Case Title: April Beguesse, Inc. v. Rammell

Citation: 

Docket Number: 40212

State: idaho

Court: Idaho Supreme Court (civil)

Date: 2014-06-18T00:00:00Z

Document:
1 
IN THE SUPREME COURT OF THE STATE OF IDAHO 
Docket No. 40212 
 
 
APRIL BEGUESSE, INC., an Idaho 
corporation, 
 
       Plaintiff-Counterdefendant- 
       Respondent, 
 
v. 
 
KENNETH RAMMELL, an individual, 
CHRISTA BEGUESSE, INC., an Idaho 
corporation, THE ESTATE OF CHRISTA 
BEGUESSE RAMMELL, by its qualified 
personal representative, KENNETH 
RAMMELL,  
 
       Defendants-Counterclaimant- 
       Appellants. 
____________________________________ 
) 
) 
) 
) 
) 
) 
) 
) 
)
)
)
)
)
)
)
)
) 
 
 
 
Idaho Falls, May 2014 Term 
 
2014 Opinion No. 59 
 
Dated:  June 18, 2014 
 
Stephen W. Kenyon, Clerk 
    
 
    
 
 
Appeal from the District Court of the Seventh Judicial District of the State of 
 
Idaho, Bonneville County.  Hon. Joel E. Tingey, District Judge. 
 
 
The judgment of the district court is affirmed.  Attorney’s fees and costs on 
 
appeal are awarded to respondent. 
 
 
Racine, Olson, Nye, Budge & Bailey, Pocatello, attorneys for appellants. David 
 
E. Alexander argued. 
 
 
Beard St. Clair Gaffney, Idaho Falls, attorneys for respondent. Jeffrey D. 
 
Brunson argued. 
__________________________ 
 
W. JONES, Justice 
 
I.  NATURE OF THE CASE 
This appeal arises from a fraud, breach of contract, and breach of warranty action brought 
by April Beguesse, Inc. (ABI) against Kenneth Rammell (Rammell), the estate of Christa 
Beguesse (Christa), and Christa Beguesse, Inc. (CBI) (collectively Defendants) and a breach of 
contract counterclaim brought by CBI against ABI. The parties went to trial and the jury returned 
2 
a verdict in favor of ABI on all claims. Defendants moved for a judgment notwithstanding the 
verdict (JNOV) or in the alternative a new trial. The district court granted Defendants’ motion 
for JNOV on the finding of fraud by Christa’s estate and dismissed that claim. The district court 
also granted Defendants a new trial on the issue of damages unless ABI accepted a remittitur for 
damages assessed against CBI only. The district court denied Defendants’ motion on the 
remaining claims of breach of contract, breach of warranty, and fraud. ABI accepted the 
remittitur. Defendants appeal the district court’s denial of their motion. Defendants also seek a 
reversal of the district court’s judgment or in the alternative a new trial on their counterclaim. 
They raise one evidentiary error. We affirm the judgment of the district court. 
II.  FACTUAL AND PROCEDURAL BACKGROUND 
In 1996, Christa and her husband Rammell incorporated CBI in Idaho. CBI provided 
typesetting services to The Rutter Group (Rutter), a legal publisher. Christa and Rammell each 
owned fifty percent of stock in CBI with Christa as the president and Rammell as the secretary 
and treasurer. Christa did almost all of the typesetting work and had extensive knowledge and 
expertise in the field due to her years of experience. Rammell occasionally did accounting for 
CBI, but the parties agree that Rammell had limited involvement in the business.  
In 1999, Rammell and Christa met with an attorney for estate planning purposes. 
Rammell and Christa valued CBI at $40,000. The parties agree that the value of the business 
reflected Rammell and Christa’s belief that CBI would have little value without Christa because 
Christa was the sole typesetter for CBI and she never trained anyone else to do the work. 
In November of 2001, Rammell and Christa approached Christa’s daughter April 
Beguesse (April) to purchase CBI after first spending two years working closely with Christa to 
learn the business. April agreed. April would work for CBI from 2002 to 2004, and in 2004 April 
would take over the business and pay CBI $12,000 a month for eight years, a total of $1,152,000. 
In exchange for the monthly payments, April believed that she would get consulting and 
assistance from Christa, CBI’s office equipment, ownership of a library of computer files, and 
proprietary software developed by Christa. Christa and Rammell told April that she could sell the 
business in the future in a similar way that CBI would be sold to her. April believed that CBI 
owned the library of computer files, which CBI used to typeset for Rutter’s publications 
specifically, and she believed that the library of files was valued at 1 to 1.3 million dollars. At 
trial April testified that she relied on Rammell’s statements as to the value of the library of files 
3 
and CBI’s ownership of the files. April also believed that the proprietary software had unique 
codes created by Christa for efficient typesetting within a computer software program called 
PageMaker. April testified at trial that Christa told her that she created the proprietary software 
and that Christa made a similar statement during an Idaho Falls Exchange Club presentation. 
April testified that she did not know that Rammell had stock in CBI. She stated that she would 
not have agreed to purchase CBI if she knew Rammell was an owner or if she knew CBI did not 
own the library of files. 
On January 6, 2002, April began working for CBI. On January 7, 2002, April sent a letter 
to Rutter’s editor-in-chief Linda Diamond Raznick to introduce herself and announce that she 
would be joining CBI. From January 6, 2002, to May of 2004, Christa trained April to typeset 
with the PageMaker software. In January of 2004, April transitioned CBI’s typesetting business 
to ABI, and ABI began making monthly payments of $12,000 to CBI. On October 6, 2004, ABI 
and CBI signed a lease agreement.1 ABI frequently hired Christa for consulting work.  
In November of 2006, April studied the PageMaker manual for the first time during an 
update of the software. She learned that the proprietary software actually was provided by 
PageMaker. Christa had not developed any unique codes for typesetting. 
ABI continued to make monthly payments to CBI through November of 2008. On 
November 10, 2008, Christa died unexpectedly, and ABI stopped making payments to CBI. In 
total, ABI had paid CBI 59 monthly payments of $12,000, totaling $708,000, and $50,000 in 
consulting fees to Christa. According to Rammell, ABI owed CBI 37 more payments of $12,000, 
totaling $444,000, to fulfill the eight-year agreement. Christa’s 2007 holographic will left her 
entire estate to Rammell. 
After Christa’s death in late 2008, April contacted Raznick and learned that Rutter owned 
the library of files. Raznick told April that ABI could not sell the library of files upon April’s 
retirement. April explained at trial that the ownership of the library was significant because she 
“thought the Rutter Group needed us just as much as we needed them. . . . and because of that, 
there was no need to even think about going anyplace else.” It became a “big time” concern for 
her that Rutter “could take the business away.” Raznick’s testimony corroborated April’s 
understanding of the ownership of the library of files. Raznick testified that Rutter paid CBI and 
                                                 
1 On summary judgment, the district court ruled that the lease agreement was a sham contract for the purpose of 
avoiding tax consequences and that neither party intended to agree to a lease. The district court concluded that the 
lease was unenforceable and that the alleged contract was an oral agreement for the purchase of a business. 
4 
ABI to house the files on their servers, but Rutter owned the files and ABI could not sell the 
business without Rutter’s approval. Raznick explained that she could not give assurances to CBI 
that Rutter would continue to do business with ABI when CBI sold the business. In March of 
2009, April relocated ABI to Nevada. 
On May 8, 2009, ABI filed a suit in Bonneville County against Rammell, Christa’s estate, 
and CBI seeking declaratory relief and raising claims of fraud, constructive fraud, breach of 
contract, breach of express warranty, breach of implied warranty, unjust enrichment, and quasi-
estoppel. CBI filed a counterclaim against ABI for breach of contract, unjust enrichment, 
constructive trust, and violation of the Uniform Trade Secrets Act. 
After the district court resolved some of the parties’ claims on summary judgment, the 
parties went to trial. ABI presented three claims: (1) fraud by Rammell, Christa’s estate, and 
CBI; (2) breach of contract by CBI; and (3) breach of express warranty by CBI. For the fraud 
claim, ABI alleged that Rammell and Christa individually and on behalf of CBI knowingly made 
fraudulent material representations to induce ABI into the purchase agreement with CBI. Those 
representations were that (1) CBI owned a library of files worth at least one million dollars; (2) 
CBI owned proprietary software unique to CBI’s business; and (3) the payments would cease in 
the event of Christa’s death within the eight-year payment period. For the breach of contract 
claim, ABI alleged that CBI promised to assign or sell to ABI the library of files and proprietary 
software in exchange for the payments. For the breach of warranty claim, ABI alleged that CBI 
expressly warranted that CBI could transfer ownership of the library of files and proprietary 
software to ABI and that these warranties were material terms of the contract. CBI presented a 
breach of contract counterclaim against ABI. CBI alleged that ABI breached the purchase 
agreement by failing or refusing to continue the monthly $12,000 payments after Christa’s death. 
April offered testimony on the value of the business at trial. She valued the furniture and 
office equipment at $3,500 and the PageMaker software at $600. In her opinion, the value of the 
business when it became ABI in 2004 was $250,000, excluding the equipment and PageMaker 
software. That value included mentoring by Christa, such as “[g]etting up to speed on the 
processes, the production work flow . . . [and] things that had changed.” April placed “no value” 
on the library of files. She did not believe that she could “ethically” sell the business to a third 
party because she did not believe that she had anything to sell without ownership of the files. She 
could not “in good faith” guarantee a third party that Rutter would work with them and “sell 
5 
anything tangible to somebody.” She also explained that she could not successfully sell the 
business like Christa sold it to her because she bought the business with the belief that she could 
charge Rutter for return of the files and now she knows that she would have to return the files at 
no charge. 
Rammell also testified at trial. He denied making an agreement with April that ABI’s 
payments would cease on anyone’s death. He testified that he told April that she could sell the 
business in the same way that he and Christa were selling it to her. He explained that he 
calculated the $12,000 monthly payments to obtain a little over one million dollars to retire and 
provide an income for April. He acknowledged that CBI would not be worth anything if Rutter 
took its business elsewhere, but stated that ABI would have to pay CBI even if Rutter left. 
Rammell agreed that it was possible that Christa and April could have had separate oral 
agreements without his knowledge.  
Rammell denied that he indicated to April that the files were worth at least one million 
dollars. He testified that he never represented to April that the files had any value outside of the 
business. He stated that the files had no value without Christa. He explained, “If the files would 
have been worth a million dollars, I’d have just sold the files for a million dollars, put it in the 
bank, and discontinued the business.” He was not aware that April ever raised the issue of 
ownership of the library of files with him. He also testified that he “came up with the value of the 
business that they were selling to April.” He valued the business by considering only “what [he] 
wanted to get out of the business and what April could afford to pay.” To contradict these 
statements, ABI had Rammell read his deposition testimony. In his deposition, he testified that 
he did not value the business to April and he had “no understanding” of whether CBI owned a 
library of files and “no way to evaluate” the files. ABI then had Rammell read his deposition 
testimony from the second day of his deposition, after Rammell had met with his attorney, 
wherein he testified that he believed CBI owned the library of files and that he communicated to 
April that the files were part of the business’s value. Regarding the proprietary software, 
Rammell testified that he was “not sure” if he told April that the proprietary software was written 
by Christa, but he knew that April knew it was written by Christa. He later testified that he did 
not tell April that Christa wrote the software and he never heard Christa tell that to April. 
Rammell also testified that he was aware that CBI at one time owned intellectual property or 
trade secrets because “all of the things that Christa added to her programs are a trade secret to 
6 
her,” but then he read his deposition testimony denying knowledge of any intellectual property or 
trade secrets.  
Defendants also called Stephan Douglas Hall, who explained that about five to ten years 
ago Christa gave a presentation at the Idaho Falls Exchange Club about her typesetting business. 
Although his memory was “vague,” he remembered that Christa said something about 
developing software or writing software. He testified that he asked Christa if she developed 
proprietary software and she eventually responded that she used an off-the-shelf publishing 
software package. Hall knew April was present during the presentation, but he was not sure if 
April heard his question or Christa’s response.  
Among other exhibits, the jury was provided a copy of the lease agreement. The jury was 
instructed that the agreement was “not an enforceable contract,” but “may be evidence as to the 
actual agreement entered into by the Parties.” The jury also was provided an exhibit of the 
QuickBooks register of the payments ABI made to CBI and a 2004 cash flow statement prepared 
by Rammell for April during the parties’ 2001 meeting to purchase the business.  
On April 13, 2012, the jury returned a verdict in favor of ABI on all claims. The jury 
determined that ABI’s fraud claim was not barred by the statute of limitations and that Rammell, 
Christa’s estate, and CBI each committed fraud. The jury awarded $354,000.00 in damages. For 
the breach of contract and express warranty claims, the jury determined that these claims also 
were not barred by the statute of limitations. The jury verdict form divided these claims by the 
subjects “proprietary software” and “library of files.” The jury determined that CBI “breach[ed] 
its contact and/or warranty” with ABI “as to a library of files” and awarded $190,013.00 in 
damages. Next the jury determined that CBI “breach[ed] its contact and/or warranty” with ABI 
“as to proprietary software,” but awarded no damages. In total, Rammell, Christa’s estate, and 
CBI were jointly and severally liable for $354,000 in damages for fraud, and CBI was liable for 
an additional $190,013 in damages for breach of contract and breach of warranty as to the library 
of files, a total of $544,013 against CBI. For Defendants’ counterclaim, the jury determined that 
ABI did not breach its contract with CBI. 
Defendants moved for JNOV or a new trial in the alternative. The district court 
concluded that the evidence was sufficient to support the jury verdict except as to ABI’s fraud 
claim against Christa’s estate. As such, the district court dismissed the fraud claim against 
Christa’s estate. In addition, the district court granted Defendants’ motion for a new trial on the 
7 
issue of damages unless ABI accepted a remittitur to reduce the damages against CBI by 
$90,113. The district court stated that ABI paid CBI $708,000 to purchase the business, but April 
testified that the business was worth $254,100. Thus, the district court concluded that the total 
possible amount of damages incurred by ABI was $453,900, the amount paid by ABI less the 
business’ worth. By awarding ABI $544,013 in damages against CBI, the district court 
calculated that the jury exceeded the total amount of damages by $90,113. The district court 
determined that the excess amount was inexplicable and based on passion and prejudice. ABI 
accepted the district court’s remittitur. Defendants appeal to this Court.  
III.  ISSUES ON APPEAL 
1. 
Whether the district court erred in denying Defendants’ motion for a directed verdict and 
JNOV on ABI’s fraud claims. 
2. 
Whether the district court erred in issuing a remittitur and denying in part Defendants’ 
motion for a directed verdict and JNOV on ABI’s breach of contract and breach of 
warranty claims.  
3. 
Whether the district court erred in denying Defendants’ motion for JNOV on ABI’s 
breach of contract and breach of warranty claims due to the statute of limitations. 
4. 
Whether the district court abused its discretion by admitting April’s testimony regarding 
Christa’s will.  
5. 
Whether the judgment on Defendants’ counterclaim should be reversed or remanded for a 
new trial.  
6. 
Whether either Defendants or ABI is entitled to attorney’s fees on appeal. 
IV.  STANDARD OF REVIEW 
 
“We review a trial court’s decision whether to admit or exclude evidence under an abuse 
of discretion standard.” Harris, Inc. v. Foxhollow Const. & Trucking, Inc., 151 Idaho 761, 770, 
264 P.3d 400, 409 (2011). “To determine whether a trial court has abused its discretion, this 
Court considers whether the district court: (1) perceived the issue as one of discretion; (2) acted 
within the outer boundaries of that discretion consistent with applicable legal standards; and (3) 
reached its decision through the exercise of reason.” Hansen v. Roberts, 154 Idaho 469, 472, 299 
P.3d 781, 784 (2013).  
 
“When reviewing a decision to grant or deny a motion for a directed verdict, this Court 
applies the same standard the trial court applied when originally ruling on the motion.” Enriquez 
v. Idaho Power Co., 152 Idaho 562, 565, 272 P.3d 534, 537 (2012). The Court determines  
whether there was sufficient evidence to justify submitting the claim to the jury, 
viewing as true all adverse evidence and drawing every legitimate inference in 
8 
favor of the party opposing the motion for a directed verdict. This test does not 
require the evidence be uncontradicted, but only that it be of sufficient quantity 
and probative value that reasonable minds could conclude that a verdict in favor 
of the party against whom the motion is made is proper. Where a non-moving 
party produces sufficient evidence from which reasonable minds could find in its 
favor, a motion for directed verdict should be denied. 
 
Id. (internal citations and quotations omitted).  
 
When reviewing a decision to grant or deny a motion for JNOV, this Court also applies 
the same standard as the trial court. Athay v. Rich Cnty., 153 Idaho 815, 825, 291 P.3d 1014, 
1024 (2012). 
A jury verdict must be upheld if there is evidence of sufficient quantity and 
probative value that reasonable minds could have reached a similar conclusion to 
that of the jury. In reviewing a grant or denial of a motion for JNOV the court 
may not reweigh evidence, consider witness credibility, or compare its factual 
findings with that of the jury. The court reviews the facts as if the moving party 
had admitted any adverse facts, drawing reasonable inferences in favor of the 
non-moving party. 
 
Id. (quoting Hall v. Farmers Alliance Mut. Ins. Co., 145 Idaho 313, 324, 179 P.3d 276, 287 
(2008)). 
V.  ANALYSIS 
A. 
The District Court Did Not Err In Denying Defendants’ Motion For A Directed 
Verdict And JNOV On ABI’s Fraud Claims. 
ABI pursued its fraud claim based on three representations: (1) CBI owned a library of 
computer files worth at least one million dollars; (2) CBI developed proprietary software; and (3) 
ABI could cease its monthly payments to CBI if Christa died before ABI completed the 
payments. The nine elements of a fraud claim are: “(1) a statement or a representation of fact; (2) 
its falsity; (3) its materiality; (4) the speaker’s knowledge of its falsity; (5) the speaker’s intent 
that there be reliance; (6) the hearer’s ignorance of the falsity of the statement; (7) reliance by the 
hearer; (8) justifiable reliance; and (9) resultant injury.” Bank of Commerce v. Jefferson Enters., 
LLC, 154 Idaho 824, 833, 303 P.3d 183, 192 (2013) (quoting Chavez v. Barrus, 146 Idaho 212, 
223, 192 P.3d 1036, 1047 (2008)). “Fraud is to be determined from all the facts and 
circumstances of the case.” Penn Mut. Life Ins. Co. v. Ireton, 57 Idaho 466, 482, 65 P.2d 1032, 
1039 (1937).  
1. 
There was sufficient evidence for the jury to conclude that Defendants committed 
fraud through their representation to ABI that ABI purchased from CBI a library 
of computer files worth at least one million dollars. 
 
9 
Defendants argue that any representation by Rammell or CBI as to the value or 
ownership of the library of files was an opinion, not a fact. This Court concludes that Rammell’s 
and CBI’s representations fall into an exception to the general rule that fraud cannot be based on 
an opinion or prediction. Defendants also argue that ABI failed to show any damages from the 
fraudulent statements. This Court concludes that ABI presented sufficient evidence of damages 
to the jury. 
a. 
It was reasonable to conclude from the evidence that Rammell and CBI 
knowingly made false representations with the intent to induce ABI into 
purchasing CBI.   
 
In general, “the representation forming the basis of a claim for fraud must concern past or 
existing material facts.” Maroun v. Wyreless Sys., Inc., 141 Idaho 604, 615, 114 P.3d 974, 985 
(2005) (quoting Magic Lantern Prods., Inc. v. Dolsot, 126 Idaho 805, 807, 892 P.2d 480, 482 
(1995)). “Opinions and predictions cannot form the basis of a fraud claim because they do not 
speak to matters of fact.” Country Cove Dev., Inc. v. May, 143 Idaho 595, 601, 150 P.3d 288, 
294 (2006). Thus, “a representation consisting of promise or a statement as to a future event will 
not serve as basis for fraud, even though it was made under circumstances as to knowledge and 
belief which would give rise to an action for fraud had it related to an existing or past fact.” 
Sharp v. Idaho Inv. Corp., 95 Idaho 113, 122, 504 P.2d 386, 395 (1972). Similarly, “[o]pinions 
or predictions about the anticipated profitability of a business are usually not actionable as 
fraud.” Id. 
The Court has recognized two exceptions to the general rule that fraud cannot be based 
on an opinion or prediction of future events.  Gillespie v. Mountain Park Estates, LLC, 142 Idaho 
671, 673–74, 132 P.3d 428, 430–31 (2006). One exception exists “where a false prediction or 
opinion is given with the intent to mislead.” Country Cove Dev., 143 Idaho at 601, 150 P.3d at 
294. Under this exception, the speaker makes “the promise without any intent to keep it, but to 
induce action on the part of the promisee.” Gillespie, 142 Idaho at 674, 132 P.3d at 431. For 
example, this exception is triggered “where a speaker gives an opinion when he is aware of facts 
incompatible with such opinion . . . made with the intention of deceiving or misleading.” 
Country Cove Dev., 143 Idaho at 601, 150 P.3d at 294 (quoting Jordan v. Hunter, 124 Idaho 899, 
907, 865 P.2d 990, 998 (Ct. App. 1993)). Similarly, this exception occurs “[w]here actual value 
is known and false statements are knowingly made with intention to deceive, and do deceive the 
parties to whom they are made . . . . Such statements are not expressions of opinion but are 
10 
statements of material facts.” Fox v. Cosgriff, 66 Idaho 371, 380, 159 P.2d 224, 227 (1945). The 
second exception exists where “the promise was accompanied by statements of existing fact 
which show the promisor’s ability to perform the promise and those statements were false.” 
Gillespie, 142 Idaho at 674, 132 P.3d at 431.  
In this case, there was sufficient evidence for the jury to conclude that Rammell’s and 
CBI’s representations that CBI owned a library of files worth at least one million dollars were 
more than mere opinions or predictions. These representations fall under the first exception for 
false opinions with the intent to mislead. The evidence showed that Rammell and Christa valued 
the business at $40,000 to their attorney in 1999, and they believed that the business had little 
value without Christa. The evidence also showed that Rammell stated in his deposition prior to 
consulting with his attorney that he had no understanding of whether CBI owned the files. Yet, 
according to April, Rammell and Christa told her that she was purchasing from CBI a library of 
files worth at least one million dollars. In addition, the evidence showed that one of Rammell and 
Christa’s motives for the sale was to secure a retirement income. Based on this evidence 
presented at trial, reasonable minds could conclude that Rammell and Christa, motivated to 
secure a retirement income, provided a false opinion of the value and ownership of the library of 
files with the intent to induce April to purchase the business. 
b. 
It was reasonable to conclude from the evidence that ABI had a resultant 
injury and incurred damages from Rammell’s and CBI’s fraudulent 
statements.   
 
 “In order to secure relief on a basis of fraud, the party seeking redress must have been 
damaged, injured or harmed as a result of the asserted fraud. A false representation which causes 
no loss is not actionable.” Bryant Motors, Inc. v. Am. States Ins. Cos., 118 Idaho 796, 800, 800 
P.2d 683, 687 (Ct. App. 1990) (citing Kloppenburg v. Mays, 60 Idaho 19, 88 P.2d 513 (1939)). 
The amount of damages “must be proven with reasonable certainty.” Griffith v. Clear Lakes 
Trout Co., 143 Idaho 733, 740, 152 P.3d 604, 611 (2007). “‘Reasonable certainty’ does not mean 
that damages need to be proven with ‘mathematical exactitude,’ but it does require a plaintiff to 
prove that damages are not merely speculative.” Harris, 151 Idaho at 770, 264 P.3d at 409 
(quoting Griffith, 143 Idaho at 740, 152 P.3d at 611). 
In fraud claims, Idaho courts have applied the “out-of-pocket” rule in measuring 
damages, but have also recognized the existence of a different measure of damages referred to as 
the “benefit of the bargain” rule. Watts v. Krebs, 131 Idaho 616, 621, 962 P.2d 387, 392 (1998). 
11 
The benefit of the bargain rule measures damages “by the difference between the value of the 
thing actually received and the value it would have had if it were as it was fraudulently 
represented to be.” Walston v. Monumental Life Ins. Co., 129 Idaho 211, 217, 923 P.2d 456, 462 
(1996) (quoting Nelson v. Armstrong, 99 Idaho 422, 427 n.1, 582 P.2d 1100, 1105 n.1 (1978)). 
The out-of-pocket rule “limits the recovery of damages to the difference between” the real value 
of the thing actually received “and the price paid or contracted for.” Id. at 217, 923 P.2d at 462 
(quoting Shrives v. Talbot, 91 Idaho 338, 345, 421 P.2d 133, 140 (1966)). 
 
The benefit of the bargain and out-of-pocket rules are not exclusive. Id. “The underlying 
principle is that the victim of fraud is entitled to compensation for every wrong which is the 
natural and proximate result of the fraud. The measure of damages which should be adopted 
under the facts of a case is the one which will effect such result.” Weitzel v. Jukich, 73 Idaho 
301, 308, 251 P.2d 542, 546 (1952). 
In this case the jury was instructed to “determine the amount of money that will 
reasonably and fairly compensate ABI for any damages provided by the evidence to have 
resulted from the breach or fraud.” The jury also was instructed against awarding duplicative 
damages. 
The Court finds that April’s testimony provided sufficient evidence of ABI’s damages 
from Defendants’ fraud. April testified that she could not sell the business because, in her 
opinion, it had no value without ownership of the library of files. The evidence showed that ABI 
agreed to pay CBI $1,152,000 over eight years, and paid only $708,000 due to Christa’s death. 
April stated that the value of CBI when it transitioned to ABI was $250,000 plus $600 for the 
PageMaker software and $3,500 for office equipment, which totals to $254,100. Defendants 
offered no evidence to refute or challenge the $254,100 value. Taking the difference of the 
$254,100 value with the $708,000 payment, April testified that ABI had a claim for “about 
$455,000,” an out-of-pocket calculation.  
Defendants showed that ABI recouped the money it paid for CBI and that April was 
successfully running the business. Defendants also showed that April believed that she would 
sell the files with the business if she ever sold ABI. In other words, she would not sell the files 
independently. She acknowledged that CBI told her she could sell the business like it was sold to 
her: to a third party to continue business with Rutter with the same files. April agreed that she 
had not tried to sell the business. 
12 
Defendants focus on ABI’s ability to sell the business in the future as the measure of 
damages. They claim that ABI was not injured by any fraudulent statements because no evidence 
showed that ABI could not sell the business to a third party in the way that CBI was sold to her. 
The flaw in Defendants’ argument is their assumption that a future sale is the only way to 
calculate damages. Based on the evidence presented at trial, the jury could have calculated 
damages in other ways. The jury reasonably could have concluded that ABI’s injury was not in 
its inability to sell the files independent of the business, but in its purchase of a business worth 
much less than its represented value. Put another way, the jury reasonably could have determined 
that ABI was injured because CBI knowingly overcharged ABI, and, although ABI profited from 
the business, ABI still overpaid based on CBI’s misrepresentations. In sum, the evidence showed 
that ABI believed it was purchasing a business with property worth at least one million dollars, 
but learned later that the business was worth only $254,100 without any ownership rights to the 
represented property.  
The resolution of this damages issue, like many other issues in this case, depended on 
which witnesses the jury found credible. Based on the evidence, it was reasonable for the jury to 
conclude April’s testimony of the business’ value was credible, especially considering that 
Defendants offered no contrary evidence. The Court concludes that there was sufficient evidence 
for the jury to calculate an award of damages based on ABI’s purchase of a business with a 
misrepresented value. 
Based on the above reasons, the Court holds that the district court did not err in denying 
Defendants’ motion for a directed verdict and JNOV on the fraud claims because reasonable 
minds could conclude from the evidence presented at trial that ABI was defrauded by Rammell 
and CBI regarding their purported ownership of a library of files worth at least one million 
dollars. This Court declines to review whether the evidence also was sufficient for the jury to 
find fraud based on the proprietary software because there was sufficient evidence of fraud based 
solely on the library of files. 
B. 
The District Court Did Not Err In Issuing A Remittitur And Denying In Part 
Defendants’ Motion For A Directed Verdict And JNOV On ABI’s Breach of 
Contract and Breach Of Warranty Claims.  
 
For the breach of warranty claims, the jury was instructed that ABI had the burden to 
prove: (1) CBI made a warranty as part of the sale of the business; (2) CBI breached the 
13 
warranty; (3) ABI incurred damage due to the breach; and (4) the amount of damages. The jury 
instruction explained “express warranty” as:  
An express warranty is a warranty created by words or actions of the seller. 
Express warranties may be created by affirmation of fact or promises made by the 
seller to the buyer relating to the goods that become the basis of the bargain; (2) a 
description of the goods that becomes part of the bargain; (3) a sample or model 
made part of the basis of the bargain. . . . An affirmation merely of the value of 
the goods or a statement purporting to be merely the seller’s opinion or 
commendation of the goods does not create a warranty.  
 
This explanation of express warranty mirrors I.C. § 28-2-313. “Whether a statement by the seller 
was an express warranty is a question of fact.” Keller v. Inland Metals All Weather Conditioning, 
Inc., 139 Idaho 233, 237, 76 P.3d 977, 981 (2003).  
 
The two warranties at issue at trial pertained to CBI’s ability to transfer to ABI (1) 
ownership of the library of files and (2) the proprietary software. The jury found that both 
express warranties were breached by CBI.  
 
Regarding the library of files, there was sufficient evidence for the jury reasonably to 
conclude that CBI warranted more than a mere affirmation of the value of the files. The evidence 
showed that CBI informed ABI that ABI would have ownership of files worth at least one 
million dollars by purchasing the business. Reasonable minds could conclude that this warranty 
was more than the mere value of the business because ownership of the library of files 
represented to ABI that it had some security in its business relationship with Rutter. The 
evidence showed that ABI believed it could charge Rutter for return of the files if Rutter ceased 
doing business with ABI. The promise of ownership also suggested to ABI that it could sell the 
files to a third party with the business and, as such, those files had an additional value separate 
from the other business assets. Based on the evidence presented at trial, reasonable minds could 
conclude that CBI made an express warranty to ABI regarding the library of files and this 
warranty was a basis of the purchase agreement. 
 
Regarding the proprietary software, there also was sufficient evidence for the jury 
reasonably to conclude that CBI warranted that ABI would own unique software developed by 
CBI exclusively for servicing Rutter’s publications. April testified that Christa informed her that 
she created proprietary software to work with Rutter. The evidence showed that ABI believed it 
would be purchasing this software to run the business efficiently and successfully without 
spending additional time and resources to recreate the software for Rutter. The evidence also 
14 
showed that ABI knew it took CBI many years to develop the macros and commands specific to 
Rutter’s typesetting needs. Like the ownership of the library of files, the ownership of the 
propriety software gave ABI security in its business relationship with Rutter. Therefore, the jury 
reasonably could have concluded that obtaining ownership of the proprietary software was an 
express warranty that formed a basis of the purchase agreement.  
 
Further, the evidence was sufficient for the conclusion that CBI breached both of these 
express warranties. Defendants focus on ABI’s ability to sell the files to a third party, but 
Defendants ignore April’s testimony that she believed she could charge Rutter for return of the 
files, which indicated that the files had value outside of a sale of the business. Additionally, 
reasonable minds could conclude that the evidence showed that ABI believed that Rutter would 
want to approve the purchaser, but ABI still had the authority to sell the files with the caveat that 
Rutter may not continue to do business with that purchaser. As to the proprietary software, the 
evidence showed that CBI breached its warranty because CBI did not develop any unique 
propriety software. Based on the evidence presented, reasonable minds could determine that CBI 
breached the express warranties.  
1. 
The district court corrected any error in the jury’s calculation of damages by 
issuing a remittitur. 
 
 
In this case, the jury determined that ABI incurred $190,013 in damages due to CBI’s 
“breach of contract and/or warranty as to the library of files, not otherwise awarded [for fraud],” 
in addition to the $354,000 damages amount for fraud. The jury awarded no additional damages 
for CBI’s breach of contract and breach of warranty due to the proprietary software.  
 
The district court reduced the damages award for breach of contract and breach of 
warranty as to the library of files by $90,113 because the district court determined that that sum 
was in excess of the total amount of damages shown by ABI at trial. ABI accepted the remittitur. 
As such, CBI was liable for $99,900 in damages for breach of contract and breach of warranty 
and jointly and severally liable for $354,000 for fraud. The damages against CBI totaled to 
$453,900, which was the difference between the $708,000 sum paid by ABI and the $254,100 
value of the business.  
 
“A new trial is warranted where the jury’s determination of damages appears to have 
resulted from passion or prejudice.” Kuhn v. Coldwell Banker Landmark, Inc., 150 Idaho 240, 
248, 245 P.3d 992, 1000 (2010) (citing Quick v. Crane, 111 Idaho 759, 769–70, 727 P.2d 1187, 
1197–98 (1986); Idaho Rule of Civil Procedure (I.R.C.P.) 59(a)(5)).  
15 
In determining whether damages are excessive or inadequate, the district court 
must weigh the evidence and compare the jury award with the award that it would 
have imposed. “If the disparity is so great that it appears to the trial court that the 
award was given under the influence of passion or prejudice, the verdict ought not 
stand.”  
 
Kuhn, 150 Idaho at 248, 245 P.3d at 1000 (quoting Quick, 111 Idaho at 768, 727 P.2d at 1196). 
An alternative to granting a new trial based on excessive damages is a remittitur. Quick, 111 
Idaho at 770, 727 P.2d at 1198. Remittiturs are limited to correcting errors in damages. Id. 
Remittiturs are improper “if the verdict was the result of passion or prejudice to such an extent 
that such passion or prejudice may have infected the jury’s decision on liability as well as 
damages.” Id. “Hence, the amount by which the trial judge offers to reduce the damage award is 
a discretionary decision that is inexorably linked to the exercise of discretion in ruling on a new 
trial motion under I.R.C.P. 59(a)(5).” Id. 
 
 
The Court first highlights that it was reasonable for the jury to conclude, based on the 
evidence, that ABI incurred damages from the breach of contract and express warranty claims. 
Reasonable minds could determine that ABI agreed to purchase the business for $1,152,000 
because CBI warranted that ABI would receive a library of files worth at least one million 
dollars and unique proprietary software developed by Christa over many years. The evidence 
then showed that ABI learned that CBI did not create any software after ABI paid $420,000 and 
ABI learned that CBI did not own the library of files after ABI paid $708,000. April’s testimony, 
which was not contradicted by Defendants, provided that the actual value of the business at the 
time of the transition to ABI was $254,100. The jury also was provided with ABI’s 
documentation of payments to CBI, Rammell’s projected business cash flow, and testimony 
regarding the profits and expenses of ABI. Due to the conflicting testimony and credibility 
determinations, there were multiple means by which the jury could have calculated and divided 
damages in a reasonable manner based on sufficient evidence.  
 
Although there was sufficient evidence on the issue of damages for the breach of contract 
and breach of warranty claims, the district court concluded that the jury awarded excessive 
damages based on passion and prejudice. As such, the district court issued a remittitur for the 
breach of contract and breach of warranty claims as to the library of files. This decision was 
reasonable based on the evidence presented at trial, and it corrected any error in the jury verdict. 
The Court recognizes that the jury could have been influenced by passion and prejudice due to 
the evidence presented at trial. However, the jury’s passion and prejudice does not invalidate the 
16 
jury’s verdict. There was sufficient evidence of Defendants’ liability for breach of contract and 
breach of warranty to avoid any infection from the jury’s passion and prejudice as to damages. 
Many issues in this case turned on the credibility determinations made by the jury. Reasonable 
minds could conclude based on the evidence that Defendants were liable for the breach of 
contract and breach of warranty claims without any influence of passion or prejudice. The Court 
concludes that any error in the jury’s award of damages for breach of contract and breach of 
warranty as to the library of files was properly resolved by the district court’s remittitur.  
 
In conclusion, the Court holds that the district court properly ruled on Defendants’ 
motion for a directed verdict and JNOV regarding the breach of contract and breach of warranty 
claims. 
C. 
The District Court Did Not Err In Denying Defendants’ Motion For JNOV On 
ABI’s Breach Of Contract And Breach Of Warranty Claims Due To The Statute Of 
Limitations. 
ABI filed its suit on May 8, 2009, and the jury concluded that ABI’s breach of contract 
and breach of warranty claims were not barred by the applicable statute of limitations. Based on 
the evidence presented at trial, the Court finds that reasonable minds could have reached a 
similar conclusion to that of the jury.  
For the claims based on the library of files, the jury was instructed that ABI had four 
years to bring the claims and that the claims began “to run from the time ABI knew of the Rutter 
Group’s claim of ownership interest in the library of files.” The evidence reasonably supports a 
conclusion that April interpreted the caveat that Rutter had to approve the sale of the business to 
a third party to mean that Rutter had to approve the purchaser, and not necessarily that CBI or 
ABI did not have ownership of the files. Additionally, the jury could have concluded that 
“ownership” included not only ABI’s ability to sell the files, but also ABI’s ability to charge 
Rutter for return of the files if Rutter ceased to do business with ABI. According to April, she did 
not learn until late 2008 that ABI had no ownership of the files and could not charge Rutter to 
return the files. Therefore, there was sufficient evidence for the jury to conclude that ABI had 
knowledge of Rutter’s ownership in late 2008 and filed its suit within the four year statute of 
limitations. 
For the claims based on the proprietary software, the jury was instructed that the claims 
began “to run from the time the Parties entered into the contract,” but “estoppel may apply to bar 
the application of the statute of limitations to this claim.” The district court further instructed the 
17 
jury on the estoppel elements. The evidence showed that April waited to read the manual until 
November of 2006, but also that April relied on an information technology employee and Christa 
as a consultant. The evidence also showed that the macros and commands in PageMaker took 
years to develop. Additionally, April testified that Christa told her that she created the 
proprietary software. April’s belief that Christa created the software was further supported by 
Christa’s statements at the Idaho Falls Exchange Club, which were corroborated by Hall. This 
evidence supports a conclusion that it would be reasonable for April to believe Christa developed 
the proprietary software and to wait to read the manual until necessary. Moreover, the 
reasonableness of ABI’s actions was a determination for the jury. Based on the evidence 
presented, it was reasonable for the jury to conclude that estoppel barred the application of the 
statute of limitations and that ABI acted with due diligence in asserting its claim.   
D. 
The District Court Did Not Abuse Its Discretion By Admitting April’s Testimony 
Regarding Christa’s Will. 
 
ABI inquired into April’s inheritance during April’s testimony regarding her meeting 
with Rammell and Christa about the purchase of CBI. Defendants objected to this line of 
questioning pursuant to Idaho Rule of Evidence (I.R.E.) 601. The district court took up 
Defendants’ objection outside the presence of the jury. The district court recognized an overlap 
between ABI’s claim against Christa’s estate for fraud and ABI’s claims against CBI for fraud, 
breach of contract, and breach of warranty. The district court determined that the rules of 
evidence permitted April’s testimony about Christa’s will as it related to ABI’s claims against 
CBI, but not as it related to ABI’s fraud claim against Christa. Upon the jury’s return to the 
courtroom, the district court gave a limiting instruction before April continued her testimony and 
advised the jury that CBI “is a different entity” than Christa’s estate. The district court instructed 
the jury that April’s testimony of Christa’s will was not admissible evidence for purposes of 
supporting a claim against Christa’s estate. April then testified about statements Christa made to 
her about April’s inheritance, her ownership of the business, and payment cessation upon 
Christa’s death. The district court also provided a jury instruction regarding this testimony for 
deliberations:  
In this case, certain evidence was admitted for a limited purpose. Specifically, the 
testimony of April Beguesse as to statements made by Christa Beguesse may not 
be considered as evidence in supporting a claim against the Estate of Christa 
Beguesse. Such evidence however may be used for any other purpose. 
 
18 
Defendants challenge the district court’s admission of April’s testimony. They argue that April’s 
testimony was inadmissible under I.R.E. 601 and irrelevant. Each issue will be addressed in turn. 
1. 
I.R.E. 601(b) does not prohibit April’s testimony regarding Christa’s will because 
ABI pursued claims against parties other than Christa’s estate. 
 
I.R.E. 601(b) “bars (1) certain persons from testifying (2) in specified actions (3) as to 
certain communications.” Montgomery v. Montgomery, 147 Idaho 1, 8, 205 P.3d 650, 657 (2009) 
(quoting In re Estate of Keeven, 110 Idaho 452, 460, 716 P.2d 1224, 1232 (1986)). The rule 
“prohibit[s] a party making a claim against an estate from testifying as to any unwritten 
communication with the deceased.” Lunders v. Estate of Snyder, 131 Idaho 689, 698–99, 963 
P.2d 372, 381–82 (1998). “I.R.E. 601(b) is virtually identical to I.C. § 9-202(3),2 the so-called 
‘Deadman’s Statute.’” Montgomery, 147 Idaho at 7–8, 205 P.3d at 656–57. “Given the virtual 
identity of the rule and statute,” the Court applies the same analysis to the evidentiary rule and 
the statute. Id. at 8, 205 P.3d at 657. “Application of a dead man’s statute is reviewed for abuse 
of discretion.” Lunders, 131 Idaho at 699, 963 P.2d at 382. 
 
The Court has “not interpreted this provision so broadly as to bar testimony concerning a 
state of affairs or matters of fact occurring before a decedent[’]s death.” Montgomery, 147 Idaho 
at 8, 205 P.3d at 657. Additionally, I.R.E. 601(b) “does not apply where . . . the action is not 
against the executor or administrator of an estate and the claim does not represent a demand 
against the estate.” Rowan v. Riley, 139 Idaho 49, 54, 72 P.3d 889, 894 (2003). Nor does it apply 
“when the testimony is being offered to defend against a counterclaim.” Lunders, 131 Idaho at 
699, 963 P.2d at 382. Thus, the district court did not abuse its discretion by allowing April’s 
testimony because I.R.E. 601(b) allows a party to testify to unwritten communication with the 
deceased if the party’s claim is not against the estate. For example, in Argyle v. Slemaker the 
plaintiff sought to testify regarding certain communications with the deceased in a property 
dispute. 99 Idaho 544, 545–46, 547, 585 P.2d 954, 955–56, 957 (1978). The plaintiff brought a 
claim against the decedent’s estate and also the decedent’s grantee, a third party corporation. Id. 
at 545–46, 585 P.2d at 955–56. “An additional reason” the Court held that the plaintiff’s 
testimony was not barred was because the deadman’s statute “prohibits testimony introduced 
against the estate of a deceased person,” but “does not prohibit the admissibility of this evidence 
as against . . . a corporation.” Id. at 547–48, 585 P.2d at 957–58. Similarly, April’s testimony 
                                                 
2 “I.C. § 9-202(3) has a comma after the phrase ‘estate of a deceased person,’ whereas that comma is omitted in 
I.R.E. 601(b).” Montgomery, 147 Idaho at 8 n.1, 205 P.3d at 657 n.1. 
19 
was prohibited as to her fraud claim against Christa’s estate, but her testimony was not 
prohibited as to her claims against CBI. The district court recognized this distinction with the 
limiting instruction. Therefore, this Court concludes that the district court perceived the 
admissibility of April’s testimony as one of discretion, acted within the boundaries of that 
discretion consistent with I.R.E. 601, and reached its decision to admit the evidence through an 
exercise of reason. There was no error in admission of this testimony. 
2. 
April’s testimony regarding Christa’s will was relevant to ABI’s claims against 
CBI. 
 
“The question of relevancy is not a discretionary matter as there is no issue of credibility 
or finding of fact for the trial court to resolve prior to deciding to admit or reject the evidence.” 
Lubcke v. Boise City/Ada Cnty. Hous. Auth., Corp., 124 Idaho 450, 466, 860 P.2d 653, 669 
(1993). As such, the Court reviews a trial court’s relevancy decision de novo. Id. “‘Relevant 
Evidence’ means evidence having any tendency to make the existence of any fact that is of 
consequence to the determination of the action more probable or less probable than it would be 
without the evidence.” I.R.E. 401. “All relevant evidence is admissible . . . . Evidence which is 
not relevant is not admissible.” I.R.E. 402. 
Defendants argue that April’s testimony regarding Christa’s will was irrelevant because 
(1) fraud cannot be premised on the promise to make a will and (2) the district court granted 
Defendants a directed verdict on the fraud claim based on CBI’s representation that payments 
would cease upon Christa’s death if within the eight-year purchase agreement. First, ABI’s fraud 
claim against CBI was not premised on the promise to make a will, but rather on the 
representation by CBI that ABI could cease payments to CBI if Christa died within eight years of 
the business purchase. As discussed above, fraud may be premised on a promise if the speaker 
makes the promise with no intention to keep it, but to induce the promisee. See Gillespie v. 
Mountain Park Estates, LLC, 142 Idaho 671, 673–74, 132 P.3d 428, 430–31 (2006). In this case, 
the jury could have considered April’s testimony of Christa’s will as evidence to support ABI’s 
claim that CBI promised ABI it could cease payments if Christa died within eight years to induce 
ABI to purchase the business, even though CBI had no intention of allowing ABI to cease 
payments. In addition, April’s testimony was relevant to the jury’s determination of terms of the 
oral contract between ABI and CBI. Second, the district court did not grant Defendants a 
directed verdict as to a fraud claim based on a representation regarding a promise of payment 
cessation upon Christa’s death. In fact, the district court stated that it was not granting a directed 
20 
verdict on that claim. Rather, the district court granted Defendants a directed verdict as to ABI’s 
fraud claim that CBI’s assets would be bequeathed to April upon Christa’s death. Thus, the 
district court barred ABI from presenting evidence of Christa’s will to prove a fraudulent 
representation of the existence of a will, but allowed ABI to present that same evidence to 
support a claim that CBI fraudulently represented the conditions for ABI to cease payment. 
April’s testimony regarding Christa’s will was admissible and relevant to ABI’s breach of 
contract and fraud claims against CBI. 
E. 
The Court Declines To Review The Jury Verdict On Defendants’ Counterclaim. 
Defendants assert that the Court should reverse the jury’s verdict on CBI’s counterclaim 
against ABI or award Defendants a new trial on this claim, but Defendants did not specifically 
move for JNOV or a new trial on the counterclaim. Without the issue adequately raised in 
Defendants’ motion below, the Court declines to address this issue for the first time on appeal. 
Garner v. Bartschi, 139 Idaho 430, 436, 80 P.3d 1031, 1037 (2003). 
F. 
The Court Awards ABI Attorney’s Fees On Appeal. 
Both parties seek attorney’s fees on appeal pursuant to I.C. § 12-120(3), which “provides 
for attorney fees to the prevailing party in a civil action to recover on ‘any commercial 
transaction.’” De Groot v. Standley Trenching, Inc., No. 39406, 2014 WL 1266104, at *10 
(Idaho March 28, 2014) (quoting I.C. § 12-120(3)). The parties agree that this case arises from a 
commercial transaction—the purchase agreement between ABI and CBI for an ongoing business.  
As the prevailing party, the Court awards ABI attorney’s fees pursuant to I.C. § 12-120(3). 
VI.  CONCLUSION 
The Court affirms the judgment of the district court. Attorney’s fees and costs on appeal 
to ABI. 
 
Chief Justice BURDICK, Justices EISMANN, J. JONES and HORTON CONCUR.