Justia Idaho Supreme Court Opinion Summaries

Two real estate developers, a husband and wife, operated through various entities including a corporation and an LLC. In 2002, the corporation borrowed money from a lender; the developers, in their individual capacities, guaranteed this loan and all future advances. The corporation promptly repaid this loan. In 2005, the LLC twice borrowed money from the same lender. The lender originally insisted on a personal guaranty for these loans, but, in order to secure the developer's business, stated that no personal guaranty would be required. In 2006–07, the corporation again borrowed money from the lender in six separate loans. The corporation defaulted on these six loans, and, after the lender foreclosed on the real estate that served as collateral for the loans, the lender sued the developers for the deficiency. The district court granted the lender's motion for summary judgment, holding that the developers' affirmative defenses (1) were barred by the statute of frauds, (2) failed for lack of consideration, and (3) raised no genuine issues of material fact. The developers timely appealed to the Supreme Court. Upon review, the Court held that the developers' affirmative defenses were neither barred by the statute of frauds nor failed for lack of consideration. However, because none of those defenses raised a genuine issue of material fact, the Court affirmed. View "Washington Federal Savings v. Engelen" on Justia Law

Randy and Trudi Poole filed an action against Darin Davis, dba Darin Davis Construction (Davis), alleging breach of contract, breach of warranty, and fraud. Davis counterclaimed for breach of contract, unjust enrichment, and promissory estoppel. The jury found that the Pooles had prevailed only on the fraud claim and that Davis had not proved any of his counterclaims. The district court entered judgment in favor of the Pooles for damages on the fraud claim. The Pooles moved for attorney fees and costs, claiming that as the prevailing party in a dispute over a commercial transaction, they were entitled to fees pursuant to Idaho Code 12-120(3). The court determined that there was no prevailing party and denied the motion. The Pooles timely appealed, asking the Supreme Court to reverse the decision of the district court and find, as a matter of law, that the Pooles were the prevailing party and are entitled to attorney fees. Finding no error, the Supreme Court affirmed. View "Poole v. Davis" on Justia Law

This appeal came before the Supreme Court from a declaratory judgment action brought by Farm Bureau Mutual Insurance Company of Idaho (Farm Bureau). Farm Bureau brought suit in response to a claim for insurance benefits filed by the personal representatives of the estate of a deceased policyholder (the Estate). Farm Bureau requested a judgment declaring that the Estate was not an "insured" under the decedent's insurance policy and was therefore not entitled to payment of wrongful death damages under the Policy's underinsured motorist coverage. The district court granted the Estate's motion for summary judgment, determining that Idaho's wrongful death statute, entitled the insured's Estate to recover damages for wrongful death and that the Policy provided coverage for those damages. Farm Bureau appealed. Upon review, the Supreme Court reversed: as to the Estate, the Court determined that under the plain language of the wrongful death statute, the Estate was not legally entitled to recover damages for itself, but only to bring an action on behalf of the heirs to recover their damages. "The Estate stepped into [the decedent's] shoes for those claims, and Farm Bureau made those payments to the Estate. Farm Bureau's payment of these legitimate claims under the insurance contract does not constitute a change of position or an admission that coverage exists for other claims. We hold that these payments do not prevent Farm Bureau from arguing that it is not required to pay the Estate for damages that [the decedent] was not legally entitled to recover." View "Farm Bureau v. Estate of Eisenman" on Justia Law

Plaintiff Christina Brooksby demanded payment from Defendant GEICO General Insurance Company, her father's liability insurer, alleging that he negligently injured her by crashing the car in which she was riding. After GEICO refused Plaintiff's demand pursuant to an exclusion in its insurance policy with Father, she sued GEICO for a declaratory judgment establishing coverage. The district court dismissed Plaintiff's complaint for lack of standing, holding that Idaho has no common-law direct-action rule that would give an injured third party standing to sue her tortfeasor’s insurer absent some statutory or contractual authorization, and that Idaho's Uniform Declaratory Judgment Act does not confer standing where it does not otherwise exist. Plaintiff appealed. Upon review, the Supreme Court affirmed the district court’s grant of GEICO’s Motion to Dismiss pursuant to Idaho Rule of Civil Procedure 12(b)(6) because the Court concluded Plaintiff lacked standing to seek a declaratory judgment against GEICO. View "Brooksby v. GEICO" on Justia Law

This was an appeal of a judgment which held that a mechanic’s lien had priority over a mortgage. The judgment was predicated upon the district court's refusal to permit the mortgagee to withdraw an admission made in open court by its counsel that the mechanic's lien was valid. Upon review of the matter, the Supreme Court reversed the district court and held that the mechanic's lien was invalid because the lien did not show that it was verified before a person entitled to administer oaths. View "First Federal Savings Bank of Twin Falls v. Riedesel Engineering, Inc." on Justia Law

Krystal Kinghorn and Kelly Clay agreed that Clay would co-sign for a loan for Kinghorn's benefit. In order to protect Clay in the event that Kinghorn defaulted on the loan, Kinghorn agreed to execute a quitclaim deed to real property that Clay could record if King defaulted. When Kinghorn defaulted, Clay recorded the deed and conveyed the property to BRP Incorporated (BRP). Kinghorn filed suit, and the district court unwound the conveyance, granting summary judgment that the deed was a mortgage and that Kinghorn had a right to redeem the property. BRP filed and prevailed upon a cross-claim against Clay for breach of its warranty deed. BRP later petitioned for a writ of attachment. The district court held that Kinghorn had not timely exercised her right to redeem and ordered Clay to foreclose the mortgage. Kinghorn and Clay stipulated that Kinghorn would purchase the property and that the court should perform an accounting and set off of their liabilities. The court found that a balance remained due to Clay, and entered judgment in his favor. Clay's attorney, Brian Smith (Smith), then moved to perfect an attorney's lien as to the judgment. Kinghorn deposited the amount due with the court, and after the court denied Smith's motion, the court awarded the deposited funds to BRP. Smith appealed the court's denial of the motion for lien, as well as the order for transfer of funds to BRP. Upon review, the Supreme Court dismissed the appeal, finding Smith was not a party to the action, and therefore had no standing to assert his claim. View "Kinghorn v. Clay " on Justia Law

This appeal arose from a dispute between two competing creditors, DAFCO, LLC, and New Phase Investments, LLC. DAFCO appealed the district court's determination on summary judgment that DAFCO's deed of trust, although first recorded, was void under I.C. 32-912 because it encumbered community real property but was not signed by both spouses. Because I.C. 32-912 was enacted for the protection of the community rather than third-party creditors, the Supreme Court found that New Phase could not invoke that statute to void DAFCO's competing encumbrance. Accordingly, the Court reversed: the district court erred in declaring DAFCO's trust deed void under that statute at New Phase's request. View "New Phase Investments v. Jarvis" on Justia Law

Defendants Jay and Theresa Knowlton appealed the grant of summary judgment in favor of Plaintiffs-Appellants Tapadeera, LLC and Cary Hamilton (d/b/a C&J Construction) on their claim that Defendants prevented Plaintiffs from performing a settlement agreement to resolve a lawsuit between the parties. Tapadeera owned a parcel of property that had been platted as one lot. Tapadeera sold the property as two parcels -a two-acre parcel and a six-acre parcel purchased apparently under a real estate contract. The purchasers had a modular home placed on the two-acre parcel, but they failed to make the payments due in both transactions. As a result, the lender foreclosed on the two-acre parcel, and Tapadeera regained title to the six-acre parcel. Defendants desired both parcels to construct a home. They purchased the two-acre parcel from the bank, and contracted with Tapadeera to purchase the six-acre parcel. After making several payments under the contract, Mr. Knowlton contacted Cary Hamilton, Tapadeera's president, to determine the amount necessary to pay the contract in full. Mrs. Knowlton recorded the deed, and the Knowltons stopped payment on the check when they discovered that they could not obtain a building permit for the six-acre parcel because it had been wrongly divided from the two-acre parcel. For over four years, neither party took any action regarding this transaction. Eventually the parties sought to finish the deal, and it headed to court. Mr. Hamilton agreed to fix the subdivision problem and the Knowltons agreed to pay the balance owing. However, when notice of the subdivision was mailed to adjacent and affected property owners, the Knowltons were omitted from the notice. They learned of the hearing regarding the subdivision after it was over; they gave notice that they were withdrawing their subdivision application. The court held that the county's approval of the subdivision application was a condition precedent to the Knowltons' obligation to pay the balance, but that they had wrongfully prevented performance of that condition by withdrawing the subdivision application. The Knowltons moved for reconsideration which was denied. Upon review, the Supreme Court affirmed: "This case illustrates the time and expense that can be wasted when the parties fail to exercise common sense to resolve an issue. Clearly, Tapadeera should have had the lot subdivided in connection with the first sale. When the issue arose after the sale of the six-acre parcel to the Knowltons, the parties should have met and agreed to the resolution they reached six years later. Once they did so, they both should have been reasonable in doing whatever was necessary to effectuate the replatting of the lot." View "Tapadeera v. Knowlton" on Justia Law

The issue in this case arose from a judgment which held that a "Designated Project or Premises" endorsement of a commercial general liability insurance policy purchased by a sporting goods store excluded coverage for a claim arising out of the sale of improperly reloaded ammunition. Petitioner Tom Erekson purchased a used .500 revolver from a sporting goods store, along with three boxes of handloaded ammunition, all of which the store purchased from the gun's previous owner. Erekson and his sons took the revolver to a shooting range, loaded five chambers with the reloaded ammunition, and fired. The one cartridge discharged, but two others detonated simultaneously. When the cartridge under the loading gate detonated, it sheared off the gate, a portion of the cartridge rocketed rearward, and struck Erekson in the forehead, lodging three inches into his brain. He also lost a portion of his thumb. The store held a general liability policy through Markel International Insurance Company. The store brought suit for a court order to declare Erekson's injuries were covered under the policy. The district court held that the injury was excluded; Erekson unsuccessfully moved for reconsideration. Upon review of the policy, the Supreme Court affirmed, finding coverage was excluded under the endorsement. View "Markel International Ins. Co. v. Erekson" on Justia Law

The issue before the Supreme Court in this was the denial of attorney fees under Idaho Code section 41-1839 on the ground that the insured's proof of loss was insufficient under the statute because it did not provide the insurer with the legal theory upon which coverage was later determined to exist. Upon review of the matter, the Supreme Court vacated the judgment because a proof of loss need not include an analysis of the proper theory of coverage under the insurance policy. View "Estate of Benjamin Holland v. Metropolitan Property & Casualty Ins." on Justia Law