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IN THE SUPREME COURT OF THE STATE OF IDAHO

Docket No. 36556/36567

PRINTCRAFT PRESS, INC.,

 Plaintiff-Respondent-Cross-Appellant,

v.

SUNNYSIDE PARK UTILITIES, INC., an

Idaho corporation, DOYLE BECK, an

individual, and KIRK WOOLF, an

individual,

 Defendants-Appellants-Cross-

 Respondents,

and

SUNNYSIDE PARK OWNERS

ASSOCIATION, INC., an Idaho corporation,

and SUNNYSIDE INDUSTRIAL AND

PROFESSIONAL PARK, LLC, an Idaho

limited liability corporation,

 Defendants.

_______________________________________

PRINTCRAFT PRESS, INC.,

 Plaintiff-Respondent,

v.

SUNNYSIDE PARK UTILITIES, INC., an

Idaho corporation,

 Defendant-Appellant,

and

SUNNYSIDE PARK OWNERS

ASSOCIATION, INC., an Idaho corporation,

and SUNNYSIDE INDUSTRIAL &

PROFESSIONAL PARK, LLC, an Idaho

limited liability company, DOYLE BECK, an

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Boise, January 2012 Term

2012 Opinion No. 105

Filed: July 2, 2012

Stephen Kenyon, Clerk
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individual and KIRK WOOLF, an individual,

 Defendants. 

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Appeal from the District Court of the Seventh Judicial District of the State of 

Idaho, Bonneville County, Hon. Joel E. Tingey, District Judge.

The district court’s grant of SPU’s motion under I.R.C.P. 60(b)(2) is reversed. 

The district court’s denial of the defendants’ motion for JNOV as to the existence 

and breach of a duty to disclose and as to the amount of damages is affirmed. The 

district court’s order denying Printcraft’s request for attorney fees below is 

affirmed.

Fuller & Carr, Idaho Falls, for appellant Sunnyside Park Utilities, Inc. Mark R. 

Fuller argued.

Smith, Driscoll & Associates, PLLC, Idaho Falls, for appellants Beck and Woolf. 

Bryan D. Smith argued.

Beard St. Clair Gaffney PA, Idaho Falls, for respondent. Michael D. Gaffney 

argued.

HORTON, Justice

This case arises from a dispute regarding the sewer system serving Sunnyside Industrial 

Park, LLC (the industrial park). Sunnyside Park Utilities (SPU) provides water and sewer 

services to the industrial park and Doyle Beck and Kirk Woolf are, respectively, the Secretary 

and President of SPU. Printcraft Press, Inc. (Printcraft) is a printing business that occupies a 

building in the industrial park. In 2004, via its principal, Travis Waters (Waters), Printcraft 

entered a ten-year lease for property in the industrial park. The dispute in this case concerns the 

failure of Beck, Woolf, and SPU to disclose limitations on the sewage system, including the 

amount of sewage the system could handle and its lack of suitability to dispose of some 

chemicals used in the printing business.

After Printcraft started using the sewage system, SPU disconnected Printcraft from the 

system in December 2006. Printcraft sued SPU, Beck, and Woolf (collectively the defendants) 

for breach of contract, fraudulent nondisclosure, and fraud. At trial, the jury found that the 

defendants owed Printcraft a duty to disclose the limitations of the system and failed to do so. As 

a result, the jury found that Printcraft suffered $990,000 in damages. The trial court denied the 
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defendants’ motion for judgment notwithstanding the verdict (JNOV) and entered judgment in 

favor of Printcraft on March 31, 2009. The defendants timely appealed and Printcraft timely 

cross-appealed. However, in August 2009, SPU filed a renewed motion for relief from judgment 

under Idaho Rule of Civil Procedure 60(b), asserting newly discovered evidence regarding 

whether Printcraft’s damages claim was affected by its subsequent connection to the Idaho Falls 

city sewer system. The district court found that the newly discovered evidence satisfied the 

requirements of I.R.C.P. 60(b) and granted a new trial on the issue of damages.

On appeal, the defendants argue that they had no duty to disclose, that any failure to 

disclose did not lead Printcraft to believe any fact that was false, that the refusal to give SPU’s 

requested jury instructions was improper, and that the district court erred in denying their motion 

for JNOV because there was not sufficient evidence to support the jury’s determination of 

damages. In turn, Printcraft’s cross-appeal argues that the district court erred in limiting the 

potential bases for the defendants’ duty to disclose, that Printcraft’s breach of contract claim was 

improperly dismissed, that the subsequent Rule 60(b) motion was improperly granted, that the 

issue of punitive damages should have been submitted to the jury, and that the judge erred in 

denying Printcraft’s request for attorney fees. We affirm in part and reverse in part.

I. FACTUAL AND PROCEDURAL BACKGROUND

1. Factual background

The sewage system for the industrial park was a 1,000 gallon septic system with a 

capacity of 300 gallons per day until 2006 when the system was expanded to a 2,000 gallon per 

day capacity. In 2002, the industrial park entered a “Third Party Beneficiary Utility Agreement” 

(Third Party Agreement or the Agreement) with SPU to manage the industrial park’s sewer 

system. The Third Party Agreement was made “for the benefit of the present and future owners 

of or occupants of all and each of the properties” in the industrial park. The Agreement called for 

SPU to supply “sewage collection of disposal service” to the buildings in the industrial park, 

excluding garbage collection. The Agreement authorized SPU to establish rules and regulations 

governing the sewer system. As noted above, Woolf was the president of SPU and Beck was the 

secretary. A sign was displayed at the industrial park, stating: “Sunnyside Industrial and 

Professional Park. Developed by: K.H. Woolf Development Co. . . . Water – Sewer –

Intermountain Gas – County Taxes. Build to Suit KW Contractors, Inc.”
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In 2002, the District Seven Health Department sent a letter to Woolf regarding the SPU 

septic system. The letter informed Woolf that “no new connections will be allowed on the 

current sewer collection system until a Large Soil Absorption System, that replaces the current 

septic system, is approved and operating.” At that point in 2002, there were eleven connections 

to the sewer system. By June of 2006, SPU added another seven connections to the system, 

including Printcraft’s.

In 2004, Printcraft purchased a competing business and moved to the industrial park to 

consolidate the two businesses. Waters testified that he did not have to move the consolidated 

businesses into the industrial park, but did so to become more efficient. During this period, while 

Waters was preparing to move Printcraft, Waters met with Beck and Woolf a number of times in 

various capacities. These included: a meeting with Woolf in 2004 to discuss buying a lot in the 

industrial park; a brief meeting with Beck in 2004, discussing a railroad easement; a meeting 

with Beck in 2005 in which Waters gave Beck a preliminary sketch of the property; and in June 

or July of 2005, a meeting with Woolf regarding the need for approval of the building plans by 

the architectural committee, of which Beck was a member. At no time during these meetings was 

there any discussion of Printcraft’s sewage needs nor was there any discussion of the system’s 

limitations. Waters testified that before he moved Printcraft to the industrial park, he was not told 

of the Agreement, the limitations on the sewer system, or the rules and regulations associated 

with it. He testified that, had he known, he never would have moved Printcraft to the industrial 

park.

Waters, in addition to acting as principal for Printcraft, was also the owner of Waters 

Land and Cattle (WLC), CTR Development, and CTR Management. Through WLC, Waters 

purchased a lot in the industrial park from Mark Miskin, who is not involved in these 

proceedings. WLC then sold the property to CTR Development, which developed the property 

and paid SPU the connection fee for the septic services. CTR Development then sold the 

building to J&LB Properties, CTR Management entered a ten-year lease with J&LB, and 

Printcraft took possession of the building in 2006 under a ten-year sublease from CTR 

Management. 

Shortly after Printcraft took possession of the building, there were at least two instances 

where the septic tank overflowed. The second of these overflows, in June 2006, resulted in inks 

pooling on the ground above the septic system. Waters met with Beck regarding Printcraft’s
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sewage and on September 6, 2006, Beck sent Waters a letter describing the system’s limitations, 

most notably that it was only designed to accommodate human waste. On September 20, 2006, 

SPU’s attorney sent a letter demanding that Printcraft comply with the applicable IDAPA 

provisions governing disposal in septic systems. Beck, Woolf, and Waters met on September 25 

and reached an agreement as to the types of substances Printcraft could discharge. On December 

11, 2006, SPU sent Printcraft a letter asserting that Printcraft was in breach of that agreement and 

threatening to disconnect Printcraft from the septic system. Printcraft denied that it was in 

violation of their agreement. SPU responded by stating that it would disconnect Printcraft from 

the system and, on December 15, 2006, Printcraft was disconnected. Following its disconnection, 

Printcraft obtained private sewer services at its own expense. It also pursued a connection to the 

Idaho Falls city sewer system. That connection was completed shortly after the trial.

2. Procedural history

Printcraft filed suit on December 18, 2006, and, by the time of its Third Amended 

Complaint, asserted two claims for breach of contract, one for fraudulent misrepresentation, and 

two counts of fraud. Printcraft also sought punitive damages. Printcraft claimed that it had 

incurred costs of $27,880 for moving into the industrial park, $15,098 for a lift station it installed 

to pump its waste into trucks for disposal away from the industrial park, and $12,000 per year for 

common-area maintenance at the industrial park. Printcraft also stated that the value of the 10-

year lease at the industrial park was $1.08 million. SPU counterclaimed, asserting breach of 

contract, trespass, and nuisance.

The district court made a number of orders limiting the scope of these claims. Most 

notably, the district court denied SPU’s motion for summary judgment as to the fraudulent 

misrepresentation claim, finding that, although there was neither a special relationship between 

the parties nor any partial, misleading statement, Printcraft could pursue its claim if it proved that 

it was mistaken about a material fact and that the defendants knew that it was mistaken. The 

court granted Printcraft’s pre-trial motion to amend its complaint to include punitive damages 

claims against the defendants. The district court dismissed Printcraft’s breach of contract claims, 

finding that because there was no dispute that it had discharged sewage in violation of IDAPA 

58.01.03.004.03, Printcraft’s illegal conduct justified the termination of its sewer service. The 

district court also dismissed Printcraft’s fraud claim. 
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Printcraft’s claims were limited to the fraudulent disclosure claim and the case went to 

trial. At trial, after putting forward evidence that it had not discharged illegal waste after 

September 2006, Printcraft moved for reconsideration of the order dismissing the breach of 

contract claim, which the district court denied. Printcraft rested its case in chief without 

presenting its evidence in support of its claim for punitive damages and the district court denied 

Printcraft’s request to reopen its case to present that evidence. The defendants moved for a

directed verdict after the close of their case, arguing again that no duty to disclose existed. The 

court denied the motion. Before the matter was submitted to the jury, the defendants objected to 

the court’s refusal to give several of their proposed jury instructions. The jury returned a 

$990,000 judgment against the three defendants for fraudulent misrepresentation. The jury did 

not find Printcraft liable on any of SPU’s counterclaims. The defendants moved for JNOV. The 

court denied this motion, finding that the jury’s decision was supported by the evidence. The 

court, in a later decision, denied Printcraft’s request for attorney fees. On April 2, 2009, the court 

entered judgment. The defendants timely appealed and Printcraft timely cross-appealed. 

On August 20, 2009, the defendants moved for relief from the judgment based upon 

additional evidence under I.R.C.P. 60(b). In particular, they argued that three documents 

concerning the subsequent connection of Printcraft to the Idaho Falls sewer system constituted 

newly discovered evidence. The documents included: 1) the Right of Way Encroachment 

Application and Permit for Utilities; 2) the Plan and Profile for Printcraft Press Sewer 

Connection; and 3) the Notice of Intent to Excavate. They also argued that Waters’ statement at 

trial that connecting to the Idaho Falls sewer system was not an option constituted fraud such that 

they were eligible for relief under I.R.C.P. 60(b)(3). After a hearing, the court entered an order 

granting the motion on the basis of I.R.C.P. 60(b)(2), newly discovered evidence, and 60(b)(6), 

regarding other grounds for relief.

II. ISSUES ON APPEAL

1. Whether the district court abused its discretion in granting a new trial under Rule 60(b).

2. Whether the defendants owed Printcraft a duty to disclose the limitations of the septic system.

3. Whether the amount of damages was supported by substantial and competent evidence.

4. Whether the district court erred in dismissing Printcraft’s breach of contract claim.

5. Whether the district court erred in denying Printcraft’s motion to reopen its case to present 

 evidence in support of its claim for punitive damages.
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6. Whether the jury instructions fairly stated the law.

7. Whether the district court properly denied Printcraft’s request for attorney fees at trial.

8. Whether any party is entitled to attorney fees on appeal.

III. ANALYSIS

A. The district court abused its discretion in granting the defendants’ Rule 60(b) motion.

Following entry of judgment in this case, the defendants sought a new trial on the issue of 

damages. They based their motion on: I.R.C.P. 60(b)(2), for relief based on newly discovered 

evidence; I.R.C.P. 60(b)(3), based on fraud; and I.R.C.P. 60(b)(6), which provides for relief 

based on “any other reason justifying relief from the operation of the judgment.” The district 

court found that the defendants had not made a showing of fraud but that they were entitled to 

relief under I.R.C.P. 60(b)(2) and 60(b)(6) based on the newly discovered evidence regarding 

Printcraft’s imminent connection to the Idaho Falls sewer system. We hold that the district 

court’s grant of relief under I.R.C.P. 60(b) was an abuse of discretion because the district court 

failed to apply the correct legal standard in reaching its decision.

1. Standard of review

The interpretation of the Idaho Rules of Civil Procedure is a matter of law 

over which this Court has free review. The decision to grant or deny a motion 

under I.R.C.P. 60(b) is committed to the discretion of the trial court.

A trial court’s decision whether to grant relief pursuant to I.R.C.P. 60(b) is 

reviewed for abuse of discretion. The decision will be upheld if it appears that the 

trial court (1) correctly perceived the issue as discretionary, (2) acted within the 

boundaries of its discretion and consistent with the applicable legal standards, and 

(3) reached its determination through an exercise of reason. A determination 

under Rule 60(b) turns largely on questions of fact to be determined by the trial 

court. Those factual findings will be upheld unless they are clearly erroneous. If 

the trial court applies the facts in a logical manner to the criteria set forth in Rule 

60(b), while keeping in mind the policy favoring relief in doubtful cases, the court 

will be deemed to have acted within its discretion.

Eby v. State, 148 Idaho 731, 734, 228 P.3d 998, 1001 (2010) (internal citations omitted).

2. The district court abused its discretion in granting a new trial under I.R.C.P. 60(b).

In its order granting the motion for relief from judgment, the district court stated: “The 

primary issue under Defendant’s [sic] motion is whether evidence that existed prior to trial to the 

effect that a connection to the City’s system was possible/probable/imminent was not reasonably 

discoverable either under the circumstances, or due to Printcraft’s misconduct.” The court went 

on to say:
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In considering the record, this Court is satisfied that there are unique and 

compelling circumstances entitling Defendants to relief under Rule 60(b)(2). 

Newly discovered evidence relating to Printcraft’s connection to the City’s system 

was not discoverable by due diligence. That evidence is material to the issue of 

damages, not merely cumulative, and would likely have an effect on the damage 

award. The Court does not find that Defendants are entitled to relief under Rule 

60(b)(3). However, the Court’s finding that the newly discovered evidence was 

not previously discoverable is in part based upon Printcraft’s discovery responses 

and obligation to supplement discovery. Under the circumstances, the Court also 

finds that Defendants are entitled to relief under Rule 60(b)(6). 

(Emphasis added.) The district court expressly stated that its ruling was not based upon 

misrepresentation or other misconduct of an adverse party under Rule 60(b)(3). Instead, the court 

concluded that the evidence regarding Printcraft’s connection to the City sewer system was not 

discoverable based in part on Printcraft’s obligation to supplement discovery, which it found to 

be a unique and compelling circumstance under both I.R.C.P. 60(b)(2) and (6).

The district court appears to have conflated Rules 60(b)(2) and 60(b)(3). Rule 60(b)(2) 

allows for relief if the movant points to “newly discovered evidence which by due diligence 

could not have been discovered in time to move for a new trial under Rule 59(b),” while Rule 

60(b)(3) allows a court to grant relief if there is misconduct by an adverse party. Here, the court 

said that the defendants were not entitled to relief under 60(b)(3), but granted relief under 

60(b)(2), based “in part” on Printcraft’s alleged discovery misconduct. That holding 

inappropriately blends the two rules. If Printcraft committed misconduct warranting relief, then 

Rule 60(b)(3) should have applied; if the defendants could not have found “newly discovered 

evidence” through the exercise of due diligence, then Rule 60(b)(2) should have applied. While 

the court did conclude there was “newly discovered evidence” that was not discoverable by due 

diligence, it failed to explain what the evidence was or why it was previously undiscoverable. 

Nor did the court identify the other “part” of its reason for granting relief.

The court also applied a “unique and compelling circumstances” standard under Rule 

60(b)(2). This standard circumscribes the trial court’s discretion to grant relief under Rule 

60(b)(6). The Court of Appeals first articulated the standard. See In re Estate of Bagley, 117 

Idaho 1091, 1093–94, 793 P.2d 1263, 1265–66 (Ct. App. 1990) (“The party making a Rule 

60(b)(6) motion must demonstrate unique and compelling circumstances justifying relief.”). We 

then quoted the Court of Appeals’ “unique and compelling” language in Miller v. Haller, where 

we considered a motion for relief under Rule 60(b)(6). 129 Idaho 345, 349, 924 P.2d 607, 611
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(1996) (stating that “although the [trial] court is vested with broad discretion in determining 

whether to grant or deny a Rule 60(b) motion, its discretion is limited and may be granted only 

on a showing of ‘unique and compelling circumstances’ justifying relief.”). Thus, even though 

we were deciding a decision involving Rule 60(b)(6), we spoke of the unique and compelling 

circumstances standard in terms of Rule 60(b) generally.

However, this Court has not previously applied the unique and compelling circumstances 

standard in the context of I.R.C.P. 60(b)(2). We have generally, but sparingly, applied it in cases 

where a party seeks relief under Rule 60(b)(6). See Dawson v. Cheyovich Family Trust, 149 

Idaho 375, 380–81, 234 P.3d 699, 704–05 (2010); Eby, 148 Idaho at 736–37, 228 P.3d at 1003–

04; Berg v. Kendall, 147 Idaho 571, 578–79, 212 P.3d 1001, 1008–09 (2009); Miller, 129 Idaho 

at 349 924 P.2d at 611. We have also applied the standard in cases where a party has sought 

relief from a judgment but failed to specify a particular subsection of Rule 60(b). See Villa 

Highlands, LLC v. W. Cmty. Ins. Co., 148 Idaho 598, 604–05, 226 P.3d 540, 546–47 (2010); 

Palmer v. Spain, 138 Idaho 798, 802, 69 P.3d 1059, 1063 (2003). Given our limited application 

of the standard, it applies only to define the outer bounds of the trial court’s discretion. Such 

delineation is unnecessary when considering a Rule 60(b)(2) motion because that subsection 

supplies its own limitation—the movant must show the existence of newly discovered evidence 

it could not previously have discovered by due diligence. 

In this case, the trial court failed to articulate and correctly apply any existing Rule 60(b) 

standard. In the absence of an explanation as to why this case presented unique and compelling 

circumstances to trigger Rule 60(b)(6), the court abused its discretion in relying on that 

subsection to grant relief. 

Rule 60(b)(2) only applies if there was “newly discovered evidence” that, by due 

diligence, was undiscoverable before the defendants could move for a new trial under Rule 

59(b). Except for a passing reference to Printcraft’s failure to supplement discovery, however, 

the court’s order did not identify what evidence was “newly discovered.” Nor did the court 

discuss whether any diligent attempts were made by the defendants to obtain such evidence. Nor 

did the court mention whether the defendants obtained the “newly discovered evidence” in time 

to move for a new trial under Rule 59(b).

It is clear from our review of the record that Printcraft made no attempt to conceal its 

efforts to connect to the city’s sewer system. It is also clear from the record that this connection
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would be a significant step toward mitigating Printcraft’s damages. Nevertheless, the defendants 

were less than diligent in attempting to learn the status of Printcraft’s efforts to obtain a 

connection.1 It was within the defendants’ power to have discovered Printcraft’s intentions by

exercising due diligence. If the defendants initially were unaware that Printcraft was seeking to 

connect to the City’s sewer system and making significant progress in that regard, the Affidavit 

of Lawry Wilde, dated and served on the defendants’ counsel on September 2, 2008, at least six 

months before trial, clearly should have placed the defendants on notice. In his affidavit, Wilde, 

who is a member of CTR Management, stated that he had been at an Idaho Falls City Council 

meeting on July 10, 2008, to urge the city to annex Printcraft’s building into the City of Idaho 

Falls in order to obtain a sewer connection and that Doyle Beck appeared in order to express his 

opposition to the proposed annexation. Nevertheless, the City approved the annexation. The 

affidavit continues, stating the following as facts:

12. Printcraft will have a lift stationed [sic] installed at its building within 

approximately a week’s time. 

13. Arrangements have been made for accessing the City’s sewer system via 

an easement with the railroad.

14. Mountain River Engineering has designed the system and process by 

which Printcraft will access the City’s sewer system.

15. Printcraft has arranged for a contractor to perform the necessary work to 

connect Printcraft to the City’s sewer system.

16. Printcraft is currently at the “permit” stage of annexation and it is nearly 

complete and Printcraft anticipates that it will be connected to Idaho Falls’ 

sewer system within a matter of weeks.

Thus, it should have been apparent to the defendants that they needed to direct efforts toward 

obtaining information as to the progress of the sewer connection in order to counter any damage 

request made by Printcraft. The record does not reveal the defendants’ exercise of any diligence

in this regard. 

None of the defendants’ document requests relate to accessing city sewer services or 

mitigation of damages, nor do the defendants point to pertinent document requests to which 

 1 Although not directly relevant to our analysis, it appears that the defendants’ failure to investigate Printcraft’s 

efforts to connect to the city sewer system is explained by a failed trial strategy. Defendants entirely focused their 

defense on the issue of liability, making no effort to present evidence regarding Printcraft’s ability to mitigate its 

damages.
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Printcraft did not properly respond. The three documents the defendants identified in their 

motion for relief—the Right of Way Encroachment Application and Permit for Utilities, the Plan 

and Profile for Printcraft Press Sewer Connection, and the Notice of Intent to Excavate—are not

encompassed within the scope of any of those document requests. They are, however, within the 

scope of that which Wilde disclosed in his pre-trial affidavit. 

Rather than pointing to a specific discovery request to which Printcraft did not respond,

the defendants point to trial testimony of Travis Waters, which they contend constituted a 

statement that a sewer connection was “not an option.” The defendants’ characterization of 

Waters’ testimony is not completely accurate. On cross-examination, counsel for defendant SPU 

asked Waters several questions about connecting to the city sewer, which Waters answered 

candidly:

Q. [by SPU’s counsel] And you’re now trying to connect to the City of Idaho 

Falls, correct?

A. [by Waters] That’s our hopes.

Q. Is it your position that that is the only option available to you now?

A. Well, I can keep doing what I’m doing or I can hook up to the City. So yeah, I 

guess there’s some options out there.

Q. Isn’t it correct that you either have to connect to the City or figure out some 

other option because Sunnyside disconnected you and refuses to provide you 

with sewer service?

A. Yes.

On re-direct, Waters again discussed Printcraft’s attempts to connect to the city sewer:

Q. [by Printcraft’s counsel] All right. [Counsel for SPU] asked you a question 

that says that you only have two options right now, basically stay where you 

are and deal with the situation or connect to the City. As we sit here right now, 

has that option come to any fruition?

A. [by Waters] No.

Q. Now, Printcraft – has Printcraft made some attempts to go that route?

A. We’ve made a lot of attempts to work towards that.

Q. Okay. Did the lot get annexed into the City?

A. Yes.

Q. And we talked about that with Mr. Beck, correct?

A. Correct.

Q. All right. But as we sit here today, that is not an option, right?

A. That hasn’t happened.

Waters’ answer—“That hasn’t happened”—was not directly responsive to the question of

whether Printcraft had the immediate option of connecting to the sewer; but neither was it an 

incorrect answer. On the record before us, it is evident that Waters’ ambiguous response did not 
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excuse the defendants from their obligation to exercise due diligence in advance of trial to 

develop evidence that Printcraft could have mitigated its claimed damages. 

While the district court has broad discretion to rule on a Rule 60(b) motion, its discretion 

is not without limit. In light of the record, the trial court’s failure to articulate its reasoning, and 

its failure to correctly apply Rule 60(b), we hold that the district court abused its discretion in 

granting the defendants a new trial on damages.

B. The district court did not err in submitting the issue of the defendants’ duty to disclose 

to the jury and the jury’s finding is supported by substantial and competent evidence.

The district court partially granted SPU’s motion for summary judgment regarding the 

defendants’ duty to disclose the limitations on the septic system. A duty to disclose may arise:

(1) if there is a fiduciary or other similar relation of trust and confidence between 

the two parties; (2) in order to prevent a partial statement of the facts from being 

misleading; or (3) if a fact known by one party and not the other is so vital that if 

the mistake were mutual the contract would be voidable, and the party knowing 

the fact also knows that the other does not know it.

Sowards v. Rathbun, 134 Idaho 702, 707, 8 P.3d 1245, 1250 (2000). The district court granted 

the defendants’ motion for summary judgment as to the first and second prongs of Sowards. The 

defendants now argue that the district court erred by denying summary judgment as to the third 

prong. Printcraft cross-appeals, arguing that the district court erred in dismissing claims based on 

the first two prongs of Sowards. We affirm.

1. Standard of review

The parties assert that the existence of a duty is a matter of law. While generally true, that 

statement is not always correct. The Restatement (Second) on the Law of Torts states the rule as:

Whether there is a duty to the other to disclose the fact in question is always a 

matter for the determination of the court. If there are disputed facts bearing upon 

the existence of the duty, as for example the defendant’s knowledge of the fact, 

the other’s ignorance of it or his opportunity to ascertain it, the customs of the 

particular trade, or the defendant’s knowledge that the plaintiff reasonably expects 

him to make the disclosure, they are to be determined by the jury under 

appropriate instructions as to the existence of the duty.

Restatement (Second) of Torts § 551 cmt. m (1977). Likewise, a federal district court phrased the 

inquiry as follows:

Thus, the court must decide in the first instance whether the circumstances 

asserted, if proved, would be sufficient to give rise to a duty to disclose; if the 

court finds the circumstances alleged would be sufficient, the jury will then be 

presented with the factual question of whether those circumstances indeed 
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existed, provided of course, at the summary judgment stage of the proceedings, 

the plaintiff can generate a genuine issue of material fact as to the existence of 

those circumstances.

Jones Distrib. Co. v. White Consol. Indus., Inc., 943 F.Supp. 1445, 1474 (N.D. Iowa 1996). See 

also Zawaideh v. Nebraska Dep’t of Health & Human Servs. Reg. & Licensure, 792 N.W.2d 484, 

496 (Neb. 2011). Consequently, it is the district court that determines whether, as a matter of 

law, the facts asserted would give rise to a duty to disclose if they are proven. But once it makes 

that determination, it falls to the jury to decide whether those facts are proven, and thus whether 

there was a duty to disclose.

Because the question regarding duty under the third prong was submitted to the jury, the 

issue on appeal is whether the district court erred in denying the defendants’ motion for JNOV. 

When we review a district court’s decision to grant or deny a motion for JNOV, this Court:

employs the same standard the district court used in ruling on the motion. An 

order granting a j.n.o.v. is appropriate when “the facts are undisputed” and “there 

can be but one conclusion as to the verdict that reasonable minds could have 

reached”—namely, that the moving party should prevail. On the other hand, a 

verdict will be upheld when it is supported by substantial and competent 

evidence. Substantial evidence is evidence of “such sufficient quantity and 

probative value that reasonable minds could conclude that the verdict of the jury 

was proper.” Evidence may be substantial even though it is contradicted.

Coombs v. Curnow, 148 Idaho 129, 136, 219 P.3d 453, 460 (2009) (citations omitted).

2. The court properly applied the test for whether a party has a duty to disclose.

At the outset, because the parties argue a variety of interrelated issues, it is important to 

define the scope of the duty to disclose and the points of contention with respect to the district 

court’s ruling. The district court summarized the bases of Printcraft’s argument in favor of a duty 

to disclose:

(1) under the terms of the [Third Party] Agreement; (2) because the development 

was named “Sunnyside Professional and Industrial Park” indicating that industrial 

activity was permitted; (3) pursuant to a letter sent by District Seven to SIPP on 

April 15, 2002 indicating that District Seven prohibited further sewer connections 

to SIPP; and (4) because Woolf and/or Beck knew of the nature of Printcraft’s 

business from the blueprints, but failed to warn Waters of the septic system’s 

limitations.

In holding that the question of whether the facts of this case fit the third prong of Sowards was a 

question for the jury, the district court stated:
14

By affidavit, Waters testified that the [sic] Woolf and/or Beck understood the 

nature of the business and its need for a septic connection, but failed to disclose 

several deficiencies with the system. . . . Waters further testified that he did not 

know the limitations of the septic system.

The district court later stated:

[T]he Court assumes (and it does not seem to be disputed) that Printcraft 

had no knowledge as to the limitations/restrictions applicable to the septic system. 

The issue then is whether, as a matter of law, there is no evidence that Beck or 

Woolf know that Printcraft did not have that knowledge.

Printcraft has presented evidence supporting the inference that Beck and 

Woolf knew that Printcraft did not know of material issues relating to the septic 

system, since (arguably) such information could only have been obtained from 

Beck or Woolf. Such an inference precludes granting summary judgment on this 

issue. It is worth noting that the decision in Sowards, where it was found that the 

plaintiff failed to prove the “knowledge” element of a nondisclosure claim, was 

based upon a finding of fact by the trier of fact, after all evidence was presented at 

the time of trial.

From these statements and the parties’ arguments, three issues are presented on appeal: (a)

whether a plaintiff can ever assert a fraudulent misrepresentation claim as a third party 

beneficiary; (b) whether any of the various bases of a proposed duty to disclose support the 

finding of such a duty in this case; and (c) whether substantial and competent evidence supports 

the jury’s verdict that the defendants breached this duty.

a. Third party beneficiaries may be owed a duty to disclose.

The defendants rely on three arguments in support of their assertion that no duty to 

disclose exists with regard to a third party beneficiary. First, they argue that the class of potential 

future beneficiaries is undefined and therefore unlimited. This argument is not persuasive 

because it ignores the reality that the duty to disclose is the product of some form of relationship, 

interaction, or communication between the parties that necessarily limits the prospective class of 

plaintiffs to parties known to the defendant. Considering the three instances where the duty to 

disclose may arise, it requires: (a) that there be a fiduciary or similar relationship of trust 

between the parties; (b) that the defendant both possess knowledge of facts and awareness that 

those facts must be disclosed in order to prevent a partial statement of the facts from misleading 

the plaintiff; or (3) know that the plaintiff is about to enter into a transaction under a mistaken 

belief of the facts. Each of these circumstances requires that the defendant possess knowledge 

about the potential plaintiff, foreclosing the possibility that some unknown or unforeseen 

plaintiff may advance a claim. 
15

Second, the defendants point to the brief reference in Chavez v. Barrus, 146 Idaho 212, 

223 n.6, 192 P.3d 1036, 1047 n.6 (2008) where we stated that “this Court has not previously 

engrafted the body of contract law relating to third-party beneficiaries to the law of intentional 

torts.” But, as the district court pointed out, the statement in Chavez can easily be read to indicate 

“that in a claim for intentional torts . . . , contractual elements and third party beneficiary status 

are not relevant to the inquiry whether the elements of fraud have been proven.” It should be 

noted that, within the context of Chavez, the issue of third party beneficiary status had already 

been disposed of by a finding that the plaintiff was not a beneficiary. 146 Idaho at 223 n.6, 192 

P.3d at 1047 n.6.

Third, the defendants argue that finding a duty to disclose to third party beneficiaries is 

against public policy because it would create numerous lawsuits. They do not specify the kinds 

of lawsuits that would result nor do they explain how the misrepresentation by silence would 

implicate the concern, as expressed in Harrigfeld v. Hancock, that a wide-ranging duty “would 

subject attorneys to lawsuits by persons who simply did not receive what they believed was their 

fair share of the testator’s estate, or who simply did not receive in the testamentary instruments 

what they understood the testator had stated or indicated they would receive.” 140 Idaho 134, 

138-39, 90 P.3d 884, 888-89 (2004). We find this argument unpersuasive. To the contrary, we 

can discern no public policy that would be advanced by permitting parties to consciously 

misrepresent a contract that will benefit them to the detriment of a third party, simply because 

that person or entity is not a party to the contract. That the prospective plaintiff must satisfy the 

requirements of Sowards before a duty will arise suggests that the floodgates of litigation will 

not be opened by this holding. 

In contrast, in Harrigfeld, this Court recognized that a defendant may owe limited duties 

to a third party. 140 Idaho at 138, 90 P.3d at 888 (recognizing an attorney’s duty to third party 

beneficiaries that would form the basis for a negligence claim). In addition, the Restatement 

supports the contention that third parties may be owed a duty of disclosure. Section 532 of the 

Restatement states:

One who embodies a fraudulent misrepresentation in an article of commerce, a 

muniment of title, a negotiable instrument or a similar commercial document, is 

subject to liability for pecuniary loss caused to another who deals with him or 

with a third person regarding the article or document in justifiable reliance upon 

the truth of the representation.
16

Restatement (Second) of Torts, § 532 (emphasis added). That this provision is applicable to cases 

involving a duty to disclose can be seen in the cases of a variety of other jurisdictions. E.g.,

Peerless Mills, Inc. v. AT&T, 527 F.2d 445, 450 (2d Cir. 1975) (“A third party can recover 

damages for a fraudulent misrepresentation if he can establish that he relied upon it to his 

detriment, and that the defendants intended the misrepresentation to be conveyed to him.”); 

Nader v. Allegheny Airlines, Inc., 512 F.2d 527, 547-48 (D.C. Cir. 1975) (“It is unequivocal that 

privity of contract is not a prerequisite to recovery where the plaintiff proves fraudulent 

misrepresentation.”) (rev’d on other grounds by Nader v. Allegheny Airlines, Inc., 426 U.S. 290 

(1976)). Therefore, we hold that a duty to disclose may arise in the context of third party 

beneficiaries.

b. A duty to disclose arose under the facts of this case.

The district court focused on the fact that the defendants knew of the nature and size of 

Printcraft’s business. It is a reasonable inference that the defendants therefore knew or had 

reason to know that Printcraft might dispose of materials or quantities that the industrial park’s 

septic-based sewer system was not capable of handling. Waters testified that he did not know the 

limitations of the system and would not have moved to the industrial park had he known about 

those limitations. Thus, the limitations of the sewer system were facts known by one party and 

not the other. Waters’ testimony demonstrated that an adequate sewer system was vital to 

Printcraft’s business. The evidence likewise supports a finding that the defendants knew that 

Printcraft did not know about those limitations. On these facts, Printcraft’s claim that the 

defendants breached their duty to disclose under the third prong of Sowards was properly 

submitted to the jury.

On appeal, the defendants argue that because IDAPA prohibits discharge of water 

softener brine into a septic system, Printcraft had no right to rely on the assumption that they 

could dispose of all of their wastes. However, IDAPA 58.01.03.004.03, which governs septic 

systems, states: “Cooling water, backwash or backflush water, hot tub or spa water, air 

conditioning water, water softener brine, groundwater, oil, or roof drainage cannot be discharged 

into any system unless that discharge is approved by the Director.” This may have rendered 

SPU’s actions in disconnecting Printcraft from the septic system legal, but it did not make the 

contract per se illegal. First, IDAPA 58.01.03.004.03 only controls septic systems. If the 

industrial park had been connected to the Idaho Falls sewer system or some other, non-septic 
17

based sewage disposal system, there is no evidence that Printcraft would not have been able to 

dispose of its wastewater. Second, the IDAPA provision specifically allows for otherwiseprohibited discharge into a septic system upon approval by the Director. There is no evidence 

presented that SPU sought such approval, much less that the Director denied a request to permit 

discharge of Printcraft’s waste.2 Thus, it may have been possible for Printcraft to use the septic 

system. As such, the application of the third party beneficiary agreement to Printcraft did not

render it an illegal contract.

The defendants also aggressively advance the proposition that because Printcraft was 

connected to the septic system the duty to disclose was not triggered. The fact that Printcraft was 

connected does not require the conclusion that the defendants owed no duty of disclosure. 

Rather, this fact goes to the materiality of the information regarding the sewage system’s 

limitations. As the district court properly concluded, materiality is a question of fact. In re 

Tobacco II Cases, 207 P.3d 20, 39 (Cal. 2009); Powers v. United Servs. Auto. Ass’n, 979 P.2d 

1286, 1289 n.5 (Nev. 1999); Berkeley Bank for Coops. v. Meibos, 607 P.2d 798, 801 (Utah 

1980). The fact that Printcraft was connected to the septic system merely indicates that it was, in 

fact, a third party beneficiary of the Agreement. Whether the defendants breached a duty to 

disclose is a separate question, discussed below.

c. The jury’s determination that the defendants breached their duty to disclose is 

supported by substantial and competent evidence.

The key argument made by the defendants on appeal is that, even assuming that some 

duty to disclose arose, they did not breach that duty. As noted, a district court’s denial of a 

motion for JNOV is proper when the verdict was “supported by substantial and competent 

evidence,” which is evidence that would permit a reasonable mind to conclude that the jury’s 

 2 We note that the Agreement required SPU to provide adequate sewage disposal facilities and that SPU was 

required to foot the bill for those facilities. Section 2(b) of the Agreement provides, in pertinent part:

The Company shall provide at all times for each of the buildings ... sewage service 

adequate for safe and sanitary collection and disposal of all sewage from said buildings.... The 

Company further shall operate and maintain the sewage systems, including the disbursement field, 

in a manner so as not to pollute the ground, air, or water in, under, or around said areas or 

subdivisions with improperly or inadequately treated sewage. ... The Company further agrees to 

operate the systems in accordance with regulations and recommendations of the State Board of 

Health.... In the event said Board shall determine that the operations of the systems do not meet 

the said regulations or recommendations, the Company shall immediately, at its sole cost and 

expense, make any adjustment, repair, installation or improvement to its facilities that shall be 

necessary or required or recommended by said Board to bring the operation of the systems up to 

the said regulations and recommendations. 
18

verdict was proper. Coombs v. Curnow, 148 Idaho 129, 136, 219 P.3d 453, 460 (2009) (citation 

omitted). “Evidence may be substantial even though it is contradicted.” Id.

Here, it is uncontroverted that none of the defendants ever disclosed the limitations of the 

septic system to Waters. Additionally, there was evidence presented to support the claim that 

Printcraft did not know about the limitations on the system, as Waters testified that, had he 

known of those limitations, he would not have relocated to the park. The fact that a large sign 

indicated that sewer services were provided to the industrial park certainly did nothing to place 

Waters on notice of those limitations. Finally, the fact that Printcraft’s business involved waste 

that would have breached IDAPA 58.01.03.004.03 suggests that the ability to have a sewer 

system that would accommodate that waste was a material condition of Printcraft’s decision to 

choose the industrial park as a site for its business. Under these circumstances, the jury was 

certainly free to accept Waters’ statement that he would not have moved Printcraft’s business to 

a location unable to accommodate the discharge of its waste.

The defendants further argue that there could not have been a breach because no damages 

resulted. In support of this argument, the defendants point to the fact that, until Printcraft was 

disconnected for violating IDAPA 58.01.03.004.03, SPU accepted, and disposed of, all of 

Printcraft’s waste.3 However, the fact remains that Printcraft was still unable to dispose of its 

waste based on the nature of that waste. Even if the septic system’s limitations regarding the 

amount of waste would not have created a duty to disclose (since, with the exception of the limits 

provided in the September 2006 agreement, all of Printcraft’s waste water was accepted by 

SPU), the failure to disclose the limitations on the types of waste provides substantial and 

competent evidence that the defendants breached the duty to disclose. We therefore affirm the 

district court’s denial of the motion for JNOV.

Because we affirm the district court’s decision with regard to the duty to disclose under 

the third prong of Sowards, we do not reach Printcraft’s cross-appeal arguments regarding the 

existence of a duty under the other two prongs.

 3 Based on the September 2006 discussions between the parties, it appears the amount of waste was an issue. 

However, Printcraft’s agreement to limit its discharges suggests that the amount was not a material condition of its 

decision to relocate.
19

C. The jury’s damage award was supported by substantial and competence evidence.

1. Standard of review

When reviewing a district court’s decision to grant or deny a motion for JNOV, the 

standard this Court uses is:

the same standard the district court used in ruling on the motion. An order 

granting a j.n.o.v. is appropriate when “the facts are undisputed” and “there can 

be but one conclusion as to the verdict that reasonable minds could have 

reached”—namely, that the moving party should prevail. On the other hand, a 

verdict will be upheld when it is supported by substantial and competent 

evidence. Substantial evidence is evidence of “such sufficient quantity and 

probative value that reasonable minds could conclude that the verdict of the jury 

was proper.” Evidence may be substantial even though it is contradicted.

Coombs, 148 Idaho at 136, 219 P.3d at 460 (citations omitted). When applying this standard, 

“the Court may not reweigh evidence, consider witness credibility, or compare its factual 

findings with that of the jury.” Horner v. Sani-Top, Inc., 143 Idaho 230, 233, 141 P.3d 1099, 

1102 (2006) (citing Griff, Inc. v. Curry Bean Co., Inc., 138 Idaho 315, 319, 63 P.3d 441, 445 

(2003)). “This 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. (citing Ricketts v. E. Idaho 

Equip. Co., Inc., 137 Idaho 578, 580, 51 P.3d 392, 394 (2002)).

2. The jury’s award of damages was supported by substantial and competent evidence.

The defendants argue that the jury’s award of damages was not supported by substantial 

and competent evidence and therefore the district court erred in denying the request for JNOV.

The defendants contend that Printcraft may not claim any damages related to disposing of its 

waste because those damages are a result of its disconnection from the industrial park’s septic 

system.4 They argue that Printcraft’s illegal conduct in discharging prohibited material into the 

system was a superseding intervening cause of the damages. Beck and Woolf also argue that

even if Printcraft had not leased space at the industrial park, it would have leased new premises 

somewhere. Therefore, they argue, Printcraft cannot claim lease payments as damages because it 

would have incurred lease costs anyway. Printcraft responds that all the damages were the result 

of the defendants’ failure to disclose the limitations of the system and that it would not have 

incurred any of its claimed damages if proper disclosures had been made because it would not 

have moved into the industrial park.

 4 The district court expressly ruled that the disconnection was lawful and thus, that no award of damages could be 

based upon the termination of septic services.
20

Waters testified that Printcraft moved into the industrial park to be more efficient, but 

that it did not have to move from its previous location:

Q. [on cross-examination] But the truth is, had you not moved into this building, 

you were going to move into some other building, weren’t you?

A. [by Waters] Well, no. I didn’t have to move. I could have leased both those 

buildings and kept going the way we were. I was moving to become more 

efficient.

Waters also testified that had he known about the limitations of the septic system at the industrial 

park, Printcraft would not have relocated there:

Q. If Printcraft had known prior to moving, before moving, that there was a 

prohibition by District Seven Health directed to Sunnyside Park Utilities that no 

more buildings could connect or there would be no more connections to the septic 

system, had you known that information, would you have moved?

A: No.

Q: If you had known prior to moving that there were rules and regulations related 

to disposal of septic [sic] in the industrial park, rules put out by Sunnyside Park 

Utilities that you couldn’t dispose of industrial waste from your facility, would 

you have moved?

A: No.

Printcraft also provided evidence of the costs it incurred moving into the industrial park, the 

value of the lease over its 10-year term, and the cost of common-area maintenance at the 

industrial park.

When all of the evidence and inferences drawn from the evidence are viewed in the light 

most favorable to Printcraft, there is sufficient evidence to support the jury’s award of damages. 

The jury could reasonably have concluded from Waters’ testimony that the defendants’ 

nondisclosure caused Printcraft to enter into a lease that it would not otherwise have executed. 

While the defendants contend that Printcraft would have incurred these costs even absent the 

nondisclosure, the weight and credibility of the evidence are for the jury to decide. We hold that 

there is substantial and competent, though conflicting, evidence to support the jury’s conclusion 

regarding the amount of damages caused by the defendants’ nondisclosure. Therefore, we affirm 

the district court’s denial of the motion for JNOV.

D. We do not reach the question of the dismissal of Printcraft’s breach of contract claim.

On cross-appeal, Printcraft argues that the district court erred in dismissing its breach of 

contract claim. However, the damages Printcraft alleges in this claim are the same that it claims 

as a result of the fraudulent misrepresentation claim. Thus, because we affirm the district court 
21

on the issue of fraudulent misrepresentation, and these damages are duplicative, we need not 

reach this issue. See Seiniger Law Office, P.A. v. N. Pac. Ins. Co., 145 Idaho 241, 248, 178 P.3d 

606, 613 (2008) (declining to remand on a separate cause of action where damages were 

identical).

E. The district court did not abuse its discretion in denying Printcraft’s motion to reopen 

its case in chief to present evidence on its claim for punitive damages.

1. Standard of review

The decision whether to reopen a case and receive additional evidence 

before final judgment involves an exercise of discretion and will not be disturbed 

absent a showing that such discretion was abused. See Seubert Excavators, Inc. v. 

Eucon Corp., 125 Idaho 409, 416, 871 P.2d 826, 833 (1994). On review, this 

Court must determine whether the lower court correctly perceived the issue as one 

of discretion, whether the court acted within the outer boundaries of such 

discretion and consistently with any legal standards applicable to specific choices, 

and whether the court reached its decision by an exercise of reason. See id.

Idaho Power Co. v. Cogeneration, Inc., 134 Idaho 738, 744, 9 P.3d 1204, 1210 (2000). When a 

party seeks to reopen, it “must show some reasonable excuse, such as oversight, inability to 

produce the evidence, or ignorance of the evidence. Id. (citing Smith v. Smith, 95 Idaho 477, 481, 

511 P.2d 294, 298 (1973)).

2. The district court properly exercised its discretion.

Printcraft argues that the district court erred in declining to submit its claim for punitive 

damages to the jury because Printcraft rested its case in chief without presenting any evidence in 

support of its claim. Printcraft contends that because punitive damages are permitted in fraud 

claims, and the district court instructed the jury regarding fraud by nondisclosure, the jury should 

also have been instructed as to punitive damages. Printcraft is correct that Idaho Code § 6-

1604(1), governing punitive damages, provides that:

In any action seeking recovery of punitive damages, the claimant must prove, by 

clear and convincing evidence, oppressive, fraudulent, malicious or outrageous 

conduct by the party against whom the claim for punitive damages is asserted.

However, the district court’s decision was rendered on the basis that Printcraft had rested its case

without presenting evidence to support an award of damages and without seeking guidance from 

the court, holding that it was improper to reopen to address the omission. After defense counsel 

objected to Printcraft’s request to question a witness in support of its punitive damages claim, 
22

Printcraft’s attorney gave his reason for not having presented his evidence for the claim during 

Printcraft’s case in chief:

Your Honor, typically what would happen is, the Court would instruct the jury 

yes or no; and then it would be—I think it would be bifurcated to come back and 

present that evidence Typically that’s the way it would happen. I’m just trying to 

speed things up.

Thus, Printcraft’s decision was not an oversight, nor was it based on its inability to present the 

evidence, nor on ignorance of the evidence. Rather, it appears counsel intended to present the 

evidence at a later point in the trial.

While Printcraft characterizes the district court’s decision as simply dismissing its claim

for punitive damages, the court’s actual statement was:

Well, as I recall my ruling on that, I think I indicated that once your—once you 

presented your evidence on everything but punitive damages, then we’d take up 

the issue whether I was going to even allow that to go to the jury; and then I’d 

make a determination whether to let you go forward with evidence on that.

. . .

I mean, I was primed to make a ruling at the end of plaintiff’s case on this because 

I expected that issue to come up. It didn’t. And so when [Printcraft] rested, I 

figured [punitive damages were] now a nonissue. So I think that’s still the case. 

It’s a nonissue. It wasn’t raised at the end of the nonpunitive damage case.

Thus, the court recognized it had a discretionary decision to make and then exercised reason to 

determine that it would not reopen the case. The district court did not act outside the boundaries 

of its discretion nor in contradiction of the applicable legal standards because, as noted, this 

Court has recognized the power of a district court to reopen a case prior to final judgment. The 

court also reached its decision through an exercise of reason. Consequently, we hold that the trial 

court did not abuse its discretion in declining to permit Printcraft to reopen its case to present

evidence to support its punitive damages claim to the jury.

F. The district court did not commit reversible error regarding the jury instructions.

1. Standard of review

The standard of review for issues concerning jury instructions is limited to 

a determination of whether the instructions, as a whole, fairly and adequately 

present the issues and state the law. When the instructions, taken as a whole, do 

not mislead or prejudice a party, an erroneous instruction does not constitute 

reversible error.
23

Chapman v. Chapman, 147 Idaho 756, 762, 215 P.3d 476, 482 (2009). We hold that the district

court’s instructions fairly and adequately presented the issues and stated the governing law.

2. The district court properly refused to give a jury instruction precluding damages 

resulting from Printcraft’s disconnection from the industrial park septic system.

SPU contends that the exclusion of its Proposed Jury Instruction No. 16 allowed the jury 

to award damages that were caused by SPU’s lawful termination of Printcraft’s septic system 

connection. Proposed Instruction No. 16 stated: “Printcraft is not entitled to recover any damages 

which were caused by Sunnyside Park Utilities’ disconnection of Printcraft’s septic service, as 

the termination was justified by Printcraft’s discharge of illegal substances into the septic 

system.” Instead, the jury was instructed that it could award damages only if it found that 

Printcraft “suffered damages proximately caused by” the defendants’ failure to disclose the 

limitations of the septic system. SPU argues that the instruction was incomplete as it did not 

inform the jury that Printcraft was not entitled to damages caused by the disconnection. We 

disagree.

When it made its ruling excluding the possibility of damages based upon the 

disconnection, the court also stated that whether any wrongful act by SPU proximately caused 

damages to Printcraft was a question for the jury. The court then specifically instructed the jury

in instruction 26 “[t]he Court has previously ruled as a matter of law that due to Plaintiff’s 

unlawful discharge, Defendant lawfully terminated the septic system connection to the building 

occupied by Plaintiff.” The jury was also instructed as to proximate cause and that any damages 

must have resulted from the defendants’ wrongful conduct of failure to disclose. Together, these 

instructions served to indicate to the jury that any damages Printcraft suffered as a result of the 

disconnection, rather than from its reliance on the nondisclosed limitations on the sewer system, 

were not permitted. Therefore, we hold that the failure to give SPU’s Proposed Jury Instruction 

No. 16 was not error.

3. The district court properly refused to give a jury instruction regarding settlement 

agreements.

SPU argues that the lack of any jury instruction regarding settlement agreements was 

reversible error. It contends that the letters between Printcraft and SPU in September 2006 

created a settlement agreement that limited its liability. These letters, it argues, constitute 

sufficient evidence of a settlement agreement such that a jury instruction on settlement 
24

agreements should have been submitted to the jury. SPU further points to the statement the 

district court made in dismissing its motion for JNOV that “the jury’s conclusion that Printcraft’s 

claims were not defeated by any alleged compromise agreement is supported by substantial and 

competent evidence . . . .” SPU contends that this statement means that the jury decision was 

affirmed on a basis that they had no ability to challenge.

The defendants correctly cite Wilson v. Bogert, 81 Idaho 535, 347 P.2d 341 (1959) for the 

following proposition: 

Where the parties to a legal controversy, in good faith enter into a contract 

compromising and settling their adverse claims, such agreement is binding upon 

the parties, and, in the absence of fraud, duress or undue influence, is enforceable 

either at law or in equity according to the nature of the case.

Id. at 542, 347 P.2d at 345 (citations omitted).

Although this is an accurate statement of the law and the defendants are correct in their 

assertion that the district court erred in its description of “the jury’s conclusion,” the only 

evidence presented at trial which the defendants have identified as supporting the requested 

instruction is Exhibit AN. That document reveals that the extent of the parties’ agreement was 

that Printcraft would “no longer be putting the RO water into the sewer system” and that 

Printcraft would “make arrangements to collect and dispose of what [the defendants] classify as 

‘processed waste.’” The defendants have failed to direct our attention to evidence presented at 

trial that would permit a reasonable trier of fact to conclude that the parties’ discussion and 

agreement as to the types of waste that Printcraft would discharge constituted an agreement 

“compromising and settling their adverse claims.” “An instruction is not to be given if it is . . . 

not supported by the facts . . . .” Vanderford Co. v. Knudson, 144 Idaho 547, 555, 165 P.3d 261, 

269 (2007). In short, SPU has shown no error in the failure to instruct the jury on settlement 

agreements.

4. The district court properly refused to give a jury instruction regarding the doctrine of 

superseding cause.

SPU argues that it was entitled to a jury instruction regarding superseding cause and that 

no instruction was given which adequately addressed the defendants’ claim that any damages 

claimed by Printcraft were caused by SPU’s lawful act of disconnecting Printcraft’s sewer 

service. However, as we previously explained, the jury was instructed that SPU lawfully 

terminated Printcraft’s septic system connection and any damages must have been the result of
25

SPU’s wrongful conduct -– in this case, the nondisclosure of the sewer system’s limitations. As 

we stated regarding the exclusion of SPU’s Proposed Instruction No. 16, the jury instructions 

were adequate to indicate to the jury that only those damages Printcraft suffered as a result of the 

breach of the duty to disclose material facts were permitted. 

A superseding cause refers to an independent act or force that breaks the causal chain 

between a defendant’s culpable act and the claimed injury. State v. Lampien, 148 Idaho 367, 374, 

223 P.3d 750, 757 (2009). The dispute in this case centered on whether the defendants failed to 

disclose the limitations as to the type and quantity of waste that Printcraft could discharge with 

knowledge that this information was material to Printcraft’s decision to relocate to the industrial 

park. Although the district court found that SPU’s act of disconnecting Printcraft was lawful, this 

does not dictate the conclusion that the lawful disconnection was a superseding cause of 

Printcraft’s claimed injury. Regardless of whether Printcraft was prohibited by law from 

discharging its waste into the septic system, or prohibited in fact by the physical disconnection 

from the system, the lack of access to a suitable sewage disposal system was the source of the 

damages at the heart of Printcraft’s claim. The particular fashion in which the claimed injury 

arose did not break the causal chain between the claimed breach of duty and the claimed 

damages. The district court properly refused to give the requested instruction.

5. The district court properly refused to give jury instructions regarding the district 

court’s pre-trial orders.

After the district court limited the defendants’ opening statements by prohibiting a 

recitation of the court’s pre-trial orders, the defendants submitted an amended list of proposed 

instructions that included those pre-trial rulings. The district court declined to give the additional 

instructions. Printcraft argues that Proposed Jury Instructions 38-42 were untimely and therefore 

properly excluded. SPU admits as much. The instructions were, therefore, properly excluded.

The fact that this may not have been the basis of the district court’s decision is irrelevant upon 

appeal. “Where an order of a lower court is correct, but based upon an erroneous theory, the 

order will be affirmed upon the correct theory.” McGrew v. McGrew, 139 Idaho 551, 559, 82 

P.3d 833, 841 (2003).
26

G. The district court properly denied Printcraft’s request for costs and attorney fees.

Printcraft asks this Court to reverse the district court’s denial of its request for attorney 

fees below under I.C. § 12-120(3) and additionally requests attorney fees on appeal under the 

same statutory provision. Therefore, the issues are treated together.

Printcraft was the prevailing party below. “An award of attorney fees under Idaho Code § 

12-120(3) is proper if a ‘commercial transaction is integral to the claim, and constitutes the basis 

upon which the party is attempting to recover.’” Meyers v. Hansen, 148 Idaho 283, 292, 221 P.3d 

81, 90 (2009) (quoting Brower v. E.I. DuPont De Nemours & Co., 117 Idaho 780, 784, 792 P.2d 

345, 349 (1990)).

The awarding of attorney fees under I.C. 12-120(3) is reviewed for an abuse of 

discretion. Fox v. Mountain West Elec., Inc., 137 Idaho 703, 711, 52 P.3d 848, 

856 (2002). To prove an abuse of discretion this Court looks to three factors: (1) 

whether the trial court correctly perceived the issue as one of discretion; (2) 

whether the trial court acted within the boundaries of its discretion and consistent 

with legal standards applicable to the specific choices available to it; and (3) 

whether the trial court reached its decision by an exercise of reason. Id. However, 

whether a statute awarding attorney fees applies to a given set of facts is a 

question of law and subject to free review. Ransom v. Topaz Marketing, L.P., 143 

Idaho 641, 644, 152 P.3d 2, 5 (2006).

Vanderford Co., 144 Idaho at 552, 165 P.3d at 266. “Whether a district court has correctly 

determined that a case is based on a “commercial transaction” for the purpose of I.C. § 12-120(3) 

is a question of law. This Court exercises free review over questions of law.” Fritts v. Liddle & 

Moeller Const., Inc., 144 Idaho 171, 173, 158 P.3d 947, 949 (2007) (internal citations omitted).

This Court has held that only the parties to the commercial transaction are entitled to 

attorney fees under I.C. § 12-120(3). E.g. BECO Constr. Co. v. J-U-B Eng’rs, Inc., 145 Idaho 

719, 726, 184 P.3d 844, 851 (2008); Soignier v. Fletcher, 151 Idaho 322, 327, 256 P.3d 730, 735 

(2011); Harris, Inc. v. Foxhollow Constr. & Trucking, Inc., 151 Idaho 761, 778, 264 P.3d 400, 

417 (2011). Thus, even though fees are available in cases involving a tort claim, a commercial 

transaction between the parties to the lawsuit must form the basis of the claim.

In this case, the issue is whether there was a commercial transaction between Printcraft

and any of the defendants. Waters admitted at trial that there were no contracts between 
27

Printcraft and either Beck, Woolf, or SPU.5 Instead, Printcraft points to two other potential 

commercial transactions: the Third Party Beneficiary Agreement and the “totality of the parties’ 

dealings.” The first suggested basis does not support application of I.C. § 12-120(3) because the 

Third Party Beneficiary Agreement was not an agreement between Printcraft and the defendants, 

but rather an agreement between the industrial park and the defendants. Thus, although Printcraft 

was asserting rights created under that agreement, there was no commercial transaction between 

the parties that gave rise to this litigation.

The second claimed basis suffers from the same defect. Printcraft contends that the 

lawsuit originated from “a series of interactions between the parties.” However, as previously 

explained, there were no transactions between Printcraft and the defendants. Printcraft cites 

Lettunich v. Key Bank National Association, 141 Idaho 362, 109 P.3d 1104 (2005), for the 

proposition that claims arising in a “commercial context,” even in the absence of a contract, 

constitute claims based upon a commercial transaction. However, in that case, the fraud claim 

was based upon statements allegedly made to the plaintiff by the defendant’s employee. Thus, 

the “commercial context” clearly referred to conduct or transactions between the parties. Here, 

even if there are several commercial transactions that created the circumstances underlying the 

claims, none of those transactions are between the parties. Therefore, we hold that Printcraft’s 

claims were not based upon a commercial transaction between the parties and we affirm the trial 

court’s denial of attorney fees under I.C. § 12-120(3).

For the same reason, Printcraft is not entitled to attorney fees on appeal.

IV. CONCLUSION

We reverse the district court’s grant of SPU’s motion under I.R.C.P. 60(b)(2). We affirm 

the district court’s denial of the defendants’ motion for JNOV as to the existence and breach of a 

duty to disclose and as to the amount of damages. We hold that the district court did not abuse its 

discretion in excluding jury instructions 16, 31, 34, and 38-42, nor in declining to submit 

Printcraft’s question of punitive damages to the jury. We affirm the district court’s order denying

Printcraft’s request for attorney fees below. Because both parties prevailed in part, we do not 

award costs or attorney fees on appeal.

Chief Justice BURDICK and Justices EISMANN, J. JONES and W. JONES CONCUR.

 5 While Waters was personally involved as an owner of many of the entities participating in the transactions that 

eventually led to Printcraft’s leasing of the property, Printcraft, the only Waters-owned entity that is a party in this 

lawsuit, was not a party to any transaction involving the defendants.