Bailey v. Ness, No. 15530

• Court: United States State Supreme Court of Idaho
• Writing for the Court: BISTLINE; DONALDSON; SHEPARD
• Citation: 708 P.2d 900,109 Idaho 495
• Docket Number: No. 15530
• Decision Date: 01 November 1985
• Parties: P. Chad BAILEY, Plaintiff-Appellant, v. Stanley J. NESS, Jr., individually; Stanley J. Ness, Jr., and Robert W. McKinstry, dba Feed-Rite Systems, Inc., an Idaho corporation; Borg-Warner Leasing, a division of Borg-Warner Acceptance Corporation, a Delaware corporation; and Modern Mill Inc., an Indiana corporation, Defendants, and Mix-Mill Manufacturing Company, a Delaware corporation, Defendant-Respondent.

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708 P.2d 900 109 Idaho 495 P. Chad BAILEY, Plaintiff-Appellant,
v.
Stanley J. NESS, Jr., individually; Stanley J. Ness, Jr., and Robert W. McKinstry, dba Feed-Rite Systems, Inc., an Idaho corporation; Borg-Warner Leasing, a division of Borg-Warner Acceptance Corporation, a Delaware corporation; and Modern Mill Inc., an Indiana corporation, Defendants,
and Mix-Mill Manufacturing Company, a Delaware corporation, Defendant-Respondent. No. 15530. Supreme Court of Idaho. Nov. 1, 1985.

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[109 Idaho 496] Mark J. Taylor, Rupert, for plaintiff-appellant.

J. Robert Alexander, Twin Falls, for defendant-respondent.

BISTLINE, Justice.

HISTORY

Appellant Chad Bailey attended an agricultural fair at Idaho State University in Pocatello, Idaho, where he obtained information regarding Mix-Mill feed mill systems. Because Bailey was interested in obtaining a Mix-Mill feed mill system for use on his dairy farm, he wrote to respondent Mix-Mill inquiring about its product. On June 27, 1980, Mix-Mill wrote a letter to Bailey with numerous enclosed brochures describing Mix-Mill products and referring Bailey to Mr. Stan Ness and Feed-Rite Systems, Inc. for further assistance. ¹ Bailey called Ness, who ultimately sent Jeff Allen, a salesman for Feed-Rite under Ness's direction.

In addition to the brochures sent to Bailey by Mix-Mill, Ness used a large folder provided by Mix-Mill to sell a Mix-Mill feed mill system to Bailey. The folder contained numerous blueprint diagrams of Mix-Mill feed mill systems, apparently designed and drafted by Mix-Mill, and often prepared for specific purchasers. Ultimately, Bailey entered into a contract with Feed-Rite Systems, Inc. on April 14, 1981 for the purchase of a Mix-Mill feed mill system. This lawsuit arises out of that contract, wherein Bailey alleges that the

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[109 Idaho 497] design and construction of the feed mill system was defective.

Although Mix-Mill equipment is called for in the Bailey agreement with Feed-Rite, and in the Bailey agreement with Borg-Warner Leasing, which financed the purchase, Mix-Mill equipment was never sold, delivered or installed in the Bailey feed mill. Other than two small accessory items, all of the essential equipment installed in the feed mill was the product of manufacturers other than Mix-Mill.

It is undisputed that Ness and Feed-Rite had no written distributor agreement with Mix-Mill. Ness had distributed Mix-Mill products since the fall of 1979, but because Ness had failed to pay Mix-Mill for products purchased, he had been placed on a cash basis only with Mix-Mill.

On May 15, 1981 Feed-Rite sent purchase orders to Mix-Mill for various pieces of equipment for Bailey's system. Mix-Mill immediately notified Ness that Mix-Mill would not manufacture or ship the items ordered until he made arrangements to pay for the product. Unable to purchase Mix-Mill equipment, Ness went to other manufacturers to purchase the components that were installed in the Bailey feed mill. Mix-Mill was never consulted concerning the design or construction of the Bailey feed mill.

Bailey's suit against Mix-Mill is premised, in part, upon there being an agency relationship between Ness and Mix-Mill. While conceding that Mix-Mill never expressly authorized Ness to design feed systems on its behalf, Bailey argues that Mix-Mill can still be found liable for acts done within the scope of Ness's apparent authority as an agent for Mix-Mill.

Both parties filed motions for summary judgment. The district court denied Bailey's motion and granted Mix-Mill's. Bailey appeals the district court's granting of summary judgment for Mix-Mill.

I.A.

A summary judgment is only to be granted when all the facts contained in all the applicable pleadings, depositions, admissions, and affidavits have been construed most favorably to the nonmoving party, and it is clear that there is no genuine issue as to any material fact. Crowley v. Lafayette Life Insurance Co., 106 Idaho 818, 821, 683 P.2d 854, 857 (1984). Further, motions for summary judgment should be granted with caution. Steele v. Nagel, 89 Idaho 522, 528, 406 P.2d 805, 808 (1965).

B.

There are three separate types of agency, any of which are...