Justia Idaho Supreme Court Opinion Summaries

Bret and Mary Bennett filed an action to quiet title to their residence in Payette, Idaho, against the Bank of Eastern Oregon (“BEO”), seeking to remove a judgment lien and a deed of trust. In 2007, the Bennetts started a motorsports business in Ontario, Oregon, which leased its premises from a different business entity owned by the Bennetts. In 2008, the Bennetts personally guaranteed one or more loans between BEO and these businesses. Among these loans was a $100,000 promissory note (“the Note”) that was secured by a deed of trust on the Bennetts’ residence situated on the other side of the Snake River in Payette, Idaho (“the Property”). The deed of trust designated 1st American Title Company of Malheur County, Oregon as trustee. The parties signed the deed of trust on April 10, 2008. One day later, on April 11, 2008, BEO recorded the deed of trust in the Payette County Recorder’s Office. By its terms, the deed of trust was set to mature on May 5, 2009. The Bennetts later defaulted on the Note and other obligations to BEO. Rather than seeking to foreclose on the Property for a breach of the Note’s terms, BEO successfully pursued a collection action against the Bennetts in Oregon state court to recover on all of the Bennetts’ debts, including the Note. This appeal addressed whether a debtor could use Idaho’s single-action rule as a sanction to quiet title against a deed of trust when the secured creditor has violated the rule by filing an action against the debtor to recover on the debt before seeking satisfaction of the debt by foreclosing on the property serving as security. The Idaho Supreme Court determined the Bennetts stated a cause of action that could allow them to quiet title against BEO for the deed of trust. Construing the pleadings in favor of the Bennetts, BEO violated the single-action rule codified in Idaho Code section 45-1503(1) by seeking to recover from the Bennetts on the Note personally before seeking to foreclose on the Property. Thus, the Supreme Court reversed the district court's decision granting BEO's motion to dismiss, vacated the judgment of dismissal, and remanded for further proceedings. View "Bennett v. Bank of Eastern Oregon" on Justia Law

Appellants Jerry and JoCarol Losee appeal the district court’s decision granting Deutsche Bank National Trust Company’s motion for summary judgment, arguing the district court erred by refusing to consider their “Chain of Title Analysis” as inadmissible hearsay. The Losees also argue the district court erred in failing to rule on two of their claims against Deutsche Bank. In 2009, the Losees became delinquent in their mortgage payments, eventually defaulting on their home mortgage loan. Over two years after the foreclosure sale was supposed to take place, a second notice of default was recorded on April 20, 2014. However, the foreclosure sale was postponed when the Losees requested a loss mitigation review. The owner of the loan would not allow loan modification, so the Losees were advised that a short sale of the property was the only loss mitigation available. On August 17, 2015, this case commenced when the Losees, acting pro se, filed their “Original Petition for Breach of Contract, Slander of Title for Declaratory Judgment and Motion for Temporary Restraining Order and Application for Temporary Injunction” (“Complaint”) with the district court. In 2017, the Losees submitted a “Notice of Filing for Judicial Review,” to which they attached a “Chain of Title Analysis.” The “Chain of Title Analysis” was a report resulting from a mortgage fraud investigation conducted by a private investigation company they hired. The district court granted the Bank's motion for summary judgment, concluding there was no breach of the Deed of Trust, title to the property had not been slandered or become clouded by assignment, and that the Chain of Title Analysis was inadmissible hearsay not appropriate for consideration by the court on summary judgment. The Idaho Supreme Court found no reversible error in the district court's grant of summary judgment and affirmed. View "Losee v. Deutsche Bank Nat'l Trust" on Justia Law

First Bank of Lincoln (First Bank) challenged a district court’s grant of summary judgment in favor of Land Title of Nez Perce County Incorporated (Land Title). In 2011, First Bank loaned Donald Tuschoff $440,000 to purchase the Hotel Lincoln in Lincoln, Montana. The loan was secured by a deed of trust against the hotel. As additional collateral, Tuschoff assigned First Bank his interest in a note and deed of trust on a bowling alley in Washington. Later, following a sale of the bowling alley, Land Title distributed the proceeds to Tuschoff and other interested parties rather than First Bank. First Bank did not learn of the bowling alley sale until it completed its annual loan review of Tuschoff’s hotel loan. Subsequently, Tuschoff defaulted on the hotel loan. First Bank held a non-judicial foreclosure sale of the hotel and placed a full-credit bid of the approximately $425,000 owed to it by Tuschoff. First Bank was able to later sell the hotel for approximately $190,000. First Bank then initiated several lawsuits against various parties in Washington, Montana, and Idaho, seeking to recover the “deficiency” between what it was owed and for what it sold the hotel. Relevant here was First Bank’s suit against Land Title in Idaho. The district court, applying Montana law, granted summary judgment in favor of Land Title. The court determined that First Bank’s full credit bid extinguished Tuschoff’s debt, and once that debt was extinguished, the assignment of Tuschoff’s interest in the bowling alley as collateral for that debt was also extinguished. The Idaho Supreme Court concurred with this conclusion, and affirmed. View "First Bank of Lincoln v. Land Title of Nez Perce County" on Justia Law

After Ellen Gittel Gordon defaulted on her mortgage, the loan servicer initiated nonjudicial foreclosure proceedings to sell her home at auction. Gordon submitted multiple loan modification applications and appeals in an attempt to keep her home but ultimately, all were rejected. As a result, Gordon initiated the underlying action in district court to enjoin the foreclosure sale. Upon the filing of a motion to dismiss that was later converted to a motion for summary judgment, the district court dismissed Gordon’s action and allowed the foreclosure sale to take place. Gordon timely appealed. The Idaho Supreme Court concluded none of the reasons Gordon offered were sufficient to reverse the district court judgment, and affirmed dismissal of Gordon’s complaint. View "Gordon v. U.S. Bank" on Justia Law

Darin Bergeman appeals the district court’s dismissal of his action against Select Portfolio Servicing, Inc. (SPS) and Mohamed Elabed. This case arose from disposition of a home and acreage owned by Bergeman’s mother, Karen Hansen. In 1998, Ms. Hansen obtained a loan on the property that was secured by a deed of trust. The loan and deed of trust were eventually assigned to U.S. Bank National Association with SPS as the servicer for the loan. After Ms. Hansen died in 2006, Bergeman took possession of the property. Mortgage statements continued to be sent to the estate of Ms. Hansen and Bergeman made payments that were accepted and credited to the loan. However, Bergeman did not personally assume liability on the note. In March 2012, the executor of Ms. Hansen’s estate issued Bergeman an executor’s deed for the property. Around July 2015, apparently as a result of Bergeman’s incarceration, he stopped making payments on the loan. In September 2016, a Notice of Default was recorded. Although he alleges that he either made payments or made arrangements for others to make payments on the loan, Bergeman acknowledged the loan was in default. The Notice of Default was followed in October 2016 by a Trustee’s Notice of Sale that announced the foreclosure sale of the property. Notices of this sale were mailed to Ms. Hansen’s estate, the executor, Bergeman, and the current occupants of the property. During this same time, SPS continued to send monthly mortgage statements to the estate. At the foreclosure sale on February 23, 2017, Mohamed Elabed purchased the property. Bergeman sued SPS and Elabed alleging misrepresentation, negligent supervision, trespass, intentional infliction of emotional distress, and negligent infliction of emotional distress. SPS and Elabed moved to dismiss, which was granted. Finding that Bergeman failed to support his claims as a "general attack upon the decision of the district court," the Idaho Supreme Court affirmed dismissal. View "Bergeman v. Select Portfolio Svc" on Justia Law

This case arose out of the foreclosure of nine commercial condominium units owned by Michael Hulsey and SM Commercial Properties, LLC. Prior to a sheriff’s sale, SM Commercial Properties filed bankruptcy. Eventually the bankruptcy stay was lifted and the sale took place. Washington Federal bought the property with a credit bid and then asserted a deficiency against Hulsey. The district court found that Washington Federal failed to prove both the existence of a deficiency as well as the fair market value of the property. On appeal, Washington Federal argued: (1) Hulsey was precluded from litigating the fair market value of the property based on the bankruptcy court proceedings; and (2) the district court erred when it determined that Washington Federal failed to prove the existence of the deficiency and the fair market value of the property. Both parties appealed the district court’s denial of attorney’s fees, but Hulsey dismissed his cross-appeal at the time of oral argument. The Idaho Supreme Court affirmed dismissal of Washington Federal’s claim for a deficiency, but vacated the judgment denying Washington Federal’s costs and attorney’s fees incurred to enforce the judgment and decree of foreclosure. View "Washington Federal v. Hulsey" on Justia Law

Marty and Cindy Frantz executed a series of commercial guaranties so that Idaho Independent Bank (“Bank”) would lend money to Eagle Ridge on Twin Lakes, Inc. (“Eagle Ridge”), a closely held corporation in which the Frantzes held a majority interest. Bank filed this action against the Frantzes to recover on their commercial guaranties. The Frantzes filed an answer in which they admitted the material allegations in the complaint, but asserted affirmative defenses and counterclaims against Bank. They later amended their answer to include a third-party claim against Eagle Ridge. The Frantzes initially filed a petition under chapter 11 of the bankruptcy code the day before Mr. Frantz’s deposition was to occur; the Frantzes’ bankruptcy was converted to a liquidation case under chapter 7, and a trustee was duly appointed for the estate. Less than two weeks before the trial on Bank’s adversary proceeding in the bankruptcy case, the Frantzes filed a voluntary waiver of discharge, and the bankruptcy court approved the waiver. As a result, the bankruptcy court was deprived of jurisdiction to hear the adversary proceeding, and it dismissed it without prejudice. However, the court did award sanctions in the sum of $49,477.46 against the Frantzes and their attorney, jointly and severally, for their conduct during the course of the adversary proceeding. The court found that their conduct constituted misuse of litigation tactics to cause economic injury to an opponent and its counsel in the form of increased litigation costs. Bank filed a notice in this case that because of the waiver of discharge, the automatic stay from the bankruptcy court was terminated. Bank then moved for summary judgment. The district court entered a judgment against the Frantzes “in the amount of $9,193,546.50, plus pre-judgment interest at the rate of $2,475.02 per diem from September 16, 2015, until the date this Judgment is entered.” Because the Frantzes' third-party claim against Eagle Ridge that was yet unresolved, the court certified the judgment as final pursuant to Rule 54(b) of the Idaho Rules of Civil Procedure. The Frantzes filed a motion for reconsideration, and the court denied that motion. They then timely appealed, arguing the district court erred in denying them affirmative defenses based upon an alleged breach of contract. Finding no reversible error, the Idaho Supreme Court affirmed. View "Idaho Independent Bank v. Frantz" on Justia Law

North Idaho Resorts (NIR) appealed the district court’s grant of summary judgment in favor of Union Bank, N.A. (Union Bank) in a mortgage priority dispute. The district court held that NIR did not possess a vendor’s lien because NIR was not the owner of record and that any lien NIR might have possessed had no value. The district court further held that if NIR possessed a valid lien, NIR released any such lien as part of a recorded agreement and that Union Bank was a good faith encumbrancer with no actual or constructive knowledge of the lien. On appeal, NIR argued: (1) the district court misconstrued Idaho Code section 45-801 and that the statute did not require the seller to be the owner of record; (2) the remaining conditional purchase price constituted an unpaid and unsecured value; (3) Union Bank knew NIR was still owed money under the contract; and (4) Union Bank did not qualify as a good faith encumbrancer. Finding no reversible error, the Supreme Court affirmed the district court’s judgment. View "Union Bank, N.A. v. North Idaho Resorts" on Justia Law

JV, LLC (JV) appealed the district court’s grant of summary judgment in favor of Union Bank, N.A. (Union Bank) in a mortgage priority dispute. Union Bank sought to foreclose a mortgage on a property known as “Trestle Creek.” JV claimed priority to the Trestle Creek property through a mortgage recorded June 19, 2006. Union Bank’s mortgage was recorded March 25, 2008. Union Bank moved for summary judgment, arguing that JV had subordinated its lien to that of Union Bank. The district court agreed and granted the motion. Finding no reversible error, the Supreme Court affirmed the district court’s judgment. View "Union Bank, N.A. v. JV L.L.C" on Justia Law

Charles and Donna Nickerson appeal from the grant of summary judgment in favor of PHH Mortgage and J.P. Morgan Chase Bank. The suit involved an action for judicial foreclosure of a loan by PHH Mortgage against the Nickersons, and third-party claims against J.P. Morgan Chase by the Nickersons. The Nickersons argued they were entitled to relief based on: mistakes by the court; surprise due to the actions and withdrawal of their former counsel; excusable neglect due to their reliance on their former counsel; new evidence showing PHH did not have standing to pursue foreclosure; fraud regarding PHH’s chain of title, the amount of default, and coercion of the Nickersons at closing; and misconduct of the opposing parties regarding the depositions of the Nickersons and the submission of a fraudulent affidavit. The district court denied the Nickersons’ motions, concluding that the Nickersons failed to present admissible evidence to support their claims. Finding no reversible error in the trial court's decision to grant summary judgment in favor of PHH Mortgage, the Supreme Court affirmed. View "PHH Mortgage v. Nickerson" on Justia Law