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De Groot v. Standley Trenching, Inc.

Supreme Court of Idaho

March 28, 2014

CHARLES JAY DE GROOT and DE GROOT FARMS, LLC, Plaintiffs-Counterdefendants-Appellants,
v.
STANDLEY TRENCHING, INC., d/b/a STANDLEY & CO., Defendant-Counterclaimant-Respondent, and J. HOULE & FILS, INC., a Canadian corporation, Defendant-Respondent

2014 Opinion No. 39.

Page 537

Appeal from the District Court of the Third Judicial District of the State of Idaho, Canyon County. Hon. Gregory M. Culet, District Judge.

The decision of the district court is affirmed. Attorney's fees and costs on appeal are awarded to respondent.

Dinius & Associates, PLLC, Nampa, attorneys for appellants. Kevin E. Dinius argued.

Sasser & Inglis, PC, Boise, attorneys for respondent J. Houle & Fils, Inc. Clay M. Shockley argued.

Cantrill, Sullivan & King, Boise, attorneys for respondent Standley Trenching. Robert D. Lewis argued.

W. JONES, Justice. Chief Justice BURDICK, Justices EISMANN, J. JONES and HORTON CONCUR.

OPINION

Page 538

[157 Idaho 559] W. JONES, Justice

I. Nature of the Case

Appellant, Charles DeGroot and DeGroot Farms, LLC (collectively " DeGroot" ), appeals the district court's entry of summary judgment on its claims against Standley Trenching, Inc. d/b/a Standley & Co. (" Standley" ), relating to the construction and installation of a manure handling system at the DeGroot dairy. Beltman Construction, Inc., d/b/a Beltman Weldling and Construction (" Beltman" ), was the general contractor for the project. Beltman subcontracted with Standley for the installation of the manure handling equipment. J. Houle & Fils, Inc. (" Houle" ) manufactured the manure handling equipment installed at the DeGroot dairy.

Page 539

[157 Idaho 560] Because of maintenance problems with the manure handling equipment, DeGroot initiated litigation against Standley and Houle. DeGroot then initiated litigation against Beltman. Beltman brought a third party complaint against Standley. Standley counterclaimed against DeGroot for amounts due for parts and services. The district court granted Standley summary judgment on its counterclaim, granted Standley summary judgment on DeGroot's claims, and granted Standley summary judgment on Beltman's third party complaint. DeGroot appeals. We affirm.

II. Factual and Procedural Background

In 1998, DeGroot purchased a parcel of real property in Melba, Idaho, for the purpose of establishing a 2,000 cow dairy. In February 1999, Charles DeGroot spoke with Kurt Standley at a trade show in California regarding manure handling systems for dairies. Standley was in the business of constructing manure handling systems and expressed an interest in installing such a system at the new DeGroot dairy. After the trade show, Standley was provided the plans for the DeGroot dairy by Charles DeGroot. Those plans were developed by a different bidding contractor. DeGroot contracted with Beltman in approximately June, July, or August of 1999 to design and build a 2,500 cow dairy.

Beltman was the general contractor for the DeGroot dairy project. Standley prepared a bid for the project as a subcontractor. That bid included equipment obtained from Houle. DeGroot directed Beltman to utilize Houle parts for the manure flushing and drainage system in the dairy, and DeGroot directed Beltman to use Standley, who was the local dealer for Houle, for these parts. DeGroot concedes that it never entered into a contract with Standley and concedes that Standley's contract was with Beltman, not DeGroot. Other than Beltman's acceptance of Standley's bid, there was no written or oral communication between Beltman and Standley. Beginning in the summer of 1999 and continuing through April of 2000, Standley undertook the installation of the manure system. Standley was paid approximately $230,000 by Beltman for the design and installation of the equipment.

Neither Houle nor Standley provided any maintenance or materials to DeGroot during the installation of the equipment. DeGroot was informed by Standley that the manure handling system would function as intended and would all but run itself with little involvement by DeGroot. Following the completion of the DeGroot dairy in April of 2000, maintenance problems soon arose. The DeGroot dairy was running a pit mixture of sand and gravel instead of compost for bedding in the stalls. When the manure was flushed out of the barn, the pit mixture of sand and gravel was also flushed, which interfered with the proper operation of the manure handling equipment. The lagoon pump was inadequate and needed modifications and upgrades. As a result, Idaho Power had to replace a transformer because the pump was blowing fuses. DeGroot incurred over $5,000 in electrical repairs to the pump and breaker box. DeGroot also expended over $16,000 to renovate the manure screening setup. There were also issues with the agitator pump.

DeGroot attempted to revoke or rescind acceptance of the equipment by a letter to Standley, and demand was made for return of approximately $119,000. DeGroot also made demand for $25,088. This amount reflected the alleged sum to fix the design problems that DeGroot suffered. During this time, when requested by DeGroot, Standley sent employees to DeGroot to provide maintenance and repair services. As of October 6, 2000, $13,317 was owed by DeGroot to Standley for Standley's maintenance services. It is undisputed that DeGroot owed this sum to Standley for maintenance services and that Charles DeGroot made assurances to Standley that this sum would be paid.

On December 21, 2001, DeGroot filed suit against Standley and Houle asserting claims for breach of contract, rescission, breach of the implied covenant of good faith and fair dealing, breach of implied UCC warranties, and violation of the Idaho Consumer Protection Act. Standley moved for summary judgment on each of DeGroot's claims, which the district court granted in its entirety on

Page 540

[157 Idaho 561] March 1, 2005. The district court ruled that DeGroot was not a third-party beneficiary of the contract between Standley and Beltman. DeGroot twice moved for reconsideration, both of which motions were denied by the district court. The district court also granted summary judgment to Standley on its counterclaim because there was no dispute that DeGroot agreed to pay on Standley's open account.

On March 2, 2005, DeGroot filed suit against Beltman. Beltman filed a third-party complaint against Standley and Houle on March 22, 2005, asserting causes of action for breach of contract, rescission, breach of the covenant of good faith and fair dealing, breach of implied UCC warranties, and violation of the Idaho Consumer Protection Act. In April of 2006, Beltman stipulated to judgment in favor of DeGroot in the amount of $964,255. Beltman then assigned to DeGroot any rights it possessed against Standley pursuant to the third-party complaint in satisfaction of the judgment. A satisfaction of judgment was registered in the case. Beltman never paid any money to DeGroot.

On March 26, 2011, Standley filed a motion for partial summary judgment. At hearing on that motion, Standley moved to expand the motion to include summary judgment on all claims based on the admission that Beltman had no independent damages. In a ruling from the bench, the district court granted Standley's motion for partial summary judgment with respect to the breach of express warranty and rescission claims. The district court denied Standley's motion for partial summary judgment with respect to Beltman's third-party claims of breach of the implied warranty of fitness for a particular purpose and breach of the covenant of good faith and fair dealing, Standley sought to expand its motion for partial summary judgment to a motion for complete summary judgment on the basis that Beltman failed to identify any independent damages. The district court, after further argument, granted Standley summary judgment as to all of Beltman's third-party claims because Beltman failed to identify any independent damages. Final Judgment was entered on November 8, 2011. The trial court awarded Standley attorney fees and costs on December 29, 2011. DeGroot filed a Notice of ...


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