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Bakke v. Magi-Touch Carpet One Floor & Home, Inc.

Supreme Court of North Dakota

December 6, 2018

Shannon Bakke, Plaintiff and Appellant
v.
Magi-Touch Carpet One Floor & Home, Inc., Defendant and Appellee and SPS Companies, Inc., Defendant

          Appeal from the District Court of Burleigh County, South Central Judicial District, the Honorable David E. Reich, Judge.

          Shawn A. Grinolds, Bismarck, ND, for plaintiff and appellant.

          Cloe A. Kilwein (argued) and William P. Harrie (on brief), Fargo, ND, for defendant and appellee Magi-Touch Carpet One Floor & Home, Inc.

          OPINION

          JENSEN, JUSTICE.

         [¶ 1] Shannon Bakke appeals from a judgment in favor of Magi-Touch Carpet One Floor & Home, Inc. and denial of her motion to amend her complaint. Bakke asserts the district court erred in concluding she could not pursue a claim against Magi-Touch because Magi-Touch was not liable for the acts of its independent contractor. Bakke also asserts the district court erred in denying, as futile, her motion to amend her complaint to assert a contract claim against Magi-Touch. We affirm in part, reverse in part, and remand this case to the district court for further proceedings on Bakke's contract claim.

         I.

         [¶ 2] Bakke entered into a contract with Magi-Touch for the installation of floor tiles, a shower base, and related products in a bathroom within Bakke's home. Magi-Touch arranged to have the shower base and tile installed by VA Solutions, LLC, an independent contractor. Bakke asserts the shower door was improperly installed, the improper installation resulted in the shower door imploding, and the implosion caused damage to property in and around the shower requiring the bathroom door and trim to be repainted.

         [¶ 3] Magi-Touch refused to compensate Bakke for repainting the bathroom door and trim. Bakke initiated the litigation in small claims court using a court provided small claims court affidavit form and sought to recover compensation for the repairs to the bathroom door and trim. The small claims court affidavit form only requires a general description of the claim, and Bakke did not state whether she was asserting tort or contract claims.

         [¶ 4] Magi-Touch responded to the small claims court affidavit with a formal answer and did not use the small claims court answer form. The answer included a demand for a jury trial and defenses that can be fairly characterized as responding to a negligence (tort) cause of action. The answer included an assertion that Bakke's claim was barred by the economic loss doctrine; the economic loss doctrine would limit Bakke's recovery to a breach of contract claim and preclude tort claims such as negligence. Magi-Touch also requested removal of the case from the small claims court to the district court.

         [¶ 5] After removal of the case to the district court, Magi-Touch moved for summary judgment asserting VA Solutions was hired as an independent contractor and Magi-Touch could not be held liable for the negligence of an independent contractor. The district court granted Magi-Touch's request for summary judgment after determining Magi-Touch had no liability for the negligence of an independent contractor. In the same order, the district court granted SPS Companies, Inc.'s motion to dismiss after determining SPS was relieved from liability for distribution of a defective product because SPS is a non-manufacturing seller as defined by N.D.C.C. § 28-01.3-04. Bakke has not appealed the dismissal of SPS from the litigation.

         [¶ 6] At the same time the district court considered Magi-Touch's motion for summary judgment and SPS's motion to dismiss, the district court considered Bakke's motion to file an amended complaint. The amended complaint expanded on the general claim asserted in the small claims court affidavit and specifically asserted claims for breach of contract, fraud, deceit, negligence, and unlawful sales practices. The district court denied Bakke's request for leave to file the amended complaint after determining the claims would be futile. In doing so, the district court relied on its prior determination that Magi-Touch could not be held responsible for the negligent acts of VA Solutions, an independent contractor.

         II.

         [¶ 7] In its order granting summary judgment, the district court determined Bakke and Magi-Touch entered into a contract for the installation of floor tiles, a shower base, and the related products in a bathroom within Bakke's home. That finding is consistent with Magi-Touch's assertion in its answer that the economic loss doctrine precludes tort claims.

         [¶ 8] The elements of a contract are outlined in N.D.C.C. § 9-01-02 and include parties capable of contracting, the consent of the parties, a lawful object, and consideration. In the present case, all of those elements exist: 1) both parties were capable of entering into a contract; 2) both parties consented to the contract; 3) installation/remodeling of a bathroom is a lawful object; and 4) consideration for the contract was satisfied by Magi-Touch's agreement to provide materials and installation in exchange for payment from Bakke. The district court properly determined the ...


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