Johnson v. Lambros

147 P.3d 100, 143 Idaho 468, 2006 Ida. App. LEXIS 112
CourtIdaho Court of Appeals
DecidedOctober 27, 2006
Docket31867
StatusPublished
Cited by10 cases

This text of 147 P.3d 100 (Johnson v. Lambros) is published on Counsel Stack Legal Research, covering Idaho Court of Appeals primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Johnson v. Lambros, 147 P.3d 100, 143 Idaho 468, 2006 Ida. App. LEXIS 112 (Idaho Ct. App. 2006).

Opinion

LANSING, Judge.

J. David Johnson brought this action against John Lambros for breach of an agreement for the sale of real property. Johnson, the purchaser, alleged that Lam-bros breached the contract by failing to obtain clear title prior to the closing date. Following a bench trial, the district court found no breach, and the court adhered to this decision after hearing a motion for reconsideration. Johnson appeals the order denying his motion for reconsideration.

I.

BACKGROUND

In June 2001, the parties entered into a written agreement (the “Agreement”) under which Lambros agreed to sell a parcel of real property to Johnson, who was looking for investment property with which to complete a deferred tax exchange under Internal Revenue Code § 1031 (a “1031 Exchange”). In order for Johnson to gain this tax benefit, it was necessary that closing occur before October 28, 2001. The pertinent provisions of the Agreement provided:

8. TITLE CONVEYANCE: Title of
SELLER is to be conveyed by warranty deed, unless otherwise provided, and is to be marketable and insurable ... No liens, encumbrances or defects, which are to be discharged or assumed by BUYER or to which title is taken subject to, exist unless otherwise specified in this agreement.
9. TITLE INSURANCE
(A) TITLE COMMITMENT: Prior to closing the transaction SELLER ... shall furnish to BUYER a commitment of a title insurance policy showing title to said premises. BUYER shall have 5 business days from receipt of the commitment or not less than twenty-four (24) hours prior to closing, within which to object in writing to the condition of the title as set forth in the commitment. If BUYER does not so object, BUYER shall be deemed to have accepted the condition of the title. It is agreed that if the title of said premises is not marketable, or cannot be made so within 3 business days after notice containing a written statement of defect is delivered to SELLER, BUYER’S Earnest Money deposit will be refunded to BUYER and SELLER shall pay for the cost of title insurance cancellation fee, escrow and legal fees, if any.

In compliance with the Agreement, Lambros obtained a title insurance commitment, which revealed for the first time a lis pendens and a lawsuit filed by a third party who was attempting to enforce an option to purchase the property. 1 Rather than terminating their transaction, Johnson and Lambros executed an addendum, which stated:

1. Buyer is ready, willing and able to proceed with closing this transaction on this 10th day of July 2001. However, seller is not able to close transaction and provide clear, unencumbered title to subject property as of this date.
2. Buyer is willing to extend the closing date of this transaction to on or before August 10th 2001 at 5 p.m.
3. The purpose of this agreement is to allow seller take [sic] whatever action is necessary to provide clear title to subject property.

In an attempt to clear the title, Lambros promptly filed a motion for summary judgment in the third party’s lawsuit. A short time later, Johnson and Lambros executed a second addendum nearly identical to the first, which extended the closing date until *471 September 14, 2001. It was the parties’ expectation that summary judgment would be granted to Lambros in the third-party action several days before September 14. Lambros became unable to obtain judgment, however, because the third party filed for bankruptcy protection before Lambros’s motion could be heard. Lambros remained unable to clear the title for several years 2 due to the bankruptcy. Consequently, the sale of the property to Johnson was never completed.

Johnson filed this action for breach of the Agreement, seeking specific performance of the contract, or in the alternative, damages of approximately $65,000 for additional tax liability that he contends he incurred because the 1031 Exchange did not occur. Johnson alleged that the addenda to the Agreement created an affirmative duty for Lambros to provide clear title to the property. A court trial was conducted, after which the court issued findings and conclusions determining that Lambros had not breached the Agreement. The court found that the Agreement and addenda did not include a promise by Lambros to clear title but, rather, gave Johnson the right to a refund of his earnest money, as his sole remedy, if Lambros could not deliver title satisfactory to Johnson. The court further found that Lambros had discharged any obligation he had in regard to the title by taking reasonable steps to clear the title until his efforts were frustrated by the third party’s bankruptcy. The court also concluded that even if a breach had been shown, Johnson would not have been entitled to the damages he sought because they were speculative.

Before judgment was entered on the court’s findings and conclusions, Johnson filed a motion for reconsideration, renewing his argument that the addenda created a duty for Lambros to provide clear title to the property. Johnson did not present any additional evidence with this motion. After a hearing, the court denied the motion for reconsideration, a decision that Johnson now appeals.

II.

ANALYSIS

A. Johnson Was not Required to Present New Evidence with His Motion for Reconsideration

Preliminarily, we must address Lambros’s contention that because Johnson presented no new evidence with his motion for reconsideration, the motion was properly denied and we need not address the merits of the case. This argument is based on the timing of Johnson’s motion for reconsideration. On October 20, 2004, the district court issued its finding of facts and conclusions of law in which it determined that Lambros had not breached the Agreement. On November 2, 2004, Johnson filed a motion for reconsideration. This motion did not include any additional evidence, but merely requested reconsideration based on the evidence presented at trial. Judgment was entered three days later, on November 5, 2004, followed by an amended judgment on January 26, 2005. A hearing on Johnson’s motion for reconsideration was held on February 14, 2005, at which time the motion was denied.

Lambros argues that because Johnson’s motion to reconsider was filed before judgment was entered, it was necessarily brought under Idaho Rule of Civil Procedure 11(a)(2)(B), which governs motions for reconsideration of interlocutory orders, and not under I.R.C.P. 59(e), which authorizes motions to alter or amend a judgment. This distinction is significant, Johnson asserts, because while a party is not permitted to present new evidence with motions made pursuant to I.R.C.P. 59(e), 3 a motion for re *472 consideration under Rule 11(a)(2)(B) must be accompanied by new evidence. When a Rule 11(a)(2)(B) motion is not supported by new evidence, Johnson asserts, the trial court necessarily acts within the scope of its discretion in denying the motion.

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Cite This Page — Counsel Stack

Bluebook (online)
147 P.3d 100, 143 Idaho 468, 2006 Ida. App. LEXIS 112, Counsel Stack Legal Research, https://law.counselstack.com/opinion/johnson-v-lambros-idahoctapp-2006.