Justia Contracts Opinion Summaries

At issue in this appeal before the Idaho Supreme Court was the doctrine of successor liability and its applicability to a business known as “Fatty’s Bar” (“Fatty’s”). Tons of Fun, LLC opened Fatty’s in October 2010 and a short time later its manager, Clay Roman, signed a textile services agreement with Alsco, Inc. The Agreement contained an automatic renewal clause, by which the Agreement would renew automatically for a period of 60 months if neither party terminated it in writing at least 90 days before its initial expiration. Fatty’s fell on difficult financial times, and closed for a period in January 2013. Soon after, Steven and Jennifer Masonheimer created a limited liability company called Fatty’s Bar, LLC, and re-opened Fatty’s in mid-February, 2013, continuing to receive textiles from Alsco. The Agreement automatically renewed in March 2016. In March 2017, Fatty’s Bar, LLC terminated the Agreement, well before the 60-month term was set to expire. Alsco then sued Fatty’s Bar, LLC and Clay Roman, seeking damages based on a liquidated damages provision in the Agreement. After a court trial, the district court held that both Fatty’s Bar, LLC and Roman, were jointly and severally liable to Alsco for damages under a liquidated damages clause that was also in the Agreement. Fatty’s Bar, LLC appealed. Finding no reversible error, the Idaho Supreme Court affirmed. View "Alsco v. Fatty's Bar" on Justia Law

Jeff Good and Harry’s Dairy entered into a contract providing that Harry’s Dairy would purchase 3,000 tons of Good’s hay. Harry’s Dairy paid for and hauled approximately 1,000 tons of hay over a period of approximately eight weeks, but did not always pay for the hay before hauling it and at one point went several weeks without hauling hay. After Harry’s Dairy went a month without hauling additional hay, Good demanded that Harry’s Dairy begin paying for and hauling the remaining hay. Harry’s Dairy responded that it had encountered mold in some of the hay, but would be willing to pay for and haul non-moldy hay at the contract price. Good then sold the remaining hay for a substantially lower price than he would have received under the contract and filed a complaint against Harry’s Dairy alleging breach of contract. Harry’s Dairy counterclaimed for violation of implied and express warranties and breach of contract. The district court granted summary judgment in favor of Good on all claims, and a jury ultimately awarded Good $144,000 in damages. Harry’s Dairy appealed, arguing that there were several genuine issues of material fact precluding summary judgment, that the jury verdict was not supported by substantial and competent evidence, and that the district court erred in awarding attorney fees, costs, and prejudgment interest to Good. Finding only that the district court erred in granting summary judgment on the implied warranty of merchantability counterclaim, the Idaho Supreme Court reversed as to that issue, affirmed as to all others, and remanded for further proceedings. View "Good v. Harry's Dairy" on Justia Law

Jeff Good and Harry’s Dairy entered into a contract providing that Harry’s Dairy would purchase 3,000 tons of Good’s hay. Harry’s Dairy paid for and hauled approximately 1,000 tons of hay over a period of approximately eight weeks, but did not always pay for the hay before hauling it and at one point went several weeks without hauling hay. After Harry’s Dairy went a month without hauling additional hay, Good demanded that Harry’s Dairy begin paying for and hauling the remaining hay. Harry’s Dairy responded that it had encountered mold in some of the hay, but would be willing to pay for and haul non-moldy hay at the contract price. Good then sold the remaining hay for a substantially lower price than he would have received under the contract, and filed a complaint against Harry’s Dairy alleging breach of contract. Harry’s Dairy counterclaimed for violation of implied and express warranties and breach of contract. The district court granted summary judgment in favor of Good on all claims, and a jury ultimately awarded Good $144,000 in damages. Harry’s Dairy appealed, arguing that there were several genuine issues of material fact precluding summary judgment, that the jury verdict was not supported by substantial and competent evidence, and that the district court erred in awarding attorney fees, costs, and prejudgment interest to Good. The Idaho Supreme Court determined the district court erred only in its decision with respect to Good’s breach of contract claim and Harry’s Dairy’s breach of the implied warranty of merchantability claims. Judgment was vacated and the matter remanded for further proceedings. View "Good v. Harry's Dairy" on Justia Law

Amey Nelson brought a negligence claim against Stefani Kaufman, the Idaho Falls Anytime Fitness, and AT Fitness, LLC. Nelson was using a weight machine at the Idaho Falls Anytime Fitness under the direction of Kaufman, a personal trainer, when Nelson injured a metacarpal bone in her hand. Nelson filed suit alleging that Kaufman had improperly instructed her on the machine’s use, which caused her injury. The district court granted summary judgment in favor of Kaufman, holding that Kaufman was an express or apparent agent of Anytime Fitness and therefore released from liability under the terms of the Member Assumption of Risk and Release form Nelson signed when she joined the gym. Nelson unsuccessfully moved for reconsideration, and appealed. The Idaho Supreme Court determined Nelson did not waive her appeal by failing to expressly challenge the district court's finding of an express agency relationship. The Court determined the district court erred in granting summary judgment to Kaufman on the basis that Kaufman was an express agent of Anytime Fitness. Further, the court erred in apply the apparent agency doctrine defensively to find Kaufman was covered by the specific terms of the Membership Agreement. With judgment reversed, the Supreme Court remanded the case back to the district court for further proceedings. View "Nelson v. Kaufman" on Justia Law

BrunoBuilt, Inc. appealed a district court’s dismissal of its claims against Strata, Inc., Chris Comstock, H. Robert Howard, and Michael Woodworth (collectively, “the Strata Defendants”). BrunoBuilt filed a professional negligence action against the Strata Defendants alleging that when the Strata Defendants rendered engineering services for the Terra Nativa Subdivision they failed to identify a pre-existing landslide and negligently failed to recommend construction of infrastructure that would stabilize and prevent further landslides within the Subdivision. A home BrunoBuilt had contracted to build and the lot on which the dwelling was located were allegedly damaged as a result. The district court dismissed BrunoBuilt’s claims after holding that the parties had entered into an enforceable settlement agreement, or alternatively, that summary judgment was warranted in favor of the Strata Defendants based on the economic loss rule. After review of the situation, the Idaho Supreme Court affirmed the district court judgment because the parties entered into an enforceable settlement agreement. View "Brunobuilt, Inc. v. Strata, Inc." on Justia Law

Primera Beef, LLC appealed a district court’s grant of summary judgment in favor of Allan Ward. Primera Beef alleged Ward breached the confidentiality provision of a settlement agreement between him and Primera Beef when Ward’s attorney disclosed the terms of the agreement to a prosecutor in a related criminal action. Ward moved for summary judgment, arguing that he was not liable for his attorney’s actions because his attorney was not acting within the scope of his authority when he disclosed the terms. The district court agreed. The Idaho Supreme Court concurred and affirmed the district court. View "Primera Beef v. Ward" on Justia Law

ABK, LLC owned and operated a gas station in Post Falls, Idaho where underground storage tanks were damaged due to water infiltration into the gas stored in the tanks. After the damage occurred, ABK submitted a claim to its insurer, Mid-Century Insurance Company. Mid-Century denied the claim. ABK then sued Mid-Century alleging breach of contract and bad faith. Mid-Century moved for summary judgment on both claims. The district court granted summary judgment for Mid-Century on ABK’s breach of contract claim finding ABK failed to raise a genuine dispute as to the fact the underground storage tanks were damaged by water, specifically excluded by the terms of the policy. The district court also granted summary judgment for Mid-Century on ABK’s bad faith claim finding ABK failed to establish coverage. ABK appealed the district court’s grant of summary judgment in favor of Mid-Century on both claims. Finding no reversible error, the Idaho Supreme Court affirmed. View "ABK v. Mid-Century Insurance" on Justia Law

In December 1995, Brian Trumble entered into a Career Agent’s Contract (“Agent Contract”) with Farm Bureau Mutual Insurance Company of Idaho. Under the Agent Contract, Trumble was an independent contractor who procured insurance from interested buyers on Farm Bureau’s behalf. The Agent Contract included a non-competition clause. This case was about whether Trumble could collect service bonus commissions that were credited to him during his career, but which became forfeitable after his termination if he competed with Farm Bureau within one year of the termination. In addition, this case is about Farm Bureau’s counterclaims against the agent, alleging the agent misappropriated trade secrets and intentionally interfered with Farm Bureau’s prospective economic advantage after his termination. The district court held that Trumble forfeited his commissions by competing with Farm Bureau in violation of the one-year non-competition requirement. And the district court held that the agent was blameless for his actions after termination and dismissed Farm Bureau’s counterclaims. After review, the Idaho Supreme Court agreed, affirming the district court’s judgment dismissing the agent’s claims and the insurance company's counterclaims. View "Trumble v. Farm Bureau" on Justia Law

The issue this case presented for the Idaho Supreme Court's review concerned an unjust enrichment claim brought by Kenworth, a commercial truck dealer, against Skinner Trucking, one of its customers. Kenworth claimed Skinner was unjustly enriched when Kenworth paid past due lease payments and the residual balance owed on Skinner’s lease with GE Transportation Finance. The district court entered judgment for Skinner on the grounds that, as to the residual value of the trucks, Kenworth had not conferred a benefit on Skinner, and that as to both the residual value of the trucks and the past due lease payments, Kenworth was an “officious intermeddler” because it had voluntarily paid GE without request by Skinner and without a valid reason. In a subsequent order, the district court denied Skinner’s request for attorney fees under Idaho Code sections 12-120(3) and 12-121. Kenworth appealed the district court’s judgment; Skinner appealed the district court’s order regarding costs and fees. The Supreme Court concluded after review: (1) the "officious intermeddler" rule was not an affirmative defense; the district court did not err in concluding Kenworth was an officious intermeddler; and (3) the district court did not err in determining that Skinner was not entitled to attorney fees under the circumstances. View "Kenworth Sales v. Skinner Trucking" on Justia Law

In its motion for summary judgment, Farmers Insurance Company of Idaho argued that Erica Klein was barred from pursuing a supplemental UIM claim because the five-year statute of limitations in Idaho Code section 5-216 had run. Farmers asserted the statute of limitations began to run on either the date of the accident or the date Klein settled with the third party tortfeasor, both of which occurred more than five years prior to Klein filing her complaint to compel arbitration of her UIM claim. The district court denied Farmers’s motion and subsequent motion for reconsideration, holding that the “breach of contract” rule was the proper method of calculating the accrual date for Klein’s cause of action. Farmers appealed the district court’s denial of both motions. The Idaho Supreme Court determined the issue raised by this case was one of first impression, inasmuch as it was asked to determine when the statute of limitations began to run on a cause of action for UIM benefits under an automobile insurance policy. After considering the different approaches taken by other states, the Court adopted the majority’s “breach of contract” rule and affirmed the district court’s decisions. View "Klein v. Farmers Insurance Co." on Justia Law