Osterman v. Sears11/26/2003
Submitted on Briefs: August 8, 2002
Laura Osterman (Osterman) brought this action in the District Court for the Eighth Judicial District, Cascade County, alleging actual and constructive fraud, negligent misrepresentation, negligence, negligent hiring of an independent contractor, breach of express warranty, and deceptive, unfair trade practices. Defendants moved for summary judgment on all claims. The District Court granted summary judgment to Defendants on Osterman's claims for actual and constructive fraud, unfair trade practices, and negligent misrepresentation. A jury trial ensued on the remaining claims, and a verdict was returned in favor of Osterman for breach of express warranty. Osterman thereafter sought attorney fees and costs. Following a hearing, the District Court concluded Osterman was entitled to attorney fees and costs for her breach of warranty claim only, reducing her requested amount based upon a pro rata calculation of the attorneys' time spent on that claim. Osterman appeals the District Court's order granting summary judgment on her claims for fraud and unfair trade practices, as well as the court's award of attorney fees. We affirm in part, reverse in part, and remand.
Osterman raises the following issues on appeal:
1. Did the District Court err in granting summary judgment to Defendants on Osterman's claims for actual fraud, constructive fraud, unfair trade practices, and negligent misrepresentation?
2. Did the District Court abuse its discretion in applying a pro rata reduction to Osterman's requested attorney fees?
FACTUAL AND PROCEDURAL BACKGROUND
In the summer of 1996, Laura Osterman, then age 69 and recently widowed, responded to a written solicitation from Sears, Roebuck & Co. (Sears) regarding vinyl siding for her home. On August 15, 1996, James E. Sluder (Sluder) of K-Designers (KDesigners), an authorized contractor of Sears, visited Osterman at her home to discuss the purchase and installation of vinyl siding. During his visit, Sluder provided Osterman with a number of color brochures, including one clearly identifying the manufacturer of the siding as a company named "Gentek." Sluder also provided a brochure, several pages in length, in which the words "SEARS SIDING," repeatedly appeared throughout the brochure in large print followed by the slogan, " roudly sold, furnished and installed by K-Designers, a Sears authorized contractor," which appeared in small font near the bottom of the page. The brochure also contained one page dedicated entirely to promoting K-Designers, bearing the K-Designers logo at the bottom right hand corner.
On the day of Sluder's visit, Osterman agreed to purchase approximately $22,000 worth of vinyl siding, to be financed through "Sears Financial," and installed at her residence the following month. Osterman and Sluder executed a Sales Agreement, whereby Osterman agreed to purchase the siding and "to contract with K-Designers, to furnish, deliver, and arrange for installation of all materials . . . ." Osterman additionally agreed to participate in a product awareness program and signed a certificate-like document indicating that she would, among other things, allow K-Designers to use "before and after" photographs of her home, allow placement of a Sears Siding/K-Designers sign on her property during installation, and allow K-Designers to show the exterior of her property to prospective customers.
Despite this, Osterman believed she was dealing exclusively with Sears, that Sluder was a Sears' employee, and that the materials provided would be Sears' products. When installation of the siding commenced in September 1996, however, it
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