Case Name: G&M FARMS, a partnership, Plaintiff-Appellant, v. FUNK IRRIGATION COMPANY, Lindsay Manufacturing Company, and DeKalb Agresearch, Inc., corporations, Defendants-Respondents; FUNK IRRIGATION COMPANY, Counterclaimant, v. G&M FARMS, a partnership, Counterdefendant
Court: Idaho Supreme Court
Jurisdiction: Idaho
Decision Date: 1991-03-19
Citations: 119 Idaho 514
Docket Number: No. 18136
Parties: G&M FARMS, a partnership, Plaintiff-Appellant, v. FUNK IRRIGATION COMPANY, Lindsay Manufacturing Company, and DeKalb Agresearch, Inc., corporations, Defendants-Respondents. FUNK IRRIGATION COMPANY, Counterclaimant, v. G&M FARMS, a partnership, Counterdefendant.
Judges: JOHNSON and McDEVITT, JJ., concur.
Reporter: Idaho Reports
Volume: 119
Pages: 514–539

Head Matter:
808 P.2d 851
G&M FARMS, a partnership, Plaintiff-Appellant, v. FUNK IRRIGATION COMPANY, Lindsay Manufacturing Company, and DeKalb Agresearch, Inc., corporations, Defendants-Respondents. FUNK IRRIGATION COMPANY, Counterclaimant, v. G&M FARMS, a partnership, Counterdefendant.
No. 18136.
Supreme Court of Idaho, Boise,
February 1990 Term.
March 19, 1991.
Green, Service, Gasser & Kerl, Pocatello, for plaintiff-appellant. James B. Green, Pocatello, argued.
Elam, Burke & Boyd, Boise, for defendants-respondents Lindsay and DeKalb. Bobbi K. Dominick, Boise, argued.
Quane, Smith, Howard & Hull, Boise, for defendant-respondent Funk Irr. Allyn L. Sweeney, Boise, argued.

Opinion:
BOYLE, Justice.
In this appeal from entry of a partial summary judgment, we are called upon to determine whether the trial court correctly ruled that plaintiff failed to establish a prima facie case on the claims for intentional and negligent misrepresentation.
The plaintiff-appellant, G & M Farms, is the purchaser of an agriculture irrigation system manufactured by the defendant-respondent Lindsay Manufacturing Company and distributed by Lindsay's co-defendant-respondent, Funk Irrigation. According to the record, G & M Farms began negotiating in the summer of 1984 with Funk Irrigation and Lindsay Manufacturing for the purchase of a Lindsay Generation II Zimmatic three-quarter mile wide lateral move pipeline irrigation system. In July of 1984, a purchase order was prepared by Funk Irrigation, but it was never signed by either party. In August, 1984 James O'Cilka, a Lindsay representative, visited G & M Farms' property to inspect the lay of the land to determine the suitability of this particular system for G & M Farms' use. The record demonstrates that O'Cilka represented to G & M Farms that the machine was suitable for the proposed site and that it would work on that particular terrain. Subsequent to this meeting, and relying on the representations of O'Cilka, G & M Farms agreed to purchase and install the Lindsay Generation II system. A second purchase order was prepared and signed by G & M Farms on October 17, 1984 and a third purchase order, intended to modify the contract price, was prepared in December, 1984, but was never signed.
The Lindsay irrigation system was installed and operational by June, 1985, however G & M Farms asserts that throughout the 1985 crop season it repeatedly malfunctioned, broke down and stopped operating, requiring numerous repairs and modifications. Plaintiff alleged that these numerous malfunctions resulted in an insufficient water supply to G & M's crops causing crop losses.
On October 7, 1985, G & M Farms notified Funk Irrigation that it was revoking acceptance of the Lindsay irrigation system and the following January filed this action for economic loss against Funk Irrigation, Lindsay Manufacturing and DeKalb Agresearch, Inc., parent corporation of Lindsay Manufacturing. G & M Farms seeks to hold the defendants liable for the amount paid for the irrigation system, for economic loss damages resulting from crop loss and for incidental losses relating to the deficiencies of the irrigation system. G & M Farms bases its claims for damages on the theories of breach of contract, breach of express and implied warranties, negligent design and manufacture, and intentional and negligent misrepresentation. Funk Irrigation counterclaimed for the balance of the purchase price.
The trial court granted a partial summary judgment in favor of the defendants on the negligent and intentional misrepresentation claims and the negligent design and manufacture claim. The trial court's basis for granting the partial summary judgment on the negligent manufacturing claim was that a plaintiff is prohibited from recovering purely economic losses in a products liability action sounding in tort. The partial summary judgments on the intentional and negligent misrepresentation claims were granted on the basis that G & M Farms failed to establish a prima facie case supported by clear and convincing evidence. G & M Farms appeals from the trial court's entry of summary judgment against it on the claims for negligent and intentional misrepresentation. These issues were certified as final pursuant to I.R.C.P. 54(b) and are thus appealable. Walker v. Shoshone County, 112 Idaho 991, 739 P.2d 290 (1987).
The primary issue presented in this appeal is whether the trial court erred in granting the respondents' motion for summary judgment on the claims for negligent and intentional misrepresentation.
I.
Standard of Review
It is well established that "[A] motion for summary judgment shall be rendered forthwith if the pleadings, depositions, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law." I.R.C.P. 56(c); Olson v. Freeman, 117 Idaho 706, 791 P.2d 1285 (1990); Rawson v. United Steelworkers of Am., 111 Idaho 630, 726 P.2d 742 (1986); Boise Car & Truck v. Waco, 108 Idaho 780, 702 P.2d 818 (1985); Schaefer v. Elswood Trailer Sales, 95 Idaho 654, 516 P.2d 1168 (1973). Upon a motion for summary judgment, all controverted facts are liberally construed in favor of the non-moving party. Tusch Enters, v. Coffin, 113 Idaho 37, 740 P.2d 1022 (1987); Doe v. Durtschi, 110 Idaho 466, 716 P.2d 1238 (1986); Kline v. Clinton, 103 Idaho 116, 645 P.2d 350 (1982). Likewise, all reasonable inferences which can be made from the record shall be made in favor of the party resisting the motion. Tusch Enters, v. Coffin, 113 Idaho 37, 740 P.2d 1022 (1987); Doe v. Durtschi, 110 Idaho 466, 716 P.2d 1238 (1986); Meridian Bowling Lanes, Inc. v. Meridian Athlete Ass'n, Inc. 105 Idaho 509, 670 P.2d 1294 (1983); Anderson v. Ethington, 103 Idaho 658, 651 P.2d 923 (1982); Kline v. Clinton, 103 Idaho 116, 645 P.2d 350 (1982). The burden at all times is upon the moving party to prove the absence of a genuine issue of material fact. Petricevich v. Salmon River Canal Company, 92 Idaho 865, 452 P.2d 362 (1969). However, the plaintiffs case must be anchored in something more than speculation and a mere scintilla of evidence is not enough to create a genuine issue. Id. See also Nelson v. Steer, 118 Idaho 409, 797 P.2d 117 (1990). If the record contains conflicting inferences or reasonable minds might reach different conclusions, a summary judgment must be denied. Kline v. Clinton, 103 Idaho 116, 645 P.2d 350 (1982); Farmer's Ins. Co. of Idaho v. Brown, 97 Idaho 380, 544 P.2d 1150 (1976). All doubts are to be resolved against the moving party, and the motion must be denied if the evidence is such that conflicting inferences may be drawn therefrom, and if reasonable people might reach different conclusions. Doe v. Durtschi, 110 Idaho 466, 716 P.2d 1238 (1986); Ashby v. Hubbard, 100 Idaho 67, 593 P.2d 402 (1979).
However, in cases such as the instant action, where the standard of proof required of the plaintiff at trial is clear and convincing evidence, we have been urged to adopt a standard which would require the trial courts to take that quality and quantity of evidence into account when ruling on motions for summary judgment. The position urged by respondents is based on an extension of the standard adopted in defamation cases in Weimer v. Rankin, 117 Idaho 566, 790 P.2d 347 (1990), and Anderson v. Liberty Lobby, 477 U.S. 242, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). In defamation cases clear and convincing evidence is required at trial and the question on summary judgment is whether the record discloses evidence such that a jury applying the clear and convincing standard could reasonably find for the plaintiff. Anderson v. Liberty Lobby, id.; Weimer v. Rankin, id.
In Nelson v. Steer, 118 Idaho 409, 797 P.2d 117 (1990), an action which alleged interference with contract and breach of fiduciary duty, we cited Anderson v. Liberty Lobby for the well-established summary judgment principles that it is not the trial court's function to weigh the evidence, but to determine whether there is a genuine issue for trial. There is no issue for trial unless there is sufficient evidence favoring the non-moving party for a jury to return a verdict for that party, and that summary judgment should be granted if the evidence in opposition to the motion is merely color-able or is not significantly probative. 118 Idaho 409, 410, 797 P.2d 117, 118. As will be discussed below, the evidence submitted by G & M Farms in opposition to respondents' motions for summary judgment is not merely colorable, but rather is significantly probative and is sufficient to withstand entry of summary judgment particularly where the evidence in the record is not applied nor considered under a clear and convincing evidence standard.
Our citation to Anderson v. Liberty Lobby in Nelson v. Steer was intended for the purpose relating to those summary judgment principles discussed in Nelson. By our citation to Liberty Lobby in Nelson v. Steer, we did not intend therein to adopt a clear and convincing evidence standard in summary judgment proceedings in all cases where the burden of proof at trial is by clear and convincing evidence.
Therefore, for reasons set forth and discussed hereinafter, we decline to extend the elevated summary judgment burden of proof established in Weimer v. Rankin and Anderson v. Liberty Lobby in defamation cases to the summary judgment proceedings on the legal theories presented in the instant appeal. Rather, the traditional I.R.C.P. 56(c) summary judgment principles and standards govern the granting of summary judgment on the issues of fraud and intentional misrepresentation.
II.
Dismissal of Intentional Misrepresentation Claim
In its complaint appellant G & M Farms alleges intentional misrepresentation by defendants Lindsay Manufacturing and DeKalb Agresearch, Inc. G & M Farms asserts that Lindsay Manufacturing and DeKalb Agresearch, Inc., falsely represented that the Generation II system possessed the capacity and operational capability to meet the general and special needs of G & M Farms and failed to disclose facts known exclusively by the defendants concerning the expected problematic performance of this particular system. The appellant bases its claim on four statements made by the representatives of Lindsay Manufacturing. These include representations that (1) the irrigation system "would work"; (2) there were "thousands of these machines around"; (3) Lindsay had experienced "great success" with this irrigation system and that Lindsay had received "no complaints"; and (4) G & M Farms were "the only ones having problems."
To establish actionable fraud, also referred to as intentional misrepresentation, a plaintiff must prove the following elements:
(1) a representation; (2) its falsity; (3) its materiality; (4) the speaker's knowledge of its falsity or ignorance of its truth; (5) his intent that it should be acted on by the person and in the manner reasonably contemplated; (6) the hearer's ignorance of its falsity; (7) his reliance on the truth; (8) his right to rely thereon; and (9) his consequent and proximate injury.
Tusch Enters. v. Coffin, 113 Idaho 37, 41, 740 P.2d 1022, 1026 (1987); Faw v. Greenwood, 101 Idaho 387, 613 P.2d 1338 (1980); Smith v. King, 100 Idaho 331, 597 P.2d 217 (1979); Mitchell v. Siqueiros, 99 Idaho 396, 582 P.2d 1074 (1978). The party alleging fraud must support the existence of each of the elements of the cause of action for fraud by pleading with particularity the factual circumstances constituting fraud. I.R.C.P. 9(b); Theriault v. A.H. Robins, 108 Idaho 303, 307, 698 P.2d 365, 369 (1985); Galaxy Outdoor Advertising v. Idaho Transp. Dep't, 109 Idaho 692, 710 P.2d 602 (1985); see Witt v. Jones, 111 Idaho 165, 722 P.2d 474 (1986). Furthermore, the party alleging an action for fraud has the burden of proving all these elements at trial by clear and convincing evidence. Faw v. Greenwood, 101 Idaho 387, 613 P.2d 1338 (1980); Smith v. King, 100 Idaho 331, 597 P.2d 217 (1979); Gneiting v. Clement, 96 Idaho 348, 528 P.2d 1283 (1974).
In its memorandum decision and order, the trial court observed that the parties did not dispute that Lindsay's representative made the four statements alleged to be misrepresentations, and then analyzed each statement separately to determine whether the statement demonstrated a sufficient basis for proof of fraud. Upon review we must also determine whether the defendants' statements provide the basis for a claim of intentional misrepresentation, and whether the record supports the trial court's determination that there are no genuine issues of material fact and that the respondents were entitled to judgment as a matter of law.
A. Representations Made By Lindsay
1. Representation That The Irrigation System "Would Work."
G & M Farms contends that in August, 1984, James O'Cilka, a Lindsay repre sentative, visited G & M Farms' property to inspect the lay of the land and to determine the suitability of the Generation II irrigation system for G & M's purposes. In his deposition, Gary Funk, a partner in G & M Farms, stated that he asked O'Cilka if the irrigation system would cover the necessary ground and supply sufficient water. O'Cilka's reply was "yes it will work." Mr. Funk stated that he relied on O'Cilka's judgment because he was the factory representative and because O'Cilka stated that they had "thousands" of these machines, that they were a "great success," and were operating with no customer complaints.
As evidence that these representations were false, and that the respondents had knowledge of their falsity, G & M Farms placed into the record two indemnity agreements entered into between Lindsay Manufacturing and Funk Irrigation. In addition to the indemnity agreements, deposition testimony regarding mechanical failures with other Generation II systems was presented to the trial court.
The first indemnity agreement presented by G & M Farms was entered into between Lindsay and Funk on August 22, 1984 and pertained to the purchase of two Lindsay Generation II three-quarter-mile lateral move irrigation systems. This indemnity agreement was entered into after G & M Farms started its negotiations with Funk for the purchase of the irrigation system, but more than a month prior to G & M Farms signing the October, 1984 purchase order agreement with Lindsay. This indemnity agreement (contained as Attachment A in the addendum to this opinion) stated that the Lindsay Generation II was not designed for the length required by Funk Irrigation and that there existed certain operational characteristics of the equipment which had not been corrected and which may cause the system to misalign and shut down. The indemnity agreement further stated, "Lindsay is willing to sell the same to Funk only upon condition that Funk indemnify and hold harmless Lindsay from any claim of damages that may result from the above ." Gordon Toevs, manager for Funk Irrigation, stated in his deposition that the two machines referred to in the first indemnity agreement applied to two three-quarter-mile wide machines which had been ordered for the Behrend farm located next to G & M Farms. Toevs stated in his deposition that Lindsay would not sell the machines to Funk Irrigation without the indemnity agreement because Lindsay was concerned it did not have sufficient experience with three-quarter mile wide irrigation machines. Toevs also stated in his deposition that at the time he signed the first indemnity agreement, he was of the understanding that this was a "blanket" agreement for any over-length system that Funk Irrigation would subsequently purchase from Lindsay.
The second indemnity agreement was entered into between Lindsay and Funk Irrigation in January, 1985 (contained as Attachment B in the addendum to this opinion). This indemnity agreement pertained to the actual machine sold to G & M Farms and expressly stated that Lindsay did not recommend the system, that it was not designed for the three-quarter mile length requested by Funk, and that its length may cause the system to misalign and shut down. This agreement also stated that Lindsay would sell the system only if Funk Irrigation agreed to indemnify and hold harmless Lindsay from any claims for damages.
G & M Farms asserts that at no time did a Lindsay representative inform G & M Farms that the Generation II system was not designed for the three-quarter mile length or that the system possessed certain operational characteristics which may affect its operation under normal operating conditions. G & M Farms contends that it was not aware that Lindsay personnel would be unavailable to work on this system which Lindsay knew would not operate or function properly. G & M Farms argues that these two indemnity agreements clearly established at the time of the sale negotiations and at the time the purchase contract was signed that Lindsay knew that the system was not operational. G & M Farms further argues that Lindsay intentionally misrepresented and failed to dis close material information regarding that fact.
With regard to O'Cilka's statement to Gary Funk that the Generation II three-quarter mile length irrigation system "would work," the trial court held:
[TJhere are disputed issues of fact concerning some of the elements of misrepresentation. For example, there is evidence in the record that the representation was made, that it was material to the plaintiff's decision to purchase the irrigation system, and that it was made with the intent that it should be acted upon by the plaintiff. Likewise the indemnification agreement between Lindsay and Funk Irrigation dated January 29, 1985 contained statements indicating that the defendants knew that the system would not work and that their statements to the contrary were false. In short, there are issues of fact which would, under most circumstances, preclude the granting of summary judgment. However, the weakness of the plaintiff's claim is that representation is only actionable if it relates to an existing or past fact. The courts have consistently held "that a representation consisting of a promise or statement as to a future event will not serve as a basis for fraud, even though it was made under circumstances of 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, 505 [504] P.2d 386 (1972).
Citing Tusch Enters, v. Coffin, 113 Idaho 37, 740 P.2d 1022 (1987), G & M Farms concede that O'Cilka's representation that the system "would work" pertains in part to the future, but argues that the representations also touch on past and existing facts and events. G & M Farms contend that the failure to disclose known facts concerning the problematic design and the likely malfunctioning of the irrigation system falls within the category of intentional misrepresentation cases based on nondisclosure of material information. We agree.
In Tusch Enters, v. Coffin, 113 Idaho 37, 41, 740 P.2d 1022, 1026 (1987), this Court held that an intentional misrepresentation or fraud claim should not be analyzed only with reference to the elements recited in Faw v. Greenwood, 101 Idaho 387, 613 P.2d 1338 (1980). We stated in Tusch that the facts of that case fell within the category of misrepresentation on the basis of nondisclosure. 113 Idaho at 41-42, 740 P.2d at 1026-27. The plaintiff in Tusch Enterprises was a purchaser of several duplexes and the defendants were the respective builder and vendor of the duplexes. The vendor stated that the buildings were of "good quality construction." It was later shown that the buildings had been constructed on fill dirt which eventually settled and caused the foundations and walls to crack. Tusch Enterprises submitted proof that it was not told of the fill dirt conditions or of possible problems with the foundations. We held that the vendor should have disclosed the latent fill dirt problems and that Tusch Enterprises was entitled to rely upon the vendor's representation that the dwellings were well constructed. The trial court's entry of summary judgment against Tusch Enterprises was reversed on the fraud claim, and the case was remanded for trial.
In Bethlahmy v. Bechtel, 91 Idaho 55, 415 P.2d 698 (1966), a home builder failed to disclose to a purchaser the presence of an unsealed irrigation ditch running beneath the garage of the house which, in conjunction with the fact that the basement was not of waterproof construction, caused seepage into the basement during the irrigation season. We held in Bethlahmy that the failure to disclose these major defects which were known to the defendants and unknown to the plaintiffs, and not discoverable upon reasonable inspection, supported a finding of fraud.
In the instant case, for purposes of creating genuine issues sufficient to withstand summary judgment, the indemnity agreements support the claim that Lindsay Manufacturing was aware of defects with the irrigation system it was selling to G & M Farms. Although the first indemnity agreement, which was entered into prior to the sale of the irrigation system to G & M Farms, does not refer to the actual machine sold to G & M Farms, it does pertain to the same model machine and system sold to G & M Farms. In the first indemnity agreement, as well as the January, 1985 agreement, Lindsay expressly states that the machine is not designed for the three-quarter mile length, and that there are operational characteristics which are likely to cause the machine to malfunction. These operational characteristics and the design limitations constitute, for purposes of summary judgment proceedings, hidden conditions or defects similar in nature to those presented in Tusch Enterprises or Bethlahmy.
Fraud may be established by silence where the defendant had a duty to speak. Chiarella v. United States, 445 U.S. 222, 100 S.Ct. 1108, 63 L.Ed.2d 348 (1980); see also Tusch Enters. v. Coffin, 113 Idaho 37, 740 P.2d 1022 (1987) (failure to disclose may amount to a misrepresentation); Bethlahmy v. Bechtel, 91 Idaho 55, 415 P.2d 698 (1966) (failure to disclose may amount to a misrepresentation); Jones v. Majestas, 108 Idaho 69, 696 P.2d 920 (Ct.App.1985) (fraud may be established by silence where information to be conveyed is not already in possession of other party). A duty to speak arises in situations where the parties do not deal on equal terms or where information to be conveyed is not already in possession of the other party. Jones v. Maestas, 108 Idaho 69, 696 P.2d 920 (Ct.App.1985); see also Sorenson v. Adams, 98 Idaho 708, 571 P.2d 769 (1977) (silence in circumstances where a prospective purchaser might be led to harmful conclusion is a form of "representation").
In the instant case the indemnity agreements in the record demonstrate that Lindsay knew that the Generation II machine ordered by G & M Farms was not designed for the three-quarter mile length as required by G & M Farms. The indemnity agreements also indicate that Lindsay knew that the Generation II three-quarter mile irrigation system possessed certain operational characteristics which might cause it to malfunction or shut down under normal operating conditions. Knowledge of these operational and design defects was known only to Lindsay and discoverable by G & M Farms only after purchase and installation of the extensive irrigation system. Under these circumstances the inference can be drawn that G & M Farms and Lindsay were not dealing on equal terms. Consequently, for purposes of our review on summary judgment, Lindsay had a duty to disclose that the system was not designed for the length required by G & M Farms and that the system was likely to malfunction or shut down under normal operating conditions. Such information was material to G & M Farms' decision to purchase the irrigation system. "Materiality refers to the importance of the misrepresentation in determining the plaintiff's course of action." Edmark Motors, Inc. v. Twin Cities Toyota, 111 Idaho 846, 727 P.2d 1274 (Ct.App.1986). This information, if known to G & M Farms, may well have induced G & M Farms to refrain from purchasing the machine which would have resulted in Lindsay losing the $425,000.00 sale. Instead, Lindsay representatives assured G & M Farms that the system would work. G & M Farms had the right to rely on the manufacturer's representation that the machine would perform the job for which it was purchased. As evidence of reliance, Gary Funk stated in his deposition that he had received a bid from another dealer, Lockwood, that was approximately $20,000.00 to $50,000.00 less expensive than the Funk Irrigation bid. Notwithstanding the lower bid, the record supports an inference that G & M Farms accepted Funk Irrigation's bid because it had been assured by Lindsay representatives that the three-quarter mile linear system would work, whereas Lockwood would not make a similar guarantee.
A liberal construction of the facts contained in the record, and drawing all reasonable inferences in favor of G & M Farms as the non-moving party, demonstrates the existence of genuine issues of material fact sufficient to withstand granting of summary judgment. Lindsay's failure to disclose that the machine was not designed for the length required and that it possessed operational characteristics which had not been corrected and which would likely cause the machine to shut down, are latent defects and material to a decision to purchase the machine. Clearly, if true, Lindsay had a duty to divulge this information to G & M Farms prior to it entering into a contractual agreement for the purchase of such machine. Tusch Enters, v. Coffin, 113 Idaho 37, 740 P.2d 1022 (1987); see also Bethlahmy v. Bechtel, 91 Idaho 55, 415 P.2d 698 (1966). The indemnity agreements in the record demonstrate Lindsay's knowledge of those latent defects. Hence, there exist genuine issues of material facts which preclude granting of summary judgment on the intentional misrepresentation claim against Lindsay Manufacturing and DeKalb, Inc.
2. Representation That There Were "Thousands of These Machines Around."
In August, 1984 when O'Cilka inspected the farm, the record clearly reveals that he represented to Gary Funk that there were "thousands of these machines around." Gary Funk testified in his deposition that he understood this to mean linear machines and, being assured by O'Cilka that there were many of these machines in use and operative, made him comfortable about purchasing the Lindsay system. However, it was only after the system was installed and experiencing substantial mechanical failures did Funk learn that there were only twenty-five or thirty linear machines in operation and only five three-quarter mile machines, including the one installed on G & M Farms' property.
In its memorandum decision and order, the trial court held that G & M Farms had not presented evidence establishing that the representation that there were "thousands of these machines around" was false and that the speaker knew of its falsity. In addition, the trial court held that the evidence did not establish that this statement was material to, or that G & M Farms had relied upon the truth of this statement in deciding to purchase the Lindsay system. The trial court stated that the statement can best be viewed simply as "puffing" or "sales talk" and therefore not actionable.
We disagree. Although the general rule with regards to "trade talk," "dealer's talk," "puffing," and "seller's talk," is that such statements do not amount to actionable misrepresentation, this rule is not applicable where the parties to the transaction do not stand on equal footing or have equal means of knowing the truth. Weitzel v. Jukich, 73 Idaho 301, 251 P.2d 542 (1952). O'Cilka represented to G & M Farms that there were thousands of the machines in use like the one being sold to them. However, it appears from our review of the record that there were only twenty-five or thirty, if it was Generation II machines that were being referred to, or as few as four irrigation systems if the reference applied to the three-quarter mile machine. There is a substantial difference between a representation that thousands of these machines exist versus the reality of somewhere between four and thirty of the systems in operation. Such a statement, for purposes of summary judgment proceedings, does not constitute mere sales talk or puffing and may give rise to an award of damages. The representation that thousands of these machines exist may also have been taken as an indication of the machine's quality and reliability which is material to the decision to purchase a $450,000.00 irrigation system. Based on our review of the entire record and the facts in this case we conclude, for summary judgment purposes, that the representation "there are thousands of these machines around" is not mere puffing or sales talk and may be the basis for a claim for intentional misrepresentation.
The well-established standards governing motions for summary judgment require that all reasonable inferences drawn from the statements be construed in favor of the nonmoving party. Tusch Enters, v. Coffin, 113 Idaho 37, 740 P.2d 1022 (1987); Doe v. Durtschi, 110 Idaho 466, 716 P.2d 1238 (1986); Meridian Bowling Lanes, Inc. v. Meridian Athlete Ass'n, Inc., 105 Idaho 509, 670 P.2d 1294 (1983). Thus, when construed in favor of the nonmoving party we reasonably infer that O'Cilka's statement referred to the Generation II Lateral Move Irrigation System. In conjunction with the other statements and representations made by the defendants, we hold that the statement "there are thousands of these machines around" creates a genuine issue of fact and supports G & M Farms' claim of intentional misrepresentation sufficient to withstand entry of summary judgment.
3. Representation That The System Was A "Great Success" And That There Have Been "No Complaints."
G & M Farms contends that Lindsay was aware of the falsity of this representation due to the complaints of other purchasers and dealers. G & M Farms further maintains that the Generation II linear machine was an experimental machine, not proven technology, and that Lindsay had an obligation to inform G & M Farms of this prior to the sale. In support of its claim, G & M Farms heavily relies on similar problems experienced with the Generation II system by an Arizona farmer named Raymond Clayton. However, the trial court held that "a single instance of problems with linear irrigation systems which were ultimately resolved and involved different problems does not provide a basis for showing that the Lindsay representatives knew that their representations were false, particularly when such knowledge must be shown by clear and convincing evidence." As support for its claim, G & M Farms cites to deposition statements made by Pat Hennesy, Jr., a Lindsay manufacturer's representative, concerning the nine Generation II irrigation systems sold in Arizona to Clayton. Hennesy testified that Clayton had originally contracted to purchase Generation I machines but, as a result of Lindsay's urging, Clayton agreed to accept Generation II machines. Hennesy states in his deposition that the nine machines sold to Clayton in mid-1983, were the first Generation II systems sold and following installation there were numerous problems with the machines which were so severe as to require repair and maintenance personnel on site at all times in order to keep the machines running. Hennesy also testified in his deposition that during this period of time there were dealer council meetings, the focus of which was the Generation II machine, apprising Lindsay of extensive field problems with this particular irrigation system.
Gary Funk testified in his deposition that he personally traveled to Arizona and visited Clayton's farm. Funk stated that he talked with a foreman working on Clayton's farm who told him about the machine's many mechanical failures and the problems they encountered in keeping the irrigation systems running. Funk also testified that he talked with an irrigation system dealer in Arizona who commented that the Clayton installation was somewhat of an experimental situation to see how the Generation II's would perform. Funk testified in his deposition that he spoke with several other Arizona irrigation system dealers who told him that they had experienced numerous problems with the Generation II system, and that another Arizona farmer told him that his Lindsay Generation I system had worked adequately but that he had experienced significant problems with the Generation II linear machine. Funk also testified in his deposition that he spoke with a past president of the Lindsay Dealers Council who told him of a former employee of DeKalb who quit because he would not sell farming equipment he believed would not work. Funk testified that he was told by Hennesy that the Generation II machines in California had just as many problems as those experienced by G & M Farms and that Lindsay should have researched its machine more thoroughly before marketing it. According to Funk, Hennesy also told him that Lindsay was trying to keep the problems with the Generation II quiet because there was interest in the machines from consumers in South Africa and Australia.
The foregoing deposition testimony is cited to demonstrate the extensive troubled history of the Generation II irrigation system which was contained in the record. The statements by Funk with regard to what was told to him by various individuals not employed by defendants is hearsay and therefore inadmissable to prove the falsity of the statements that the irrigation systems were a "great success" with "no complaints". However, Pat Hennesy, Jr.'s statements regarding the Generation II machines installed on Clayton's farm are admissible evidence. Based on the evidence of known, extensive problems set forth in the record, we disagree with the trial court's conclusion that "a single instance of problems with linear irrigation systems [machines on Clayton's farm] which were ultimately resolved and involved different problems does not provide a basis for showing that the Lindsay representatives knew their representations were false."
At the time the Generation II equipment was installed on Clayton's Arizona farm, the record indicates that his nine irrigation systems were the only Generation II machines in existence. Thus it is axiomatic that G & M Farms relies heavily on the problems experienced by Clayton to demonstrate Lindsay's knowledge of the mechanical failures associated with Generation II machines. Although the mechanical failures experienced by Clayton were not identical to those experienced by G & M Farms, the problems encountered were sufficiently similar and equally as severe. Like G & M Farms, Clayton's problems were so severe as to require repair personnel on the farm at all times just to keep the machines operating. The record before us leads to the inference that Lindsay was aware of these mechanical problems since it was often Lindsay's personnel making the repairs on Clayton's machinery. Furthermore, Lindsay was aware of the operational problems as a result of the dealer council meetings which provided input from various manufacturer's representatives concerning the problematic performance of the Generation II machines. The fact that mechanical problems on Clayton's machines were ultimately repaired is irrelevant. What is relevant, however, is Lindsay's knowledge pri- or to, and at the time of, the G & M Farms transaction that problems existed and until they were repaired, the irrigation system machine was not going to work properly and as a result G & M Farms was risking crop damage. Viewing this evidence in a light most favorable to the plaintiffs, we hold that genuine issues of material fact exist as to whether the defendants knew their representations regarding the irrigation system were false.
B. Summary Judgment Should Not Have Been Granted On Intentional Misrepresen ta tion
Although the standard for summary judgment was previously discussed in Part I, the issues presented in this action warrant further discussion. If uncontroverted facts exist which lead to a definite disposition as a matter of law, summary judgment is appropriate. Kline v. Clinton, 103 Idaho 116, 645 P.2d 350 (1982); Smith v. Boise Kenworth Sales, Inc., 102 Idaho 63, 625 P.2d 417 (1981). Controverted facts are viewed in favor of the party resisting the motion for summary judgment. Tusch Enters, v. Coffin, 113 Idaho 37, 740 P.2d 1022 (1987); Doe v. Durtschi, 110 Idaho 466, 716 P.2d 1238 (1986). It is well established that the non-moving party is entitled to the benefit of every reasonable inference that can be drawn from the evidentiary facts. Anderson v. Ethington, 103 Idaho 658, 651 P.2d 923 (1982); Kline v. Clinton, 103 Idaho 116, 645 P.2d 350 (1982); Taylor v. Choules, 102 Idaho 222, 628 P.2d 1056 (1981). "The burden of the plaintiff when faced with a motion for summary judgment, is not to persuade the judge that an issue will be decided in his favor at trial. Rather, he simply must present sufficient materials to show that there is a triable issue." Earl v. Cryovac, a Div. of W.R. Grace, 115 Idaho 1087, 1093, 772 P.2d 725, 731 (Ct.App.1989), citing 6 J. Moore, W. Taggart & J. Wicker, Moore's Federal Practice § 56.11(3), at pp. 56-243 (2d ed. 1988) (emphasis original). "A triable issue exists whenever reasonable minds could disagree as to the material facts or the inferences to be drawn from those facts. E.g., Earl v. Cryovac, a Div. of W.R. Grace, 115 Idaho 1087, 772 P.2d 725 (Ct.App.1989); Petricevich v. Salmon River Canal Co., 92 Idaho 865, 452 P.2d 362 (1969). Summary judgment is improperly granted where any genuine issue of material fact remains unresolved. Kline v. Clinton, 103 Idaho 116, 645 P.2d 350 (1982); Taylor v. Choules, 102 Idaho 222, 628 P.2d 1056 (1981). If the record contains conflicting inferences or reasonable minds might reach different conclusions, a summary judgment must be denied. Kline v. Clinton, 103 Idaho 116, 645 P.2d 350 (1982); Farmer's Ins. Co. of Idaho v. Brown, 97 Idaho 380, 544 P.2d 1150 (1976).
A review of the entire record and the evidence presented to the trial court supports an inference that the Generation II lateral move irrigation system was, as the appellant argues, a prototype and not proven technology. Accordingly, if proven to be true, Lindsay had a duty to disclose this information to G & M Farms prior to it purchasing the system. Furthermore, Lindsay clearly had a duty to disclose the fact that the irrigation system installed on G & M Farms' property was not designed for the three-quarter mile length. In construing the evidence in the record most favorable to G & M Farms, and giving it the benefit of all favorable inferences which may be drawn therefrom, there is ample evidence for summary judgment purposes to support each element of the prima facie case necessary for the theory of intentional misrepresentation. In our view of the record, reasonable minds could easily differ regarding these factual issues. We conclude that genuine issues of material fact exist regarding G & M Farms' claim that Lindsay Manufacturing and DeKalb Agresearch failed to disclose material information regarding the Generation II lateral move irrigation system prior to the purchase of the system by G & M Farms. We reverse the trial court's grant of summary judgment against the defendants Lindsay Manufacturing and DeKalb Agresearch on this issue and remand for trial.
In the instant case, the trial court relied on the case of Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986), when it granted the defendant's motion for summary judgment on the intentional misrepresentation claim. Specifically, the trial court stated,
In reviewing the defendant's motion, the court notes that the plaintiff must establish its fraud claims by clear and convincing evidence (citation omitted), and that this elevated standard of summary proof must be taken into account in ruling on the defendant's summary judgment motion. The court's inquiry must be whether the record discloses evidence such that a jury applying the clear and convincing standard could reasonably find for the plaintiff.
In Anderson v. Liberty Lobby, the United States Supreme Court held in a defamation case involving a public figure or public official in which actual malice must be proved, that the clear and convincing standard of proof should be taken into account in ruling on summary judgment motions. We adopted that standard in Weimer v. Rankin, 117 Idaho 566, 790 P.2d 347 (1990), which was also a defamation case. However, although this elevated standard applies in the context of defamation eases, it is not necessary in fraud or intentional misrepresentation actions that the clear and convincing standard of proof required at trial be taken into account as the standard in ruling on a motion for summary judgment.
In Kline v. Clinton, 103 Idaho 116, 645 P.2d 350 (1982), this Court was required to review the granting of partial summary judgment in a case dealing with an oral modification of a written agreement. The trial court granted the defendant's summary judgment motion on the basis that the plaintiffs were unable to show by clear and convincing evidence the terms of the oral agreement. We reversed the trial court's decision and held,
While proof of an oral modification by clear and convincing evidence is the appropriate burden of proof at the trial of a matter, at the summary judgment stage the function of the trial court is not to weigh the evidence or to try the factual issues by whatever standard is appropriate to the case, but merely to determine whether or not there exists any genuine issue of material fact as adduced from the entire record.
Id. at 103 Idaho 121, 645 P.2d at 355. (Emphasis added.)
In Collord v. Cooley, 92 Idaho 789, 451 P.2d 535 (1969), the defendants' motion for summary judgment was granted. On appeal the respondents argued that summary judgment was properly granted because the plaintiffs had failed to come forward with clear and convincing evidence to establish the existence of a contract to make a will. Referring to respondent's position, the Court stated, "[tjhis argument, however, misconstrues the role of a summary judgment. The burden is upon the party moving for summary judgment — the respondents here — to establish that there is no genuine issue of material fact. (Quoting from 6 Moore's Federal Practice, § 56.15[3], pp. 2335-2336 (2d ed. 1966), the Court then stated,
The courts hold the movant to a strict standard. To satisfy his burden the movant must make a showing that is quite clear what the truth is, and that excludes any real doubt as to the existence of any genuine issue of material fact.
92 Idaho at 795, 451 P.2d at 541.
In the instant case, when considered in light of the traditional standards applicable to summary judgment, the record contains controverted facts upon which reasonable minds might reach different conclusions. A review of the entire record and the evidence presented to the trial court in light of that standard could support a conclusion that the Generation II lateral move irrigation system was, as the appellant argues, a prototype and not proven technology and not designed for the three-quarter mile length or terrain. If proven to be true at trial, Lindsay had a duty to disclose this information to G & M Farms prior to it purchasing the system.
Respondents urge that application of the principles first established by the United States Supreme Court in Celotex v. Catrett, 477 U.S. 317, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986), and thereafter adopted by this Court in Olsen v. J.A. Freeman Co., 117 Idaho 706, 791 P.2d 1285 (1990); Sparks v. St. Luke's Regional Medical Center, Ltd., 115 Idaho 505, 768 P.2d 768 (1988); Dekker v. Magic Valley Regional Medical Center, 115 Idaho 332, 766 P.2d 1213 (1988); Badell v. Beeks, 115 Idaho 101, 765 P.2d 126 (1988), requires affirming the entry of partial summary judgment. We disagree. The principle established in Celotex and its progeny simply establishes that the language of Rule 56 requires entry of summary judgment after adequate time for discovery against a party who fails to make a showing sufficient to establish the existence of an element essential to that party's case and in which that party will bear the burden of proof at trial. Celotex v. Catrett, 477 U.S. at 321-25, 106 S.Ct. at 2552-53, 91 L.Ed.2d at 272-75. See also Olsen v. Freeman, 117 Idaho at 720-21, 791 P.2d at 1299-300, and Badell v. Beeks, 115 Idaho at 102, 765 P.2d at 127. In construing the evidence in the record most favorably to G & M Farms, and giving it the benefit of all favorable inferences which may be drawn therefrom, there is evidence to support each element of the prima facie case necessary for the theory of intentional misrepresentation.
We therefore conclude that genuine issues of material fact exist regarding G & M Farms' claim that Lindsay Manufacturing and DeKalb Agresearch, as Lindsay's parent company, failed to disclose material information regarding the Generation II lateral move irrigation system prior to the purchase of the system by G & M Farms. Accordingly, we reverse the summary judgment granted against defendants Lindsay Manufacturing and DeKalb Agresearch on this issue and remand for trial.
Although we hold that application of the clear and convincing evidence standard is not required in these summary judgment proceedings, and continue to adhere to the traditional Rule 56 standards, it must be kept in mind that the plaintiff must still prove the claims and allegations of fraud and intentional misrepresentation at trial by clear and convincing evidence. Tusch Enters, v. Coffin, 113 Idaho 37, 740 P.2d 1022 (1987); Faw v. Greenwood, 101 Idaho 387, 613 P.2d 1338 (1980); Smith v. King, 100 Idaho 331, 597 P.2d 217 (1979); Gneit ing v. Clement, 96 Idaho 348, 528 P.2d 1283 (1974).
III.
Dismissal of Negligent Misrepresentation Claim
In its sixth cause of action G & M Farms alleges that Lindsay Manufacturing Co., DeKalb Agresearch, Inc., and/or Funk Irrigation negligently misrepresented that the Generation II three-quarter mile wide irrigation system possessed the capacity and operational ability to meet the general and specific needs of G & M Farms. G & M Farms asserts that the defendants knew or should have known that this particular system lacked the requisite capacity and operational ability and could not meet the reasonable needs of G & M Farms.
In Clark v. International Harvester, 99 Idaho 326, 581 P.2d 784 (1978), this Court held in actions for purely economic loss arising from the sale of tangible personal property, that the Uniform Commercial Code "adequately define[s] the rights of the parties in such cases and the judicial expansion of negligence law to cover purely economic losses would only add more confusion in an area already plagued with overlapping and conflicting theories of recovery." 99 Idaho at 336, 581 P.2d at 794. This Court held in Clark that unless there was injury to persons or property as a result of the malfunction of a product, there was no justifiable reason for expanding tort law to cover purely economic losses, since such losses are recoverable under the Uniform Commercial Code.
In the instant case, G & M Farm's claim for negligent misrepresentation alleges that the defendants negligently failed to disclose that the irrigation system was not designed for its specific needs. G & M Farms alleges that it suffered economic loss in the form of reduced crop yield. A review of the pleadings contained in the record confirms that G & M Farms did not allege property damage. The remedy for a claim for purely economic damages falls within the implied warranty of fitness for a particular purpose under I.C. § 28-2-315. As such, the Uniform Commercial Code, and this Court's decision in Clark v. International Harvester, 99 Idaho 326, 581 P.2d 784 (1978), precludes a products liability action sounding in tort under these circumstances where there is no personal injury or damage to property alleged. Therefore, we affirm the trial court's dismissal of the negligent misrepresentation claim.
IY.
Conclusion
Based on our review of the entire record before us, and construing the facts in this case most favorably to G & M Farms, we reverse the partial summary judgments entered in favor of Lindsay Manufacturing and DeKalb Agresearch, Inc., as to the claim for intentional misrepresentation. We affirm the partial summary judgment in favor of Lindsay Manufacturing, DeKalb Agresearch and Funk Irrigation on the negligent misrepresentation claim.
The case is remanded for further proceedings consistent with this opinion. We award no attorney fees on appeal. Costs to appellant.
JOHNSON and McDEVITT, JJ., concur.
. Plaintiffs complaint alleges economic loss as a result of reduced crop yield, however, property damage is not alleged or sought in plaintiffs complaint.