920 N.W.2d 726
N.D.2018Background
- Bakke contracted with Magi-Touch for installation of bathroom floor tile, a shower base, and related products; Magi-Touch subcontracted installation work to independent contractor VA Solutions.
- A shower door allegedly was improperly installed, imploded, and damaged the bathroom door and trim; Bakke sought compensation for repainting/repairs.
- Bakke filed in small claims court without specifying tort or contract; Magi-Touch answered asserting defenses including the economic loss doctrine and demanded removal to district court.
- In district court Magi-Touch moved for summary judgment arguing it cannot be liable for the negligence of an independent contractor; the court granted summary judgment for Magi-Touch on tort claims and dismissed defendant SPS (undisputed on appeal).
- Bakke moved to amend her complaint to add specific claims including breach of contract (implied warranty of fitness), negligence, fraud, deceit, and unlawful sales practices; the district court denied amendment as futile.
- The Supreme Court affirmed dismissal of tort claims and denial of amendments asserting torts, but reversed denial of amendment as to the breach of contract claim and remanded for further proceedings on that claim.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Magi-Touch is liable for negligent acts of independent contractor | Bakke: Magi-Touch remains liable for defects causing damage despite subcontracting | Magi-Touch: independent contractor rule bars vicarious liability for negligence | Held: Independent-contractor rule bars negligence claims against Magi-Touch (affirmed) |
| Whether Bakke may proceed on a breach of contract (implied warranty of fitness) claim against Magi-Touch | Bakke: contract (and implied warranty) claim exists against Magi-Touch despite delegation | Magi-Touch: delegating labor to VA Solutions discharged its contractual liability | Held: Delegation does not relieve Magi-Touch of contractual obligations; amendment to assert breach of contract not futile (reversed & remanded) |
| Whether amendment to add tort claims (fraud, deceit, UDAP) was proper | Bakke: sought to add fraud, deceit, and UDAP claims in amended complaint | Magi-Touch: alleged insufficient support and futility given record | Held: Amendment to add fraud, deceit, and UDAP claims properly denied as futile (affirmed) |
| Proper measure and availability of damages for breach of construction contract | Bakke: seeks repair/repainting costs for damage caused by defective installation | Magi-Touch: disputed liability and measure | Held: If breach proven, damages recoverable under contract law; repair cost or diminution in value as appropriate (remand to evaluate) |
Key Cases Cited
- Leno v. K & L Homes, Inc., 803 N.W.2d 543 (N.D. 2011) (recognizes implied warranty of fitness in construction contracts)
- Dobler v. Malloy, 214 N.W.2d 510 (N.D. 1973) (sets elements and scope of implied warranty of fitness and measure of contract damages)
- Rosenberg v. Son, Inc., 491 N.W.2d 71 (N.D. 1992) (delegation of duties does not relieve contracting party of liability)
- Dakota Grain Co. v. Ehrmantrout, 502 N.W.2d 234 (N.D. 1993) (distinguishes contract warranty claims from negligence; tort requires independent duty)
- Darby v. Swenson, Inc., 767 N.W.2d 147 (N.D. 2009) (standards for permitting amendments post-discovery and in face of summary judgment)
- Grewal v. North Dakota Ass’n of Ctys., 670 N.W.2d 336 (N.D. 2003) (independent-contractor rule precludes vicarious liability for contractor's negligence)