Johannsen v. Utterbeck

196 P.3d 341, 146 Idaho 423, 2008 Ida. LEXIS 196
CourtIdaho Supreme Court
DecidedOctober 16, 2008
Docket34023
StatusPublished
Cited by40 cases

This text of 196 P.3d 341 (Johannsen v. Utterbeck) is published on Counsel Stack Legal Research, covering Idaho Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Johannsen v. Utterbeck, 196 P.3d 341, 146 Idaho 423, 2008 Ida. LEXIS 196 (Idaho 2008).

Opinion

*426 W. JONES, Justice.

I. FACTUAL AND PROCEDURAL BACKGROUND

In early 2001, Robert Utterbeck (“Appellant”) and Robert Johannsen (“Respondent”) formed Brookside, LLC (“LLC”) to develop the Brookside subdivision (“Brookside”). Soon thereafter the parties executed the LLC Operating Agreement, which includes the following relevant clauses:

2.04. Capital Contributions. A member’s capital contributions to the Company may consist of cash, property, services rendered, or a binding written promise to contribute cash, property or services in the future. The value of all capital contributions shall be determined by the members. A member shall not be entitled to withdraw a capital contribution without the consent of all other members. A member shall not be entitled to interest on or with respect to any capital contribution. Additional capital contributions may be made by a member only with the consent of all other members. The capital contributions required of new members shall be determined by the existing members. The initial capital contributions and the initial proportionate ownership interests of the initial members of the Company are set forth in Exhibit A.

It is anticipated that the Capital Contributions of each of the initial members, [sic] shall be contributed by each as follows:

1. Robert Johannsen shall contribute certain real property to the limited liability company herein, and shall be given a credit for said contribution of said real property, in an amount equal to $8,000.00 per acre, or any pro-rata amount contributed.
2. Robert Utterbeck shall contribute cash to the limited liability company, in an amount equal to the value as indicated above for the capital contribution of Robert Johannsen’s real property.
This arrangement for capital contributions shall be contributed incrementally during the development of the development project as the members shall agree.
3.01. Management by Members. The Company shall be managed by the members. The Company shall not have managers within the meaning of the Idaho Limited Liability Company Act. No member shall be entitled to compensation for managing the Company unless otherwise approved in advance by the members.
3.02. Authority of Members. Subject to the provisions of the foregoing section, each member may exercise all powers of the LLC and perform any lawful act or function deemed necessary or appropriate in the ordinary course of the Company business, except as otherwise provided in the Operating Agreement. However, a member may not perform any of the following acts or functions without the written consent of all members:
... (4) Incur a Company liability in excess of $2,000.00.

A preliminary plat showed Brookside was to be comprised of approximately 57 acres. By September 2004, Respondent deeded approximately 27 of the contemplated 57 acres of real property to the LLC in three separate transactions. During trial Appellant admitted that it took him a full year to make final payment to the LLC in an amount equal to the value of real property contributed by Respondent.

By late 2005 the relationship between Respondent and Appellant broke down and Respondent filed suit against Appellant and the LLC for breach of contract, an accounting and dissolution of the LLC. Respondent alleged in the complaint that Appellant failed to make required capital contributions in violation of the Operating Agreement and that he acted beyond the scope of his authority by, among other things, incurring unauthorized debts on behalf of the LLC. Appellant filed an answer including affirmative defenses and a counterclaim for breach of contract, an accounting and dissolution. 1 In June *427 2006, the district court appointed a receiver to carry out an accounting for dissolution and to wind up the LLC.

In October 2006, Respondent filed a motion for summary judgment and a motion to preclude Appellant, under the parol evidence rule, from presenting evidence as to the intent and interpretation of the Operating Agreement. Respondent argued that the Operating Agreement was unambiguous and did not require him to contribute any particular amount of land to the LLC and that since the document was unambiguous, Appellant should be precluded from introducing any evidence as to the parties’ intent. In ruling on the motion, the court found that the language “certain real property” in the Operating Agreement was ambiguous. It then held that parol evidence could be used to resolve the ambiguity. The court’s written decision is perplexing and contradictory. After stating that the phrase “certain real property” was ambiguous, the court went on to state that “[t]he documents subsequently signed by Respondent 2 resolved the ambiguity and indicate that the approximately 57 acres were destined to be used in the Brook-side Development.” Not only would it be inappropriate for the court to resolve ambiguous language on a motion for summary judgment, since such a matter would be for the jury, but the court went on in its written decision to hold that since the contract was ambiguous, summary judgment must be denied. On appeal, Appellant argues that the court’s language that “the approximately 57 acres were destined to be used in the Brook-side Development” establishes the law of the case and that the jury should have been so instructed.

The case proceeded to a jury trial, resulting in a verdict finding that Respondent did not breach the contract. Appellant then filed a motion for JNOV or, in the alternative, a new trial, both of which the court denied. The court held a hearing on dissolution and winding up of the LLC and found that Appellant was not entitled to be paid for any management services and further held there was no evidence presented establishing intangible rights or assets in either of the parties. The court then entered an order distributing liabilities and dividing assets according to each party’s equity.

The district court found Respondent to be the prevailing party and awarded him $10,000.00 in attorney’s fees and $800.00 in costs.

II. ISSUES ON APPEAL

Appellant Robert Utterbeck raises the following issues on appeal:

(1) Did the district court establish the law of the case in its opinion denying Respondent’s motion for summary judgment?

(2) Did the district court err in denying Appellant’s motion for JNOV, or in the alternative, for a new trial?

(3) Did the district court err in denying Appellant’s motion for a mistrial?

(4) Was the Order of Final Dissolution clear error?

Respondent/Cross-Appellant Robert Johannsen raises the following issue on his cross-appeal:

(1) Did the district court abuse its discretion in awarding Respondent only $10,000 in attorney’s fees?

Both Appellant and Respondent seek attorney’s fees on appeal. We will discuss each of these issues in turn.

III. ANALYSIS

A.

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Cite This Page — Counsel Stack

Bluebook (online)
196 P.3d 341, 146 Idaho 423, 2008 Ida. LEXIS 196, Counsel Stack Legal Research, https://law.counselstack.com/opinion/johannsen-v-utterbeck-idaho-2008.