Alpha Mortg. Fund Ii, an Idaho Ltd. v. Drinkard

• Decision Date: 13 October 2021
• Docket Number: Docket No. 48424
• Citation: 169 Idaho 446,497 P.3d 200
• Court: Idaho Supreme Court
• Parties: ALPHA MORTGAGE FUND II, an Idaho limited liability company, "as trustee for the benefit, on a parity of all Variable Rate 30-Year (Series "II-A") Debenture Holders," Plaintiff-Respondent, v. Robert L. DRINKARD and Nancy A. Drinkard, Husband and Wife, Defendants-Appellants, and Pheasant Run VI, LLC, an Idaho limited liability company, Defendant.

169 Idaho 446

497 P.3d 200

ALPHA MORTGAGE FUND II, an Idaho limited liability company, "as trustee for the benefit, on a parity of all Variable Rate 30-Year (Series "II-A") Debenture Holders," Plaintiff-Respondent,

v.Robert L. DRINKARD and Nancy A. Drinkard, Husband and Wife, Defendants-Appellants,andPheasant Run VI, LLC, an Idaho limited liability company, Defendant.

Docket No. 48424

Supreme Court of Idaho, Boise, August 2021 Term.

Filed: October 13, 2021

Vernon K. Smith, Boise, attorney for Appellants.

Gery W. Edson, P.A., Boise, attorney for Respondents.

BEVAN, Chief Justice

This appeal challenges the propriety of an order renewing a judgment. Pheasant Run VI, LLC, Robert Drinkard, and Nancy Drinkard (collectively, "the Drinkards") appeal from the district court's order renewing a judgment for Alpha Mortgage Fund II ("Alpha") in the amount of $1,842,509.59. The Drinkards argue the district court erred when it granted Alpha's motion to renew because Alpha had not recorded its most recent judgment.

I. FACTUAL AND PROCEDURAL BACKGROUND

Pheasant Run VI, LLC, ("Pheasant Run") is a limited liability company wholly owned by Robert and Nancy Drinkard. In 2007, Pheasant Run obtained a loan from Alpha and, to secure the loan, executed a deed of trust on property in Canyon County, Idaho. Robert and Nancy acted as guarantors for the loan. Soon after, Pheasant Run defaulted on the loan and Alpha pursued a foreclosure sale of the Canyon County property. Although Alpha recouped the property, a significant deficiency existed between the amount Pheasant Run owed and the property's fair market value.

Based on the deficiency, Alpha sued Pheasant Run and Robert and Nancy, as guarantors. Alpha sought a judgment against Pheasant Run, Robert and Nancy in the amount of the deficiency, $1,056,912.53, plus interest. Ultimately, based on a stipulation among the parties, judgment was entered for Alpha in the amount of $1,170,101.95, on February 23, 2010 ("Original Judgment"). The Original Judgment was renewed on February 12, 2015, in the amount of $1,510,663.35 ("2015 Judgment"). The increase was due to accumulated interest. Alpha did not record the 2015 Judgment.

On February 10, 2020, Alpha moved the district court to again renew the Original Judgment pursuant to Idaho Code section 10-1111, seeking $1,842.509.59, which included accrued interest. The Drinkards objected. The Drinkards argued the Original Judgment had expired, the 2015 Judgment served as the basis for renewal, and the 2015 Judgment could not be renewed because Alpha had not recorded it. The district court, finding recording of the 2015 Judgment was unnecessary and that the motion to renew was made within the statutory timeframes of Idaho Code section 10-1111, granted Alpha's motion to renew. The renewed judgment was entered on September 23, 2020, in the amount of $1,842,509.59. The Drinkards timely appealed.

II. ISSUES ON APPEAL

1. Did the district court err when it granted Alpha's motion to renew the Original Judgment?

2. If so, is an inappropriate renewal of a money judgment a violation of the Takings Clause of the United States Constitution?

3. Is either party entitled to attorney fees on appeal?

III. STANDARD OF REVIEW

"The interpretation of a statute is a question of law this Court reviews de novo." State v. Smalley , 164 Idaho 780, 783, 435 P.3d 1100, 1103 (2019). Similarly, "[c]onstitutional questions ... are questions of law over which this Court exercises free review." Dep't of Fin., Sec. Bureau v. Zarinegar , 167 Idaho 611, 622, 474 P.3d 683, 694 (2020) (quoting Nye v. Katsilometes , 165 Idaho 455, 458, 447 P.3d 903, 906 (2019) ).

IV. ANALYSIS

First, the Drinkards assert a constitutional claim and a judicial extinguishment claim based on theories first raised on appeal. Second, Alpha moves this Court to strike background facts from the Drinkards’ opening brief. Finally, the district court granted Alpha's motion to renew the Original Judgment after finding the judgment remained unsatisfied and Alpha's motion to renew was filed within five years of the 2015 Judgment. The Drinkards argue the district court erred when it granted Alpha's motion to renew because Idaho Code section 10-1111(1) requires a renewed judgment to be recorded to seek a subsequent renewal within the statutory timeframe. For the reasons below, we affirm the district court's decision.

A. The Drinkards’ constitutional and judicial extinguishment arguments will not be addressed because they were not preserved below.

"This Court will not consider issues raised for the first time on appeal."

ABK, LLC v. Mid-Century Ins. Co ., 166 Idaho 92, 101, 454 P.3d 1175, 1184 (2019) (quoting Mickelsen Constr., Inc. v. Horrocks , 154 Idaho 396, 405, 299 P.3d 203, 212 (2013) ). "[P]arties will be held to the theory upon which the case was presented to the lower court." Id . (quoting State v. Garcia-Rodriguez , 162 Idaho 271, 275, 396 P.3d 700, 704 (2017) ). Moreover, an issue first raised in oral argument before this Court is untimely and will not be considered. Robbins v. County of Blaine , 134 Idaho 113, 115 n. 1, 996 P.2d 813, 815 n. 1 (2000) (citing Mac Tools, Inc. v. Griffin , 126 Idaho 193, 198, 879 P.2d 1126, 1131 (1994) ).

The Drinkards raise two issues for the first time on appeal. First, the Drinkards allege that the district court's renewal of the Original Judgment was error. Based on this allegation, the Drinkards further contend the district court's renewal constitutes an unlawful taking under the United States Constitution. According to the Drinkards,

[b]y virtue of the procedural aspect of the renewal [s]tatute which Alpha's "Renewed Judgment" has failed to meet, the Drinkards are being denied equal protection under the law and denied due process, significant constitutional issues raised when substantive due process procedures are ignored by the lower court, and the court exceed [sic] the statutory authority by renewing an expired [j]udgment. The wrongful taking of property, in violation of the United States Constitution, is an issue arising from this controversial disposition.

Second, the Drinkards argue for the first time in their reply brief that, had Alpha sought and received a deficiency judgment against the Drinkards after this Court rendered its decision in AgStar Financial Services, ACA v. Gordon Paving Co. Inc. , 161 Idaho 817, 391 P.3d 1287 (2017), no deficiency judgment would exist because the underlying debt would be judicially extinguished.

The record is completely devoid of either the Drinkards’ takings argument or their judicial extinguishment argument based on AgStar . The takings issue was not raised in the Drinkards’ memorandum opposing Alpha's motion to renew the judgment. The issue was also not raised in the Drinkards’ reply memorandum in opposition to the motion to renew. Moreover, the district court made no ruling on the Drinkards’ takings assertions. Likewise, nowhere in the record do the Drinkards rely on this Court's holding in AgStar .

Thus, this Court concludes the Drinkards’ takings argument and judicial extinguishment argument will not be addressed because of the failure to raise the issues below.

B. Alpha's motion to strike is denied.

Alpha moves this Court to strike background facts from the Drinkards’ opening brief under Idaho Rule of Civil Procedure 12(f)(2). Alpha asserts the facts are repetitive, scandalous, and imply Alpha improperly obtained the Original Judgment. In response, the Drinkards argue the facts at issue are necessary to reflect the origins of this case.

To begin, we note that the proper authority for such a motion is I.A.R. 11.2(a) (if a motion "is signed in violation of this rule, the court, upon motion or upon its own initiative, shall impose upon the person who signed it, a represented party, or both, an appropriate sanction. ..."). An appropriate sanction could include striking portions of briefs which are allegedly signed in contravention of the rule. Motions to strike under Idaho Rule of Civil Procedure 12(f) generally focus on pleadings. "The court may strike from a pleading ...." I.R.C.P. 12(f) ; see also Hayden Lake Recreational Water and Sewer Dist. v. Haydenview Cottage, LLC , 835 F. Supp. 2d 965, 984 (D. Idaho 2011) ("The [c]ourt has recognized in previous cases that motions to strike ... are limited to pleadings[.]"). In addition, motions to strike may also be addressed to the sufficiency of affidavits on summary judgment. See generally Sales v. Peabody , 157 Idaho 195, 202, 335 P.3d 40, 47 (2014) (explaining that motions to strike are also permissible for affidavits at summary judgment under I.R.C.P. 56(c) to preserve the right to challenge the admission of evidence on appeal).

Since Alpha moved to strike the statements under a rule of civil procedure that is unsuited to appellate proceedings, we will deny the motion. In addition, we also decline to take such action on our own initiative under I.A.R. 11.2(a).

C. The district court did not err when it granted Alpha's motion to renew the Original Judgment even though Alpha did not record the 2015 Judgment.

The district court granted Alpha's motion to renew the Original Judgment after finding the judgment remained unsatisfied and that Alpha's motion was filed within five years of the most recently renewed 2015 Judgment. For the reasons below, we affirm.

The Drinkards assert the Original Judgment has expired and the only judgment subject to renewal is the 2015 Judgment. Even so, the Drinkards maintain the 2015 Judgment cannot be renewed because Alpha did not record it. According to the Drinkards, "[s]ince the adoption of [ Idaho Code section 10-1111(1) ] ... there has always been the requirement of a lien to be eligible for renewal, and it must exist when the [m]otion to [r]enew is filed." (Emphasis in original.) The Drinkards argue the district court erred when it granted Alpha's motion to renew because

[t]he February 12, 2015[,] [i]nstrument was the proper subject for reviewal [sic] by the lower court

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