Swafford v. Huntsman Springs Inc ( 2017 )

IN THE SUPREME COURT OF THE STATE OF IDAHO
Docket No. 44240
RONALD L. SWAFFORD and )
MARGARET SWAFFORD, husband and ) Boise, May 2017 Term
wife, )
) 2017 Opinion No. 125
Plaintiffs-Appellants, )
) Filed: December 13, 2017
v. )
) Karel A. Lehrman, Clerk
HUNTSMAN SPRINGS, INC., an Idaho )
corporation, ) SUBSTITUTE OPINION, THE
) COURT’S PRIOR OPINION
Defendant-Respondent. ) DATED JULY 6, 2017 IS
_____________________________________ ) HEREBY WITHDRAWN.
Appeal from the District Court of the Seventh Judicial District of the
State of Idaho, Teton County. Hon. Gregory W. Moeller, District Judge.
The district court’s judgment in favor of Huntsman Springs is affirmed.
Attorney fees and costs on appeal are awarded to Huntsman Springs.
Swafford Law, PLLC, Idaho Falls, attorneys for appellant. Larren K.
Covert argued.
Moulton Law Office, Driggs, attorneys for respondent. Sean R.
Moulton argued.
_____________________________
JONES, Justice.
I. NATURE OF THE CASE
In an appeal arising out of Teton County, Appellants, Ronald and Margaret Swafford
(collectively, the “Swaffords”), challenge a district court’s grant of summary judgment in favor
of Respondent, Huntsman Springs, Inc. (“Huntsman Springs”). The action stems from the
Swaffords’ claim that Huntsman Springs failed to comply with the Master Plan by essentially
cutting off their property from the development. The district court granted summary judgment in
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favor of Huntsman Springs after concluding that all of the Swaffords’ claims were barred by the
applicable statutes of limitations.
II. FACTUAL AND PROCEDURAL BACKGROUND
Huntsman Springs is a 1,350 acre development in Driggs, Idaho, that is planned to
include 650 homes, a five-star hotel, and a golf course. Between 2006 and 2007, Huntsman
Springs promoted its priority reservation program, which allowed prospective buyers to reserve
an opportunity to purchase certain property sites. On July 16, 2007, during the infancy of the
development, the Swaffords entered into a contract (the “Contract”) with Huntsman Springs to
purchase an undeveloped commercial site at “Lot 4, Block 50, Huntsman Springs PUD, Phase 1,
Addition to the City of Driggs, Teton County, Idaho” (the “Property”). At the time of purchase,
Huntsman Springs’ promotional materials included a Master Plan, which indicated that the
Property’s east side would be bordered by a walk and bike path while its west side would be
bordered by grass, trees, and a path or roadway. On September 21, 2007, the sale of the Property
closed with the recording of a warranty deed.
Between 2007 and 2008, Primrose Street, which bordered the west side of the Property,
was paved, but the area between Primrose Street and the Property was improved by adding
landscaping, a walking path, and trees. Thus, the Property did not have access to Primrose Street.
On August 20, 2014, Mr. Swafford wrote a letter to Huntsman Springs demanding
that the Master Plan be complied with, providing my lot with ingress and egress
from Primrose as expected from the address. I also insist that the family walk and
bike paths as well as trees be in place immediately. I hereby request immediate
resolution of this issue. I request the area conform to the plans provided at the
time of purchase.
On July 17, 2015, the Swaffords filed a complaint wherein they claimed that Huntsman
Springs “specifically intended for the [Swaffords] to rely on the Master Plan.” The Swaffords
alleged the following: (1) Huntsman Springs breached the Contract by failing to comply with the
Master Plan; (2) Huntsman Springs breached an express warranty that the Property would be
developed and improved in accordance with the Master Plan; (3) Huntsman Springs breached its
duty of good faith and fair dealing by failing to develop the Property in accordance with the
Master Plan; (4) Huntsman Springs’ unfair and deceptive marketing and sales conduct breached
the Idaho Consumer Protection Act (the “ICPA”); and (5) Huntsman Springs’ promotional
materials included false representations.
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On September 28, 2015, Huntsman Springs filed an answer. On September 29, 2015,
Huntsman Springs filed a motion for judgment on the pleadings, or in the alternative, a motion
for summary judgment. In an accompanying memorandum, Huntsman Springs argued that each
of the Swaffords’ claims was barred by the applicable statutes of limitations. On November 3,
2015, the Swaffords responded with a memorandum in opposition to Huntsman Springs’ motion
for judgment on the pleadings and/or motion for summary judgment. Therein, the Swaffords
argued that their contractual claims were not barred by the five-year statute of limitations
because they were not fully aware of the damage until September 2014, because until then, they
“expected and anticipated that [Huntsman Springs] would eventually complete the project as
specified on the Master Plan.”
On November 17, 2015, the district court held a hearing on Huntsman Springs’ motion.
The district court characterized Huntsman Springs’ motion as a motion for summary judgment so
that each party’s affidavit could be considered. On February 19, 2016, the district court issued its
memorandum decision. First, the district court found that the Swaffords’ contractual causes of
action were subject to a five-year statute of limitations under Idaho Code section 5-216. Further,
the district court held that the statute of limitations in a contract case begins to run when the
aggrieved party has constructive notice of the breach. The district court found that the Swaffords
had constructive notice of Huntsman Springs’ breach when a plat was recorded on July 20, 2007,
showing that Huntsman Springs was not complying with the Master Plan, or, at the latest, when
the improvements were made to the area between the Property and Primrose Street in August
2008. Accordingly, the district court held that the contractual causes of action were barred by the
statute of limitations because the Swaffords did not file their complaint until July 2015—nearly
seven years after the latest time the cause of action could have accrued. Second, the district court
held that the ICPA claim was barred because it was subject to a two-year statute of limitations,
which began running at the same time as the contractual claims. Third, the district court held that
the misrepresentation claim was barred because it was subject to a three-year statute of
limitations under Idaho Code section 5-218(4), which began running at the same time the other
causes of action accrued. A corresponding judgment was entered on April 11, 2016.
On May 20, 2016, the Swaffords filed a timely notice of appeal. On July 6, 2017, this
Court released its original decision in this appeal. On July 25, 2017, the Swaffords filed a
petition for rehearing, and on August 11, 2017, the Swaffords filed a brief in support of their
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petition for rehearing. In response to the Swaffords’ petition for rehearing, we issue this
substitute opinion.
III. ISSUES ON APPEAL
1. Did the district court err in granting summary judgment in favor of Huntsman Springs?
2. Is either party entitled to attorney fees on appeal?
IV. STANDARD OF REVIEW
“When this Court reviews a district court’s ruling on a motion for
summary judgment, it employs the same standard properly employed by the
district court when originally ruling on the motion.” Chandler v. Hayden, 147
Idaho 765, 768, 215 P.3d 485, 488 (2009). “Summary judgment is proper when
there is no genuine issue of material fact and the only remaining questions are
questions of law.” Id. “This Court liberally construes all disputed facts in favor of
the nonmoving party and draws all reasonable inferences and conclusions
supported by the record in favor of the party opposing the motion.” Id.Kugler v. Nelson, 160 Idaho 408, 412, 374 P.3d 571, 575 (2016).
V. ANALYSIS
A. The district court did not err in granting summary judgment in favor of Huntsman
Springs because there are no genuine issues of fact as to the time at which the
Swaffords’ causes of action accrued.
As a preliminary matter, we may affirm a judgment on alternate grounds “[w]hen a
judgment on appeal reaches the correct conclusion, but employs reasoning contrary to that of this
Court.” Kosmann v. Gilbride, 161 Idaho 363, 366, 386 P.3d 504, 507 (2016) (quoting Martel v.
Bulotti, 138 Idaho 451, 454–55, 65 P.3d 192, 195–96 (2003)). Here, the district court’s holding
that the statute of limitations began to run, at the latest, in 2008 was based, in part, on the filing
of a plat. We affirm the district court’s judgment on alternate grounds and decline to address
whether the filing of the plat amounted to notice of the breach.
“A cause of action accrues and the statute of limitations begins to run when a cause of
action exists.” Lido Van and Storage, Inc. v. Kuck, 110 Idaho 939, 942, 719 P.2d 1199, 1202
(1986). Idaho Code section 5-216 provides that an action upon a written contract must be
brought within five years. I.C. § 5-216; Saddlehorn Ranch Landowner’s, Inc. v. Dyer, 146 Idaho
747, 750, 203 P.3d 677, 680 (2009). In this case, the alleged breach of contract was the failure to
provide the Property with access to Primrose Street. In their brief in support of the petition for
rehearing, the Swaffords allege that there are other breaches of contract and misrepresentations
that must be addressed. Specifically, the Swaffords claim that Huntsman Springs was obligated
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to construct certain “proposed recreational facilities,” such as paths and equestrian trails, “within
the project.” The Swaffords argue that summary judgment was improper because a question of
fact existed regarding what the “proposed recreational facilities actually were and how they were
proposed.” However, in their briefing on appeal, this issue was merely mentioned in passing and
was not supported with cogent argument; therefore, this Court will not consider the issue. Bach
v. Bagley, 148 Idaho 784, 790, 229 P.3d 1146, 1152 (2010) (citing Inama v. Boise Cnty. Bd. of
Comm’rs, 138 Idaho 324, 330, 63 P.3d 450, 456 (2003)) (“Regardless of whether an issue is
explicitly set forth in the party’s brief as one of the issues on appeal, if the issue is only
mentioned in passing and not supported by any cogent argument or authority, it cannot be
considered by this Court.”). In sum, this Court’s analysis of the Swaffords’ claims will be limited
to their allegation that Huntsman Springs failed to provide the Property with access to Primrose
Street.
“Where no time is expressed in a contract for its performance, the law implies that it shall
be performed within a reasonable time as determined by the subject matter of the contract, the
situation of the parties, and the circumstances attending the performance.” Curzon v. Wells
Cargo, Inc., 86 Idaho 38, 43, 382 P.2d 906, 908 (1963). There was no contractual agreement as
to when the access would be provided. Between 2007 and 2008, Primrose Street was paved and
the area between the street and the Property was improved by landscaping it, constructing a
walking path, and planting trees. If a reasonable time to provide the claimed access had run
before the construction of those improvements, then the Swaffords’ cause of action had accrued
and the statute of limitations had begun to run. If a reasonable time had not yet run, then the
construction of those improvements constituted an anticipatory breach of contract and the statute
of limitations had begun to run. “An anticipatory breach of contract has been defined as ‘a
repudiation [by the promisor] of his contractual duty before the time fixed in the contract for his
performance has arrived.’” Foley v. Munio, 105 Idaho 309, 311, 669 P.2d 198, 200 (1983). The
construction of those improvements in the area between the Property and Primrose Street was
notice to the Swaffords that Huntsman Springs would not perform the alleged agreement to
provide access to Primrose Street. Id. at 312, 669 P.2d at 201 (a present breach of contract is
equivalent to notice to the promisee that the promisor would not perform). Thus, in either
instance the statute of limitations began to run by the completion of the improvements in 2008.
The Swaffords did not bring their breach of contract action until July 17, 2015, which was nearly
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three years after the deadline. Accordingly, we affirm the district court’s judgment because the
Swaffords’ breach of contract action is barred by the statute of limitations.
Although the bulk of the Swaffords’ briefing on appeal was dedicated to their contractual
claims, they also appealed, and briefly discussed, the district court’s dismissal of their ICPA
claim and their misrepresentation claim. We affirm the district court’s judgment on both of these
claims because both claims are barred by the applicable statute of limitations.
The statute of limitations for a private action under the ICPA is two years, and it begins
to run after the cause of action accrues. I.C. § 48-619. The ICPA provides that:
(1) Any person who purchases or leases goods . . . and thereby suffers any
ascertainable loss of money or property, real or personal, as a result of the use or
employment by another person of a method, act or practice declared unlawful by
this chapter, may treat any agreement incident thereto as voidable or, in the
alternative, may bring an action to recover actual damages or one thousand dollars
($1,000), whichever is the greater.
I.C. § 48-608(1). The definition of “goods” includes real property. I.C. § 48-602(6). Acts or
practices declared unlawful by the ICPA include “[a]dvertising goods or services with intent not
to sell them as advertised . . . [and] [e]ngaging in any act or practice which is otherwise
misleading, false, or deceptive to the consumer.” I.C. § 48-603(9) and (17).
Further, the ICPA requires that the offending party must be a person who “knows, or in
the exercise of due care should know, that he has in the past, or is” committing an act or practice
declared unlawful by Idaho Code section 48-603. I.C. § 48-603.
In their complaint, the Swaffords alleged that Huntsman Springs violated the ICPA by
advertising the commercial lots with no intention of constructing the development in compliance
with the advertisements.
The district court held as follows:
Nothing in the record would support a finding that a cause of action under [the
ICPA] could have accrued any later than the date applicable to the breach of
contract claims. Because the statute governing the [ICPA] bars any action after
two years, [the ICPA claim] is even more untimely than those centered on a
breach of written contract.
It is uncontested that the improvements were completed in 2008. Without ruling upon
whether Huntsman Springs violated the ICPA, if Huntsman Springs violated the ICPA, that
violation occurred when the improvements were completed in 2008. It was then that the
Swaffords suffered an ascertainable loss and the ICPA cause of action accrued. The Swaffords
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did not bring their ICPA action until July 17, 2015, which was nearly five years after the
deadline. Accordingly, we affirm the district court’s judgment because the Swaffords’ ICPA
claim is barred by the statute of limitations.
The statute of limitations for a misrepresentation claim is three years, and it begins to run
after “the discovery, by the aggrieved party, of the facts constituting the fraud or mistake.” I.C. §
5-218(4).
Where discovery of a cause of action for fraud commences the statute of
limitations, the date of discovery is a fact question for the jury unless there is no
evidence creating a question of fact. DBSI/TRI v. Bender, 130 Idaho 796, 807, 948
P.2d 151, 162 (1997). Actual knowledge of the fraud can be inferred if the
aggrieved party could have discovered the fraud by reasonable diligence, although
the Court will hesitate to infer such knowledge. Id. at 807, 948 P.2d at 162.
Nerco Minerals Co. v. Morrison Knudsen Corp., 140 Idaho 144, 150, 90 P.3d 894, 900 (2004).
In their complaint, the Swaffords alleged that Huntsman Springs misrepresented the
development of the Property. The Swaffords did not specify whether the alleged
misrepresentation was fraudulent or negligent, but for the purposes of this appeal, the distinction
is immaterial because both causes of action have a three-year statute of limitations.
The district court held that “the facts alleging [the misrepresentation] were discovered, or
could have been discovered, . . . at the very least, when the park separating the [Property] and
Primrose Street was completed. Therefore, this action should have been brought by July 20,
2010, or at least by August 2011.”
It is uncontested that the improvements were completed in 2008. Without ruling upon
whether Huntsman Springs misrepresented the development of the Property, if Huntsman
Springs misrepresented the development of the Property, the Swaffords could have discovered
the misrepresentation when the improvements were completed in 2008. It was then that the
Swaffords had actual knowledge of the alleged misrepresentation. The Swaffords did not bring
their misrepresentation action until July 17, 2015, which was nearly four years after the deadline.
Accordingly, we affirm the district court’s judgment because the Swaffords’ misrepresentation
claim is barred by the statute of limitations.
B. Huntsman Springs is entitled to costs and attorney fees on appeal.
Idaho Code section 12-120(3) mandates that when “the gravamen of a lawsuit” is
a commercial transaction, the prevailing party is entitled to attorney’s fees. Kugler
v. Nelson, 160 Idaho 408, 413, 374 P.3d 571, 579 (2016). Under the statute, a
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“commercial transaction” is any “transaction[ ] except transactions for personal or
household purposes.” I.C. § 12-120(3).
Prehn v. Hodge, 161 Idaho 321, 331, 385 P.3d 876, 886 (2016).
Huntsman Springs is entitled to costs and attorney fees on appeal. The subject of this
lawsuit is the contract for the sale of the Property, which is a commercial lot. Indeed, the
Swaffords refer to the Property as a commercial lot in their complaint. Moreover, no facts
indicate that the Property is for the Swaffords’ personal or household purposes. Therefore,
because the subject of the lawsuit is a commercial transaction and Huntsman Springs has
prevailed, Huntsman Springs is entitled to costs and attorney fees on appeal.
VI. CONCLUSION
We affirm the district court’s judgment in favor of Huntsman Springs and award costs
and attorney fees on appeal to Huntsman Springs.
Chief Justice BURDICK, Justices EISMANN, HORTON and BRODY CONCUR.
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