AED, Inc. v. KDC Investments, LLC
155 Idaho 159
| Idaho | 2013Background
- AED sold the Bellaire Toll Bridge to KDC for $25,000 under an Asset Purchase and Liability Agreement, including a merger clause.
- AED and KDC executed a Blasting Agreement on June 1, 2010 for AED to perform demolition work, with no signature on the front page.
- AED did not have a West Virginia contractor license at the time of signing the Blasting Agreement; license obtained later, likely October 17, 2010.
- AED alleged fraud in the inducement and breach of contract, seeking rescission; KDC moved for summary judgment, which the district court granted in part.
- The district court held the Blasting Agreement illegal and thus not part of consideration, denied rescission, and quieted title in KDC.
- On appeal, the Idaho Supreme Court affirmed, holding the Blasting Agreement was illegal, the Sales Agreement integrated, and KDC prevailing on grounds.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Fraudulent inducement evidence exists? | AED contends KDC lacked intent to use AED for blasting. | KDC argues AED failed to challenge independent grounds; lack of intent shown. | Affirmed on unchallenged alternative ground. |
| Is the Blasting Agreement part of consideration for the Sales Agreement? | AED argues Blasting Agreement contributed to consideration and sale illegality. | KDC asserts the Sales Agreement is integrated; Blasting Agreement not consideration. | Blasting Agreement not part of consideration; Sales Agreement integrated. |
| Rescission available where fraud or breach proven? | Rescission based on fraud and/or material breach. | No proven fraud or material breach; rescission improper. | Rescission denied; not available without fraud or breach. |
| Is the Blasting Agreement illegal and does that make the contract void? | Lawfulness could be cured by later licensing; contract valid if licensed later. | Unlicensed contract under ICRA/WV license laws is illegal and unenforceable; cannot be cured. | Blasting Agreement illegal and void; subsequent licensing does not validate. |
| Was there breach of contract or illegal contract bars recovery? | AED seeks damages for breach based on illegality. | Illegal contract bars enforcement; no damages under void contract. | KDC granted summary judgment for breach due to illegality. |
Key Cases Cited
- Weisel v. Beaver Springs Owners Ass’n, Inc., 152 Idaho 519 (2012) (appeal requires challenging all independent grounds for summary judgment)
- ParkWest Homes v. Barnson, 149 Idaho 603 (2010) (lien validity depends on performance during registration period)
- Farrell v. Whiteman, 146 Idaho 604 (2009) (licensing timing affects contract legality; post-licensing work may be severable)
- City of Meridian v. Petra Inc., 154 Idaho 425 (2013) (contracts cannot be performed without violating law are illegal and void)
- Taylor v. AIA Services Corp., 151 Idaho 552 (2011) (illegality and voidness affect contract remedies)
- Barry v. Pac. W. Constr., Inc., 140 Idaho 827 (2004) (illegality of consideration renders contract unenforceable)