385 P.3d 448
Idaho2016Background
- Silver Creek contracted to grow Sunrain proprietary seed potatoes (seed year 2012/2013); some seed (including variety 84180) had earlier generations grown on Ebe Farms, which tested positive for BRR in 2011.
- After Silver Creek grew and stored the crop, testing in 2013 revealed BRR in remaining 84180 and Rumba lots; other varieties tested negative and Silver Creek performed testing consistent with ICIA standards.
- Sunrain arranged shipments (one in March 2013) and later sold portions; Sunrain did not share proceeds with Silver Creek and did not pay for the uninfected varieties Silver Creek grew.
- Silver Creek sued for breach of contract and implied warranties; Sunrain counterclaimed for unpaid seed delivered to Silver Creek. The district court granted partial summary judgment to Silver Creek on acceptance/payment for certain lots.
- A jury awarded Silver Creek damages (~$760,739 total); the district court awarded prejudgment interest and attorney fees to Silver Creek; Sunrain appealed several evidentiary, instruction, and discretionary rulings.
- The Idaho Supreme Court affirmed in all respects and awarded Silver Creek costs and attorney fees on appeal under the contract.
Issues
| Issue | Plaintiff's Argument (Silver Creek) | Defendant's Argument (Sunrain) | Held |
|---|---|---|---|
| Whether district court erred denying motion to reconsider partial summary judgment on conformity/acceptance/impairment | Uninfected potatoes conformed to contract and were accepted; March infected lot did not impair whole contract | Uninfected lots were nonconforming because not recertifiable; Sunrain had rejected remaining seed; infected lot substantially impaired whole contract | Affirmed: uninfected lots were certifiable and conformed; Sunrain’s acts (sales, payment, seeking buyers) showed acceptance; contract not impaired so no genuine issue of material fact |
| Admissibility of back side of ICIA blue tag disclaimers | Blue tag disclaimers are not part of the written contract and lacked foundation | Blue tag language limited remedies and disclaimed warranties; should be admitted | Affirmed exclusion: no evidence parties incorporated the back-of-tag language; contract contains integration/no-modification clause |
| Admission of testimony about BRR on Ebe Farms (hearsay) | Testimony showed Sunrain’s notice and was admissible; even if error it was harmless given other evidence | Testimony was inadmissible hearsay (and not a party admission) | Affirmed: admission harmless because other unobjected evidence established BRR at Ebe Farms; no substantial right affected |
| Jury instructions & claim of omitted contract-modification instruction | Instructions reiterated valid summary-judgment conclusions, acceptance law, latent-defect/implied-warranty law | Some instructions relied on improperly admitted evidence; blue-tag modification should have been instructed | Affirmed: instructions supported by evidence and correct law; no modification instruction because blue-tag evidence excluded and contract bars oral modification |
| Prejudgment interest award | Amount was liquidated/ascertainable by calculation; Silver Creek entitled to interest | Amount not ascertainable until trial; prejudgment interest improper | Affirmed: award within discretion—liability calculable by formula; court properly denied Sunrain interest because Silver Creek’s recovery offset Sunrain’s directed verdict |
| Attorney fees and costs to Silver Creek | Prevailing party under contract; contract entitles prevailing party to actual fees and costs; also eligible under I.C. § 12-120(3) | Sunrain argued no prevailing party due to its directed verdict on counterclaim; Silver Creek limited to statutory fees/costs | Affirmed: Silver Creek was prevailing party (won main issues) and award of contractual fees and statutory fees was within discretion; appellate fees awarded to Silver Creek |
Key Cases Cited
- Fragnella v. Petrovich, 153 Idaho 266 (reconsideration reviewed using original standard)
- Frazier v. J.R. Simplot Co., 136 Idaho 100 (summary judgment standard)
- Navo v. Bingham Mem'l Hosp., 160 Idaho 363 (abuse of discretion standard for evidentiary rulings)
- Mackay v. Four Rivers Packing Co., 151 Idaho 388 (review of jury instructions)
- Clark v. Klein, 137 Idaho 154 (instruction supported by evidence and correct law standard)
- Duffin v. Idaho Crop Imp. Ass'n, 126 Idaho 1002 (treatment of ICIA blue tags as factual inquiry in different context)
- Millenkamp v. Davisco Foods Intern., Inc., 562 F.3d 971 (latent defect and implied warranty under Idaho law)
- Child v. Blaser, 111 Idaho 702 (prejudgment interest requires liquidated or ascertainable liability)
- Lickley v. Max Herbold, Inc., 133 Idaho 209 (determining prevailing party based on success on main issues)