Thieme v. Worst

745 P.2d 1076 (1987)

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Nature of the Case

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Facts

D acquired land intending to build a home. They later decided not to build. In 1982, they listed the parcel for sale with and included the property in a multiple listing service. The listing described the land as being five acres, together with seven shares of Twin Falls Canal Company water. Another real estate broker, John Tolk (D1), who worked for Interstate Realty, learned that Ps were looking for a home building site. Ps were interested in property for the purpose of building a home, and they desired irrigation water on the property in order to pasture a few animals and raise a garden. After viewing the property, Ps assumed that irrigation water could be delivered to the southeast corner of the property and that the property could be irrigated simply by gravity flow through existing ditches. Ps never made any direct contact with Ds or with Irwin Realty, the listing broker. P paid cash for the property, receiving a deed and a certificate for the water shares. P planted a garden and allowed a third party to cultivate the land and to plant wheat. P also began construction of a house on the property, completing excavation of the basement and laying a foundation. Ps then discovered that there was a cement barrier in front of the headgate, obstructing the delivery of water into the ditch which had previously conveyed water to the parcel. All parties were unaware of this obstruction at the time of the purchase. Ps tried to get water but failed. On September 22, 1983, Ps sent a letter to D stating they were rescinding the purchase because of 'fraudulent nondisclosure' that D had abandoned the easement for conveying water to the property. P sued D. The court determined there was no fraud or actionable misrepresentation. It did find that both parties mistakenly believed the shares of water could be delivered to the southeast corner of the property. The court 'reformed' the contract and refused to grant rescission. Ds were to be required to specifically perform the 'reformed' contract by providing a permanent delivery system that would again conduct the water to the southeast corner. The court awarded damages of $151.53 for expenses incurred in planting the garden in 1983. The court awarded no damages in connection with the aborted home construction. Everyone appealed.