Breckenridge Prop. Fund 2016, LLC v. Wally Enters., Inc.

• Decision Date: 22 August 2022
• Docket Number: Docket Nos. 48489 & 48703
• Citation: 516 P.3d 73
• Parties: BRECKENRIDGE PROPERTY FUND 2016, LLC, a Delaware limited liability company Plaintiff-Appellant, v. WALLY ENTERPRISES, INC., a Kansas corporation dba We Serve Idaho; Weinstein & Riley, P.S., a Washington professional corporation; Cornerstone Properties, LLC, an Idaho limited liability company Defendants-Respondents, and John Does 1-10, and Corporations XYZ, Defendants, Cornerstone Properties, LLC, an Idaho limited liability company Cross-Claimant, v. Weinstein & Riley, P.S., a Washington professional corporation Cross-Defendant
• Court: Idaho Supreme Court

516 P.3d 73

BRECKENRIDGE PROPERTY FUND 2016, LLC, a Delaware limited liability company Plaintiff-Appellant,
v.
WALLY ENTERPRISES, INC., a Kansas corporation dba We Serve Idaho; Weinstein & Riley, P.S., a Washington professional corporation; Cornerstone Properties, LLC, an Idaho limited liability company Defendants-Respondents,
and
John Does 1-10, and Corporations XYZ, Defendants,

Cornerstone Properties, LLC, an Idaho limited liability company Cross-Claimant,
v.
Weinstein & Riley, P.S., a Washington professional corporation Cross-Defendant,

Docket Nos. 48489 & 48703

Supreme Court of Idaho, Boise, April 2022 Term.

Filed: August 22, 2022

Stover, Gadd & Associates, PLLC, Twin Falls, attorneys for Breckenridge Property Fund 2016, LLC. David Gadd argued.

Holden, Kidwell, Hawn & Crapo, PLLC, Idaho Falls, attorneys for Cornerstone Properties, PLLC. D. Andrew Rawlings argued.

Brassey Crawford, PLLC, Boise, attorneys for Wally Enterprises, Inc. Ryan Janis argued.

BEVAN, Chief Justice

516 P.3d 77

This appeal is about the legality of an auctioneer providing the terms of sale at the time of the foreclosure sale, including acceptable methods of payment, without providing earlier notice to potential bidders. Andrew Ashmore, agent for appellant Breckenridge Property Fund 2016, LLC, ("Breckenridge") arrived at a foreclosure sale with endorsed checks to support Breckenridge's bid. Jesse Thomas, agent for Cornerstone Properties, LLC, ("Cornerstone") was also present. Before the auction, the auctioneer provided Ashmore and Thomas a packet of paperwork. The last page contained a requirement that endorsed checks would not be accepted as payment for a bid. Because Ashmore only had endorsed checks, the auctioneer gave Ashmore one hour to cure the payment defect, but the auction eventually proceeded with Ashmore unable to secure a different form of payment. The property ultimately sold to Cornerstone. Breckenridge filed a complaint against the two respondents and a third defendant, alleging: (1) violations of Idaho Code section 45-1506 ; (2) estoppel; and (3) negligence/negligence per se, seeking mainly to void the sale to Cornerstone. Breckenridge also recorded a lis pendens against the property. The district court ultimately entered summary judgment for all defendants and quashed the lis pendens. Breckenridge timely appealed to this Court. We affirm in part and reverse in part.

I. FACTUAL AND PROCEDURAL BACKGROUND

A. Factual Background

Weinstein & Riley, P.S., a Washington professional corporation ("W&R") was the trustee for property subject to a deed of trust in Ammon, Idaho (Bonneville County).¹ W&R posted notice of the foreclosure sale and scheduled the auction for June 19, 2020, at 1:00 p.m. in Idaho Falls, Idaho. W&R hired Gary's Processing Service ("Gary's") to assist with the sale. Gary's subcontracted with Wally Enterprises, Inc., a Kansas corporation doing business as We Serve Idaho ("Wally") to hire an auctioneer and post notice of the sale on its website. Wally hired Kathy Cook, an independent contractor, as the auctioneer. Before the sale, Wally posted notice of the property's location along with the date, time, and location of the sale on its website. The information on the website gave no other details about the sale, nor did it include any restrictions or information about the form of payment that would be accepted.

Breckenridge is a Delaware limited liability company. It buys real property at foreclosure sales, improves the property, and then sells it for a profit. On the date of the foreclosure sale, Ashmore attended the public auction as an agent for Breckenridge. Before the sale, Breckenridge had given Ashmore cashier's checks in various amounts made payable to an entity affiliated with Breckenridge. If Breckenridge turned out to be the highest bidder, Ashmore planned to endorse and deliver the cashier's checks to the trustee as payment. Ashmore confirmed the date, time, and location of the auction by emailing W&R the day before the sale. Ashmore also visited the auctioneer's website and noted no restrictions on payment methods listed.

When Ashmore arrived at the sale, Cook provided him with a packet of documents that included a payment condition for the auction: "NO ENDORSED CHECKS[.] CHECKS MADE PAYABLE TO WEINSTEIN & RILEY PS." (Capitalization in original). Ashmore objected to this condition. He had no checks from Breckenridge that were payable to W&R. As a result, Cook agreed to postpone the auction for one hour so Ashmore could attempt to remedy the situation. Breckenridge failed to obtain checks payable to W&R in the time available.

516 P.3d 78

As a result, Ashmore was not able to register to bid.

At about 2:00 p.m., Cook went ahead with the auction. At the time, Thomas and Ashmore were the only people in attendance. The opening bid from Cook was $194,000. Thomas bid $194,001. Ashmore tried to bid $195,000, but Cook would not acknowledge his bid. Thus, Cornerstone was the winning bidder at the auction. Thomas gave Cook a $200,000 certified check payable to W&R for the property. W&R later executed a trustee's deed conveying the property to Cornerstone. W&R refunded Cornerstone $5,999.00.

B. Procedural Background

On June 24, 2020, Breckenridge recorded a lis pendens against the property. Breckenridge also filed a complaint against Cornerstone, Wally, and W&R alleging violations of Idaho Code section 45-1506, and claims for estoppel, negligence/negligence per se, and attorney fees. Each defendant answered the complaint. Cornerstone included a counterclaim, crossclaim, and demand for jury trial. Relevant to this appeal, Cornerstone counterclaimed against Breckenridge seeking a declaratory judgment or to quiet title. On August 24, 2020, Cornerstone recorded its deed in Bonneville County.

Cornerstone moved for judgment on the pleadings and to quash the lis pendens. In response, Breckenridge moved for summary judgment on Count I of its complaint (violation of Idaho Code section 45-1506 by Wally and W&R) and Claim I of Cornerstone's crossclaim (breach of contract against W&R for failing to convey the property to Cornerstone). W&R joined in opposing Breckenridge's motion for summary judgment. Wally also filed a cross-motion for summary judgment and an opposition to Breckenridge's motion for summary judgment.

The district court ultimately granted partial summary judgment to Cornerstone and certified the judgment as final under Idaho Rule of Civil Procedure 54(b). On December 4, 2020, Breckenridge timely filed its first notice of appeal. Soon after, the district court granted Wally's motion for summary judgment and entered judgment dismissing Breckenridge's claims against Wally. Both Cornerstone and Wally moved for attorney fees and costs against Breckenridge, which the district court granted over Breckenridge's objections. After entry of amended judgments in favor of Cornerstone and Wally, Breckenridge filed its amended second notice of appeal.

II. ISSUES ON APPEAL

1. Did the district court err in concluding the trustee's agent had the discretion to reject Breckenridge's bid?

2. Did the district court err in concluding that W&R and Wally complied with the provisions of Idaho Code section 45-1506 ?

3. Did the district court err in concluding that it could not set aside the sale?

4. Did the district court err in dismissing Breckenridge's claims of estoppel, negligence, and negligence per se?

5. Did the district court err in awarding attorney fees to Cornerstone and Wally under Idaho Code section 12-120(3) ?

6. Are any of the parties entitled to attorney fees on appeal?

III. STANDARDS OF REVIEW

"After the pleadings are closed, but early enough not to delay trial, a party may move for judgment on the pleadings." I.R.C.P. 12(c). On such a motion, "[i]f ... matters outside the pleadings are presented to and not excluded by the court, the motion must be treated as one for summary judgment under [Idaho Rule of Civil Procedure] 56 [where] [a]ll parties must be given a reasonable opportunity to present all the material that is pertinent to the motion." I.R.C.P. 12(d). "A judgment on the pleadings is reviewed under the same standard as a ruling on summary judgment." Elsaesser v. Gibson , 168 Idaho 585, 590, 484 P.3d 866, 871 (2021) (quoting State v. Yzaguirre , 144 Idaho 471, 474, 163 P.3d 1183, 1186 (2007) ).

"This Court employs the same standard as the district court when reviewing rulings on summary judgment motions." Owen v. Smith , 168 Idaho 633, 640, 485 P.3d 129, 136–37 (2021) (quoting

516 P.3d 79

Trumble v. Farm Bureau Mut. Ins. Co. of Idaho , 166 Idaho 132, 140–41, 456 P.3d 201, 209–10 (2019) ). "Summary judgment is proper ‘if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.’ " Id (quoting I.R.C.P. 56(a) ). "A moving party must support its assertion by citing particular materials in the record or by showing the ‘materials cited do not establish the. . . presence of a genuine dispute, or that an adverse party cannot produce admissible evidence to support the fact[s].’ " Id (quoting I.R.C.P. 56(c)(1)(B) ). "Summary judgment is improper ‘if reasonable persons could reach differing conclusions or draw conflicting inferences from the evidence presented.’ " Owen , 168 Idaho at 641, 485 P.3d at 137 (quoting Trumble , 166 Idaho at 141, 456 P.3d at 210 ). A "mere scintilla of evidence or only slight doubt as to the facts is not sufficient to create a genuine issue of material fact for the purposes of summary judgment." Id .

This Court exercises free review over questions of law, which includes whether the district court correctly determined that a case is based on a "commercial transaction" for the purpose of Idaho Code section 12-120(3). Great Plains Equip., Inc. v. Nw. Pipeline Corp. , 136 Idaho 466, 470, 36 P.3d 218, 222 (2001).

IV. ANALYSIS

A. The district court correctly concluded that W&R and Wally properly rejected Breckenridge's bid.

Breckenridge argues the district...