Justia Idaho Supreme Court Opinion Summaries

In 2006, Richard Myers owned the property at issue in this case. At the time, the property was subject to a deed of trust in favor of First Horizon Home Loans. Myers enlisted Michael Horn and his company, Frontier Development Group (FDG) to build a residence on the property, which First Horizon financed. However, in April of 2007, Myers filed for bankruptcy, and First Horizon rescinded the construction loan and instructed FDG to halt construction when the project was only fifty percent complete. The structure was left exposed to the elements for fourteen months. Following Myers' bankruptcy, foreclosure proceedings were initiated, and Myers hired Kathleen Horn (Michael Horn's wife), of Windermere Real Estate/Teton Valley to list the property for sale. The Caravellas, who were Ohio residents, looking for property in the Teton Valley, contacted their real estate agent who put them in touch with Kathleen Horn who provided them with information on the stalled Myers project. Kathleen Horn eventually put the Caravellas in touch with Michael Horn. The Caravellas traveled to Idaho, met with Kathleen Horn, and spent two days inspecting the property. The Caravellas testified that Kathleen Horn minimized issues with the house, telling them that it was "in good shape,""structurally sound,"and a "great house."The Caravellas chose not to have a professional inspection performed and closed on May 5, 2008. After closing, the Caravellas and Michael Horn agreed that Horn would complete construction on the house in accordance with Myers' original plans. In reaching this agreement, the Caravellas testified that they believed they were dealing with Horn as an individual. The total contract price for the first phase of work that the Caravellas authorized was $88,500. However, the Caravellas paid FDG $138,097.24 for the first phase before refusing to pay any more. Much of the money that the Caravellas paid to FDG was for unauthorized work or work that was completed in a nonconforming or substandard manner. The Caravellas hired a second builder to complete the first phase and to remedy the substandard work. FDG initiated this action by filing a complaint to foreclose on a lien for construction services and building materials provided to, but not paid for by, the Caravellas. The Caravellas filed an amended counterclaim alleging that FDG and Horn: (1) breached the parties' contract; (2) breached the duty of good faith and fair dealing; (3) violated the Idaho Consumer Protection Act; (4) breached the implied warranty of habitability; (5) committed slander of title; (6) committed fraud and misrepresentation; (7) engaged in a civil conspiracy; and (8) acted negligently. The district court held that FDG's lien was defective and dismissed it. The district court also held that FDG breached its contract with the Caravellas by: (1) failing to complete agreed upon work in conformity with the plans and in a workmanlike manner; (2) charging the Caravellas for unauthorized and defective work; and (3) substantially overbilling the Caravellas for work and materials that were not authorized and never provided. As to the Caravellas' fraud counterclaim, the district court concluded that the Caravellas failed to establish all nine elements of fraud and dismissed the claim. The district court also concluded that Horn was not personally liable. The district court awarded the Caravellas $113,775.45 in attorney fees, $5,484.83 in costs as a matter of right, and $200.00 in discretionary costs. The Caravellas timely appealed. Upon review, the Supreme Court concluded the district court erred by applying the incorrect evidentiary standard to the Caravellas' fraud counterclaim, but that error was harmless. The Court affirmed that portion of the district court's judgment dismissing the Caravellas' fraud claim, and reversed that portion of the judgment dismissing the Caravellas' claims against Michael Horn personally. In all other respects, the Supreme Court affirmed the district court's decision. View "Frontier Development Grp v. Caravella" on Justia Law

In 2009, Joseph Pierce filed this action against Steven McMullen and Highland Financial, LLC, seeking damages for various violations of the Idaho Consumer Protection Act and for breach of contract, all based upon an alleged scam in which defendants represented that they could protect Pierce from losing his equity in real property that was facing foreclosure. He alleged that the defendants obtained title to his real property pursuant to a promise to assume the loans secured by the property, to market and sell the property, and to pay him at least $50,000 or more from the sale proceeds, depending upon the sale price. He claimed that he deeded the property to defendants, they failed to make the payments on the loans, and that the property was sold at a foreclosure sale. The complaint also alleged that Highland Financial was the alter ego of McMullen. Only McMullen appeared in the action, but he did not deny the allegations of wrongdoing in the complaint. When McMullen failed to appear at the trial, the district court ordered that he was in default, that Pierce prevailed on his complaint, and that he could present evidence of his damages. Pierce did so, but the district court later dismissed the action on the ground that Mr. Pierce had failed to prove liability. Finding that decision was made in error, the Supreme Court reversed the district court's decision and remanded the case for further proceedings. View "Pierce v. McMullen" on Justia Law

This case arose from Agrisource’s breach of contract claim against Robert Johnson (Johnson). Johnson argued that he was not liable on the contract because he was an agent for a disclosed principal named “Johnson Grain Inc.” which was owned by Neil Brown. Agrisource leased a grain elevator in Ririe from Johnson’s father, Wydell. For several years prior to 2006, Johnson was Agrisource’s employee and managed the elevator. Agrisource terminated its elevator lease in summer 2006, and Johnson was then unemployed. Brown purchased the grain elevator in August 2006 from Wydell. Brown was Johnson Grain Inc.’s majority shareholder from August 2006 through December 2007. Johnson and Brown opened a business checking account under Johnson Grain Inc.’s name with both men as signatories. Johnson entered into two contracts to sell durum wheat to Agrisource. Agrisource did not receive 15,527.87 bushels of wheat promised by Johnson Grain. Agrisource contacted both Johnson and Brown for two years about the undelivered wheat. Neither party delivered the wheat, so in 2009 Agrisource purchased wheat elsewhere. This resulted in $51,241.97 in damages. In 2010, Agrisource filed a claim alleging breach of the 2007 contract against Brown, Brown’s wife, and Neil Brown, Inc., Johnson, Johnson’s wife, and Johnson’s corporation as defendants. Agrisource alleged that Johnson was an individual doing business as Johnson Grain when he entered into the contract. Johnson appealed the district court’s grant of summary judgment in favor of Agrisource, Inc. The district court held that there was no genuine disputed issue of material fact as to Johnson’s lack of disclosure of his agency and alleged principal. Johnson argued on appeal that Agrisource had notice that Johnson was the principal’s agent because Agrisource should have known Johnson was an agent and disputed issues of fact existed. Upon review, the Supreme Court affirmed the district court’s grant of summary judgment to Agrisource and the denial of Johnson’s third motion to reconsider. However, the Court vacated the district court’s denial of Johnson’s request for I.R.C.P. 60(b) relief and remanded for the district court to analyze Johnson’s third affidavit in the context of Johnson’s request for I.R.C.P. 60(b) relief. View "Agrisource, Inc v. Johnson" on Justia Law

Saint Alphonsus Diversified Care, Inc.formed a general partnership named MRI Associates. The parties executed a written partnership agreement for the purpose acquiring and operating diagnostic and therapeutic devices, equipment, and accessories, beginning with a magnetic resonance imaging (MRI) scanner. MRI Associates formed two limited partnerships: MRI Limited Partnership (which owned and operated an MRI scanner located on Saint Alphonsus' campus) (“MRI Center”); and MRI Mobile Limited Partnership (which owned and operated mobile MRI scanners) (“MRI Mobile”). For decades, a group of radiologists known as Gem State Radiologists had interpreted medical images pursuant to a contract that gave them the exclusive right to serve the radiological needs of patients of Saint Alphonsus. After the formation of MRI Associates, they interpreted MRI scans performed at MRI Center. In 1998, the Radiologists began planning to construct and operate an outpatient facility in Boise that was located away from the hospital. The proposed facility would provide a full range of medical imaging services, including MRI imaging. There were negotiations among the Radiologists, Saint Alphonsus, and MRI Associates to have one medical imaging entity, but those negotiations were unsuccessful. There was evidence that Saint Alphonsus was negotiating against MRI Associates with the Radiologists. In 1999, the Radiologists formed Intermountain Medical Imaging, LLC, (“IMI”), and on September 1, 1999, they opened their facility. Saint Alphonsus began negotiating with the Radiologists to partner with them in the imaging center. In 2001, Saint Alphonsus became a member of IMI. IMI opened another facility in Meridian. In 2004, Saint Alphonsus gave notice to MRI Associates that it would dissociate from the partnership. Under the partnership agreement, upon dissociation Saint Alphonsus could not compete with MRI Associates for a period of one year. Saint Alphonsus then filed this action seeking to recover the value of its partnership interest from MRI Associates, and MRI Associates responded by filing a multi-count counterclaim and claims against third parties. The third-party claims were ultimately dismissed. The jury found Saint Alphonsus liable on all causes of action, and MRI Associates was awarded a judgment in the sum of $36.3 million. That judgment was vacated on appeal, and the case was remanded for further proceedings. The case was again tried to a jury. The jury found in favor of the MRI Entities on each of the claims. Under the judgment entered by the district court, the awards under each claim for relief were in the alternative. The highest award to each of the MRI Entities was: $3,906,338 to MRI Associates; $25,828,208 to MRI Center; and $22,349,967 to MRI Mobile, which totaled $52,084,513. On its complaint, Saint Alphonsus was awarded $4.6 million against MRI Associates. Saint Alphonsus appealed, and the MRI Entities cross-appealed. Finding no reversible error in the district court's decision, the Supreme Court affirmed the district court. View "St. Alphonsus Diversified Care v. MRI Associates, LLP" on Justia Law

This case arose out of a contract dispute when Robert Coleman, Profits Plus Capital Management, LLC (“Profits Plus”), and Dollars and Sense Growth Fund Limited Partnership (“Dollars and Sense”) filed a claim for declaratory judgment against Jeffrey Podesta and Street Search, LLC. Coleman, Profits Plus, and Dollars and Sense sought a judgment declaring that they did not have a contract with either Podesta or Street Search. Podesta and Street Search then counterclaimed seeking damages for breach of contract, fraud, constructive fraud, and breach of fiduciary duties. Ultimately, only Podesta and Street Search’s breach of contract and breach of fiduciary duty claims went to the jury, which decided those claims in favor of Coleman, Profits Plus, and Dollars and Sense. Podesta and Street Search now appeal a number of the district court’s decisions made before, during, and after trial. We affirm the district court’s decisions. View "Profits Plus Capital Mgmt. v. Podesta" on Justia Law

Tracy Sales brought suit against spa owner Stacie Peabody, claiming that she contracted a toe infection as a result of a pedicure performed at the spa. The district court granted summary judgment against Sales after concluding that she had failed to present sufficient evidence of causation. The district court also denied Sales' motion for reconsideration based on the ground that she had not adequately alleged the theory of negligence she relied on in support of that motion. Sales timely appealed to the Supreme Court. And after its review, the Court concluded that the district court erred in denying Sales' motion for reconsideration. The decision was vacated and the case remanded for further proceedings. View "Sales v. Peabody" on Justia Law

Appellants-plaintiffs Wandering Trails, LLC and Liquid Realty, Inc. appealed the district court’s entry of summary judgment and denial of their veil-piercing claims against defendants Big Bite Excavation, Inc., Piper Ranch, LLC, and Tim and Julie Schelhorn in their individual capacity. Big Bite and Piper Ranch were both wholly owned by the Schelhorns. Wandering Trails was created for the purposes of obtaining and developing property. Wandering Trails entered into an agreement with Piper Ranch under which Piper Ranch agreed to pave the roadways for the development in exchange for a 25% interest in Wandering Trails. Piper Ranch did not do any work on the development. Wandering Trails and Liquid Realty brought suit and alleged an alter ego claim against Big Bite, Piper Ranch, and the Schelhorns. The district court granted summary judgment to Big Bite and the Schelhorns and refused the Plaintiffs’ veil-piercing claims. Wandering Trails and Liquid Realty appealed, and the Schelhorns cross-appealed. Finding no reversible error after careful consideration of the trial court record, the Supreme Court affirmed. View "Wandering Trails v. Big Bite Excavation" on Justia Law

This appeal stemmed from a fraud, breach of contract, and breach of warranty action brought by April Beguesse, Inc. (ABI) against defendants Kenneth Rammell, the estate of Christa Beguesse, and Christa Beguesse, Inc. (CBI), and a breach of contract counterclaim brought by CBI against ABI. The parties went to trial and the jury returned a verdict in favor of ABI on all claims. Defendants moved for a judgment notwithstanding the verdict (JNOV) or in the alternative a new trial. The district court granted Defendants’ motion for JNOV on the finding of fraud by Christa’s estate and dismissed that claim. The district court also granted Defendants a new trial on the issue of damages unless ABI accepted a remittitur for damages assessed against CBI only. The district court denied Defendants’ motion on the remaining claims of breach of contract, breach of warranty, and fraud. ABI accepted the remittitur. Defendants appealed the district court’s denial of their motion. Defendants also sought reversal of the district court’s judgment or in the alternative a new trial on their counterclaim. Finding no reversible error, the Supreme Court affirmed. View "April Beguesse, Inc. v. Rammell" on Justia Law

In January 2007, the Bank of Idaho made two construction loans to developers who planned to construct a fourplex on each of two adjoining lots in Idaho Falls. The bank loaned one sum of money to build a fourplex on Lot 1 and another sum for a fourplex on Lot 2. The bank secured a separate policy of title insurance for each lot that was issued by the predecessor of First American Title Insurance Company. Each policy included an endorsement that the parties understood would insure against loss or damage that the bank might sustain by reason of a multifamily residence not being constructed on the lot. After discussion with representatives of the city, the developers changed their original plans and built both fourplexes on Lot 2 and built a parking lot with storm water retention and landscaping on Lot 1. The developers later defaulted on their loans, and the bank foreclosed on both deeds of trust. At the foreclosure sale, the bank acquired each lot by making a full credit bid on all amounts due and owing on the note secured by the deed of trust. In 2010, the bank submitted a claim under the title policy issue with respect to Lot 1 to recover under the endorsement. The insurance company rejected the claim and the bank filed suit to recover under the policy. The district court granted the insurance company’s motion for summary judgment and dismissed this action. The bank then appealed. The Supreme Court concluded after its review that the district court erred in holding that the title insurance company had no liability under the policy. The endorsement provided that "[t]he Company hereby insures the owner of the indebtedness secured by the insured mortgage against loss or damage which the insured shall sustain by reason of the failure of [a multifamily residence to be built on Lot 1]." The endorsement insured against "loss or damage" that the bank argued was the failure of the multifamily residence to be constructed on the lot. It did not define what constituted "loss or damage." Subsections of the pertinent indemnity clause stated limits on the insurance company's liability, but it did not define loss or damage. Accordingly, the district court was reversed and the case remanded for further proceedings. View "Bank of Idaho v. First American Title" on Justia Law

In 2009, Joseph Pierce filed suit against Steven McMullen and Highland Financial, LLC, seeking damages for various violations of the Idaho Consumer Protection Act and for breach of contract, all based upon an alleged scam in which the Defendants represented that they could protect Pierce from losing his equity in real property that was facing foreclosure. Pierce alleged that the Defendants obtained title to his real property pursuant to a promise to assume the loans secured by the property, to market and sell the property, and to pay him at least $50,000 or more from the sale proceeds, depending upon the sale price. He claimed that he deeded the property to the Defendants, that they failed to make the payments on the loans, and that the property was sold at a foreclosure sale. The complaint also alleged that Highland Financial was the alter ego of McMullen. Defendants did not appear, and on August 6, 2010, the court entered default against them. Mr. Pierce filed his amended complaint on May 11, 2011. The complaint simply added allegations to support an award of punitive damages. On June 13, 2011, Mr. McMullen filed a notice of appearance on behalf of himself and on behalf of Highland Financial. McMullen filed an answer to the amended complaint in his behalf and on the behalf of Highland Financial. McMullen was not licensed to practice law in Idaho, therefore his appearance on behalf of Highland Financial and the answer he filed on its behalf were nullities. In his answer, McMullen only denied the allegations regarding punitive damages. The case was scheduled for trial to commence on June 18, 2012. Plaintiff appeared with counsel, but the Defendants again did not appear. After discussion with Pierce’s counsel, the district court stated that McMullen "is defaulted, his answer is stricken, and the plaintiff prevails on their [sic] claims," then asked Pierce to present evidence as to damages. Pierce testified as did another alleged victim of. McMullen. At the conclusion of the testimony, Pierce’s counsel filed proposed findings of fact and conclusions of law and a trial brief. The district court then issued its memorandum decision holding that. Pierce failed to prove any of his claims and ordered that his amended complaint be dismissed with prejudice. Pierce timely appealed. Largely because Defendants failed to appear and failed to answer the complaint and the facts of this case were therefore undisputed, the Supreme Court concluded that the district court erred in holding that Pierce did not prove his case. The case was remanded for further proceedings. View "Pierce v. McMullen" on Justia Law