Articles Posted in Contracts

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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

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This appeal related to a purported agreement resolving a lawsuit between Kevin Seward and Musick Auction, LLC (“Musick”). Seward claimed that the parties entered into a binding oral settlement agreement and he moved to enforce the agreement. The district court granted Seward’s motion. Musick contended on appeal the district court erred in several respects when it held that the parties had entered into a binding settlement agreement. Finding no reversible error in the district court's judgment, the Idaho Supreme Court affirmed. View "Seward v. Musick Auction, LLC" on Justia Law

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This appeal concerned the guardianship of a ten-year-old child, Jane Doe II (“Jane”), whose parents passed away in 2017. A family friend petitioned for guardianship; Jane's aunt (twin sister of her mother) also petitioned for guardianship. A guardian ad litem recommended the friend be awarded temporary guardianship for Jane to finish the school year, then the aunt be permanent guardian. The friend appealed. The final decree appointing Aunt as Jane’s permanent guardian was vacated by the Idaho Supreme Court, which remanded the case for the magistrate court to conduct a hearing to determine whether Jane possessed sufficient maturity to direct her own attorney prior to a new trial. View "Western Community Ins v. Burks Tractor" on Justia Law

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Appellant Jennifer Eastman sought a declaratory judgment that she was entitled to underinsured motorist insurance coverage (“UIM coverage”) under her auto insurance policy (the “Policy”) with Respondent Farmers Insurance Company (“Farmers”). Eastman was involved in a motor vehicle accident while traveling in a van operated by the Spokane Transit Authority (“STA”). Eastman sustained injuries as a result of the accident. Both the at-fault driver and STA held insurance policies. Eastman collected $50,000 from the at-fault driver’s insurance policy. Additionally, Eastman collected $48,846 in UIM coverage from STA’s insurance policy. Eastman’s special damages from the accident exceeded the amount that she collected from the two insurance policies. Eastman thereafter filed a claim with her insurer, Farmers, in an attempt to collect her own UIM coverage under the Policy. Specifically, Eastman sought her UIM coverage limit ($500,000) minus the $98,846 that she had already collected from the other insurance policies. Farmers denied Eastman’s claim based on an exclusion within the Policy which eliminated UIM coverage in situations where the insured was riding in another vehicle that had UIM coverage. The district court granted summary judgment in favor of Farmers, ruling that an exclusion contained in the Policy precluded UIM coverage for Eastman’s injuries. Finding that the clause in Eastman's policy violated Idaho's public policy, the Idaho Supreme Court vacated the district court's judgment and remanded this case with direction to invalidate the insurance exclusion at issue here. View "Eastman v. Farmers Insurance" 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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In January 2017, a jury found that an enforceable contract bound Mike Von Jones to pay Safaris Unlimited, LLC, (Safaris) $26,040 for a 2012 big game hunt Jones went on in Zimbabwe, Africa (2012 hunt). After the jury’s verdict, Safaris was awarded attorney fees plus interest on the judgment, bringing the judgment against Jones to $122,984.82. Safaris obtained a writ of execution in June 2017 and attended the sheriff sale as the only bidder. At the sale, Safaris purchased a pending lawsuit arising from Jones’s business venture by making a $2,500 credit bid. Jones was later successful in moving to vacate the sale. Jones appealed three issues from the jury trial: (1) the admission of a handwriting exemplar; (2) certain statements made by the district court concerning the handwriting exemplar; and (3) a jury instruction on agency law. Safaris cross appealed the district court’s decision to vacate the sheriff sale. After review, the Idaho Supreme Court determined: (1) the district court did not abuse its discretion by admitting the handwriting exemplar; (2) the district court did not violate Jones’s procedural due process rights by instructing Jones to answer whether he signed a particular document after viewing the exemplar; and (3) the Court did not reach the merits of Jones’s argument that the district court erred by giving jury instruction 13 since Jones failed to object to the instruction below. Thus, the Court affirmed in part, reversed in part and remanded the case for further proceedings. View "Safaris Unlimited v. Jones" on Justia Law

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Thomas Lunneborg claimed he was entitled to $60,000 severance because he was terminated without cause. Lunneborg was hired to be Chief Operating Officer (COO) of My Fun Life Corporation (MFL) on April 16, 2014. Lunneborg was terminated on July 29, 2014, ostensibly for cause. Lunneborg brought this action seeking his severance pay pursuant to the employment contract. After a bench trial, the district court found MFL did not have cause to terminate Lunneborg. Therefore, Lunneborg was awarded $60,000 in damages, which was trebled to $180,000 under the Idaho Wage Claims Act. Lunneborg was also awarded attorney fees. The court also pierced MFL’s corporate veil and found that Lunneborg’s judgment could be collected against MFL’s sole shareholder, Dan Edwards (Edwards), and against Edwards’ wife, Carrie Edwards (Carrie), personally. MFL, Edwards, and Carrie appealed, contending that the trial court erred by: (1) failing to uphold Edwards’ determination that Lunneborg was fired for cause; (2) piercing the corporate veil; and (3) abusing its discretion in the amount of attorney fees it awarded to Lunneborg. Finding no reversible error, the Idaho Supreme Court affirmed. View "Lunneborg v. My Fun Life" on Justia Law

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The City of Idaho Falls (“Idaho Falls”) appealed an order dismissing its breach of contract and waste claims against H-K Contractors, Inc. (“H-K”). In 2005, H-K entered into a written contract requiring it to convey a parcel of property to Idaho Falls. The contract required that H-K initially grant Idaho Falls a storm drainage easement “over and across” the parcel. H-K was also required to convey fee title to the parcel at a future date, in no event later than March 1, 2010. H-K failed to convey the property to Idaho Falls as required. In 2016, Idaho Falls sent a letter to H-K requesting conveyance of title. H-K responded by refusing to convey title to the property, claiming that in 2009 a city official had orally informed H-K that Idaho Falls was no longer interested in the property. Based on that alleged representation, H-K decided to invest in the property to make it profitable. Idaho Falls filed a complaint against H-K for breach of contract and waste. H-K moved to dismiss the complaint based on the limitation found in Idaho Code section 5-216, alleging Idaho Falls’ claims were time barred because they were not brought within the five-year statute of limitations governing contract actions. Idaho Falls countered that the statute of limitations did not apply to it as a subdivision of the State of Idaho. On January 3, 2017, the district court dismissed Idaho Falls’ complaint as time barred. Idaho Falls timely appealed, claiming the district court erred in enforcing the five-year limitation set forth in section 5-216. The Idaho Supreme Court vacated the district court's judgment, finding it erred when it determined the term “state” in Idaho Code section 5- 216 did not include Idaho’s municipalities. Because Idaho Falls was the “state,” the district court erred when it found its contract claims against H-K were not “for the benefit of the state.” View "City of Idaho Falls v. H-K Contractors" on Justia Law