McCormick International USA, Inc. v. Shore

277 P.3d 367, 152 Idaho 920, 2012 WL 1433980, 2012 Ida. LEXIS 107
CourtIdaho Supreme Court
DecidedApril 26, 2012
Docket38454
StatusPublished
Cited by8 cases

This text of 277 P.3d 367 (McCormick International USA, Inc. v. Shore) 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
McCormick International USA, Inc. v. Shore, 277 P.3d 367, 152 Idaho 920, 2012 WL 1433980, 2012 Ida. LEXIS 107 (Idaho 2012).

Opinion

HORTON, Justice.

Roberta Shore (Roberta) retained attorney Nicholas Bokides (Bokides) to represent her in her divorce from William Shore (William). Pursuant to the divorce decree, William took all interest in the couple’s business, Bear River Equipment, Inc. (Bear River), a farm equipment dealership. Roberta had instructed Bokides to provide notice to McCormick International USA, Inc. (McCormick), a Bear River creditor, that she would no longer personally guarantee its advances. Bokides never provided the notice, and McCormick sued Roberta to enforce the guarantee. Roberta brought a third party complaint against Bokides for malpractice. Bokides did not deny the malpractice claim, but alleged that Roberta failed to mitigate her damages because she did not seek to enforce the divorce decree’s mandate that William hold her harmless from all Bear River debts. Bok-ides appeals the trial court’s judgment in Roberta’s favor. Roberta cross-appeals the district court’s determination that her damages were limited to advances made after entry of the divorce decree. We affirm.

I. FACTUAL AND PROCEDURAL BACKGROUND

Roberta retained Bokides in the spring of 2006 to represent her in the divorce from William, her husband of fifteen years. Incident to the divorce, Roberta intended to transfer to William all interest, assets, and liabilities related to Bear River. The previous spring, McCormick had required William and Roberta to each execute personal guarantees in order to obtain financing for Bear River. Sometime between March and May of 2006, Roberta instructed Bokides to notify McCormick that she would not personally guarantee future advances. 1 Roberta and Bokides did not discuss a specific time for Bokides to provide the notice and they did not discuss the subject again before the divorce decree was entered on November 16, 2006. The divorce decree transferred to William all assets related to Bear River and required that he defend and hold Roberta harmless with regard to all Bear River liabilities.

Until the time of the divorce, Bear River was profitable. Following the divorce, Bear River’s financial fortunes took a turn for the worse, and on August 30, 2007, nearly ten months after the divorce became final, Roberta received notice from McCormick that *923 Bear River had failed to meet its financial obligations with regard to eight pieces of financed farm equipment. McCormick informed Roberta that it intended to enforce her personal guarantee as to these liabilities. When Roberta contacted Bokides, she first learned that he had failed to notify McCormick that she would no longer guarantee Bear River’s obligations. On August 29, 2008, McCormick sued Bear River, William, and Roberta. On August 12, 2010, judgment was entered jointly and severally against each of the three.

Meanwhile, Roberta had joined Bokides as a third-party defendant, asserting legal malpractice. Bokides admitted that he had breached his professional duties to Roberta, but asserted, as an affirmative defense, that Roberta had failed to mitigate her damages. He claimed that Roberta had a duty to enforce the divoi’ce decree by requiring William to defend and indemnify her as to all Bear River debts. Bokides alleged that Roberta’s failure to do so relieved Bokides of liability for most or all of the damages resulting from his malpractice. On August 24, 2010, Roberta’s malpractice claim was tried to the court without a jury. Roberta testified that because she had been married to William for fifteen years, had acted as the couple’s bookkeeper, and was only recently divorced from him, she was aware that he had very few assets and was faced with significant liabilities. William testified and submitted evidence representing that the value of his assets was too little to reach a settlement with McCormick, let alone satisfy the full extent of McCormick’s claims.

The court found that Roberta had reasonably believed that William was judgment proof and thus had acted reasonably by declining to pursue litigation against William to enforce the divorce decree because it would have ultimately proved to be fruitless. The court also found that a reasonable time for Bokides to give notice to McCormick that Roberta would no longer guarantee Bear River’s obligations was no later than the time of the entry of the divorce decree. Thus, the trial court found that Bokides was not liable for damages due to McCormick’s enforcement of Roberta’s guaranty as to one tractor that was financed before the decree was entered. The court entered judgment in favor of Roberta against Bokides for $299,085.53, reflecting the full extent of McCormick’s judgment against Roberta, less the value of the tractor.

Bokides appeals the court’s finding that Roberta had not failed to mitigate her damages and the amount of damages that were awarded to Roberta. Roberta cross-appeals the court’s failure to award her damages compensating her for her liability to McCormick for the tractor that was financed before her divorce. Both parties seek attorney fees on appeal.

II. STANDARD OF REVIEW

This Court will not set aside a trial court’s findings of fact unless those findings are clearly erroneous. I.R.C.P. 52(a). Where the trial court acted as factfinder below, we grant due regard to its special opportunity to assess witness credibility. Id. Factual findings are not clearly erroneous if they are supported by substantial and competent, although conflicting, evidence. As piazu v. Mortimer, 139 Idaho 548, 550, 82 P.3d 830, 832 (2003). “Evidence is substantial if a reasonable trier of fact would accept it and rely on it.” Id. This Court reviews a trial court’s conclusions of law de novo. Shore v. Peterson, 146 Idaho 903, 907, 204 P.3d 1114, 1118 (2009).

III. ANALYSIS

A. The district court’s findings of fact are supported by substantial and competent evidence.

1. Substantial, competent evidence supports the court’s finding that Roberta acted reasonably when she did not sue William.

Bokides contends that Roberta cannot recover damages from him because she made no attempt to enforce the divorce decree’s mandate that William indemnify her for obligations related to Bear River. The district court held that “Bokides did not present sufficient evidence at trial that Roberta’s pursuit of William could have led to a *924 collectible judgment that would have satisfied or decreased her liability to McCormick.” We hold that the court’s findings are supported by substantial and competent evidence.

The doctrine of avoidable consequences, or the duty to mitigate, is an affirmative defense that provides for a reduction in damages where a defendant proves that it would have been reasonable for the plaintiff to take steps to avoid the full extent of the damages caused by the defendant’s actionable conduct. Davis v. First Interstate Bank of Idaho, N.A., 115 Idaho 169, 170, 765 P.2d 680, 681 (1988).

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Cite This Page — Counsel Stack

Bluebook (online)
277 P.3d 367, 152 Idaho 920, 2012 WL 1433980, 2012 Ida. LEXIS 107, Counsel Stack Legal Research, https://law.counselstack.com/opinion/mccormick-international-usa-inc-v-shore-idaho-2012.