Chavez v. Barrus

Decision Date26 August 2008
Docket NumberNo. 33727.,33727.
Citation192 P.3d 1036,146 Idaho 212
CourtIdaho Supreme Court
PartiesDebra K. CHAVEZ, Plaintiff-Appellant, v. William J. BARRUS, First American Title, Co., and Baker & Harris, Attorneys at Law, Defendants-Respondents.

Curtis N. Holmes, Pocatello, for appellant.

Baker & Harris, Blackfoot, for respondents William Barrus and Baker & Harris. Jared Harris argued.

Holden, Kidwell, Hahn & Crapo, Idaho Falls, for respondent First American Title Company. William Faler argued.

HORTON, Justice.

Appellant Debra K. Chavez appeals from an order of the district court dismissing her quiet title action and granting summary judgment to Respondents William J. Barrus, Baker & Harris, and First American Title Company (First American) (collectively Respondents). We affirm the district court's dismissal of the quiet title action.

In a separate order, the district court awarded attorney fees to Barrus and Baker & Harris pursuant to I.C. § 12-120(1) and to First American pursuant to I.C. §§ 12-120(1) and 12-121. We reverse the district court's order awarding attorney fees to Respondents to the extent it was based on I.C. § 12-120(1), because we do not find that Chavez's complaint clearly indicates that she sought $25,000 or less in damages. However, because we find Chavez's claim against First American to be frivolous, we affirm the district court's order to the extent it awarded attorney fees to First American under I.C. § 12-121. We further award First American attorney fees on appeal pursuant to I.C. § 12-121 and I.A.R. 11.1.

I. FACTUAL AND PROCEDURAL BACKGROUND

Chavez and Barrus were previously married. During the course of their marriage they acquired a home in Bingham County, which is the disputed property at the center of this appeal. They were divorced on July 3, 2002. Baker & Harris represented Barrus in the divorce action. The divorce decree incorporated the parties' Parenting and Property Settlement Agreement (Agreement), which set forth the distribution of the parties' community property and debts. The Agreement provided in relevant part:

Assets Distributed to [Barrus]

. . . The house located at 363 W 150 N, Blackfoot, Idaho . . .

All equity in the house subject to an obligation to pay [Chavez] a portion of her equity as set forth hereafter;. . . .

Assets Distributed to [Chavez]

. . . The amount of $21,500.00 from the house, to be paid within 3 years at 0% interest;

In the event [Barrus] sells the house within 3 years, [Chavez] shall received [sic] the greater of $21,500.00 or ½ of the equity generated by the sale, after deducting all sale costs and expenses . . . [Barrus] will receive his ½ of the equity upon refinance or sale of the property, the greater of $19,500.00 or ½ of the equity.

. . . .

Debts Distributed to [Barrus]

Debt on residence;

. . . .

Debts Distributed to [Chavez]

. . . [Chavez] will pay [Barrus] the sum of [$2,000.00] to be used towards payment of the debt given to [Barrus].

. . . .

ATTORNEY'S FEES

If the agreement is breached by either party, the breaching party shall pay all reasonable costs, expenses, and attorney's fees incident to the breach, which are actually incurred by the other party and reasonably necessary to enforce this Agreement by litigation.

An Order of Clarification later amended the decree to include a legal description of the house.

On December 13, 2002, Barrus filed a Motion for Judgment, seeking a judgment against Chavez for $3,046.38 for sums she was required to pay under the Agreement. On January 23, 2003, the magistrate entered a Judgment against Chavez for $2,000.00, and specified that Barrus could execute on the Judgment on February 6, 2003. On February 5, 2003, Barrus, through his attorneys Baker & Harris, sent a letter directing the Bingham County Sheriff to execute on Chavez's "right to receive" monies from Barrus in order to satisfy the Judgment against Chavez. Barrus provided the Sheriff with a Writ of Execution, Notice of Attachment, and Claims of Exemption package. The Notice of Attachment attached "All right to receive monies from William J. Barrus as set forth in the Decree of Divorce between William J. Barrus and Debra K. Barrus. . . ." Marjorie Anderson, a civil deputy for the Bingham County Sheriff, received the execution documents on February 10, 2003. Anderson states that she served the Writ of Execution on Barrus and mailed the debtor's packet to Chavez at the residence where Chavez was then living. Anderson did not personally serve Chavez.

On March 3, 2003, Deputy Byron Howell posted a Notice of Sale in three public places in Blackfoot, according to Anderson's instructions. The sheriff's sale was held on March 10, 2003. At the sale, Barrus purchased his obligation to Chavez under the decree of divorce, specifically, "$21,500 or ½ of the equity generated by the sale [of the house], after deducting all sale costs or expenses."

Chavez contends that Barrus delayed pursuing execution until she was out of state in order to ensure that she would not receive notice of the execution. According to Chavez, she did not receive the Writ of Execution or the debtor's packet and, thus, she was not aware of the sheriff's sale. Chavez explained that she had experienced difficulty in receiving mail at her residence due to theft and non-delivery.

On March 20, 2003, (after the sheriff's sale had already occurred) Chavez filed a Chapter 7 bankruptcy petition. She identified Barrus as a creditor in the bankruptcy proceedings. The bankruptcy court granted Chavez a discharge on July 3, 2002 and the case was closed.

On November 1, 2004, Barrus issued a promissory note to Baker & Harris, secured by a deed of trust on the house, for payment of the legal fees Barrus incurred in the divorce.

Barrus decided to refinance the mortgage on the house in December, 2004. At the request of Coventry Mortgage, First American issued a commitment for title insurance on the house on December 13, 2004. This first title commitment reflected that the house was owned by Chavez and Barrus, and included an exception for the $21,500 debt owed to Chavez. On January 3, 2005, Baker & Harris recorded the divorce decree in Bingham County and Barrus recorded the Order of Clarification that included the legal description of the house. First American then issued a second title insurance commitment (superseding the first), reflecting that the house was owned by Barrus and listing an exception for the debt to Chavez. That same day, Barrus, by affidavit, stated the $21,500 debt to Chavez had been extinguished in the sheriff's sale and documented the sale. First American then issued a third title insurance commitment without the exception for the $21,500 debt.

After accepting First American's title commitments, Coventry Mortgage prepared the refinancing documents for Barrus. Closing on the refinancing occurred on January 18, 2005. With the proceeds, Barrus paid $8,936.92 to Baker & Harris and extinguished the deed of trust. Barrus also received $12,308.24 in loan proceeds.

In July of 2005, three years after the divorce decree was entered, after Barrus failed to pay Chavez the share of the equity in the house that she believed was due her under the terms of the Agreement, she contacted her attorney to initiate contempt proceedings. At this time, she first learned of Barrus's execution on his earlier judgment. Following a hearing, the magistrate ruled that the contempt action would not be acted upon until Chavez filed a quiet title action.

On June 14, 2006, Chavez filed a Complaint to Quiet Title with the district court. In her complaint, Chavez sought both an order for payment of the $21,500 she believed due under the terms of the Agreement and an order quieting title in favor of Chavez "for her one-half (1/2) share in the subject real property." Chavez also sought costs to revise and record the deed and other documents required to quiet title, reimbursement for the funds received by Barrus, Baker & Harris, and First American from the refinancing, and attorney fees.

Chavez moved for summary judgment on August 3, 2006. Barrus and Baker & Harris moved for summary judgment on August 21, 2006. First American moved for summary judgment on August 21, 2006. Chavez filed additional motions: a motion to amend her complaint to seek punitive damages, a motion to join additional parties and add a cause of action, a second motion to add an additional cause of action, a motion to compel and a motion to continue the summary judgment hearing.1

The district court heard argument on the pending motions on September 18, 2006. Chavez's motions to compel and to continue the summary judgment hearing were both denied. The district court took the motions for summary judgment under advisement and stated it would consider the motions to amend after resolving the motions for summary judgment. On October 19, 2006, the district court sent a letter to the parties requesting additional information as to whether the Bingham County Sheriff attempted to personally serve Ms. Chavez prior to mailing the Writ of Execution and debtor's packet. The parties responded to the inquiry with additional briefing.

After considering the file, pleadings, depositions, admissions, affidavits, and the arguments of counsel, the district court concluded that the decree of divorce converted Chavez's real property interest in the house into a personal property interest in the $21,500 debt owed by Barrus to her for the equity in the house. The district court held that Barrus correctly followed the statutory procedures for executing against personal property and declined to vacate the sheriff's sale for reasons of equity. Concluding that any interest that Chavez had in the house was extinguished, the district court denied Chavez's motion for summary judgment and dismissed her quiet title action. The district court granted summary judgment in favor of Barrus and Baker & Harris. The district court...

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