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Hamell v. Idaho County

United States District Court, D. Idaho

July 5, 2017

IDAHO COUNTY, a political subdivision of the State of Idaho, KATHY ACKERMAN, Idaho County Clerk, JIM CHMELICK, Idaho County Commissioner, MARK FREI, Idaho County Commissioner, SKIP BRANDT, Idaho County Commissioner, JOHN AND JANE DOES 1 - 5, in their individual and official capacities, Defendants.


          Edward J. Lodge United States District Judge


         Pending before the Court in the above entitled matter are Defendants' Motion for a Judgment on the Pleadings made pursuant to Federal Rule of Civil Procedure 12(c) and Plaintiffs' Motion for Leave to File an Amended Complaint. (Dkt. 10, 15.) The Motions have been fully briefed and are ripe for the Court's consideration. Having fully reviewed the record herein, the Court finds that the facts and legal arguments are adequately presented in the briefs and record. Accordingly, in the interest of avoiding further delay, and because the Court conclusively finds that the decisional process would not be significantly aided by oral argument, the Motions shall be decided on the record before this Court without oral argument.


         Plaintiffs, Raymond R. Hamell and Rachelle J. Hamell, owned three pieces of real property located in Idaho County, Idaho identified as: Shingle Creek Property, Shaw Subdivision Lot 1, and Shaw Subdivision Lot 2. (Dkt. 1.) Defendants acquired the three properties through tax deeds from the Hamells and sold the parcels via public auctions.[1]Plaintiffs' allege the Notices of Sale for each of the public auctions were deficient because they failed to contain a description of the distance or direction from the properties to the nearest city and/or the properties' addresses as required by Idaho Code § 31-808. (Dkt. 1.) As a result, the Plaintiffs allege the properties either sold for less than their assessed value or did not sell thereby reducing, or eliminating, Plaintiffs' redemption of any proceeds from the sales of the properties in excess of the amounts owed.

         Plaintiffs have brought this action raising claims of Negligence per se - Breach of Statutory Duty in violation of Idaho Code § 31-808; Deprivation of Plaintiffs' Property Interest without Due Process in Violation of 42 U.S.C. § 1983; and Deprivation of Plaintiffs' Property Interest without Due Process in violation of Article, I, § 13 of the Idaho State Constitution. (Dkt. 1.) Plaintiffs seek 1) monetary damages comprised of the difference between the assessed amount of the properties and the amount the properties sold for and 2) injunctive relief against future improperly advertised sales of other properties by way of an order requiring Defendants to change their tax sale procedure to properly advertise the location of tax deed properties. (Dkt. 1.) Defendants filed a Motion for Judgment on the Pleadings seeking dismissal of all claims. (Dkt. 10.) Plaintiffs have filed a Motion to Amend/Correct Complaint. (Dkt. 15.) The Court finds as follows as to both Motions.


         Rule 12(c) provides that “[a]fter the pleadings are closed—but early enough not to delay trial—a party may move for judgment on the pleadings.” Fed.R.Civ.P. 12(c). A motion for judgment on the pleadings pursuant to Rule 12(c) challenges the legal sufficiency of the opposing party's pleadings. See, e.g., Westlands Water Dist. v. Bureau of Rec., 805 F.Supp. 1503, 1506 (E.D. Cal. 1992). A motion for judgment on the pleadings should only be granted if “the moving party clearly establishes on the face of the pleadings that no material issue of fact remains to be resolved and that it is entitled to judgment as a matter of law.” Hal Roach Studios, Inc. v. Richard Feiner & Co., Inc., 896 F.2d 1542, 1550 (9th Cir. 1989). Judgment on the pleadings is also proper when there is either a “lack of cognizable legal theory” or the “absence of sufficient facts alleged under a cognizable legal theory.” Balistreri v. Pacifica Police Dept., 901 F.2d 696, 699 (9th Cir. 1988). In reviewing a Rule 12(c) motion, “all factual allegations in the complaint [must be accepted] as true and construe[d] ... in the light most favorable to the non-moving party.” Fleming v. Pickard, 581 F.3d 922, 925 (9th Cir. 2009). Judgment on the pleadings under Rule 12(c) is warranted “only if it is clear that no relief could be granted under any set of facts that could be proved consistent with the allegations.” Deveraturda v. Globe Aviation Sec. Servs., 454 F.3d 1043, 1046 (9th Cir. 2006) (internal citations omitted).


         1. Motion for Judgment on the Pleadings A. Negligence Per Se - Breach of Statutory Duty in violation of Idaho Code § 31-808

         The First Claim for Relief in the Complaint alleges Defendants breached their statutory duty under Idaho Code § 31-808 which required Defendants to abide by the procedures set forth therein when it sold the real property at issue in this case. (Dkt. 1.) Defendants argue this claim is barred by the economic loss rule and because Plaintiffs have failed to assert a viable claim for negligence per se. (Dkt. 10, 14.)

         “Unless an exception applies, the economic loss rule prohibits recovery of purely economic losses in a negligence action because there is no duty to prevent economic loss to another.” Path to Health, LLP v. Long, 383 P.3d 1220, 1226 (Idaho 2016) (quoting Blahd v. Richard B. Smith, Inc., 108 P.3d 996, 1000 (Idaho 2005). The rule applies to negligence cases in general and to products liability cases. See Kayser v. McClary, 875 F.Supp.2d 1167, 1175-76 (D. Idaho 2012); Ramerth v. Hart, 983 P.2d 848, 851 (Idaho 1999). “Economic loss” includes costs of repair and replacement of defective property which is the subject of the transaction, as well as commercial loss of profits or use. Blahd, 108 P.3d at 1000. For purposes of the economic loss rule, “transaction” does not mean a business deal; rather, it means the subject of the litigation. Blahd, 108 P.3d at 1000.

         In this case, Plaintiffs argue the economic loss rule does not bar their negligence per se claim because the source of the duty alleged is Idaho Code § 31-808 and the damages are recoverable in tort. (Dkt. 12 at 4-7.) The Court disagrees.

         The economic loss rule applies to Plaintiffs' negligence per se claim. There is no dispute that the damages sought by Plaintiffs are purely economic. (Dkt. 12 at 4-7.) Therefore, the rule applies to bar the claim unless an exception to the rule applies. See Path to Health, 383 P.3d at 1226.

         There are two exceptions to the economic loss rule: the existence of a special relationship between the parties and unique circumstances requiring a reallocation of the risk. ...

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