City of Kellogg v. Mission Mountain Interests Ltd., Co.

• Decision Date: 19 December 2000
• Docket Number: No. 25309.,25309.
• Parties: CITY OF KELLOGG, an Idaho Municipal Corporation; and Silver Mountain Corp., an Oregon Corporation, Plaintiffs-Counterdefendants-Respondents, v. MISSION MOUNTAIN INTERESTS LTD., CO., a Limited Liability Company, Defendants-Counterplaintiff-Appellant.
• Court: Idaho Supreme Court

16 P.3d 915

135 Idaho 239

CITY OF KELLOGG, an Idaho Municipal Corporation; and Silver Mountain Corp., an Oregon Corporation, Plaintiffs-Counterdefendants-Respondents, v. MISSION MOUNTAIN INTERESTS LTD., CO., a Limited Liability Company, Defendants-Counterplaintiff-Appellant.

No. 25309.

Supreme Court of Idaho, Coeur d'Alene, October 2000 Term.

December 19, 2000.

Preston, Gates & Ellis, Coeur d'Alene; J. Todd Reuter, Spokane, WA, for appellant. J. Todd Reuter argued.

Evans, Keane, Kellogg, for respondents. Charles L.A. Cox argued.

WALTERS, Justice.

This is an appeal from a decision of the district court determining that a written agreement constituted a valid conveyance of property. We affirm.

FACTS AND PROCEDURE

This case has a long and somewhat convoluted background. The respondent City of Kellogg, Idaho, is the owner of a recreational ski area known as the Silver Mountain Resort. The ski resort consists in part of a leasehold interest in land obtained from Bunker Limited Partnership (Bunker) as the lessor under a lease dated June 30, 1989, and several subsequent corrected and amended leases, all of which we will refer to as the City Lease. On December 19, 1990, the parties to the lease entered into an agreement purporting to convey ownership to the City of a lodge known as the Tamarack Lodge, together with the land on which the lodge is located, and Chair Lift No. 4, all of which was situated on the leased property. In exchange for the conveyance from Bunker Limited Partnership, the City agreed to allow Bunker to hook up to the water and sewer lines constructed in the area by the City to service the lodge. The hookup right was for several "units" on an as available basis and was not transferable. The City further agreed "to deed the land under the lodge to Bunker Limited Partnership on the termination of the lease for the Silver Mountain Resort."

In November 1994, Bunker sold its interest in the real property described in the City Lease to the appellant, Mission Mountain Interests Ltd., Co. (Mission). Bunker also executed an assignment of its interest in the City Lease to Mission. Bunker conducted unsuccessful negotiations with the City to permit a transfer to Mission of Bunker's right to the water hookups conveyed by the December 19, 1990, agreement.

During the fall of 1994, the City became in default on its obligations on the revenue bonds used for financing construction and development of the ski resort. The City entered into a forbearance agreement with the indemnitor on the revenue bonds and began searching for an entity to assume the operation of the ski resort. In May of 1996, the City assigned its interest in the City Lease to Silver Mountain Corporation.

The City of Kellogg and Silver Mountain Corporation subsequently filed an action against Mission Mountain Interests Ltd., Co., in September 1996. The plaintiffs alleged they had been damaged by Mission's trespass and by breach of the lease agreement through interference with the plaintiffs' quiet enjoyment of the leased property. The plaintiffs sought a declaratory judgment quieting title to the surface rights of the leased area and for an injunction to prohibit the construction of a logging service road across the ski resort. Mission answered the complaint and asserted various counterclaims including breach of the lease by the plaintiffs for failing to maintain the Tamarack Lodge, the water supply, the roads on the leasehold, the storage tanks that were subject to government regulation, and for removing timber from the property without the lessor's consent. Mission also submitted a counterclaim seeking damages for waste, for a declaratory judgment that the sublease between the City and Silver Mountain Corporation effectively terminated the City Lease, and for damages stemming from the plaintiffs' alleged trespass and conversion. In answering Mission's counterclaims, the plaintiffs asserted, among other claims, their ownership of the Tamarack Lodge, the land upon which the lodge is located, and the ski lift (Chair Lift No. 4) by virtue of the December 19, 1990, agreement between the City and Bunker Limited Partnership, the predecessor in interest of Mission Mountain Interests Ltd., Co.

The plaintiffs moved for partial summary judgment on two of the counterclaims, which put at issue whether the transfer from the City to Silver Mountain Corporation was permitted under the terms of the City Lease. Following a hearing on the motion, the district court issued a memorandum decision denying summary judgment on the ground that a factual question existed as to the legitimate or fraudulent nature of the transaction between the City and Silver Mountain Corporation.

The plaintiffs renewed their motion for summary judgment and provided supplemental information obtained by the deposition of Mark Bee, the president of the indemnitor who had threatened to foreclose as a result of the City's default in its revenue bond obligations. The district court thereafter determined that there was no evidence to support Mission's contention of a sham transaction and granted summary judgment to the plaintiffs on that issue. The district court also found as matter of law that the redemption of the revenue bonds did not terminate the City Lease. In November 1997, the district court entered an order granting partial summary judgment to the plaintiffs on the defendant's first counterclaim alleging breach of the lease by subletting the City Lease to Silver Mountain Corporation and on the defendant's third counterclaim alleging trespass.

The plaintiffs then filed a second motion for summary judgment regarding all of the remaining claims. In their memorandum in support of the motion, the plaintiffs asserted in relevant part:

As to other alleged breaches, . . . the following facts are not in issue:

1. Ownership of the Tamarack Lodge was transferred to the City by agreement with Bunker Limited Partnership on December 19, 1990, almost four years prior to Mission Mountain acquiring the reversionary interest of the City Lease.

Mission responded by filing a cross-motion for summary judgment on the discrete issue of ownership with respect to the lodge, the land upon which the lodge was located, and of the ski lift. Mission claimed that the December 19, 1990, agreement on which the plaintiffs' based their claim of ownership was defective and invalid for the purpose of effecting a conveyance. Mission also argued that it had become the owner of the disputed property pursuant to a 1994 deed from the Bunker Limited Partnership with respect to the leasehold interest where the lodge and ski lift are located.

The district court entered a memorandum decision and order granting the plaintiffs' second summary judgment motion and denied Mission's cross-motion for summary judgment. A final judgment was entered on December 14, 1998. Mission Mountain Interests Ltd., Co., timely appealed from the judgment.

ISSUES ON APPEAL

Mission raises two issues on appeal. First, Mission submits that the district court erred in holding that the December 19, 1990, agreement complies with the statutory requirements to effectuate a valid conveyance of real property. Contrary to the district court's ruling, Mission argues that the agreement lacked three elements essential to a valid conveyance: (a) the complete address of the grantee, (b) words of grant, and (c) a sufficient description of the property to be conveyed. As its second issue, Mission contends that it should receive an award for attorney fees based on I.C. § 12-120(3). Similarly, the City also makes a claim for fees on appeal, but pursuant to an express provision in the City Lease. All of the issues raised in this appeal concern questions of law.

STANDARD OF REVIEW

A review by this Court of a district court's decision granting a motion for summary judgment is the same as that required of the district court when ruling on the motion. Summary judgment shall be granted if the "pleadings, depositions, and admissions on file, together with affidavits, if any, show that there is no genuine issue as to any material fact and the moving party is entitled to judgment as a matter of law." I.R.C.P. 56. In making this determination, all allegations of fact in the record, and all reasonable inferences from the record are construed in the light most favorable to the party opposing the motion. Friel v. Boise City Housing Authority, 126 Idaho 484, 887 P.2d 29 (1994). If the evidence reveals no disputed issues of material fact, what remains is a question of law, over which this Court exercises free review. Id.

DISCUSSION

I. Grantee's Address

In analyzing whether a conveyance has been made, a court must first consider whether the agreement of the parties meets the requirements set forth in the relevant statutes. Idaho Code § 55-813 defines a conveyance to embrace every instrument in writing by which any estate or interest in real property is created, alienated, mortgaged or encumbered, or by which the title to any real property may be affected, except wills. Idaho Code § 55-601 provides that a conveyance of an estate in real property may be made by an instrument in writing, subscribed by the grantor, and that "[t]he name of the grantee and his complete mailing address must appear on such instrument."

Mission argues that the address requirement of Idaho Code § 55-601 was not satisfied by the December 19, 1990, agreement which contains only the name of the City of Kellogg, the grantee, with no address whatsoever appearing on the face of the document. We disagree. The agreement recited that it was entered into between Bunker Limited Partnership, an Idaho limited partnership, and the City of Kellogg, a municipal corporation. The City of Kellogg is a well-known municipality in the State of Idaho. It has corporate boundaries and is located in Shoshone County. The address of the City of Kellogg is the City of Kellogg. We hold that the identification of the...