Cook v. Skyline Corp., 24714.

Citation135 Idaho 26,13 P.3d 857
Decision Date29 September 2000
Docket NumberNo. 24714.,24714.
PartiesSam COOK and Sandra Cook, husband and wife; Plaintiffs-Appellants, v. SKYLINE CORPORATION, a California corporation; Norwest Home Center, Inc., an Idaho corporation, d/b/a Norwest Mobile Homes, Defendants-Respondents.
CourtUnited States State Supreme Court of Idaho

Evans, Craven Lackie, P.S., Coeur d'Alene, for appellants. Amy C. Clemmons argued.

Quane Smith, Coeur d'Alene, for respondents. Susan Service argued.

SILAK, Justice.

Appellants Sam and Sandra Cook (the Cooks) appeal the district court's order granting a new trial to respondent Skyline Corporation (Skyline).

I. FACTUAL AND PROCEDURAL HISTORY
A. Facts

In 1993, the Cooks purchased a manufactured home built by Skyline and sold and assembled by defendant Norwest Home Center, Inc. (Norwest). The Cooks' inspection of the assembled home revealed several defects that the Cooks believed were attributable to Skyline's manufacturing of the home and Norwest's transport and installation of the home.

The Cooks notified Norwest pursuant to the home's warranty provisions, but were dissatisfied with Norwest's ineffectual response to their concerns. In January or February of 1994, the Cooks notified Skyline of the problems they were having with Norwest's failure to respond satisfactorily to their warranty claims. Skyline assured the Cooks that the problems would be resolved, but the Cooks remained dissatisfied with Skyline's remedial measures.

B. Procedural Background

On June 26, 1996, the Cooks filed a complaint alleging breach of contract, breach of warranty, Skyline's negligent selection of Norwest as a dealer, Norwest's negligence in making repairs, and unfair or deceptive trade practices under the Idaho Consumer Protection Act. Norwest went out of business in 1994, did not respond to the Cooks' complaint, and did not participate at trial. The Cooks secured a default judgment against Norwest on March 29, 1996.

At trial, it became clear that the breach of contract claim against Skyline was grounded on an alleged breach of the contract between Skyline and Norwest, to which the Cooks claimed third-party beneficiary status. Skyline objected, arguing that the breach of a third-party beneficiary agreement was not alleged in the Cooks' amended complaint and that it was not prepared to address such issues at trial. Skyline also objected to the testimony of Shelly Sturman (Sturman), a witness who had purchased a home from Norwest and who had problems with Norwest's warranty service. Skyline objected because the testimony was not limited to describing Norwest's allegedly faulty service, but also included descriptions of the defects encountered in Sturman's home. Skyline also objected to the testimony of an expert who testified that he had never seen a drip edge like the one on the Cooks' home installed on any other manufactured home.

The district court overruled all of Skyline's objections. The evidence was presented to the jury, which found in favor of the Cooks and awarded $75,684.15 for the breach of contract and warranty claims, plus an additional $75,684.15 in damages for emotional distress.

After the trial, Skyline filed alternative motions for a new trial under Idaho Rule of Civil Procedure 59(a) and for judgment notwithstanding the verdict pursuant to Idaho Rule of Civil Procedure 50(b). The district court found no error in its earlier decision allowing the Cooks to proceed with their third-party beneficiary theory. The district court ruled, however, that it had abused its discretion in allowing the aforementioned testimony to which Skyline had objected. The district court also ruled that it had erred in allowing the Cooks to proceed with their negligent retention claim. The district court granted the motion for a new trial, but denied the motion for judgment notwithstanding the verdict. The Cooks appealed.

II. ISSUES ON APPEAL

The Cooks raise the following issues on appeal:

A. Whether the district court abused its discretion in ruling that testimony regarding the drip edge on the Cook's home could be construed as an inadmissible post-incident design change.
B. Whether the district court abused its discretion in ruling that Shelly Sturman's testimony which listed the defects in her home created prejudicial error.
C. Whether the district court erred in ruling that the Cooks' negligence claim was not sufficiently pled under Idaho law
D. Whether the district court erred in ruling that medical opinion testimony is necessary to present a negligent infliction of emotional distress claim.
III. STANDARD OF REVIEW

The district court's decision to grant a new trial under I.R.C.P. 59(a) will not be overturned absent an abuse of discretion. See Lanham v. Idaho Power Co., 130 Idaho 486, 491, 943 P.2d 912, 917 (1997)

; Watson v. Navistar Int'l Transp. Corp., 121 Idaho 643, 654, 827 P.2d 656, 667 (1992). When a court's discretionary decision is reviewed on appeal, the appellate court considers "(1) whether the trial court correctly perceived the issue as one of discretion; (2) whether the trial court acted within the outer boundaries of its discretion and consistently with the legal standards applicable to the specific choices available to it; and (3) and whether the trial court reached its decision by an exercise of reason." Sun Valley Shopping Ctr., Inc. v. Idaho Power Co., 119 Idaho 87, 94, 803 P.2d 993, 1000 (1991).

IV. ANALYSIS
A. The District Court Abused Its Discretion By Ordering A New Trial Based On Its Conclusion That The Testimony Regarding The Drip Edge On Redirect Was Erroneously Admitted.

At trial, the Cooks called Mike Roerick (Roerick), a licensed manufactured home installer, to testify concerning the possible causes of the damage to the Cooks' manufactured home. During direct examination, Roerick testified that the installation of the Cooks' home "was done in such a way that most anything [Norwest] could have done wrong they did do wrong. The home was very poorly set up." Roerick also testified regarding the installation of the home's drip edge, a piece of metal flashing that runs along the perimeter of the roof. Roerick testified that "[the drip edge is] to be installed underneath the tar paper and over the top of the fascia to aid the water run off the roof."

When asked about the drip edge on the Cooks' home, Roerick said: "The drip edge was installed in such a manner that I'd never seen before on any different type of manufactured home or site-built home. The drip edge was installed with the fascia of the eave over the top of the bottom of the drip edge." Roerick also testified that most of the time, the drip edge is installed "over top of the fascia, forcing the water to run outside." Roerick further testified that in his opinion, a drip edge like the one on the Cooks' home would "let the water run inside of the fascia instead of forcing it over the outside of the fascia." Roerick also testified that he had inspected the Cooks' home during a rainy day, and observed that while "some of [the water] would run off the roof like it was supposed to, but yet some of [the water] would run in behind the fascia." Skyline did not object to any of Roerick's testimony to that point.

On cross-examination, the following exchange occurred between Roerick and Skyline's trial counsel:

Q. You testified regarding the drip edge; is that correct?
A. Yes.
Q. And you testified as to how it was set up—on the Skyline home; is that correct?
A. How it was installed on this particular home, yes, versus how it's done on new homes.
Q. You mean versus how it's done on new Skyline homes?
A. That's right.
Q. Do you know whether the drip edge in the Cook's home was installed pursuant to the manufacturing specifications of this home?
A. I know it was installed different than any other that I've seen.
Q. Will you answer the question, please. Do you know whether the drip edge in the Cook's home was installed on their home in accordance with the specifications for this home?
A. I did not see the plans and specifications for this home.

On redirect examination, the following exchange between Roerick and Cooks' counsel occurred:

Q. You said you're not an engineer with regard to drip edge and design of a home. Are you aware of how the Skyline homes install their drip edge now?
A. They do it like everyone else now —
[COUNSEL FOR SKYLINE]: Objection, Your Honor. I think that it's clearly improper.
[COUNSEL FOR THE COOKS]: He opened the door on cross by asking about it, Your Honor.
THE COURT: I'll permit it. Overruled.
THE WITNESS: Like I said, in 11 years the Cooks' home is the only one I've ever seen with the drip edge installed behind the fascia.
Q. BY [COUNSEL FOR THE COOKS]: Are you aware of how Skyline installs the drip edge now?
A. I set a lot of Skyline homes last summer. They install it on the outside now.

In its order granting a new trial, the district court determined it had abused its discretion in admitting Roerick's drip edge testimony on redirect, stating: "The Court believes it is likely that the jury perceived the final effect of such evidence to be that Skyline changed its practices after building this home, tacitly admitting that this home was assembled incorrectly as to that aspect. This violates I.R.E. 407, and Skyline was prejudiced thereby."

Idaho Rule of Evidence 407 states:

Subsequent Remedial Measures: Whenever, after an event, measures are taken which, if taken previously, would have made the event less likely to occur, evidence of the subsequent measures is not admissible to prove negligence or culpable conduct in connection with the event. This rule does not require the exclusion of evidence of subsequent measures if offered for another purpose, such as proving ownership, control, or feasibility of precautionary measures, if controverted, or impeachment.

I.R.E. 407.

The Cooks argue that Roerick's testimony cannot be construed as a subsequent...

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