Campbell v. Parkway Surgery Center, LLC
354 P.3d 1172
Idaho2015Background
- Campbell received a forgivable tuition loan ($6,800) from Bingham Memorial Hospital Foundation that would become payable if she left BMH before a service period ended.
- Parkway Surgery Center orally offered Campbell employment and promised to “take care of” her Foundation loan if she left BMH to work for Parkway.
- Campbell accepted, resigned from BMH, and began work at Parkway; Parkway did not pay the Foundation and later refused Campbell’s demand to do so.
- Campbell sued for breach of contract; the magistrate court awarded $6,800 plus interest and attorney fees to Campbell.
- The district court affirmed liability but reversed the damages award (finding no economic injury) and remanded to reform the judgment to grant specific performance; the Idaho Supreme Court reviewed the appeal.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Standing to sue on the oral promise | Campbell argued she was a party/third-party beneficiary and thus had standing to enforce Parkway’s promise | Parkway contended Campbell lacked a distinct economic injury and thus lacked standing, or was asserting third-party rights | Held: Campbell had standing as a promisee/third-party beneficiary; standing is satisfied by privity/third-party beneficiary status |
| Whether Campbell received the benefit of the bargain (breach/damages) | Campbell argued Parkway’s promise meant paying off the loan; refusal was breach and caused injury | Parkway claimed “take care of” did not necessarily mean pay, and that Campbell suffered no economic harm (she hadn’t paid the loan) | Held: Substantial evidence showed parties understood “take care of” to mean pay; Parkway breached and Campbell did not receive her bargain |
| Applicability of the statute of frauds | Campbell argued the oral promise falls under the statutory exception where promisor receives a direct benefit, so writing not required | Parkway argued the statute of frauds barred enforcement or converted Parkway into the primary obligor, cutting off Campbell’s remedy | Held: Idaho Code §9-506(3) exception applies because Parkway obtained the benefit (hiring Campbell); Campbell retained enforcement rights |
| Remedy — damages vs. specific performance; attorney fees on appeal | Campbell sought damages (loan amount) and fees; argued damages available without having paid the third-party creditor | Parkway argued damages were unavailable absent economic injury and that specific performance was appropriate; challenged fee awards | Held: Court reversed district court on damages — promisee may recover debt amount without first paying creditor (following Restatement and authority); specific performance unnecessary; attorney fees awarded to Campbell under Idaho Code §§12-120(1) and (3), and she is entitled to fees on appeal as prevailing party |
Key Cases Cited
- Pelayo v. Pelayo, 303 P.3d 214 (Idaho 2013) (standard for appellate review of magistrate record)
- Bailey v. Bailey, 284 P.3d 970 (Idaho 2012) (procedural guidance on affirming magistrate when district court did)
- Melaleuca, Inc. v. Foeller, 318 P.3d 910 (Idaho 2014) (discussion of damages requiring injury—distinguished)
- Bergkamp v. Martin, 759 P.2d 941 (Idaho Ct. App. 1988) (distinguished on issue of damages/standing)
- Wing v. Martin, 688 P.2d 1172 (Idaho 1984) (privity/third-party beneficiary principles for contract enforcement)
- Mead v. Johnson Group, Inc., 615 S.W.2d 685 (Tex. 1981) (promisor’s failure to pay third-party debt permits promisee to recover damages without first paying creditor)
- Meyer v. Parsons, 62 P. 216 (Cal. 1900) (measure of damages for promisor’s failure to pay promisee’s debt is amount of debt regardless of whether promisee paid it)
- Merriam v. Pine City Lumber Co., 23 Minn. 314 (Minn. 1877) (promisee may recover immediately for promisor’s failure to pay a debt owed to third party)