Court Opinion

ID: 9593995
Source: CourtListenerOpinion
Date Created: 2023-08-22 00:26:09.021701+00
Date Added: 2024-06-11T13:05:19.545304
License: Public Domain

*369BAKES, Justice,
dissenting:
I concur with the dissent of Justice McFadden which explains clearly why the trial court erred in not granting the defendant’s motion for a directed verdict. Reduced to its basic holding, the majority opinion states that an insurance carrier can be held liable in tort for failing to settle a claim quickly enough, even though the insurance contract which defines the settlement procedures which the claimant must rely on to establish a legal duty on the insurance company's part, has not been introduced into evidence.
The defendant American Hardware’s duty to its insured was created by the insurance contract. Absent that insurance contract there was no relationship between the parties. Yet this Court assumes that there is some legal duty in tort between the parties, independent of the contract, which duty may well be contrary to the contractual duty which was contained in the insurance agreement. The time and manner of settlement in this case may well have been within the limits of the insurance contract itself. Without proof of the contractual relationship between the parties, there is no relationship between the plaintiff and defendant which could create a duty in tort upon the defendant. As this Court held in Taylor v. Herbold, 94 Idaho 133, 138, 483 P.2d 664, 669 (1971), “To found an action in tort, there must be a breach of duty apart from the non-performance of a contract.” The Court’s opinion today throws great doubt on the continued viability of all our prior cases relating to the concept of breach of contract and duty in tort.
Furthermore, the majority opinion allows the plaintiff to recover consequential damages when this Court, as recently as two months ago in Brown’s Tie & Lumber Co. v. Chicago Title Co., 115 Idaho 56, 764 P.2d 423 (1988), again recognized that consequential damages are not recoverable in these circumstances. In his complaint Reynolds asserted that defendant American Hardware’s delay caused his damages, including the loss of a sale of his business property which could have been negotiated and perhaps ultimately consummated. As the majority acknowledges, “The prayer, which does not elucidate whether plaintiff seeks recovery in contract or tort, was for consequential damages in the sum of $20,000.00 plus attorney fees.” Ante at 364, 766 P.2d at 1245, emphasis added.
The same scenario was presented in Brown’s Tie and we there reaffirmed that such consequential damages are not recoverable. In Brown’s Tie “we address[ed] the propriety of the trial court’s order in limine, which excluded evidence of business losses allegedly incurred during the period of delay and also evidence purporting to establish the terms of a sale which Brown’s Tie could have negotiated but for the delay.” At 61, 764 P.2d at 428. In response, we stated the following:
“These damages were properly excluded. Under general contract principles, consequential damages are not recoverable unless they were specifically contemplated by the parties at the time of contracting:
‘The damages for which compensation is sought need not have been precisely and specifically foreseeable, but only “such as were reasonably foreseeable and within the contemplation of the parties at the time they made the contract.” Suitts v. First Sec. Bank of Idaho, N.A., 110 Idaho 15, 22, 713 P.2d 1374, 1381 (1985) (emphasis in original).’
“Lost profits are generally not recoverable in contract unless there is something in that contract that suggests that they were within the contemplation of the parties and are proved with reasonable certainty. Nelson v. World Wide Lease, Inc., 110 Idaho 369, 378, 716 P.2d 513, 522 (Ct.App.1986)." (Emphasis added.)
Here we are not able to determine if there is something in the contract which suggests that the prayed-for consequential damages were within the contemplation of the parties at the time of contracting. Plaintiff has failed to introduce the contract, or any other evidence regarding settlement procedures contemplated by the parties at the time they entered into the contract, into evidence. Accordingly, there *370is no basis for an award of consequential damages in this case. For all these reasons, I respectfully dissent.
McFADDEN, J. Pro Tem., concurs.