Opinion ID: 874449
Heading Depth: 2
Heading Rank: 1

Heading: Summary Judgment on the Breach of Contract Claim

Text: Partout argues summary judgment on the breach of contract claim was improper because there are genuine issues of material fact regarding Partout's status as a third-party beneficiary to the contract between Harper and the VA. [2] Harper argues Partout only alleged a breach of contract claim based on I.C. § 55-2501 et seq. which deals with a seller's disclosure form, and therefore, does not apply to Harper. We will first address whether the third-party beneficiary claim is sufficiently pleaded and then whether there are issues of fact precluding summary judgment on the breach of contract claim.
The district court granted summary judgment to Harper on Partout's breach of contract claim. The court noted Partout submitted argument on the issue of third-party beneficiary theory, however, it determined that argument was irrelevant because Partout's pleading shows the claim was specifically brought under I.C. § 55-2501 et seq., the Idaho Property Condition Disclosure Act. The district court further held that since I.C. § 55-2501 et seq. deals with the seller's property disclosure form, to which Harper was not a party and with which Harper had no involvement, Harper was entitled to summary judgment on the breach of contract claim. [I]ssues considered on summary judgment are those raised by the pleadings. Gardner v. Evans, 110 Idaho 925, 939, 719 P.2d 1185, 1199 (1986) (quoting Argyle v. Slemaker, 107 Idaho 668, 669, 691 P.2d 1283, 1284 (Ct.App.1984)). Thus, this Court must determine whether the pleadings . . . can fairly be viewed as adequately giving notice of the claim. O'Guin v. Bingham County, 139 Idaho 9, 15, 72 P.3d 849, 855 (2003). Idaho follows a system of notice pleading. Cafferty v. State, Dept. of Transp., 144 Idaho 324, 328, 160 P.3d 763, 767 (2007). A complaint need only contain a concise statement of the facts constituting the cause of action and a demand for relief. Id. (citing I.R.C.P. 8(a)(1); Clark v. Olsen, 110 Idaho 323, 325, 715 P.2d 993, 995 (1986)). Partout's complaint sets forth breach of contract as the first cause of action. Partout indicates he is bringing that cause of action against Harper and the seller of the house, Breuer. That section of the complaint focuses on Breuer's written disclosure statement and makes no mention of third-party beneficiary theory. However, Partout does make the following factual allegations in his complaint: 13. Plaintiff is a third party beneficiary of the contract between Harper and the Lender, by which the Lender obtained an appraisal, which appraisal was a condition prerequisite to the lender financing the purchase of the house. . . . . 16. That as a condition of purchase, the home was appraised by a VA approved appraiser, Harper, who was hired and paid to inspect the home for compliance with VA standards and specification; local, state, and federal building, electrical, plumbing and well, and septic code requirements, and to determine the market value of the property for financing purposes. 17. The appraiser examined and made a report and appraisal to VA for financing. In the complaint Partout specifically alleges a breach of contract claim against Harper. This claim is supported by factual averments in the complaint alleging the existence of a contract between Harper and the VA, and that Partout is a third-party beneficiary to that contract. Additionally, in this case it is clear the complaint put Harper on notice since in his answer he explicitly alleges Partout is not a third-party beneficiary to his contract with the VA. Therefore, we hold the complaint can be fairly viewed to have provided Harper adequate notice of Partout's breach of contract claim based on third-party beneficiary theory, and thus, it was an issue to be considered on summary judgment.
When a contract is made expressly for the benefit of a third person, the contract may be enforced by the third person at any time before the parties to the contract rescind it. Blickenstaff v. Clegg, 140 Idaho 572, 579, 97 P.3d 439, 446 (2004); I.C. § 29-102. The test for determining a party's status as a third-party beneficiary . . . is whether the agreement reflects an intent to benefit the third party. Idaho Power Co. v. Hulet, 140 Idaho 110, 112, 90 P.3d 335, 337 (2004). The third party must show the contract was made primarily for his benefit; it is not sufficient that the third party is a mere incidental beneficiary to the contract. Id. (quoting Adkison Corp. v. Am. Bldg. Co., 107 Idaho 406, 409, 690 P.2d 341, 344 (1984)); Fenwick v. Idaho Dep't of Lands, 144 Idaho 318, 323, 160 P.3d 757, 762 (2007) (quoting Dawson v. Eldredge, 84 Idaho 331, 337, 372 P.2d 414, 418 (1962) (quoting Sachs v. Ohio Nat'l Life Ins. Co., 148 F.2d 128, 131 (7th Cir.1945))). The intent to benefit the third party must be expressed in the contract itself. Idaho Power Co., 140 Idaho at 112, 90 P.3d at 337 (quoting Adkison Corp., 107 Idaho at 409, 690 P.2d at 344;) Fenwick, 144 Idaho at 323, 160 P.3d at 762 (quoting Adkison Corp., 107 Idaho at 409, 690 P.2d at 344). In his appellate brief, Partout fails to point to any specific written contract or to set forth the terms of an oral contract showing an intent that the contract benefit Partout. Partout states that in support of his third-party beneficiary claim he submitted portions of the VA's Lender's Handbook and portions of the Uniform Standards of Professional Appraisal Practice which establishes a material issue of fact as to his status as a third party beneficiary. However Partout does not show that these documents comprise part of the contract, and Idaho law requires that the intent to benefit the third party be expressed in the contract itself. [3] The assignment letter requesting Harper appraise the property appears in the record, but does not express any intent to benefit Partout. Partout's name does not appear in the letter, the appraisal requestor is Washington Mutual Home Loans, and the letter requests the appraisal report be sent to the VA office. The letter also requests the assignment be completed according to current VA instructions. A VA appraisal must conform to the Uniform Standards of Professional Appraisal Practice (USPAP) and meet the requirements outlined in chapter 11 of the Department of Veterans Affairs, Veterans Benefits Administration Lender's Handbook VA Pamphlet 26-7. We have not discovered anything in Chapter 11 of the VA Pamphlet or the USPAP that expresses an intent that the appraisal primarily benefit the home buyer. [4] At summary judgment the burden of proving the absence of material facts is upon the moving party. Thomson v. City of Lewiston, 137 Idaho 473, 476, 50 P.3d 488, 491 (2002). The adverse party, however, may not rest upon the mere allegations or denials of that party's pleadings, but that party's response, by affidavits or as otherwise provided in this rule, must set forth specific facts showing that there is a genuine issue for trial. I.R.C.P. 56(e); see also Edmunds v. Kraner, 142 Idaho 867, 876, 136 P.3d 338, 347 (2006). The nonmoving party must submit more than just conclusory assertions that an issue of material fact exists to establish a genuine issue. Northwest Bec-Corp v. Home Living Serv., 136 Idaho 835, 839, 41 P.3d 263, 267 (2002). Therefore, [t]he moving party is entitled to judgment when the nonmoving party fails to make a showing sufficient to establish the existence of an element essential to that party's case on which that party will bear the burden of proof at trial. Badell, 115 Idaho at 102, 765 P.2d at 127. At trial Partout would have the burden of proving he is a third-party beneficiary to the contract between Harper and the VA, and Idaho law requires that the contract itself reflect an intent to benefit the third party. See Idaho Power Co., 140 Idaho at 112, 90 P.3d at 337. Partout has failed to show the agreement between Harper and the VA expressed an intent to benefit him. Therefore, we affirm the grant of summary judgment to Harper on the breach of contract claim because Partout failed to establish an essential element to his claim.