Opinion ID: 2360472
Heading Depth: 2
Heading Rank: 1

Heading: The district court properly granted Brighton's 12(b)(6) motion to dismiss Harris' claims for breach of contract and breach of the implied covenant of good faith and fair dealing.

Text: The district court's order dismissing Harris' claims sounding in contract reasoned that Brighton did not breach its contract because, pursuant to the parties' stipulation, the Court ordered that Harris Ranch no longer owned any right to enforce the restrictive covenants against the school site. Neither the purchase agreement nor its restrictive covenants limited Brighton's right to sell the land to a third party, including a party with condemnation authority. Therefore, Harris Ranch did not state a claim for relief ... Harris asserts that the district court's order condemning the Restrictive Covenants did not eliminate Harris' breach of contract claims against Brighton, and thus the court's order granting Brighton's 12(b)(6) motion to dismiss those claims was error.
We hold that the district court properly dismissed Harris' claims because Brighton did not breach the Restrictive Covenants.
In order to state a breach of contract claim capable of surviving a 12(b)(6) motion to dismiss, Harris was required to allege that a contract between itself and Brighton existed, and that while obligated thereby, Brighton engaged in conduct that violated that contract. The parties' briefing on appeal devotes substantial attention to whether the Restrictive Covenants in fact limited the Property to solely residential uses. However, for purposes of deciding a 12(b)(6) motion, the only facts which a court may properly consider ... are those appearing in the complaint, supplemented by such facts as the court may properly judicially notice. Taylor v. McNichols, 149 Idaho 826, 833, 243 P.3d 642, 649 (2010). Therefore, for our purposes only those facts asserted in Harris' third party complaint are relevant to the analysis. Harris asserted that the parties agreed that the Property was planned for single family residential development under Governmental Approvals previously obtained, and as part of the overall Harris Ranch Master Plan. Harris also asserted that the Restrictive Covenants required the Property to be developed consistently with existing governmental approvals which, in pertinent part, limited and restricted the development of the [Property] to single family residences. Therefore, for purposes of reviewing the district court's dismissal, we assume the parties intended the Covenants to impose a residential-use restriction on the Property.
Harris asserts that Brighton's conveyance to BSU with the prior knowledge and intent that the Property would be put to a non-residential use was sufficient to breach the Restrictive Covenants. However, as the district court stated, knowledge of a likely breach in the future is not a breach that gives rise to a cause of actionespecially if that breach will be committed by a third party. This is demonstrated by the fact that if Harris had attempted to sue Brighton at the time it claims Brighton's breach occurredthe date of Brighton's conveyance to BSUthe Property would not yet have been developed for non-residential use, and thus Harris' claim would have been dismissed as unripe. See Noh v. Cenarrusa, 137 Idaho 798, 801, 53 P.3d 1217, 1220 (2002) (the ripeness doctrine requires a petitioner or plaintiff to prove 1) that the case presents definite and concrete issues, 2) that a real and substantial controversy exists, and 3) that there is a present need for adjudication.). Brighton's ability and obligation to comply with the Restrictive Covenants terminated when it conveyed its interest in the Property to BSU. The burdens imposed by restrictive covenants run with the land, i.e., they may be enforced against one who purchases real property with notice of the covenants. Shawver v. Huckleberry Estates, LLC, 140 Idaho 354, 365, 93 P.3d 685, 696 (2004). Since only a current owner may comply with restrictive covenants, either voluntarily or pursuant to injunction, only a current owner may be liable for their breach. In the present case, the obligation to comply with the Restrictive Covenants ran first to Brighton and subsequently to BSU and then the School District. Brighton did not avoid its obligations under the Restrictive Covenants. It conveyed the Property to a party that took on the burden of the Covenants until they were properly condemned.