Articles Posted in Business Law

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The underlying dispute in this case involved a commercial transaction between H2O Environmental, Inc. (H2O) and Farm Supply Distributors, Inc. (Farm Supply). Following a bench trial, H2O was awarded $7,354.64 for Farm Supply’s breach of an express oral contract. The magistrate court subsequently awarded attorney’s fees to H2O pursuant to Idaho Code section 12-120(3), but limited its award to the amount in controversy. H2O appealed to the district court, claiming that the magistrate court abused its discretion. The district court affirmed and awarded attorney’s fees to Farm Supply. H2O timely appealed. The Idaho Supreme Court determined the district court erred when it affirmed the magistrate court’s award of attorney fees: nothing in the record explained the relationship between the magistrate court’s evaluation of the Idaho Rule of Civil Procedure 54(e)(3) factors and its decision regarding the amount to award for attorney’s fees. “It is not enough for a trial court to acknowledge the existence of the Rule 54(e)(3) factors; rather, it must appear that there is a reasoned application of those factors in the trial court’s decision regarding the amount of attorney’s fees to be awarded.” The Supreme Court reversed and remanded for further proceedings. View "H20 Environmental v. Farm Supply" on Justia Law

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This appeal involved an Idaho district court’s denial of a jury trial under Rule 39(b) of the Idaho Rules of Civil Procedure and the decision to pierce the corporate veil. The dispute stemmed from a transaction between Kym Nelson, who acted on behalf of KDN Management Inc., (“KDN”), and WinCo, Foods, LLC (“WinCo”), for concrete floor work that KDN performed in several WinCo stores. The district court found that KDN had overcharged WinCo for the work, and awarded WinCo $2,929,383.31 in damages, including attorney fees. The district court also held Nelson and two entities associated with her, SealSource International, LLC, and KD3 Flooring LLC, jointly and severally liable for WinCo’s damages. Nelson, SealSource and KD3 argued on appeal to the Idaho Supreme Court that the trial court erred in concluding: (1) Nelson was personally liable for damages relating to this dispute; and (2) that KDN, SealSource and KD3 were alter egos of one another. Nelson and the corporate co-defendants also argued the district court abused its discretion by denying their motion for a jury trial under Rule of Civil Procedure 39(b). Finding no reversible error in the district court’s judgment, the Idaho Supreme Court affirmed the judgment and award of attorney fees to WinCo. View "KDN Management, Inc. v. WinCo" on Justia Law

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Donna Taylor appealed a district court’s judgment regarding her Series A Preferred Shares in AIA Services Corporation (AIA). In 1987, Donna received 200,000 Series A Preferred Shares in AIA as part of a divorce settlement. Between 1987 and 1996, Donna, AIA, and other relevant parties entered into various stock redemption agreements with differing terms and interest rates. One such agreement was challenged in Taylor v. AIA Servs. Corp., 261 P.3d 829 (2011). While the Taylor case was being litigated, AIA stopped paying Donna for the redemption of her shares, prompting her to file suit. Donna alleged several causes of action against AIA, with the primary issue being whether Donna was entitled to have her shares redeemed at the prime lending rate plus one-quarter percent. AIA contended any agreement providing that interest rate was unenforceable, and instead Donna’s redemption was governed by AIA’s amended articles of incorporation, which provided the interest rate as the prime lending rate minus one-half percent. The district court determined Donna’s share redemption was governed by AIA’s amended articles of incorporation, and as such, all but 7,110 of Donna’s shares had been redeemed. After review, the Idaho Supreme Court reversed the district court’s dismissal of Donna’s breach of contract claim as it related to a 1995 Letter Agreement, and remanded for further proceedings. The Supreme Court also reverse the district court’s dismissal of Donna’s fraud claims. The Court affirmed the district court’s dismissal of Donna’s unjust enrichment claim, and the dismissal of AIA’s counterclaim against Donna. View "Taylor v. Taylor" on Justia Law

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Karen Savage appealed the dismissal of her Idaho Wage Claim Act (“IWCA”) action by the district court. Savage brought this action against her employer Scandit Inc. (“Scandit”) in November 2016 after Scandit failed to pay her over $400,000 in commissions and bonuses she claims were due by the end of October. The district court granted Scandit’s motion to dismiss finding that Savage had failed to allege that she had earned the commissions as defined in the 2016 Commission Compensation Plan (“CCP”) between Savage and Scandit. The district court also denied Savage’s motion to amend, holding that the amendment would be futile. After review, the Idaho Supreme Court determined Savage alleged sufficient facts in her complaint to preclude dismissal, and that her motion to amend the complaint was not futile. Therefore, the Supreme Court reversed the district court’s decision granting the motion to dismiss the complaint, and denial of the motion to amend were reversed. The matter was remanded for further proceedings. View "Savage v. Scandit, Inc." on Justia Law

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Budget Truck Sales, LLC, Brek A. Pilling, Brian L. Tibbets, and Mike Tilley (the “Budget Parties”) and Kent Tilley entered into various oral agreements relating to the purchase, repair and sale of large trucks and heavy equipment. Shortly thereafter, the relationship of the parties broke down, leading to the filing of three separate lawsuits. Budget Truck Sales, LLC filed a lawsuit against Tilley, alleging that Tilley owed it money on an open account for loans it had provided to Tilley. Tilley filed a lawsuit against Brek Pilling and Brian Tibbits, alleging they personally owed him for his share of the profits. Trial started for the consolidated cases on December 13, 2016. By the second day of trial, the parties engaged in settlement negotiations to resolve each of the cases. Once a resolution was reached, the parties recited the terms of their agreement on the record in open court. In accordance with the settlement agreement, a loader was delivered to the Budget Truck Sales’ lot. Because the loader’s condition was not as Tilley had allegedly represented, the Budget Parties refused to pay Tilley the $100,000 that was due the following day. Tilley’s attorney advised that if the $100,000 payment was not received the next day a motion to enforce the settlement agreement would be filed, and Tilley would seek an award of attorney fees. Tilley’s counsel was notified the Budget Parties would not honor the agreement because they believed Tilley had misrepresented the condition of the loader, and the Budget Parties relied upon that representation when they agreed to the settlement. The parties appealed enforcement of the settlement agreement; the Budget Parties alleged the settlement agreement was void because it was procured by fraud. The Idaho Supreme Court concluded material questions of fact existed upon which the district court could rely in finding that Tilley committed fraud in the inducement by allegedly representing to the Budget Parties the loader was in “great working condition.” Accordingly, the judgment was vacated and the case was remanded for an evidentiary hearing on the Budget Parties’ claim of fraud in the inducement. If such fraud occurred, the entire settlement was vitiated and the parties are placed back in the position they were in before the case was purportedly settled. View "Budget Truck Sales v. Tilley" on Justia Law

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This case arose out of an oral agreement between David Crossett (“Crossett”) and David Johnson (“Johnson”) to form a limited liability company (“LLC”). After Crossett formed the LLC, Johnson backed out by refusing to sign the written operating agreement. Crossett remained as the sole member of the LLC, which he eventually sold. Johnson and Tessa Cousins (“Cousins”), the LLC’s only employee, filed a complaint against Crossett, wherein they asserted, amongst other things, that: (1) they were members of the LLC since its inception; and (2) Crossett had breached his fiduciary duties. The district court dismissed the case after concluding that Johnson and Cousins were never members of the LLC because they had refused to sign the written operating agreement. Finding no reversible error, the Idaho Supreme Court affirmed the district court’s judgment. View "Johnson v. Crossett" on Justia Law

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Lincoln Land Company, LLC (“Lincoln Land”) appealed a district court’s judgment which dismissed Lincoln Land’s complaint. LP Broadband cross-appeals the district court’s denial of LP Broadband’s motion for attorney fees. The dispute arose over LP Broadband’s placement and use of antenna equipment on the rooftop of a grain silo owned by Lincoln Land, but leased to General Mills. General Mills had allowed MicroServ Computer Technologies, Inc., (“MicroServ”) (which merged with LP Broadband in 2013) to utilize the rooftop space on the property since March 2000, in exchange for $50 per month. Lincoln Land subsequently purchased the grain silos and, in 2010, executed a lease agreement with General Mills, which specifically prohibited a sublease of the property without prior written consent from Lincoln Land. Notwithstanding the lease provision, General Mills continued to sublease the rooftop space to LP Broadband. Upon discovering that LP Broadband was using the rooftop space, Lincoln Land filed a complaint against LP Broadband for unjust enrichment. Therein, Lincoln Land argued that it had conferred a benefit to LP Broadband and that it would be inequitable for LP Broadband to retain such a benefit without compensating Lincoln Land. The district court dismissed the complaint after concluding that Lincoln Land failed to establish that it, not General Mills, had conferred the benefit to LP Broadband. Finding no reversible error in the district court judgment, the Idaho Supreme Court affirmed. View "Lincoln Land Co v. LP Broadband" on Justia Law

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This was a companion case to Green River Ranches, LLC v. Silva Land Company, LLC, Docket No. 43548. In an appeal arising out of Twin Falls County, Appellant Silva Dairy, LLC (“Silva Dairy”), challenged a district court’s holding that Silva Dairy’s claim against Respondent Jack McCall for herd management services was offset by amounts that Silva Dairy owed McCall for feed expenses and pasture rent. McCall owned a livestock business and used Silva Dairy’s herd management services. The district court found that McCall’s total claims against Silva Dairy were at least $492,464.77 and exceeded Silva Dairy’s claim by $287,487.12. Accordingly, the district court dismissed Silva Dairy’s claim with prejudice. Finding no reversible error in this, the Idaho Supreme Court affirmed the district court’s judgment. View "McCall v. Silva Dairy" on Justia Law

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The issue presented in this contract dispute was whether personal jurisdiction was proper over an out-of-state defendant. It centered on two out-of-state companies, one of which, H2O Environmental, Inc. (“H2O”), was registered to do business in Idaho and maintained an office in Boise. H2O filed suit in Idaho against the other company, Proimtu MMI, LLC, alleging breach of contract and seeking reimbursement for the payment of employment taxes for Proimtu employees. Proimtu moved to dismiss for lack of personal jurisdiction and the district court granted the motion. The Idaho Supreme Court found that Proimtu purposefully availed itself of the benefits and protection of Idaho laws. The exercise of personal jurisdiction by Idaho courts over Proimtu was therefore constitutionally proper. View "H20 Environmental v. Proimtu MMI" on Justia Law

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Plainitffs appealed when their claims against a person who sold a steer for slaughter were dismissed. The steer was later found to be contaminated with E. coli bacteria. Patty Anderson agreed to sell a 4-H steer for her eighteen-year-old granddaughter. Joseph Deiter purchased one-half of the steer. Anderson contacted Donald Janak, who owned a mobile slaughtering business. He was asked to slaughter the steer for Deiter, and to deliver the carcass to Don’s Meats, which was a custom meat processing business that was owned and operated by Donald and Sharon Coons and their daughter Penny Coons. Janak slaughtered and skinned the steer, cut the carcass in half down the middle, and delivered the two halves of the carcass to Don’s Meats, where the meat was processed. After eating the meat, the members of the Deiter family became ill due to becoming infected with E. coli bacteria. The Deiters filed suit against Anderson, Janak and his corporation, and the Coonses. Anderson successfully moved for summary judgment as to the claims against her. The Coonses also successfully moved for summary judgment. The Deiters settled with Janak, and they appealed the judgment in favor of Anderson and the Coonses. The Deiters argued to the district court that Anderson and the Coonses violated the Federal Meat Inspection Act because she sold or offered for sale, in commerce, articles which were capable for use as human food and which were adulterated at the time of the sale or offer for sale as proscribed by 21 U.S.C. 610(c). Finding that the Deiters did not show any genuine issue of material fact with respect to the grant of summary judgment to Anderson or the Coonses, the Supreme Court affirmed dismissal of claims against those parties. View "Deiter v. Coons" on Justia Law