Davis v. Blast Props.

• Decision Date: 04 January 2022
• Docket Number: 1:21-cv-00218-BLW
• Court: U.S. District Court — District of Idaho
• Parties: MYLES DAVIS, an individual, and JANELLE DAHL, an individual, Plaintiffs, v. BLAST PROPERTIES, INC. dba B&B CUSTOM HOMES, an Idaho corporation, and TYLER BOSIER, an individual, Defendants.

MYLES DAVIS, an individual, and JANELLE DAHL, an individual, Plaintiffs, v. BLAST PROPERTIES, INC. dba B&B CUSTOM HOMES, an Idaho corporation, and TYLER BOSIER, an individual, Defendants.

No. 1:21-cv-00218-BLW

United States District Court, D. Idaho

January 4, 2022

MEMORANDUM DECISION AND ORDER

B Lynn Winmill U.S. District Court Judge

INTRODUCTION

Before the Court is the Motion for Partial Summary Judgment filed by Plaintiffs Myles Davis and Janelle Dahl. Dkt. 16. The Court heard oral argument on November 1, 2021. For the reasons explained below, the Court will grant the motion in part and deny the motion in part.

BACKGROUND

The dispute in this case centers on a combined contract for real estate and construction. A review of parties' history places the present motion in its necessary context.

In the Summer of 2020, Plaintiffs Myles Davis and Janelle Dahl contacted Defendant Tyler Bosier, ^[1] president of Co-Defendant Blast Properties, Inc. d/b/a B&B Custom Homes, about building a new home. Dkt. 22-2 at 2. The record shows that the parties amicably worked through the design phase of the project and eventually completed preliminary plans for the home. See Dkt. 22-6 (discussing preliminary plans). Friction first arose when Mr. Davis and Ms. Dahl notified Blast that they could not enter a contractual agreement without substantially reducing the project's budget. See Dkt. 22-8; Dkt. 22-7. Mr. Davis and Ms. Dahl consequently removed certain features that had been set out in the preliminary plans. See Dkt. 22-8; Dkt. 22-7; Dkt. 22-10 (identifying home features removed and including final plans).

Blast eventually sent final plans to Mr. Davis and Ms. Dahl's agent. Dkt. 22-11. But the final plans did not include a new electrical plan that reflected the budget-reducing changes. Instead, the final plans consisted of the preliminary electrical plans overlayed with Mr. Davis's handwritten annotations that attempted to explain which features they wanted to remove. Dkt. 22-11 at 54. Mr. Bosier, on behalf of Blast, approved these final plans by initialing each page included in the final contract. Dkt. 22-12 at 35-48.

In early December 2020, the parties signed an RE-22 Pre-Sold New Construction Real Estate Purchase and Sale Agreement along with Addendum 1, the final building plans, and a warranty (all collectively referred to as the “Initial Agreement”). Dkt. 22-12. Several provisions of the Initial Agreement later proved relevant to the parties' dispute. First, the Initial Agreement identifies $59, 000 as “additional nonrefundable consideration” that Mr Davis and Ms. Dahl would pay upfront. Dkt. 22-12 at 2. Next the Initial Agreement provides stucco exterior for the home. Dkt. 22-12 at 50; see also Dkt. 16-16 at 1-2 (explaining issue related to stucco exterior). Additionally the Initial Agreement requires any modification to be in writing and signed by each of the parties. Dkt. 22-12 at 6. Finally, the Initial Agreement has a fixed purchase price, meaning the $615, 000 purchase price includes “all labor and materials furnished and work performed by [Blast].” Dkt. 22-12 at 11. In practice, this meant that Blast bore the burden or received the benefit of any increases or decreases in labor or material costs during the home's construction. See Dkt. 22-12 at 11; Dkt. 22-1 at 3-4.

On January 11, 2021, the parties executed Addendum 2 (collectively referred to along with the Initial Agreement as the “Contract”). Dkt. 22-13. Addendum 2 provided that the initial $2, 500 earnest money and the additional $59, 000 would be combined for a total of $61, 500 and be “released to [Blast] immediately as non-refundable for any reason.” Dkt. 22-13. Blast characterizes this $61, 500 as a deposit to cover up-front construction costs. Dkt. 22-1 at 3; see also Dkt. 22-12 at 11 (requiring ten percent down payment of purchase price). The funds released by Addendum 2, in conjunction with Mr. Davis and Ms. Dahl satisfying documentation of loan commitment, triggered Blast's obligation to begin work on the home. Dkt. 22-12 at 12.

But Blast did not begin construction until sometime in late March or early April 2021. See Dkt. 24-2 at 3. During this time Mr. Bosier became concerned about the rising cost of building materials, particularly lumber. Dkt. 22-2 at 4. Mr. Bosier was also concerned that the Contract did not set out clear electrical and plumbing plans for the pool that was initially planned, and later removed. Dkt. 22-2 at 4. According to Mr. Bosier, these concerns led to a new proposed addendum to the Contract (“Proposed Addendum 3”), which he sent to Mr. Davis and Ms. Dahl. Dkt. 22-2 at 4.

At this point the parties' relationship began to unravel. Much of the present dispute stems from Proposed Addendum 3. On April 15, 2021, Blast's agent sent Proposed Addendum 3 to Mr. Davis and Ms. Dahl's real estate broker, Dan Allen. Dkt. 16-15 at 1. The document contains five proposed items:

(1) Buyer & Seller understand and agree that Seller will not be installing heated flooring and there are no plumbing and/or electrical upgrades for a pool.

(2) Electrical sketch from client is not a part of the building plans and/or contract. Any extras or requests from Buyer to be handled via change orders. This includes any electrical upgrades for this property outside of the initial budget, which are to be requested by Buyer to Seller and addressed through the Seller's change order process.

(3) Buyer understands the lumber and pre-engineered trusses costs have increased a total overage to date of $13, 888 (Thirteen Thousand, Eight Hundred Eighty-Eight and 00/100 Dollars). This increased cost amount to be added to the Purchase Price.

(4) New Purchase Price, including cost increases =$628, 888 (Six Hundred Twenty-Eight Thousand, Eight Hundred Eighty-Eight and 00/100 Dollars).

(5) Buyer to deliver an updated preapproval letter to Seller within 3 business days of full execution of this Addendum.

Dkt. 22-14 at 1. Plaintiffs argue that in proposing this addendum, Blast asked to do less work for more money-removing heated floors and electrical upgrades and increasing the contract price to account for rising material prices. Dkt. 16-2 at 2. Blast basically agrees, stating that the plumbing and electrical upgrades for the pool was a contract clarification while “the other changes were requests for contract modifications in order to adjust for various cost increases Blast was facing on this project.” Dkt. 22-2 at 4.

Hours after receiving the proposed addendum on April 15, 2021, Mr. Davis emailed Mr. Bosier to inquire about Proposed Addendum 3. Dkt. 22-15 at 2. Separately, Mr. Allen asked Seller's real estate agents via email the same day “[i]f my client does not agree to these changes requested by the builder, what will be the builder's response?” Dkt. 16-15 at 1. Four days later, on April 19, 2021, Mr. Bosier responded, explaining that he had been on a family vacation and would have addressed their concerns sooner had he seen the email. Dkt. 22-15 at 1. Mr. Davis replied, expressing his concerns about Mr. Bosier's delayed response, especially considering none of the $61, 500 deposit remained in escrow. Dkt. 22-15 at 1.

In further response to Proposed Addendum 3, Plaintiffs' attorney, Peter Singler, sent a letter to Mr. Bosier demanding assurance that Blast would perform its obligations under the Contract. Dkt. 16-4. Singler underscored Plaintiffs' concerns: “based on the slow commencement of construction, and this attempt to increase the Contract price and reduce the scope without justification, my clients are very concerned that you will not be able to perform under the Contract.” Dkt. 16-4. This letter was forwarded via email to Mr. Bosier's attorney, Wyatt Johnson. Dkt. 22-16 at 1. During the attorneys' correspondence, Mr. Singler suggested on two occasions that the $61, 500 deposit be returned to escrow while the parties sorted out their dispute over Proposed Addendum 3. Dkt. 22-17 at 3. Mr. Johnson instead proposed the parties meet to resolve their dispute. Dkt. 22-17 at 2. The email string ends with Mr. Davis stating he and Ms. Dahl understood the $61, 500 being put back in escrow was “not going to happen.” Dkt. 22-17 at 1. Still, Mr. Davis reiterated he and Ms. Dahl would “like some assurances the house will be built” and hoped the parties would be able to meet in the coming days. Dkt. 22-17 at 1.

The parties met, but the discussion was not fruitful. Dkt. 22-2 at 5. Several days later, Mr. Bosier emailed Mr. Davis with further suggestions about a path forward. Dkt. 16-16 at 2-3. The parties' attorneys and real estate agents were copied on the email, but Ms. Dahl's personal email was inadvertently omitted. Dkt. 16-16 at 2-3; Dkt. 22-2 at 5. In his email, Mr. Bosier explains that he sent over “an addendum for a materials increase.” Dkt. 16-16 at 2. Mr. Bosier further explained that

If you [Mr. Davis] do not wish to pay this materials increase I understand but I will be forced to absorb your lumber increases and only follow our standard specs for your home and design of your home. In doing so I will not allow any upgrades, change orders or special requests on your project due to limited resources and time to accommodate your special requests. We need to come to a final resolution on your pricing for materials increases and your electrical requests.

Dkt. 16-16 at 2-3. Mr. Bosier went on to suggest that Mr Davis perform the electrical work on the home and supply the materials and labor to do so. Dkt. 16-16 at 3. In exchange, Mr. Bosier would “eat the lumber upgrades.” Dkt. 16-16 at 3. Mr. Bosier also requested Mr. Davis' input on “our best path forward to get you the extras and special requests you want as well as help me to offset the extra costs we are experiencing in...