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10/26/93 VIOLET SCHIEWE v. WILLIAM A. FARWELL AND

Filed: October 26, 1993.

VIOLET SCHIEWE, A PERSONAL REPRESENTATIVE FOR THE ESTATE OF H. ARTHUR SCHIEWE, AND VIOLET SCHIEWE, AN INDIVIDUAL ACTING IN HER OWN PERSONAL CAPACITY, PLAINTIFF-APPELLANT
v.
WILLIAM A. FARWELL AND IRENE FARWELL, HUSBAND AND WIFE, AND MARY CURL AND MARIAN BASTERRECHEA, DEFENDANTS-RESPONDENT



On petition for review from a decision by the Idaho Court of Appeals which reversed a decision of the District Court of the Fifth Judicial District of the State of Idaho, Cassia County, Honorable George Granata, Jr., District Judge. 1993 Opinion No. 117

Trout, McDEVITT, McDERMOTT, Bistline

Author: Trout

TROUT, Justice.

I.

BACKGROUND AND PRIOR PROCEEDINGS

This is a landlord/tenant case involving an oral lease of land and a contract under the federal Conservation Reserve Program (CRP). The plaintiff, Violet Schiewe (Schiewe), originally brought this suit as a declaratory judgment action in district court to determine her rights as a tenant on land owned by respondents, Irene and William Farwell (Farwells), Mary Curl (Curl) and Marian Basterrechea (Basterrechea). Farwells leased the land from the other respondents and administered it, together with their own, as one parcel of approximately 2,800 acres. Schiewe and her husband leased the land for farming through Farwells under a written contract for the years 1970 through 1974. Thereafter from 1975 through 1987, Schiewe and her husband maintained possession as holdover tenants on a year-to-year basis under the same terms as their previous written lease.

In 1987, Farwells decided to enter 2,214 acres of the land into a CRP contract with the federal government. This program provides reimbursement to farm owners and operators who desire to take certain ground out of production.[Footnote 1] The Schiewes were included in the contract as operators of the ground in question who desired to participate in the program. The contract required that the participants place the land into the CRP program for a period of ten years.

After Mr. Schiewe died in July of 1987, his widow prepared the land by spraying for noxious weeds and planting grass seed pursuant to the requirements of the contract. Farwells and Schiewe split the cost of the seed and the herbicide and received partial reimbursement from the federal government. Schiewe paid for spraying of the land, repaired equipment and provided labor, for which she was not reimbursed. Schiewe and Farwells divided the profits under the CRP contract according to the same terms as their previous sharecropping agreement. Farwells and Schiewe were each to receive about $50,000 per year after Curl and Basterrechea had been paid.

In 1988, Farwells requested that Schiewe sign a five-year lease. Schiewe refused to sign the lease because she believed she had a right to remain on the land for ten years under the terms of the CRP contract. As a result, Farwells threatened to evict Schiewe as a holdover tenant and Schiewe brought an action in district court to determine if she had a right to remain on the land.

The district court held that Schiewe was operating under an oral year-to-year lease and did not have any extended rights to lease the land under the CRP contract. The court also found that the doctrine of equitable estoppel did not apply because Farwells did not misrepresent or conceal material facts in negotiations with Schiewe.

Schiewe appealed and the case was assigned to the Court of Appeals. In her brief on appeal, Schiewe argued that: (1) the CRP contract qualifies as a lease under the circumstances of this case; (2) the doctrines of equitable estoppel and part performance should apply; (3) she had a right to remain on the land as an "operator" under the CRP contract; and (4) Farwells should not have been awarded costs.

The Court of Appeals held that Schiewe had a right to stay on the land because the CRP contract created legal obligations which were independent of any obligations created by the prior lease. The Court also concluded that Schiewe did not intend to limit her argument to the theory of equitable estoppel and found that the trial court erred in not applying quasi-estoppel to this case. Farwells petitioned the Supreme Court to review the decision of the Court of Appeals reversing the trial court and this Court granted review.

II.

THIS COURT WILL NOT ADDRESS THE ISSUE OF QUASI ESTOPPEL AS THAT ISSUE WAS NOT RAISED BEFORE THE TRIAL COURT

In cases which come before the Supreme Court on a petition for review of a Court of Appeals decision, this Court gives serious consideration to the views of the Court of Appeals; however, this Court reviews the opinion of the trial court directly. Matter of Hanson, 121 Idaho 507, 509, 826 P.2d 468, 470 (1992). On appeal, neither this Court, nor the Court of Appeals, can consider issues which were not raised before the trial court. See Old Nat'l Bank of Washington v. Tate, 122 Idaho 401, 402, 834 P.2d 1317, 1318 (1992); Sun Valley Shopping Center, Inc. v. Idaho Power Co., 119 Idaho 87, 94, 803 P.2d 993, 1000 (1991). In her response to Farwells' petition for review, Schiewe asserts that she raised the issue of quasi estoppel at trial. We disagree.

Quasi-estoppel "precludes a party from asserting, to another's disadvantage, a right inconsistent with a position previously taken by [them]. The doctrine applies where it would be unconscionable to allow a person to maintain a position inconsistent with one in which [they] acquiesced, or of which [they] accepted a benefit." KTVB, Inc. v. Boise City, 94 Idaho 279, 281, 486 P.2d 992, 994 (1971). The doctrine of quasi-estoppel is distinguishable from equitable estoppel in that "no concealment or misrepresentation of existing facts on the one side, nor ignorance or reliance on the other, is a necessary ingredient." Obray v. Mitchell, 98 Idaho 533, 538, 567 P.2d 1284, 1289 (1977); see also Hecla Mining Co. v. Star-Morning Mining Co., 122 Idaho 778, 784, 839 P.2d 1192, 1197 (1992).

At trial, Schiewe did not specifically plead quasi-estoppel, nor did she argue case law involving quasi-estoppel. In her reply to Farwells' counterclaim, Schiewe alleged as an affirmative defense that she materially changed her position in reliance on oral representations made by Farwells and, accordingly, Farwells should be estopped from denying the validity of the ten year contract. In briefs to the trial court, Schiewe alleged that Farwells made a false representation by entering into the ten-year contract without the intent to include Schiewe in the full ten years of the contract. The elements of false representation and reliance indicate that Schiewe raised and argued the theory of equitable estoppel, not quasi-estoppel. The trial court, after considering the pleadings, arguments and evidence presented by the parties, ruled on the issue of equitable estoppel which was presented to it and did not address the issue of quasi estoppel. We conclude that the issue of quasi-estoppel was not raised at trial; accordingly, we will not now address the issue on appeal. See Old Nat'l Bank of Washington, 122 Idaho at 401, 834 P.2d at 1318.

III.

THE CRP CONTRACT DID NOT CREATE A RIGHT TO REMAIN ON THE LAND FOR TEN YEARS

The district court found that Schiewe was operating solely under a year-to-year tenancy and no additional rights to remain on the property were created by the CRP contract. We agree.

The CRP contract requires an operator to produce some proof of a right to operate the farm land for the term of the contract. In order to be eligible for the program under Section 2A (1) of the contract, an operator must have operated [the] cropland for the period beginning not less than 3 years prior to the close of the applicable period for entering into contracts with CCC [Commodity Credit Corporation] or January 1, 1985, whichever is later, and must provide satisfactory evidence that such person will operate such cropland for the contract period.

(Emphasis added). This provision is in accordance with the requirements of 16 U.S.C. § 3835(a)(2)(B).

In this case, Schiewe contends she had a lease for the term of the CRP contract because she is the operator of the cropland. Although a lease or some proof of a continuing right to operate the ground is necessary to comply with the CRP contract, the contract itself does not create such a lease. By requiring "satisfactory evidence," it is clear that the contract contemplates that there must be some outside proof of the operator's right to continue to operate the land for the contract period.

Because Schiewe and Farwells were permitted to enter into the agreement we must assume that some appropriate proof was presented to the CCC prior to entering into the contract. There is nothing, however, in the record before this Court which demonstrates what, if anything, Schiewe might have provided as independent evidence that she would operate the cropland for the contract period. We are left with only the evidence that she had been farming under a year-to-year oral lease from 1974 to 1987, and no new lease was signed before or after entering the CRP contract. Furthermore, the CRP contract does not provide for any of the standard lease provisions which we would expect to find in a document governing the possession of land, such as payment of property taxes, liability insurance and maintenance of buildings on the property.

Consequently, although Schiewe may be a party to the contract, this contract does not create a right to remain on the cropland for the contract period where no independent right exists. The provisions of the CRP contract specifically contemplate that owners or operators may change during the contract term. Section 26 states that a new owner or operator may become a participant in the contract if such a person assumes the obligations of the previous participants in the contract. Section 28 of the CRP contract states that the contract "may not be revoked or revised unless upon mutual agreement between the parties." Both of these provisions clearly anticipate that changes may occur, so long as all parties to the agreement concur. We are left then with the question of what occurs if a term of the contract changes without the mutual agreement of the participants; such as the termination of the operator's tenancy.

Under section 15 of the CRP contract, an owner of land will not be paid if the owner: (1) has not given the tenant an opportunity to participate in the program; (2) reduces the number of tenants on the farm by forcing tenants off the land ; (3) uses the contract to deprive a tenant of a benefit; (4) increases the rent or reduces the share of proceeds a tenant was entitled to receive. This provision does not guarantee a tenant a right to remain on the land for the period of the CRP contract, it only prevents owners from benefitting by reducing the number of tenants and keeping the profits to themselves. The purpose of the CRP contract is to provide for reimbursement payments to those who are willing to participate in the program. The method of enforcing the provisions is to withhold payment, or in some instances, to force participants to pay back the government for benefits wrongfully received. There is nothing in the contract or program which creates a right to possession of the property in addition to the payments.

We note that this case is before us as a declaratory judgment action to determine whether Schiewe has a right to remain on the land. We are not determining the parties' other rights and obligations under the CRP contract. Whether the parties have fully complied with the requirements for entering and completing the CRP contract, or whether Farwells will continue to have any right to payments under the agreement, are questions not presented to this Court. Accordingly, we affirm the trial court and hold that Schiewe's right to the land is limited to the provisions of the year-to-year oral lease.

IV.

THE DOCTRINES OF EQUITABLE ESTOPPEL AND PART PERFORMANCE

DO NOT APPLY IN THIS CASE

The trial court found that the doctrine of equitable estoppel did not apply in this case because Farwells did not misrepresent any material facts. This Court will not overturn a factual finding of a trial court unless such finding is clearly erroneous. Alumet v. Bear Lake Grazing Co., 119 Idaho 946, 949, 812 P.2d 253, 256 (1991). The Court must accept the trial court's findings of fact if they are supported by substantial, competent evidence. Id. We have reviewed the record at trial and find no indication that Farwells misrepresented or concealed material facts with respect to the CRP contract. Although they signed a ten year contract, both parties were aware of the provisions of the contract and of the oral lease. There is substantial, competent evidence to indicate that Farwells made no promise of a ten-year lease. Accordingly, we hold that the trial court's finding was not clearly erroneous and affirm the court's decision on the issue of equitable estoppel.

The trial court found that the doctrine of part performance did not apply because Schiewe was operating under a year-to-year lease. We agree with the trial court. In general, part performance is an affirmative defense to an assertion that a lease is invalid under the statute of frauds. See Fry v. Weyen, 58 Idaho 181, 70 P.2d 359 (1937). The doctrine of part performance is not applicable to the facts of this case. Even if the CRP contract created some right to possess the real property, the doctrine does not apply to it because, as a written document, the contract complies with I.C. § 9-505 and does not implicate the statute of frauds. Similarly, part performance does not apply to the oral lease because it was only for one year and the statute of frauds is not implicated if the contract involving the lease of real property is for a term of less than one year. I.C. § 9-505(5)

V.

THE TRIAL COURT DID NOT ABUSE ITS DISCRETION IN AWARDING COSTS

The trial court awarded Farwells costs at trial as the prevailing party under I.R.C.P. 54(d). After reviewing the record under the abuse of discretion test outlined in Sun Valley Shopping Center, 119 Idaho at 94, 803 P.2d at 1000, we find that the trial court did not abuse its discretion in awarding costs to Farwells.

VI.

Conclusion

For the above reasons we affirm the decision of the trial court. No costs or attorney fees awarded on appeal.

McDEVITT, C.J. and JOHNSON, J. concur.

Disposition

The judgment of the district court that the plaintiff's tenancy was governed by an oral year-to-year lease, rather than a Conservation Reserve Program contract is affirmed.

McDERMOTT, D.J. (Pro Tem.), Dissenting.

I respectfully depart from the authored opinion of Justice Linda Trout and would affirm the opinion of the Court of Appeals.

From 1970 to 1987, Schiewe and her husband, now deceased, farmed the property which is at the center of this litigation. Those initial years were pursuant to a five year written lease which was never renewed. Thereafter the Schiewes remained on the land as a permissive hold-over tenant on a year-to-year basis. For the better part of seventeen years the Schiewes made their livelihood from this land. Their initiative and productivity benefitted the Farwells, who were the owners of the land, and also the holders of leases obtained from Mary Curl and Marion Basterrechea. The record before this Court is void of any problems between the parties during this time that would have given the Farwells reason or cause to terminate the Schiewes' right to remain on the land.

In 1987, the Farwells, the Schiewes, and the other named participants decided to enter the property (2,414 acres) into the Conservation Reserve Program (CRP). In July of 1987 Mr. Schiewe died, and his widow, Violet Schiewe, assumed responsibility as operator of the farm. Accordingly, Mrs. Schiewe prepared the land for performance of the terms of the CRP contract which began in that year. She expended substantial time, effort and money to this end. In 1988, Farwell approached Schiewe and requested her to sign a five year lease which would nearly halve the payments owed to her under the CRP contract. Understandably, Mrs. Schiewe refused, asserting that she had rights to remain on the land for the ten year period of the CRP contract. Farwell denied that she had that right, and this litigation ensued in the form of a declaratory action.

1.

Estoppel

The opinion for the Court does not allow Schiewe to present her claim of quasi-estoppel, purportedly because it was not specifically pled and argued before the trial court. In proper circumstances, this Court does refuse to consider issues on appeal that were not raised before the trial court. Nevertheless, it is clear that Schiewe did plead estoppel.

The underlying policy of the Idaho Rules of Civil Procedure has always been to liberally construe pleadings to allow for fair and efficient handling of civil matters and resolve disputes on their merits, not on technicalities. The trial court, and now in turn, the majority have chosen to "split hairs" as to whether Schiewe pleaded "equitable estoppel"[Footnote 2] or "quasi-estoppel."[Footnote 3] The result obviously is that under equitable estoppel Schiewe is afforded no trial on the merits, and under quasi-estoppel she is.

Quasi-estoppel is a broadly remedial doctrine, often applied ad hoc to specific fact patterns. Schiewe v. Farwell, 1992 WL 114698 at 3 (Ct. App. 1992); Keesee v. Fetzek, 111 Idaho 360, 362, 723 P.2d 904, 906 (Ct. App. 1986). The doctrine is designed to prevent a party from reaping an unconscionable advantage, or from imposing an unconscionable disadvantage upon another, by asserting to the pleader's disadvantage a right that is inconsistent with one in which he accepted a benefit. Tommerup v. Albertson's, Inc., 101 Idaho 1, 6, 607 P.2d 1055, 1060 (1980); Schiewe, 1992 WL 114698 at 3; Keesee, 111 Idaho at 362, 723 P.2d at 906. Quasi-estoppel, unlike the more traditional form of estoppel (called estoppel in pais or equitable estoppel), does not require misrepresentation by one party or actual reliance by the other.

From the record presented it is not certain how the trial court and in turn the majority of this Court concludes that Schiewe intended to limit her case to equitable estoppel only and not to include a theory of quasi-estoppel. Black's Law Dictionary, which contains the most fundamental propositions of law, states that "'Equitable estoppel' [is a] convertible term[] embracing 'quasi estoppel.'" The elements which must be proved in a claim for equitable estoppel necessarily encompass those elements necessary to prove quasi-estoppel. In other words, because Mrs. Schiewe argued that she detrimentally relied on Farwell's misrepresentations, she essentially argued that she has been disadvantaged by his actions. The advantage reaped by Farwell -- $20,000 or more per year -- is unarguably unconscionable.

Furthermore, the policy behind encouraging parties to appeal only those issues that were tried below is to provide fair notice to the other party. Here, Farwell clearly received notice of Mrs. Schiewe's claim of quasi-estoppel, since, as noted above, she essentially argued its exact elements. See Frost v. Mead, 86 Idaho 155, 166, 383 P.2d 834, 845 (1963). Moreover, at least one other court has concluded that "glaring inconsistencies" among the oral promises by a landowner to his tenant, under the auspices of a soil bank program, are enough to estop the landowner's legal defenses. Daley v. Daley, 150 Montana 432, 436 P.2d 88, 90 (1968).

The opinion of the Court of Appeals is better reasoned and more persuasive than the majority opinion, given the totality of the circumstances surrounding this particular case:

The applicability of quasi estoppel turns upon the specific facts and circumstances of the case under consideration. William Lake Lands, 108 Idaho at 829, 702 P.2d at 867. As noted above, the facts in this case are not in dispute. After having enjoyed a long landlord-tenant relationship, Schiewe, together with Farwell, entered into a ten-year CRP Contract. By entering into the CRP Contract and by having Schiewe sign the contract as the operator of the land, Farwell led Schiewe to believe that she would have the benefit of the ten-year contract which would pay her $50,000 per year. Under the terms of the contract, Schiewe took the land out of production. Schiewe incurred considerable expense to prepare the land, seed it with grass, and spray it for noxious weeds. After Schiewe's husband died, Farwell attempted to terminate Schiewe's tenancy. Initially, Farwell presented Schiewe with a five-year lease contract which would have reduced the amount she received yearly to $30,000. Schiewe refused to sign the contract. Farwell then gave her notice of his intent to terminate her tenancy.

Farwell gained an advantage for himself by inducing Schiewe to enter the CRP Contract and perform the work necessary to take the land out of production. After he obtained this benefit, he decided to terminate her tenancy. Terminating Schiewe's tenancy midway through the contract is a position which is inconsistent with the representation Farwell initially made to Schiewe by entering into the CRP Contract. By changing his position and terminating the contract, Farwell deprives Schiewe of the benefits she expected to enjoy as a participant in the CRP program. This is an unconscionable disadvantage to Schiewe. In reaching this Conclusion, we rely on our interpretation of the CRP Contract which provides significant protections to tenants and operators and which prohibits a landlord from unilaterally excluding a tenant from enjoying the benefits of the CRP program.

2. Statute of Frauds

In Idaho some agreements must be evidenced by a writing. Idaho Code § 9-505 governs these transactions. In relevant part it provides:

9-505. Certain agreements to be in writing.-- In the following cases the agreement is invalid, unless the same or some note or memorandum thereof, be in writing and subscribed by the party charged, or by his agent. Evidence, therefore, of the agreement cannot be received without the writing or secondary evidence of its contents:

1. An agreement that by its terms is not to be performed within a year from the making therefrom.

5. An agreement for the leasing, for a longer period than one (1) year, or for the sale, of real property, or of an interest therein, and such agreement, . . .

The CRP contract satisfies those requirements and therefore suffices as a binding contract (memorandum) regarding the ten year executed written commitment of both the Farwells and the Schiewes, respectively "owners" and "operators," especially when taken together with their possession and actual farming of the property.

Although no particular form of language or instrument is necessary to constitute a note or memorandum required by the statute, the essentials of the oral agreement must be contained in the writings. The memorandum must plainly set forth the parties to the contract, the subject matter thereof, the price or consideration, a ...


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