Appeal from the District Court of the Fourth Judicial District, State of Idaho, Ada County. Hon. Ronald J. Wilper, District Judge.
The opinion of the court was delivered by: Burdick, Justice
District court order granting summary judgment, vacated.
This case comes before this Court on appeal from a grant of summary judgment in favor of David Callister, Confluence Management, LLC ("CM") and Liberty Partners, Inc. ("LP") (collectively, "Respondents"). On appeal David Fuller and Shirley Fuller (the Fullers) argue that the district court erred, as a matter of law, in finding that: (1) the doctrine of merger prevented the Fullers from enforcing an addendum to a purchase and sale agreement, where there had been a subsequent warranty deed conveying the property that was the subject of the purchase and sale agreement; (2) an assignment of all rights under the purchase and sale agreement from CM to LP, which the Fullers consented to, relieved CM of all obligations or liabilities arising under that purchase and sale agreement; and (3) David Callister, as an individual, should be dismissed from the lawsuit as it was never alleged that he acted outside of his capacity as a corporate representative (where this issue was raised by the court sua sponte)*fn1 . Respondents cross-appeal, arguing that the district court erred in finding that Respondents were not entitled to attorney fees under I.C. § 12-120(3).
I. FACTUAL AND PROCEDURAL BACKGROUND
On September 20, 2005, CM entered into a Commercial/Investment Real Estate Purchase and Sale Agreement ("Purchase Agreement") with the Fullers, to acquire approximately 12.73 acres of property adjacent to Ten Mile Road in Meridian, Idaho. At the time the Purchase Agreement was entered into Ada County Highway District (ACHD) was attempting to acquire part of the property for a right-of-way in order to expand Ten Mile Road. On September 20, 2005, after entering into the Purchase Agreement, the Fullers and CM executed an addendum to the Purchase Agreement ("Addendum #1") wherein CM agreed that it would deed over a portion of the property to ACHD and transfer the proceeds of such conveyance to the Fullers. Under Addendum #1 the Fullers retained the right to negotiate the purchase price with ACHD.
On September 22, 2005, CM assigned the Purchase Agreement to LP, with the consent of the Fullers. On the same day, the Fullers executed a warranty deed conveying the property to LP; the warranty deed contained no mention of an anticipated condemnation or of Addendum #1. On August 10, 2006, LP entered into a Sale and Purchase Agreement with ACHD, and issued a warranty deed conveying approximately 1.43 acres of the property purchased from the Fullers to ACHD. ACHD paid $83,921 for this property. The Fullers requested that LP turn these funds over to the Fullers pursuant to Addendum #1 of the Purchase Agreement, but LP refused.
On October 21, 2008, the Fullers filed suit against CM, LP and Callister, alleging, inter alia, that CM and Callister breached the Purchase Agreement. On June 23, 2009, the Fullers brought a Motion for Partial Summary Judgment, and after both parties briefed the issues raised in that motion, oral argument was held on July 20, 2009. On August 24, 2009, the district court issued a Memorandum Decision and Order on Plaintiffs' Motion for Partial Summary Judgment ("Memorandum Decision") finding that: (1) the Purchase Agreement and Addendum #1 merged into the warranty deed and were no longer enforceable; (2) CM assigned all rights and responsibilities under the Purchase Agreement to LP and was no longer liable to the Fullers; and (3) Callister should be dismissed as a party.
On September 28, 2009, the district court entered a Judgment consistent with the Memorandum Decision. The Judgment dismissed Count 1 of the Fullers' Amended Complaint (breach of contract claim against Callister and CM) on the basis that: (1) the district court found at summary judgment that the Purchase Agreement had been merged into the warranty deed; and (2) the district court had found that the assignment of the Purchase Agreement from CM to LP relieved CM from any obligations under the Purchase Agreement. The Judgment dismissed Count 2 of the Fullers' Amended Complaint (unjust enrichment against LP) on the basis that it found there was an enforceable express contract. As the two causes of action dismissed by the district court were the only claims brought by the Fullers, the court entered summary judgment in favor of Respondents on all claims. The Fullers filed their notice of appeal on October 9, 2009.
1. Whether the district court erred in finding that the Purchase Agreement and Addendum #1 had merged into the subsequently executed warranty deed and granting summary judgment on that issue.
2. Whether the district court erred in finding that the assignment of the Purchase Agreement from CM to LP, with the consent of the Fullers, removed all liabilities and obligations of CM pursuant to that agreement.
3. Whether the district court erred in failing to grant attorney fees to Respondents under I.C. § 12-120(3), having found that the gravamen of this legal action was not a commercial transaction, and whether Respondents are entitled to attorney fees on appeal on the same basis. Or whether, in the alternative, the Fullers are entitled to attorney fees on appeal pursuant to I.A.R. 40 and 41 and paragraph 17 of the Purchase Agreement.
As this Court noted in Castorena v. General Electric:
When reviewing an order for summary judgment, the standard of review for this Court is the same standard as that used by the district court in ruling on the motion. Summary judgment is appropriate if "the pleadings, depositions, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." I.R.C.P. 56(c). Disputed facts should be construed in favor of the non-moving party, and all reasonable inferences that can be drawn from the record are to be drawn in favor of the non-moving party. This Court exercises free review over questions of law.