Court Opinion

ID: 5173420
Source: CourtListenerOpinion
Date Created: 2022-01-02 05:13:11.606323+00
Date Added: 2024-06-11T08:26:11.125799
License: Public Domain

BISTLINE, Justice,
specially concurring in affirming the district court, disagreeing with award of attorneys’ fees to both respondents:
The Carter brief informs us as follows:
4. An Earnest Money Agreement dated December 17, 1979, was prepared by Kirby, and signed by the Carters, it comprised an offer to purchase approximately 600 acres of land located in Cassia County, Idaho, and 300 acres located in Box Elder County, Utah. The lands were represented as owned by the Respondents Rich. The offer was signed by the Carters, Riches, and by Kirby as the real estate broker and agent of Riches.
5. The Earnest Money Agreement dated December 17, 1979, expressly agreed to furnish the Carters with marketable title to the real estate.
Appellants’ Brief, p. 3.
The Rich brief informs us similarly:
11. Some time prior to December 17, 1979, Carter submitted an offer to Rich by means of an Earnest Money Agreement for the purchase of the Idaho and Utah property. That offer was rejected by Rich and thereafter, on December 17, 1979, a second offer by way of an Earnest Money Agreement was presented to Rich and the same was accepted by Rich.
12. Kirby with the consent and acquiescence of Carter and Rich employed attorney Jenkins of Logan, Utah, to prepare a contract for the sale of the Rich property to Carter. A draft of the contract was prepared by said attorney after he had received suggestions, requests and other input from Carter and Rich. In January of 1980, a draft of a contract was discussed by the attorney and Carters and a copy of the draft was delivered to Carters and Rich.
17. Prior to the time Carter signed the Real Estate Installment Purchase Contract dated February 28,1980, Carter was aware that Rich was not the owner, but was purchasing the property described therein by means of contracts.
Respondents’ Brief, pp. 10-12.
Pertinent conclusions of law of the trial court are:
1. The irrigation water used to irrigate the Idaho real property was discussed between the plaintiff Scott Carter and the defendant Jeff Rich in the presence of the defendant Sherwin O. Kirby prior to the time that the Real Estate Installment Purchase Contract was prepared and executed by the parties. Such discussion was a part of the preliminary negotiations for the sale contract to be prepared.
2. All preliminary negotiations between the plaintiffs and the defendants for the sale and purchase of the real property under the contract of February 28, 1980, were merged into the contract of February 28, 1980, including any terms contained in the Earnest Money Agreement of December 17, 1979.
3. At the time the contract was prepared it clearly stated, and does not state, that the lands situated in Idaho and Utah were to be sold together, with all rights, rights-of-way, easements, water rights, if any, and appurtenances thereunto belonging or in any way appertaining to such real property.
The plaintiffs read the contract, and such contractual language, consulted with their attorney about such contractual language, and executed the contract without changing such language or requesting a change. Thus, the written contract is binding, and supersedes all *690previous oral statements and/or representations made during the negotiations.
4. The contract of February 28, 1980, consummated all prior agreements and negotiations between the plaintiffs and the defendants, and such contract supersedes all previous understandings; and the intent of the parties must be ascertained from such contract, and the contract of February 28, 1980, was fully integrated. Chapman v. Haney Seed Co., 102 Idaho 26, 624 P.2d 408 (1981); Pinnacle Peak Developers v. TRW Investment Corp., 129 Ariz. 385, 631 P.2d 540 (1980); J. Calimari, Contracts 2d Ed., Sec. 3-1 to 3-13 (1979).
13. The Real Estate Installment Purchase Contract dated February 28, 1980, between the defendants Rich and the plaintiffs fully documented the understandings of the parties, and reliance upon representations contrary to the specific provisions of such contract was not justified by the plaintiffs.
18. The defendants Rich would have been able to convey good title to the real property described in the contract when the time for the conveyance of the land would have arisen, and this is sufficient, even though the title of the defendants Rich at the time they entered into the executory contract for the conveyance of the land was defective.
22. Where a party desires to rescind on the ground of misrepresentation or fraud, he or she must, upon the discovery of the facts, at once announce his or her purpose and adhere to it. If such party continues to treat the property involved as his or her own, the right to rescission is lost and the party will be conclusively bound by the contract. 13 Am.Jur.2d Cancellation of Instruments, Sec. 44 (1964).
23. There was no misrepresentation or fraud by the defendants. Thus, there are no grounds for rescission of this contract. Even absent this determination, the plaintiffs’ acts were inconsistent with rescission. The plaintiffs continued in possession of the real property, continued to farm it and did not contact the defendants regarding the state of the title or existing water licenses, but did request of the defendant Kirby that he assist them in finding adequate financing to obtain a dairy herd consistent with their continuing possession of the land.
24.The plaintiffs waived their right, if any, to rescind the Real Estate Installment Purchase Contract dated February 28, 1980, by their failure to promptly give notice of their intent to rescind once the grounds for rescission may have arisen, and by continuing to treat the contract as in existence.
The earnest money agreement of December 17, 1979 contains this language:
[T]he seller [the Riches] agrees to furnish good and marketable title with abstract brought to date or at Seller’s opting a policy of title insurance in the name of the purchaser____
Plaintiffs’ Ex. 2.
The contract of February 28, 1979, however, contained this paragraph:
6. WARRANTY OF TITLE. Seller convenants and warrants that Seller shall furnish Buyer a Warranty Deed to the real property described upon full completion by Buyer of the terms and conditions of this contract and agrees to furnish lawful title free and clear of all encumbrances to the date that possession is given with the exception of those encumbrances expressly stated herein. Seller further agrees to furnish Buyer a title insurance policy naming Buyer as insured in the amount of $820,000.00 upon full completion of the terms of this contract, or at the time Seller’s deed is released; Escrow Holder is hereby authorized to withhold from the final installment under this Agreement sufficient funds to purchase such a title insurance policy.
It is hereby acknowledged that Parcels 3, 4, and 5 of the above-described Cassia County Property are subject to that cer*691tain contract of sale dated July 10, 1975 between Reed S. Stewart and Ruth 0. Stewart, husband and wife as Sellers and Wayne R. Rich and Gene M. Rich, husband and wife as Purchasers, which contract Sellers agree to continue to perform and satisfy. It is further understood and agreed that pursuant to said contract, Sellers, Reed S. Stewart and Ruth 0. Stewart shall not obtain fee title in the subject realty of that contract until 1988.
Plaintiffs’ Ex. 1.
The second paragraph of Conclusion No. 3 is somewhat disturbing. It is indeed applicable where one party to a contract attempts to modify the contract with parol evidence of other conditions and provisions. But it is not applicable to preclude parol evidence which is offered to prove false statements which are the basis of an action based on fraud in the inducement where the relief sought is equitable — to rescind— or in tort where the contract is affirmed and the relief sought is attributable to false representations or fraudulent non-disclosure.
This case is somewhat unique. Here the Carters’ prayer for relief against the Riches was in the triple alternative: It sought damages against the defendants for breach of contract in the misrepresentation and warranty of the condition of the title to the real estate; it sought a decree of rescission and a restitution of monies paid; and it sought reformation of the contract and adjustment of the purchase price to reflect lack of licensed water rights. The record does not show that the defendants ever moved the court for an order requiring the Carters to elect as between what appear to be inconsistent theories. Such being the state of affairs, the district court had before it an unusual case to try. The Carters, who had demanded a jury trial, were clearly entitled to such on their tort theory for damages sounding in fraud and deceit. It can only be surmised that they tacitly agreed that all claims and theories could be tried to the court.
The trial court’s findings and conclusions are very extensive and clearly were intended to, and do, encompass all theories of the parties, including the counterclaim (more appropriately a cross-complaint) of the Riches that the contract had been terminated.
While, as stated above, it appears that doctrine of merger may have been inappropriately considered by the court, the findings and conclusions that the Carters were not justified in relying on oral statements of quality of the title on signing of the written contract on February 28 (as well as the clear covenant of the earnest money agreement as to then present marketability of the title) would appear to sustain- the trial court in denying the Carters any relief.
II.
As presented to the trial court the case was not an easy one. The cross-complaint which asked the court to uphold the fait accompli forfeiture proceedings was in essence a quiet-title action. The trial court so perceived, as per paragraph 5 of the final judgment. In awarding attorney's fees to the Riches, the court went exactly contrary to the majority holding in Ellis v. Butterfield, 98 Idaho 644, 650, 570 P.2d 1334, 1340 (1977): “Having terminated the contract, they cannot later assert the attorney fee clause in it while defending successfully against appellants’ action to reinstate the contract.” See Ellis, Id. at 650, 570 P.2d at 1340 (Bistline, J., dissenting): “I would also grant the vendor the relief here denied him by the majority. Clearly, he deserves attorney’s fees for proceedings brought to protect his rights which have been jeopardized by a defaulting purchaser.”
The majority holding in the Ellis case precluded the district court from awarding attorney’s fees to the Riches.1 Likewise, *692as in Ellis, and because of Ellis, this Court cannot base an award of attorney’s fees on a contractual provision exactly like that in Ellis.
In awarding substantial attorney’s fees to the Riches the trial court relied on this paragraph of the contract:
COSTS OF ENFORCEMENT. If it is necessary to enforce performance under this contract by referring to an attorney, the defaulting party shall be liable for all costs incurred, including a reasonable attorney fee.
R., p. 275.
The cross-action clearly was not an action to enforce the contract, but rather to quiet title to the real estate free of any cloud on title by reason of the contract. As in the Ellis case, the Riches had previously terminated the contract in accordance with their contract right to do so. So, as was held by the Ellis majority, there was thereafter no contract in existence to enforce.
As to the Riches, as defendants, the trial court having gone the contract route on their request for attorney's fees, did not have to rule whether the case was brought frivolously, unreasonably, or without foundation.
But, as to the defendant Kirby, his claim for attorney’s fees was so predicated upon Rule 54(e)(1). In denying any attorney’s fees to Kirby, the trial court ruled thusly:
Although the plaintiffs did not ultimately persuade this court as to their claims, this court determines, from the facts presented to it, that the plaintiffs’ claims were not brought frivolously, unreasonably or without foundation; therefore, the defendant Kirby does not have the right to an award of attorney’s fees in this action.
R., p. 277.
Nothing which I see in this record persuades me that the trial court’s perception of the sincerity of the Carters’ claims, and the complexity of the case — made so largely by a failure of the Riches to require an election upon the part of the Carters, was not proper. As the trial court said of the trial: “Although the plaintiffs did not ultimately persuade this Court as to their claims ...,” equally true here I am not persuaded to impugn the sincerity of the appeal by ruling that it was frivolously or unreasonably brought. We will, in time, and by virtue of the majority’s award of attorneys’ fees to both defendants, see how much time and effort — reduced to dollars— was expended in defending against an appeal impliedly said to be frivolous, unreasonable, or without foundation.

. My own view, however, continues to be that the majority was wrong in Ellis. As was said in our most recent case, where there was a differing provision as to awarding attorney’s fees, Ayotte v. Redmon, 110 Idaho 726, 718 P.2d 1164, 1165 (1986): “Who wins the race to the court*692house is not dispositive of the entitlement to attorney's fees.” Here, the trial court in like language reasoned that nothing in the particular contract provision made its application dependent upon which party was the first to file a lawsuit. R., p. 277.