Articles Posted in Contracts

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Starting in February of 2014, Philip McGimpsey (“McGimpsey”) and his wife Jolene leased a home from D&L Ventures, Inc. D&L was a Nevada corporation owned by David Asher and his wife Georgina. The residential property McGimpsey leased from D&L was located in Eagle, Idaho. D&L obtained the Property in a 2013 foreclosure sale and received a trustee’s deed, which excluded any warranties. A dispute arose out of a breach of contract claim between the McGimpsey and D&L, who entered into a combined lease/Buy-Sell Agreement for the property. On discovering that D&L was an unregistered Nevada corporation conducting business in Ada County, McGimpsey failed to close on the purchase of the home in 2017, because he believed D&L to be in violation of Idaho Code section 30-21-502(a). After the closing date passed, D&L informed McGimpsey that the contractual provisions terminated upon his failure to close and reminded McGimpsey he had to vacate the property, pursuant to the Buy-Sell Agreement. About a month later, D&L registered with the Idaho Secretary of State as a Nevada corporation and filed all of its tax returns and paid its other obligations. McGimpsey subsequently filed a complaint against D&L, and the corporation counterclaimed against McGimpsey and third-party defendants. D&L moved for summary judgment that was granted in part and denied in part. The district court ultimately concluded that D&L had the legal ability to convey the property via warranty deed and that McGimpsey breached the Buy-Sell Agreement by failing to close and failing to show that his breach was excused by D&L’s alleged inability to convey marketable title. McGimpsey and third-party defendants timely appealed and their appeals were consolidated. The Idaho Supreme Court affirmed the district court’s award of summary judgment to D&L because Idaho Code section 30- 21-502 did not impair the validity of contracts; therefore, D&L had the legal ability to convey the property via warranty deed. View "McGimpsey v. D&L Ventures" on Justia Law

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Believing that she would be inheriting half of her father’s estate, Deann Turcott and her husband spent considerable time and money making improvements on the father’s land. However, the father subsequently changed his will and left Deann nothing. Deann filed suit seeking quantum meruit damages for the work she had performed. The district court held that quantum meruit damages were not appropriate and awarded damages under a theory of unjust enrichment. Deann appealed the district court’s award of unjust enrichment damages as inadequate. Finding no reversible error in the district court’s judgment, the Idaho Supreme Court affirmed. View "Turcott v. Estate of Clarence D. Bates" on Justia Law

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Believing that she would be inheriting half of her father’s estate, Deann Turcott and her husband spent considerable time and money making improvements on the father’s land. However, the father subsequently changed his will and left Deann nothing. Deann filed suit seeking quantum meruit damages for the work she had performed. The district court held that quantum meruit damages were not appropriate and awarded damages under a theory of unjust enrichment. Deann appealed the district court’s award of unjust enrichment damages as inadequate. Finding no reversible error in the district court’s judgment, the Idaho Supreme Court affirmed. View "Turcott v. Estate of Clarence D. Bates" on Justia Law

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David Kosmann appealed a district court judgment relating to a dispute that arose from the sale of real property. He claimed the district court erred in enforcing an oral settlement agreement reached in mediation between Kosmann, Kevin Dinius, and Dinius & Associates, PLLC (collectively “Dinius”). Kosmann also argued the trial court erred in: (1) awarding attorney fees to Dinius as a sanction against Kosmann and his attorney; (2) declining to impose sanctions against Dinius and his attorney; and (3) striking an untimely memorandum and declaration in support of his motion to reconsider. After review of the trial court record, the Idaho Supreme Court affirmed in part and reversed in part. The Supreme Court determined the district court did not err in enforcing the settlement agreement; the court also did not err in declining to impose sanctions against Dinius on ethics violations. However, the Supreme Court determined the district court abused its discretion in imposing I.R.C.P. 11 sanctions against Kossman and his counsel: the district court did not act consistently with the applicable legal standard for imposing sanctions pursuant to I.R.C.P. 11(b). The Supreme Court declined to address all other issues Kossman raised, and determined he was not entitled to attorney fees on appeal. "The record in this case is so tarnished with questionable conduct that it has presented this Court with a vexing ethical and legal dilemma. While we are gravely concerned over the potential ethical lapses which allegedly occurred during the mediation of this matter, there are no findings in the record concerning these matters. Therefore, as the trial court determined, we will leave to the Idaho State Bar, if properly called upon, the responsibility to investigate this matter further and make the necessary findings and conclusions as to the ethical issues presented." View "Kosmann v. Dinius" on Justia Law

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This appeal stemmed from a dispute between SilverWing at Sandpoint, LLC (“SilverWing”) and Appellant Bonner County, Idaho (the “County”). SilverWing sought to develop a residential hangar and taxiway adjacent to the Sandpoint Airport for residents who wished to park their aircraft in their home garage. SilverWing alleged that “[i]n 2007, the County provided to SilverWing an ALP that reflected the existing location of the Airport’s runway, and made no mention or reference to any plans for the runway to be moved. At the same time, the County promised that there were no plans regarding changes to runway location which would be incompatible with SilverWing’s development.” During the initial stages of engineering for the development, the County informed SilverWing that it needed to move the taxiway from where it was originally planned onto County-owned airport property, to accord with the County’s Airport Layout Plan (ALP). SilverWing proceeded with its development based on the County’s assurances, and built a taxiway and other infrastructure, including streets, to support its development. Once the taxiway was built, SilverWing learned that the placement of the taxiway was not approved by the FAA. After several years of legal maneuvering, SilverWing proceeded against the County in court, ultimately on a theory of promissory estoppel. After trial, a jury returned a verdict in favor of SilverWing. The County filed a motion for judgment notwithstanding the verdict (“JNOV”), which the district court denied. The County appealed. The Idaho Supreme Court reversed the district court’s ruling on the JNOV and vacated its ruling regarding attorney fees. The Court determined the district court erred with respect to JNOV on the claim of promissory estoppel: "SilverWing actually got what it claims the County promised—an FAA approved taxiway in the location where SilverWing built it. SilverWing can now sell its development with no regulatory uncertainty." View "SilverWing v. Bonner County" on Justia Law

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In 2006, T3 Enterprises entered into the Distributor Agreement with Safeguard Business Systems (SBS). In 2014, T3 filed suit alleging SBS had breached the Distributor Agreement by failing to prevent other SBS distributors from selling to T3’s customers and for paying commissions to the interfering distributors rather than to T3. The Distributor Agreement between SBS and T3 contained an arbitration clause indicating disputes must be resolved in a Dallas, Texas based arbitration procedure. The Distributor Agreement also contained a forum selection clause indicating that the Federal Arbitration Act (FAA) and Texas law would apply to any disputes between the parties. Pursuant to this agreement, SBS moved the district court to compel arbitration in Dallas. The district court determined the parties had to submit to arbitration, but that the Dallas forum selection clause was unenforceable, and arbitration was to take place in Idaho. The Arbitration Panel (the Panel) found for T3 and the district court confirmed the award in the amount of $4,362,041.95. The district court denied SBS’s motion to vacate or modify the award. SBS appealed, but finding no reversible error, the Idaho Supreme Court affirmed the district court. View "T3 Enterprises v. Safeguard Business Sys" on Justia Law

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This appeal arose in the context of Safeguard Business Systems, Inc.’s (“SBS”) alleged breach of its distributorship agreement with Thurston Enterprises, Inc. (“Thurston”). After a jury trial Thurston was awarded approximately $6.8 million in damages. SBS filed a motion for post-judgment relief, which the district court denied. The Idaho Supreme Court determined the district court correctly decided that SBS breached Thurston’s account protection rights under the Agreement as a matter of law. Furthermore, the district court properly denied SBS’s motions for post-judgment relief on Thurston’s claim for fraud in the inducement of the March 2014 agreement, on Thurston’s claim that SBS breached the pricing guarantee in the Agreement, and on Thurston's claim for good faith and fair dealing because the jury’s findings were supported by substantial evidence. The Supreme Court, therefore, affirmed the district court's judgment. View "Thurston and T3 v. Safeguard" on Justia Law

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Appellants Ryan and Kathryn McFarland owned real property in Garden Valley, Idaho, which feathred three structures insured through Liberty Mutual Insurance Group: a main cabin; a detached garage with an upstairs “bonus room”; and a pump house containing a geothermal well. The policy provided two types of coverage for structures. Coverage A (“Dwelling Coverage”) provided up to $188,500 in coverage for “the dwelling on the ‘residence premises’. . . including structures attached to the dwelling . . .” and Coverage B (“Other Structures Coverage”) provided up to $22,350 for “other structures on the ‘residence premises’ set apart from the dwelling by clear space.” In February 2017, a radiant heater burst in the bonus room and damaged the garage and its contents. After the McFarlands filed a claim, Liberty stated that the damage was covered under the policy. Believing the damage to fall under the Dwelling Coverage, the McFarlands hired contractors to repair the damage. However, after Liberty paid out a total of $23,467.50 in March 2017, Liberty stated that the coverage was exhausted because the damage fell under the Other Structures Coverage. This led the McFarlands to sue, alleging among other claims, breach of contract based on Liberty’s interpretation of the policy. The parties filed cross motions for summary judgment on the issue of whether the damage fell under the Dwelling Coverage or the Other Structures Coverage. Ruling that the policy unambiguously provided coverage for the garage under the Other Structures Coverage, the district court denied the McFarlands’ motion and granted Liberty’s. The McFarlands appealed. Finding that the policy at issue here failed to define the term "dwelling", and the term was reasonably subject to differing interpretations, the Idaho Supreme Court reversed the award of summary judgment and remanded for further proceedings. View "McFarland v. Liberty Insurance Corp" on Justia 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 case stemmed from a dispute regarding Idaho First Bank’s (“IFB”) efforts to collect on a note secured by a deed of trust. IFB appealed a district court order granting summary judgment in favor of debtors Maj-Le and Harold Bridges (the “Bridges”). The Bridges began leasing land from the Idaho Department of Lands (the “State”) in 2005, with the intent to build a cottage on the land. In 2014, the Bridges entered into a new nine-year term lease agreement with the State. This new lease contained a provision classifying buildings and structures on the leased land as “Personal Property.” This provision was not in the original 2005 lease agreement. In May 2015, the Bridges defaulted on the note. The Bridges then tendered both the cottage and the lease to IFB. On June 19, 2015, IFB filed suit, seeking a judgment on the note without taking action to foreclose on the deed of trust. Significant here, more than three months later, IFB amended its complaint a second time, claiming two separate causes of action seeking a deficiency judgment in the sum of $344,377.24. The first cause of action sought a deficiency under Idaho Code section 28-9-615, with IFB continuing to maintain that the 5000-square-foot cottage was personal property; the second cause of action sought the same relief on the basis of Idaho Code section 45-1512, relative to trust deeds and real property. The Bridges moved for summary judgment against IFB’s deficiency claims, arguing: (1) the cottage was not personal property, making the claim pursuant to section 28-9-61 erroneous; and (2) IFB’s deficiency claims were time barred because they were not filed within three months after foreclosure of the deed of trust, as required by section 45-1512. Finding no reversible error in the district court order, the Idaho Supreme Court affirmed the grant of summary judgment. View "Idaho First Bank v. Bridges" on Justia Law