Haskett v. Am. Home Ctrs.

636 F.Supp.3d 1187

Howard J. HASKETT and Kathleen M. Haskett, Plaintiff, v. AMERICAN HOME CENTERS, LLC; Kit Homebuilders West, LLC,Bennett Truck Transport, LLC; and John Does 2-5, Defendant.

CV-21-68-BU-BMM

United States District Court, D. Montana, Butte Division

Signed October 20, 2022

Lincoln Palmer, Rex L. Palmer, Attorney'S, Inc., Missoula, MT, for Plaintiff.

Jesse Beaudette, Bohyer, Erickson, Beaudette & Tranel, P.C., Missoula, MT, for Defendant American Home Centers.

Matthew Albert Haus, Tarlow Stonecipher Weamer & Kelly, PLLC, Bozeman, MT, for Defendant Kit Homebuilders West.

ORDER

Brian Morris, Chief District Judge

INTRODUCTION

Plaintiffs Howard and Kathleen Haskett ("Plaintiffs") filed this action against American Home Centers, LLC, ("AHC") Kit Homebuilders West, LLC, ("Kit") and Bennett Truck Transport, LLC ("Bennett").

Plaintiffs have sued AHC, Kit, and Bennett for negligence, negligent misrepresentation, constructive fraud, violations of the Montana Consumer Protection Act, deceit, breach of contract, breach of the implied covenant of good faith and fair dealing, breach of warranty, and malice and fraud. (Doc. 22 at 20-25.)

Plaintiffs settled their claims with Defendant Bennett in August 2022. (Doc. 59.) Plaintiffs and AHC and Kit ("Defendants") now individually move this Court for summary judgment pursuant to Federal Rule of Civil Procedure 56(a). (Doc. 63); (Doc. 60); (Doc. 70.) Each party has also filed several Motions in Limine. (Doc 50); (Doc. 53); (Doc. 66); (Doc. 68); (Doc. 73); (Doc. 80); (Doc. 82). The Court held a hearing on these motions on October 6, 2022. The Court has scheduled a jury trial for December 13, 2022.

BACKGROUND

Plaintiffs purchased a modular home from AHC, a retailer exclusively selling Kit Homebuilders Homes, on December 19, 2017. (Doc. 61 at 5.) Plaintiffs allege that AHC and Kit induced them into purchasing the home with representations about the quality of the home. These representations include the following: that the modular home would conform to building codes; it would be constructed according to Plaintiffs' specifications; and it would be constructed with high quality materials and sound workmanship. (Id. at 5.) Plaintiffs claim that AHC and Kit's staff, website, the final Purchase Agreement, and final walk-through checklist all made these representations. (Id. at 6-8.)

Kit built the home in Caldwell, Idaho. (Id. at 5.) Kit and AHC hired Bennett to transport the modular home in two parts. (Id. at 5.) Plaintiffs allege that the home was damaged during transportation to Montana around July 18, 2018. (Doc. 64 at 3.) Plaintiffs allege that the uneven stress that occurred from that event caused substantial damage to the home. (Id. at 2.)

Plaintiffs also allege that many defects were apparent after home was delivered and assembled. These defects include improperly installed windows and a sliding glass door; egress windows that do not fully open; other windows installed upside down; broken flooring; unpainted portions of the house; an unlevel island countertop; sheared wall structures; and a faulty roof system. (Id. at 2-3.)

AHC conducted a final walk-through of the property and generated a report titled "American Home Centers, LLC, final walk-through." Plaintiffs assert that the final walk-through report included notes that several damaged areas, structures, and components were "complete." (Doc. 95 at 10); (Doc. 65-6.) Plaintiffs assert that these items were not complete and showed visible defects at the time of the walk-through, including insulation blockage, detached gusset plates, and detached baseboards. (Doc. 95 at 6.) Plaintiffs also allege that Defendants ignored the seriousness of these defects and instead informed Plaintiffs that any necessary repairs were "standard" and "simple post-delivery repairs." (Doc. 64 at 3.)

Plaintiffs claim that they requested that Defendants make the necessary repairs several times in the months following the walk-through. (Id. at 3.) Plaintiffs and Defendants now dispute the extent of the repairs needed and the scope of Defendants' responsibility for assuring the home's quality. Plaintiffs allege that their home requires $280,000 in repairs as a result of Defendants' conduct. (Id. at 3.)

DISCUSSION

The Court will grant summary judgment when the moving party demonstrates both an absence of material fact issues and its entitlement to judgment as a matter of law. Fed. R. Civ. P. 56(a). The movant bears the initial burden of establishing the basis for its motion and identifying those portions of "the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, which it believes demonstrate the absence of a genuine issue of material fact." Celotex Corp. v. Catrett, 477 U.S. 317, 323, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986).

The summary judgment inquiry requires examining the evidence in the light most favorable to the nonmovant. Once the movant has met this initial burden, however, the party opposing the motion "may not rest upon the mere allegations or denials of [her] pleading, but . . . must set forth specific facts showing that there is a genuine issue for trial." Id.

I. Defendant American Home Centers' Motion for Partial Summary Judgment (Doc. 60)

AHC asks for summary judgment on Plaintiffs' claims for 1) negligent misrepresentation; 2) constructive fraud; and 3) violation of the Montana Consumer Protection Act. (Doc. 61 at 5.) Kit has joined in this Motion.

Negligent misrepresentation claims require proving the following elements: 1) the defendant made a representation as to a past or existing material fact; 2) the representation must have been untrue; 3) regardless of its actual belief, the defendant must have made the representation without any reasonable ground for believing it to be true; 4) the representation must have been made with the intent to induce the plaintiffs to rely on it; 5) the plaintiffs must have been unaware of the falsity of the representation, and they must have been justified in relying upon the representation; and 6) the plaintiffs, as a result of their reliance, must sustain damage. Cechovic v. Hardin & Assocs., 273 Mont. 104, 902 P.2d 520, 525 (1995).

A constructive fraud claim requires proof of the following elements: 1) a material representation; 2) the falsity of that representation; 3) the speaker's knowledge of that representation's falsity or ignorance of its truth; 4) the hearer's ignorance of that representation's falsity; 5) the hearer's reliance upon the truth of that representation; 6) the hearer's right to rely upon that representation; and 7) the hearer's consequent and proximate injury or damage caused by reliance on that representation. Dewey v. Stringer, 375 Mont. 176, 325 P.3d 1236, 1240 (2014).

The Montana Consumer Protection Act prohibits unfair or deceptive practices in commercial conduct. Mont. Code Ann.§ 30-14-103. The law deems an act or practice "unfair" if it "offends established public policy and . . . is either immoral, unethical, oppressive, unscrupulous or substantially injurious to consumers." Morrow v. Bank of America, N.A., 375 Mont. 38, 324 P.3d 1167, 1184 (2014).

A. Plaintiffs have alleged sufficiently that Defendants made misrepresentations regarding an existing fact.

AHC contends that claims for negligent misrepresentation, constructive fraud, and violations of the Montana Consumer Protection Act all require the defendant to have made a representation of a past or existing material fact that was untrue at the time of making the representation. (Doc. 61 at 10.) AHC argues that nearly all its representations regarding the quality of the Plaintiff's modular unit related to the future construction and quality assessments of Plaintiff's home. AHC contends that these statements cannot constitute misrepresentations, therefore, because Plaintiffs' home had not been manufactured or assembled when Defendants made the representations at issue. AHC relies on WLW Realty Partners, LLC v. Cont'l Partners VIII, LLC, 381 Mont. 333, 360 P.3d 1112 (2015) for this proposition.

WLW Realty involved the representations a land developer made to a land purchaser, WLW, regarding future work, construction of ski access to a mountain chalet, that a third-party business had promised to complete. WLW Realty Partners, 360 P.3d at 1114. The third party was not a signatory to the contract between developer and purchaser, and the third party's bankruptcy ultimately prevented the promised ski access construction. Id. WLW then sued the land developer for negligent misrepresentation related to the allegedly false representation that ski access would be built. Id. The Montana Supreme Court rejected this argument, explaining that the representation as to the future event of construction did not relate to a past or existing fact: "[n]ot until the representation was made could the parties determine its accuracy." Id. at 1117.

AHC argues that, as in WLW, "Plaintiffs assert that the statements later became untrue" rather than alleging that, "at the time AHC made the statements, the statements were untrue." (Doc. 61 at 21.) AHC correctly asserts that several of the representations referenced in its Motion concern work that had not yet occurred when Defendants made the statements to Plaintiffs. Examples of such representations would include the following: 1) a statement from Kit's website describing that "[t]o ensure the exceptional quality of our homes, [Kit] enforce[s] a 64-point Quality Assurance inspection program;" 2) a statement from AHC's website describing that "Modulars are built to conform to all state, local or regional building codes (USB or IBC) at their destinations . . . ;" and 3) that the final Purchase Contract described that "[a]fter the home is complete, AHC will conduct a 'walk thru.' . . . . AHC's rep will make note of any remaining service items that need to be addressed. Many repairs may be taken care of at time of walk thru, but some...