Goodspeed v. Shippen

Summary

The Idaho Supreme Court affirmed an order granting the purchasers a new trial on their breach of the implied warranty of habitability claim. The court held that the trial court properly determined that the purchase agreement's warranty disclaimer required a jury instruction addressing conspicuousness, explanation of the disclaimer's effect, and knowing waiver, and that failure to give the instruction may have been prejudicial. The court also affirmed deferral and denial of attorney fees, concluding that prevailing-party status was premature and Idaho Code § 12-120(3) did not apply to the personal-purpose transaction.

Holdings

1. When a party requests a jury instruction on a legal theory supported by any reasonable view of the evidence, the trial court must give the instruction unless it is an erroneous statement of law, unsupported by the facts, or adequately covered by other instructions. Because the Goodspeeds presented a reasonable factual basis for their implied-warranty theory and for disputing the effectiveness of the disclaimer, the district court correctly determined that it erred by refusing the requested instruction.
2. A contractual disclaimer of Idaho's implied warranty of habitability is ineffective unless it is conspicuous, explains the effect of the disclaimer, and demonstrates that the parties knowingly waived the warranty. A clause embedded in ordinary surrounding text and labeled only as an 'ENTIRE AGREEMENT' provision is not necessarily conspicuous, and general evidence that the contract was explained does not conclusively establish actual notice of the disclaimer's effect.
3. An erroneous jury instruction is prejudicial when it could have affected or did affect the outcome of the trial. Because the jury's verdict could have rested either on a finding of no breach or on an improperly determined disclaimer, the failure to give the disclaimer instruction may have prejudiced the Goodspeeds and required a new trial.
4. A determination of prevailing-party status and attorney fees was premature while the Goodspeeds' claim remained subject to a new trial. In addition, Idaho Code section 12-120(3) did not apply because the transaction was for personal or household purposes and lacked the required commercial-purpose symmetry between the parties.
5. The Shippens were not entitled to attorney fees on appeal because they did not prevail. The Goodspeeds were not entitled to attorney fees under Idaho Code section 12-121 because the Shippens presented at least one legitimate, nonfrivolous appellate issue.

Questions Presented

1. Whether the district court abused its discretion by granting a new trial after determining that it had improperly refused to instruct the jury on the requirements for a valid disclaimer of the implied warranty of habitability.
2. Whether the evidence conclusively established that the Goodspeeds had actual notice of the disclaimer and its effect, making a disclaimer instruction unnecessary.
3. Whether the Shippens were entitled to attorney fees based on the jury verdict and Idaho Code section 12-120(3).
4. Whether either party was entitled to attorney fees on appeal under Idaho Code sections 12-120(3) or 12-121.

Disposition

affirmed