483 P.3d 985
Idaho2020Background
- Burns Holdings entered a 2007 Development Agreement with Teton County requiring a permanent 75-ft ready-mix concrete facility within 18 months and permitting a temporary facility pending completion; Driggs/Teton zoning limited height to 45 ft.
- County denied a CUP and later a variance for the 75-ft permanent facility; this Court previously held (Burns 2016) the Development Agreement’s force majeure clause could excuse delay caused by unforeseeable denial of zoning approvals.
- County revoked authority to operate the Temporary Facility in 2012; Burns Concrete and Burns Holdings sued for breach of contract, declaratory relief, and unjust enrichment; after multiple appeals and remands the district court granted partial summary judgment on liability for Burns and tried damages.
- At trial the district court awarded $1,049,250.90 in reliance damages (finding $1,461,393.53 in reasonable reliance expenditures but subtracting $412,142.63 based on sales minus cost of sales), denied prejudgment interest, and awarded attorney fees to Burns in part.
- On appeal the Idaho Supreme Court affirmed liability (including breach of implied covenant), reversed the declaratory tolling ruling, vacated the damages judgment for recalculation (ordering reversal of the sales–costs subtraction), and vacated the attorney-fee awards for inadequate explanation.
Issues
| Issue | Plaintiff's Argument (Burns) | Defendant's Argument (County) | Held |
|---|---|---|---|
| Whether both Burns Concrete and Burns Holdings may recover | Assignments created undivided present interests in Agreement and claims so both are real parties in interest | Only Burns Holdings was a party to the Agreement; Burns Concrete lacked standing | Both may recover—assignments conferred enforceable undivided interests |
| Whether County breached by revoking Temporary Facility and violated implied covenant | Revocation nullified a contract benefit and occurred without proper notice/cure | County acted lawfully and the Agreement required compliance with applicable laws | Court affirmed breach and violation of implied covenant; summary judgment for Burns on breach upheld |
| Causation for reliance damages given Burns stopped operating in 2010 | County created hostile environment causing cessation; expenses were incurred in reliance on the Agreement | Breaches occurred in 2012, after cessation, so they could not have caused damages | Causation found: evidence supports that County conduct contributed to cessation and but‑for reliance |
| Declaratory relief tolling the 18‑month period | Tolling is required; judicial declaration appropriate | Tolling plus reliance damages risks double recovery and creates confusion | Declaratory tolling as a matter of law was improper where reliance damages (including demobilization) were awarded |
| Damages calculation—subtracting sales minus cost of sales | Reduction was improper because Temporary Facility actually operated at a net loss when all costs accounted | Reduction reflected profits and should offset reliance award | Court held subtraction unsupported by substantial evidence and directed recalculation without that reduction |
| Attorney fees based on modified contingent/hybrid agreement | Fee award appropriate; district court should honor contingency conversion for unpaid fees | Agreement created an unreasonable/suspect fee metric; district court abused discretion if it awarded supplemental contingency fees | Fee awards vacated and remanded—district court failed to explain application of Rule 54(e)(3) factors to amounts awarded |
Key Cases Cited
- Burns Concrete, Inc. v. Teton Cnty., 161 Idaho 117, 384 P.3d 364 (2016) (force majeure tolled construction deadline where County’s denial of approvals was unforeseeable)
- Burns Holdings, LLC v. Teton Cnty. Bd. of Comm’rs, 152 Idaho 440, 272 P.3d 412 (2012) (LLUPA requires a variance, not a conditional use permit, to modify height restrictions)
- King v. Beatrice Foods Co., 89 Idaho 52, 402 P.2d 966 (1965) (limitations on double recovery when awarding reliance and expectation damages)
- SilverWing at Sandpoint, LLC v. Bonner Cnty., 164 Idaho 786, 435 P.3d 1106 (2019) (lost‑profits awards may be denied as speculative for nascent businesses)
- Beco Const. Co. v. Harper Contracting, Inc., 130 Idaho 4, 936 P.2d 202 (Ct. App. 1997) (definition and scope of reliance damages)
- Merry Gentleman, LLC v. George & Leona Prods., Inc., 799 F.3d 827 (7th Cir. 2015) (distinguishes typical reliance cases from ones where breach affects only product quality for causation analysis)
- H2O Envtl., Inc. v. Farm Supply Distributors, Inc., 164 Idaho 295, 429 P.3d 183 (2018) (trial court must explain how Rule 54(e)(3) factors support the specific attorney‑fee award)
- Parsons v. Mut. of Enumclaw Ins. Co., 143 Idaho 743, 152 P.3d 614 (2007) (observations on contingency fees and their potential to exceed hourly rates)