Case Title: SCOTT AND RHONDA TERRIS, Husband and Wife V. EDWARD KIMMEL and EDWAL ENTERPRISES, INC.

Citation: 

Docket Number: S-10-0028

State: wyoming

Court: Wyoming Supreme Court

Date: 2010-08-05T00:00:00Z

Document:
SCOTT AND RHONDA TERRIS, Husband and Wife V. EDWARD KIMMEL and EDWAL ENTERPRISES, INC.2010 WY 110Case Number: S-10-0028Decided: 08/05/2010NOTICE:  This opinion is subject to formal revision before publication in Pacific Reporter Third.  Readers are requested to notify the Clerk of the Supreme Court, Supreme Court Building, Cheyenne, Wyoming 82002, of any typographical or other formal errors so that correction may be made before final publication in the permanent volume.
APRIL 
TERM, A.D. 2010

 
 
SCOTT 
AND RHONDA TERRIS, Husband and Wife,

 
 
Appellants

(Plaintiffs),

 
 
v.

 
 
EDWARD 
KIMMEL and EDWAL ENTERPRISES, INC.,

 
 
Appellees

(Defendants).

 
 
Appeal 
from the District Court of Teton County

The 
Honorable Nancy J. Guthrie, Judge

 
 

Representing 
Appellants:

Katherine 
D. Peters and Thomas S. Peters of Peters Associates, LLC, Teton Village, 
Wyoming.

 
 

Representing 
Appellees:

Peter 
F. Moyer of Jackson, Wyoming.

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

 
 
*Chief 
Justice at time of expedited conference.

 
 
VOIGT, 
Justice.

 
 
[¶1]      Scott and Rhonda 
Terris (the Terrises) appeal the district court's Judgment, arising from a 
dispute relating to a lease agreement with Edwal Enterprises, Inc. and Edward 
Kimmel as principal of Edwal Enterprises, Inc. (Kimmel).  Finding no error on the part of the 
district court, we will affirm. 

 
 
ISSUES

 
 
[¶2]      1.    Did the district court err as 
a matter of law when it found that the Terrises breached the lease agreement and 
that Kimmel did not breach the lease agreement?

 
 
2.    Did the district court err by 
finding that Kimmel did not commit a conversion, that Kimmel did not act with 
willful misconduct, and that Kimmel did not violate the implied covenant of good 
faith and fair dealing?

 
 
3.    Did the district court err as 
a matter of law when it awarded attorney's fees and costs to 
Kimmel?

 
 
FACTS

 
 
[¶3]      The Terrises 
rented a storage unit from Kimmel in 1998, pursuant to a written lease 
agreement, which they continued renting until the summer of 2006 when the 
current dispute arose.  Kimmel 
notified the Terrises via letter several times between April and August of 2006 
that they were over seven months behind in rental payments.  In July of 2006, Kimmel and his employee 
smelled gasoline fumes coming from the Terrises' storage unit so they cut the 
lock and entered the unit, because storage of flammable and explosive materials 
is prohibited by the lease agreement.  
According to Kimmel, he and his employee removed "three full propane 
tanks and two full 5 gallon gas containers," as well as "a lot of junk," such as 
a moldy horse blanket and lumber.

 
 
[¶4]      The Terrises 
contacted Kimmel in August of 2006 after having received one of Kimmel's letters 
regarding the Terrises' default for nonpayment.  The Terrises and Kimmel met at the 
storage unit facility and the Terrises paid most of the delinquent rent.1  The Terrises also requested that Kimmel 
allow them to rent the unit for another month, which Kimmel agreed to do and the 
Terrises paid for the additional month at that time.

 
 
[¶5]      In August of 
2007, the Terrises filed a complaint against Kimmel alleging that he committed 
conversion of their property by removing items valued at more than $10,000 from 
their storage unit.2  Kimmel denied the allegations of 
conversion and counterclaimed for breach of contract.  The district court found that no 
conversion occurred, that Kimmel did not breach the lease agreement, and that 
the Terrises had breached the lease agreement.  The district court also awarded 
attorney's fees and costs to Kimmel pursuant to the lease agreement.  This timely appeal by the Terrises 
followed.

 
 
DISCUSSION

 
 
Did 
the district court err as a matter of law when it found that the Terrises 
breached the lease agreement and that Kimmel did not breach the lease 
agreement?

 
 
[¶6]      The Terrises make 
several arguments relating to this issue.  
First, the Terrises argue that the district court erred by finding that 
the lease agreement had not been amended through course of conduct or a separate 
oral agreement to allow the Terrises to pay rent several times a year, rather 
than monthly as the written lease agreement provided.  Specifically, the Terrises argue that 
they had a separate oral agreement with the manager of the storage unit to allow 
them to pay their rent only several times a year, rather than monthly.  Alternatively, the Terrises argue that 
by actually paying only several times a year and Kimmel accepting payment, their 
course of conduct amended the written lease agreement accordingly.  Second, the Terrises argue that because 
the district court erred in finding that the lease agreement had not been 
amended to allow them to pay several times a year, rather than monthly, the 
district court erred in finding the Terrises in breach for not making timely 
payments.  Finally, the Terrises 
argue that the district court erred by finding that Kimmel did not breach the 
lease agreement by removing their property from the storage unit and taking it 
to the dump.

 
 
[¶7]      To address the 
Terrises' arguments we must examine and interpret the lease agreement.  We have repeatedly stated the following 
in relation to interpreting contracts:

 
 
The 
primary focus is on determining the intent of the parties to the contract.  The initial question is whether the 
language of the contract is clear and unambiguous.  If it is, then the trial court determines 
the parties' intent from the contract language alone.  It does not consider extrinsic evidence, 
although it may consider the context in which the contract 
was written, including the subject matter, the purpose of the contract, and the circumstances surrounding its making, all to 
help ascertain what the parties intended when they made the contract.  The 
trial court then enforces the contract in accordance with 
the plain meaning its language would be given by a reasonable person.  All of these issues--deciding whether a 
contract is unambiguous, determining the parties' intent 
from the unambiguous language, and enforcing the contract in 
accordance with its plain meaning--nvolve questions of law for the trial court. 
 When we undertake de novo review of 
the trial court's conclusions of law, we follow the same familiar path.  See Double Eagle Petroleum & 
Mining Corp. v. Questar Exploration & Production Co., 2003 WY 139, ¶¶ 7-8, 78 P.3d 679, 
681-82 (Wyo. 2003), and cases cited therein.

 
 

Horse 
Creek Conservation Dist. v. State ex rel. Wyo. Attorney Gen., 
2009 WY 143, ¶ 25,  221 P.3d 306, 315 (Wyo. 2009) (quoting Fox v. Wheeler Elec., Inc, 2007 WY 171, 
¶ 10, 169 P.3d 875, 878 (Wyo. 2007)).  
This Court has previously acknowledged that the parties to a written 
agreement may orally waive or modify their rights under the 
agreement.  Keever v. Payless Auto Sales, Inc., 2003 
WY 147, ¶ 12, 79 P.3d 496, 499 (Wyo. 2003).  Moreover, we have recognized that a 
written agreement may be modified through course of conduct.  
Id. at ¶¶ 12-14, at 499-500.

 
 
Wyoming 
law is clear that the party asserting a written agreement was modified by the subsequent 
expressions or conduct of the parties must prove so by clear and convincing 
evidence.  Ruby Drilling 
Co. [v. Duncan Oil Co., 
2002 WY 85,] ¶ 11 [, 47 P.3d 964, 968-69 (Wyo. 2002)].  The question of whether the alleged 
modification of the written agreement has been proved by the required quantum of 
evidence is one to be decided by the trier of fact.  Id.

 
 
In 
order to prevail on appeal, [the appellant] must overcome the onerous burden of 
persuading this Court that the district court's findings are clearly erroneous. 
. . .

 
 

Id. 
at ¶¶ 13-14, at 499-500 (some internal 
citations omitted).  

 
 
We 
do not substitute ourselves for the trial court as a finder of facts; instead, 
we defer to those findings unless they are unsupported by the record or 
erroneous as a matter of law.  
Life Care Centers of America, Inc. v. Dexter, 2003 WY 38, ¶ 7, 65 P.3d 385, 
[389] (Wyo. 2003).  We affirm the 
trial court's findings if there is any evidence to support them.  Id.  We accept the evidence of the prevailing 
party as true and give that party the benefit of all favorable inferences that 
can fairly be drawn from the evidence, while disregarding conflicting 
evidence.  Narans v. Paulsen, 
803 P.2d 358, 360 (Wyo. 1990).  A 
reviewing court will not set aside the court's findings merely because it might 
have reached a different result.  
Conner v. Board of County Commissioners, Natrona County, 2002 WY 148, ¶ 23, 54 P.3d 1274, 
[1283] (Wyo. 2002).  A finding can 
be "clearly erroneous" even though there is evidence to support it, if after a 
review of the entire record, the court "is left with the definite and firm 
conviction that a mistake has been committed."  Hammons v. Table Mountain Ranches 
Owners Association, Inc., 
2003 WY 85, ¶ 12, 72 P.3d 1153, [1155] (Wyo. 2003).

 
 

Id. at 
¶ 7, at 498.

 
 
[¶8]      The lease 
agreement provided the following regarding payment:

 
 
3.         
RENT       Rent for 
the balance of this calendar month is $30.00, payable immediately.  Thereafter, Tenant agrees to pay the 
Landlord $40.00 on or before the first day of each month, in advance, as rental 
for the use of the rental space. . . .

 
 
In 
support of their argument that the contract was modified, the Terrises testified 
that they made an oral agreement with the manager of the storage facility, 
whereby the Terrises were allowed to make several payments over the course of 
the year, rather than monthly payments as required by the written lease 
agreement, as long as they were paid in full by the end of the year.3  The Terrises argue that they made 
payments according to that oral agreement.  
Kimmel testified that he did have an employee helping him manage the 
units, but he was never authorized to amend the written lease agreement.  Kimmel also testified that he "was in 
the room with [the manager] when Mrs. Terris requested a delay of two months in 
2005 due to her father's illness.  I 
agreed, but there was no discussion or consent whatsoever on deferring rent 
payments beyond that one period in 2005."  
Kimmel unequivocally testified that he never authorized a modification of 
the contract.  Moreover, Kimmel 
testified that he sent late payment notices to the Terrises dating back to April 
of 2006, three months prior to Kimmel entering the storage 
unit.

 
 
[¶9]      After considering 
the above evidence, the district court concluded that the Terrises failed in 
their burden to show by clear and convincing evidence that the written contract 
had been modified.  The district 
court had the opportunity to hear the evidence of both parties regarding the 
terms of the agreement and any modification thereto and determined Kimmel's 
testimony to be more credible.  
"Due regard is given to the opportunity of the trial judge to assess the 
credibility of the witnesses, and our review does not entail re-weighing 
disputed evidence.'"  Morris v. CMS Oil & Gas 
Co., 2010 WY 37, ¶ 12, 227 P.3d 325, 330 (Wyo. 2010) (quoting 
Lieberman v. Mossbrook, 
2009 WY 65, ¶ 40, 208 P.3d 1296, 1308 (Wyo. 2009)).  Accepting Kimmel's evidence as true and 
giving Kimmel all favorable inferences thereto, as required, we cannot say that 
the district court's finding that a contract modification did not occur was 
clearly erroneous.  Accordingly, the 
district court did not err as a matter of law by finding that the lease 
agreement was clear and unambiguous, requiring the Terrises to pay rent on a 
monthly basis, and their failure to do so was a breach of the agreement.  

 
 
[¶10]   Finally, we will address the 
Terrises' argument that the district court erred as a matter of law in finding 
that Kimmel did not breach the contract by disposing of their property.  The Terrises note that the default 
provision of the lease agreement provides in part that 

 
 
In 
[the event of default], Tenant agrees that Landlord shall have the right to 
store the property at Tenant's expense, or to sell the property, without the 
requirements of civil action or judgement [sic], at public or private sale, and 
to apply the proceeds of sale first to Landlord's costs and then to all amounts 
due from Tenant to Landlord.  

 
 
The 
Terrises argue that Kimmel breached the lease agreement by not storing or 
selling their property, but instead disposing of it at the 
dump.

 
 
[¶11]   Kimmel testified that when he 
entered the Terrises' storage unit he

 
 
found 
three full propane tanks and two full 5 gallon gas containers, in addition to a 
lot of junk (moldy horse blankets and lumber) plus some tools.  I removed the flammable materials 
(gasoline tanks and propane tanks) and took junk with no value (lumber, horse 
blankets) to the dump as part of a much larger trash load, leaving all items of 
value, including tools, in the unit.  
I saw no jewelry or apparel.      

 
 
Contained 
in the record are several sheets of paper with handwritten itemizations of 
property, with some containing corresponding estimates of value.  Presumably these sheets were prepared by 
the Terrises as a description of the property that was stored in the unit and 
represent the property that the Terrises claim is missing.  "Mrs. Terris testified that the items 
listed on the inventory sheets they prepared after the meeting and submitted as 
evidence were accurate to the best of her recollection."  Not all of the lists are identical, nor 
are all labeled as exhibits, so it is difficult to tell which list or lists were 
actually entered into evidence and referenced in the above-quoted portion of 
Mrs. Terris' testimony.  What is 
clear from these lists, however, is that they contain items starkly different 
from that which Kimmel testified to having encountered when he entered the 
storage unit.  For instance, the 
lists prepared by the Terrises contain over thirty items, including a diamond 
ring and earrings, gold earrings, dishes, miscellaneous antiques, and a wedding 
dress.  

 
 
[¶12]   Once again confronted with 
conflicting testimony, the district court was required to make a credibility 
determination.  As noted above, "Due 
regard is given to the opportunity of the trial judge to 
assess the credibility of the witnesses, 
and our review does not entail re-weighing disputed evidence."  Morris, 2010 WY 37, ¶ 12, 227 P.3d  
at 330 (quoting Lieberman, 2009 WY 65, ¶ 40, 208 P.3d at 1308).  The Terrises failed to persuade the 
district court that those items of personal property existed or that Kimmel 
disposed of them, and we do not find anything in the record to suggest 
otherwise.4  Consequently, the district court did not 
err by finding that Kimmel did not breach the lease 
agreement.

 
 
Did 
the district court err by finding that Kimmel did not commit a conversion, that 
Kimmel did not act with willful misconduct, and that Kimmel did not violate the 
implied covenant of good faith and fair dealing?

 
 
[¶13]   The Terrises argue that Kimmel 
violated the implied covenant of good faith and fair dealing and committed a 
conversion of their property when Kimmel failed to follow the lease agreement 
which required Kimmel to store or sell their property and instead removed their 
property from the storage unit and disposed of it at the dump.  The Terrises also argue that Kimmel 
disposed of their property willfully in violation of the lease agreement.5  All of these claims rely on proof that 
Kimmel removed and disposed of the Terrises' personal property; however, as 
discussed above, we affirm the district court's determination that the Terrises 
failed to prove these pertinent facts and therefore we will not further address 
these issues.  See supra ¶ 12.

 
 

Did 
the district court err as a matter of law when it awarded attorney's fees and 
costs to Kimmel?

 
 
[¶14]   The Terrises argue that the 
district court erred as a matter of law by awarding attorney's fees and costs to 
Kimmel, claiming that such an award was not proper under the attorney's fees 
provision of the lease agreement.  
Specifically, the Terrises argue that at the time the Terrises breached 
the lease agreement, Kimmel had not incurred any attorney's fees or costs 
relating to the Terrises' breach, and all subsequent fees and costs resulted 
from defending the conversion claim which are not recoverable under the lease 
agreement.

 
 
We 
review a district court's decision regarding the award of attorneys' fees and 
costs for abuse of discretion.  A 
court abuses its discretion only when it acts in a manner which exceeds the 
bounds of reason under the circumstances.  The burden is placed upon the party who 
is attacking the trial court's ruling to establish an abuse of 
discretion.

 
 

Meyer 
v. Hatto, 
2008 WY 153, ¶ 25, 198 P.3d 552, 557 (Wyo. 2008) (internal citations 
omitted).  Wyoming follows the 
American rule regarding the award of attorney's fees, which rule states that 
each party is responsible for his or her own fees and costs.  Id. at ¶ 26, at 557.  "A prevailing party, however, is 
generally entitled to be reimbursed for his attorney's fees and costs when an express contractual authorization exists 
for such an award."  Id. at ¶ 26, at 558. 

 
 
[¶15]   Regarding attorney's fees, the 
lease agreement provided: 

 
 
12.  ATTORNEY'S FEES  In the event of any default by Tenant 
hereunder, Tenant shall pay all costs and expenses incurred by Landlord as a 
result thereof, including reasonable attorneys fees, whether suit is brought or 
not.  

 
 
[¶16]   As noted above, this case 
originated as a result of the Terrises' suit against Kimmel for conversion.  Kimmel responded by denying the 
conversion claim and counterclaiming for breach of contract.  The Terrises argue that the attorney's 
fees incurred by Kimmel arose out of their conversion claim, not as a result of 
any default under the lease, and therefore the Terrises insist that attorney's 
fees are not recoverable under the lease agreement.  We disagree.

 
 
[¶17]   The attorney's fees provision of 
the lease agreement does not limit the availability of fees and costs only to 
those arising out of claims initiated by the landlord.  Rather, it states that the tenant shall 
pay any costs, including attorney's fees, resulting from "any default by 
Tenant."  Both the conversion claim 
and the breach of contract counterclaim arose directly from the Terrises' 
default under the lease agreement.  
Kimmel exercised his right of entry into the unit provided for in the 
lease agreement and allegedly disposed of the Terrises' property only after the 
Terrises breached the lease agreement by storing flammable or explosive 
materials, and after the Terrises defaulted by failing to make timely 
payments.6  The Terrises would not have asserted 
their unsuccessful conversion claim, and Kimmel would not have incurred 
attorney's fees defending against that claim and asserting a successful 
counterclaim for breach of the lease agreement if not for the Terrises' default 
under the lease agreement.  
Accordingly, we cannot say that the district court abused its discretion 
in awarding attorney's fees and costs. 

 
 
CONCLUSION

 
 
[¶18]   
The Terrises failed to prove by clear and convincing evidence that 
the written lease agreement was modified.  
Consequently, the district court did not err in finding the Terrises in 
breach of the lease agreement for failure to make timely rental payments.  The Terrises also failed to prove that 
Kimmel removed or disposed of any of the Terrises' personal property.  As a result, the district court did not 
err in finding that Kimmel had not breached the lease agreement, committed a 
conversion, acted willfully in violation of the lease agreement, or violated the 
covenant of good faith and fair dealing.  
Nor did the district court abuse its discretion in awarding attorney's 
fees and costs to Kimmel pursuant to the lease agreement, as those fees and 
costs were a direct result of the Terrises' default under the lease agreement. 

 
 
[¶19]   Affirmed.

 
 
FOOTNOTES

 
 

1Kimmel testified that the Terrises did not pay the full amount owed to 
Kimmel, but that Kimmel did not press the issue.

 
 

2More about the specific property alleged to have been converted will be 
discussed below.

 
 

3The record does not contain a transcript of the proceedings but instead 
contains Defendants' Amended Statement of the Evidence, which was submitted and 
accepted by the district court pursuant to W.R.A.P. 3.03.  All referenced "testimony" is from this 
statement of the evidence.

 
 

4Kimmel admits to having removed lumber and horse blankets and disposing 
of them at the dump.  However, the 
Terrises did not include those items on any of their lists of items allegedly 
disposed of by Kimmel, those items do not appear to be a subject of the 
conversion claim, nor do the Terrises present any argument on appeal regarding 
those items.

 
 

5The lease agreement provides the landlord with indemnity from liability 
in the event the tenant's property is destroyed or damaged, except in the event 
that it is destroyed or damaged as a result of the landlord's gross negligence 
or willful misconduct.

 

6The lease agreement allows the landlord "to terminate this agreement 
and/or take possession of the rental space and all property located therein" in 
the event that the tenant fails to pay rent within 14 days of it being 
due.