Justia Business Law Opinion Summaries

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

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

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

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

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

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

This appeal stemmed from a family dispute concerning ownership interests in Nelsen Farms, LLC (“LLC”). The LLC, as originally established, included equal ownership for two of the Nelsen’s sons, Jack S. and Jonathan. However, in 2015, Jack H. Nelsen (“Jack H.”) and Joan Nelsen modified their estate plans and decided to pass their interests in the LLC to Jonathan via an inter vivos transfer, rather than through their wills. In August 2017, members of the LLC held a special meeting, during which the transfer of the membership interest to Jonathan was approved. The next month, Jack S., his wife and son, and Jack S.’s sister Janice Lehman, filed a complaint against Jack H., Joan and Jonathan alleging Jack H. and Joan were incompetent and lacked testamentary capacity to modify their 2015 wills and to make the 2017 inter vivos conveyance. Appellants also alleged Jonathan unduly influenced Jack H. and Joan to obtain the estate modification. Appellants amended their complaint in October 2017, adding a claim for dissolution of the LLC. The district court ultimately granted summary judgment to Respondents and dismissed all of Appellants’ claims. After review, the Idaho Supreme Court affirmed the district court in all respects save one: dissolution of the LLC. To this, the Court held that when the district court granted dissolution on summary judgment, Jack S. was ipso facto deprived of his membership interest and relegated to the status of economic interest holder, without the right to petition for dissolution since, under the statute, only members could do so. Jack S. was reinstated as a member of the LLC, and had the right to seek dissolution upon remand. View "Nelsen v. Nelsen" on Justia Law

Robert, David, and Troy Taylor were partners in a commercial fire prevention business based in Alaska. Troy later formed his own business that directly competed with the partnership. In January 2015, Robert, David, and Troy signed an eight-paragraph agreement (“the Agreement”) that settled all potential legal claims relating to Troy’s competing business. The Agreement provided that Robert and David would buy Troy’s interest in the partnership. In exchange, Troy agreed to pay Robert and David $30,000 each and not work in the fire prevention industry in Alaska and Nevada. In March 2018, Robert and David brought this action in Idaho alleging, among other things, that Troy had breached the Agreement by working for a competing fire prevention business in Nevada. Troy counterclaimed, asserting Robert and David had breached the Agreement. Robert and David voluntarily dismissed some claims and the district court dismissed the rest. In addition, the district court granted summary judgment in Troy’s favor on his breach of contract counterclaim. Robert and David appealed, challenging the district court’s rulings that: (1) the noncompete provision in the Agreement was unenforceable; (2) the Agreement was severable and enforceable without the noncompete provision; and (3) they could not assert an affirmative defense of excusable nonperformance based on their allegation that Troy materially breached the Agreement. After review, the Idaho Supreme Court found the district court only erred in finding the noncompete clause was severable from the Agreement as a matter of law. The Court affirmed in all other respects. View "Taylor v. Taylor" on Justia Law

Eric Christiansen filed a nine-count complaint against respondents, Michael Moser and Potlatch #1 Financial Credit Union (“P1FCU”), following a decision by the Lewiston Roundup Association (“LRA”) to discontinue contracting with Christiansen to produce motorsport events at the LRA’s facility. The complaint alleged that Moser, a P1FCU employee and LRA member, improperly accessed information from Christiansen’s P1FCU account and shared it with the LRA so that it could recreate his business model and produce motorsport events without him. The district court granted summary judgment in the Respondents’ favor on each of Christiansen’s claims. Christiansen appealed, arguing that the district court erred in granting summary judgment because it failed to rule on Christiansen’s motion to compel discovery, failed to grant Christiansen more time to complete discovery, and failed to conclude that genuine issues of material fact precluded dismissal of four of Christiansen’s claims. The Idaho Supreme Court concluded after review that the district court abused its discretion by failing to decide Christiansen’s motion to compel discovery before considering the Respondents’ motions for summary judgment. Accordingly, judgment was reversed and the matter remanded for further proceedings. View "Christiansen v. Potlatch #1 FCU" on Justia Law

SRM Arms, Inc. (“SRM”) filed suit against GSA Direct, LLC, (“GSA”) and FFL Design, LLC, (“FFL”) (collectively, the “Entity Defendants”), and Anthony Turlington, David Lehman, and Ryan Fitzgerald (collectively the “Individual Defendants”), alleging breach of contract, breach of the covenant of good faith and fair dealing, fraud, aiding and abetting in the commission of fraud, and unjust enrichment. After the jury awarded verdicts for SRM, all Defendants asked the court to modify the judgments or grant a new trial. The district court entered a remittitur for the claims against the Entity Defendants because it found the amount the jury awarded was excessive and not supported by sufficient evidence at trial. On appeal, SRM argued the district court erred in reducing the awarded damages. In their cross-appeal, the Entity Defendants argued the jury improperly found fraud and improperly found FFL liable for GSA’s debts. The Entity Defendants also argued the damages should have been reduced further. Additionally, the district court granted the Individual Defendants’ motion for a new trial on liability and damages because it found the jury instructions were inadequate to distinguish between direct liability and alter-ego liability. On appeal, SRM argues the jury correctly determined direct liability and associated damages. The Idaho Supreme Court affirmed in part, reversed in part and remanded in part. Regarding the Entity Defendants, the Supreme Court reversed and remanded for reconsideration of the remittitur, or in the alternative, a new trial, in light of the Supreme Court's conclusion that a possible alternate basis for the jury’s verdict could exist. The Supreme Court affirmed the district court’s decision upholding the verdict of fraud against GSA and FFL. The district court’s decision to uphold the verdict that FFL is liable to SRM was also affirmed; the Court found the statute of frauds was satisfied and not, as the jury decided, because an exception to the statute of frauds applied. The Court reversed the district court’s decision to uphold the finding of unjust enrichment and remanded for further consideration of whether there was substantial and competent evidence in the record supporting the jury’s award of damages against FFL for both breach of an implied-in-fact contract and unjust enrichment. Regarding the Individual Defendants, the Supreme Court affirmed the district court’s granting of a new trial on liability against the Individual Defendants. The district court’s award of a new trial on damages against the Individual Defendants was also affirmed. View "SRM Arms, Inc. v. GSA Direct, LLC" on Justia Law