United States District Court, D. Idaho
PINNACLE GREAT PLAINS OPERATING COMPANY, LLC, an Arkansas Limited Liability Company, Plaintiff,
WYNN DEWSNUP REVOCABLE TRUST; WYNN DEWSNUP, in his individual capacity and as trustee of the Wynn Dewsnup Revocable Trust; 1 STOP REALTY, INC., and DOES INDIVIDUAL/ENTITIES I through XX, Defendants. WYNN DEWSNUP REVOCABLE TRUST; and WYNN DEWSNUP, in his individual capacity and as trustee of the Wynn Dewsnup Revocable Trust, Cross-Claimants,
1 STOP REALTY, INC., Cross-Defendant.
ORDER ON REPORT AND RECOMMENDATION
J. Lodge, United States District Judge
United States Magistrate Judge Candy W. Dale issued a Report
and Recommendation (Report) in this matter. Dkt.75. Pursuant
to 28 U.S.C. § 636(b)(1), the parties had fourteen days
in which to file written objections to the Report. Plaintiff
Pinnacle Great Plains Operating Compnay, LLC filed its
objection to the Report on August 10, 2016. Dkt. 76.
Defendant and Cross Claimant Wynn Dewsnup, individually and
as trustee of the Wynn Dewsnup Revocable Trust (collectively
referred to as “Dewsnup”) joined Pinnacle's
objection. Dkt. 77. Defendant 1 Stop Realty, Inc. filed a
response to the objections of Pinnacle and Dewsnup. Dkt. 78
to 28 U.S.C. § 636(b)(1)(C), this Court “may
accept, reject, or modify, in whole or in part, the findings
and recommendations made by the magistrate judge." Where
the parties object to a report and recommendation, this Court
“shall make a de novo determination of those portions
of the report which objection is made." Id.
Where, however, no objections are filed the district court
need not conduct a de novo review. In United
States v. Reyna-Tapia, 328 F.3d 1114, 1121 (9th Cir.
2003), the court interpreted the requirements of 28 U.S.C.
The statute [28 U.S.C. Â§636(b)(1)(C)] makes it clear that the
district judge must review the magistrate judge's
findings and recommendations de novo if objection is made,
but not otherwise. As the Peretz Court instructed,
“to the extent de novo review is required to satisfy
Article III concerns, it need not be exercised unless
requested by the parties." Peretz, 501 U.S. at
939 (internal citation omitted). Neither the Constitution nor
the statute requires a district judge to review, de novo,
findings and recommendations that the parties themselves
accept as correct. See Ciapponi, 77 F.3d at 1251
(“Absent an objection or request for review by the
defendant, the district court was not required to engage in
any more formal review of the plea proceeding.");
see also Peretz, 501 U.S. at 937-39 (clarifying that
de novo review not required for Article III purposes unless
requested by the parties) . . . .
See also Wang v. Masaitis, 416 F.3d 993, 1000 &
n.13 (9th Cir. 2005). Furthermore, to the extent that no
objections are made, arguments to the contrary are waived.
See Fed. R. Civ. P. 72; 28 U.S.C. § 636(b)(1)
(objections are waived if they are not filed within fourteen
days of service of the Report and Recommendation).
“When no timely objection is filed, the Court need only
satisfy itself that there is no clear error on the face of
the record in order to accept the recommendation."
Advisory Committee Notes to Fed.R.Civ.P. 72 (citing
Campbell v. United States Dist. Court, 501 F.2d 196,
206 (9th Cir.1974)).
case, objections were filed to portions of the Report, so the
Court is required to conduct a de novo determination
of the objected portions of the Report. The Court finds the
objections of Dewsnup are moot as Dewsnup settled the claims
by Pinnacle and 1 Stop Realty. Dkts. 83-86.
Court adopts the factual and procedural background set forth
by Judge Dale (with slight modifications) to begin its
analysis of the objections to the Report This litigation
arises from Dewsnup's October 2011 sale to Pinnacle of a
5, 487-acre parcel of agricultural land near Malta, Idaho,
known as “Bridge Farm.” Specifically, Pinnacle
claims Dewsnup and Pinnacle's purported broker, 1 Stop
Realty, misrepresented the quality of the groundwater supply
for Bridge Farm's irrigation system.
to resolution of the pending motions to amend is determining
when 1 Stop Realty's officers, Swenson and Heller, became
aware of the alleged problems with the quality of Bridge
Farm's groundwater supply and when, through the process
of discovery, Pinnacle became aware of Swenson's and
Heller's knowledge of Bridge Farm's water quality
issues. To better understand the parties' arguments, the
Court will explain briefly the basic structure of 1 Stop
Realty, how 1 Stop Realty learned about the Bridge Farm
property, and 1 Stop Realty's relationship history with
Pinnacle leading up to the Bridge Farm sale.
1 Stop Realty
Realty is a Minnesota corporation that sells and purchases
agricultural property. (Dkt. 62-2 at 8.) 1 Stop Realty's
officers include President Kirk Swenson, and Vice President
Roger Heller. In addition to its officers, 1 Stop Realty
employs an office manager, an assistant, and a website
technician. It has also three sales associates who work as
independent contractors. 1 Stop Realty operates out of two
locations. The main office is located in Kasson, Minnesota,
and the other office is located in Olivia, Minnesota. Swenson
works from the Kasson office; Heller works out of the Olivia
1 Stop Realty's Introduction to Bridge Farm
early 2010, 1 Stop Realty's client, Teays River
Investments, LLC,  expressed interest in expanding into the
northwest United States and sought 1 Stop Realty's
services in its search for farmland in which to invest. (Dkt.
62-2 at 20.) Heller discovered Bridge Farm and began
preparing paperwork on the property to present to Teays.
of 2010, Heller and Swenson travelled to Idaho to tour Bridge
Farm. Afterward, Swenson sent an email to Teays informing
them that he had visited Bridge Farm, and recommending moving
forward by submitting a letter of intent to the Dewsnups.
(Dkt. 64-2 at 16.) In the email, Swenson stated, among other
things: Bridge Farm “has really good water with
inexpensive pumping cost….Nice deal, good
water.” Id. Despite making this statement in
his email, Swenson clarified during his recent deposition
that, at the time he sent the email, 1 Stop Realty had not
yet investigated Bridge Farm's water quality. (Dkt. 62-2
2010, 1 Stop Realty continued to collect more information on
Bridge Farm for Teays. In late May of 2010, Garrett
Dewsnup emailed Pat Kelgen, Heller's
assistant, five pages of Bridge Farm water analysis lab
results from the year 2003. (Dkt. 64-2 at 2-7.) Kelgen
forwarded the results to Heller who then forwarded them to
Swenson. The lab results indicate “possible” and
“significant” problems with Bridge Farm's
water. Id. Swenson explained during his recent
deposition that he and Heller discussed the 2003 lab results
in 2010, and concluded that, given the out-dated nature of
the reports, Bridge Farm's water quality would need to be
re-tested during the due-diligence period prior to Teays'
purchase of the farm. (Dkt. 62-2 at 56.)
this same time period, Heller had been in communication with
Dewsnup's agronomist, Kyle Carpenter, who had worked on
Bridge Farm for several years, to discuss Bridge Farm's
soil and water quality. On June 28, 2010, Heller emailed
Swenson to inform him about his discussion with Carpenter.
Most of the soils are Genola which is Class IIe irrigated and
a good one. Some of the others take more careful management
as per the ...