Articles Posted in Real Estate & Property Law

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Burns Concrete, Inc., and Canyon Cove Development Company, LLP, (Canyon Cove), appealed a district court judgment in favor of Nora Mulberry and TN Properties, LLC, (collectively, Mulberry) regarding the extinguishment of a right of first refusal (ROFR). In 1999, Nora and Theodore Mulberry sold a piece of real property to Canyon Cove and included a ROFR to a nearby, distinct parcel of real property (ROFR Property). Twelve days later, Canyon Cove conveyed its interest in both the purchased property and the ROFR to Burns Concrete and recorded the deed to the purchased property with the Bonneville County, Idaho Recorder. In 2005, Nora Mulberry and her husband (now deceased) conveyed the ROFR Property to their wholly owned limited liability company, TN Properties, and subsequently recorded the deed with the Bonneville County Recorder. In 2016, Mulberry filed a complaint seeking declaratory judgment and subsequently a motion for partial summary judgment. The district court entered partial summary judgment in favor of Mulberry finding the ROFR was personal to Mulberry and Canyon Cove, and it was subsequently extinguished when Canyon Cove assigned it to Burns Concrete. On reconsideration, the district court held that the ROFR was a servitude appurtenant to the purchased property, and reaffirmed it was extinguished by Canyon Cove’s conveyance to Burns Concrete. Burns Concrete and Canyon Cove timely appealed. The Idaho Supreme Court reversed and remanded, finding: (1) the ROFR was personal to the parties, and thus, non-assignable; and (2) the ROFR was not extinguished when Canyon Cove purported to assign it to Burns Concrete. Therefore, the district court erred in ruling the ROFR was extinguished after Canyon Cove purported to assign it to Burns Concrete; the matter was remanded for a determination of the other issues raised in the complaint that were previously dismissed as moot. View "Mulberry v. Burns Concrete" on Justia Law

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The City of Middleton (the City) appealed the district court’s grant of summary judgment to Martin and Patricia Galvin on their claim of prescriptive easement and its award of attorney fees to the Galvins pursuant to Idaho Code section 12-117. In 2016, the Galvins filed a complaint against the City of Middleton for quiet title, declaratory judgment, and a permanent injunction concerning their use of Willis Road, a private road that the City acquired in 2015. The Galvins alleged that their use of Willis Road since 1949 created a prescriptive easement entitling them to use the road for ingress, egress, and farming and irrigation purposes. The City’s answer denied the existence of the easement but did not dispute that the Galvins had used the road for the past sixty years. Finding no reversible error in the grant of summary judgment, the Idaho Supreme Court affirmed. View "Galvin v. City of Middleton" on Justia Law

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Appellants Ryan and Kathryn McFarland owned real property in Garden Valley, Idaho, which feathred three structures insured through Liberty Mutual Insurance Group: a main cabin; a detached garage with an upstairs “bonus room”; and a pump house containing a geothermal well. The policy provided two types of coverage for structures. Coverage A (“Dwelling Coverage”) provided up to $188,500 in coverage for “the dwelling on the ‘residence premises’. . . including structures attached to the dwelling . . .” and Coverage B (“Other Structures Coverage”) provided up to $22,350 for “other structures on the ‘residence premises’ set apart from the dwelling by clear space.” In February 2017, a radiant heater burst in the bonus room and damaged the garage and its contents. After the McFarlands filed a claim, Liberty stated that the damage was covered under the policy. Believing the damage to fall under the Dwelling Coverage, the McFarlands hired contractors to repair the damage. However, after Liberty paid out a total of $23,467.50 in March 2017, Liberty stated that the coverage was exhausted because the damage fell under the Other Structures Coverage. This led the McFarlands to sue, alleging among other claims, breach of contract based on Liberty’s interpretation of the policy. The parties filed cross motions for summary judgment on the issue of whether the damage fell under the Dwelling Coverage or the Other Structures Coverage. Ruling that the policy unambiguously provided coverage for the garage under the Other Structures Coverage, the district court denied the McFarlands’ motion and granted Liberty’s. The McFarlands appealed. Finding that the policy at issue here failed to define the term "dwelling", and the term was reasonably subject to differing interpretations, the Idaho Supreme Court reversed the award of summary judgment and remanded for further proceedings. View "McFarland v. Liberty Insurance Corp" on Justia Law

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This appeal arose out of an Ada County Board of Commissioners’ decision to direct issuance of a tax deed. The property owner, James Floyd, was incarcerated in the county jail throughout the proceedings, and alleged he never received official notice of the pending tax deed until a month before his hearing. Despite having his jail address on file, the County Treasurer delivered statutory notices to Floyd’s vacant home. However, she also sent Floyd letters at the jail apprising him of the tax deed proceedings and delinquent taxes owed. The Board of Commissioners determined that Floyd received sufficient due process, and directed the tax deed to issue. The district court affirmed, holding that Floyd had actual notice despite the Treasurer’s failure to comply with statutory notice requirements. The Idaho Supreme Court affirmed the district court’s determination because it found Floyd had actual notice of the pending tax deed. View "Floyd v. Bd of Ada County Commissioners" on Justia Law

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Monitor Finance, L.C., and First Capital Funding, L.C., (collectively referred to as the Beneficiaries) were the holders of a deed of trust, which encumbered the real property claimed to be owned in fee simple by Wildlife Ridge Estates, LLC (Wildlife LLC). Prior to this judicial foreclosure action being brought, Wildlife LLC filed suit against the Beneficiaries seeking to quiet title to the real property. In that previous action, Wildlife LLC alleged that the Beneficiaries no longer retained an interest in the property because the debt underlying the promissory note had been paid in full. By stipulation of the parties, that quiet title action was ultimately dismissed with prejudice. Subsequently, the Beneficiaries initiated this action to foreclose the deed of trust based on their contention that the debt created by the promissory note had not been paid and was in default. The Beneficiaries moved the district court for summary judgment, contending that Wildlife LLC’s affirmative defenses and counterclaim were barred by res judicata because the previous quiet title action brought by Wildlife LLC had been dismissed on its merits. The district judge granted the Beneficiaries’ motion and denied Wildlife LLC’s motion to reconsider. In doing so, the district court summarily dismissed Wildlife LLC’s counterclaim and affirmative defenses. The district court ultimately entered summary judgment in favor of the Beneficiaries. Wildlife LLC appealed, claiming, among other things, that the district court misapplied the doctrine of res judicata. The Idaho Supreme Court diagreed, finding Wildlife LLC's affirmative defenses and counterclaim were correctly barred by res judicata. View "Monitor Finance v. Wildlife Ridge Estates" on Justia Law

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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

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Dale and Kathi Lee appealed a district court’s decision granting summary judgment in favor of Willow Creek Ranch Estates No. 2 Subdivision Homeowners’ Association, Inc. (the HOA). The dispute between the Lees and the HOA centered on a 1997 agreement that purportedly granted the Lees three access points to a private road owned by the HOA. The Lees conceded in the district court that the Agreement alone did not create an enforceable easement. The Lees asserted, however, that an easement existed based on the doctrine of part performance or that an enforceable encumbrance existed through the doctrine of equitable servitudes. The district court determined that neither the doctrine of part performance nor the doctrine of equitable servitudes were applicable to this case and granted the HOA’s motion for summary judgment. Finding no error in the district court judgment, the Idaho Supreme Court affirmed. View "Lee v. Willow Creek Ranch Est." on Justia Law

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This appeal arose out of a failed golf course development project known as “The Idaho Club” undertaken by Pend Oreille Bonner Development, LLC (“POBD”). POBD took out several loans to finance the development of The Idaho Club and subsequently defaulted on them, failed to pay mechanics and materialmen for their services, and failed to pay real property taxes. During this litigation, three lending companies, R.E. Loans, LLC, Pensco Trust Co. and Mortgage Fund ’08 assigned and/or sold all of their right, title, and interest in their three loans with POBD to Valiant Idaho, LLC (“Valiant”). The loans were secured by three mortgages that provided parcels of The Idaho Club as collateral. VP, Inc. had an interest in certain lots containing water and sewer infrastructure (the lagoon lots and the well lots) and it held utility easements for the same. VP obtained its interest in The Idaho Club from quitclaim deeds to four parcels and an alleged equitable servitude and prescriptive easements. The Idaho Supreme Court determined VP did not err in granting partial summary judgment against VP as to its liens' priority, nor did it err as to Valiant's third motion for summary judgment or in granting Valiant's temporary restraining order and injunction. The Court determined VP waived its right to challenge a second decree of foreclosure on appeal. The Supreme Court affirmed the district court except as to the issue of discretionary costs, which was vacated and remanded for further proceedings. View "Valiant Idaho v. VP Inc." on Justia Law

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This case stems from the foreclosure and lien priority case arising out of the failed Idaho Club golf course and residential housing development project. The developer, Pend Oreille Bonner Development, LLC (“POBD”), took out several loans on the real property, agreed to promissory notes, and mortgaged the Idaho Club real property with several lenders, including JV, LLC and, as relevant to this appeal, three other lenders: RE Loans (“REL”), LLC, Pensco Trust Co., and Mortgage Fund ’08 LLC (“MF08”) (collectively, the three “lenders”). JV’s interest in the Idaho Club arose out of a mortgage (the “JV Mortgage”) it recorded against five parcels on the Idaho Club property that JV sold to POBD. POBD ultimately defaulted on its obligations on the promissory notes associated with the mortgages. In addition to defaulting on the notes, POBD failed to pay property taxes to Bonner County for several years and failed to pay various mechanics and materialmen, one of which was Genesis Golf Builders, Inc. (“Genesis”). JV appealed the district court's conclusion that Valiant Idaho, LLC (“Valiant”) held a priority position in the mortgages on the development. JV also appealed the district court’s award of costs against it, as well as a judgment by the district court that awarded sanctions against JV and its attorney. The Idaho Supreme Court affirmed in part and vacated in part, finding JV's redemption deed did not subordinate it to Bonner County's right, title, claim and interested based on a tax deed. The Supreme Court also found the district court abused its discretion in the way that it applied the formula announced in Valiant Idaho, LLC v. North Idaho Resorts, LLC (No. 44583, 2018 WL 4927560) to arrive at its costs award. View "Valiant Idaho v. JV, LLC" on Justia Law

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This was an action arising out of a failed golf course and residential development project known as the “Idaho Club.” North Idaho Resorts, LLC (“NIR”) appealed an award of discretionary costs and costs as a matter of right awarded against it, contending the district court abused its discretion by awarding discretionary costs, and that the court’s award of some costs as a matter of right was erroneous. After review of the district court record, the Idaho Supreme Court determined the district court abused its discretion by using a formulaic analysis in this case, and by awarding some costs as a matter of right against NIR. The district court judgment was reversed and remanded for further proceedings. View "Valiant Idaho v. No. Idaho Resorts" on Justia Law