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AED, Inc. v. KDC Investments, LLC

Supreme Court of Idaho, Boise

August 15, 2013

AED, INC., an Idaho corporation, Plaintiff-Appellant,
v.
KDC INVESTMENTS, LLC, a Virginia LLC, and Lee Chaklos and Krystal Chaklos, individually, Defendants-Respondents.

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[Copyrighted Material Omitted]

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Bistline Law, PLLC, Coeur d'Alene, for appellant. Arthur Bistline argued.

Silvey Law Office, Ltd., Star, for respondents. Greg Silvey argued.

HORTON, Justice.

The underlying dispute in this matter centers on the sale and demolition of a bridge across the Ohio River between West Virginia and Ohio. Advanced Explosives Demolition, Inc. (AED) entered a contract to sell the bridge to KDC Investments, LLC (KDC) for $25,000. AED alleges that it also entered into another contract in which KDC hired it to perform explosive demolition work prior to removal of the bridge. After the bridge sale was complete, KDC terminated its relationship with AED and hired another demolition contractor. AED brought an action for fraud and breach of contract against KDC and asked the district court to rescind the sales contract. The district court denied the request for rescission and granted summary judgment in favor of KDC on the fraud and breach of contract claims, holding that AED had provided no evidence of fraud and concluding

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that the demolition contract was illegal because AED did not have the necessary West Virginia contractor's license when it entered into the contract. AED appeals from the district court's denial of its request for rescission and from the grant of summary judgment in favor of KDC. We affirm.

I. FACTUAL AND PROCEDURAL BACKGROUND

AED and KDC executed an " Asset Purchase and Liability Assumption Agreement" (Sales Agreement) on May 20, 2010. Under the terms of the Sales Agreement, AED transferred all of its interest in the Bellaire Toll Bridge (Bridge) to KDC. As consideration, KDC agreed to the terms of the Sales Agreement and to pay $25,000 to AED. The Sales Agreement includes a merger clause and provides that it is " a negotiated contract ... not to be construed for or against" either party. KDC paid $25,000 to AED on June 3, 2010, and began the demolition process.

On June 1, 2010, AED's vice president, Eric Kelly, and KDC's owner, Krystal Chaklos, signed the last page of a document entitled " Proposal" (Blasting Agreement). This document set forth AED's proposed terms for it to perform part of the demolition of the Bridge for KDC. The front page of the document provided a signature line for KDC to accept the proposal and authorize AED to begin work, but there is no signature. KDC alleges that it signed the last page of the Blasting Agreement to acknowledge its receipt and that, at the time it signed, KDC intended to hire AED to perform the explosives work.

Under West Virginia law, a person may not " engage in this state in any act as a contractor, or submit a bid to perform work as a contractor, ... unless such person holds a license issued under the provisions of this article." W.Va.Code Ann. ยง 21-11-6(a) (West). There is no evidence in the record indicating the date AED obtained its West Virginia Contractor's license, but it is undisputed that AED did not obtain the license until after the Blasting Agreement was signed. The district court noted that the date AED received its license was " unclear, but likely did not happen until October 17, 2010." KDC alleges it " repeatedly" informed AED that AED would need to obtain a West Virginia Contractor's License to perform the explosives demolition. Citing AED's failure obtain the license, KDC informed AED on July 7, 2010, that KDC was no longer interested in hiring AED for the blasting work.

AED filed its original complaint against KDC on August 23, 2010. KDC filed an answer and counterclaim on November 8, 2010, and an amended answer and counterclaim on November 9, 2010. AED then filed an amended complaint on October 29, 2010, alleging fraud in the inducement and breach of contract, and seeking rescission, damages, or specific performance. KDC moved for a preliminary injunction, which the district court denied. In its decision, the district court also determined that AED was not entitled to rescission of the Sales Agreement.

The district court set forth the subsequent procedural history of this litigation as follows:

On December 15, 2010, KDC filed its Motion for Summary Judgment, Memorandum in Support of Motion for Summary Judgment, and the Affidavits of Randall Schmitz, Lee Chaklos, and Krystal Chaklos in support of the motion.... Hearing on KDC's motion for summary judgment was held on January 12, 2011. This Court heard oral argument on AED's motion to reconsider the Court's ruling that AED was not entitled to rescission of the contract on January 26, 2011. On January 31, 2011, the Court issued its Memorandum Decision and Order Granting Defendant KDC's Motion for Summary Judgment and Denying Plaintiff AED's Motion for Reconsideration. On February 3, 2011, the parties stipulated to dismiss Counts I and II of KDC's counterclaim without prejudice.

On February 4, 2011, AED filed another motion for reconsideration, asking the court to vacate the portion of its summary judgment that granted KDC's request for an order quieting title of the Bridge in its name or, alternatively, to submit to the jury the question of " whether AED would have sold the bridge without the agreement that AED perform the blast." After hearing oral argument,

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the district court denied AED's second motion to reconsider. AED filed a motion to alter or amend the judgment on February 28, 2011, which the district court denied. AED timely appealed.

II. STANDARD OF REVIEW

This Court exercises de novo review of a grant of summary judgment and the " standard of review is the same as the standard used by the trial court in ruling on a motion for summary judgment." Stonebrook Const., LLC v. Chase Home Fin., LLC, 152 Idaho 927, 929, 277 P.3d 374, 376 (2012) (quoting Curlee v. Kootenai Cnty. Fire & Rescue, 148 Idaho 391, 394, 224 P.3d 458, 461 (2008)). Summary judgment is proper if " the pleadings, depositions, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." I.R.C.P. 56(c). When applying this standard, this Court construes disputed facts " in favor of the non-moving party, and all reasonable inferences that can be drawn from the record are drawn in favor of the non-moving party." Curlee, 148 Idaho at 394, 224 P.3d at 461. Where " the evidence reveals no disputed issues of material fact, then only a question of law remains, over which this Court exercises free review." Lockheed Martin Corp. v. Idaho State Tax Comm'n, 142 Idaho 790, 793, 134 P.3d 641, 644 (2006) (citing Infanger v. City of Salmon, 137 Idaho 45, 44 P.3d 1100 (2002)). However, to survive summary judgment, " an adverse party may not rest upon the mere allegations or denials of that party's pleadings, but the party's response, by affidavits or as otherwise provided in this rule, must set forth specific facts showing that there is a genuine issue for trial." I.R.C.P. 56(c). Therefore, " the nonmoving party must submit more than just conclusory assertions that an issue of material fact exists...." Jenkins v. Boise Cascade Corp., 141 Idaho 233, 238, 108 P.3d 380, 385 (2005) (citing Northwest Bec-Corp. v. Home Living Serv., 136 Idaho 835, 839, 41 P.3d 263, 267 (2002)). " A mere scintilla of evidence or only slight doubt as to the facts is not sufficient to create a genuine issue of material fact for the purposes of summary judgment." Id.

We recently clarified the standard this Court uses when reviewing a denial of a motion for reconsideration:

[W]hen reviewing a trial court's decision to grant or deny a motion for reconsideration, this Court utilizes the same standard of review used by the lower court in deciding the motion for reconsideration. If the decision was within the trial court's discretion, we apply an abuse of discretion standard. On the other hand, when reviewing the grant or denial of a motion for reconsideration following the grant of summary judgment, this Court must determine whether the evidence presented a genuine issue of material fact to defeat summary judgment.

Fragnella v. Petrovich, 153 Idaho 266, 276, 281 P.3d 103, 113 (2012). Stated differently, if the underlying decision for which reconsideration is sought required the exercise of discretion, we will review the grant or denial of the motion for an abuse of discretion. If the ...


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