Justia Idaho Supreme Court Opinion Summaries

Articles Posted in Business Law
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Two online fundraising companies, Snap! Mobile, Inc. ("Snap") and Vertical Raise, LLC ("Vertical Raise"), were involved in a dispute. Snap accused Vertical Raise and its CEO, Paul Landers, of poaching its sales representatives and customers, which violated non-compete and confidentiality provisions in the former sales representatives’ employment agreements with Snap. The trial court granted Snap a preliminary injunction to prevent further violations and partially ruled in Snap's favor on some claims. A jury trial on damages resulted in an award of $1,000,000 to Snap. However, the trial court increased the award to $2,310,021. Both parties appealed. The Supreme Court of Idaho affirmed the trial court's award of discretionary costs for expert witness fees but reversed the trial court’s order granting an additur or new trial. The Supreme Court ordered the trial court to enter a judgment consistent with the original jury award. The Supreme Court also reversed the trial court’s decision granting Snap a permanent injunction. In a separate contempt proceeding, the Supreme Court affirmed the contempt court's decision to dismiss contempt charges against Vertical Raise and Paul Croghan, a former Snap employee. The contempt court had determined the preliminary injunction was vague, overbroad, and unenforceable. View "Snap! Mobile v. Vertical Raise" on Justia Law

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In a wrongful death action brought by Laura Milus on behalf of herself and her minor child against Sun Valley Company, the Supreme Court of the State of Idaho reversed the district court's grant of summary judgment to the defendant, Sun Valley. Ms. Milus' husband died after colliding with snowmaking equipment while skiing at Sun Valley Ski Resort. Ms. Milus alleged that Sun Valley breached its duties under Idaho Code section 6-1103(2) and (6), which require ski area operators to mark snowmaking equipment with visible signs or warning implements and place a conspicuous notice at or near the top of a trail or slope when snowmaking operations are being undertaken. The district court granted Sun Valley's summary judgment motion, concluding that Sun Valley had fulfilled its duty under section 6-1103(2) by marking the snowmaking equipment with yellow padding and did not have a duty under section 6-1103(6) because the snowmaking equipment was not actively discharging snow. However, the Supreme Court of the State of Idaho reversed the district court's decision, finding that the question of whether the yellow padding constitutes a warning implement under section 6-1103(2) is a question of fact for the jury. The court also held that section 6-1103(6) imposes a duty on ski area operators to place a conspicuous notice at or near the top of the trail or slope when snowmaking equipment is placed on the ski run or slope, regardless of whether the equipment is actively discharging snow. The case was remanded for further proceedings consistent with the court's opinion. View "Milus v. Sun Valley Company" on Justia Law

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The Supreme Court of Idaho affirmed the lower court's decision that A.C. & C.E. Investments, Inc. (AC&CE) did not properly plead a derivative action and lacked standing to bring a direct claim in a lawsuit against Eagle Creek Irrigation Company (Eagle Creek). AC&CE, a shareholder of Eagle Creek, a nonprofit mutual irrigation corporation, challenged amendments made to Eagle Creek's bylaws and articles of incorporation that increased the number of capital shares the corporation was authorized to issue and removed a provision that Eagle Creek would hold all the water rights it acquired “in trust” for the benefit of its shareholders. AC&CE claimed Eagle Creek breached its fiduciary duty and requested that the district court declare the proposed amendments void. However, the district court concluded that AC&CE's complaint did not properly plead a derivative action, that AC&CE lacked standing to bring a direct claim, and that the amendments were validly adopted by a majority shareholder vote. The Supreme Court of Idaho affirmed these conclusions. The court also found that AC&CE's claim regarding the increase in the number of authorized capital shares was not ripe for adjudication because no additional shares had been issued. Finally, the court affirmed the lower court's denial of Eagle Creek's request for attorney fees. View "A.C. & C.E. Investments, Inc. v. Eagle Creek Irrigation Company" on Justia Law

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Facing foreclosure, Ralph and Paula Isom entered into a deed in lieu of foreclosure agreement with Farms, LLC (“Farms”). The Isoms then leased the real property (a farm and various houses) back from Farms, subsequently defaulted on their obligations under the lease agreement, and filed a Chapter 11 bankruptcy, which was later converted to a Chapter 7. During the Isoms’ bankruptcy, Farms also acquired several third-party claims against the Isoms from other independent creditors of the Isoms. The bankruptcy court denied the Isoms a discharge, and after the bankruptcy case closed, Farms sued the Isoms personally, alleging three counts of breach of contract. Following a one-day bench trial, the district court awarded Farms a judgment of $1,281,501.68 as to Count III—related to Farms’ purchase of the third-party claims—but concluded that Farms’ remaining two claims related to the lease were barred by the applicable statute of limitations. The Isoms appealed, arguing the district court erred in determining the applicable statute of limitations as to Count III. Farms cross-appealed, arguing the district court erred in applying the statutes of limitation as to Counts I and II. After review, the Idaho Supreme Court affirmed the district court’s judgment as to Count III but reversed and vacated the judgment on Counts I and II. View "Farms, LLC v. Isom" on Justia Law

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Shake Out, LLC entered into a contract with Clearwater Construction, LLC (“Clearwater”), to repair the building Shake Out’s restaurant occupied. The relationship between the parties quickly deteriorated, resulting in Shake Out filing a lawsuit against Clearwater. The parties attempted to mediate their dispute but were unsuccessful. After the case had proceeded for some time, Clearwater sought to compel arbitration pursuant to the contract. Shake Out objected, asserting that Clearwater had waived its right to enforce the arbitration clause because it had participated in the litigation for almost ten months before seeking to compel arbitration. The district court concluded Clearwater had not waived its right to seek arbitration and entered an order compelling arbitration and staying the proceedings. Finding no reversible error in that judgment, the Idaho Supreme Court affirmed. View "Shake Out, LLC v. Clearwater Construction, LLC" on Justia Law

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In 2019, Matt Dorsey brought an action against his father, Tom Dorsey, seeking formal accounting, dissolution, and winding up of their joint dairy operation, Dorsey Organics, LLC. The district court appointed a Special Master; the Special Master subsequently recommended to the district court that it grant partial summary judgment to Tom on Counts Four (breach of contract) and Five (constructive fraud). Without receiving a definitive ruling from the district court on the recommendations regarding the motions for summary judgment, the case then proceeded to a four-day hearing presided over by the Special Master, which resulted in the Special Master making Proposed Findings of Fact and Conclusions of Law. The district court adopted, with almost no changes, the Special Master’s Proposed Findings of Fact and Conclusions of Law, which relied upon the accounting of Tom's expert and rejected the opinions of Matt's expert. The district court then entered a judgment incorporating, with few changes, the Special Master’s Proposed Findings of Fact and Conclusions of Law. The district court also denied Tom's request for attorney fees. Matt appealed, arguing: (1) the district court failed to properly review the evidence before accepting the findings of the Special Master; (2) questioned whether a court could override the terms of a contract even though the contract’s terms arguably produced an inequitable result; (3) Tom wrongfully dissociated from Dorsey Organics prior to its dissolution and the winding up of its affairs; and (4) challenged whether summary judgment was properly granted on Counts Four and Five of the Third Amended Complaint. The Idaho Supreme Court concluded the district court erred in failing to independently review the record before adopting the Special Master's Proposed Findings of Fact and Conclusions of Law. Accordingly, the Court vacated the district court's conclusions that relied on the Special Master's findings. The case was thus remanded for further proceedings. View "Dorsey v. Dorsey" on Justia Law

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This consolidated appeal arose from personal injuries Adrian Carillo Alcala (“Carillo”) suffered at a potato packaging plant, SunRiver of Idaho, Inc. (“SunRiver”), after his head and shoulders were crushed by a box palletizer designed, manufactured, delivered, and installed by a Dutch company, Verbruggen Emmeloord, B.V. (“VE”), along with its United States affiliate, Verbruggen Palletizing Solutions, Inc. (“VPS”). The box palletizer was one of seven machines SunRiver purchased in a transaction with Volm Companies, Inc. (“Volm”). Because this was a workplace injury, Carillo received worker’s compensation benefits through his employers, SunRiver, Employers Resource Management Company, and Employers Resource of America, Inc.—and the surety American Zurich Insurance Company (collectively “the SunRiver Plaintiffs”). Afterwards, the SunRiver Plaintiffs jointly with, and in the name of Carillo, sued Volm, VE, and VPS. Pursuant to a stipulation and compromise agreement, Volm was dismissed from this suit before this appeal. The district court granted summary judgment to Respondents and dismissed all claims after concluding that VE and VPS were Carillo’s statutory co-employees immune from common law liability under Richardson v. Z & H Construction, LLC, 470 P.3d 1154 (2020). On appeal, the SunRiver Plaintiffs and Carillo argued that the transaction between SunRiver and Volm did not make Carillo, VE, and VPS statutory co-employees because it was a “hybrid” transaction consisting of goods with incidental services under Kelly v. TRC Fabrication, LLC, 487 P.3d 723 (2021). VE and VPS cross-appealed the district court’s denial of attorney fees under Idaho Code section 12-120(3). The Idaho Supreme Court agreed with the SunRiver Plaintiffs and Carillo. VE and VPS were “third parties” and were not entitled to immunity from suit in tort under the Worker’s Compensation law. The district court’s judgment dismissing all claims was vacated, the grant of summary judgment to VE and VPS was reversed, and this case was remanded for further proceedings. The Supreme Court also rejected VE’s and VPS’s argument that the SunRiver Plaintiffs’ subrogation interest was barred at summary judgment. The Court found evidence in the record sufficient to create a disputed issue of material fact over whether the SunRiver Plaintiffs had any comparative fault for Carillo’s accident. As for the cross-appeal, the Court vacated the district court’s decision denying attorney fees under section 12-120(3) below because there was not yet a prevailing party. View "Alcala v. Verbruggen Palletizing Solutions, Inc." on Justia Law

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Taunton Properties, LLC owned 63 townhomes and 3.8 acres of adjacent land in Eagle, Idaho. In 2020, Commercial Northwest, Taunton’s property manager and agent, provided Geringer Capital with documents regarding the property. The documents identified the townhomes as “Woodside Villas,” and included financial statements and tenant information. Geringer sent a written offer (“Offer Letter”) to Taunton Properties, proposing to purchase the 63 townhomes; the Offer Letter identified the Seller only as “Title Holder.” The Offer Letter also stated that, “Buyer and Seller agree to execute a more formal Agreement of Purchase and Sale within thirty (30) days containing market specific terms and the items set forth in this Agreement.” The Offer Letter contained sections for “Title Insurance,” “Proration’s [sic] and Closing Costs,” and “Seller’s Deliveries,” but stated those terms were “to be specified in the Agreement of Purchase and Sale.” Peter Taunton, the manager of Taunton Properties, electronically signed the Offer Letter through DocuSign, which presumably returned it to Geringer. One day after signing and returning the Offer Letter, Taunton Properties received a different purchase offer from LCA-CA I, LLC (“LCA”), with a proposed sale price that was $400,000 more than Geringer’s offer. That same day, Peter Taunton advised Geringer that Taunton Properties considered Geringer’s Offer Letter unenforceable and that Taunton Properties would be selling the properties to LCA. Geringer filed a complaint for specific performance, breach of contract, and breach of preliminary agreement against Taunton Properties. The district court granted Respondents’ motions to dismiss. The district court determined: (1) the Offer Letter lacked material terms and represented an agreement to agree; (2) the property description was insufficient under the statute of frauds; and (3) Geringer’s claims for breach of preliminary agreement, tortious interference with contract, and civil conspiracy failed to state claims upon which relief could be granted. The Idaho Supreme Court concurred with the district court: the Offer Letter failed to satisfy the statute of frauds and was so vague, uncertain, and indefinite that it was unenforceable. As a result, there was no enforceable contract with which to tortiously interfere. View "Geringer Capital v. Taunton Properties, LLC" on Justia Law

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In this appeal, the issue presented was whether a contract for the sale of business assets also contained language conveying an enforceable leasehold interest in real property in favor of the buyer. At summary judgment, the district court determined that the Ellis Family Trust owned the real property underlying this leasehold dispute, and that the contract selling the assets of Pullover Prints Corporation (“PPC”) to 616, Inc. (“616”) did not convey a leasehold interest to 616 because material terms necessary to form a valid and enforceable lease were missing. Instead, the district court concluded that the contract involving the sale of assets only contained an “agreement to agree” on the terms of a written lease at a later date. Accordingly, the district court entered judgment in favor of the Ellis Family Trust. 616 appealed, arguing that all material terms necessary to form a valid and enforceable lease could be found within the asset contract. Respondents PPC, Mae Properties, LLC (“Mae”), and Ellis in his individual capacity and in his capacity as trustee for the Ellis Family Trust, cross-appealed the district court’s decision regarding their collective motion for attorney fees. Finding no reversible error in either the appeal or cross-appeal, the Idaho Supreme Court affirmed. View "616 Inc. v. Mae Properties, LLC" on Justia Law

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This appeal arose from a district court’s decision denying a motion for sanctions and attorney fees against Roy Gilbert’s former attorney, William Mitchell. The underlying litigation giving rise to the sanctions request stemmed from a dispute over a medical transport business and the business relationship between Gilbert and Richard Radnovich. Gilbert was the sole member of two LLCs: Resilient Transportation Leasing, LLC, and Resilient Transport LLC. According to Gilbert’s complaint, Radnovich was allegedly the owner of two business entities: Injury Care Emergency Medical Services (ICEMS) LLC and “Injury Care EMS,” as well as other entities not at issue in this appeal. In 2017, Gilbert executed an agreement purporting to sell Resilient Transport, LLC, to Injury Care EMS, LLC. According to Gilbert, Injury Care EMS, LLC, was never formed. Gilbert alleged that this “fictitious” LLC was an alter ego of Radnovich. The parties signed a supplement to the agreement which amended the business name for ICEMS, LLC to ICEMS, P.C, and clarified that Resilient Transport, LLC, would be subsumed by ICEMS, P.C. into another fictitious business called “Resilient Transport Operated by Injury Care EMS,” and that Resilient Transport, LLC would later be dissolved. Following a breakdown in both the agreement and the relationship, Gilbert sued Radnovich and the business entities. Mitchell filed the initial and amended complaint on behalf of Gilbert against Radnovich. Later in the proceedings, a second attorney substituted for Mitchell and soon after, both sides stipulated to dismiss the case with prejudice. A few weeks later, Radnovich filed a motion for sanctions and attorney fees against Mitchell. The district court denied the motion. Radnovich appealed, arguing the district court abused its discretion in denying sanctions and attorney fees against Mitchell. Finding no reversible error or abuse of discretion, the Idaho Supreme Court affirmed the district court’s decision. View "Gilbert v. Radnovich" on Justia Law