Empire Lumber Co. v. Thermal-Dynamic Towers, Inc.

P.2d 1119 COMPANY, EMPIRE LUMBER Washington corporation,

Plaintiff-Respondent, INC., TOWERS, THERMAL-DYNAMIC Thermal-Dynamic Cooling d/b/a Towers, Defendant-Appellant.

No. 23062. Idaho, Supreme Court of d’Alene, Term. Oct. 1997 Coeur

Nov. 1998. Rehearing Feb. Denied Thermal-Dynamic appellant

Towers, (TDT), lessee, Inc. space in a warehouse

and breach of a lease destroyed the fire resulting from a We affirm. warehouse.

I. AND

FACTS PROCEDURAL

BACKGROUND 1979, Empire purchased nine-acre In Falls, Idaho, upon parcel in Post property of buildings The which three were located. building large burned was a warehouse which walls, floor, and with a cinder block concrete building The a wooden roof. contained truss 32,000 square open un- approximately feet of 4,000 square space divided and feet floor space office The other two on mezzanine. buildings property to a were leased company Requipco. trucking/leasing called a diesel One those structures contained engine pump allegedly was supply purposes suppression water for fire for warehouse and the other Requipco. leased to Empire en- November whereby Em- tered a five month lease into pire to TDT 38% of the warehouse. leased fi- space TDT used the leased to construct berglass components cooling towers for which TDT used of manufac- business turing cooling equipment. TDT process constructing manufacturing a new Rathdrum, Idaho, facility away miles few until the needed the short term lease facility op- completed and TDT’s entire eration moved. could be (which original term of the lease by Empire) drafted ran November 22,1990. Paragraph through April 5 of Moffatt, Barrett, Fields, Thomas, Rock & that, “[ejxcept for reason- provided the lease Chartered, Boise, Associates, Lynch & tear and fire able wear and argued. appellant. E. Bakes for Robert casualty, at all times unavoidable Lessee will Brown, Lewiston, respon- Charles A. repair preserve premises good as as said dent. they may put are or hereafter be now to____” Paragraph provided of9 the lease SILAK, Justice that, will insure “Lessee said $_and protection day fur- appeal judgment fire on this This is an from a entered insured; naming respondent verdict in nish a favor binder Lessor lessor, Empire Company (Empire), shall Lessor Lumber insurance show insured, additionally pay spread and Lessee shall all the floor. across There was also premiums.” testimony that TDT had left the valve to the sprinkler system posi- overhead in the “off’ parties, The record indicates that the tion. negotiating agreed would required provide not be fire insurance on May filed suit building, the leased and that alleging express implied breach of (cid:127) provide the insurance. The letters contract, Code, “N/A” breach of the Fire Uniform typed space were into the blank negli- and attractive nuisance. A claim for indicating although of the lease nor- gence year was added a later. thereaf- mally provide the lessee was to fire insurance summary judgment ter moved for all as to amount, in a certain dollar it was upon paragraph claims based 5 of the lease. 1989, applicable. not Empire November except The district court denied the motion purchased fire insurance on the warehouse as to the attractive nuisance claim. The year for a period. one At the end of the rely court that TDT ruled could not 1990, April initial term of the in lease “damage by contract exclusion for fire” if it parties continued the on a month-to- negligent. a After two and a half week facility month basis due to TDT’s new trial, a in returned a verdict favor of being completed. Although parties alleg- $550,593.70, Empire finding in the amount of edly again never discussed the issue of insur- negligence both breach of contract and on ance, 1990, Empire in November extended part post-trial of TDT. TDT’s motions 1991, through February the fire insurance were denied. The district court entered a 22, again through April and 1991. At the judgment final amended in for April gave 30-day end of writ- $550,593.70, together amount of with attor- ten notice to that it would be vacat- ney fees on the contract claim in amount ing May on or before $114,416.00, $9,460.95 costs, and in for Empire’s request of its insurer to extend the $674,470.65. judgment appeals total fire insurance one more month was either summary from the denial of its motion for prohibitive. denied was cost and/or judgment, post-trial from the denial of its JNOV, remittitur, motions for new trial and Sunday, May juveniles, On two judgment judg- and from the and amended ages 10 and entered the warehouse by ment entered the district court. through engaged an unlocked in door and game they placed wadded-up in which news- sack,

paper plastic paper inside set the on II. fire, and then tossed the sack back and forth. ON APPEAL ISSUES point, bag At one went over the head of youths, landing one on some flamma- A. in Whether district court erred started, pallets. spread ble A fire de- ruling 5 of the lease stroyed pallets the warehouse. The had did not relieve TDT of by employees been stored there of TDT to by negligent its actions. fires caused open doorway. an block The overhead door in B. Whether the district court erred doorway open which would have secured the juveniles’ refusing place the days had been knocked off its rollers several special Requipco’s names on the ver- operated by earlier a forklift a TDT em- refusing dict form and in to instruct ployee yet repaired. and had not been Testi- superseding on cause. mony indicated that there was also a hazard- in C. Whether the district court erred highly ous and flammable material refusing to instruct on warehouse at the time of the fire called “Phil- estoppel. defenses of waiver and ly “Philly Apparently, this had Clad.” Clad” in court erred been left the warehouse five D. Whether district lease, cans, gallon numbering approximately redacting paragraph 9 of the twen- ty. giving Jury Nos. 12 punctured of the cans had been on Instruction One (cid:127) “Philly day the fire and the and 13. started Clad” them. relying on party its the district court abused

E. Whether Anderson, P.2d at 712. use of restricting the discretion liabil- purporting to exclude testimony in ad- clauses Contract East’s Clarence clearly and speak Wayne must ity opinion evidence of mitting the the de- conduct of particular directly to the Syth David Elaue. Id. at issue. the harm caused fendant which erred F. Whether attorney fees to awarding costs Poling, 248 Sears, and Co. Roebuck Empire. the Iowa N.W.2d Iowa is- following additional Empire raises the a clause similar held that Supreme Court appeal: sue on clearly did not present case the one in the to attor- Empire is entitled Whether G. to relieve parties’ intention express the para- appeal pursuant ney fees liability for fire tenant I.A.R. I.C. graph 20 of the pro- exculpatory clause negligence. The own 12-120(3) § 12-121. § and I.C. ... agrees that “Tenant vided: premis- this lease the demised

termination III. substantially good condition es will be fire, tornado, earthquake received, loss ANALYSIS ordinary casualty and any unavoidable 464. The excepted.” Id. at tear wear and Correctly Ruled The District Court A. Court, strictly construing in Supreme Iowa Paragraph Did The Lease That 5 Of Sears, held Liability exculpatory clause For Not Relieve Of clearly express the did not that the lease By Negligent Ac- Fires Its Caused from parties to relieve Sears of the intention tions. negligence. by its own liability fire caused for its lease paragraph that 5 of TDT claims truly parties that The court noted liability all TDT from with relieves such a the lessee from relieve intended to pertinent The damage caused fire. for apt more they have included liability, “[EJxcept provided: portion paragraph 5 Id. at 466. express that intent. language to damage by wear and tear and for reasonable all casualty, will at or unavoidable Lessee fire Amusement Appalachian v. In Winkler good re- preserve premises as times said (1953), Co., 589, 185 own- 79 S.E.2d 238 N.C. put they may be pair now are or hereafter as for Appalachian the lessee er sued Winkler to____” exculpatory clause such an Whether negligence the lessee’s damages a result of as liability a is for fire which relieves tenant popcorn machine which operation of a in the negligence is an issue of of its own the result damage. caused extensive caught fire and that this impression in Idaho. We hold first following lan- argued that The lessee regarding who particular exculpatory clause liability: it from in the lease released guage not excuse of loss for fire does bears the risk will, they at the agree that lessees “[T]he negligent actions liability if its TDT from lease, up return deliver expiration this caused the fire. the lessors premises to possession of the order, as at repair and condition good as parties that has held This Court excepted, ordinary and tear present, wear contract, lease, limit may agree to as a such excepted.” The ... fire contractually liability waive for that Supreme held Court remedies, subject ex North Carolina to certain rights and lessee of not relieve the language did present case. such applicable in the ceptions not negligence. The Co., liability for its own Valley 107 Idaho Lee v. Sun intended such a parties if the (1984); that 361, & stated Anderson 363 Naf contract, provided Inc., they have so Newcomb, should 100 Idaho ziger v. G.T. 190-91; also (1979). However, see 79 S.E.2d this exact terms. Bennett, Industries, Inc. Mountain with Stone that courts look has also noted Court (1965) 591, 593 145 S.E.2d liability Ga.App. limit attempts to on such disfavor (“Fire casualty excepted” clause or other provisions strictly these construe and will provision agreed precautions to TDT failed take extra in se- within lease lessee premises curing from future intrusions. good return as condition and received, repair as when first referred to fire cases, argues that two Idaho Safeco casualty deemed to be and not one caused Weisgerber, Ins. Cos. v. negligence). lessee’s (1989), Bldg. P.2d 271 and Bannock Co. v. Sahlberg, 126 Idaho 887 P.2d 1052 case, present In the a review of the controlling and that under these are appears lease as a whole to be consistent cases, negli- TDT not liable to ruling with the district court’s gently find these cases to caused fires. We negligently liable for caused fires. The lease therefore, factually distinguishable, indicate, language clearly does not as re present inapplicable to the case. quired by this Court’s decision Anderson Weisgerber, although Ins. Cos. v. Safeco Nafziger, parties & that the intended to re “damage by exculpatory fire” clause similar negligent for its agreement be- was included rental language paragraph excepting acts. tenant, pre- tween the landlord and the “damage by casualty” fire or unavoidable meaning cise of such clause and whether relieving TDT from reason its obli negli- tenant was liable to the landlord for gation to return the in a like condi gently in that caused fires were not issues tion, fire, to accidental refers events such as they are in the case. Weis- earthquakes, floods and other casualties. such gerber is an insurance case and involved interpret language to We mean a co-in- issues as whether the tenant was out of the accidents occurrences lessee’s sured of the landlord under the landlord’s liability, exempt control will the lessee from respect policy with to fire dam- homeowner’s negligently not fires the lessee. age, whether the landlord’s insurer had a Further, entitled right subrogation against negligent Premises,” TDT provides “Care of was 428-29, at tenant. 115 Idaho at 767 P.2d premises required to take care of the and 271-72. waste, damage injury was not to allow Bldg. Sahlberg, Bannock Co. v. is also property. paragraph is the When 8 read factually distinguishable present from the conjunction “except by with the fire” lan it, too, Further, is an insurance case. case guage clear that the in Bannock was an oral lease so no liability did not intend to relieve TDT from “damage by exculpatory was in- fire” clause caused, negligently only for fires TDT Rather, question before volved at all. parties accidental fires. If the did from the tenants were the trial court was whether agree they to such an exclusion should landlord’s fire implied co-insureds under the Thus, expressly so stated in the lease. we building, property insurance for the and correctly inter hold that the district court thereby prohibiting subrogation by the les- relieving preted expressly the contract as not against the lessees under Weis- sor’s insurer negli liability TDT for fires 546-47, at gerber. 887 P.2d gence. held, vacating 1053-54. This Court grant summary judgment favor of neg Additionally, jury’s finding of lessees, as to question that a of fact existed destroying ligence part of TDT in party agreed to bear the risk of loss supported in record: TDT warehouse is damage. P.2d at 1056. for fire Id. at 887 securing building, and destroyed the door Thus, presented in doorway, find the issues pallets in the we then stacked wooden Bldg. inap- are Weisgerber Bannock Co. securing it in reasonable instead of some i.e., here, combustible, fashion; presented brought highly posite TDT to the issue exculpatory “damage fire” which whether hazardous material agreement be- clause included in the lease punctured and left to ooze across had been floor; TDT released TDT that TDT tween and there was evidence liability Empire for fire attributed juveniles had entered the was aware that day negligence. of the fire and that to TDT’s warehouse before (1986). find these do not We 726 P.2d Did Not Err The District Court B. if TDT had agree that applicable. We Refusing The cases To Place Juveniles’ theory, TDT Spe- under a tort Requipco’s The held liable Names On been And affir- Refusing tort-based And In be entitled Form cial Verdict however, TDT Jury Supersed- In this The On mative defenses. To Instruct theory, even under a contract ing held liable Cause. was determining contrac- though component be found liable argues that it cannot determining whether liability tual involved causing fire without con- negligently therefore, TDT was negligent, and TDT was affirmative of TDT’s tort-based sideration affirmative present contract-based entitled to disagree. defenses. We defenses, hold defenses. We not tort-based above, under the terms of As noted refusing not err the trial court did contract, exempted from TDT was not juveniles’ Requipeo’s names include the by TDT. liability negligently caused for fires form. special verdict determining TDT was covered whether jury’s Additionally, argues contract, exculpatory clause under by the is undermined finding negligence necessary to determine it was jury on to instruct the trial court’s failure Although negligent. in fact been had argues intervening cause. superseding, necessary, TDT’s finding of was on su- instructed that if the had been under liability analyzed this Court cause, intervening it could have perseding, theory. TDT’s contract Since fire, juveniles caused the concluded that the principles, we hold that found under contract therefore, TDT, not have TDT would tort are un affirmative defenses based in negligent consequently not found been v. to TDT. See Richardson Assoc. available terms of the con- held liable under the been Lincoln-Devore, Inc., tract. (Wyo.1991) (holding that defenses tort-based when the cause of action are not available prove TDT agree that in order to We subjected although was based contract liable, TDT’s had to find that Drake challenges); Corp. tort Centric causally related to the or omissions were acts (Wyo. Building Corp., 726 P.2d Leasing, Inc. v. fire. Mico Mobile Sales 1986) (“A arising claim of defense out of tort Corp., Skyline concepts, indemnity, is not available such jury did find that TDT’s acts plaintiff premised the claim of the is where were a substantial factor or omissions contract.”). jury If that upon the had found Yet, juve the causing fire. order for the negligent, TDT TDT would not have was not in superseding, a niles’ actions to constitute contractually liable as TDT would have been cause, high tervening their actions had to be liability con exculpated been from under the extraordinary to be foreseeable ly so as not defense, An tract. affirmative tort-based 412, Although by TDT. Id. at 546 P.2d however, to contractual lia is not defense usually ques foreseeability is question bility. fact, only lead to one tion of if the facts can conclusion, may rule this Court upon proposi- reasonable TDT relies two cases Id. We upon as a matter of law. trial court to the issue tion that it was error record, it upon reviewing the is place juveniles’ names on believe that refused to have foreseen the jury clear that TDT should special form so that verdict above, juveniles’ As stated TDT had juveniles’ actions. if the conduct could determine building fire, destroyed securing the place Re- the door and to refuse to caused the highly material to ooze special for its allowed a combustible quipco verdict form on sys- though it was aware proper sprinkler across the floor even failure to maintain a TDT, however, juveniles the ware that had entered by are some tem. The cases cited Despite day fire. determining house on the before the cases Court any take extra Hughes knowledge, TDT failed to theories. v. State under tort (1996); building. It far Idaho, 558, precautions is to secure 129 Idaho 929 P.2d Co., juveniles entered extraordinary that the Uniroyal Ill Idaho Vannoy v. Tire change det- 4.The was to the defendant’s day the fire and that material caused the. combustible riment. their actions fire, destroying building. to catch in its answer to the com- TDT states that of waiver and plaint it raised the defenses only occurs when

Reversible error claims, Empire’s upon an estoppel to based jury misleads the instruction at issue Empire would insure the agreement oral that party. Spence v. prejudices or by argues that Howell, premises from loss fire. 890 P.2d 126 Idaho property eighteen (1995). Empire did insure the that we hold as a matter law Since months, lapse let the insurance intervening then superseding, there was not a that, therefore, to TDT and cause, by lack of without notice was not misled right Empire has waived its assert prejudiced. nor was TDT the instruction TDT, against and is Therefore, breach of contract claims not err the district court did making estopped from such claims superseding, failing to instruct give ei- TDT. The district court declined to intervening cause. requested jury instructions on of TDT’s ther Err In The District Did Not C. Court these theories. Jury Refusing To Instruct On “equitable estoppel,” In order to establish Estop- And The Defenses Of Waiver (1) that have had to have shown: pel. representation to Empire made a false argues that next fact with actual or or concealed a material Jury giving in not Instruction Nos. erred (2) truth; knowledge of the that constructive relating contractual defens- and 27 to TDT’s know or could not have discov- TDT did not estoppel. These instruc- es of waiver and (3) truth; representa- that the false ered the provide as follows: tions by Empire was made tion or concealment REQUESTED JURY DEFENDANT’S upon relied the intent with NO. 26 INSTRUCTION (4) TDT; acted that TDT relied and Dynamic Tow- Thermal or concealment to its representation The defendant ers,. plaintiff Agee, Em- prejudice. Inc. not hable to the Knudsen v. (1996). Company for the claimed

pire Lumber order you “waiver,” of contract find TDT would have had to breach establish voluntarily in- plaintiff has waived the breach. have shown right tentionally relinquished a known or ad- voluntary relinquishment of Waiver is & Loan vantage. Frontier Federal Sav. right may be evidenced a known 808, 812, Douglass, 123 Idaho Ass’n v. conduct, words, by acquiescence. REQUESTED JURY DEFENDANT’S 27NO. INSTRUCTION the district court cor hold that We Dynamic Tow- Thermal The defendant requested in TDT’s rectly give refused ers, plaintiff, is not liable to the theories. Pursuant structions on these Company, claimed breach Lumber lease, party was the neither express terms of defense of if the affirmative of contract Further, required procure to insurance. This defense estoppel is established. in procure elected to though even following: you if find all of the established eighteen months for the first surance words or conduct plaintiff 1. his that there was Kast admitted Clarence duty when he had or his silence the time regarding insurance at no discussion to the defendant speak represented importantly, extended. More the lease was waiving the defendant’s that he was ruled, the failure to court as the district contract; of breach simply cannot be con procure insurance reasonably there- relied 2. The defendant estoppel. A lessee is as a waiver strued on; purchase rely the lessor to on not entitled from is free the lessee insurance so materially changed his The defendant Thus, a fire. negligently causes liability it position; and

303 irrelevant prejudicial and any, highly support were do not facts of this case of whether respect to the issue with estoppel and theories of waiver and defense liability for fires exempt from ruling. was in court was correct its The court thus admitted negligence. judgment opinion affirms the Because this evidence, entire redacted the into contractual theories based below paragraph 9. TDT’s issues we need not address Empire’s claims concerning tort appeal on relevancy deter This Court reviews ie., theories, tort-based defense and TDT’s a de novo court under minations of the trial error; Jury No. 20 was Instruction whether Tools, Inc. v. Mac of review. standard Grif failing whether the district court erred 1126, 1132 fin, 126 Idaho juveniles’ responsibili- the issue of the submit County (1994); City/Ada Boise Lubcke v. ty jury, include their names on and to 466, Auth., P.2d 124 Idaho 860 Hous. Verdict; district Special whether ease, failing of erred in to submit the issue paragraph 9 to redact district court’s decision jury, Requipco’s responsibility to the and to grounds that it was irrelevant whether Verdict; Special Requipco on the include procure fire required to TDT or dis- the district court erred whether insurance, in error. was not the act missing Empire’s tort claims because and un a contract is clear When juveniles intervening supersed- was an interpretation of that con ambiguous, the Further, these ing cause as a matter of law. by the question of law to be decided tract is a only in argued appeal defenses were v. Home City Idaho Falls trial court. liability. context of tort Co., Indem. (1995). Here, primary contractual The District Did Not Err In D. Court paragraph 5 of was whether determination Redacting Paragraph 9 Of The liability for exempted TDT from the lease Lease, Giving Jury Nor In Instruc- destroyed causing the fire that negligently tion Nos. 12 And 13. court, finding The district the warehouse. TDT claims that the district court erred unambiguous, clear and that the lease was redacting paragraph 9 of the lease when paragraph 5 did not release ruled that trial. lease was admitted as evidence at have liability negligence. for its We “Use-Insurance,” Paragraph pro- entitled ruling in this court’s affirmed district vided, pertinent part: “Lessee will insure Therefore, party of which regard. the issue $_and protection said for fire obligated carry fire insurance on the day naming Lessor on this furnish binder irrelevant as it would warehouse was ...” The executed lease had the as insured interpret the lease possibly led the typed space letters into the blank “N/A” Thus, we differently court. from the district signifying parties’ agreement that TDT did not err the district court hold required to obtain the fire would not redacting prior to the admission paragraph only leasing ap- insurance since of the lease into evidence. proximately one-third of the warehouse for argues that the district court TDT next portion months. The latter six giving Jury Instructions Nos. erred in liability insurance provided: “[A]nd provided: 13. Instruction No. insured, additionally Lessor as shall show liable, under either breach of pay premiums.” TDT A tenant is shall all Lessee theory, theory or initially requested that the insurance contract from the destruction injury to its landlord paragraph 9 redacted from the clause of prem- demised by fire of a admitted into evidence. version of the lease by proximately the tenant’s requested ises caused Empire argued it and then though the lease contains negligence, as even fire insurance clause be redacted that the it provision that at the end of the term a The district court concluded that both well. by “subject loss yield possession to and which shall the matters of insurance insurance, if fire.” party required to obtain fire was

304 9, provided: party,

Instruction No. 13 “Neither No. 13 is an incorrect Instruction not contract, fire, under terms of the was re- statement. At the time of neither quired carry party required to fire insurance.” the lease was terms of carry Thus, that to fire insurance. we hold The standard of review when re although unnecessary, was it the instruction viewing jury appeal requires instructions was not error for court reversible jury this Court to whether the determine given jury. to it to the properly adequately instructed. There fore, sum, reviewing In the Court when all the instruc- must review instructions whole, including instructions, given tions case as a and ascertain this whether when 13, whole, fairly adequately appears a 12 and that considered as Instruction Nos. it they fairly adequately case and set forth the is- issues of the state the Ranches, applicable applicable Gigray law. sues and There- Brooks v. state law. Inc., fore, 744, giving did 128 Idaho 910 P.2d 748 district court not err Inc., (1996); Tools, 196, these instructions. Mac 126 Idaho at P.2d at 1129. E. Abuse The District Court Did Not 12, respect With to Instruction No. Restricting The Its Discretion argues paragraph that misconstrues 5 of Testimony, Use Clarence East’s Of by instructing as lease a matter Admitting Opinion Tes- Nor of law that tenant is liable either under Wayne Syth timony David Of And breach of if it contract theories Elaue. negligently though, the fire even ac- The standard of review on the instruction, cording duty to the the tenant’s admissibility regarding issue of certain yield possession at the end of the term testimony witness is whether was a there “subject to loss fire.” TDT also clear and manifest abuse discretion claims that this construction was error be- County, trial court. Fowler v. Kootenai impermissibly cause it mixed two distinct 743, 1188.(1996); 1185, 918 P.2d legal theories. Tools, Inc., Mac 126 Idaho 879 P.2d at We see no error Instruction No. at 1132. court has The trial broad discretion nothing 12. This instruction does more than its the admission of evidence at trial and explain that the terms of the decision be re to admit such evidence will 5) damages (paragraph only versed there a clear when has been warehouse result of an accidental were the Inc., Tools, abuse of discretion. that Mac fire, required then TDT not be would 1132. This Idaho at property good return the in as condition applies equally standard to the admis well possession, if the when it took testimony. Rubber expert sion of State v. negligence, resulted TDT’s then maid, Inc., duty. not be Fur relieved from ther, we do this not find instruction impermissibly contract and tort recov mixed 1. Clarence East. usually preferable ery theories. it is While argues that the district court erred separate pro such theories when distinct testi- restricting the use of Clarence East’s jury, viding legal instructions to Instruction (East) mony. and his son East Clarence No. an incorrect statement of the inception were the of TDT from its owners Thus, we that the law. hold district TDT’s until 1991. East testified that while giving did not err in Instruction No. built, being TDT was plant Rathdrum com- argues space that Instruction No. 13 need of in which manufacture cooling East saw a redacting para ponents after towers. was erroneous because phone number on the graph sign then “for lease” with the district court warehouse, thereafter paragraph gate Empire’s told the what the redacted manager, Empire’s with to be came into contact meant. While we find instruction (Shustoff). East testified superfluous after the redaction Alex Shustoff Wayne Syth. leasing during their conversation about space operation, told East for TDT’s Shustoff (Syth), Wayne Syth Fire Chief of system building sprinkler in the was District, Protection testi Hayden Lake Fire inoperable. led to a discussion of fire This Empire. expert an witness for fied at trial as insurance. East stated he told Shustoff jury certain Syth to read to the was allowed system sprinkler operate, that if the did not (U.F.C.) Fire Code sections of the Uniform Empire carry have to the fire insur- would opinion concluding expert render an and then East, According prior to the execu- in ance. to violated the U.F.C. various that TDT had storage Philly lease, carry ways, including in its Clad. Empire agree to tion of the did TDT the admission of this testi however, claims that admitted, the fire insurance. East mony error. was that when the lease was extended there was regarding no discussion with Shustoff who designed provide “mini- The U.F.C. is to Indeed, carry the insurance. East protection of life and mum standards for the only admitted the conversation he had with property ... of Idaho.” from fire state regarding the insurance was at the Fleming, § Shustoff 41-253. In Stevens v. I.C. signed time the in November 1989. 777 P.2d 1196 this Court applicable was not held that while U.F.C. The district court limited the use of East’s question pre- to that case as the in testimony to his conversation with Shustoff enactment, prove dated its U.F.C. could and whether East’s conduct in not maintain- setting forth minimum standards: useful ing sprinkler system being and not con- specific statutory provi- applicable, When operation cerned about its was reasonable or may Fire sions such as the Uniform Code breach of the lease. claims that East delineating minimum prove useful stan- testify should have been allowed to as to an binding every upon dards which are owner agreement Empire oral between TDT and onpoint premises. of a rented Such code regarding procure who would the fire insur- ready provisions provide a measure of the ance. base standard of care and failure to meet may negligence if per such standard se above, As we held because the dis designed the statutes or ordinances were correctly interpreted trict court the lease prevent type harm oc- which 5), (specifically paragraph that TDT to mean curred. exempt negligently was not Stevens, 116 Idaho at 777 P.2d at 1199. fires, any evidence on the issue During the instruction conference party required by of the terms the district court concluded by any alleged agreement, or oral licensing provision that the U.F.C. did insurance, carry fire is irrelevant. Whether apply Philly to the amount of Clad which may required TDT or have been premises, on and de- had stored bearing obtain fire insurance has no give Empire’s proposed clined to whether liable to for the fire Thus, although per se instruction. the court Furthermore, damage. even this testimo Syth may ultimately decided that relevant, ny properly had been it was still respect any should not have testified with excluded the district court from consider pres- correlation between the U.F.C. and the ation since East admitted that Clad, Philly in- ence of was never only regarding discussion fire insurance structed on this issue. occurred at the time the lease was entered however, testimony permissible, into, and that there was no discussion about general agreed for a more reason. it when the lease was extended. 8 of the lease that its use rules, comply reg- with the Thus, warehouse would hold that no clear and we there was ulations and laws of the state of Idaho: manifest abuse of discretion limiting testimony of Clarence The Lessor shall not be called any improvement repair of East. make upon premises allowing jury damages kind said and said ation to determine kept presented shall times in at all be and used based these facts others at and Further, with the trial. expert accordance laws of state of there was other testi- directions, mony regarding building, Idaho in with all and accordance the value of officer, Verdict, regulations Special rules health and of the and in the did not marshal, Instead, building inspector accept fire or other Klaue’s value determination. Falls, proper city officer of of Post Id. found the warehouse to worth $400,000. at the expense sole cost and of said Lessee. words, agreed other it would Empire’s Klaue also testified as to lost Empire’s maintain in property accordance Klaue it income. stated that would take 28

with the minimum set forth standards building, months to rebuild the and that Em- Thus, pursuant Fleming, U.F.C. to v. Stevens pire suffered lost income the amount of Syth properly the district court allowed to $6,000 months, x $168,000. per month testify provided as the minimum to standards $140,000 The Empire awarded for lost by the U.F.C. court therefore did not it was income. claims that error allowing abuse discretion this testimo- testify profits Klaue as to to lost based on ny. gross testifying rents without first to the expenses property, related to the such as David Klaue. taxes, insurance, heat, repairs, roof etc. Thus, (Klaue), argues testimony David Klaue President of that the should Empire profits, net and and son of the founder and of reflected lost because CEO not, damage damages company, Empire’s speculative testified did were valuations resulting building from the loss of the uncertain. based theory his of investment value valua Empire’s profit We hold that lost the property tion. Klaue first testified that speculative damages evidence not since produced an rental income of annualized pursuant Empire manner which $72,000. at a capitali He also testified that warehouse, Empire leased the not re 10%, $72,000yearly zation of income rate sponsible repairs, for such items as utilities yield gross would valuation ware Therefore, other than the insurance. $720,000. house of Klaue then estimated expense of taxes because land, remained, value of to be still for, paid amount earned rent on as $196,000, $200,000. and rounded this to Sub the warehouse was net amount. tracting value the land his investment Thus, we hold that the district court did ($720,000 $200,000), minus ar total Klaue admitting not abuse its discretion the valu- at rived valuation warehouse profit testimony of $520,000. ation and lost Klaue. The that Klaue’s meth of claims Klaue an intelligent court found to be od of valuation was error and should not have sophisticated regard witness with to business been admitted. value, quite capable arriving We that the district court did not err hold willing buyer the fair market value of what testimony. admitting Klaue’s This Court willing would pay and what a seller prop- rule has followed the that the owner accept property. qualified erty testify to its value. Poca- Color, Inc., Coatings, Inc. v. tello Auto Akzo F. Is Entitled To And Costs (1995); 896 P.2d Idaho Attorney Ap- Below And Fees On Village Bancroft, 92 see also Weaver peal. The district court awarded Klaue testified $9,460.95 willing right pursu- he in costs a matter amount which would be to sell 54(d)(1)(C). The also testimony merely ant to I.R.C.P. building. His did $114,416.00 attorney Em- his the amount of awarded fees state conclusions as to sustained, upon para- monetary damage pire prevailing party he as the based also set 54(e)(1) graph reasoning behind valu- 20 of the lease and I.R.C.P. forth the facts and his district court did hold that the Paragraph of the We further § 12-121. and I.C. redacting paragraph 9 of the err in provided: lease 12 and giving Jury Instruction Nos. nor in any part of of default on the If reason party, any, if the issue of which since necessary the Lessee becomes wholly is procure fire insurance required to attorney, in employ or case an Lessor disposition of this case. irrelevant to the any bring to recover rent Lessor shall suit hereunder, any provi- for breach of due or showing of that there was no We also hold Lease, possession or to recover sion of this manifest abuse of discretion a clear and premises, if shall the leased of Lessee of of the use court in its restriction any against Les- bring any action for relief in admission of testimony nor of East’s otherwise, arising sor, declaratory out Syth and Elaue. opinion evidence of Lease, prevail in of and Lessor shall this court’s Finally, affirm the district we action, any in then and of such events such below, attorney fees award of costs and pay at- Lessor reasonable Lessee shall attorney appeal pur- fees on award costs and expenses torney’s fee and all costs and I.A.R. paragraph 20 of the lease and suant to in expended or incurred the Lessor 41(d). with such default or action. connection Accordingly, judgment of the district argues that the award of costs affirmed. court is attorney Empire be reversed fees should “damage by the exclusion for fire” since Justice TROUT Justice Chief paragraph precludes con- 5 of WALTERS, CONCUR. action TDT. tract Because we affirm the district court JOHNSON, AND Justice DISSENTING case and on the contractual issues IN THE RESULT CONCURRING paragraph that 5 of the lease does not hold 111(A) part of respectfully I dissent from exempt negli fires it (The opinion District Court Cor- Court’s caused, gently Empire entitled to the is rectly Paragraph That 5 Of The Lease Ruled attorney pursuant to award of costs and fees Liability Fires Relieve TDT Of For Did Not Spokane Farm Bank lease. Credit of Actions). By Negligent Its Caused Wissel, 568-69, P.2d (“[W]here (1992) portion part a valid con 514-15 there is I in the result of the of concur (The III(B) parties opinion tract between the which contains a District of the Court’s attorney provision Refusing for an award of fees and Err In To Place The Court Did Not costs, provision Requipco’s the terms of that contractual Names On the Juveniles’ and right attorney Refusing Special establish a to an award of fees And In To Verdict Form costs.”). Cause) Thus, Jury Superseding the district court’s award Instruct On attorney refusing place based costs and fees that with the names deals special upon paragraph juveniles Requipco 20 of the lease is affirmed. form. verdict attorney award costs and fees to We also upon paragraph appeal based respectfully portion from the I dissent and I.A.R. 41. of the lease III(B) opinion part of the Court’s that deals refusing to instruct the on inter- with

IY. vening superseding cause. CONCLUSION OF PARAGRAPH RELIEVED correctly We hold district FIRE. LIABILITY FOR THE “damage by except fire” ruled view, analysis part my In contained exclusion in 5 of the lease did not 111(A) incorrectly opinion fails liability Empire TDT from for fires of the Court’s relieve actions, pertinent provisions all the negligent TDT’s and that to consider caused erroneously authorities properly give jury in- lease and relies on the court refused to jurisdictions, when decisions of estoppel. on waiver and from other structions provide damage, this Court including correct focus for who should bear analysis. risk to be determined by negligent acts the tenant. Weisgerber, Ins. Cos. v. 115 Ida- Safeco (emphasis Id. at at 1056 ho 767 P.2d 271 add- case which ed). view, my should alleged causing tenant was the Court focus on negligent to be paragraphs damaged deciding a fire that both 5 and 9 premises, leased party the risk prem- bore of loss the lease provision Court considered lease similar to fire, damaged by ises were even a fire caused paragraph lease 5 of the between by negligence. TDT, TDT’s and and concluded: agrees a tenant to the When maintain Paragraph provides that TDT is not property good in a state and with condition responsible for wear “reasonable and tear “damage by excepted,” fire a landlord damage by and caused fire or unavoidable reasonably expected should be the to bear casualty.” by If “damage caused fire” did by burdens damage associated with fire fire negligence, not include caused TDT’s eventuality. and insure casualty” the term “unavoidable would be “other,” prefaced making the word 431, Id. 767 P.2d at 274. “damage exclusion read fire or paragraph In addition to 5 of the lease reads, casualty.” other unavoidable As it TDT, between and the Court should does paragraph 5 not limit the exclusion of 9, also have paragraph considered which responsibility TDT’s unavoidable to fires. states: concerning The decisions of this Court USE-INSURANCE agreements limiting liability limitations on carry 9. The Lessee shall conduct negligence do re for not dictate different premises, continuously during on in said Nafziger In Anderson v. G.T. New sult. & every each and day business of the term Inc., comb, 100 Idaho 595 P.2d 709 hereof, premis- for the business which said (1979),the Court said: leased, premis- es are and shall not use the general It is a rule of this state and the illegal purposes. agrees es for The Lessee jurisdictions majority of that a American carried, goods no stock-of will party may contract to absolve himself from anything premises done in or about the duties liabilities under a con- certain obtaining prevent which will Lessee from subject tract to certain limitations. How- required. insurance as herein Lessee will ever, it is nevertheless well established premises protection insure for said fire that courts will look with disfavor on such day and on this furnish a binder $NA liability attempts to avoid construe insured; naming liability Lessor as strictly against person provisions such additionally insurance Lessor shall show relying them, per- especially when that insured, premi- pay and Lessee shall all preparer son is the of the document. ums. (citations omitted). 178, 595 Id. at P.2d at In v. Bldg. Sahlberg, Bannock Co. Anderson, seeking to ad- party take Idaho 887 P.2d the Court limiting vantage provision liability had said: provision. In the prepared exculpatory basis, case-by-case hold that on a [W]e TDT, prepared the present Empire, not trier of focus on of the fact must the terms present case The circumstances lease. agreement to what lease itself determine do not call the Court rewrite expectations parties the reasonable of the limiting provision TDT’s that was were as bear of loss to who should the risk by Empire. prepared premises. fire leased ease, Also, opinion, respect contrary para- With we hold to the Court’s concerning judgment summary graph must be vacated 8 of care reading require does not a different premises case remanded Belknap, party issue of 5. In Miller determine the (1954),the agreed the risk of for fire 266 P.2d 662 Court said: to bear loss po- were if others who negligence, tive even 'a like It is axiomatic that tentially negligent had been included contract, give is to be construed other form, TDT would have been special verdict parties. In so to the intention of effect damages. Beitzel v. Empire for its liable to doing, generally hold that cove- the courts Orton, repair and cov- for maintenance nants good condition are enants to surrender and, together, con- so to be construed THE OF JUVE-

strued, good THE FORESEEABILITY the covenant to surrender QUESTION condition, A to reasonable ACTIONS IS wear and tear due NILES’ THAT HAVE FACT SHOULD excepted. OF use THE TO JURY. BEEN SUBMITTED general force and effect of “The to make all re- covenant the lessee view, foreseeability question of my during pairs to the leased a matter of opinion treats as that the Court’s limit- the lease is restricted and term of have question of fact that should law is a by containing an ed a surrender clause jury part of instruc- to the been submitted by exception damage as to fire and ordi- concerning that the ac- TDT’s defense tions nary provisions wear and tear. The two juveniles intervening were an tions of the together imposing will be construed superseding cause. I am unable to upon obligation an to make all the lessee agree that the evidence in this ease leads may necessary repairs as such only one reasonable conclusion—that preservation premises in the con- of the juveniles that the would should have foreseen he them from dition which received pres- The evidence in this case set the fire. lessor, by except repairs required his opposite circumstance from ents the tear, by ordinary reason of wear and Leasing, Inc. & posed in Mico Mobile Sales Ordinary and tear reason of fire. wear Corp., 97 Idaho 546 P.2d 54 Skyline v. deterioration from the include usual por- support cited in of this the case premises by lapse of use of the Mobile, opinion. In Mico tion of the Court’s 45 A.L.R. Annotation 70. time.” only ruling that the reasonable instead of 52-53, Id. at 266 P.2d at 665-66. question the act conclusion was foreseen, con- have been the Court should view, my In 5 excluded TDT’s placing act of the methanol cluded: “Mice’s to the leased system in violation of in a fresh water by fire. standards, law, industry mobile home state thus, practices; act plumbing trade its IT IS NOT NECESSARY TO ADDRESS extraordinary was not was an event which THE TRIAL TO COURT’S REFUSAL Skyline.” Id. at 546 P.2d foreseeable to THE SPECIAL VER- INCLUDE ON foreseeability Ruling under the THE at 60. out DICT FORM OF OTH- NAMES distinctly in Mico Mobile is a circumstances ERS WHO WERE POTENTIALLY concluding matter matter than as a different NEGLIGENT. present in the case. of law that exists view, analysis portion my In the the III(B) Although that TDT opinion in which there was evidence part of the Court’s juveniles had access to the the trial court’s refusal was aware that the Court addresses fire, the there was also evi- special on the verdict form before court to include juveniles the juveniles Requipco that the fire started when the names of the and of is dence building through an unlocked necessary. answering questions In the entered the not form, they placed played game which special verdict the door contained sack, newspaper plastic negligent, wadded-up not inside found that fire, it back paper on and then tossed negligent TDT was and that set the game in a of “chick- proximate of the and forth to one another negligence was the cause Therefore, pallets plastic sack landed some damages by Empire. en.” The sustained employees been stacked adopted rule” that had under the “individual doorway, ere- compara- open which had been legislature when it enacted block an Idaho Bishara, days several Doty ated earlier when overhead this case TDT. v. (1992). door had been off its knocked rollers P.2d 387 Failure submit operated by employee. forklift a TDT party’s Even and theories defenses juveniles though attempted stomp out reversible Freightlines, error. Garrett Inc. fire, fire, pallets Co., sack set the Paving v. Bannock Idaho spread up pallets to the roof. P.2d 1033 view, my question foreseeability Vannoy Court made this statement in clearly Court, jury, one for and not Co., Uniroyal v. Tire Ill Idaho to decide. (1985): upon based SCHROEDER, Justice DISSENTING. by plaintiffs’ evidence submitted own ex- join I in Justice Johnson’s dissent and also pert applied and the standard in Fouche dissent on the that failure to basis include Chrysler, supra, [101 juveniles’ Requipco names and (1984)] been en- special verdict was error because it limited justified tirely allocating to the mount- scope jury’s consideration on cau- Coats, ing machine manufactured sation. by Kelsey- to the rim wheel manufactured The Court has determined the case based Hayes, responsibility all some or and, principles consequently, contract proximately causing damages holds that are avail- tort-based defenses plaintiffs. Accordingly, it was reversible However, to TDT. able to hold liable for to error for the trial court refuse to include necessary of breach contract it was to deter- jury them v. on the verdict form. Lasselle negligent mine that TDT was and that its Co., Special Products negligence damage. jury caused the The P.2d 483 to should have been allowed consider the Id. at at 655. negligence juveniles actually who the theory Vannoy was a tort case based on a possible the negligence started fire and the liability, of strict not a contract the but Requipco negligence to if their determine principle jury the this case the is same. actually damage Empire. was the cause of to might negligence all of have allocated the given question directly special If the on the proximately juve- the that caused fire to the form, jury might verdict the have determined niles. the oth- There was also evidence that juveniles’ Requipco’s negligence the that or premises, Requipco, er tenant on the failed Empire. damages was the cause of Under system, pump sprinkler maintain or analysis, the Court’s TDT for on ver- special it should have been also dependent damage upon accepting the contract dict. Even Court’s negligent determination that TDT was analysis, place non- failure to the other negligence the cause of that parties ques- into special verdict calls damage. finding negligence A TDT is finding by jury as to negligence tion verdict, jury’s specu- inherent is requires TDT and the reversal of the con- say jury might lation to what the have done finding. upon tract claim which relies what the when the did or verdict means full opportunity not have a verdict to further jury’s negligence finding The question of whose address trial court’s failure undermined damage. the fire and the The Court TDT’s of su- instruct on defense of law an that is determines a matter issue intervening Again, cause. while perseding, routinely question jury. held to be a tort, it has concept applicable is a duty based application The trial the contract claim is court had a instruct when terms, negligence. defenses Even contract all of TDT’s theories and which find evidence, the breach any support Spence v. How- there must a relation between ell, not the damage. P.2d 714 and the A breach that is liability. favorably must most cause of does not result the facts be construed instruction, party requesting could well concluded juveniles damage to cause of burning

trespassing playing catch with to maintain the Requipco’s failure sack or issue system. It was an pump sprinkler unduly jury. The verdict form of fact jury’s limited the consideration. P.2d 1135 Tony Lamanna, Sandy HOSKINS Plaintiffs-Appellants, HOWARD, individually, and as Robert County, Deputy of Bonner Sheriff Howard, through I and John Does Linda Defendants-Respondents. V,

No. 23755. Supreme Court of Idaho. d’Alene, September, 1998 Term. Coeur

Dec. Rehearing Feb. Denied

Case Details

Case Name: Empire Lumber Co. v. Thermal-Dynamic Towers, Inc.

Court Name: Idaho Supreme Court

Date Published: Nov 30, 1998

Citation: 971 P.2d 1119

Docket Number: 23062

Court Abbreviation: Idaho