Ghidotti v. Waldron

Decision Date02 May 2019
Docket NumberNo. 20180045-CA,20180045-CA
Citation442 P.3d 1237
Parties Darnell GHIDOTTI and Greg Ghidotti, Appellants, v. Melodie WALDRON and Re/Max Metro, Appellees.
CourtUtah Court of Appeals

Lincoln W. Hobbs and Sarah H. Orme, Salt Lake City, Attorneys for Appellants

Stuart H. Schultz and Nicholas E. Dudoich, Salt Lake City, Attorneys for Appellees

Judge Kate Appleby authored this Opinion, in which Judges Michele M. Christiansen Forster and David N. Mortensen concurred.

Opinion

APPLEBY, Judge:

¶1 Darnell and Greg Ghidotti appeal the district court’s grant of summary judgment in favor of Melodie Waldron and Re/Max Metro (collectively, Re/Max). The court ruled that the Ghidottis were unable to prove their damages with the requisite degree of certainty and had not properly disclosed Darnell1 as an expert witness prior to trial. We affirm.

BACKGROUND

¶2 The Ghidottis were looking to purchase a house where they could live and operate a dog training and boarding business. They specifically wanted to find one in a community that was not controlled by a homeowners’ association (HOA) because they anticipated an HOA would not allow them to operate this type of business from their home. One of the listings the Ghidottis reviewed with their real estate agent was for a property (Property) that apparently was not subject to an HOA: the listing left "blank[s]" after "HOA contact," "HOA phone," and "HOA remarks," and the section identifying "Restrictions on the property" was marked "No."

¶3 The Ghidottis signed a real estate purchase contract for the Property in May 2014. The contract required the sellers (Sellers) to make various disclosures including providing "a copy of any restrictive covenants (CC&Rs) [and] rules and regulations affecting the property." In their disclosures, the Sellers represented the Property was not "part of a condominium or other [HOA]." The Ghidottis allege they were never provided copies of any CC&Rs or rules and regulations affecting the Property. Based on the representations in the real estate purchase contract and the Sellers’ disclosures that the Property was not subject to an HOA, the Ghidottis closed the deal on the Property.

¶4 After purchasing the Property, the Ghidottis applied for a conditional use permit, which they needed for keeping dogs on the Property. After becoming aware of the permit application, members of the Country Lane Ranchette’s Homeowners’ Association objected to its issuance, asserting that the Property was subject to CC&Rs. Further research revealed the Property was in fact subject to CC&Rs, which prohibited the Ghidottis from keeping their own dogs on the Property and precluded them from operating a training and kennel business there.

¶5 The Ghidottis filed a lawsuit in 2015 against the Sellers, Re/Max, and their real estate agent and broker.2 In March 2015, the Ghidottis served their initial disclosures. The disclosures designated Darnell as a fact witness who potentially would testify about the Ghidottis’ desire to purchase property not subject to an HOA, their efforts to ensure the Property was not subject to an HOA, the information provided to them about the Property, and how they discovered it was subject to an HOA. Neither Ghidotti was identified as an individual who would testify about damages. Darnell was mentioned among the "individuals who the plaintiffs may call in their case in chief" along with the phrase, "See summary of expected testimony above." The "computation of damages" section stated that the Ghidottis had "not yet had an opportunity to ascertain their damages." Further, it stated that the damages calculation would "depend upon if and when the [Ghidottis were] able to sell their Property" and "upon the expenses [the Ghidottis were] forced to incur in defending the action brought against them by their neighbors who [were] seeking to enforce the [CC&Rs]."

¶6 As fact discovery progressed, Darnell testified in her deposition about her calculation of damages resulting from their inability to run the business out of their home. Darnell acknowledged this was a new business operation. She also testified there were no other businesses in the area that offered similar services. After Darnell’s deposition the Ghidottis filed their first supplemental disclosures, which included financial documents "the [Ghidottis] may offer in their case-in-chief." The documents were labeled but no explanation was provided along with them. The Ghidottis filed their second supplemental disclosures, which provided the following damages calculation:

The [Ghidottis] have computed their damages based on the difference in revenue their business ... would have earned, had they been able to operate the business as originally planned, and what it will earn in light of the required changes to its business plan. Because the [Property] ... is in the Country Lane Ranchette’s Homeowners’ Association and is subject to restrictive covenants—a fact that was concealed from and thus unbeknownst to [the Ghidottis] at the time of their purchase, despite their efforts to avoid purchasing a property in a homeowners association—[the Ghidottis] cannot operate the business on their property, as originally intended, but will have to operate the business at an off-site location. Operating at an off-site facility changes the services [the Ghidottis] can offer and increases operation costs. The [Ghidottis] calculate that the total damages, over the 20 years that [they] intend to run their business, will be $2,784,159.[3 ]

The Ghidottis did not disclose any expert witnesses and acknowledge they never intended to do so.

¶7 In late 2015, the Ghidottis’ real estate agent and broker filed a motion for summary judgment arguing the Ghidottis were unable to prove their damages with reasonable certainty.4 The district court granted the motion and dismissed the Ghidottis’ claims against their real estate agent and broker as well as Re/Max. The court ruled that the Ghidottis could not prove their damages with the requisite degree of certainty because they did "not have an expert to testify on profit potential." And although the Ghidottis suggested that "Darnell planned to offer expert testimony at trial," they did not properly disclose her as an expert witness under the Utah Rules of Civil Procedure. The Ghidottis appeal.

ISSUE AND STANDARD OF REVIEW

¶8 The Ghidottis argue the district court erred in granting summary judgment on the grounds that Darnell was not properly disclosed as an expert witness under the Utah Rules of Civil Procedure and therefore they failed to prove their damages with the requisite degree of certainty. "Interpretation of the Utah Rules of Civil Procedure is a question of law that we review for correctness." Pete v. Youngblood , 2006 UT App 303, ¶ 7, 141 P.3d 629. This court also "reviews a [district] court’s entry of summary judgment for correctness and gives its conclusions of law no deference." Utah Farm Bureau Ins. Co. v. Crook , 1999 UT 47, ¶ 3, 980 P.2d 685. Further, "in reviewing a grant of summary judgment, we view the facts and all reasonable inferences drawn therefrom in the light most favorable to the nonmoving party." GLFP, Ltd. v. CL Mgmt., Ltd. , 2007 UT App 131, ¶ 5, 163 P.3d 636 (quotation simplified).

ANALYSIS

¶9 The Ghidottis challenge the district court’s finding that they failed to timely disclose their intent to rely on Darnell as a non-retained expert witness. They acknowledge they did not properly disclose her as a retained expert but argue they "implicitly and sufficiently identified [Darnell] as an unretained expert witness to testify regarding the Ghidottis’ damages." The Ghidottis argue that Darnell was properly disclosed as a non-retained expert when they listed her as a potential fact witness in their initial disclosures, when she testified about their damages during her deposition, and when they disclosed their financial documents in their first supplemental disclosures. The Ghidottis argue summary judgment was improper because these disclosures gave Re/Max "ample notice" that they intended to have Darnell testify about their damages as an expert at trial. We disagree.

¶10 Summary judgment is appropriate when "the moving party shows that there is no genuine dispute as to any material fact and the moving party is entitled to judgment as a matter of law." Utah R. Civ. P. 56(a). The district court "should not weigh disputed evidence" and must view "the facts and all reasonable inferences to be drawn therefrom in a light most favorable to the nonmoving party." Pigs Gun Club, Inc. v. Sanpete County , 2002 UT 17, ¶ 24, 42 P.3d 379 (quotation simplified).

¶11 In this case, Re/Max argued the Ghidottis were unable to prove damages with the requisite degree of certainty and therefore their claims should be dismissed on summary judgment. To recover damages, a plaintiff must prove both the fact of damages and the amount of damages. Atkin, Wright & Miles v. Mountain States Tel. & Tel. Co. , 709 P.2d 330, 336 (Utah 1985). "The level of persuasiveness required to establish the fact of loss is generally higher than that required to establish the amount of a loss." Id. (quotation simplified). But "there still must be evidence that rises above speculation and provides a reasonable, even though not necessarily precise, estimate of damages." Id. ¶12 The Ghidottis sought damages in the form of lost profits, which "must be established with ... sufficient certainty that reasonable minds might believe from a preponderance of the evidence that the damages were actually suffered." Kilpatrick v. Wiley, Rein & Fielding , 2001 UT 107, ¶ 76, 37 P.3d 1130 (quotation simplified). In particular, new businesses, such as the Ghidottis’, "lack an actual record of past earnings, which decreases the certainty with which one could predict future profits." Id. (quotation simplified). But this does not "automatically preclude new businesses from recovering lost profits" and "new businesses should be allowed to try to prove lost profits up to...

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