WILLIAM SHAWN GOODSPEED and SHELLEE BETH GOODSPEED, Plaintiffs-Respondents,
ROBERT D. SHIPPEN and JORJA SHIPPEN, Defendants-Appellants.
2013 Opinion No. 79
Appeal from the District Court of the Seventh Judicial District of the State of Idaho, Jefferson County. Hon. Gregory S. Anderson, District Judge.
The district court's order granting a new trial on the Goodspeeds' claim for breach of the implied warranty of habitability is affirmed. The district court's decision denying the Shippens' request for attorney fees at trial is affirmed.
Dunn Law Offices, PLLC, Rigby, for appellants. Robin D. Dunn argued.
Nelson Hall Parry Tucker, P.A., Idaho Falls, for respondents. Weston S. Davis argued.
Shawn and Shellee Goodspeed purchased a home from Robert and Jorja Shippen via warranty deed. After the basement of the home flooded, the Goodspeeds filed suit against the Shippens, alleging breach of the implied warranty of habitability. The district court denied the Goodspeeds' request for a jury instruction on the requirements for disclaiming the implied warranty of habitability and the case went to trial. The jury returned a verdict in favor of the Shippens, and the Goodspeeds moved for judgment notwithstanding the verdict or, alternatively, for a new trial, arguing the disclaimer of the implied warranty of habitability in the purchase and sale agreement was ineffective because it was not conspicuous. The district court granted a new trial after determining it had excluded the disclaimer instruction based upon its incorrect belief that the Goodspeeds had actual knowledge of the disclaimer. The Shippens appeal, arguing that the instruction was properly excluded. We affirm.
I. FACTUAL AND PROCEDURAL BACKGROUND
In 2005, Robert and Jorja Shippen purchased real property in Rigby, Idaho, and constructed a home on the lot. In June 2007, William Shawn Goodspeed (Shawn) and Shellee Beth Goodspeed entered into a real estate purchase and sale agreement (PSA) with the Shippens, under which the Shippens agreed to sell the home to the Goodspeeds. The property was eventually transferred to the Goodspeeds via warranty deed. Because the area was known for groundwater flooding, the Shippens agreed to install a leaching system and drain field on the walkout basement side of the property.
The Goodspeeds moved in and began to experience problems with flooding. According to Shawn's testimony, groundwater saturated the area outside the home's walkout basement in September 2007, and came within an inch of the basement floor slab. Shawn testified there was flooding again in September 2008, in which the water actually entered the house and damaged the carpet and walls. The Goodspeeds filed an action against the Shippens in January 2009, alleging several causes of action, including a claim that the Shippens breached the implied warranty of habitability. Prior to trial, the Goodspeeds requested a jury instruction on the requirements for disclaiming the implied warranty of habitability. The trial court declined to give the instruction, and the jury returned a verdict in favor of the Shippens on all causes of action. The Goodspeeds timely filed a motion for a judgment notwithstanding the verdict or, alternatively, for a new trial. They contended, among other issues, that the district court improperly excluded the requested jury instruction on the requirements for disclaiming the implied warranty of habitability.
The district court granted the Goodspeeds a new trial solely on their claim for breach of the implied warranty of habitability. The court explained that it initially declined to give the instruction because the "Shippens' counsel erroneously represented to this Court that [the] Goodspeeds acknowledged having read and understood" the disclaimer, which led the court to believe the Goodspeeds had actual notice of the disclaimer of the implied warranty of habitability. However, in considering the Goodspeeds' motion, the district court reviewed the trial testimony and concluded the evidence did not support a finding that the Goodspeeds had actual notice because it did not "clearly show [the] Goodspeeds were aware of and agreed to" the disclaimer and its consequences. The court also reviewed the requirements for making a valid contractual disclaimer of the implied warranty of habitability and determined that the language in the PSA did not satisfy those requirements because it was merely boilerplate language and not conspicuous. Consequently, the court determined it had erred in declining to give an instruction regarding the requirements for disclaiming the implied warranty of habitability and that the Goodspeeds were therefore entitled to a new trial on that issue.
After the verdict was rendered, the Shippens sought attorney fees pursuant to Idaho Code § 12-120(3) and also under the terms of the PSA. The district court issued a separate decision explaining that it would not award attorney fees until the claim for breach of the implied warranty of habitability was resolved and final judgment was entered. The Shippens timely appeal, arguing that the district court erred in granting a new trial because the Goodspeeds had actual notice the warranty was disclaimed and therefore no instruction was necessary. They also contend the district court erred in declining to award fees because, based upon the jury's verdict, they were the prevailing party.
II. STANDARD OF REVIEW
In Munns v. Swift Transp. Co., Inc., this Court set forth the standard it applies when reviewing a motion for a new trial:
On appeal, the Supreme Court will not reverse a trial court's order granting or denying a motion for new trial unless the court has manifestly abused the wide discretion vested in it. While the Supreme Court must review the evidence, it is not in a position to "weigh" the evidence as is the trial court. Jones v. Panhandle Distribs., Inc., 117 Idaho 750, 792 P.2d 315 (1990). In considering a motion for a new trial, the trial judge is not required to view the evidence in a light most favorable to the verdict winner. Quick v. Crane, 111 Idaho 759, 727 P.2d 1187 (1986).
138 Idaho 108, 110, 58 P.3d 92, 94 (2002). "The district court's determination of prevailing party status for the purpose of awarding attorney fees and costs is within the court's sound discretion, and will not be disturbed on appeal unless there is an abuse of discretion." Hobson Fabricating Corp. v. SE/Z Const., LLC, 154 Idaho 45, ___, 294 P.3d 171, 175 (2012) (citing Jorgensen v. Coppedge, 148 Idaho 536, 538, 224 P.3d 1125, 1127 (2010)).
This Court's test to determine whether a trial court has abused its discretion consists of three parts: "(1) whether the lower court rightly perceived the issue as one of discretion; (2) whether the court acted within the outer boundaries of such discretion and consistently with any legal standards applicable to specific choices; and (3) whether the court reached its decision by an exercise of reason." Schmechel v. Dillé, 148 Idaho 176, 179, ...