Bret and Marti Kunz v. Nield, Inc.

IN THE SUPREME COURT OF THE STATE OF IDAHO
Docket No. 43724
BRET D. KUNZ and MARTI KUNZ, )
Husband and Wife, ) Boise, April 2017 Term
)
Plaintiffs-Appellants, ) 2017 Opinion No. 86
)
v. ) Filed: July 11, 2017
)
NIELD, INC., dba INSURANCE ) Karel A. Lehrman, Clerk
DESIGNERS, an Idaho corporation, )
)
Defendants-Respondents. )
_____________________________________
Appeal from the District Court of the Sixth Judicial District of the
State of Idaho, Bear Lake County. Hon. Mitchell Brown, District Judge.
The judgment of the district court is affirmed. No attorney fees or costs
on appeal are awarded to either party.
Steven A. Wuthrich, Montpelier, attorney for appellant.
Echohawk Law, Pocatello, attorneys for respondent. Joseph T. Preston
argued.
__________________________________
JONES, Justice.
I. NATURE OF THE CASE
This appeal arises from an agent contract (the “2009 Contract”) entered into between Bret
Kunz (“Bret”) and Nield, Inc. (“N.I.”) authorizing Bret to sell insurance on behalf of N.I. N.I. is
owned by two brothers, Bryan Nield (“Bryan”) and Benjamin Nield. A dispute arose concerning
the method and type of compensation available to Bret under the 2009 Contract. Bret filed a
complaint seeking, inter alia, a declaratory judgment interpreting the 2009 Contract. The district
court held, inter alia, that the 2009 Contract did not provide for profit sharing as Bret claimed.
Bret and his wife, Marti, (collectively, the “Kunzes”) appeal.
II. FACTUAL AND PROCEDURAL BACKGROUND
1
The crux of this appeal is whether Bret is entitled to profit sharing payments under the
2009 Contract, and if so, what percentage of the profit sharing should be distributed to him.
Profit sharing is a unique type of commission that insurance agents earn by meeting certain
goals. 1 If an insurance agent qualifies for profit sharing, the payment is made the year after it is
earned. Ordinary insurance commissions, which are a percentage of the premiums for new and
renewed policies, are paid monthly.
The business relationship between Bret and N.I. began in 1996 when the parties entered
into a written contract (the “1996 Contract”) for Bret to sell insurance as a subcontractor for N.I.
As a subcontractor for N.I., Bret worked under his brother Michael, who was also a
subcontractor for N.I. and had been since 1982. Pursuant to a contract Michael signed with N.I.
in 1982, he and N.I. split his book of business 50/50. While Bret’s 1996 Contract was
substantially similar to Michael’s 1982 Contract, it did not contain a provision addressing the
ownership of the book of business.
Bret and Michael agreed that Michael would cover all of the overhead expenses and Bret
would receive the entire 80% monthly commission to which he was entitled under the 1996
Contract. Michael did not make any money from Bret, but received profit sharing from sales
attributable to Bret due to the fact that Michael owned 50% of the book of business. According
to Bret’s testimony, he did not expect to receive profit sharing under his 1996 Contract because
that contract did not address the ownership of the book of business.
On July 4, 2008, Michael died. Thereafter, the Kunzes purchased Michael’s insurance
agency and Michael’s share of the business placed with N.I. from Michael’s surviving spouse.
Around October 2008, Bret and N.I. began to discuss the need for a new contract that would
include an ownership provision similar to the ownership provision in Michael’s 1982 contract.
Bret testified that Bryan brought a draft of the 2009 Contract to his office that mirrored
Michael’s 1982 contract.
Sometime around the end of October, or the beginning of November 2008, Bret signed a
final version of the 2009 Contract. Bret testified that he did not review the 2009 Contract closely
and was not aware that the language therein was different from the language in the draft contract.
Bret testified that at the time he signed the 2009 Contract, Bryan mentioned that “they had some
1
Within the insurance industry, “profit sharing” and “contingent commissions” are used interchangeably.
2
pretty good profit sharing checks with [Michael].” Bret also recalled that between November
2008 and February 2009, Bryan mentioned the profit sharing checks again, likely in an attempt
to motivate Bret to sell more insurance.
The pertinent provisions of the 2009 Contract are as follows:
(5) Responsibilities of Agent: The agent is a sub-contractor and as such has
responsibility for all expenses related to his or her business. . . . Agent is to place
all insurance business through company. Company has final underwriting
authority for all business placed. . . . Agent is responsible for all premium and
return commissions on business placed. When collections are not on time,
deduction may be made from payment of commissions due. When the collection
is completed the deducted commission will be paid.
(6) Responsibilities of Company: Company will maintain contracts with
companies for placing of insurances. Company will do all billing and accounting
functions (except collections). Agent is personally responsible for the collection
of premiums and returned commissions on business placed. . . . [provide Bret with
a commission check based on agreed percentages on the 15th of each month, and
other functions based upon commission split and individual agreement]. 2
(7) Terms of Compensation: Agent will receive 80 percent of commissions
received on insurance placed by agent with company. Company will receive 20
percent of commission placed by agent with company.
(8) Ownership: This is subject to change, but only as agreed between Company
and Agent. The agent will own 50% of the book of business and the company will
own 50% of the book of business.
As previously mentioned, the crux of this appeal is whether Bret is entitled to profit
sharing under the 2009 Contract. More specifically, the issue is whether Bret is entitled to profit
sharing for business he wrote with Gem State Insurance Company (“Gem State”), Farmers
Alliance Mutual Insurance Company (“Farmers Alliance”), Acuity Mutual Insurance Company
(“Acuity”), and Allied Insurance Company (“Allied”). The following is a summary of payments
that N.I. made to Bret, which the Kunzes allege were profit sharing payments. In 2009, Bret
received his first alleged profit sharing check from N.I. for 2008 business done with Gem State.
Bret’s work in 2009 did not qualify for profit sharing; accordingly, he did not receive an alleged
profit sharing check in 2010. In 2011, Bret received an alleged profit sharing check for 2010
business done with Gem State and Acuity. Bret testified that, at the time he received the check,
2
The bracketed language is the district court’s paraphrasing of the 2009 Contract language. N.I.’s letterhead is
printed over three lines of paragraph six rendering those lines illegible. The district court explained that its
paraphrasing was based on an attempt to decipher the blocked content, the testimony of the parties, and reviewing
other N.I. agent contracts.
3
he believed the amount he received was the appropriate percentage of the profit share. However,
he did not have access to data to enable him to verify that he received the appropriate amount of
the profit share. He did, however, have access to Gem State data because he had exclusive
control over the Gem State book of business. In 2012, Bret received an alleged profit sharing
check for 2011 work done with Gem State and Farmers Alliance. Bret testified that the profit
sharing amount he received for Gem State business reflected a 50/50 split, but that the profit
sharing for Farmers Alliance was less than 10% of the 80% he believed he was owed.
Bryan testified that N.I. does not pay profit sharing or contingent commissions and
characterized the payments made to Bret as bonuses. Notwithstanding the foregoing, Bryan
conceded that N.I. paid Bret 50% of the profit sharing that N.I. received from Gem State. The
district court concluded that the Gem State profit sharing agreement was an “individual
agreement,” which Bryan described as follows:
Gem State is a separate issue by itself. . . . the whole book of business is totally
separate from ours. Therefore anything that he would receive as profit sharing is
paid directly to Bret from Gem State. . . . So based on the Gem State paying him,
since we own 50 percent of his book of business, therefore we receive 50 percent
of the profit sharing.
On January 16, 2013, Bret sent Bryan a letter wherein he argued that the profit sharing
split should be the same as the ordinary commission split, 80% to him, and 20% to N.I. In the
letter, Bret conceded that the profit sharing split “was never addressed in the contract with
[Michael] or me.” On January 22, 2013, Bryan responded to Bret’s letter and agreed that there
was nothing in the 2009 Contract addressing the issue. Bryan explained that “[p]rofit sharing is a
bonus based on loss ratios and book of business as you know. It is not based on commissions.
The reason we have split profit sharing 50/50 is based on ownership, not commissions, and there
are no guarantees on profit sharing.” Nonetheless, Bryan included a check for 80% of the profit
sharing for Gem State, which the district court concluded was a “one-time acquiescence and
showing of good faith.” Bryan testified that he gave Bret the 80% because it was “not worth the
fight for a couple hundred dollars.”
In April 2013, Bret received a check from N.I. for $424 with the notation “Profit Sharing
2012.” On April 17, 2013, Bret emailed Bryan asking for the “company [the profit sharing
check] came from” and the split percentage. Additionally, Bret asked for information regarding
4
the “profit sharing agreements with all of the companies.” Bret testified that Bryan never
responded to the email, but that he later learned the check was for business written with Acuity.
After the initiation of this action, Bret learned the amount of profit sharing that N.I.
received from Acuity between 2009 and 2013 and from Farmers Alliance between 2010 and
2014. Bret argued that he did not receive the profit sharing to which he was entitled, considering
the amounts received by N.I. Bret testified that he believes profit sharing should be calculated as
follows:
I would take the total written premium. So, for example, let’s say the total
written premium with Acuity was [$]200,000. If I had wrote [$]100,000 of that,
then I would - - and let’s say the total contingent payment was [$]10,000, and my
book of business would have been responsible for [$]5,000 of that, then I would
take 80 percent of that [$]5,000.
Conversely, Bryan offered the following testimony to explain N.I.’s bonus structure:
[W]hat we do is get together and take any profits that we’ve earned. And if we
decide to give out bonuses then we decide what - - we take and pay money to the
company, see what is left, and determine what amount to pay for a bonus to
whoever we feel it is necessary.
Bryan continued, explaining that N.I would not pay bonuses unless it received profit sharing
from an insurance company.
Bret filed a complaint on November 13, 2013, with two causes of action. 3 First, Bret
sought an accounting of all profit sharing, bonuses, incentives, or unpaid commissions that he
generated, in whole or in part, between 2008 and 2012. In the event that the accounting revealed
monies due, Bret requested a corresponding judgment. Second, Bret sought declaratory relief
that: (1) the 2009 Contract included bonus commissions and profit sharing received by N.I. that
were generated by Bret; (2) Bret’s share of the bonuses or profit sharing was 80% of what he
generated; and (3) N.I. had no interest in life and health insurance sold by Bret or Marti and no
interest in the health insurance book of business bought from Michael’s widow. Bret also
requested prejudgment interest on all sums found properly due and costs and attorney’s fees.
On December 2, 2013, N.I. filed its answer and counterclaim alleging that Bret breached
the 2009 Contract by not placing all insurance through N.I. 4 Bret sought to subpoena the records
3
During the course of pre-trial motion practice, the district court concluded that while not expressly pleaded, Bret
had asserted a claim for breach of contract in his complaint.
4
N.I. also filed a third party complaint against Marti Kunz alleging breach of contract. This claim was later
dismissed and the parties stipulated that Marti would be added to Bret’s complaint as a plaintiff.
5
of Farmers Alliance, Acuity, and Allied for 2009 through 2012, which N.I. opposed via a motion
for a protective order. N.I. also filed a motion for change of venue and a motion to bifurcate the
proceedings. The district court denied N.I.’s motions for a protective order and change of venue,
but granted the motion to bifurcate. In granting the motion to bifurcate, the district court held that
the first bifurcated proceeding would address the merits of the declaratory relief action, i.e., the
interpretation of the 2009 Contract, while the second proceeding would address the merits of the
breach of contract claims and Bret’s accounting claim. On November 20, 2014, N.I. voluntarily
dismissed, without prejudice, its counterclaim against Bret and stipulated that it had no interest in
life and health insurance sold by Bret.
On December 8 and 9, 2014, the district court held a two day bench trial, and on August
31, 2015, the district court issued its findings of fact, conclusions of law and memorandum
decision. Therein, the district court concluded as follows: (1) the 2009 Contract was not
integrated and was not intended to be a final expression of their agreement; (2) the parties had a
separate individual agreement, which was established by their testimony and course of dealing
whereby N.I. paid Bret 50% of the profit sharing received from Gem State; (3) paragraph six of
the 2009 Contract was ambiguous and it could not be determined whether the parties had a profit
sharing agreement for any insurance company other than Gem State; (4) the term “commission”
as used in the 2009 Contract was not defined, and it could not be determined, based upon a
review of extrinsic evidence, that it included profit sharing; (5) there was no legally enforceable
agreement whereby Bret was entitled to receive profit sharing from N.I. with respect to Acuity,
Farmers Alliance, or Allied; and (6) the payments made by N.I. to Bret, which the Kunzes allege
were profit sharing payments, were actually gratuitous bonuses.
The Kunzes appeal.
III. ISSUES ON APPEAL
1. Whether the district court erred in interpreting the term “commission.”
2. Whether the district court erred in interpreting the phrase “other functions.”
3. Whether the district court erred in characterizing certain payments as “gratuitous
bonuses.”
4. Whether the district court erred in concluding that the profit sharing payments related to
the Gem State implied in fact contract should be split 50/50.
5. Whether the district court erred in failing to construe the 2009 Contract against the
drafter, N.I.
6. Whether the district court’s judgment was erroneous because it failed to acknowledge
that the Kunzes prevailed in part.
6
7. Whether either party is entitled to attorney’s fees on appeal.
IV. STANDARD OF REVIEW
When considering an appeal of a trial court’s decision from a bench trial, this Court’s
review is limited as follows:
[W]hether the evidence supports the findings of fact, and whether the
findings of fact support the conclusions of law. A district court’s findings of fact
in a bench trial will be liberally construed on appeal in favor of the judgment
entered, in view of the district court’s role as trier of fact. It is the province of the
district judge acting as trier of fact to weigh conflicting evidence and testimony
and to judge the credibility of the witnesses. We will not substitute our view of
the facts for the view of the district court. Instead, where findings of fact are
based on substantial evidence, even if the evidence is conflicting, those findings
will not be overturned on appeal. We exercise free review over the lower court’s
conclusions of law, however, to determine whether the court correctly stated the
applicable law, and whether the legal conclusions are sustained by the facts found.
Pocatello Hosp., LLC v. Quail Ridge Med. Investor, LLC, 156 Idaho 709, 714, 330 P.3d 1067,
1072 (2014) (quoting Clayson v. Zebe, 153 Idaho 228, 232, 280 P.3d 731, 735 (2012)).
“Whether a contract is ambiguous is a question of law over which we exercise free
review.” Swanson v. Beco Constr. Co., Inc., 145 Idaho 59, 62, 175 P.3d 748, 751 (2007)
(citing Howard v. Perry, 141 Idaho 139, 142, 106 P.3d 465, 468 (2005)).
V. ANALYSIS
1. The district court did not err in interpreting the term “commission.”
The Kunzes argue that the district court erred in interpreting the term “commission” by
relying on Bryan’s subjective, undisclosed intent—that the payments were bonuses, not profit
sharing payments—and failed to attribute more significance to the parties’ course of conduct.
Specifically, the Kunzes argue that in interpreting the term “commission” narrowly, the district
court ignored the following: (1) that N.I. made profit sharing payments to Bret; and (2) that at the
time the 2009 Contract was signed, Bryan mentioned that N.I. had a good profit sharing
arrangement with Michael. Citing Johnson Cattle Co. v. Idaho First Nat’l Bank, 110 Idaho 604,
607, 716 P.2d 1376, 1379 (Ct. App. 1986), the Kunzes submit that Bryan’s statement, which was
made contemporaneous with the signing of the 2009 Contract, is material to the interpretation of
the 2009 Contract.
On a somewhat unrelated note, the Kunzes argue that the district court erred in
concluding that a profit sharing agreement did not exist for business written with Acuity or
7
Farmers Alliance. The Kunzes argue that the only difference between Gem State and the
aforementioned companies is that N.I. had exclusive control over the accounting information for
Acuity and Farmers Alliance.
In response, N.I. makes two arguments. First, N.I. argues that the Kunzes’ argument fails
to consider the fact that the parties’ course of conduct is merely one of several factors the district
court considered in interpreting the term “commission.” Second, N.I. argues that the district
court erred in considering extrinsic evidence, i.e., the parties’ course of conduct, to conclude that
an implied in fact contract existed for Gem State profit sharing. Specifically, N.I. argues that the
district court erred in making findings concerning the separate agreement because the legal
theory upon which it was based—an implied in fact contract—was not pleaded by the Kunzes.
Nonetheless, N.I. recognizes that because the district court ultimately entered judgment in its
favor, the error was “probably harmless.”
“A contract term is ambiguous when there are two different, reasonable interpretations of
the language.” Brown v. Greenheart, 157 Idaho 156, 167, 335 P.3d 1, 12 (2014) (citing Swanson
v. Beco Constr. Co., 145 Idaho 59, 62, 175 P.3d 748, 751 (2007)). In J.R. Simplot Co. v. Bosen,
this Court explained how a court should interpret an ambiguous contract.
If the provisions of a contract are ambiguous, the interpretation of those
provisions is a question of fact which focuses upon the intent of the
parties. Bream v. Benscoter, 139 Idaho 364, 79 P.3d 723 (2003). The
determination of the parties’ intent is to be determined by looking at the contract
as a whole, the language used in the document, the circumstances under which it
was made, the objective and purpose of the particular provision, and any
construction placed upon it by the contracting parties as shown by their conduct
or dealings. Ramco v. H–K Contractors, Inc., 118 Idaho 108, 794 P.2d 1381(1990); International Eng’g Co., Inc. v. Daum Indus., Inc., 102 Idaho 363, 630
P.2d 155 (1981). A party’s subjective, undisclosed intent is immaterial to the
interpretation of a contract.
144 Idaho 611, 614, 167 P.3d 748, 751 (2006).
The term “commission” is ambiguous because it is not defined by the 2009 Contract and
has multiple reasonable definitions in the insurance industry including monthly commissions and
annual contingent commissions. The parties both proffered a reasonable definition that,
unsurprisingly, best suited their respective positions. To resolve the ambiguity, the district
correctly applied the factors from Bosen. The district court examined the 2009 Contract as a
whole and the language used therein and noted that the term “commission” was used multiple
8
times, including in the context of monthly payments with no attempt to import different
meanings between each use of the term. Further, the district court highlighted the fact that Bret’s
2009 Contract and his 1996 Contract were nearly identical, and Bret admitted that he did not
expect to receive profit sharing under his 1996 Contract. As for the circumstances surrounding
the execution of the 2009 Contract, the district court noted that Bret testified that he entered the
2009 Contract with the expectation that an ownership provision would be included; therefore, the
district court reasoned that it would be expected that had profit sharing been contemplated by the
parties, it would be expressly provided in the 2009 Contract. Regarding the parties’ course of
conduct, the district court found that both sides agreed that commissions were paid monthly and
profit sharing was paid annually. Accordingly, because there was no attempt to distinguish
“commission” in paragraph six (in the context of monthly payments) from “commission” in
paragraph seven (addressing the compensation percentage split), the district court found that both
uses of the term must be limited to the monthly commission payments, not annual profit sharing
payments. In sum, substantial and competent evidence supports the district court’s finding that
the term “commission,” as used in the 2009 Contract, is limited to monthly commissions and
does not include profit sharing.
The Kunzes’ arguments are unpersuasive. Bryan’s comments about profit sharing checks,
and the fact that N.I.’s payments to Bret were labeled “profit sharing” are not dispositive. The
Kunzes are correct in asserting that Johnson Cattle Co., Inc. stands for the proposition that, in
interpreting an ambiguous contract, evidence of an oral agreement reached prior to the signing of
a contract may be admissible to resolve the ambiguity. 110 Idaho 604, 607, 716 P.2d 1376, 1379
(Ct. App. 1986). In Johnson Cattle Co., however, the oral agreement was just that: an agreement.
Id. A bank manager purportedly agreed to finance a loan if the opposing party was willing to
relinquish its secured position. Id. Here, however, the Kunzes rely merely upon a statement made
by Bryan and fail to present evidence that the parties had reached an oral agreement regarding
profit sharing. Bryan’s statements are of limited value to the Kunzes’ position because the
Kunzes failed to present evidence that an oral agreement had been reached.
The Kunzes’ somewhat unrelated argument—that the district court erred in concluding
that an individual profit sharing agreement did not exist for business written for Acuity or
Farmers Alliance—is meritless. The Kunzes argue that the only difference between Gem State
and the aforementioned companies is that N.I. had exclusive control over the accounting
9
information for Acuity and Farmers Alliance. The Kunzes’ argument ignores the basis upon
which the district court concluded a side agreement existed, i.e., N.I. and Bret, through an
exchange of emails and corresponding payments, reached an implied in fact contract to split
Gem State profit sharing 50/50. Whether or not N.I. had exclusive control over certain
accounting information is irrelevant.
Under Idaho Appellate Rule 11(g), a respondent must file a cross-appeal if it seeks
affirmative relief by way of reversal, vacation, or modification of the judgment. I.A.R. 11(g).
This Court has clarified, in Walker v. Shoshone Cnty., that a cross-appeal is not required when a
respondent “merely seeks to sustain a judgment for reasons presented at trial which were not
relied upon by the trial judge but should have been.” 112 Idaho 991, 993, 739 P.2d 290, 292
(1987). Here, N.I. is seeking the vacation or reversal of the district court’s conclusion that an
implied in fact contract existed for Gem State’s profit sharing. We will not consider N.I.’s claim
because N.I. failed to file a cross-appeal. 5
2. The district court did not err in interpreting the phrase “other functions.”
The Kunzes argue that the phrase “other functions” provides an alternative basis for their
entitlement to profit sharing payments and that the district court erred by failing to interpret it as
such. The Kunzes note that while the district court concluded that the phrase “other functions”
was ambiguous, it failed to resolve the ambiguity. Thus, the Kunzes reason, the phrase was
rendered “meaningless surplusage.” The Kunzes argue that, in construing a contract, an
interpretation should be avoided that would render meaningless any particular provision of the
contract.
N.I. argues that the Kunzes’ assertion is meritless. N.I. notes that the district court
specifically addressed the phrase and concluded that it had “no place within this document other
than to notify the reader and the parties that there are other unexpressed functions and individual
agreements not discussed and/or outlined in the body of this document.”
The Kunzes premise their argument on a theory of contract interpretation advanced by
Justice Schroeder in his dissent in Star Phoenix Min. Co. v. Hecla Min. Co., 130 Idaho 223, 233,
939 P.2d 542, 552 (1996) (Schroeder, J., dissenting). Justice Schroeder quoted a Maine court,
5
For the same reason, we will not consider N.I.’s argument that the district court erred in concluding that Idaho Rule
of Civil Procedure 41(b) does not apply to declaratory judgment actions.
10
stating: “In construing a contract, an interpretation should be avoided that would render
meaningless any particular provision in the contract.” Id. While Justice Schroeder’s approach
does not appear to be adopted as precedent by this Court, it does mirror a well-recognized
approach to statutory interpretation: “The Supreme Court will not construe a statute in a way
which makes mere surplusage of provisions included therein.” Sweitzer v. Dean, 118 Idaho 568,
572, 798 P.2d 27, 31 (1990) (citing Hartley v. Miller-Stephan, 107 Idaho 688, 692 P.2d 332(1984)).
The Kunzes’ argument is unpersuasive. Considering the Bosen factors, there is no
indication that the phrase “other functions” includes profit sharing. For example, Bret’s 1996
Contract includes the phrase “other functions”; yet, Bret did not expect profit sharing under that
contract. As for the purpose of the phrase, it notifies a reader that unexpressed functions, which
are the responsibility of N.I., exist. Further, considering the 2009 Contract as a whole, there is no
mention of profit sharing. It is unreasonable to assume that “other functions” would somehow
include profit sharing.
3. The district court did not err when it characterized certain payments as “gratuitous
bonuses.”
The Kunzes argue that the district court erred in concluding that certain payments from
N.I., which related to business with Acuity, Farmers Alliance, and Allied, were “gratuitous
bonuses.” The Kunzes assert that the only explanation for the district court’s conclusion is that it
impermissibly considered Bryan’s subjective, undisclosed intent that the payments were bonuses.
N.I. does not dispute the Kunzes’ argument that a party’s subjective, undisclosed intent is
immaterial to the interpretation of a contract. Indeed, N.I. argues that the objective law of
contract should be applied when a contract is unambiguous. However, N.I. asserts that the
Kunzes’ argument fails because they attempt to apply the objective law of contract interpretation
to extrinsic evidence, i.e., the checks labeled “profit sharing.” N.I. argues that there is no
authority supporting such an application. Separately, N.I. asserts that the Kunzes overlook the
reasonable approach by which the district court reached its conclusion.
The Kunzes’ argument is unpersuasive. Inexplicably, they assert that the district court
must have relied on Bryan’s subjective, undisclosed intent in characterizing certain payments as
gratuitous bonuses. Such an assertion ignores the rational process by which the district court
reached its conclusion. The district court determined that the term “commission” in the 2009
11
Contract was ambiguous, applied the Bosen factors, and concluded that the meaning of
“commission” was limited to monthly commissions. Thus, the district court held that the 2009
Contract did not provide for profit sharing. As discussed above, this conclusion was correct.
Digressing for a moment from the substantive issues, we feel compelled to acknowledge
that this result is not especially equitable to the Kunzes. N.I. was less than transparent with Bret
regarding its position on profit sharing. Indeed, N.I. allowed Bret to operate under the 2009
Contract with the understanding that he would receive profit sharing, but did not correct Bret
until litigation commenced. Despite our discomfort with the scenario, there is no legal basis upon
which to find that the parties had a legally enforceable contract regarding profit sharing.
“[C]ourts do not possess the roving power to rewrite contracts in order to make them more
equitable.” Kantor v. Kantor, 160 Idaho 810, 820, 379 P.3d 1080, 1090 (2016) (quoting Losee v.
Idaho Co., 148 Idaho 219, 223, 220 P.3d 575, 579 (2009)). Furthermore, while “[e]quity may
intervene to change the terms of a contract if the court finds unconscionable conduct serious
enough to justify its interference,” the harsh enforcement of unwise provisions is not proper
justification. Id. Despite our misgivings with the result, we affirm the district court’s decision.
4. The district court did not err in concluding that profit sharing payments for Gem
State should be split 50/50.
The Kunzes assert that the district court erred by importing the 50/50 ownership split
from the 2009 Contract to the Gem State implied in fact contract instead of the 80/20
commission split, which was also in the 2009 Contract. They argue that this Court should “set
aside the conclusion that profit sharing payments are limited to 50/50 where nothing in the [2009
Contract] supports that.”
N.I. asserts that the district court’s conclusion that the Gem State profit sharing should be
split 50/50 was based on the parties’ course of conduct. Further, N.I. argues that the Kunzes’
argument that the profit sharing split should be 80/20 contradicts the district court’s conclusion
that the term “commission” does not include profit sharing.
The Kunzes’ argument is unpersuasive. The crux of the Kunzes’ argument is that the
district court erred by importing the incorrect percentage split from the 2009 Contract to the
implied in fact contract. This position is undermined by two of the district court’s findings. First,
the district court found that the profit sharing split for the implied in fact contract stemmed from
the parties’ course of conduct. Accordingly, the Kunzes’ assumption that the 2009 Contract was
12
the source of the profit sharing split for the implied in fact contract is incorrect. Second, the
district court found that the 2009 Contract did not provide for profit sharing. Thus, it would be
nonsensical for the 2009 Contract to provide the profit sharing percentage split for the implied in
fact contract.
5. The district court did not err by failing to construe the 2009 Contract against the
drafter, N.I.
The Kunzes argue that the district court erred by failing to apply the general rule that
written documents, if ambiguous, should be construed against the drafter. They assert that the
district court found that there was little evidence demonstrating that a discussion occurred
regarding profit sharing, yet failed to interpret the 2009 Contract against N.I., the drafter.
In Sinclair Mktg., Inc. v. Siepert, this Court provided as follows: “If the factfinder is
unable to determine the intentions of the parties from the factual evidence, then the ambiguity
should be resolved against the drafter of the contract as a last resort.” 107 Idaho 1000, 1005, 695
P.2d 385, 390, n.5 (1985). This approach is confirmed by Idaho Jury Instruction 6.08.3, which
states:
Where there is ambiguous language in a contract, and where the true intent
of the parties cannot be ascertained by any other evidence, the ambiguity can be
resolved by interpreting the contract against the party who drafted the contract or
provided the ambiguous language.
I.D.J.I. 6.08.3.
The Kunzes’ argument is unavailing because the ambiguities in the 2009 Contract were
resolved by applying the Bosen factors. Accordingly, it is unnecessary to interpret the 2009
Contract against the drafter, N.I., because such an approach is only employed when the intent of
the parties cannot be ascertained by any other evidence. Sinclair Mktg., Inc., 107 Idaho at 1005,
695 P.2d at 390, n.5.
6. The district court did not err by failing to note in its judgment that the Kunzes
prevailed in part.
The Kunzes emphasize that, before trial, N.I. stipulated that it had no interest in life or
health insurance sold by Bret or his wife, and no interest in the health insurance book of business
that they purchased from Michael’s widow. The Kunzes argue that the district court erred by
failing to include this stipulation into its judgment. They assert that the district court’s omission
is noteworthy because it may have an impact on attorney’s fees awarded below. Accordingly,
13
they ask this Court to order that any final judgment from the district court must incorporate N.I.’s
stipulation.
N.I. argues that the Kunzes waived this issue because they did not raise it below and
because they failed to provide legal authority supporting the assertion. Further, N.I. argues that
the Kunzes’ position on this issue is inconsistent with their position at a January 21, 2016
hearing, in which Bret objected to “any amendment.” Lastly, N.I. argues that the Kunzes’
argument is inconsistent with Idaho Rule of Civil Procedure 54(b) because after this appeal, the
district court will resume jurisdiction and enter judgment on all remaining claims.
Idaho Rule of Civil Procedure 54(b) addresses partial judgment upon multiple claims or
involving multiple parties. I.R.C.P. 54(b). Subsection one of the rule provides as follows:
When an action presents more than one claim for relief, whether as a
claim, counterclaim, crossclaim, or third-party claim . . . the court may direct
entry of a final judgment as to one or more, but fewer than all, claims or parties
only if the court expressly determines that there is no just reason for delay.
Otherwise, any judgment, however designated, that adjudicates fewer than all the
claims or the rights and liabilities of fewer than all the parties does not end the
action as to any of the claims or parties and may be revised at any time before the
entry of a judgment adjudicating all the claims and all the parties’ rights and
liabilities. In the event the trial court determines that a partial judgment should be
certified as final under this Rule 54(b), the court must execute a certificate which
must immediately follow the court's signature on the partial judgment and be in
substantially the form found in Appendix B.
Id.The district court still has the opportunity to address the remaining claims and issue a
final judgment. Further, the district court will have the opportunity to consider the fact that N.I.
stipulated to part of the Kunzes’ complaint before ruling on costs and attorney’s fees. Therefore,
the district court did not err by failing to note that the Kunzes prevailed in part.
7. Neither party is entitled to attorney’s fees on appeal.
In their opening brief, the Kunzes’ argument for attorney’s fees on appeal consists, in its
entirety, as follows: “Appellants should be awarded their attorney’s fees on appeal.”
N.I. argues that it is entitled to attorney’s fees and costs on appeal on multiple grounds.
First, N.I. asserts that it is entitled to costs under Idaho Code section 10-1210. Next, N.I. argues
that it should be awarded attorney’s fees as the prevailing party under Idaho Code section 12-
14
120(1) and (3). Lastly, N.I. asserts that it should be awarded attorney’s fees under Idaho Code
section 12-121 because the Kunzes’ appeal was unreasonable and lacked foundation.
In Asbury Park, LLC v. Greenbriar Estate Homeowners’ Ass’n, Inc., this Court reviewed
a partial judgment that was certified as final pursuant to Idaho Rule of Civil Procedure 54(b).
152 Idaho 338, 345, 271 P.3d 1194, 1201 (2012). The Court reasoned that it could not determine
the prevailing party, nor could it award attorney’s fees because the certified judgment did not
dispose of all of the parties’ claims. Id. The Court instructed the district court to “take the issue
of attorney fees and costs . . . into consideration when it addresses all fees and costs at the
conclusion of the case.” Id. at 346, 271 P.3d at 1202. Similarly, at this time, we cannot determine
a prevailing party, nor can we award attorney’s fees on appeal, because the judgment before this
Court did not dispose of all the parties’ claims; namely, Bret’s accounting claim. Nonetheless,
we instruct the district court to consider the issue of attorney’s fees and costs when it addresses
all fees and costs at the conclusion of the case.
VI. CONCLUSION
We affirm the judgment of the district court. Attorney’s fees and costs on appeal are not
awarded to either party at this time.
Chief Justice BURDICK, Justices EISMANN, HORTON and BRODY, CONCUR.
15