Sunday, April 6, 2014

H-D Irrigating v. Kimble Properties case brief

H-D Irrigating v. Kimble Properties case brief summary

Read the Full Case Text:

Diamond Cattle Company sold land, Kimble Properties sold equipment
Lloyd Kimble is president of both Companys

Plaintiffs argue that all the defendants are jointly and severally liable for the misrepresentation and breach of duty due to the fact that the irrigation equipment sold by Kimble Prop and Lloyd Kimble did not work.

The lower court found all three defendants liable.

Is the Agent and Principle liable for the wrong act of the agent?

Agent: A principle is liable for wrongs committed by an agent while the agent acts within the scope of his employment.
Individual: a director or officer is individually liable for his false representation. Personal liability attaches regardless of whether liability also attaches to the corporation.  This happens when a director or an officer fradulently acts or makes false representations.

Lloyd Kimble made false representations regarding the irrigation equipment.  He was working as an agent of Kimble properties at the time the false representations were made. He was not acting as an agent of Diamond Cattle at the time, which was a seperate transaction.

Lloyd and Kimble Properties were held jointly and severally liable for Llyod's constructive fraud (false representations), but Diamond Cattle was not liable.The court relies on a formalistic approach here instead of a equitable approach.
The companies in this case were separate and there is no theory of enterprise liability here.

1 comment:

  1. Susan G. Ridgeway,Datsopoulos, MacDonald & Lind, P.C., Missoula, Montana, For Appellants. James L. Jones, Dorsey & Whitney, Billings, Montana, For Respondents.

    ¶ 1 The Plaintiffs, H-D Irrigating, Inc. and William H. Lane, Jr., (Buyers), filed this action in the District Court for the Sixth Judicial District in Sweet Grass County to recover damages from the Defendants, Kimble Properties, Inc., Hobble Diamond Cattle Co., and Lloyd L. Kimble (Sellers), for misrepresentation and breach of a duty to disclose.   The Defendants filed a counterclaim to recover payments due from the Plaintiffs for the property purchased.   Following a nonjury trial, the District Court found the Defendants were liable for constructive fraud and that the Plaintiffs were liable for payment pursuant to the promissory note.   The Defendants appeal and the Plaintiffs cross-appeal.   We affirm in part and reverse in part the judgment of the District Court and remand to the District Court for further proceedings.

    ¶ 2 The following issues are presented on appeal:

    ¶ 3 1. Did Kimble Properties, Inc. waive its right to appeal when it accepted partial payment that H-D Irrigating, Inc. had deposited with the clerk of district court?

    ¶ 4 2. Did the District Court have jurisdiction to decide the issue of constructive fraud?

    ¶ 5 3. Did the District Court err when it concluded that the Sellers committed constructive fraud?

    ¶ 6 4. Are the District Court's findings of fact clearly erroneous?

    ¶ 7 5. Did the District Court abuse it discretion when it assessed damages against Hobble Diamond Cattle Co. and Lloyd Kimble?

    ¶ 8 6. Did the District Court abuse its discretion when it calculated damages?

    ¶ 9 7. Did the District Court abuse its discretion when it held neither party was the prevailing party and did not award attorney fees?


    ¶ 10  On February 13, 1991, William H. Lane, Jr. agreed with Hobble Diamond Cattle Co. and Kimble Properties, Inc. to purchase land from Hobble Diamond Cattle Co. for $1,650,000 and irrigation equipment from Kimble Properties, Inc. for $350,000.   Lloyd L. Kimble was the president of both companies.

    ¶ 11 Subsequently, on April 1, 1991, Lane assigned his rights and his duties regarding the irrigation equipment to H-D Irrigating, Inc. Lane was the president of H-D Irrigating, Inc. On May 24, 1991, in accordance with the purchase agreement, H-D Irrigating, Inc. paid Kimble Properties, Inc. $150,000 and executed a promissory note in the amount of $200,000.   The note bore interest at a rate of 8 percent per year and provided:

    On June 15, 1992, Maker shall pay all accrued and unpaid interest then outstanding.   On June 15, 1993, the outstanding principal balance of this Note and all accrued and unpaid interest shall be due and payable in full.

    The note further provided:

    If any payment due under this Note is not paid in full within fifteen days of the time specified therefor, the unpaid principal balance of this Note and all accrued and unpaid interest shall be immediately due and payable without notice and shall thereafter bear interest at the rate of 11% per annum.

    ¶ 12 On June 16, 1992, the Buyers filed a complaint, in which, among other claims, they alleged misrepresentation and breach of a duty to disclose.   The Buyers alleged that Lloyd Kimble falsely represented that the irrigation equipment was in working order;  that all pivots could be operated at the same time;  that the irrigation system provided sufficient water for the acreage;  and that he knew of no irrigation system deficiencies.   On the same day the Buyers filed their complaint, they also filed a motion to deposit their first promissory note payment with the clerk of court pursuant to Rule 67, M.R.Civ.P. On June 18, 1992, the District Court granted the Buyers' motion and the Buyers deposited $16,000 with the clerk of court.

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