Millenkamp v. Davisco Foods International, Inc. (Tort)
Filed April 14, 2009
Cite as 0735299

Negligence not a defense in claims of breach of warranty in Idaho

Bill and Susie Millenkamp (Millenkamps) raise bovine calves in Idaho.

On the other hand, Davisco Foods International (Davisco) was the operator of “Jerome Cheese Company,” which produces milk permeate as a byproduct of its cheese-making operation. Davisco sold milk permeate to several dairies in Jerome, Idaho.

Seeing the potential of using milk permeate in feeding animals, the Millenkamps discussed their operations with Steve Ewing (Ewing), a Davisco employee. Ewing admitted to have given the Millenkamps an analysis sheet showing the contents of Davisco’s milk permeate and representing a pH level of at least 6.

The Millenkamps also alleged that Ewing told them that milk permeate would be good for their calves and should be stored in plastic tanks.

After consulting with nutritionist Matt Schmitt of Cargill, Inc., the Millenkamps incorporated milk permeate in feeding their calves. However, some calves became sick, others died or failed to gain the desired weight.

Upon examination, a veterinarian told Millenkamps that they stored the milk permeate at an improper temperature which allowed lactose to ferment into a harmful lactic acid.

Consequently, the Millenkamps filed a Complaint against Davisco. They alleged breach of express warranties, breach of the implied warranty of fitness for a particular purpose, general negligence, and negligence per se.

In turn, Davisco moved for summary judgment on all negligence claims. In granting the summary judgment, the district court concluded that the Idaho economic loss rule barred recovery in negligence.

On trial, the jury found that Davisco breached its warranties and awarded damages to the Millenkamps. Subsequently, Davisco moved for judgment as a matter of law or a new trial in the alternative contending that Idaho law required the offsetting of the award for damages by the amount of the Cargill settlement.

The district court denied Davisco’s motions and assertion of offsetting.

The Millenkamps filed a motion requesting prejudgment interest, costs and attorney’s fees. The district court awarded attorney’s fees but denied the rest. Both parties appealed.

On appeal, the appeal court made the following rulings:

1. Davisco was not entitled to instruct the jury to compare its fault with that of Cargill because negligence was not a defense to liability for breach of warranty claims in Idaho.
   
   Moreover, the jury was not required to find that Davisco violated its express and implied warranties to the Millenkamps by failing to observe a state labeling requirement for its milk permeate because Idaho has no statute or case law making such violation a breach of such warranty.


2. District court abused its discretion when it admitted as evidence the testimony of Dr. Kertz testifying that American Feed Control Officials’ model feed law required sellers to label milk permeate.
   
   The district also abused its discretion when it admitted as evidence a letter from a third party stating that Davisco should be made liable for the Millenkamps’ damages as such letter was inadmissible under the hearsay rule.


3. District abused its discretion when it denied Davisco’s request for offsetting since the district court erred in instructing the jury regarding Idaho’s Milk Permeate Labeling Law. Hence, a new trial should be granted.

Considering the foregoing, the appeal court partly affirmed and partly reversed the district’s court decision and remanded the case for further consideration.