J.R. Simplot Co. v. Chemetics International, Inc.

887 P.2d 1039, 126 Idaho 532, 1994 Ida. LEXIS 136
CourtIdaho Supreme Court
DecidedDecember 5, 1994
Docket20458
StatusPublished
Cited by63 cases

This text of 887 P.2d 1039 (J.R. Simplot Co. v. Chemetics International, Inc.) is published on Counsel Stack Legal Research, covering Idaho Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
J.R. Simplot Co. v. Chemetics International, Inc., 887 P.2d 1039, 126 Idaho 532, 1994 Ida. LEXIS 136 (Idaho 1994).

Opinion

MeDEVITT, Chief Justice.

BACKGROUND AND PRIOR PROCEEDINGS

On approximately July 20, 1984, J.R. Simplot Co. (Simplot) and Chemetics International, Inc. (Chemetics) entered into a construction contract pursuant to which Chemetics was to design and build a sulfuric acid production plant for Simplot in Pocatello, Idaho. The parties agree that the purpose of the plant was to produce 2,000 short tons per day (STPD) of sulfuric .acid. The plant was completed in December 1985 at an approximate cost of $21 million. A three day “performance test” was conducted during January 1986. According to Chemetics, the plant produced 2,000 STPD of sulfuric acid during the performance test, fulfilling Chemetics performance guarantee. Simplot harbored doubts as to whether the desired production would be achieved on a day-to-day basis, but nonetheless signed an acceptance certificate at the conclusion of the performance test, on January 21, 1986. The certificate acknowledged the completion of the plant construction.

Thereafter, the plant failed to produce on a regular basis 2,000 STPD of sulfuric acid. Various causes for the production deficit became apparent during the first twelve months of Simplot’s control and operation of the plant. On September 11, 1986, a Chemetics manager assured Simplot in writing that Chemetics desired “quality and customer satisfaction” and that Chemetics would work with Simplot to obtain these objectives. For the next five years, Chemetics and Simplot attempted to remedy the plant’s problematic equipment and instruments. At least one Simplot manager testified that he met with Chemetics regarding the plant on nearly a monthly basis. Despite the continuing efforts by both parties, however, the plant failed to comply with certain design specifications. During the summer of 1992, Simplot remedied the deficiencies at the plant, without Chemetics’ assistance, at a cost of $3.4 million.

Simplot filed suit against Chemetics on May 28, 1991, alleging breach of contract (Count I), breach of express and implied warranties (Count II), and indemnification for patent infringement (Count III). In its answer, Chemetics asserted, among other affirmative defenses, the defense of the statute of limitation. Chemetics later moved for summary judgment on the grounds that Counts I and II of Simplot’s complaint should be dismissed for Simplot’s failure to meet the five year statute of limitation that is applicable to construction contracts as set forth in Idaho Code § 5-216 and § 5-241(b). The district court denied the motion, holding that genuine issues of material fact existed as to whether Chemetics was equitably es-topped from pleading the statute of limitation.

During the trial, the district court submitted to the jury, over Chemetics’ objection, *534 the issues of whether the Idaho Uniform Commercial Code (UCC) and various UCC remedies applied to the contract. The district court also submitted to the jury the interpretation of provisions in the contract that purported to limit Chemetics’ liability. Additionally, the district court held that Chemetics was barred from pleading the statute of limitation defense not because of equitable estoppel, which the court held inapplicable in this case, but because of the “repair doctrine,” a theory not previously adopted in Idaho.

The jury awarded Simplot $2,650,294.92 and interest as compensation for costs incurred repairing defects which existed in the plant. The jury awarded Simplot $37,800 as compensation for the patent infringement claim. Chemetics appeals the verdict relating to the plant, but does not appeal the verdict relating to the patent infringement claim. Simplot cross-appeals, challenging the amount of attorney fees it was awarded by the district court.

ANALYSIS

I.

THE DISTRICT COURT ERRED BY RULING THAT THE PRINCIPLES OF THE “REPAIR DOCTRINE” BARRED CHEMETICS FROM ASSERTING A DEFENSE BASED ON THE STATUTES OF LIMITATION.

Chemetics first contends that the district court erred by ruling that the “repair doctrine” precluded Chemetics’ statute of limitation defense. The issue posed by Chemetics involves the district court’s decision on a question of law, over which this Court exercises free review. E.g., Clements Farms, Inc. v. Ben Fish & Son, 120 Idaho 185, 188, 814 P.2d 917, 920 (1991).

There is no dispute that Idaho law, including Idaho statutes of limitation, governs the interpretation of the contract in this case. The parties expressly provided in their contract that “the Contract shall be governed and construed according to the laws of the state or province in which the site is located.” The plant at issue in this case is located in Idaho.

The law that governs this case is not that set forth in the Idaho UCC. This appeal is resolved by analyzing Simplot’s compliance with I.C. § 5-241(b) and § 5-216.

Pursuant to I.C. § 5-241(b) and I.C. § 5-216, a contract action arising out of the design, planning, supervision or construction of improvements to real property accrues and the statute begins to run at the time of final completion of construction of such an improvement. I.C. § 5-241(b). The statute of limitation for such an action is five years. I.C. §§ 5-216, 5-201.

The date of final completion of the construction of the sulfuric acid plant is undisputed. Both parties agree that final completion of the plant took place on January 21, 1986, when Simplot and Chemetics executed the acceptance certificate. The acceptance certificate stated that construction of the plant was complete in every respect. Pursuant to the acceptance certificate, Simplot assumed control and operation of the sulfuric acid plant. The parties do not dispute that Simplot filed its complaint five years and four months after execution of the acceptance certificate.

The only non-statutory bar to a statute of limitation defense in Idaho is the doctrine of equitable estoppel. See Theriault v. A.H. Robins Co., 108 Idaho 303, 307, 698 P.2d 365, 369 (1985); cf. Holmes v. Iwasa, 104 Idaho 179, 182-83, 657 P.2d 476, 479-80 (1983) (evaluating plaintiffs malpractice claim pursuant to the limited statutory discovery exceptions to I.C. § 5-219(4) and the doctrine of equitable estoppel). This Court has specified that the elements of equitable estoppel are: (1) a false representation or concealment of a material fact with actual or constructive knowledge of the truth; (2) that the party asserting estoppel did not know or could not discover the truth; (3) that the false representation or concealment was made with the intent that it be relied upon; and (4) that the person to whom the representation was made, or from whom the facts were concealed, relied and acted upon the representation or concealment to his prejudice. Williams v. Blakley, 114 Idaho 323, *535 325, 757 P.2d 186, 188 (1987); Twin Falls Clinic & Hosp. Bldg. v. Hamill,

Free access — add to your briefcase to read the full text and ask questions with AI

Related

Cite This Page — Counsel Stack

Bluebook (online)
887 P.2d 1039, 126 Idaho 532, 1994 Ida. LEXIS 136, Counsel Stack Legal Research, https://law.counselstack.com/opinion/jr-simplot-co-v-chemetics-international-inc-idaho-1994.