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Path to Health, LLP v. Long

Supreme Court of Idaho

November 2, 2016

PATH TO HEALTH, LLP, an Idaho limited liability partnership, Plaintiff-Appellant,
DAREN LONG, an individual residing in Idaho, ALL-IN, INC., dba RE/MAX ALL-IN REALTORS, a real estate company incorporated in Idaho, Defendants-Respondents, and JOSEPH SCOTT CANNON and MEGAN CANNON, husband and wife, Defendants.

         2016 Opinion No. 115

         Appeal from the District Court of the Seventh Judicial District of the State of Idaho, Bonneville County. Hon. Joel E. Tingey, District Judge.

         The judgment of the district court is affirmed in part, reversed in part, and the case is remanded for further proceedings consistent with this opinion.

          Petersen Moss Hall & Olsen, Idaho Falls, for appellant. Nathan Olsen argued.

          Carey Perkins LLP, Idaho Falls, for respondents. Dina L. Sallak argued.

          HORTON, Justice.

         This is an appeal from the district court's grant of summary judgment dismissing negligence, contract, and fraud claims brought by Path to Health, LLP ("Path") against Daren Long and ALL-IN INC. dba RE/MAX ALL-IN REALTORS (collectively "Realtors"). Path's claims are based on the allegation that Long misrepresented that property Path purchased was zoned for commercial use when it was actually zoned for residential use. We affirm in part, reverse in part, and remand.


         Path is a "holistic health" business based in Idaho Falls. Long is a real estate broker and his agency is the co-defendant corporation. In May of 2011, Path engaged Realtors' services to locate a property where it could operate its business. Long showed Path's principals, Dave and Troy Carpenter, various properties. A condominium designed for use as a commercial office space (the Property) was among the properties he showed them. The Property was one of four units and was owned by Joseph and Meagan Cannon. The Cannons were operating a business on the Property. According to the Carpenters, they asked Long about zoning and Long told them that he had checked the zoning and repeatedly assured them that they would be fine.

         Troy Carpenter, acting on behalf of Path, executed a Buyer Representation Agreement with Realtors dated May 18, 2011. Path alleges that Long presented the Buyer Representation Agreement after May 18th, and Carpenter executed the backdated document. By way of a standard "Real Estate Purchase and Sale Agreement" (REPSA), also dated May 18, 2011, and signed by Troy Carpenter, Path made an offer to purchase the Property for $120, 000. The Cannons accepted the offer on May 23, 2011, and the transaction subsequently closed.

         After purchasing the Property, Path attempted to obtain a permit for signage. It was then that Path learned that the Property was not zoned for commercial use and that previous businesses had operated under conditional use permits which could not be transferred. Path then applied for, and received, a conditional use permit. Thereafter, Path sought to rescind the purchase of the Property, citing concerns about future permitting and the cost of converting the Property into a residence.

         Path's initial complaint named only the Cannons as defendants. The lawsuit settled in mediation. As part of the mediated resolution, the sale was rescinded and Path returned the Property to the Cannons.[1]

         Path filed an amended complaint and demand for jury trial in which it added Realtors as defendants. The amended complaint alleged breach of contract, negligence per se, violation of the Consumer Protection Act, breach of the duty of good faith and fair dealing, and misrepresentation. Realtors moved for summary judgment as to all of Path's claims. Path's response to Realtors' motion included a "Statement of Additional Material Facts" (Statement of Additional Facts), which contained excerpts of various depositions, including the depositions of Dr. Karie Jonak and Carla Elliot. Realtors moved to strike the deposition excerpts, arguing they could not be considered because they were submitted without supporting affidavits.

         On March 24, 2014, the district court issued its memorandum decision and entered judgment dismissing Path's claims with prejudice. The district court found that it could not consider the Statement of Additional Facts because the materials were not supported by a sworn statement. Regarding Path's breach of contract claim, the district court determined that the Buyer Representation Agreement expressly provided that Realtors had no duty to investigate zoning so no contractual duty could have been breached. It further held that, under the terms of Idaho Code section 54-2087, Realtors owed Path no duty to investigate zoning in the absence of a written commitment to do so. The district court determined that Realtors had no statutory duty to investigate zoning and Path's negligence claim was barred by the economic loss rule. As to Path's misrepresentation claim, the district court held that Path could not have reasonably relied on any alleged misrepresentation because the Buyer Representation Agreement explicitly stated that Realtors would not investigate zoning.

         Path sought reconsideration. Its motion was accompanied by additional evidence, which Realtors moved to strike. The district court denied Path's motion, holding that it could not consider additional evidence because a final judgment had been entered, meaning that the only avenue for reconsideration was Idaho Rule of Civil Procedure 59(e).[2] The district court held that judicial estoppel barred Path from asserting that the Buyer Representation Agreement did not apply because it had taken a contrary position by bringing a breach of contract claim based upon the agreement. The district court further found that any damages could not have been caused by Realtors because Path contractually assumed the duty to investigate zoning. Path timely appealed.


         "An appeal from summary judgment is reviewed under the same standard a district court uses when granting a motion for summary judgment." Campbell v. Kvamme, 155 Idaho 692, 695, 316 P.3d 104, 107 (2013). 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). "The facts are to be liberally construed in favor of the non-moving party." Blackmore v. Re/Max Tri-Cities, LLC, 149 Idaho 558, 561, 237 P.3d 655, 658 (2010). However, the party opposing summary judgment "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."[3] I.R.C.P. 56(c).

         "Summary judgment proceedings are decided on the basis of admissible evidence." Campbell, 155 Idaho at 696, 316 P.3d at 108. "The admissibility of the evidence contained in affidavits and depositions in support of or in opposition to a motion for summary judgment is a threshold question to be answered before applying the liberal construction and reasonable inferences rule to determine whether the evidence is sufficient to create a genuine issue for trial." Gem State Ins. Co. v. Hutchison, 145 Idaho 10, 13, 175 P.3d 172, 175 (2007). "This Court applies an abuse of discretion standard when determining whether testimony offered in connection with a motion for summary judgment is admissible." Id. at 15, 175 P.3d at 177. "A trial court does not abuse its discretion if it (1) correctly perceives the issue as discretionary, (2) acts within the bounds of discretion and applies the correct legal standards, and (3) reaches the decision through an exercise of reason." O'Connor v. Harger Const., Inc., 145 Idaho 904, 909, 188 P.3d 846, 851 (2008).

          III. ANALYSIS

         Path contends that the district court erred by deciding the deposition excerpts contained in its Statement of Additional Facts were inadmissible. Path also challenges the district court's dismissal of its negligence, breach of contract, and fraud claims. We address these claimed errors in turn.

         A. The district court did not abuse its discretion by not ...

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