves, Miller & Kingston, P.C., Cheyenne, 
WY.

 

Representing 
Appellee:

John 
G. Fenn of Yonkee & Toner, LLP, Sheridan, WY.

 

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

 

 

 

LEHMAN, 
Justice.

 

[¶1]      Charles 
A. Ekberg filed suit requesting, in part, specific performance of an option to 
purchase real property.  Ekberg 
appeals the district court's assessment of damages. We 
affirm.

 

 

ISSUES

 

[¶2]      Ekberg sets forth 
the following issues on appeal:

 

I.  Did 
the trial court abuse its discretion in denying the appellant's timely motion 
for leave to amend as set out in his "Motion for Second Amended 
Complaint"?

 

II.  Did 
the evidence support the district court's findings as to:

 

A.  Appellant's 
claim for lost rental and appellee's claim for right to offset as of September 
15, 2001;

 

B.  Appellant 
was barred from his legal right to enter the property after September 15, 
2001.

 

Appellee Edward C. Sharp phrases the issues on appeal as:
 

Did 
the District Court abuse its discretion when denying Appellant/Plaintiff 
Ekberg's Motion to Amend his complaint a second time?

 

Did 
the District Court abuse its discretion when holding that Appellant/Plaintiff 
Ekberg failed to meet his burden of proof on his damage 
claims?

 

 

FACTS

 

[¶3]      Sharp and Ekberg 
entered into a "Lease with Purchase Option" on June 19, 2000.  The lease provided that Sharp would 
lease to Ekberg the furnished upstairs apartment of a two-story residence 
located at 631West Loucks Street, Sheridan, Wyoming.  The agreement further granted Ekberg an 
option to purchase that property.  
In August of 2001, Eckberg notified Sharp, in writing, that he was going 
to exercise his option to purchase the property and enclosed a check for 
$5,000.00.  On September 14, 2001, 
Sharp, through his attorney, notified Ekberg via letter that Sharp would not 
honor the purchase option because Sharp believed it not to be legally binding. 

 

[¶4]      On September 25, 
2001, Sheridan County Title Insurance Agency informed Sharp, in writing, that 
Ekberg had tendered $82,000.00 to the agency for the purpose of paying the full 
amount of the purchase price.  The 
agency suggested closing on the real property occur October 1, 2001.  Two days later, Sharp's attorney 
reiterated Sharp's intention not to honor the purchase option. 

 

[¶5]      On October 1, 
2001, Ekberg filed his original complaint seeking specific performance of the 
purchase option.  Sharp timely 
answered the complaint.  The 
district court then held a scheduling conference on January 11, 2002, and set 
the matter for trial August 9, 2002.  
The district court also set a dispositive motion filing deadline of 
February 18, 2002, and a discovery cut-off date of July 1, 2002.  

 

[¶6]      Subsequently, the 
parties both filed motions for summary judgment.  Ekberg then amended his complaint, after 
obtaining permission to do so by the district court through formal motion, on 
March 15, 2002.  In this amended 
complaint, Ekberg alleged causes of action for breach of contract, specific 
performance, and damages related to lost rental income.  Sharp also moved for leave to assert 
counterclaims against Ekberg, which was granted by the district court.  

 

[¶7]      The district 
court granted Ekberg partial summary judgment for specific performance of the 
purchase option on June 24, 2002.  
Thereafter, on July 10, 2002, Ekberg filed a motion to again amend his 
complaint along with a proposed second amended complaint.  This second amended complaint included 
the same causes of action as the amended complaint but added a request for 
damages related to loss of business income, loss of use of enjoyment of the 
property, and other damages.  Sharp 
filed opposition to this motion, and Ekberg replied.  The district court denied Ekberg's 
motion on July 22, 2002. 

 

[¶8]      On August 9, 
2002, a bench trial was held concerning damages and the asserted 
cross-claims.  After trial, the 
district court offset Sharp's expenses against Ekberg's actual lost rental 
income paid by tenants of the lower apartment of the property; indicated that 
insufficient facts were presented to support that Ekberg was required to pay 
additional rent to Sharp; found that Ekberg could have entered the premises and 
was therefore not entitled to expenses; and granted all interest earned on the 
$82,000.00 escrowed amount to Sharp.  
This appeal followed.  

 

 

STANDARD OF 
REVIEW

 

[¶9]      The law in 
Wyoming is well settled that the decision to allow amendment to pleadings is 
vested within the sound discretion of the district court.  That decision will be reversed only for 
an abuse of discretion shown by clear evidence.  Dynan v. Rocky Mountain Fed. Sav. 
& Loan, 792 P.2d 631, 640 (Wyo. 1990); Bush v. Duff, 754 P.2d 159, 166-67 (Wyo. 1988); Robertson v. TWP, Inc., 656 P.2d 547, 551 (Wyo. 
1983); Elder v. Jones, 608 P.2d 654, 657  (Wyo. 1980); Rose v. Rose, 576 P.2d 458, 459 (Wyo. 1978); Breazeale v. Radich, 500 P.2d 74, 74 (Wyo. 
1972).  

 

Judicial 
discretion is a composite of many things, among which are conclusions drawn from 
objective criteria; it means a sound judgment exercised with regard to what is 
right under the circumstances and without doing so arbitrarily or capriciously. 
In re: Worker's Compensation Claim of Shryack, 3 P.3d 850, 855 (Wyo. 
2000) (quoting Vaughn v. State, 962 P.2d 149, 151 (Wyo. 1998)).  An abuse of discretion has also been 
said to have occurred only when the decision shocks the conscience of the court 
and appears to be so unfair and inequitable that a reasonable person could not 
abide it.  Hall v. Hall, 2002 
WY 30, ¶12, 40 P.3d 1228, ¶12 (Wyo. 2002); Everheart v. S & L 
Industrial, 957 P.2d 847, 853 (Wyo. 1998); Goddard v. Colonel Bozeman's 
Restaurant, 914 P.2d 1233, 1238 (Wyo. 1996).

 

Sinclair 
Oil Corp. v. Pub. Serv. Comm'n, 
2003 WY 22, ¶41, 63 P.3d 887, ¶41 (Wyo. 2003).

 

[¶10]   Our standard of review when a trial 
is held before the bench is also well established:

 

The 
factual findings of a judge are not entitled to the limited review afforded a 
jury verdict. While the findings are presumptively correct, the appellate court 
may examine all of the properly admissible evidence in the record.  Due regard is given to the opportunity 
of the trial judge to assess the credibility of the witnesses, and our review 
does not entail weighing disputed evidence.  Findings of fact will not be set aside 
unless the findings are clearly erroneous.  
A finding is clearly erroneous when, although there is evidence to 
support it, the reviewing court on the entire evidence is left with the definite 
and firm conviction that a mistake has been committed.  We review a district court's conclusions 
of law de novo on appeal.

 

Carroll 
v. Bergen, 
2002 WY 166, ¶9, 57 P.3d 1209, ¶9 (Wyo. 2002) (quoting Springer v. Blue Cross 
and Blue Shield of Wyoming, 944 P.2d 1173, 1175-76 (Wyo. 1997)); see 
also Saulcy Land Co. v. Jones, 983 P.2d 1200, 1203 (Wyo. 
1999).

 

  

 

DISCUSSION

 

Denial 
of Motion to Amend Pleadings

 

[¶11]   In his first issue on appeal, 
Ekberg asserts that under the circumstances where he had tendered $82,000.00 
under the purchase option and had been denied access to the real property, it 
was an abuse of discretion for the trial court to refuse to allow him to amend 
his complaint so that he could claim all his legal damages.  Specifically, Ekberg argues that the 
first time he received official notice that he had a right to enter the real 
property as of September 15, 2001, was when the district court granted partial 
summary judgment on June 24, 2002.  
Accordingly, he contends that this marked the first day in which he could 
have been able to fathom he possessed a claim of damages as asserted in his 
proposed second amended complaint for loss 
of business income and loss of use of enjoyment of the property. In addition, 
Ekberg argues that less than two weeks after receiving such notice and less than 
a week after Sharp filed his amended answer and counterclaim, he filed his 
motion for leave to file the second amended complaint.  

 

[¶12]   Wyoming Rule of Civil Procedure 15 
addresses amendment of pleadings.  
That rule provides, in applicable part (emphasis 
added):

 

(a)  Amendments. 
 A party may amend the party's pleading once as a matter of course at any time 
before a responsive pleading is served, or if the pleading is one to which no 
responsive pleading is permitted and the action has not been placed upon the 
trial calendar, the party may so amend it at any time within 20 days after it is 
served. Otherwise a party may amend the party's pleading only by leave of 
court or by written consent of the adverse party; and leave shall be freely 
given when justice so requires. . . . 

 

(b)  Amendments 
to Conform to the Evidence.  When issues not raised by the pleadings are 
tried by express or implied consent of the parties, they shall be treated in all 
respects as if they had been raised in the pleadings.  Such amendment of the pleadings as 
may be necessary to cause them to conform to the evidence and to raise these 
issues may be made upon motion of any party at any time, even after judgment; 
but failure so to amend does not affect the result of the trial of these 
issues.  If evidence is 
objected to at the trial on the ground that it is not within the issues made by 
the pleadings, the court may allow the pleadings to be amended and shall do so 
freely when the presentation of the merits of the action will be subserved 
thereby and the objecting party fails to satisfy the court that the admission of 
such evidence would prejudice the party in maintaining the party's action or 
defense upon the merits.  The court 
may grant a continuance to enable the objecting party to meet such 
evidence.

 

Wyoming 
Rule of Civil Procedure 16 is also applicable in this instance as the district 
court set particular deadlines in this matter.  That rule authorizes the district court 
to set certain dates, including the setting of pretrial conferences, deadlines 
for pretrial motions, and deadlines for the completion of discovery and to 
address any other appropriate matters.  
The objectives of the rule are to allow the district court to expedite 
the disposition of actions, establish early and continuing control over actions, 
and facilitate settlement of the case.   In addition, under this rule, the 
dates set by the district court may not be modified except "upon a showing of 
good cause."  See also 
Carroll v. Bergen, 2002 WY 166, ¶20 (recognizing that adherence to 
scheduling orders is critical in maintaining the integrity of judicial 
proceedings; that pretrial orders control the issues to be litigated, allowing 
the parties to rely on the pretrial order exhibit and witness lists to prepare 
their cases; and holding that the trial court is vested with extensive authority 
to enforce such pretrial orders).

 

[¶13]   The facts in this matter establish 
that Ekberg sought to amend his complaint for the second time on July 10, 2002, 
after the discovery cut-off deadline of July 1, 2002, had passed and only 
shortly before the scheduled trial date of August 9, 2002.  As indicated previously, the district 
court scheduled these dates in a scheduling conference held on January 11, 
2002.   Therefore, Ekberg had 
sufficient notice of these dates.

 

[¶14]   Moreover, Ekberg provided the 
district court with no explanation of why he could not have made the additional 
amendments to his pleadings much earlier.  
Ekberg contends that he could not have envisioned requesting damages for 
loss of business income and loss of use of enjoyment of the property until 
the 
district court issued its order granting partial summary judgment on June 24, 
2002.  We do not believe this to be 
the case.  Clearly as early as 
October 
1, 2001, the date Ekberg filed his original complaint seeking to enforce the 
purchase option or in any event on at least March 15, 2002, the date Ekberg was 
given permission to file his first amended complaint, he should have 
contemplated the damages which reasonably flow from his asserted breach of 
contract claim.  

 

[¶15]   Additionally, allowing a last 
minute amendment to Ekberg's complaint after the discovery cut-off date and just 
a few weeks before trial would have caused Sharp both undue prejudice and 
delay.  Allowing the amendment to 
occur, in essence, would have allowed Ekberg to raise additional claims for 
damages, occasioning the need for significantly more discovery and substantial 
delay in the proceedings.  
Accordingly, Ekberg's efforts to bring additional last minute theories 
for loss of business income and loss of use of enjoyment of the property damages 
may be characterized as unfair, unjust, and prejudicial to Sharp.  As such, we hold that Ekberg failed to 
show good cause for his motion to amend under either W.R.C.P. 15 or 16.  We hold, therefore, that the district 
court did not abuse its discretion when it denied Ekberg's motion to amend his 
complaint a second time. 

 

Sufficiency 
of the Evidence in Assessment of Damages

 

[¶16]   Ekberg asserts that the 
district court erred by finding that any rents due him during the period after 
September 15, 2001, were offset by the expenses Sharp incurred in maintaining 
the property and the interest Ekberg earned from the purchase proceeds over that 
same time frame.  Ekberg's argument 
is founded on two theories.  First, 
Ekberg contends that the amount for which he could have rented the property 
would have been higher than what was actually received.  Secondly, Ekberg claims there should not 
have been an offset for the interest the purchase proceeds earned pending the 
completion of the sale. 

 

[¶17]   Ekberg provides no analyses 
detailing why the district court's determination was unsupported by the 
evidence.  In making his argument, 
Ekberg merely contends that his self-serving testimony and some testimony of 
Sharp were virtually uncontested and should have been relied upon by the 
district court.  Thus, the crux of 
Ekberg's argument depends on the issue of credibility of those witnesses.  Review of the transcript discloses that 
Ekberg testified over objection that it was his opinion that the main floor and 
basement of the real property could have been rented for $975.00 to $1,000.00 
per month.  This opinion was based 
on a hearsay letter from a realtor, purported newspaper advertisement concerning 
rentals in the Sheridan area, and Ekberg's own asserted experience in attempting 
to locate rental properties in that same area.  The indicated realtor never testified 
nor were the letter or newspaper advertisements ever admitted into 
evidence.  Accordingly, Ekberg 
provided little support or foundation with respect to his opinion. 

 

[¶18]   Ekberg further attempts to "back 
into" his conjectural monthly rental amount by arguing that it is supported by 
his rental of the upper floor for $450.00 per month, and Bernard and Alice 
Harnish renting the main floor and basement of the real property for $400.00 per 
month during part of the applicable periodcombined with a "good renter" 
discount afforded the Harnishes for performing certain tasks at the property, 
taking good care of the property, and paying their rent on time, estimated at 
$200.00 to $300.00 per month.  Thus, 
Ekberg asserts that the monthly rental of the entire property would have been 
$1,050.00 to $1,150.00 per month.  
Review of the "good renter" discount amounts quoted by Ekberg discloses 
that they were based on the speculative and conjectural opinion of Sharp given 
during his testimony at trial. 

 

[¶19]   The district court was provided 
credible evidence that Ekberg indeed rented the upper floor of the property for 
$450.00 per month and that Bernard and Alice Harnish rented the main floor and 
basement for $400.00 per month during part of the applicable period.  Therefore, the district court had a 
substantiated basis for utilizing these figures in making its 
determination.  In Avery v. 
State, 2002 WY 87, ¶5, 47 P.3d 973, ¶5 (Wyo. 2002), we 
recognized:

 

            
On appeal, sufficiency of the evidence is analyzed by viewing the 
evidence in the light most favorable to the prevailing party and by affording to 
the prevailing party the benefit of all reasonable inferences that may be drawn 
from that evidence.  Nollen v. 
State, 12 P.3d 682, 684 (Wyo. 2000) (quoting  Rodriguez v. State, 962 P.2d 141, 
148 (Wyo. 1998)).  We do not reweigh 
the evidence or re-examine the credibility of the witnesses.  Nollen, 12 P.3d  at 684 (quoting 
Rodriguez, 962 P.2d at 148). Neither do we usually consider conflicting 
evidence presented by the non-prevailing party.  Williams v. State, 986 P.2d 855, 
857 (Wyo. 1999).  Where, however, as 
here, the fact finder was a judge, rather than a jury, our role is somewhat more 
expansive:

 

"The 
factual findings of a judge are not entitled to the limited review afforded a 
jury verdict. Hopper v. All Pet Animal Clinic, Inc., 861 P.2d 531, 538 
(Wyo. 1993). While the findings are presumptively correct, the appellate court 
may examine all of the properly admissible evidence in the record. Id. 
Due regard is given to the opportunity of the trial judge to assess the 
credibility of the witnesses, and our review does not entail weighing disputed 
evidence. Id. Findings of fact will not be set aside unless the findings 
are clearly erroneous. Id. A finding is clearly erroneous when, although 
there is evidence to support it, the reviewing court on the entire evidence is 
left with the definite and firm conviction that a mistake has been 
committed.  
Id."

 

Stroup 
v. Oedekoven, 
995 P.2d 125, 128 (Wyo. 1999) (quoting Springer v. Blue Cross and Blue Shield 
of Wyoming, 944 P.2d 1173, 1175-76 (Wyo. 1997)).  When supported by substantial evidence, 
a judge's factual findings will not be disturbed on appeal unless they are 
against the great weight of the evidence. McNeiley v. Ayres Jewelry Co., 
886 P.2d 595, 597 (Wyo. 1994); Leavell v. Linn, 884 P.2d 1364, 1368 (Wyo. 
1994).

 

We 
simply do not find the trial court's findings to be clearly 
erroneous.

 

[¶20]   Ekberg also argues that the 
interest earned on the deposited amount of $82,000.00 should not have been 
credited as an offset in Sharp's favor.  
He contends that the district court improperly credited Sharp with the 
expenses Sharp incurred managing the property over the applicable time 
period.  We are not persuaded.  Sharp testified that he should be 
entitled to interest on the $82,000.00 from September 15, 2001, to August 31, 
2002, at 2.5% interest, for a total of $1,793.77.  Likewise, Sharp testified that he was 
required to pay $1,417.38 in expenses over the applicable period regarding the 
property.  These amounts were 
further supported by admitted documentary evidence presented at trial.  Obviously, during the period that Ekberg 
sought to recover rents concerning the property, Ekberg was not required to 
incur the maintenance, repair, insurance, taxes, and other related expenses 
associated with owning and renting the property.  Accordingly, we hold that the trial 
court did not abuse its discretion when it applied the setoff as 
determined.   

 

[¶21]   Finally, Ekberg complains that the 
district court erred in finding that Ekberg was not denied his legal right to 
enter the property after September 15, 2001, and in refusing to grant him 
damages related to hotel expenses.  
Ekberg testified that he last used the property in mid-October, 2001, and 
contends that he did not learn of his right to occupy the property until the 
district court issued its order on partial summary judgment on June 24, 
2002.  Ekberg also asserted during 
his testimony that he had incurred a $389.48 expense for staying in a hotel 
because he was not able to possess the property.  Nevertheless, other testimony at trial, 
along with Ekberg's admissions, establishes that Ekberg continued to possess a 
key to the upper apartment, left personal belongings within the apartment, and 
never provided notice that he was going to move out of the apartment.  Bernard Harnish also testified that 
Ekberg telephoned him twice during the applicable period and requested that 
Harnish turn off some telephone equipment owned by Ekberg in the apartment.  Critically, although he attempted to 
discount his statements, Ekberg in responding to interrogatories admitted that 
he continued to occupy and use the apartment after September 15, 2001.  

 

[¶22]   Accordingly, we hold that credible 
evidence was presented to the district court to support its determination that 
Ekberg was not barred from his legal right to enter the property after September 
15, 2001, and denying his request for damages related to hotel expenses.  As we recognized in Williams v. 
Collins Communications, Inc., 720 P.2d 880, 892-93 (Wyo. 
1986):

 

            
The rules on specific performance explained in McCoy Farms, Inc. v. J 
& M McKee, 263 Ark. 20, 563 S.W.2d 409, cert. denied 439 U.S. 862, 99 S. Ct. 184, 58 L. Ed. 2d 171 (1978), lend support to our 
conclusion:

 

". . . 
Specific performance is an equitable remedy which compels the performance of a 
contract on the precise terms agreed upon or such a substantial performance as 
will do justice between the parties under the circumstances.  It is a means of compelling a 
contracting party to do precisely what he should have done without being coerced 
by a court.  81 C.J.S. Specific 
Performance § 2, 701; 71 Am.Jur.2d 10, Specific Performance, § 1; Restatement of 
the Law, Contracts § 358, Comment a, § 359(2), § 360(b), § 326(c). The 
object in such cases is to place the party without fault in as nearly the same 
position as he would have been had there been no default by the other 
party.    Pillsbury v. 
J.B. Streeter, Jr. Co., 15 N.D. 174, 107 N.W. 40 (1906).  The guiding principle in such cases is 
to relate the contract back to the date set therein.  Ellis v. Mihelis, 60 Cal. 2d 206, 
32 Cal. Rptr. 415, 384 P.2d 7 (1963); Meyer v. Benko, 55 Cal. App. 3d 937, 
127 Cal. Rptr. 846 (1976)."  
(Emphasis added.)   563 S.W.2d  at 415.

 

            
As indicated in the above quotation, the object of specific performance 
is to place the party without fault in the position he would have been in had 
there been no default.  

 

[¶23]   In that same case, we addressed the 
proper considerations that must be made when specific performance is 
granted.  We 
stated:

 

            
An accounting was required in Duane Sales, Inc. v. Carmel, 57 A.D.2d 1003, 394 N.Y.S.2d 307 (1977), reversed on other grounds, 49 N.Y.2d 862, 
427 N.Y.S.2d 930, 405 N.E.2d 175 (1980), after specific performance of a real 
property purchase option agreement had been granted. The New York Supreme Court 
modified the judgment, concluding that:

 

". . . 
an accounting should be had which should take into consideration, among other 
things, the following: the rents received by defendants during the period 
from the date of the conveyance of the title to the premises; any profits 
resulting to the defendants in their operation of the property; any losses 
sustained by the plaintiff because of the delay in conveyance of title; 
necessary expenses incurred by the defendants in the operation of the property, 
such as payments of principal and interest on the mortgage, property taxes, 
insurance, and minor repairs; the benefits to the plaintiff in retaining the use 
of the purchase money during the pendency of the litigation."  (Emphasis added.)  394 N.Y.S.2d  at 308, 405 N.E.2d  at 
175.

 

            
Although Duane Sales was reversed on other grounds by the Court of 
Appeals of New York, the quoted language regarding the accounting was cited with 
approval in Bravo v. Buelow, 214 Cal. Rptr. 65, 168 Cal. App. 3d 208 (1985), 
an action for specific performance of a real estate sales contract.  The California Court of Appeal further 
said:

 

"In 
California the compensation which may be awarded incident to a decree of 
specific performance is not for breach of contract and is not legal 
damages.  The complainant affirms 
the contract and asks that it be performed. Since the time for performance has 
passed, the court relates that performance back to that date, by treating the 
parties as if [performance] . . . had taken place at that time.  Thus the [real estate] buyer is entitled 
to the rents and profits from the time the contract should have been performed, 
and the [real estate] seller is entitled to an offset for the interest on the 
purchase money which he would have received had the contract been 
performed.  The process is more like 
an accounting between the parties than an assessment of damages. 
[Citations].'"   214 Cal. Rptr. 
at 69, quoting from Hutton v. Gliksberg, 128 Cal. App. 3d 240, 248, 180 Cal. Rptr. 141 (1982).

 

720 P.2d  at 
893-94.

 

[¶24]   Upon our review, we find that the 
district court's ruling is based on sufficient evidence and that the district 
court properly applied the applicable rule of law concerning the assessment of 
damages.  Had the district court 
granted Ekberg the damages he requested, which are at issue in this appeal, 
Ekberg would have been placed in a position that was better than he would have 
been placed had there been no default on the option to purchase real 
property.  As noted above, the 
guiding principle in specific performance cases is to relate the contract back 
to the date set therein and to only place the party without fault in as nearly 
the same position as he would have been had there been no default by the other 
party. 

 

 

CONCLUSION

 

[¶25]   Given those reasons set forth 
above, the actions of the district court are affirmed.