Preview:

IN THE SUPREME COURT OF THE STATE OF IDAHO Docket No. 33752 JOE COSTA, an individual, ) ) Plaintiff-Counterdefendant-Appellant- ) Cross Respondent, ) ) v. ) ) NELSON BORGES, an individual, ) ) Defendant-Counterclaimant) Respondent-Cross Appellant. )

Boise, January 2008 Term 2008 Opinion No. 23 Filed: February 15, 2008 Stephen W. Kenyon, Clerk

Appeal from the District Court of the Fifth Judicial District of the State of Idaho, in and for Jerome County. The Hon. John K. Butler, District Judge. The judgment of the district court is affirmed in part and this case is remanded. Wright Brothers Law Office, Twin Falls, for appellant. argued. Andrew B. Wright

Hollifield Law Office, Twin Falls, for respondent. William Hollifield argued.

EISMANN, Chief Justice. This is an appeal from a judgment winding up the affairs of a joint venture. The appellant challenges the failure of the trial court to remove the respondent from the joint venture, to find that the respondent breached the joint venture agreement, and to hold that the respondent cannot share in the profits of the joint venture. The appellant also contends that the trial court erred when it determined that a backhoe was property of the joint venture. The respondent crossappeals the trial court's refusal to award costs and attorney fees. We affirm the judgment of the district court, with the exception that we remand for further findings regarding the backhoe.

I. FACTS AND PROCEDURAL HISTORY In August 2004, Joe Costa and Nelson Borges orally agreed to associate together to purchase and develop a fifteen-acre parcel of real property located in Jerome County. They

intended to develop a subdivision with forty-one residential lots and three commercial lots. Costa was to contribute his expertise in developing the real property, and Borges was to contribute his equipment to clear and level the land. They agreed to contribute equal capital and labor, with the exception that Borges could elect to contribute additional capital to hire someone to do his share of the labor. 1 They also contracted work out to third parties. Costa and Borges each contributed $55,000 to purchase the property and opened a joint bank account for the project. Between November 2004 and June 2005, they both worked on the project and met regularly to discuss financial matters regarding the development. They also each contributed additional sums to the joint venture. On June 23, 2005, they sold the first nine lots in their subdivision for $239,850, which was deposited into the joint account. In June 2005, Costa and Borges decided to build a retaining wall on the property, doing it themselves to save money. They agreed to hire Costa's son to work on the wall, but a dispute arose between them over the source of funds from which to pay him. Costa contended that Borges should pay for that labor, and Borges contended the partnership should. In an attempt to resolve the dispute, their wives arranged for them to meet on June 27, 2005, at the Costa residence. The meeting did not go well, ending in a heated exchange between Costa and Borges after which Borges and his wife left. Borges testified that he left because Costa had attempted to physically harm him. Costa testified he told Borges to leave because Borges had called him a liar. The district court did not resolve this conflict in the testimony. The meeting resulted in a breakdown of the relationship between Costa and Borges. Thereafter, they did not communicate with each other. Shortly after the meeting, Costa went to the development site to use a backhoe that Borges had provided. Costa discovered that there was no key in the backhoe, and he assumed that Borges would not let him use it. Therefore, he withdrew $10,000 from the joint account to purchase a backhoe, which he used on the project. Costa testified that the backhoe cost him $32,000. Costa continued working on the development and hired his son to do some of the work. Borges did not perform any further labor at the site.

Costa does not challenge the district court's finding that if Borges paid someone to perform his share of the labor, his payment would be considered a capital contribution, which he would receive back if the project generated a net profit, rather than the payment of a personal obligation, for which he would not be entitled to reimbursement.

1

2

On September 15, 2005, Costa filed this action. He alleged that the parties had formed a partnership, that Borges had breached the partnership agreement, and that he should be expelled from the partnership pursuant to Idaho Code

Download costa.pdf

Idaho Law