Opinion ID: 2507460
Heading Depth: 2
Heading Rank: 1

Heading: The district court erred by failing to address Appellants' claim for bad faith breach of contract.

Text: The district court's judgment was based solely on Appellants' claim under the common fund doctrine. Appellants' first issue on appeal is their assertion that the district court erred by failing to address Jennings's claim for bad faith breach of contract. We agree. Appellants' complaint asserted a claim for bad faith breach of contract. [1] In its motion for summary judgment, North Pacific asserted that Jennings did not have a legitimate bad faith claim. At oral argument before the district court, counsel for Appellants attempted to address this claim. The district court declined to receive argument on the subject, stating in reviewing the complaint, I see that the complaint is solely based on the common fund doctrine. After the district court entered judgment, Appellants moved to amend the judgment to reflect the Court's ruling that the complaint was not adequate to state any claim arising from or related to a breach of contract. This motion was denied. Generally, a claim for relief need contain only a short and plain statement of the claim showing that the pleader is entitled to relief. . . . I.R.C.P. 8(a)(1). Under notice pleading, a party is no longer slavishly bound to stating particular theories in its pleadings. Cook v. Skyline Corp., 135 Idaho 26, 33, 13 P.3d 857, 864 (2000) (citation omitted). A complaint need only state claims upon which relief may be granted. Id. at 34, 13 P.3d at 865. A party's pleadings should be liberally construed to secure a just, speedy and inexpensive resolution of the case. Vendelin v. Costco Wholesale Corp., 140 Idaho 416, 427, 95 P.3d 34, 45 (2004) (citations omitted). The emphasis is to insure that a just result is accomplished, rather than requiring strict adherence to rigid forms of pleading. Id. The key issue in determining the validity of a complaint is whether the adverse party is put on notice of the claims brought against it. Id. Here, the question is whether North Pacific was put on notice of Appellant's claim for bad faith breach of contract. The complaint is far from a model of draftsmanship and, standing alone, falls well short of the minimal standard imposed by I.R.C.P. 8(a)(1). In the body of the complaint, Appellants simply alleged that Jennings was insured under a policy issued by North Pacific and set forth facts relating to the common fund claim. The prayer for relief demanded damages . . . for bad faith breach of contract. As an apparent substitute for well-pleaded causes of action, the complaint contained a catchall provision, which asserted that the complaint was intended to place North Pacific on notice of any claims that Appellants may have elected to pursue, even if those claims were based on facts not pleaded in the complaint. Despite these deficiencies, we conclude North Pacific was put on notice of Appellants' claim based on North Pacific's answer to the complaint. In Vendelin, the defendant argued that an amended complaint was deficient as to a claim for punitive damages because it did not state the elements necessary to allege and prove a claim for punitive damages pursuant to I.C. 6-1604. Vendelin, 140 Idaho at 427, 95 P.3d at 45. This Court concluded that the language in the amended complaint did not mirror the elements necessary to support an award of punitive damages. Nonetheless, this Court upheld the award of punitive damages. The Court concluded that the punitive damages claim was sufficiently plead because the demand portion of the complaint contained a prayer for punitive damages and the allegations contained in the amended complaint suggested that the prayer was based on injuries the plaintiff sustained from falling merchandise while shopping at the defendants store. Id. at 428, 95 P.3d at 46. Additionally, the defendant raised three separate defenses to the claim for punitive damages in its amended answer. Id. This Court held the defendants answer was an acknowledgement of the claim for punitive damages. Id. (citing Zattiero v. Homedale Sch. Dist. Number 370, 137 Idaho 568, 572, 51 P.3d 382, 386 (2002) (rejecting claim that complaint failed to properly allege breach of contract, finding that defendant acknowledged a breach of contract claim by filing answer which stated: [t]o the extent that Plaintiff alleges a breach of Contract, Defendant did not breach such contract. . . . )). Despite the glaring deficiencies in the complaint, North Pacific understood and responded to Jennings's contract claim. North Pacific's answer raised the affirmative defense that it had discharged its contractual obligations to Jennings and North Pacific moved for summary judgment as to the bad faith breach of contract claim. Like the defendant in Vendelin, North Pacifics response was sufficient to demonstrate that it had been put on notice of Appellants bad faith claim. North Pacific argues [t]he prayer for relief forms no part of the statement of the cause of action. Dahlquist v. Mattson, 40 Idaho 378, 386, 233 P. 883, 885 (1925). Even if we were to look past North Pacifics affirmative defense that acknowledged the breach of contract claim, we would not find this argument persuasive. First, the authority North Pacific provides in support of its argument predates the adoption of the Idaho Rules of Civil Procedure in 1958. [2] Under the statutory rules of civil procedure in effect prior to 1958, a pleader was required to allege in a complaint `a statement of the facts constituting the cause of action, in ordinary and concise language.' Archer v. Shields Lumber Co., 91 Idaho 861, 867, 434 P.2d 79, 85 (1967) (quoting I.C. 5-605 (1932)). This is a different standard than what is required today by I.R.C.P. 8(a)(1), requiring a short and plain statement of the claim showing that the pleader is entitled to relief. Second, consistent with the mandate of I.R.C.P. 1(a), this Court will construe the provisions of the Idaho Rules of Civil Procedure liberally in order to resolve cases on their merits instead of on technicalities. Gerstner v. Washington Water Power Co., 122 Idaho 673, 676, 837 P.2d 799, 802 (1992). Therefore, in light of North Pacifics answer to Jenningss claim of bad faith breach of contract, we conclude that the district court erred by failing to address the claim. Normally this Court would vacate a grant of summary judgment when the trial court does not address a cause of action alleged in the complaint. However, in the instant case, the error does not require that this matter be remanded for consideration of Appellants' contract claim. The only contract damages Jennings seeks to recover flow from North Pacific's failure to reimburse her for its pro rata share of fees and costs. These damages are identical to those advanced under Appellants' common fund doctrine claim. We uphold Appellants' recovery of those damages in Part III. B. of this opinion. In Part III. C. of this opinion we uphold the district court's denial of Appellants' motion to amend their complaint to allege a claim for punitive damages. Thus, inasmuch as Jennings has been awarded all damages that she might recover for breach of contract, we decline to remand this claim to the district court.