Chris Drakos & Chris Drakos Enters., Inc. v. Garrett H. Sandow & Dorea Enters., Inc.
| Decision Date | 21 July 2020 |
| Docket Number | Docket No. 47363 |
| Citation | 468 P.3d 289,167 Idaho 159 |
| Court | Idaho Supreme Court |
| Parties | Chris DRAKOS and Chris Drakos Enterprises, Inc. Plaintiffs-Appellants, v. Garrett H. SANDOW and Dorea Enterprises, Inc. Defendant-Respondents. |
Dunn Law Office, PLLC, Rigby, attorneys for Appellants. Robin Dunn argued.
Garrett Sandow, Blackfoot, attorney for Respondents. Garrett Sandow argued.
In 2010, Appellant Chris Drakos loaned Respondent Garrett Sandow $200,000.00. A promissory note ("Note") executed by Sandow on November 30, 2010, secured the loan. In 2018, after receiving no payments, Drakos filed a complaint seeking to collect on the Note. Sandow moved for summary judgment arguing that the statute of limitations barred the action. Drakos filed a cross-motion for summary judgment, arguing that the statute of limitations did not apply based on the Note's clear language. The district court granted summary judgment to Sandow. Drakos moved the district court to reconsider, which the district court denied. Drakos timely appealed, arguing the district court erred in granting summary judgment for Sandow and in denying his motion for reconsideration. We affirm.
In 2010, Drakos loaned Sandow $200,000.00 for the construction and operation of a car wash. To formalize the loan, Sandow executed the Note on November 30, 2010, promising to pay Drakos $200,000.00, plus interest. The Note provided that The Note also provided:
The makers, sureties, guarantors and endorsers of this Note jointly and severally waive presentment for payment, notice of protest, and notice of nonpayment, and consent that this Note or any payment due under this Note may be extended or renewed without prior demand or notice , and further consent to the release of any collateral or part thereof, with or without substitution.
(Emphasis added.) Sandow made no payments on the Note before the deadline of August 31, 2011.
In February 2018, Drakos sent Sandow a handwritten note stating, Drakos then filed a complaint seeking to collect on the Note on August 16, 2018. Sandow moved for summary judgment arguing the statute of limitations barred Drakos’ action since the last payment was due no later than August 31, 2011. Drakos filed a cross motion for summary judgment, arguing the statute of limitations was inapplicable because the Note stated it could be extended or renewed without prior demand or notice. The district court, finding the statute of limitations barred Drakos’ action and that Drakos had failed to show Sandow had acknowledged the debt, granted summary judgment for Sandow.
Drakos moved the district court to reconsider its summary judgment ruling, alleging for the first time that Sandow provided legal services for Drakos to reduce the amount of interest owed on the Note. The district court, finding Drakos failed to provide evidence that the legal services were performed as payment toward interest on the Note, denied Drakos’ motion for reconsideration. Drakos timely appealed.
1. Whether the district court erred in granting summary judgment for Sandow?
2. Whether the district court erred in denying Drakos’ motion for reconsideration?
"[T]he standard of review for this Court when reviewing a district court's grant of summary judgment is well-settled: this Court ‘uses the same standard properly employed by the district court originally ruling on the motion.’ " Lanham v. Fleenor , 164 Idaho 355, 358, 429 P.3d 1231, 1234 (2018) (quoting Jordan v. Beeks , 135 Idaho 586, 589, 21 P.3d 908, 911 (2001) ). "The court must grant summary judgment 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." Ciccarello v. Davies , 166 Idaho 153, 158–59, 456 P.3d 519, 524–25 (2019) (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 absence or presence of a genuine dispute, or that an adverse party cannot produce admissible evidence to support the facts. Summary judgment is improper if reasonable persons could reach differing conclusions or draw conflicting inferences from the evidence presented. Even so, 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.
Trumble v. Farm Bureau Mut. Ins. Co. of Idaho , 166 Idaho 132, 140–41, 456 P.3d 201, 209–10 (2019) (internal citations and quotations omitted). When reviewing the grant or denial of a motion for reconsideration, the district court, as well as this Court, "must apply the same standard of review that the court applied when deciding the original order that is being reconsidered." Alsco, Inc. v. Fatty's Bar, LLC , 166 Idaho 516, 524, 461 P.3d 798, 806 (2020) (citation omitted). Thus, "when reviewing the grant or denial of a motion for reconsideration following the grant of summary judgment, this Court must determine whether the evidence presented a genuine issue of material fact to defeat summary judgment." Ciccarello , 166 Idaho at 159, 456 P.3d at 525 (quoting Fragnella v. Petrovich , 153 Idaho 266, 276, 281 P.3d 103, 113 (2012) ).
Drakos argues the district court erred in granting summary judgment to Sandow. According to Drakos, the statute of limitations is inapplicable because the Note's clear language permits automatic renewal or extension of payment deadlines. Drakos also argues the district court erred in denying his motion for reconsideration. Drakos maintains Sandow made payments toward interest on the Note in the form of legal services Sandow performed for Drakos on a separate collections claim. For the reasons discussed below, we affirm.
The district court granted summary judgment for Sandow after finding the statute of limitations imposed by Idaho Code section 5-216 barred Drakos’ action. Drakos argues the district court's grant of summary judgment for Sandow was erroneous. According to Drakos, the Note's clear language provides the Note can be "extended or renewed without prior demand or notice[;]" thus, Drakos argues the parties contracted around the statute of limitations when the parties executed the Note.
"Civil actions can only be commenced within the periods prescribed ... after the cause of action shall have accrued, except when, in special cases, a different limitation is prescribed by statute." I.C. § 5-201. "A cause of action accrues and the statute of limitations begins to run when a cause of action exists." Swafford v. Huntsman Springs, Inc. , 163 Idaho 209, 212, 409 P.3d 789, 792 (2017). "An action upon any contract, obligation or liability founded upon an instrument in writing[,]" must be commenced within five years. I.C. § 5-216.
This Court has explicitly held "a perpetual or indefinite waiver of the statute of limitations would be void as against public policy." Donald M. Day and Marjorie D. Day Fam. Tr. v. Transp. Dep't , 166 Idaho 293, 302, 458 P.3d 162, 171 (2018). The object of a statute of limitations "is to prevent fraudulent and stale actions from springing up after a great lapse of time." Billings v. Sisters of Mercy of Idaho , 86 Idaho 485, 496, 389 P.2d 224, 231 (1964). In fact, "the majority of jurisdictions hold an agreement contained in an original obligation never to assert the statute of limitations violates the public policy of the statute and is invalid." See Hirtler v. Hirtler , 566 P.2d 1231, 1231 (Utah 1977) ; see also Ross v. Ross , 96 Ariz. 249, 393 P.2d 933, 934 (1964) (). The rationale is that "[s]tatutes of limitations are not designed exclusively for the benefit of individuals but are also for the public good" and are "intended to prevent the revival and enforcement of stale demands" which are difficult to defend. Hirtler , 566 P.2d at 1231. If parties were able to contract around the statute of limitations at the time of execution, "[t]he door would be open to the very abuses the statute was designed to prevent, and the result would be an annihilation of the statute." Id . at 1231–32.
The longstanding rule in Idaho is that parties may not contract around a statute of limitations. While we have never explicitly defined the public policy which underpins this result, the policy statements of our sister states as set forth here are analogous to those of this state and we adopt them. Thus, we reject Drakos’ argument that the statute of limitations did not apply because the Note's language provided the Note could be extended or renewed without prior demand or notice. It is worth noting, however, that notwithstanding the prohibition against contractual provisions improperly extending or waiving the statute of limitations, our laws have recognized that the parties to a contract may shorten it under certain circumstances. See. I.C. § 28-2-725(1) ( ...
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