Lyons v. Beeman

                                        560

Argued and submitted February 11, 2020, affirmed May 19, petition for review
                   denied August 26, 2021 (

)


                         Jeffrey A. LYONS,
                        Plaintiff-Respondent,
                                  v.
                          Sean BEEMAN,
                 individually and doing business as
                          Genesis Pharms,
                        Defendant-Appellant.
                     Lane County Circuit Court
                        16CV40678; A167532
                                    

     Defendant leased property from plaintiff to grow marijuana. The parties
ended their business relationship in 2016 after a number of disputes about defendant’s proposed business ventures on the property. Plaintiff filed this lawsuit
against defendant for declaratory judgment, unpaid rent and harvest-related
payments, damage to the leased premises, intentional infliction of emotional
distress, and conversion. A jury awarded plaintiff $9,500 in unpaid rent and
$3,500 for damage to the premises, and it found that the parties had an enforceable contract requiring defendant to pay plaintiff $30,000 from defendant’s 2015
marijuana harvest. It found in favor of defendant on all other claims. On appeal,
defendant raises five assignments of error, arguing, among other points, that the
trial court erred by denying his motion for directed verdict as to plaintiff’s claims
(1) that the parties had an enforceable contract requiring payment of $30,000 by
defendant; (2) for unpaid rent and property damage; and (3) for damages to the
premises. Held: The trial court did not err. The Court of Appeals reviews motions
for directed verdict for “any evidence to support the verdict.” In light of that standard of review, the court concluded that plaintiff presented sufficient evidence
from which a jury could find for plaintiff on each of the claims at issue.
    Affirmed.



   Suzanne B. Chanti, Judge. (Judgment entered March 19,
2018, and Supplemental Judgment entered July 3, 2018)
  Debra E. Velure, Judge. (Supplemental Judgment entered
September 5, 2018)
   Brian Michaels argued the cause and filed the opening
brief for appellant. Also on the reply brief was Marianne
Dugan.
   James R. Dole argued the cause for respondent. Also on
the brief was Watkinson Laird Rubenstein, P.C.
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  Before DeVore, Presiding Judge, and DeHoog, Judge, and
Mooney, Judge.
  MOONEY, J.
  Affirmed.
562                                                     Lyons v. Beeman

           MOONEY, J.
         Defendant operated a marijuana farm on property he
leased from plaintiff. Plaintiff filed a lawsuit against defendant for declaratory judgment, unpaid rent and harvest-related payments, damage to the leased premises, intentional infliction of emotional distress, and conversion. A
jury awarded plaintiff $9,500 in unpaid rent and $3,500 for
damage to the premises, and it found that the parties had
an enforceable contract requiring defendant to pay plaintiff
$30,000 from the 2015 harvest. It found in favor of defendant on all other claims. The trial court awarded plaintiff
some, but not all, of his requested attorney fees. This appeal
followed. As explained below, we affirm.
        The original lease between the parties (the 2015
lease) permitted defendant to grow medical marijuana on
the leased property. Defendant hoped to become a licensed
recreational marijuana producer and to expand his farming
operation in 2016 when Oregon’s new marijuana law would
take effect.1 To that end, the parties included growing recreational marijuana as an allowed use of the property when
they entered into a new lease for 2016.
          After entering into the 2016 lease, defendant applied
for an Oregon Liquor Control Commission (OLCC) recreational marijuana producer license as expected. A number
of issues arose in that process and defendant asked for plaintiff’s assistance with some of those, including, for example,
obtaining a Land Use Compatibility Statement (LUCS) from
Lane County. He requested plaintiff’s consent to modify the
property by, among other things, installing security fencing
and an upgraded electrical system. The parties had numerous communications about the expansion of the marijuana
farm, licensing issues, and the parties’ obligations to each
other well into 2016.
        Ultimately, the parties were not able to resolve their
differences and plaintiff filed this action. The case was tried
to a jury and, as described above, plaintiff won some but
    1
      Oregon voters decriminalized the production, sale, and adult use of marijuana for recreational purposes under state law when they approved Ballot
Measure 91 in 2014. The Oregon Liquor Control Commission began accepting
applications for marijuana production licenses in January 2016.
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not all of his claims. Defendant appeals from the judgment
awarding plaintiff damages based upon the jury’s verdict as
well as from the supplemental judgments awarding plaintiff
his attorney fees.
         Defendant raises five assignments of error. In his
first assignment, he contends that the trial court erred in
denying his motion for directed verdict as to plaintiff’s claim
for a declaration that the parties had an enforceable contract requiring defendant to pay plaintiff $30,000 from the
2015 harvest (declaratory relief). In his second assignment,
defendant contends that the court erred in denying his
motion for directed verdict as to plaintiff’s contract claims
for unpaid rent. In his third assignment, defendant contends
that the court erred in denying his motion for directed verdict as to plaintiff’s contract claim for damages caused by
the excavation of a utility trench. Defendant’s fourth assignment of error challenges the court’s award of attorney fees to
plaintiff, and his fifth assignment of error is directed to the
denial of a requested jury instruction. We reject the fourth
and fifth assignments of error without discussion.
         We reject defendant’s third assignment of error
because there was evidence from which the jury could reasonably have concluded that defendant breached the lease
when he excavated a utility trench causing the need for
repairs to the driveway. On this assignment, defendant
relies upon the lack of evidence that the trench had been
excavated in an “unworkmanlike manner.” But the court
had granted plaintiff’s motion to amend the complaint to
remove the words “unworkmanlike manner” and defendant
does not assign error to that ruling. Therefore, testimony or
other evidence that the trench was excavated in an “unworkmanlike manner” was not specifically required.
        We take up assignments one and two, below, and
conclude that there was evidence from which a jury could
have found that the parties had an enforceable contract
requiring defendant to pay plaintiff $30,000 from the 2015
harvest and that defendant owed plaintiff unpaid rent.
          We review the denial of a motion for directed verdict for “any evidence to support the verdict” in favor of the
nonmoving party. Woodbury v. CH2M Hill, Inc., 

,
564                                            Lyons v. Beeman

159, 

 (2003). Here, plaintiff was the nonmoving
party. We, thus, view the evidence in the light most favorable to plaintiff, accepting his testimony as true and, if the
evidence supports more than one conclusion, we leave it for
the jury to decide. Kelley v. Washington County, 

, 

 (2020). We will not disturb the jury’s
verdict unless we can affirmatively say that there is no evidence from which the jury could have found the facts necessary to establish the claim or claims on which plaintiff
prevailed. Schmidt v. Noonkester, 

, 

 (2017). We state the pertinent facts in line with that
standard.
         The original lease was entered into on January 8,
2015, between plaintiff and defendant, Sean Beeman,
regarding a five-acre piece of farmland in west Eugene. The
lease term was for one year, the monthly rent was $3,250, and
growing medical marijuana on the property was expressly
allowed. Defendant produced approximately 100 marijuana
plants on the leased property in 2015, which, at the time,
was the maximum number permitted under the law.
         Defendant approached plaintiff about expanding
farm operations to include growing recreational use marijuana. Plaintiff approved. Defendant submitted his application for an OLCC recreational marijuana producer
license in January 2016, under the business name “Genesis
Pharms.” While the license application process was underway, the parties entered into a new one-year lease agreement with rent still set at $3,250 per month. The lessee was
changed from defendant, individually, to defendant’s company, Genesis Pharms. Paragraph 30 was revised to read as
follows:
   “30. Marijuana. Tenant _X_ may ___ may not (indicate
   which) grow medical and/or recreational marijuana on the
   premises. If allowed, tenant must obtain landlord’s prior
   written consent before installing any equipment or otherwise modifying the premises, which consent may be withheld at landlord’s discretion. Tenant shall be solely responsible for any and all damage to the premises resulting from
   growing or using marijuana, including but not limited to
   damage related to equipment, moisture or smoke. Tenant
   shall fully comply with the Smoking Policy disclosed herein
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   and must strictly comply with any applicable state laws
   governing marijuana.”
Paragraph 40 was also modified with the following handwritten language: “No construction, modification, or permit
application without owner approval.”
         The parties communicated as needed about the
OLCC application process during the spring of 2016. In April,
plaintiff met with defendant and defendant’s agent, O’Neal,
at the leased property where they discussed the improvements required by OLCC, defendant’s intent to increase
marijuana production, increasing the rent, an outstanding
debt related to the 2015 harvest, adding a payment for the
2016 harvest calculated as a percentage of production, and
defendant’s desire to have a multi-year lease in place. The
parties characterize those discussions differently, but, given
our standard of review, we note that plaintiff testified that
he was surprised by the magnitude of defendant’s planned
increase in marijuana production, that defendant suggested
a monthly rent increase of $1,000 to at least partially address
that projected increase and that plaintiff agreed to that rent
increase, and that the parties discussed a payment related
to the 2015 harvest that was currently due as well as a possible production-based payment for the 2016 harvest. Plaintiff
testified that, in exchange for the anticipated increase in
monthly rent and the additional harvest-related payments,
he agreed to “do whatever was necessary” to get defendant
through the OLCC licensing process, including providing
his approval for property modifications and assisting with
the various zoning, land use, and water rights issues that
arose as defendant worked to obtain the required LUCS.
         There were additional communications in early May.
In particular, plaintiff sent a text message to O’Neal on May 3,
2016, stating that, “from [his] standpoint,” plaintiff had
been waiting for months on the payment from the 2015 harvest and that he needed “to get this settled and an agreement reached.” And, on May 26, 2016, O’Neal sent plaintiff
an email that, among other things, stated:
   “We discussed two projects that need your approval, the
   electrical upgrade and the enclose fencing. …
   “…
566                                            Lyons v. Beeman

   “Lastly we discussed some financial matters. You gave me
   permission to get a detailed accounting for the work done
   by William Sherlock. You asked that I develop a plan for
   addressing 3 financial concerns; bonus for last season, raising of monthly rent, and long term plan for a bonus based
   on harvests. I will start on this right away and update you
   as soon as I have new information.”
(Emphasis added.)
        The rent payment on June 1, 2016, included a $1,000
increase and that increase was included in each monthly
rental payment thereafter until November 2016 when rental
payments stopped altogether. And, although defendant
argued that the increase was intended as an “incentive to
get a multi-year lease” rather than an actual agreed-upon
rent increase, our standard of review requires us to presume the truth of plaintiff’s testimony, which was that the
$1,000 was the rent increase defendant had proposed at the
in-person April meeting.
         And then, on June 17, 2016, O’Neal sent an email to
plaintiff on behalf of defendant that included this paragraph:
       “I am happy to tell you that I have a proposal for the
   farm on Hileman. Genesis Pharms proposes that the additional $1000 a month be permanent, that the outstanding
   lawyer bill be paid in full upon agreement to this proposal,
   and that you would receive 5% of gross sales by the 15th of
   the month following the sales month. In exchange for these
   terms, Genesis Pharms wants the lease extended until
   Dec. 31st of 2017 with an additional 2 year option.”
Notably absent from that email was any mention of the 2015
payment. Plaintiff and O’Neal exchanged text messages
and, on June 21, 2016, plaintiff emailed O’Neal expressing
frustration with the process but indicating that he would
nevertheless continue to negotiate with Genesis Pharms “to
arrive at an enforceable agreement covering the promised
payment for 2015” and for an additional payment for 2016
based on sales. “Upon receipt in full,” he would be willing to
place defendant in “first position” for a 2017 lease. As plaintiff explained in his testimony, he did not want to move on to
discussing a new lease for 2017 until they had resolved the
matters concerning the payment for the 2015 harvest and
the production-based payment for the 2016 harvest.
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        O’Neal emailed plaintiff on June 30, 2016, requesting clarification of several points and, as pertinent here,
asked, “What is your expectation for a payment for 2015 and
when would that be due?” Plaintiff responded the next day:
  “Point number one: I consider 2015 due and payable now.
  This payment was first promised to me in December 2015
  and has been the subject of numerous conversations since
  that point. I’d like to get it wrapped up.”
The two exchanged additional emails that further defined
that 2015 payment obligation. On July 11, 2016, O’Neal proposed, among other things:
  “Payment for 2015: The extra $1000 sent each month was
  meant to address this issue but Genesis is willing to add an
  additional 10k payable December 1, 2016.”
On July 15, 2016, O’Neal sent an email to plaintiff that
included, as pertinent here:
  “Basics of the agreement:
  “Language in the current lease is brought forward. …
  “…
  “2015 payment: total of 30k, current $1000 a month (total
  $9000) plus 21k payout on Dec. 1, 2016.”
That email prompted the following exchange of text messages between plaintiff and O’Neal:
  Plaintiff: “Do you want to call me with the correction to
  the rent/profit sharing issue? Or do I consider this your
  offer? Which I reject.”
  O’Neal: “Sorry I totally forgot about the continuation of
  the 4250 in rent for 2017 but let me call and talk through
  this. I will have some time this afternoon.”
  Plaintiff: “This is not about 2017. This is about GP
  attempting to modify the agreement on the rent for the
  remainder of 2016. No portion of the current 4250.00 is to
  be applied to monies owed on 2015.”
  O’Neal: “OK. . . I hear you. . . I will be in touch.”
  O’Neal: “Had a quick chat with [defendant] and if the 9k
  is the only stumbling block then the payout Dec 1 would be
  30k . . . Call you when I am free to talk.”
568                                            Lyons v. Beeman

   Plaintiff: “Thank you.”
And then, on July 22, 2016, O’Neal sent this email to
plaintiff:
   “Starting with the existing lease as a base with the following changes:
   “In ‘Tenancy’ section, lease terms will change to ‘1 year
   commencing Feb. 1 2017 and ending Jan. 31 2018 at a
   rental cost of $4250 per month …’
   “…
   “1. One-time payout of 30K due Dec. 1st, 2016, from
   Genesis Pharms to landlord. This one-time payment is to
   settle all past debts between the two parties.
   “2. Genesis Pharm agrees to payout 5% of gross proceeds
   of the sale of the flower. …
   “3. … Genesis Pharms will automatically be given the
   option to extend the lease for another year at the same
   terms as the current lease agreement.”4. At the signing of
   this document, landlord will consider the tenant in ‘good
   standing’ regarding adherence to the terms of the lease.
   …
   “Michael O’Neal
   “Genesis Pharms.”
        On August 1, 2016, plaintiff sent O’Neal an email
responding to the July 22, 2016, email, stating:
   “I accept in principal [sic]. Please prepare a document
   which we can sign. I will plan a trip to sign immediately.”
Plaintiff also sent a text message and an email shortly after
that in which he added that he was unable to agree to the
third point of the July 22 proposal concerning automatic
annual options to extend the lease.
        On September 20, 2016, plaintiff sent this text message to O’Neal:
   “At this time, after repeated attempts, I am requiring a
   written proposal from Genesis Pharms pertaining to your
   offer (which I previously accepted in principle) be submitted to me no later than September 30 2016 5pm PDT. I will
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  be submitting this proposal to my attorney at that time for
  review. Basic parameters:
  “1)   $30,000 payment from 2015 due on or before 12/1/16
  “2) Payment to Jeffrey Lyons from Genesis Pharms of a
  percentage to be determined gross sales of 2016 crop grown
  at 221 Hileman lane, Eugene, Oregon
  “These two items are the starting point for resolution of the
  offer made by Sean Beeman in 2015 and not yet fulfilled.”
         On September 30, 2016, O’Neal sent another email
to plaintiff, which proposed that the $30,000 payment obligation be broken down into three $10,000 payments to be
paid annually on December 31 in 2016, 2017, and 2018.
Plaintiff responded 30 minutes later with a one-word email:
“No.” He then sent O’Neal a text message, stating:
     “I’m sorry but your proposed offer fails to meet previously promised payments and is therefore not acceptable.
  Thank you for getting back to me.”
That discussion ended. Plaintiff terminated the lease and
defendant vacated the property in early January 2017. This
lawsuit followed, culminating in a jury trial and the jury’s
verdict as already described.
         We turn now to defendant’s first two assignments of
error, in which he argues that there was no evidence of an
enforceable contract requiring him to pay plaintiff $30,000
related to the 2015 harvest or to pay an increased rental
amount. He first notes that neither the 2015 obligation nor
the $1,000 rent increase were included in the 2016 lease,
and he specifically argues that the parol evidence rule bars
evidence of those matters as terms of that lease. He also
argues that there is no evidence of consideration or acceptance to support either the $30,000 obligation or the rent
increase. The parties agree that the 2016 lease was in place
at all times relevant to this case.
         The parol evidence rule, ORS 41.740,2
  2
    ORS 41.740 provides:
      “When the terms of an agreement have been reduced to writing by the
  parties, it is to be considered as containing all those terms, and therefore
  there can be, between the parties and their representatives or successors in
  interest, no evidence of the terms of the agreement, other than the contents
570                                                      Lyons v. Beeman

   “provides that a binding, completely integrated, written
   agreement supersedes or discharges all agreements, written or oral, that were made before the completely integrated
   agreement, to the extent that the prior agreements are
   within the scope of the completely integrated agreement.”
Abercrombie v. Hayden Corp., 

, 

(1994) (citations omitted; emphasis added). The rule’s prohibition, then, would be against the admission of evidence that
the 2016 lease included terms that do not appear within the
four corners of that written lease agreement. However, the
parol evidence rule does not apply here because the evidence
that defendant seeks to exclude under that rule concerns discussions about a different, preexisting agreement and about
modifications to the 2016 lease. Plaintiff does not argue that
the $30,000 obligation from 2015 or the $1,000 rent increase
were terms of the 2016 lease. The parol evidence rule does
not, therefore, exclude them.
         Establishing a contract modification, like establishing a contract, requires proof of three things: an offer, acceptance of the offer, and an exchange of consideration. Bennett
v. Farmers Ins. Co., 

, 

 (2001);
Marnon v. Vaughan Motor Co., Inc., 

, 

 (1948). In Oregon, we apply an objective theory of
contracts. The existence of a contract or contract modification
is not determined by the parties’ subjective understanding of
their communications. Newton/Boldt v. Newton, 

, 

, rev den, 

 (2004), cert den, 

 (2005). Instead, to determine whether a contract
was formed, we “examine the parties’ objective manifestations of intent, as evidenced by their communications and
acts.” Ken Hood Construction v. Pacific Coast Construction,

, 

 (2005), adh’d to as modified
on recons, 

, 

, rev den, 

 (2006). Assent may be inferred from the conduct of the
parties. VTech Communications, Inc. v. Robert Half, Inc., 190

   of the writing, except where a mistake or imperfection of the writing is put
   in issue by the pleadings or where the validity of the agreement is the fact
   in dispute. However, this section does not exclude other evidence of the circumstances under which the agreement was made, or to which it relates, as
   defined in ORS 42.220, or to explain an ambiguity, intrinsic or extrinsic, or
   to establish illegality or fraud. The term ‘agreement’ includes deeds and wills
   as well as contracts between parties.”
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, 86, 

 (2003), rev dismissed, 

(2004). And, importantly, “[q]uestions regarding the intent
of the parties are for the factfinder.” Dalton v. Robert Jahn
Corp., 

, 

 (2006), rev den, 

 (2007); see also Bennett, 

 (concluding
that whether a “statement or act” manifests assent or acceptance is a question for the jury).

         We begin with the additional $1,000 that defendant
added to his rent payment for each of the months of June
through October 2016. There was disputed evidence on the
question whether those additional payments represented an
agreed upon increase in the monthly rent. To be sure, defendant says that he made those payments to induce plaintiff
into giving him a multi-year lease. But plaintiff testified that
defendant proposed the $1,000 increase at the April meeting when plaintiff expressed surprise about the planned
four-fold harvest increase. Additionally, there was evidence
that the increase began soon after that meeting, on June 1,
and that it was included as part of the rent payment—not
as a separate payment—in each subsequent month. That
evidence certainly supports the jury’s determination that
the additional $1,000 was the rent increase discussed and
agreed to at the late April meeting. Defendant’s conduct in
making those additional payments was itself evidence of the
agreed increase that he had proposed at that meeting. See
Bennett, 

 (holding that a party’s conduct may
constitute evidence of mutual assent).

         We next address defendant’s argument that plaintiff did not accept defendant’s offer of $30,000. As detailed
above, the parties were engaged in ongoing discussions that
concerned a variety of topics, including matters covered by
the existing 2016 lease and matters not covered by the 2016
lease. Both parties ultimately focus on the exchange of the
July 22, 2016, email from O’Neal to plaintiff and the responsive August 1, 2016, email from plaintiff to O’Neal. The
July 22 email came after O’Neal received clarification from
plaintiff that the payment for 2015 was distinct and separate from any future lease agreement and that plaintiff considered it presently due and owing. Given that clarification,
O’Neal sent the July 22 email, in which he conveyed an offer
572                                          Lyons v. Beeman

of a “one-time payout of 30k” due December 31, 2016, “to settle
all past debts between the two parties.” Plaintiff responded
with “I accept in principal [sic].” Plaintiff requested that the
agreement be reduced to writing and he said that he was prepared to sign it. We have held that a party communicating
agreement to an offer “in principle,” subject to a formalized
writing, can constitute acceptance of the offer. Dalton, 

. And where, as here, the acceptance is clear,
the fact that the agreement still needed to be reduced to
writing does not change the fact that the offer was made and
accepted. See Restatement (Second) of Contracts § 27 (1981)
(“Manifestations of assent that are in themselves sufficient
to conclude a contract will not be prevented from so operating by the fact that the parties also manifest an intention to
prepare and adopt a written memorial thereof[.]”).

         It is true that the July 22 email from O’Neal referred
to “the existing lease as a base” and that it proposed a number of other terms for a future lease. It is also true that,
after accepting the offer in principle, plaintiff sent an email
clarifying that he would not agree to open-ended lease
extensions. However, the July 22 to August 1 exchange provides evidence to support the jury’s conclusion that there
was an offer from O’Neal and an acceptance by plaintiff.
Plaintiff’s follow up communication provides evidence that
his acceptance of the offer to pay $30,000 was to the offer as
expressed by O’Neal—as a “one-time payment … to settle
all past debts between the two parties”—an offer to settle an
existing debt.

          Finally, we turn to defendant’s argument that the
offer to increase the rent and the offer to pay $30,000 from
the 2015 harvest were not supported by valid consideration.
Consideration is “ ‘the accrual to one party of some right,
interest, profit or benefit or some forbearance, detriment,
loss or responsibility given, suffered, or undertaken by the
other.’ ” McPhail v. Milwaukie Lumber Co., 

, 

 (2000) (quoting Shelley v. Portland
Tug & Barge Co., 

, 

 (1938)). Here,
there was evidence that defendant sought and obtained
plaintiff’s approval to modify the leased property relative to
the OLCC licensing process and to defendant’s own process
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of converting his business to the production of recreational
marijuana. The 2016 lease required defendant to obtain
plaintiff’s prior written approval for such modifications. The
lease did not require plaintiff to give his approval. Without
that approval, defendant would not have been able to move
forward with his plans for producing recreational marijuana on the leased property. The jury, thus, had evidence to
conclude that plaintiff’s approval of the modifications constituted valid consideration for the $1,000 rent increase. And,
while that evidence also supports that there was consideration for the $30,000 obligation, O’Neal’s July 22 email offer
to pay plaintiff $30,000 to “settle all past debts between the
two parties” was evidence of an existing obligation between
the parties that required no new showing of consideration.
Plaintiff told defendant that he had considered the $30,000
presently due and payable and there was no evidence that
defendant disputed that. The evidence, to the contrary, is
that defendant negotiated as if he understood that to be
the case. The jury, therefore, had evidence that there was
an existing $30,000 obligation between the parties from
the 2015 harvest. That existing obligation would not have
required additional consideration. Jole v. Bredbenner, 

, 

 (1989).
        There was evidence to support the jury’s determination that the parties had enforceable agreements for the
rent increase and for the $30,000 obligation from the 2015
harvest. The trial court did not err by denying defendant’s
motion for a directed verdict on plaintiff’s breach of contract
claims.
        Affirmed.