Larson Latham Huettl v. Iversen , 2023 ND 16 ( 2023 )

FILED
IN THE OFFICE OF THE
CLERK OF SUPREME COURT
FEBRUARY 16, 2023
STATE OF NORTH DAKOTA
IN THE SUPREME COURT
STATE OF NORTH DAKOTA
2023 ND 16Larson Latham Huettl LLP, Plaintiff and Appellee
v.
Travis D. Iversen, Defendant and Appellant
No. 20220198
Appeal from the District Court of Burleigh County, South Central Judicial
District, the Honorable Dann E. Greenwood, Judge.
AFFIRMED.
Opinion of the Court by Tufte, Justice.
Samuel G. Larson (argued) and Gregory C. Larson (on brief), Bismarck, N.D.,
for plaintiff and appellee.
Travis D. Iversen, self-represented, Bismarck, N.D., defendant and appellant.
Larson Latham Huettl v. Iversen
No. 20220198
Tufte, Justice.
[¶1] Travis D. Iversen appeals from a judgment in favor of the appellee,
Larson Latham Huettl, LLP (hereafter “LLH”), and an order denying relief
from judgment under N.D.R.Civ.P. 59(j). He argues that several genuine issues
of material fact remain, precluding summary judgment. He also argues the
district court abused its discretion in denying his motion under Rule 59(j). We
affirm the judgment and the order denying Iversen’s Rule 59(j) motion.
I
[¶2] Iversen is an attorney who was employed by LLH from February 2019
until July 2021. He signed an employment agreement with LLH in May 2019.
The applicable sections of the employment agreement are:
This agreement is between Larson Latham Huettl LLP
(LLH) and Travis D. Iversen (Associate).
WHEREAS, LLH has hired Associate and accepted the
services of Associate as an associate attorney; and
WHEREAS, Associate has accepted LLH’s offer of
employment; and
WHEREAS, the parties wish to memorialize the terms of the
existing employment as set out below effective February 5, 2019.
….
1. Salary. Associate will be paid a base salary pursuant to
agreement with LLH and an incentive commission as shown on the
attached Schedule A. Associate will be required to bill out the
average number of hours per week as shown on Schedule A
commensurate with Associate’s base salary.
….
3. Billed Hours Credited. Associate will be credited with
hours that are billed out to clients that are approved by a partner
of LLH. Associate may be credited for billable hours,
administration hours, or client relation hours.
It is possible, at the discretion of the partners of LLH, that
some of Associate’s hours may be eliminated if it is determined
that the hours are not appropriate to be billed and Associate will
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not receive any credit for these hours. If Associate is asked to do
certain work for the firm that cannot be billed to a client, then this
work will be billed as administration hours or client relations
hours. All administration and client relations hours must be pre-
approved by a partner of LLH.
….
6. Hours Billed Discrepancy. In the event that Associate bills
out less than the base quota for a three month period, the
Associate’s salary will be reduced appropriately at the discretion
of LLH in order to make up for any discrepancy. Any discrepancy
where the actual hours billed is less than the base hours required
will be considered to be a debt owed by Associate to LLH at the end
of the calendar year or at the termination of employment.
[¶3] Iversen asserts that Tyrone Turner, an LLH partner, told Iversen that
“you can only do the work that we give you.” After Iversen terminated his
employment with LLH, LLH requested that Iversen refund it $35,772.63 for
overpayment. LLH argues that Iversen owes this debt to LLH because he had
not been credited with sufficient billable hours to justify the compensation he
received under the employment agreement. Iversen refused to pay the
deficiency, and LLH then sued Iversen. The district court issued a
memorandum opinion granting LLH’s motion for summary judgment. Before
judgment was entered, Iversen filed a “motion for reconsideration” citing
N.D.R.Civ.P. 59(j). The district court denied Iversen’s motion.
[¶4] On appeal, Iversen argues that summary judgment was inappropriate
because genuine issues of fact remain as to whether: the employment
agreement was ambiguous or unconscionable, LLH waived its rights under the
agreement, it was impossible for Iversen to perform the agreement, LLH failed
to mitigate damages, the employment agreement lacked consideration, and the
district court’s pre-judgment interest award was miscalculated. On these same
bases, he argues that the district court’s denial of his motion to reconsider was
an abuse of discretion.
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II
[¶5] The district court granted LLH’s motion for summary judgment. This
Court’s standard of review over district court summary judgment orders is well
established.
Summary judgment is a procedural device under
N.D.R.Civ.P. 56(c) for promptly resolving a controversy on the
merits without a trial if there are no genuine issues of material
fact or inferences that can reasonably be drawn from undisputed
facts, or if the only issues to be resolved are questions of law. The
party seeking summary judgment must demonstrate there are no
genuine issues of material fact and the case is appropriate for
judgment as a matter of law. In deciding whether the district court
appropriately granted summary judgment, we view the evidence
in the light most favorable to the opposing party, giving that party
the benefit of all favorable inferences which can reasonably be
drawn from the record. A party opposing a motion for summary
judgment cannot simply rely on the pleadings or on unsupported
conclusory allegations. Rather, a party opposing a summary
judgment motion must present competent admissible evidence by
affidavit or other comparable means that raises an issue of
material fact and must, if appropriate, draw the court’s attention
to relevant evidence in the record raising an issue of material fact.
When reasonable persons can reach only one conclusion from the
evidence, a question of fact may become a matter of law for the
court to decide. A district court’s decision on summary judgment is
a question of law that we review de novo on the record.
Cuozzo v. State, 2019 ND 95, ¶ 7, 925 N.W.2d 752 (quoting Dahms v. Nodak
Mut. Ins. Co., 2018 ND 263, ¶ 6, 920 N.W.2d 293) (cleaned up).
[¶6] Iversen raised the following affirmative defenses at the district court:
unconscionability, waiver or estoppel, impossibility of performance, failure to
mitigate damages, and lack of consideration. We conclude, however, the court
did not err in granting LLH’s motion for summary judgment.
A
[¶7] Iversen argues the employment agreement was unconscionable.
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When this Court determines whether a contractual
provision is unconscionable, we employ a two-pronged framework.
The first prong pertains to procedural unconscionability, which
encompasses factors relating to unfair surprise, oppression, and
inequality of bargaining power.… The second prong pertains to
substantive unconscionability, which focuses upon the harshness
or one-sidedness of the contractual provision in question.… To
prevail on an unconscionability claim, a party alleging
unconscionability must demonstrate some quantum of both
procedural and substantive unconscionability, and courts are to
balance the various factors, viewed in totality, to determine
whether the particular contractual provision is so one-sided as to
be unconscionable.
Rutherford v. BNSF Ry. Co., 2009 ND 88, ¶ 22, 765 N.W.2d 705 (cleaned up).
“Procedural unconscionability relates to procedural deficiencies in the contract
formation process, including refusal to bargain over contract terms.”
Thompson v. Lithia ND Acquisition Corp. #1, 2017 ND 136, ¶ 19, 896
N.W.2d 230 (citing Strand v. U.S. Bank Nat’l Ass’n ND, 2005 ND 68, ¶ 10, 693
N.W.2d 918). “When one party is in such a superior bargaining position that it
totally dictates all terms of the contract and the only option presented to the
other party is to take it or leave it, some quantum of procedural
unconscionability is established.” Id. at ¶ 20 (quoting Strand, at ¶ 15).
[¶8] “Substantive unconscionability relates to the terms of the contract and
whether the terms are unreasonably favorable to the more powerful party.” Id.
at ¶ 19. Whether there is unconscionability is a question of law, but this Court
reviews those trial court’s factual findings necessary for unconscionability
determinations under the clearly erroneous standard of review under
N.D.R.Civ.P.52(a). Terry v. Terry, 2002 ND 2, ¶ 14, 638 N.W.2d 11 (citing Weber
v. Weber, 1999 ND 11, ¶ 8, 589 N.W.2d 358).
[¶9] Iversen argues the employment agreement was unconscionable because
LLH had sole control over his performance under the employment agreement
and how many hours to credit him, and it had primary control over his work,
which prevented him from being able to comply with the employment
agreement. The district court assumed there was “some level of procedural
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unconscionability” because LLH drafted the document and asked Iversen to
sign it after he had already begun his employment. Regarding substantive
unconscionability, there are no terms in the employment agreement that
support the contention that LLH had sole control over Iversen’s performance
under the employment agreement. The district court concluded as follows:
The agreement does not appear to be substantively
unconscionable. The agreement provided a salary for Iversen, gave
him benefits, allowed for paid time off, based his billable hours
requirement on the salary he received, and was an at-will contract.
Although LLH was permitted to recover the debt if Iversen did not
achieve his billable hour requirement, such a clause is not so one-
sided to be unconscionable. Rather, LLH was seeking to make
Iversen’s position profitable for the firm. Such an agreement is
clearly distinguishable from an unconscionable agreement as was
present in Eberle v. Eberle[, 2009 ND 107, 766 N.W.2d 477]. Under
the employment agreement, both parties received benefits and had
obligations. Having requirements for one’s employees is not
unconscionable.
We conclude the court did not err in concluding the employment agreement
was not substantively unconscionable. See Larson Latham Huettl LLP v.
Burckhard, 2022 ND 230, ¶ 20.
B
[¶10] Iversen argues LLH waived its contractual rights under the employment
agreement or it accepted Iversen’s performance in satisfaction of his
contractual obligations. “Waiver is a voluntary and intentional relinquishment
of a known existing advantage, right, privilege, claim, or benefit, and a waiver
can be made expressly or be inferred from conduct.” Schmitz v. North Dakota
State Bd. of Chiropractic Examiners, 2022 ND 113, ¶ 16, 974 N.W.2d 666(cleaned up). A party may waive a contractual right by acting in a manner that
is “so inconsistent with an intent to enforce the right which arises upon the
breach as reasonably to induce a belief that the right has been relinquished.”
Beck v. Lind, 235 N.W.2d 239, 252 (N.D. 1975). A party who delays “in enforcing
his contractual rights or who accepts performance in a manner different from
that required by the contract has been held” to have waived his contractual
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rights. Dangerfield v. Markel, 252 N.W.2d 184, 191 (N.D. 1977) (citing 2
Williston on Sales, Squillante & Fonseca, § 12-8, p. 39 (4th ed. 1973)).
[¶11] First, Iversen argues LLH waived its right to receive any reimbursement
because it delayed requesting repayment until after Iversen terminated his
employment. He argues the employment agreement required LLH to reduce
his salary every three months for any debt. We have already interpreted
another employment agreement with the same language to provide “discretion
to seek a recovery of the debt owed at the end of the calendar year or at the
termination of employment.” Burckhard, 2022 ND 230, ¶ 25; see also Kessel v.
Western Sav. Credit Union, 463 N.W.2d 629, 629-31 (N.D. 1990) (credit union
did not waive its rights under the contract when its actions were expressly
authorized by the agreement). LLH’s exercise of its discretion between two
options under the employment agreement is not a waiver.
[¶12] Iversen also argues LLH waived its rights because it failed to give him
any notice that he owed a deficiency. This argument fails because there is no
notice requirement in the employment agreement, and the record shows that
Iversen had notice of his monthly obligation through the agreement and notice
of his monthly billable hours credited through monthly associate reports which
informed him of his monthly deficits. The district court did not err in rejecting
Iversen’s waiver defense.
C
[¶13] Iversen argues that it was impossible for him to perform his contractual
duties under the employment agreement because LLH failed to provide him
with a sufficient number of clients. “When a contract has but a single object,
and such object is … wholly impossible of performance … the entire contract is
void.” N.D.C.C. § 9-04-03. Impossibility of performance occurs when:
after a contract is made, a party’s performance is made
impracticable without his fault by the occurrence of an event the
non-occurrence of which was a basic assumption on which the
contract was made, his duty to render that performance is
discharged, unless the language or the circumstances indicate the
contrary.
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Huber v. Farmers Union Serv. Ass’n of N. Dakota, 2010 ND 151, ¶ 17, 787
N.W.2d 268. Parties to contracts may not assert impossibility if they caused
the impossibility. Id. at ¶ 19. Nothing in the employment agreement required
LLH to provide Iversen with work or clients. The district court concluded:
There is nothing in the contract which states the partners would
provide clients for Iversen. “It is the words of the contract and the
manifestations of assent which govern, not the secret intentions of
the parties.” Amann v. Frederick, 257 N.W.2d 436, 439 (N.D.1977).
When a contract is reduced to writing, the intent of the parties is
to be ascertained from the writing alone, if possible. N.D.C.C. § 9-
07-04.
The district court did not err in concluding the employment agreement imposed
no obligation on LLH to provide Iversen with sufficient work or a sufficient
number of clients. See Burckhard, 2022 ND 230, ¶¶ 16-17. The court did not
err in concluding there were no genuine issues of fact regarding Iversen’s
impossibility defense.
D
[¶14] Iversen argues that LLH failed to mitigate damages by failing to reduce
his salary every three months and at the end of each calendar year. He also
argues that LLH was obligated by the employment agreement to reduce his
salary if he did not satisfy the expectations associated with his base salary in
the employment agreement. “The injured party has a duty to mitigate or
minimize its damages and ‘must protect himself if he can do so with reasonable
exertion or at trifling expense, and can recover from the delinquent party only
such damages as he could not, with reasonable effort, have avoided.’” Three
Aces Properties LLC v. United Rentals (N. Am.), Inc., 2020 ND 258, ¶ 14, 952
N.W.2d 64. As stated above, under section six of the employment agreement,
LLH had discretion to reduce Iversen’s salary at the end of each calendar year
or at the termination of his employment. The district court explained:
[U]nder the terms of the contract, they were permitted to wait
until Iversen’s termination to pursue a claim. Iversen was aware
that he was consistently behind in hours. It was discretionary
whether LLH docked his pay. It is not the Court’s job to question
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the decisions of a business. Although it may have been better for
LLH to directly address the issue with Iversen, he had notice of
the deficit and knew LLH had a right to seek payment for billable
hours not made at termination. Iversen is a trained professional—
it was not the duty of his employer to ensure that he was getting
all of his work done.
There is no language in the employment agreement that imposes on LLH a
duty to reduce Iversen’s salary at the end of every three months or at the end
of each calendar year. Therefore, the district court did not err in rejecting
Iversen’s argument.
E
[¶15] Iversen argues he was not bound by the employment agreement or no
employment agreement ever formed because there was no consideration.
Iversen’s hourly billing rate in May 2019 when he signed the employment
agreement was $200.00, but it rose to $225.00 per hour on January 1, 2020. He
argues there was no consideration because LLH did not raise his compensation
and he did not receive any other benefit after his hourly rate increased.
“[C]ontinued employment for a substantial period of time is sufficient
consideration to support an employment agreement.” Thomas v. Guardsmark,
Inc., 381 F.3d 701, 705 (7th Cir. 2004). The parties signed the employment
agreement on May 21, 2019, and Iversen continued to work for LLH until July
2021. This continued employment is sufficient consideration for the
employment agreement. The district court did not err in concluding there were
no issues of material fact regarding consideration. See Burckhard, 2022 ND
230, ¶¶ 22-23.
III
[¶16] North Dakota law does not formally recognize motions to reconsider, but
if properly written and argued, a motion to reconsider may be treated as a
motion to alter or amend a judgment under N.D.R.Civ.P. 59(j), or as a motion
for relief from judgment under N.D.R.Civ.P. 60(b). Richardson v. Richardson,
2022 ND 185, ¶ 3, 981 N.W.2d 907. “A motion to alter or amend a judgment
must be served and filed no later than 28 days after notice of entry of the
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judgment.” N.D.R.Civ.P. 59(j). A Rule 59(j) motion is not a second opportunity
for a trial court to reconsider presented evidence, but rather is a “means to
correct errors of law.” Fonder v. Fonder, 2012 ND 228, ¶ 10, 823 N.W.2d 504(citing Hanson v. Hanson, 2003 ND 20, ¶ 5, 656 N.W.2d 656). We will not
reverse a district court’s decision on a motion to alter or amend judgment under
N.D.R.Civ.P. 59(j) unless the court abused its discretion. James Vault & Precast
Co. v. B&B Hot Oil Serv., Inc., 2019 ND 143, ¶ 17, 927 N.W.2d 452. “A court
abuses its discretion when it acts in an arbitrary, unreasonable, or
unconscionable manner, when it misapplies or misinterprets the law, or when
the decision is not the product of a rational mental process leading to a
reasoned decision.” Id.[¶17] Iversen argues that because several issues of fact remained, the district
court abused its discretion in denying his motion to reconsider. Iversen argued,
and the district court considered, his motion under Rule 59(j). The district court
cited and applied our cases holding that a motion for reconsideration should
not be used as a means for the court to reexamine issues or reconsider evidence,
but rather to correct misapplication of law. See Flaten v. Couture, 2018 ND 136,
¶ 28, 912 N.W.2d 330. After explaining that many of Iversen’s contentions were
not proper under Rule 59(j), the district court conducted a reasoned analysis of
Iversen’s legal and factual arguments and concluded they did not undermine
the court’s decision to grant summary judgment to LLH. The district court did
not abuse its discretion in denying Iversen’s motion.
IV
[¶18] Iversen raised several arguments for the first time either in his
appellant’s brief or in his brief in support of his motion for reconsideration.
These arguments include whether the employment agreement was ambiguous
regarding whether LLH or Iversen was responsible for providing billable work,
whether LLH waived its right to repayment for Iversen’s discrepancy in hours
when LLH paid Iversen end-of-year bonuses, whether Tyrone Turner’s alleged
out-of-court statement was not hearsay because it was an opposing party
statement under N.D.R.Ev. 801(d)(2), and whether LLH miscalculated its
prejudgment interest. He neglected to raise these issues in his response to
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LLH’s motion for summary judgment. These issues were not properly
presented to the district court, and therefore we decline to consider them on
appeal.
V
[¶19] The district court properly granted summary judgment and denied
Iversen’s motion for reconsideration. We affirm the judgment and the order
denying Iversen’s motion for reconsideration.
[¶20] Jon J. Jensen, C.J.
Daniel J. Crothers
Lisa Fair McEvers
Jerod E. Tufte
Douglas A. Bahr
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