Rex v. Cmh Homes, Inc.

Opinion

FILED

NOT FOR PUBLICATION

AUG 18 2026

UNITED STATES COURT OF APPEALS MOLLY C. DWYER, CLERK U.S. COURT OF APPEALS

FOR THE NINTH CIRCUIT

MELINDA REX; DALLEN REX; No. 24-7774 MERRILL PAUL JENSEN, D.C. No.

1:23-cv-00059-WQH-REP

Plaintiffs - Appellants,

MEMORANDUM*

v.

TY FALWELL; CMH HOMES, INC., d/b/a CLAYTON HOMES #767; KATIE TELLES DE SOUSA; JOHN AND JANE DOES, I-XX Does whose identities are unknown,

Defendants - Appellees,

and TOM BRENNER, Defendant.

Appeal from United States District Court for the District of Idaho William Q. Hayes, District Judge, Presiding Argued and Submitted March 13, 2026 Portland, Oregon

*

This disposition is not appropriate for publication and is not precedent except as provided by Ninth Circuit Rule 36-3.

Before: COLLINS and LEE, Circuit Judges, and FITZWATER,** District Judge.

Plaintiffs-Appellants Melinda Rex (“Rex”), Dallen Rex, and Merrill Paul Jensen (“Plaintiffs”) appeal the district court’s grant of summary judgment on their claims under the Fair Housing Act (“FHA”), 42 U.S.C. § 3617, and under Idaho law for breach of contract. We have jurisdiction under 28 U.S.C. § 1291, and we affirm in part and reverse and remand in part.

1. We review a district court’s grant of summary judgment de novo, and its decision to grant summary judgment sua sponte for abuse of discretion. Arce v. Douglas, 793 F.3d 968, 975–76 (9th Cir. 2015).

2. The district court abused its discretion by granting summary judgment sua sponte on Plaintiffs’ FHA § 3617 claim. Although it is correct that a district court can grant summary judgment “on grounds not raised by a party,” it can do so only “[a]fter giving [the nonmovant] notice and a reasonable time to respond.” Fed. R. Civ. P. 56(f). Here, the district court assumed that Plaintiffs had met their prima facie burden for proving retaliation, but it concluded that they had failed to demonstrate a genuine issue of material fact regarding whether the non-retaliatory reasons proffered by Defendant CMH Homes, Inc. (“CMH”) for ultimately terminating negotiations were

**

The Honorable Sidney A. Fitzwater, United States District Judge for the Northern District of Texas, sitting by designation.

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merely pretexts for a retaliatory motive. The parties did not brief the pretext issue in the district court, and nothing in the record suggests that the district court notified Plaintiffs that the court was going to address pretext in its summary judgment ruling. Because Plaintiffs did not have an adequate opportunity to address the issue of pretext, we reverse the district court’s grant of summary judgment on Plaintiffs’ § 3617 claim and remand for further proceedings. See Buckingham v. United States, 998 F.2d 735, 742 (9th Cir. 1993) (explaining that, for sua sponte summary judgment, “litigant[s] must be given reasonable notice that the sufficiency of [their] claim will be in issue”).

Although we may “affirm on any ground supported by the record[,]” Johnson v. Barr, 79 F.4th 996, 1003 (9th Cir. 2023), we are not persuaded that the district court’s grant of summary judgment on Plaintiffs’ FHA § 3604 claim is dispositive of their § 3617 claim. We have held that “[a] [§] 3617 violation does not require the person who is interfered with to capitulate to the interference, and a violation can involve a situation where no discriminatory housing practice may have occurred at all.” Morris v. W. Hayden Ests. First Addition Homeowners Ass’n, 104 F.4th 1128, 1142 (9th Cir. 2024) (simplified). Thus, even if Defendants did not violate § 3604 when Defendant Katie Teles de Sousa initially suggested that the parties “part ways,” the district court must still consider, after full briefing from the parties, whether

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Defendants violated § 3617 by refusing to continue negotiations or resume the transaction after Rex engaged in protected activity.

3. The district court did not err in granting summary judgment on Plaintiffs’

Idaho law-based breach of contract claim on the ground that no reasonable jury could find that Rex and CMH had entered into an express or implied contract.

Plaintiffs’ contention that Rex had an implied-in-fact contract with CMH is unpersuasive. Under Idaho law, “[a]n implied-in-fact contract exists where there is no express agreement, but the conduct of the parties implies an agreement from which an obligation in contract exists.” Clayson v. Zebe, 280 P.3d 731, 736 (2012) (simplified). “[W]here the conduct of the parties allows the dual inferences that one performed at the other’s request and that the requesting party promised payment, then the court may find a contract implied in fact.” Id. (citation omitted). The parties need not have reached “a common understanding of all the terms.” Id. at 738.

The record indicates that neither Rex nor CMH believed that it had reached an agreement for the purchase of manufactured homes. CMH provided documents and an expert report detailing the home purchase process, which demonstrated that CMH’s conduct throughout negotiations did not imply an agreement to sell Rex the manufactured homes. And Rex’s own testimony indicates that she understood that her housing deposit was refundable if she changed her mind and that a formal contract

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would come later. Accordingly, neither party’s conduct implied the existence of an agreement in contract, and the district court properly granted summary judgment on Plaintiffs’ breach of contract claim.

AFFIRMED IN PART, REVERSED IN PART, and REMANDED.