Court Opinion

ID: 9566652
Source: CourtListenerOpinion
Date Created: 2023-08-21 19:41:45.228398+00
Date Added: 2024-06-11T09:38:52.522453
License: Public Domain

BURNETT, Judge,
specially concurring.
The Court today sustains the judgment of rescission, but holds that the Murrs are not entitled to restitution from Seafirst. Thus, the effect of today’s decision is that the Murrs are absolved of any further obligation on the promissory note but they cannot recover from Seafirst the expenditures they have made on the subject property. Although I agree with this “bottom line” result, I think it is better supported by an alternative line of reasoning. I will outline this alternative briefly.
Mutual mistake calls forth an equitable remedy. The questions presented are how this remedy should be determined in the first instance and how it later should be reviewed on appeal. Many courts have spoken to the difficulties of choosing an appropriate remedy. Most agree that a court in equity possesses “discretion” to fix a remedy so long as the court’s choice is not contrary to established equitable principles. See, e.g., HBOP, Ltd. v. Delhi Gas Pipeline Corporation, 645 P.2d 1042 (Okla.Ct.App.1982). However, a distinct preference exists for selecting the remedy least disruptive to the underlying transaction from which the dispute arises. This preference is particularly marked in situations where there is a choice between rescission and some other remedy. D. DOBBS, REMEDIES § 11.3 (1973) (hereinafter “DOBBS”).
On appeal, several courts have denominated the standard of review as one of “abuse of discretion.” See, e.g., Scott v. Hjelm, 188 Mont. 375, 613 P.2d 1385 (1980); Mulder v. Mittelstadt, 120 Wis.2d 103, 352 N.W.2d 223 (Ct.App.1984). However, many other appellate courts adhere to the de novo standard historically found in equity cases. They will express their own judgment on the choice of a remedy. E.g., Cuzick v. Lesly, 16 Ark.App. 237, 700 S.W.2d 63 (1985); Hilo Crane Service, Inc. v. Ho, 5 Hawaii App. 360, 693 P.2d 412 (1984); Bartlett v. Whidden, 252 Or. 501, 449 P.2d 850 (1969). However, they will defer to the lower court’s findings of fact. See Town of Eustis v. Stratton-Eustis Development Corp., 516 A.2d 951 (Me.1986).
Our Court has hinted at the de novo standard. In Thieme v. Worst, 113 Idaho 455, 745 P.2d 1076 (Ct.App.1987), we upheld a trial judge’s choice of a remedy less drastic than rescission. We expressed our own view as to the proper outcome, stating that “the trial judge fashioned the correct remedy.” Id. at 459, 745 P.2d at 1080. We went on to suggest that discretion does not necessarily imply broad appellate deference. “As long as the trial court properly exercises its discretion, within permitted bounds, we will defer to that court’s discretionary authority to determine the appro*786priate ... relief as the circumstances and justice require.” Id. at 460, 745 P.2d at 1081 (emphasis added). See also Dursteler v. Dursteler, 108 Idaho 230, 697 P.2d 1244 (Ct.App.1985) (altering restitutionary remedy chosen by trial court).
In the present case, I believe the choice of rescission would fail even a deferential test. The district judge stated no reasons for his choice. Absent such an explanation, we cannot justify the sweeping deference inherent in an “abuse of discretion” review. The remedy of rescission is seldom preferred in cases where a vendor and purchaser enter into a contract for the sale of land under a mutually mistaken assumption as to the size of the parcel. The courts long have recognized the appropriateness of a less intrusive remedy, abatement, in such cases. As stated by the presiding judge in Hill v. Buckley, 34 Eng.Rep. 153, 155 (1811), “Where a misrepresentation is made as to the quantity, though innocently, I apprehend the right of the purchaser to be what the vendor can give; with an abatement out of the purchase-money for so much as the quantity falls short of the representation.” This approach commends itself even where the amount of acreage thought to be conveyed is a critical element of a purchaser’s plan to subdivide. As our Supreme Court has noted, specific performance and “damages” or “restitution” often are adequate to compensate a purchaser for any overpayment due to a deficiency in the size of the purchased tract. Simpson v. Johnson, 100 Idaho 357, 597 P.2d 600 (1979). See generally, DOBBS § 12.10. The remedy of performance plus abatement is particularly appropriate where the purchaser can still make substantial use of the remaining part of the land. See Harris v. Axline, 323 Mich. 585, 36 N.W.2d 154 (1940) (trial court decree granting rescission set aside where frontage of lot was 34, rather than 40, feet long, but where court concluded that purchasers could still commercially develop property as planned).
In my view, abatement was the preferred remedy in this case. Had this remedy been chosen, we could have avoided the nettlesome issue of Seafirst’s alleged obligation to pay restitution to the Murrs. In place of that issue we would have confronted the narrower question whether the Murrs would remain liable to Seafirst on the promissory note. In my view, the answer to that question would be “no.” As stated in this Court’s lead opinion, Seafirst allowed the property to be sold in foreclosure after the district judge announced his intention to grant rescission. By this conduct Seafirst effectively waived its right on appeal, or in any subsequent proceedings, to insist upon enforcement of the promissory note. There is no longer any mutuality of obligation underlying the note. A court in equity will not enforce a unilateral obligation. The Murrs would be entitled to relief from the balance of the abated obligation on the note.
Thus, my analysis leads me to the same “bottom line” result reached by my colleagues. The Murrs take nothing from Seafirst, and Seafirst takes nothing from the Murrs. The parties bear their own losses — which were, after all, occasioned by a mutual mistake in a speculative commercial venture. This, I conclude, is the most equitable result available in an unhappy case.