Wallace v. Smith

 matter of law that: (1) any breach occurred in 1998 because the agreement
was not an installment contract; and (2) Smith's conduct was not
anticipatory repudiation, Wallace's performance was not excused, and the
parties mutually abandoned the agreement in 1998 by failing to perform.
As a result, the district court concluded that Wallace's cause of action
accrued in 1998 and the period of limitations expired in 2004, three years
before Wallace filed his complaint. Wallace now appeals.'
We review a district court's order granting summary judgment
de novo. Wood v. Safeway, Inc., 121 Nev. 724, 729, 121 P.3d 1026, 1029
(2005). NRS 11.190(1)(b) provides a six-year period of limitations for
actions based on written contracts. Because the period of limitations does
not begin to run until a cause of action accrues, Schwartz v. Wasserburger,
117 Nev. 703, 706, 30 P.3d 1114, 1116 (2001), we must determine when
Wallace's cause of action for breach of the agreement accrued.
The agreement was an indivisible installment contract, and the period of
limitations only began to run when each installment became due
The nature of a contract depends on the intent of the parties
and is a question of law that this court reviews de novo. See Dredge Corp.
v. Wells Cargo, Inc., 82 Nev. 69, 73, 410 P.2d 751, 754 (1966); Linebarger
v. Devine, 47 Nev. 67, 72, 214 P. 532, 534 (1923). "A contract is divisible
where . . . performance of each party is divided into two or more parts; the
number of parts due from each party is the same; and the performance of
'David Wallace died after the district court entered summary
judgment in Smith's favor and before briefing was completed on appeal.
Tanya Wallace, his widow and personal representative of his estate,
maintains this appeal. However, because Ms. Wallace has no further
involvement in this matter, we refer to David Wallace simply as "Wallace"
throughout this order.
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each part is the agreed exchange for a corresponding part by the other
party." Dredge Corp., 82 Nev. at 73, 410 P.2d at 754. In contrast, a
contract is indivisible "if the consideration . . . is single, and cannot be
apportioned to particular promises on each side." 15 Richard A. Lord,
Williston on Contracts § 45:7 (4th ed. 2014); see also Linebarger, 47 Nev. at
72, 214 P. at 534.
Here, Smith was to make payments weekly, but Wallace's
services were not expressly apportioned to the payments or in any other
way. Therefore, the agreement was an indivisible contract. See Dredge
Corp., 82 Nev. at 73, 410 P.2d at 754.
However, the district court and the parties assumed that
because the agreement was indivisible, it could not be an installment
contract. This assumption is incorrect. It is well established that a
contract that provides for installment payments that "are not referable to
severable items or portions of the performance but are referable to the
performance of the whole" may still be an indivisible contract. 17A Am.
Jur. 2d Contracts § 411 (2004); see also Williston on Contracts, supra, §
45:1.
Although the agreement was indivisible because it required
Wallace's continuous services for a seven-year period, it also required
Smith to make weekly payments. This was an installment obligation
because the payments were to be made periodically. See Black's Law
Dictionary 868 (9th ed. 2009) (defining "installment" as "[a] periodic
partial payment of a debt"); Peterson v. Highland Music, Inc., 140 F.3d
1313, 1321 (9th Cir. 1998) (treating 'a continuing obligation to pay a
portion of the profits and royalties" as an installment obligation for statute
of limitations purposes).
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Accordingly, Wallace's claims are barred by the statute of
limitations only as to those installments that became due more than six
years before Wallace filed the complaint unless the parties mutually
abandoned the contract, which, as discussed below, presents a question of
fact on the record here. See Clayton v. Gardner, 107 Nev. 468, 470, 813
P.2d 997, 999 (1991) (stating that each failure to pay an installment when
due constitutes a separate breach, and the period of limitations begins to
run on each installment only when that installment is due); NRS
11.190(1)(b).
The district court erred by finding as a matter of law that Smith's conduct
did not amount to anticipatory repudiation, Wallace's performance was not
excused, and the parties mutually abandoned the agreement
Wallace argues that the district court erred by finding on
summary judgment that Smith did not anticipatorily repudiate the
agreement, Wallace's performance was not excused, and the parties
mutually abandoned the agreement by failing to perform. We agree.
Anticipatory repudiation of a contract "must be clear, positive,
and unequivocal." Covington Bros. v. Valley Plastering, Inc., 93 Nev. 355,
360, 566 P.2d 814, 817 (1977). Anticipatory repudiation may be implied
from conduct that prevents performance. Taylor v. Johnston, 539 P.2d
425, 430 (Cal. 1975). Prevention of performance may be evidenced by
"any acts, conduct, or declarations of the party, evincing a clear intention
to repudiate the contract, and to treat it as no longer binding." Cladianos
v. Fried hoff, 69 Nev. 41, 46, 240 P.2d 208, 210 (1952) (quoting Lake Shore
& M.S. Ry. Co. v. Richards, 38 N.E. 773, 779 (Ill. 1894)). Whether conduct
constitutes anticipatory repudiation depends on "the total factual context
of the individual case." Covington Bros., 93 Nev. at 360, 566 P.2d at 817.
A party's failure to perform under a contract is excused where the other
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party prevents that performance by anticipatory repudiation. Cladianos,
69 Nev. at 45, 240 P.2d at 210.
It is undisputed that Smith left Las Vegas for Los Angeles,
ceased contact with Wallace, made no payments to Wallace, and pursued
deals with record companies without consulting Wallace. Wallace was
aware of Smith's conduct. Viewing these facts in the light most favorable
to Wallace, a fact-finder could reasonably conclude that Smith's ceasing
communication with Wallace made Wallace's performance impossible and
amounted to anticipatory repudiation. 30 Williston on Contracts, supra, §
77:13 (4th ed. 2004) ("impracticability cases [are] fact driven, leaving
much for the trier of fact"). Accordingly, the district court erred by
concluding as a matter of law that Smith's conduct did not amount to
anticipatory repudiation. 2 See Cladianos, 69 Nev. at 46, 240 P.2d at 210;
Taylor, 539 P.2d at 430. As a result, we also conclude that the district
court erred by finding as a matter of law that Wallace's performance was
not excused. See Cladianos, 69 Nev. at 45-46, 240 P.2d at 210; see also 23
Williston on Contracts, supra, §63:15 (4th ed. 2002) ("The issue whether a
party's [alleged] breach excuses future performance of the contract by the
nonbreaching party. . presents a question of fact.").
2 Wallace also argues that the statute of limitations was tolled until
the end of the contract term by anticipatory repudiation. When a party
anticipatorily repudiates a contract, the cause of action for breach of
contract "accrues either on the date that performance under the contract is
due or, if the plaintiff so elects, on the date that the plaintiff sues upon the
anticipatory breach." Schwartz v. Wasserburger, 117 Nev. 703, 707, 30
P.3d 1114, 1116 (2001) (emphasis added). Therefore, assuming that
Smith's conduct amounted to anticipatory repudiation and that the parties
did not mutually abandon the contract, Wallace had the option to sue
immediately or wait until Smith actually breached the agreement. See id.
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The district court further found that because Wallace's
performance was not excused and neither Wallace nor Smith performed
under the agreement after 1998, the parties mutually abandoned the
agreement. "[C]ontract abandonment occurs when both parties depart
from the terms of the contract by mutual consent." J.A. Jones Const. Co.
v. Lehrer McGovern Bovis, Inc., 120 Nev. 277, 292, 89 P.3d 1009, 1019
(2004). Consent may be implied where 'the acts of one party inconsistent
with [the contract's] existence are acquiesced in by the other." Id.
(alteration in original) (quoting Paterson v. Condos, 55 Nev. 134, 142, 28
P.2d 499, 500 (1934)). Whether parties have abandoned a contract
presents a question of fact. Id. A nonbreaching party need not engage in
futile gestures to preserve contractual rights. 17A Am Jur. 2d Contracts §
598 (2004); see also Mayfield v. Koroghli, 124 Nev. 343, 349, 184 P.3d 362,
366 (2008).
Here, Smith left Las Vegas, and Wallace claims that he tried
to contact Smith by telephone to no avail. The record does not suggest
that Wallace ever went to Los Angeles even though he knew about Smith's
conduct, nor does it indicate how many calls he made or when he stopped
trying to contact Smith, so a reasonable fact-finder could find that Wallace
abandoned the contract by failing to put himself in a position of ability to
perform his obligations. 3 But a reasonable fact-finder also could conclude
3 Wenote that a court may refuse to allow recovery by either party to
an agreement where the parties are left in statuS quo. See, e.g., 15
Williston on Contracts, supra, § 43:31 ("[T]he mutual inability or
unwillingness of the parties to a contract to perform will discharge the
duty of each to the other."). Nonetheless, because there are material
disputes of fact with regard to the parties' actions and intentions, such a
determination would be premature at this time.
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from these sparse facts that Wallace tried, failed, and eventually gave up
trying to contact Smith but did not consent to abandoning the agreement,
see J.A. Jones Const. Co., 120 Nev. at 292, 89 P.3d at 1019, and that
further efforts to contact Smith would have been futile. See 17A Am. Jur.
2d Contracts § 598 (2004); Mayfield, 124 Nev. at 349, 184 P.3d at 366.
Thus, we conclude that the district court erred by finding that Wallace
abandoned the agreement as a matter of law.
In conclusion, the district court erred by entering summary
judgment because genuine issues of material fact exist as to anticipatory
repudiation and mutual abandonment. Assuming no mutual
abandonment, Wallace's claims are barred by the statute of limitations
but only as to those installments that became due more than six years
before Wallace filed the complaint.
Accordingly, we
ORDER the judgment of the district court AFFIRMED IN
PART AND REVERSED IN PART AND REMAND this matter to the
district court for proceedings consistent with this order.
Pickering
t-
ojtida
Parraguirre
Saitta
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cc: Hon. Linda Marie Bell, District Judge
M. Nelson Segel, Settlement Judge
David Lee Phillips & Associates
JH Freeman Law (Pro Hac Vice)
Snell & Wilmer, LLP/Las Vegas
Eighth Judicial District Court Clerk
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