Court Opinion

ID: 9565555
Source: CourtListenerOpinion
Date Created: 2023-08-21 19:23:47.158722+00
Date Added: 2024-06-11T09:19:45.301675
License: Public Domain

*1015BURNETT, Judge,
concurring in part and dissenting in part.
I concur in that part of the Court’s opinion which discusses the scope of evidence to be considered when ruling on a motion for judgment n.o.v. The opinion correctly holds, in light of all evidence presented at trial, that a judgment n.o.v. should not have been entered in this case. However, the opinion invokes alternative grounds to sustain the judgment. With respect to the fraud issue, the opinion holds that the proof of damages was insufficient to go to a jury. I respectfully disagree.
The district judge granted a directed verdict on fraud because, in his view, damages had not been established by “clear and convincing” evidence. Today’s majority deems the proof to be inadequate for a different reason. Noting that the plaintiffs’ evidence simply showed the estimated cost of replacing the defective water system, the majority states that “Idaho case law does not support replacement cost as an appropriate remedy for fraud.” I will discuss, in turn, the differing approaches of the district court and the majority.
The trial judge’s reliance upon the “clear and convincing” standard is consistent with Idaho’s pattern jury instructions. According to IDJI 460, one of the elements of proof in a fraud case is “[t]he nature and extent of the plaintiff’s damages and the amount thereof.” (Emphasis added.) However, the IDJI is not a source of substantive law. See I.R.C.P. 51(a)(2). The underlying authority cited for Instruction No. 460 consists of Faw v. Greenwood, 101 Idaho 387, 613 P.2d 1338 (1980); Smith v. King, 100 Idaho 331, 597 P.2d 217 (1979); and King v. McNeel, Inc., 94 Idaho 444, 489 P.2d 1324 (1971). These cases do not contain language corresponding to Instruction No. 460. Rather, with respect to damages, the cited cases state only that a plaintiff must prove, by clear and convincing evidence, “his consequent and proximate injury.” Faw, 101 Idaho at 389, 613 P.2d at 1340; Smith, 100 Idaho at 334, 597 P.2d at 220; McNeel, 94 Idaho at 446, 489 P.2d at 1326. The cases do not hold that a plaintiff must show the amount of his damages by the same quantum of proof. In many other jurisdictions, the case law imposes a “clear and convincing” standard upon evidence showing fraud and the fact of damage. But the standard has not been stated broadly to encompass the amount of damages. See generally 37 AM.JUR.2d Fraud and Deceit § 468 (1968).
In this case, I believe the district judge may have been misled by IDJI 460. The fraud issue should not have been taken from the jury upon application of the “clear and convincing” standard. Because I believe the standard is inapplicable, I need not reach the related question whether a judge ever should direct a verdict when the evidence is substantial, albeit not “clear and convincing,” in the judge’s mind.
The majority today focuses not upon the quantum of proof but upon what has been proven. The majority declares that evidence of replacement cost is insufficient to prove damages for fraud. I submit that this declaration is overbroad and inappropriate to the instant case. Concededly, replacement cost, in and of itself, does not constitute the measure of damages for fraud. Rather, the ordinary measure of damages, often termed the “out-of-pocket” measure, is the difference between the actual value of the property purchased and the contract price. In extraordinary circumstances not applicable here, a court might choose instead to employ a “benefit-of-bargain” measure — the difference between the actual value of the property and the value that would have been realized if all representations concerning the property had been true. See generally Shrives v. Talbot, 91 Idaho 338, 345, 421 P.2d 133, 140 (1966).
However, it is one thing to recite a measure of damages; it is quite another to limit the permissible methods of proof. Nothing in the “out-of-pocket” measure bars a plaintiff from establishing the cost to eliminate defects in the property and then arguing that such cost represents the *1016difference between the actual value of the property and the contract price. In this case, I believe such an argument would have been meritorious and could have been accepted by the jury.
The Idaho Supreme Court has acknowledged this method of proof. In Koehler v. Stenerson, 74 Idaho 281, 260 P.2d 1101 (1953), and in Addy v. Stewart, 69 Idaho 357, 207 P.2d 498 (1949), the Court stated that evidence of replacement or repair costs could be considered in determining damages for fraud. Of course, in each case, other evidence also had been presented. But in Jensen v. Bledsoe, 100 Idaho 84, 593 P.2d 988 (1979), the Court upheld the proof of damages for fraud, referring only to the cost of replacing defective equipment. The Court said:
The trial court reasonably could have inferred that the price respondents agreed to pay for the property reflected the probable cost of the cased well and sewage disposal system which appellant claimed existed. Consequently, the reasonable cost of drilling a cased well and installing an approved sewage disposal system was properly considered by the court as evidence in détermining the difference, if any, between the purchase price as agreed and the value of the property as delivered to respondents.
Id. at 88, 593 P.2d at 992.
In the present case, I would hold that the plaintiffs’ evidence of replacement cost, although not the best method of proving damages, was sufficient to take the case to the jury. The jury could have inferred that the cost of replacing the defective water system was an appropriate measure of the difference in value between the contract price for the mobile home park and the value of the park with its defective water system. Because the fraud issue should have gone to the jury, I would reverse the judgment n.o.v. and remand the ease for a new trial. I express no view as to other issues embraced by the majority's alternative grounds for affirming the judgment.