Court Opinion

ID: 9786980
Source: CourtListenerOpinion
Date Created: 2023-08-31 00:07:10.512179+00
Date Added: 2024-06-11T07:36:50.704949
License: Public Domain

HILL, Justice,
dissenting.
[122] I respectfully dissent because I do not agree that the resolution of this case should be decided on how, or if, the parol evidence rule should be applied to the circumstances of this case. Because these parties mutually adopted a mode of performing their contract that differed almost in its entirety from the terms of that contract, I would affirm the basic findings of the district court and its conclusions of law. My perception of the trial court's findings is that it found Margot Belden's testimony to be untruthful and John Thorkildsen's to be, per*326haps, just somewhat more believable than that of Belden. Thus, the district court opted to rely principally on the documentary evidence and less on the "testimony." Where I have set out facts below, I do so because they appear to be undisputed facts that do not really go to the issues to be decided by the trial court or by this Court. The only reliable evidence presented at the "trial" in this case were the written documents that controlled the relations of the parties.
[128] As I perceive the record on appeal in this case, in late 1998 or early 1999, Mar-got Belden and her son Sean O'Brien, as "partners," bought a business known as Fish Creek Interiors and Gifts (at that time "they" paid $500,000.00 for the business and $2,000,000.00 for the building it was housed in). On June 5, 2000, John Thorkildsen, at Belden's urging, agreed to purchase Sean O'Brien's 30% interest in Fish Creek Interiors and Gifts. Thorkildsen had been an employee of that business for many years. He was paid a salary of $70,000.00 a year by Belden. O'Brien's 30% interest was valued at $180,000.00, because the basis in the "business" portion of their investment had increased from $500,000.00 to $600,000.00 in the year or so they had owned it. Thorkild-sen had no money with which to purchase that interest, and so Belden took Thorkildsen to the Bank of Jackson Hole, where she and Thorkildsen borrowed $180,000.00 (posting Belden's property as collateral), so that Thorkildsen could pay O'Brien for his interest. Payments of $3,870.16 a month ($46,-441.92 annually) were made on that loan until, on June 8, 2001, it was paid off in its entirety. At that time the "partnership" disappeared, and Fish Creek Design LLC, a documented business organization, came into being. The money to pay off the earlier loan that bound both Belden and Thorkildsen was borrowed by the new LLC in the amount of $151,781.37. The following individuals signed that contract: "Margot Belden, FIN MNGR; Cheryl Wery, D MNGR; John Thorkildsen, RET MNGR; and Jacqeline Jenkins, BUS MNGR." The payments on this loan were $3,623.44 a month, and payments were made until, on February 28, 2008, the loan was paid off in fall.
[¥24] Thorkildsen conceded that he had never personally made any of the payments. It appears that most of the payments were made by one or other of the Fish Creek entities and both Belden and Thorkildsen were members of those entities until Thork-ildsen was fired on May 9, 2002. To the extent Thorkildsen ever owned any interest in either of the Fish Creek entities, he never received any payment for it. Belden and Thorkildsen each had a "story." However, giving any particular credence to the details of either of those stories would do a disservice to the law governing contracts and business relations in general.
[125] The parol evidence rule has been described thus:
It is at once perhaps the simplest substantive rule of contract law to state and to understand in its abstract foundational purpose, but undoubtedly the most difficult rule to apply to concrete fact situations. Generally stated, this rule prohibits the admission of extrinsic evidence of prior or contemporaneous oral agreements, or prior written agreements, to explain the meaning of a contract when the parties have reduced their agreement to an unambiguous integrated writing. The rule springs from several sources. It reflects and implements the legal preference, if not the talismanic legal primacy, historically given to writings. It effectuates a presumption that a subsequent written contract is of a higher nature than earlier statements, negotiations, or oral agreements by deeming those earlier expressions to be merged into or superseded by the written document. Finally, it seeks to achieve the related goals of insuring that the contracting parties, whether as a result of miscommunication, poor memory, fraud, or perjury, will not vary the terms of their written undertakings, thereby reducing the potential for litigation.
11 Williston on Contracts, Parol Evidence Rule, § 38:1, at 540-50 (4th ed.1999).
[126] Continuing, Williston states:
For purposes of the rule, "extrinsic evidence" includes any evidence that seeks to prove an agreement or understanding aris*327ing out of the parties' words or conduct spoken or engaged in prior to or contemporaneous with the execution of the final, fully integrated written agreement. Such evidence, according to the traditional approach of the vast majority of courts, may not be used to explain, vary, supplement, or contradict unambiguous language appearing in the contract.
11 Williston on Contracts, supra, § 33:1, at 550-51.
[127] I am concerned that, in elevating these extremely crude contractual agreements that were virtually ignored by the parties for years and by infusing these very informal court proceedings with greater substance than they deserve, so as to make this a case that merits the application of the parol evidence rule, we run the risk so eloquently identified in the Williston treatise:
The fact that the parol evidence rule may be stated simply belies a perplexing and confusing number of difficulties in its application. As has been seen, the facially simple rule states that, absent fraud, mistake or other invalidating cause, the parties final written integration of their agreement may not be varied, contradicted or supplemented by evidence of prior or contemporaneous oral agreements, or prior written agreements. Beneath this facial simplicity, however, is, as one federal court has declared, a "morass": "To even the most courageous Pickwickian, the parol evidence rule must seem a treacherous bog in the field of contract law. Interspersed in this quagmire are quicksand-like state court decisions, which appear equitable in specific situations but remain perilous for legal precedent. Federal courts, attempting to clarify, have sometimes but confused and compounded muddled interpretation of the axiom."
11 Williston on Contracts, supra, § 33:4, at 569-70.
[128] We have held that: "As a general rule, if the parties mutually adopt a mode of
performing their contract differing from its strict terms or if they mutually relax the contract's terms by adopting a loose mode of executing them, neither party can go back upon the past and insist upon a breach because the contract was not fulfilled according to its letter." Schuler v. Community First Nat. Bank, 999 P.2d 1303, 1305 n. 1 (Wyo. 2000) (citing Quin Blair Enterprises, Inc. v. Julien Constr. Co., 597 P.2d 945, 951 n. 6 (Wyo.1979)).
[129] Parties to a contract are free to ignore the terms of their contracts, but they must also understand that they may bear the consequences of such disregard when breach becomes a fact of life. If parties mutually adopt a mode of performing their contract differing from its strict terms or if they mutually relax its terms by adopting a loose mode of executing it, neither party can go back upon the past and insist upon a breach, because it was not fulfilled according to its letter. Here there was never any mutual agreement to vary any terms. There was unilateral disregard of terms. There were terms neither party ever seemed to be cognizant of or understand. However, there was never any mutual agreement to do anything different, and the parties must be held bound to their agreements. It is in just such instances as this that it becomes most important to read and strictly construe contracts. Quin Blair Enterprises, Inc. v. Julien Constr. Co., 597 P.2d 945, 951 n. 6 (Wyo. 1979); also see Collins v. Finnell, 2001 WY 74, 1 12, 29 P.3d 93, 98 (Wy0.2001); Colorado Interstate Gas v. Natwral Gas Pipeline, 842 P.2d 1067, 1070 (Wyo0.1992).
[130] I would affirm the district court's judgment.