Opinion ID: 2596761
Heading Depth: 2
Heading Rank: 3

Heading: District Court's Judgment after Trial

Text: Finally, Vreeken appeals from the district court's final judgment, under which the court found Vreeken personally liable on the payout notes as a result of his wrongful conduct. Vreeken argues: (1) the district court erred by failing to find the Golds breached their fiduciary duty to him, (2) the district court abused its discretion under certain evidentiary rulings, and (3) some of the district court's findings of fact are not supported by substantial and competent evidence. We affirm the district court's final judgment.
First, Vreeken argues the district court erred by failing to find that the Golds breached their fiduciary duty to him. Vreeken argues there was evidence produced at trial that demonstrated that the Golds breached their fiduciary duty to Vreeken, causing him to incur over $2,000,000 in monetary damages and to lose critical security interests. Vreeken claims that his counsel made a motion to amend the pleadings to conform to the evidence at the close of trial, which included evidence of breach of fiduciary duty, and also argues the district court granted this motion. Accordingly, Vreeken assigns as error the district court's failure to rule on his claim for breach of fiduciary duty. A motion to amend the pleadings to conform to the evidence is governed by I.R.C.P. 15(b). The rule provides, inter alia : When issues not raised by the pleading 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. I.R.C.P. 15(b). The requirement that the unpleaded issues be tried by at least the implied consent of the parties assures that the parties have notice of the issues before the court and an opportunity to address those issues with evidence and argument. M.K. Transp., Inc. v. Grover, 101 Idaho 345, 349, 612 P.2d 1192, 1196 (1980). The determination whether an issue has been tried with the consent of the parties is within the trial court's discretion, and such determination will only be reversed when that discretion has been abused. Lindberg v. Roseth, 137 Idaho 222, 226, 46 P.3d 518, 522 (2002). Vreeken argues that his counsel moved to amend the pleadings to add a claim for breach of fiduciary duty through the following language: Prior to resting, we'd simply make a motion to conform the pleadings to the evidence presented. Vreeken further asserts that the district court granted their motion by responding as follows: Thank you. All right. That completes the evidentiary portion of the trial. Without a specific motion indicating what cause of action is to be added and evidence in the trial record supporting the amendment, the trial court cannot make a reasoned analysis to guide its discretionary act. Nor does this Court have grounds upon which to review the trial court's discretionary decision. Therefore, we hold that the district court was not required to make any findings as to whether the Golds breached their fiduciary duty to Vreeken.
Next, Vreeken assigns error to some of the district court's evidentiary rulings. Specifically, Vreeken argues that the district court abused its discretion by excluding certain documentary evidence before trial, and by admitting Thomas Gold's testimony regarding his telephone conversation with Christianne under I.R.E. 801(d)(2)(D). We hold that the district court did not abuse its discretion in making these evidentiary rulings.
This Court reviews challenges to a trial court's evidentiary rulings under the abuse of discretion standard. Perry v. Magic Valley Reg'l Med. Ctr., 134 Idaho 46, 50, 995 P.2d 816, 820 (2000). These include challenges to a trial court's decision to admit or exclude documentary and/or testimonial evidence. Error is disregarded unless the ruling is a manifest abuse of the trial court's discretion and affects a substantial right of the party. Id. at 51, 995 P.2d at 821. To determine if there has been an abuse of discretion, this Court applies the following three factors: (1) whether the trial court correctly perceived the issue as one of discretion; (2) whether the trial court acted within the boundaries of this discretion and consistent with the legal standards applicable to the specific choices available to it; and (3) whether the trial court reached its decision by an exercise of reason. City of McCall v. Seubert, 142 Idaho 580, 586, 130 P.3d 1118, 1124 (2006).
Vreeken argues that the district court abused its discretion in excluding certain documentary evidence before trial, specifically, the written lease agreement for an item of disputed equipment. Vreeken disclosed this documentary evidence five days before trial, which violated the district court's pre-trial order that each party's list of proposed exhibits be submitted no later than fourteen days before trial. Vreeken claims he did not submit these documents earlier because he was unaware of their importance until the months leading up to trial. However, this excuse does not justify the late disclosure. Vreeken was notified approximately one year in advance of the fourteen day deadline for exhibits. As the district court noted, This case ha[d] been pending nearly six years. There [was] plenty of opportunity to dig out this material and get it submitted timely in discovery and have it be part of the ongoing case. It's simply not excusable to [reveal this evidence] the week before trial and [have it be] included in a late filed exhibit list without [the evidence] being disclosed as part of the normal discovery procedure. We hold the district court did not abuse its discretion in excluding the documentary evidence as being untimely.
Vreeken also asserts that the district court erred by admitting hearsay evidence that the court determined was supportive of the finding that Christianne was Vreeken's agent. During trial, Thomas Gold testified that Christianne disclosed to him over the phone that the funds used to procure her assignment from the Bank of Idaho were from her father, she had only done what her father told her to do regarding the assignment, and she did not want any part of the transaction. Vreeken objected to this testimony. The district court determined these statements fell under I.R.E. 801(d)(2)(D) as statements made by a party's agent concerning a matter within the scope of an agency made during the existence of the relationship, and accordingly admitted the testimony as non-hearsay. On appeal, Vreeken argues that there is no independent evidence in the record indicating that Christianne was Vreeken's agent. Under Idaho Rule of Evidence 802, hearsay is generally not admissible. However, I.R.E. 801(d)(2)(D) provides that a statement is not hearsay if it is offered against a party and is ... a statement by a party's agent or servant concerning a matter within the scope of the agency or employment of the servant or agent, made during the existence of the relationship. The Idaho Court of Appeals has held that a foundational requirement of this rule is that independent evidence of the agency relationship, i.e., evidence apart from the alleged agent's own statements, are necessary before the alleged agent's out-of-court declarations may be admitted. R Homes Corp. v. Herr, 142 Idaho 87, 92, 123 P.3d 720, 725 (Ct.App.2005). This holding was based on precedent developed prior to the adoption of the Idaho Rules of Evidence, in which the Court determined that independent evidence of an agency relationship is required. Id. We find that the record in this case contains independent evidence of an agency relationship between Christianne and Vreeken. During his previously published deposition, Vreeken testified that Christianne helped him manage Lockwood, thereby acting as his agent in the day-to-day function of the company. Vreeken also stated that he asked Christianne to pay off the Bank of Idaho loan with the money he gave her. Based on this evidence, we find that the district court did not abuse its discretion in determining that Christianne was acting as an agent at the time of the transfer, and that her comments to Thomas Gold concerning the transfer were admissible as a statement by a party's agent under I.R.E. 801(d)(2)(D). As such, we affirm the district court's ruling to admit Thomas Gold's testimony under I.R.E. 801(d)(2)(D).
Finally, Vreeken argues that some of the district court's findings of fact are not supported by substantial, competent evidence. These include findings that: (1) Vreeken engaged in wrongful conduct by filing UCC statements against LP and LPI's assets, and by orchestrating Christianne's procurement of the Bank of Idaho's interest in the LPI loan; (2) certain LPI assets that Vreeken purchased were capital contributions; and (3) Christianne's assignment from the Bank of Idaho was void. We hold that these findings are supported by substantial, competent evidence and, therefore, we affirm.
When reviewing a trial court's conclusions following a bench trial, our review is limited to ascertaining whether the evidence supports the findings of fact, and whether the findings support the conclusions of law. Borah v. McCandless, 147 Idaho 73, ___, 205 P.3d 1209, 1213 (2009). Since it is the province of the trial court to weigh conflicting evidence and testimony and to judge the credibility of witnesses, this Court will liberally construe the trial court's findings of fact in favor of the judgment entered. Id. These findings of fact will not be set aside unless the trial court's findings are clearly erroneous. Ransom v. Topaz Mktg., L.P., 143 Idaho 641, 643, 152 P.3d 2, 4 (2006). If the trial court based its findings on substantial evidence, even if the evidence is conflicting, this Court will not overturn those findings on appeal. Borah, 147 Idaho at ___, 205 P.3d at 1213. Furthermore, this Court will not substitute its view of the facts for that of the trial court. Ransom, 143 Idaho at 643, 152 P.3d at 4. However, we exercise free review over matters of law. Borah, 147 Idaho at ___, 205 P.3d at 1213.