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Hilliard v. Murphy Land Co., LLC

Supreme Court of Idaho

May 21, 2015

MURPHY LAND COMPANY, LLC, Defendant-Respondent

2015 Opinion No. 48

Page 1196

Appeal from the District Court of the Third Judicial District of the State of Idaho, in and for Owyhee County. Hon. Molly J. Huskey, District Judge.

The judgment of the district court is affirmed.

M. Karl Shurtliff, Boise, argued for appellants.

Steven F. Schossberger, Hawley Troxell Ennis & Hawley LLP, Boise, argued for respondent.

EISMANN, Justice. Chief Justice BURDICK, Justice W. JONES and Justice Pro Tem KIDWELL CONCUR. J. JONES, Justice, specially concurring.


Page 1197

EISMANN, Justice.

This is an appeal out of Owyhee County from a judgment that the purchaser of real property was entitled to $3,000,000 held in trust pursuant to the real estate contract to pay damages resulting from the delay in obtaining possession of the real property purchased. The district court granted summary judgment to the purchaser after holding that the material portions of the affidavits filed by the vendors in opposition to summary judgment were inadmissible. We affirm the judgment of the district court and award attorney fees on appeal.


Factual Background.

James and Barbara Hilliard (Vendors) owned a farm in Owyhee County named Crystal Springs Farm, consisting of almost 4,000 acres, although only approximately 3,000 acres of the land were farmable. For many years, they executed written leases of the best farm ground to various farmers who grew row crops, such as potatoes and sugar beets, and they orally leased to John W. Clark the other portions of the farm, on which he raised hay and grain crops.

In 2009 and 2010, Vendors leased the row crop portion of the farm to Lance Funk Farms, LLC. Because of his health, John W. Clark became unable to continue farming, and Vendors orally leased to his son Jay P. Clark, Vendors' attorney,[1] those parts of the farm not leased for growing row crops.

According to Vendors, in January 2010 Jay P. Clark fraudulently obtained a written document purporting to give him a one-year lease of the entire farm with an option to extend the lease for a period of ten years. He then recorded the document in the records of the county recorder, and in June 2010 his father recorded a document claiming to have a 10% interest in the farm. These recordings created clouds on the Vendors' title to the farm.

In November 2010, Vendors contracted to sell their farm to Murphy Land Company, LLC (Purchaser), for the sum of $9,500,000. Jay Clark told Purchaser that he would only vacate the farm upon payment to him of $2,000,000 and payment to his father of $950,000. Because of the two clouds on the title and the refusal of Jay Clark to vacate the property, the parties entered into an amendment to their contract which stated,

Page 1198

among other things, that $3,000,000 of the sale price would be held in trust to " be available to the extent determined by a court of competent jurisdiction of the purchaser's damage, if any, for loss or delay of possession of real estate purchased herein." The sale closed on December 30, 2010.

On February 16, 2011, Vendors sued Jay Clark and John Clark, and on March 23, 2012, they obtained a judgment declaring Jay Clark's purported lease null and void and ordering that John Clark's recorded claim to ownership of a 10% interest in the farm be expunged from the county records. On February 17, 2011, Purchaser filed a lawsuit to have Jay Clark removed from the farm. Mr. Clark fought that lawsuit, including filing for bankruptcy protection after Purchaser was granted summary judgment in its action to remove him from the farm. As a result, Purchaser did not obtain possession of the farm until May 2, 2012.

On July 13, 2013, Vendors filed this action for a declaratory judgment that they were entitled to the $3,000,000 being held in trust. Purchaser filed a counterclaim seeking that sum for the damages it incurred due to the delay in being able to obtain possession of the farm.

On November 15, 2013, Purchaser filed a motion for summary judgment on its counterclaim. It supported the motion with a 182-page affidavit of Frank Tiegs, a member, co-manager, and 50% owner of Purchaser. The affidavit set forth Mr. Tiegs's expertise in farming and business; his opinions as to the damages incurred; and his explanation, with copies of supporting documents, as to how he arrived at his opinion. In his opinion, the damages suffered by Purchaser because of the delay in obtaining possession of the farm exceeded $3,000,000.

In response to the motion for summary judgment, Vendors filed four affidavits on November 29, 2013, which were the affidavits of Robert F. Bennett, James Hilliard, Ken Edmunds, and Jay Clark. Mr. Bennett was the realtor whom Vendors retained to sell their farm, and he expressed his opinion regarding the amendment to the contract. Mr. Hilliard set forth a chronology of what occurred in the real estate transaction and his understanding of the amendment to the real estate contract. Mr. Edmunds and Mr. Clark challenged some of the opinions in Mr. Tiegs's affidavit.

On December 5, 2013, Purchaser filed a written objection to specified paragraphs in the affidavits of Messrs. Bennett, Edmunds, Hilliard and Clark, stating the specific grounds for such objections. Purchaser also objected to the affidavits of Messrs. Bennett and Clark on the ground that they had not been timely disclosed as experts pursuant to the pretrial order. Purchaser's motion for summary judgment was heard on December 13, 2013. The district court granted Vendors' objections to the affidavits. As a result, there was no genuine issue of material fact as to the damages set forth in Mr. Tiegs's affidavit. On December 19, 2013, the court entered a judgment awarding Purchaser the ...

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