415 P.3d 358
Idaho2018Background
- Kirk (builder) constructed a McCall home in 2004–2005 under an oral contract with Gentry-Boyd; Gentry-Boyd sold the home to Petrus in April 2012.
- The PSA required disclosure of water intrusion; Gentry-Boyd answered no, and a pre-sale inspection noted crawlspace seepage but characterized it as "normal."
- After purchase, Petrus discovered water-damaged, swollen French doors and later extensive rot/mold; Petrus spent >$60,000 on remediation.
- Petrus sued Kirk (and others) asserting breach of the implied warranty of habitability and conspiracy to defraud; Petrus later conceded the conspiracy claim at summary judgment.
- Kirk moved for summary judgment arguing the implied-warranty claim is governed by I.C. § 5-241(b) (contract accrual/statute of repose) and thus untimely; the district court granted summary judgment and awarded limited fees to Kirk under I.C. § 12-121 for the frivolous conspiracy claim.
- Petrus appealed the summary-judgment dismissal and denial of reconsideration; Kirk cross-appealed the apportionment of attorney fees. The Idaho Supreme Court affirmed summary judgment and the fee apportionment and denied appellate fees.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether breach of the implied warranty of habitability sounds in contract or tort for accrual/statute-of-repose purposes | Petrus: warranty arises in tort so § 5-241(a) six-year accrual applies (giving a later limitations period) | Kirk: warranty arises in contract so § 5-241(b) accrual at completion applies, making claim untimely | Court: warranty arises in contract; § 5-241(b) applies; Petrus's claim untimely; summary judgment affirmed |
| Whether the district court erred denying Petrus’s motion for reconsideration | Petrus: offered reasons to revisit accrual/legal standard | Kirk: no new facts/arguments were presented to warrant reconsideration | Court: denial proper—Petrus presented no new evidence or arguments |
| Whether the district court abused discretion in apportioning attorney fees under I.C. § 12-121 | Petrus: fee award should be limited; plaintiff defended good-faith issues of first impression | Kirk: sought full fees incurred defending against all claims, arguing greater share was attributable to frivolous conspiracy claim | Court: no abuse—district court properly apportioned fees to the frivolous conspiracy claim ($10,000) given overlapping work and novel legal question on warranty accrual |
| Whether Kirk is entitled to attorney fees on appeal under I.C. § 12-121 | Kirk: seeks appellate fees as prevailing party | Petrus: no fees requested; argued issues raised in good faith | Court: denied appellate fees—Kirk only prevailed in part and Petrus raised issues of first impression in good faith |
Key Cases Cited
- Bethlahmy v. Bechtel, 91 Idaho 55, 415 P.2d 698 (Idaho 1966) (recognized implied warranty of habitability for new-home buyers)
- Tusch Enterprises v. Coffin, 113 Idaho 37, 740 P.2d 1022 (Idaho 1987) (treated implied warranty of habitability as contract-based and extended it to subsequent purchasers for latent defects)
- Clark v. International Harvester Co., 99 Idaho 326, 581 P.2d 784 (Idaho 1978) (articulated economic loss rule barring negligence recovery for pure economic losses)
- Salmon Rivers Sportsman Camps, Inc. v. Cessna Aircraft Co., 97 Idaho 348, 544 P.2d 306 (Idaho 1975) (held privity required in implied-warranty contract actions for economic loss)
- Ramerth v. Hart, 133 Idaho 194, 983 P.2d 848 (Idaho 1999) (reaffirmed Salmon Rivers privity rule absent unfair prejudice)
- American West Enters., Inc. v. CNH, LLC, 155 Idaho 746, 316 P.3d 662 (Idaho 2013) (applied Salmon Rivers privity requirement to bar implied-warranty recovery for economic loss absent unfair prejudice)
- Employers Mut. Cas. Co. v. Donnelly, 154 Idaho 499, 300 P.3d 31 (Idaho 2013) (treated implied warranty of workmanship as contract-based; damages characterized as contractual)