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IN THE SUPREME COURT OF THE STATE OF IDAHO
Docket No. 34793
WILMA CLAIRE JUSTAD,                                                                                   )
                                                                                                       )   Coeur d’Alene, April 2009 Term
Plaintiff-Respondent-Cross Appellant,                                                                  )
                                                                                                       )   2009 Opinion No.   86
v.                                                                                                     )
                                                                                                       )   Filed:  June 18, 2009
RONALD WARD, person representative of                                                                  )
the PHYLLIS A. GASSER ESTATE,                                                                          )   Stephen Kenyon, Clerk
)
Defendant-Appellant-Cross Respondent.                                                                  )
Appeal from the District Court of the First Judicial District of the State of Idaho,
Kootenai County.  Honorable John T. Mitchell, District Judge.
The judgment of the district court is reversed.
William Appleton, Coeur d‟Alene, for appellant.
Lukins & Annis, Coeur d‟Alene, for respondent.  Peter J. Smith IV argued.
HORTON, Justice
This is an appeal from the district court‟s grant of specific performance of an option to
purchase real property.   Ronald Ward (Ward) appeals the district court‟s finding that Wilma
Claire Justad (Justad) timely exercised an option to purchase real property from the estate of
Phyllis Gasser  (Gasser), for which he is the personal representative, and the district court‟s
finding that the option is enforceable.   Justad cross-appeals the district court‟s decision to deny
her attorney fees and seeks an award of attorney fees on appeal.   Because we reverse the district
court‟s holding that Justad timely exercised the option and hold that she did not, we decline to
address whether the option is enforceable.  We also hold that Justad is not entitled to an award of
attorney fees.
I. FACTUAL AND PROCEDURAL BACKGROUND
In 1978, Justad and her husband entered into two written agreements with Justad‟s sister,
Gasser, and her husband.   The first was a contract wherein the Gassers agreed to sell and the
Justads agreed to purchase approximately 113 acres of real property in Harrison, Idaho.   The
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second was an option contract whereby for $100 the Justads acquired an option to purchase
property located adjacent to the 113 acres that was the subject of the first contract.
The purchase price of the property under the option was to be $97,000 “payable in equal
annual installments from the date of exercise of said Option over a ten (10) year period of time,
without interest upon the unpaid principal balance.”  The option could be:
[E]xercised upon the mutual consent of all parties to this Agreement, in writing,
or the JUSTED‟S [sic] may elect to exercise said Option upon the deaths of both
JOHN W. GASSER and PHYLLIS A. GASSER.   Provided, that said election
shall be exercised within sixty days of the death of the last to die . . .
Id.  John Gasser died in 1984, and Phyllis died on February 19, 2006.
Ward initiated a probate proceeding for Gasser‟s estate, and the court scheduled a hearing
on the application for April 11, 2006.   Upon receiving notice of the hearing, which was to take
place in Kootenai County, Justad instructed her daughter, Jodi Justad-Hood (Justad-Hood), to
travel from Boise to Coeur d‟Alene and attend the hearing in order to convey Justad‟s intent to
exercise the option.   Justad-Hood attended the hearing and explained that she was there on
Justad‟s behalf and that she held Justad‟s power of attorney.  Justad-Hood also uttered the phrase
“my mother owns a . . .                                                                                 .”   The magistrate judge mistakenly thought that Justad-Hood‟s purpose
at the hearing was to object to the appointment of Ward as personal representative, and thus the
judge interrupted Justad-Hood as she began to explain her purpose and ordered the hearing
continued until June 15, 2006.   At the June 15, 2006 hearing, Ward was appointed personal
representative of Gasser‟s estate; earlier the same day Justad provided written notice to Ward‟s
attorney of her intent to exercise the option.
Ward refused to recognize Justad‟s exercise of the option, and Justad filed a complaint on
June 16, 2006, seeking specific performance of the option.   After a court trial on October 15,
2007, the district court ruled that Justad was entitled to specific performance of the option.
Specifically, the court held that the contract does not lack essential terms and is thus enforceable;
that Justad timely exercised the option at the April 11, 2006 hearing; and, alternatively, that
Justad timely exercised the option through her June 15, 2006 letter.   The district court entered its
judgment on November 16, 2007, from which Ward appeals.   Justad cross-appeals the district
court‟s decision not to award her attorney fees and requests an award of attorney fees on appeal.
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II. STANDARD OF REVIEW
Imposition  of  an  equitable  remedy  requires  a  balancing  of  the  equities,  which  is
inherently a factual determination; therefore, the district court‟s imposition of such a remedy
should be reviewed for an abuse of discretion.   West Wood Inv., Inc. v. Acord, 141 Idaho 75, 82,
106 P.3d 401, 408 (2005).   A trial court does not abuse its discretion if it (1) correctly perceives
the issue as discretionary, (2) acts within the bounds of discretion and applies the correct legal
standards, and (3) reaches the decision through an exercise of reason.   Id. (citing Sun Valley
Potato Growers, Inc. v. Texas Refinery Corp., 139 Idaho 761, 768, 86 P.3d 475, 482 (2004)).
Review of a trial court‟s conclusions from a bench trial is limited to ascertaining whether
the  evidence  supports  the  findings  of  fact,  and  whether  the  findings  of  fact  support  the
conclusions of law.   Benninger v. Derifield, 142 Idaho 486, 488-89, 129 P.3d 1235, 1237-38
(2006) (citing Alumet v. Bear Lake Grazing Co., 119 Idaho 946, 949, 812 P.2d 253, 256 (1991)).
Since it is the province of the trial court to weigh conflicting evidence and testimony and to
judge the credibility of the witnesses, this Court will liberally construe the trial court‟s findings
of fact in favor of the judgment entered.   Rowley v. Fuhrman, 133 Idaho 105, 107, 982 P.2d 940,
942 (1999).   This Court will not set aside a trial court‟s findings of fact unless the findings are
clearly erroneous.   Ransom v. Topaz Mktg., L.P., 143 Idaho 641, 643, 152 P.3d 2, 4 (2006);
I.R.C.P. 52(a).  If the trial court based its findings on substantial evidence, even if the evidence is
conflicting, this Court will not overturn those findings on appeal.   Benninger, 142 Idaho at 489,
129 P.3d at 1238.   This Court will not substitute its view of the facts for that of the trial court.
Ransom, 143 Idaho at  643, 152 P.3d at  4.   However, this Court exercises free review over
matters of law.   Bolger v. Lance, 137 Idaho 792, 794, 53 P.3d 1211, 1213 (2002) (citing Bouten
Constr. Co. v. H.F. Magnuson Co., 133 Idaho 756, 760, 992 P.2d 751, 755 (1999)).
III. ANALYSIS
Because we find that Justad failed to timely exercise the option, either at the April 11,
2006 hearing or through her June 15, 2006 letter, we decline to address whether the option is
sufficiently certain in its essential terms so as to be enforceable.  Ward has not requested attorney
fees, and because Justad is not the prevailing party, we decline her request for attorney fees
below and on appeal.
A. The district court erred in finding that Justad exercised the option at the April 11, 2006
hearing.
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Ward argues that although it was later established that Justad-Hood only attended the
April 11, 2006 hearing in order to exercise the option on Justad‟s behalf, that purpose was not
disclosed at the hearing and thus Justad did not successfully exercise the option.  We agree.
Formation  of  a  valid  contract  requires  a meeting of the  minds as  evidenced by a
manifestation of mutual intent to contract.   Inland Title Co. v. Comstock, 116 Idaho 701, 703,
779  P.2d  15,  17  (1989).    This  manifestation  takes  the  form  of  an  offer  followed  by  an
acceptance.   Id.   An option contract is an offer that, upon sufficient consideration, may not be
revoked for an agreed upon amount of time.   See 17A Am. Jur. 2d Contracts § 53 (2d ed. 2008).
An acceptance of an option is an expression by the offeree that accepts the offer in accordance
with the terms of the offer.   See IDJI 6.05.2.   The acceptance is not complete until it has been
communicated to the offeror.   Id.   Acceptance of an offer must be unequivocal.   Huyett v. Idaho
State Univ., 140 Idaho 904, 909, 104 P.3d 946, 951 (2004). Generally, silence and inaction does
not constitute acceptance.   17A Am. Jur. 2d Contracts § 98 (2d ed. 2008).   More specifically:
Because assent to an offer that is required for the formation of a contract is
an  act  of  the  mind,  it  may either  be  expressed  by words  or  evidenced  by
circumstances from which such assent may be inferred, such as the making of
payments or the acceptance of benefits.  Anything that amounts to a manifestation
of a formed determination to accept, and is communicated or put in the proper
way to be communicated to the party making the offer, completes a contract.
A  response  to  an  offer  amounts  to  an  acceptance  if  an  objective,
reasonable person is justified in understanding that a fully enforceable contract
has been made, even if the offeree subjectively does not intend to be legally
bound. This objective standard takes into account both what the offeree said,
wrote, or did and the transactional context in which the offeree verbalized or
acted.
17A Am. Jur. 2d Contracts § 91 (2d ed. 2008).
At the April 11, 2006 hearing on Ward‟s application for informal probate of the will and
appointment as personal representative of the estate, Justad-Hood stated the following:                 “I‟m
here just to hear what I - I was not sure what this court date - what this court was - was about.
And I flew up here from Boise last night.   Um, my point is, is that my mother sold some - that
my mother owns a -.”  The magistrate judge then interrupted her, stating that a hearing needed to
be scheduled to address any objection to Ward‟s appointment and expressing concern as to
Justad-Hood‟s standing to present such an objection.   Justad-Hood responded:                           “I have my
mother‟s power of attorney.”   The court responded that “a power of attorney doesn‟t allow
someone to come to court and act as an attorney” and sua sponte ordered that the hearing be
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rescheduled.   After a discussion regarding scheduling and the necessity of an attorney appearing
on behalf of Justad, Justad-Hood stated:                                                                 “I‟m - I‟m sorry, your Honor, I - I just - I really was
not sure what was going on today.  And I wanted to be present to hear what was happening.”
The district court found that “notice of intent to exercise the option, while somewhat
incomplete . . . was on the record, it was in open court, and were it not for [the magistrate
judge‟s] interruptions, the statement would‟ve been clearly communicated.”   The court went on
to note the testimony from Justad and Justad-Hood that Justad-Hood‟s only purpose in attending
the hearing was to exercise the option, and that there was no evidence to contradict that the
option was the only thing Justad owned that was relevant to the hearing.   The court thus inferred
that, but for the magistrate judge‟s interruptions, Justad-Hood would have finished her statement
that “my mother owns a -” with words making it clear that Justad “owned” the option and
wished to exercise it.
The district court applied an incorrect legal standard in reaching this conclusion.   The
pertinent inquiry is not whether the offeree intended to communicate acceptance of the offer;
rather, the inquiry is whether the offeree communicated acceptance of the offer.  Justad-Hood did
not unequivocally state that Justad accepted the offer.   Rather than stating that she was at the
hearing to learn what was going on, Justad-Hood could have informed the court and Ward that
she was present on her mother‟s behalf to exercise the option.   Justad-Hood did not tender
payment or otherwise objectively manifest Justad‟s intent to exercise the option.   Given these
circumstances, an objective, reasonable person observing the events of the April  11,  2006
hearing  could  not  conclude  that  a  contract  had  been  formed  based  upon  Justad-Hood‟s
incomplete statement in which she made no mention of the option or its subject matter.   We thus
hold that Justad failed to exercise the option at the April 11, 2006 hearing.
B. The district court erred in finding that Justad alternatively exercised the option through
her June 15, 2006 letter.
The district court found as a matter of law that the sixty-day period after Gasser‟s death
in which Justad could exercise the option did not begin to run until Ward was appointed personal
representative on June 15, 2006.  The court reasoned that prior to Ward‟s appointment, there was
no one upon whom Justad could serve notice of her intent to exercise the option.   The court
therefore found that Justad‟s letter of June 15, 2006, stating that she intended to exercise the
option was timely.   The difficulty with the district court‟s conclusion is simply this:   Justad gave
notice to Ward‟s attorney of her intention to exercise the option prior to his appointment.   The
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district court did not explain why it felt that notice given outside of the sixty days specified in the
option, but before Ward was appointed, should be given legal effect.
In Southern v. Southern, 92 Idaho 180, 438 P.2d 925 (1968), this Court stated that “[b]y
reason of the nature of such contract, [the] time stated for the exercise of an option is of the
essence and no express provision stating that time „is of the essence‟ need be contained therein to
make it so.”   Id. at 181, 438 P.2d at 926 (citing Rosenaur v. Pacelli, 345 P.2d 102 (Cal. App.
1959); Auslen v. Johnson, 257 P.2d 664 (Cal. App. 1953); Washoma Petroleum Co. v. Eason Oil
Co., 49 P.2d 709 (Okla. 1935); Andersen v. Brennen, 43 P.2d 19 (Wash. 1935)).
We agree with the district court‟s implicit conclusion that notice to Ward would have
been sufficient to convey Justad‟s acceptance of the offer extended in the option contract;
however, we are unable to agree with the district court‟s conclusion that the notice given on June
15, 2006 was timely.   The option contract specified the time in which it was required to be
exercised, i.e., “said election shall be exercised within sixty days of the death” of Phyllis Gasser.
As Justad did not give notice to Ward - nor to anyone else associated with the Gasser estate -
within the sixty days specified by the option, and because time is of the essence in an option
contract, we are unable to conclude that Justad‟s attempt to exercise the option was timely.   The
district court erred by granting summary judgment in Justad‟s favor.
C. Justad is not entitled to attorney fees.
By way of cross-appeal, Justad asserts that the district court erred by failing to award her
attorney fees pursuant to I.C. §§ 12-120(1) and 12-120(3). She also asks this Court to award her
attorney fees on appeal pursuant to these provisions and I.C. § 12-121.   An award of attorney
fees pursuant to these statutes would only be appropriate if Justad were the prevailing party.
Because we conclude that Justad did not timely communicate her exercise of the option, she is
not the prevailing party.  She is thus not entitled to an award of attorney fees.
IV. CONCLUSION
The district court abused its discretion in granting specific performance of the option
because it failed to apply the applicable legal standards.   We therefore reverse the judgment
granting specific performance in favor of Justad.   We decline to award Justad attorney fees.
Costs to Appellant.
Chief Justice EISMANN and Justices BURDICK, J. JONES and W. JONES CONCUR.
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