United States District Court, D. Idaho
MEMORANDUM DECISION AND ORDER
C. NYE U.S. DISTRICT COURT JUDGE
matter comes before the Court on Plaintiff Pinnacle Great
Plains Operating Company, LLC's (“Pinnacle”)
Motion to Consolidate Cases (Dkt. 12) and Defendant Kirk
Swenson's Motions for Summary Judgment (Dkt. 13) and
Partial Dismissal (Dkt. 20). This dispute arose out of
Pinnacle's purchase of a 5, 487-acre parcel of
agricultural land near Malta, Idaho, known as “Bridge
Farms, ” from the Wynn Dewsnup Revocable Trust
(“the Trust”). In this case (“Pinnacle
II”), Pinnacle claims that Swenson-acting as
president of 1 Stop Realty (“1 Stop”),
Pinnacle's purported broker for the purchase-
misrepresented the quality of the groundwater and soil at
Bridge Farms prior to the sale. 1 Stop, the Trust, and Wynn
Dewsnup, the Trustee of the Trust, are the defendants in a
companion case in this District (“Pinnacle
reviewed the record and briefs, the Court finds that the
facts and legal arguments are adequately presented.
Accordingly, in the interest of avoiding further delay, and
because the Court finds that the decisional process would not
be significantly aided by oral argument, the Court will
decide the motion without oral argument. Dist. Idaho Loc.
Civ. R. 7.1(d)(2)(ii). For the reasons set forth below, the
Court grants the Motion for Partial Dismissal, grants the
Motion for Summary Judgment in part, and stays the remainder
of the claims until a final judgment has been entered in
is an Arkansas limited liability company with a single
member, the Arkansas Teacher Retirement System
(“ATRS”), an institutional pension fund. Pinnacle
owns investment farmland properties on behalf of and for the
benefit of the ATRS. Pinnacle contracted with Halderman Farm
Management Services (“HFMS”) to acquire and
manage investment farmlands on ATRS's behalf. HFMS
employs Howard Halderman, David Martin, and Adam Gore.
is the president of 1 Stop. 1 Stop has an office in Kasson,
Minnesota, where Swenson and 1 Stop's vice president,
Wendy Forthun (“Forthun”), reside. 1 Stop also
has an office located about 50 miles away in Olivia,
Minnesota, where 1 Stop's other vice president, Roger
Heller (“Heller”), resides.
early 2010, 1 Stop's client, Teays River Investments, LLC
(“Teays”), expressed interest in expanding into
the northwest United States and sought 1 Stop's services
in its search for farmland in which to invest. Shortly
thereafter, Heller discovered Bridge Farms and began
preparing paperwork on the property to present to
of 2010, Heller and Swenson travelled to Idaho to tour Bridge
Farms. On May 24, 2010, Heller sent Bridge Farms an email
requesting information on, among other things, the economics
of growing different kinds of crops at Bridge Farms, rental
income, and water and soil quality. Dkt. 16-5. On May 25,
2010, Garrett Dewsnup, Bridge Farms' manager responded
via fax with a letter and a collection of documents. Dkt.
16-6. Among these documents was an “irrigation water
analysis” from 2009, (id. at 16), and
“water analysis results” from 2003, (id.
at 17). The 2003 lab results indicated “possible”
and “significant” problems with Bridge Farms'
water. Id. Heller also spoke with Bridge Farms'
crop consultant, Kyle Carpenter, to discuss Bridge Farm's
soil and water quality.
of 2010, Swenson gained the impression that Teays did not
want to purchase Bridge Farms because it was not large
enough. Thereafter, 1 Stop ceased investigating Bridge Farms
as a prospect for Teays.
December 29, 2010, Halderman emailed Swenson asking for
assistance in finding farmland for a client (ATRS) for
investment purposes. Pinnacle I, Dkt. 64-2, at 21.
On January 17, 2011, Swenson emailed Halderman to inform him
about Bridge Farms. Id. at 23.
2011, Wynn Dewsnup emailed Heller a “lease
proposal” for Bridge Farms “presented by”
one of its tenants, Grant 4-D Farms. Dkt. 16-12. The proposal
stated that the property has “both soil and water borne
salt challenges” that require farmers to utilize
“sustainable farming practices.” Id. at
emailed Halderman again about Bridge Farms on July 20, 2011.
Dkt. 16-4. The two men exchanged a few emails over the next
few days about Bridge Farms' water. Id. Swenson
indicated the water supply was “good” and
“very adequate.” Id.
26, 2011, Forthun sent an email to Halderman, Swenson, and
others, with a short summary of information about Bridge
Farms and several other documents attached. Dkt. 16-13. The
summary indicated the property was currently producing
potatoes and sugar beets, had “quality ground water,
” and had “low saline levels” in the
“primary soil.” Id. at 4. 1 Stop and
HFMS continued to discuss Bridge Farms into August of 2011.
Dkt. 16-14. In one email, Swenson asserted the property
should be easy to rent because it was “proven beet
& potato ground.” Id. at 2.
entered into a letter of intent in late September 2011 to
purchase Bridge Farms. The parties to the sale signed a Real
Estate Purchase Agreement on October 14, 2011. At that time,
Bridge Farms' wells had already been winterized.
Believing that the property did not have water problems,
Pinnacle did not require well testing as part of its due
diligence. Rather, HFMS employees visited Bridge Farms in
November of 2011 and spoke to Wynn Dewsnup about Bridge
Farms' water quality. Wynn represented that the Farm had
“excellent” irrigation water. Swenson maintains
that no one ever asked him or 1 Stop to conduct due diligence
for Pinnacle's purchase of Bridge Farms. Dkt. 16-22, at
sale of Bridge Farms for $15, 300, 000 formally closed in
January of 2012. A few months later, in May of 2012, Pinnacle
learned about the water problems at Bridge Farms.
March 5, 2013, Pinnacle filed suit (Pinnacle I)
against Wynn Dewsnup and the Trust for breaching its
obligation under the Bridge Farms purchase agreement. On
October 13, 2014, ten days after receiving responses to its
first set of written discovery, Pinnacle moved for leave to
amend its complaint to assert fraud claims against Wynn
Dewsnup. In November of 2014, Pinnacle deposed Wynn and
Garrett Dewsnup and learned that Garrett had given Heller
information about Bridge Farms' water and soil quality in
2010. Shortly thereafter, Pinnacle sent a third-party
subpoena to 1 Stop, and Swenson responded on behalf of 1 Stop
with over 3, 000 pages of materials related to the Bridge
Farms sale. On December 12, 2014, Pinnacle moved to add 1
Stop as a defendant.
February 23, 2015, the Court granted Pinnacle's pending
requests. On February 24, 2015, Pinnacle filed its Second
Amended Complaint adding 1 Stop as a defendant and adding
one month later, 1 Stop Realty filed a third-party complaint
against Robert Jones Realty, Inc., the Trust's broker
during the sale of Bridge Farms. On April 6, 2015, Wynn
Dewsnup and the Trust filed their answer to the Second
Amended Complaint and filed a cross-claim against 1 Stop. On
June 11, 2015, in response to a written discovery request, 1
Stop produced documents related to its work and investigation
of Bridge Farms that 1 Stop Realty had collected when it was
representing Teays. These disclosures included the 2003
Bridge Farms water analysis lab results, Swenson's
personal notes from a 2010 telephone conference with Wynn
Dewsnup which acknowledge, among other points, “salts
sodium in soils, ” and emails between Heller and
Swenson, which revealed that Heller had spoken to an
agronomist regarding Bridge Farms' long term
sustainability and the salinity of its soils.
October 7, 2015, the Court dismissed the third-party
complaint against Robert Jones Realty. On November 2, 2015,
the Court issued an Amended Case Management Order
establishing new deadlines for the completion of factual
discovery, expert disclosures, mediation, and dispositive
motions, and setting trial for January 25, 2017. On January 7
and 8, 2016, Pinnacle deposed Swenson and Heller. Pinnacle
alleges 1 Stop brought to the depositions a file of documents
relating to Bridge Farms which contained more evidence of 1
Stop's knowledge of the property's soil and water
March 14, 2016, Pinnacle moved to amend its pleadings again,
this time to add Swenson to the case. On March 31, 2016, Wynn
Dewsnup and the Trust moved to add Swenson and Heller as
cross-defendants and assert new claims against them.
Judge Candy Dale took the motions under consideration and, on
July 26, 2016, issued a Report and Recommendation,
recommending that the Court deny Pinnacle's motion to
amend as untimely. Specifically, Judge Dale found, among
other things, that Pinnacle had not been diligent in seeking
to add Swenson as a party- Pinnacle could have moved to add
Swenson as a defendant as early as November of 2014, but it
waited until March of 2016. Judge Dale also found adding
Swenson would prejudice 1 Stop and Swenson, and would
significantly disrupt the deadlines in the current case
management order without good cause.
February 9, 2017, Judge Edward Lodge adopted the Report and
Recommendation and denied the motion for leave to amend. In
the meantime, the parties had reached several settlement
agreements. In October of 2016, the Court had dismissed with
prejudice all cross-claims and causes of action that were or
might have been asserted by Wynn Dewsnup or the Trust against
1 Stop in this case; and all cross-claims and causes of
action that were or might have been asserted by Pinnacle
against Wynn Dewsnup or the Trust. After these dismissals,
the only remaining claims were asserted by Pinnacle against 1
Judge Lodge considered 1 Stop's Motion for Summary
Judgment. He denied the Motion in March of 2017. The Court
then set a jury trial for May 15, 2018. However, the Court
vacated this trial date when Judge Lodge transferred the case
to the undersigned on August 1, 2017.
on October 7, 2016, Pinnacle had filed this case,
Pinnacle II, against Swenson in state court in
Cassia County, Idaho. This was after Magistrate Judge
Dale's Report and Recommendation recommending that
Swenson not be added as a party to Pinnacle I but
before Judge Lodge adopted that Report and Recommendation.
However, Pinnacle did not serve Swenson until February 25,
2017-after Judge Lodge ruled that Pinnacle could not add
Swenson to Pinnacle I. Swenson timely removed the
case to this Court on March 5, 2017.
Complaint asserts five claims for relief against Swenson: (1)
violation of Idaho's Real Estate Brokerage Representation
Act (“Brokerage Act”), Idaho Code § 54-2082
et seq.; (2) fraud; (3) negligence; (4) breach of