Title: Frank L. Chapin v. Robert M. Linden, Jr. Appeal from district courts order granting summary judgment to Linden in a dispute over an alleged contract to convey property

State: idaho

Issuer: Idaho Supreme Court (civil)

Document:

IN THE SUPREME COURT OF THE STATE OF IDAHO 
Docket No. 32946 
 
FRANK L. CHAPIN and SYDNEY L. 
CHAPIN, husband and wife, aka SYDNEY 
GUTIERREZ-CHAPIN,                           
                                                        
           Plaintiffs-Appellants,                       
                                                        
 and                                                    
                                                        
FINANCIAL MANAGEMENT SERVICES, 
INC., an Idaho corporation; and S and F, 
LLC., an Idaho Limited Liability Company,      
                                                        
           Plaintiffs,                                  
                                                        
 v.                                                     
                                                        
ROBERT M. LINDEN, JR., and PATRICIA 
A. LINDEN, husband and wife,                            
                                           
          Defendants-Respondents. 
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2007 Opinion No. 94 
 
Coeur d’Alene, April 2007 Term 
 
Filed:  June 27, 2007 
 
Stephen W. Kenyon, Clerk  
 
 
 
 
 
 
Appeal from the District Court of the First Judicial District of the State of Idaho, Bonner County.  
Hon. John T. Mitchell, District Judge. 
The decision of the district court granting summary judgment to respondents is: affirmed.   
Featherston Law Firm, Chtd., Sandpoint, for appellants.  Brent C. Featherston argued.   
Winston & Cashatt, Spokane, Washington, for respondents.  Brian T. McGinn argued.   
______________________________________ 
 
 
 
TROUT, Justice 
Appellants Frank and Sydney Chapin (the Chapins) appeal from the district court’s order 
granting summary judgment to Respondents Robert and Patricia Linden (the Lindens) in a 
dispute over an alleged contract to convey property. 
I. 
FACTUAL AND PROCEDURAL BACKGROUND 
In 1994, the Lindens sold a 40-acre parcel of pasture and farmland (the Property) located 
in Bonner County to Financial Management Services, Inc. (FMS), an Idaho corporation wholly 
owned by the Chapins.  FMS executed an installment note for the balance of the purchase price, 
$80,000, and the note was secured by a real estate mortgage.  In April 2000, FMS conveyed the 
Property to S and F, LLC. (S and F), an Idaho limited liability company, also wholly owned by 
the Chapins.  The Chapins personally paid rents to S and F, which in turn made the payments on 
the Property to the Lindens.   When the Chapins filed bankruptcy, they ceased making rent 
payments to S and F, and S and F in turn stopped making the necessary payments to the Lindens 
and consequently defaulted on the mortgage.   
The Lindens filed suit against FMS and S and F for monies due and owing and 
foreclosure of the real estate mortgage in November 2002.  FMS and S and F failed to answer, 
and a default judgment and decree of foreclosure was entered on April 3, 2003.  A sheriff’s sale 
occurred on May 28, 2003, where the Lindens re-acquired the property subject to the Chapins’ 
right of redemption.1  The Chapins’ right of redemption was scheduled to expire on May 28, 
2004, one year from the date of the sale.   
On May 27, 2004, one day before the expiration of the Chapins’ right of redemption, the 
Chapins, through their attorney, made a demand for an accounting.  The demand triggered the 
addition of five working days to the redemption period, pushing the deadline to June 7, 2004.  
Around 1:00 p.m. on June 7, 2004, the Chapins, again through their attorney, initiated a 
telephone discussion with the Lindens’ attorney.  In lieu of exercising their redemption rights, 
the Chapins sought to enter into a contract that would allow them to purchase the Property 
directly from the Lindens after the redemption period expired.  The Chapins offered to purchase 
the property from the Lindens for $90,000, rather than exercising the right of redemption.  That 
afternoon, the Lindens’ attorney relayed the offer to the Lindens, who rejected it and directed 
their attorney to counteroffer a sale price of $125,000, with a $30,000 down payment and the 
balance amortized over 30 years at the rate of 8% per year, payable in five years.   
                                                 
1 Although there is some dispute as to whether the Chapins ultimately held the right of 
redemption individually or as corporate officers on behalf of S and F, both are named plaintiffs 
in this action and for the purposes of this opinion, we address them hereafter collectively as “the 
Chapins.”   
 
 
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In response to the Lindens’ offer, the Chapins, through their counsel, contacted the 
Lindens’ attorney around 3:38 p.m. that same day to accept the offer and also propose additional 
terms.  During the telephone call in which the Chapins allege they accepted the Lindens’ 
counteroffer, the Chapins’ attorney asked whether the Lindens would agree to two additional 
provisions.  First, the Chapins wanted the contract to allow for prepayment without penalty.  
Second, the Chapins asked that the contract provide for partial deed release upon payment of 
one-third of the total purchase price, so the Chapins would have the option of subdividing the 
property into three parcels and then selling a parcel before the contract was fully paid.  The 
Lindens’ attorney stated that he would propose the terms to his clients; however, at 3:56 p.m., he 
called the Chapins’ attorney back and left a message indicating that he was unable to reach the 
Lindens “that day or anytime shortly.”  He further advised that he was headed to a doctor’s 
appointment and that he would get back to the Chapins’ attorney by 5:00 p.m.  The parties had 
no further communication that day.  The Chapins’ attorney testified that at that point the 
provisions regarding the prepayment penalty and the partial deed release “were, I guess, open, 
for lack of a better word.”  The Lindens did not respond to the Chapins’ last request conveyed in 
the 3:38 p.m. telephone call; in fact, the Chapins did not receive any response until two days 
later.  The Chapins never exercised their right to redeem through S and F.  The Lindens 
concluded that no contract had been formed and that the Property now belonged to them.   
Following the expiration of the Chapins’ right of redemption, some additional 
conversations between the attorneys took place.  Initially, the Lindens’ attorney indicated that his 
clients would agree to at least some of the new terms.  The next day, however, he notified the 
Chapins’ attorney that the Lindens had changed their mind and no longer desired to reach any 
type of agreement with the Chapins.  The Lindens’ attorney informed the Chapins’ attorney that 
the Lindens would be listing the Property for sale.   
The Chapins then filed suit against the Lindens, arguing that they had reached an 
agreement on the afternoon of the last day to redeem and they were therefore entitled to have the 
contract specifically enforced.  The Lindens answered that no enforceable agreement had been 
formed and the Chapins’ claims were barred by the statute of frauds.  The matter was heard by 
the district judge on summary judgment who concluded no meeting of the minds occurred as to 
the material terms of the contract and consequently, there was no contract to specifically enforce.  
The court granted summary judgment to the Lindens and the Chapins appealed.   
 
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II. 
STANDARD OF REVIEW 
On appeal from the grant of a motion for summary judgment, this Court’s standard of 
review is the same as the standard used by the district court originally ruling on the motion.   
Intermountain Forest Management v. Louisiana Pacific Corp., 136 Idaho 233, 235, 31 P.3d 921, 
923 (2001).  Summary judgment is appropriate “if the pleadings, depositions, and admissions on 
file, together with the affidavits, if any, show that there is no genuine issue of material fact and 
that the moving party is entitled to a judgment as a matter of law.”  I.R.C.P. 56(c).  The burden 
of establishing the absence of a genuine issue of material fact rests at all times with the party 
moving for summary judgment.  Tingley v. Harrison, 125 Idaho 86, 89, 867 P.2d 960, 963 
(1994). 
When an action will be tried before the court without a jury, resolution of the possible 
conflict between the inferences is within the responsibilities of the trial court as fact finder.  
Cameron v. Neal, 130 Idaho 898, 900, 950 P.2d 1237, 1239 (1997).  The trial judge is not 
constrained to draw inferences in favor of the party opposing a motion for summary judgment, 
but rather the judge is free to arrive at the most probable inferences to be drawn from 
uncontroverted evidentiary facts, despite the possibility of conflicting inferences.  Intermountain 
Forest Management, 136 Idaho at 235, 31 P.3d at 923; see also Loomis v. City of Hailey, 119 
Idaho 434, 437, 807 P.2d 1272, 1275 (1991).  When questions of law are presented, this Court 
exercises free review and is not bound by findings of the district court but is free to draw its own 
conclusions from the evidence presented.  Lettunich v. Key Bank Nat’l Ass’n, 141 Idaho 362, 
366, 109 P.3d 1104, 1108 (2005).   
III. 
DISCUSSION 
 
 The Chapins assert they reached an enforceable oral agreement to purchase the Property 
from the Lindens.  Under Idaho’s statute of frauds, an agreement for the sale of real property is 
invalid unless the agreement “or some note or memorandum thereof, be in writing and 
subscribed by the party charged, or by his agent.”  I.C. § 9-505(4); see also I.C. § 9-503; 
Hoffman v. SV Co., Inc., 102 Idaho 187, 190, 679 P.2d 218, 221 (1981).  The statute further 
states, however, that the statute of frauds shall not be construed “to abridge the power of any 
court to compel the specific performance of an agreement, in case of part performance thereof.”  
 
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I.C. § 9-504.  The doctrine of part performance provides that when the parties to an agreement 
fail to reduce the agreement to writing, or otherwise fail to satisfy the statute of frauds, the 
agreement “may nevertheless be specifically enforced when the purchaser has partly performed 
the agreement.”  Bear Island Water Ass’n, Inc. v. Brown, 125 Idaho 717, 722, 874 P.2d 528, 533 
(1994).   
The doctrine of part performance works in conjunction with the doctrine of equitable 
estoppel.  “Under Idaho law, part performance per se does not remove a contract from the 
operation of the statute of frauds.  Rather, the doctrine of part performance is best understood as 
a specific form of the more general principle of equitable estoppel.”  Lettunich, 141 Idaho at 367, 
109 P.3d at 1109.  (citing Sword v. Sweet, 140 Idaho 242, 249, 93 P.3d 492, 499 (2004)). 
Equitable estoppel generally, and the doctrine of part performance specifically, assume the 
existence of a complete agreement.  See Lettunich, 141 Idaho at 367, 109 P.3d at 1109.  Like any 
contract for the sale of land, an oral agreement “must be complete, definite, and certain in all its 
terms, or contain provisions which are capable in themselves of being reduced to certainty,” 
before it will be specifically enforced by operation of the doctrine of part performance.  
Lettunich, 141 Idaho at 367, 109 P.3d at 1109 (citing Bear Island Water Ass’n, Inc., 125 Idaho at 
723, 874 P.2d at 534).  
The threshold question for this Court, then, is whether there was a meeting of the minds 
between the Chapins and the Lindens on the essential terms of their agreement.  For a land sale 
contract to be specifically enforced, the contract must typically contain the minimum provisions 
of the parties involved, the subject matter thereof, the price or consideration, a description of the 
property, and all the essential terms of the agreement.  Hoffman, 102 Idaho at 190, 679 P.2d at 
221.  The Chapins point to their acceptance of a price of $125,000, a down payment of $30,000, 
and terms addressing interest, amortization, and time for final payment.  The property and parties 
involved were clearly established, and because the Property was more than 40 acres, they argue, 
a mortgage was the only permissible type of security and was thus also an established term.  
With the essential terms off the table, say the Chapins, any additional suggestions were 
necessarily “finer points” that had no bearing on the primary formation of the contract.    
While the Chapins undoubtedly agreed to the Lindens’ proposed purchase price and 
terms, they also continued to negotiate on two other terms that were important to them, the 
partial deed-release provision and the pre-payment penalty provision.  The Chapins argue that 
 
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because they had agreed to those terms typically considered to be essential, the fact that they had 
no agreement about certain other terms which were material to them is of no consequence in 
determining whether there was a meeting of the minds.  In Lawrence v. Jones, 124 Idaho 748, 
864 P.2d 194 (1993), the Court of Appeals found that a contract for the sale of land was void for 
want of a security provision.  Id. at 750, 864 P.2d at 196.  “Although a real estate contract need 
not contain a security provision if none is contemplated, once parties attempt to provide for 
security it becomes an essential term of the contract.”  Id. at 751, 864 P.2d at 197.   
By requesting that the Lindens consider releasing their security in the Property 
incrementally as the loan was paid, the Chapins put the security term of the contract at issue.  
Moreover, despite their attorney’s protestations that the deed release and prepayment terms were 
not important to the Chapins, the Chapins testimony indicates otherwise.  At his deposition, 
when asked whether it was important to have the deed release provision in the contract, Frank 
Chapin testified, “Oh, yes.  Yes.”  Sydney Chapin testified, “It didn’t matter to me as far as 
keeping us from prepayment, as long as they would allow for a deed release.”  Frank Chapin’s 
statement demonstrates the importance of the deed release provision, while Sydney Chapin’s 
language goes further to cast the Chapins’ acceptance as conditional, “as long as they [the 
Lindens] would allow for a deed release.”  Both statements underscore the materiality of the term 
to the contract as a whole.  Proposed on the afternoon of the final day of negotiations, the term 
was never accepted by the Lindens.  The absence of a meeting of the minds on this material term 
supports the district court’s finding that no contract was formed.   
Because we find that no meeting of the minds occurred, we need not reach the question 
of whether part performance would exempt the alleged oral agreement from the statute of frauds.  
Similarly, we do not address the Chapins’ claim that the contract should be enforced under a 
theory of promissory estoppel.  Promissory estoppel, as the district court correctly observed, is “a 
substitute for consideration, not a substitute for agreement between the parties.”  Lettunich, 141 
Idaho at 367, 109 P.3d at 1109.  It is not for lack of consideration that the Chapins’ claim fails, 
but rather for lack of an agreement itself.   
 
 
 
 
 
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IV. 
CONCLUSION 
Because no agreement was reached by the end of the last day before the right of 
redemption expired, we affirm the district court’s order granting summary judgment to the 
Lindens.  We award costs on appeal to the Lindens. 
 
Chief Justice SCHROEDER, and Justices EISMANN, BURDICK and JONES 
CONCUR. 
 
 
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