April Beguesse, Inc. v. Kenneth Rammell
156 Idaho 500
| Idaho | 2014Background
- April Beguesse, Inc. (ABI) purchased Christa Beguesse, Inc. (CBI) in 2004 by agreeing to pay $12,000/month for eight years (total $1,152,000); ABI paid $708,000 before Christa died in 2008 and then stopped payments. ABI alleged it was induced to buy by representations that CBI owned a library of files (worth ~ $1M) and proprietary software, and that payments would cease if Christa died during the term.
- April (ABI) trained with Christa and testified she believed CBI owned the Rutter Group files and proprietary macros Christa created; she valued the business at ~$254,100 (equipment and PageMaker excluded). After Christa’s death ABI learned Rutter owned the files and PageMaker supplied the macros.
- ABI sued CBI, Christa’s estate, and Kenneth Rammell (Christa’s husband/50% shareholder) for fraud, breach of contract, and breach of warranty; CBI counterclaimed for breach of contract. Jury found for ABI on all claims, awarding $354,000 (fraud) plus $190,013 (breach as to files).
- The district court granted JNOV dismissing ABI’s fraud claim against Christa’s estate, found excessive damages, and offered a remittitur reducing CBI’s breach damages by $90,113; ABI accepted the remittitur. Defendants appealed.
- The Idaho Supreme Court affirmed: sufficient evidence supported fraud and warranty/contract liability as to the library of files; remittitur was proper to correct excessive damages; statute of limitations and evidentiary rulings were upheld; appellate fees awarded to ABI.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether sufficient evidence supported fraud allegations about ownership/value of the library of files | ABI: Rammell/CBI represented CBI owned a library of files worth ≥ $1M and intended to induce purchase; ABI relied and was damaged | Defendants: statements were opinions/predictions (not actionable) and ABI suffered no provable damages | Held: Jury could reasonably find statements were false opinions made to mislead; sufficient evidence of out-of-pocket damages — fraud upheld against Rammell and CBI (estate claim dismissed) |
| Whether express warranty / breach of contract claims (files & proprietary software) were supported | ABI: CBI warranted transferability/ownership of files and proprietary software as basis of bargain | Defendants: statements were mere affirmations of value; ABI was not damaged because it operated profitably and could sell business | Held: Sufficient evidence that express warranties were made and breached as to the library of files (software warranty failed on damages); breach claims upheld against CBI |
| Whether statute of limitations barred ABI’s claims | ABI: discovery of Rutter’s ownership occurred late 2008; estoppel applicable for software claim | Defendants: claims time-barred | Held: Jury reasonably could find ABI’s claims timely — discovery occurred in late 2008 for files and estoppel/diligence supported software claim timing |
| Whether admission of April’s testimony about Christa’s will violated Dead Man’s Rule / was irrelevant | ABI: testimony relevant to intent, oral contract terms, and inducement by CBI (even if not used against estate) | Defendants: I.R.E. 601 barred testimony about unwritten communications with deceased and testimony was irrelevant | Held: Admission proper with limiting instruction — testimony barred as evidence against Christa’s estate but admissible against CBI; no abuse of discretion |
Key Cases Cited
- Bank of Commerce v. Jefferson Enters., LLC, 154 Idaho 824 (discussing nine elements of fraud)
- Chavez v. Barrus, 146 Idaho 212 (fraud elements and reliance standards)
- Penn Mut. Life Ins. Co. v. Ireton, 57 Idaho 466 (fraud decided on all facts and circumstances)
- Gillespie v. Mountain Park Estates, LLC, 142 Idaho 671 (exceptions where opinions/promises support fraud: intent to mislead; accompanying existing facts)
- Fox v. Cosgriff, 66 Idaho 371 (false statements of actual value are actionable fact)
- Kuhn v. Coldwell Banker Landmark, Inc., 150 Idaho 240 (new trial/remittitur for damages influenced by passion/prejudice)
- Quick v. Crane, 111 Idaho 759 (remittitur limits and relation to new trial standard)
- Montgomery v. Montgomery, 147 Idaho 1 (interpretation and scope of Dead Man’s Rule / I.R.E. 601)
- Lunders v. Estate of Snyder, 131 Idaho 689 (Dead Man’s Rule exceptions — testimony admissible where claim not against estate)
- Argyle v. Slemaker, 99 Idaho 544 (testimony barred against estate may be admissible against third-party corporation)