Eastern Idaho Agr. Credit Ass'n v. Neibaur

• Decision Date: 27 August 1997
• Docket Number: I-,I,No. 21530,21530
• Citation: 944 P.2d 1386,130 Idaho 623
• Parties: EASTERN IDAHO AGRICULTURAL CREDIT ASSOCIATION, a Federally Chartered Corp., Plaintiff-Appellant, v. Ira L. NEIBAUR and Monica D. Neibaur, husband and wife; Darwin P. Neibaur, a single man; June G. Neibaur, a single woman; Darwin P. Neibaur, June G. Neibaur, Steve Neibaur, Burke Neibaur, Ira Neibaur, Renae Hartley, Corinne Jones, and Dana Lee Dorsey, dba Darwin Neibaur Farms, an Idaho General Partnership, Defendants-Respondents, and Valley Bank of Idaho, an Idaho Banking Corporation; John Deere Company, a Division of Deere & Company, a Delaware Corporation; and John Doesnclusive, Defendants. . Twin Falls, November 1996 Term
• Court: Idaho Supreme Court

Page 1386

944 P.2d 1386

130 Idaho 623

EASTERN IDAHO AGRICULTURAL CREDIT ASSOCIATION, a Federally Chartered Corp., Plaintiff-Appellant, v. Ira L. NEIBAUR and Monica D. Neibaur, husband and wife; Darwin P. Neibaur, a single man; June G. Neibaur, a single woman; Darwin P. Neibaur, June G. Neibaur, Steve Neibaur, Burke Neibaur, Ira Neibaur, Renae Hartley, Corinne Jones, and Dana Lee Dorsey, dba Darwin Neibaur Farms, an Idaho General Partnership, Defendants-Respondents and Valley Bank of Idaho, an Idaho Banking Corporation; John Deere Company, a Division of Deere & Company, a Delaware Corporation; and John Does I-V, Inclusive, Defendants.

No. 21530.

Supreme Court of Idaho.

Twin Falls, November 1996 Term.

Aug. 27, 1997.

Rehearing Denied Aug. 27, 1997.

Racine, Olson, Nye, Cooper & Budge, Pocatello, for Plaintiff-Appellant. Daniel C. Green argued.

Ling, Nielsen & Robinson, Rupert, for Defendants-Respondents Darwin P. Neibaur and June G. Neibaur. Brent T. Robinson argued.

Byington, Holloway, Whipple & Jones, Chtd., Pocatello, for Defendants-Respondents Ira L. Neibaur and Monica D. Neibaur. Kent D. Jensen argued.

Westberg, McCabe & Collins, Boise, for Defendants-Respondents Darwin Neibaur Farms. Paul Larry Westberg argued.

McDEVITT, Justice.

This case involves a complaint to foreclose against security agreements and real estate mortgages that were executed by respondents to serve as collateral for operating loans that were made by appellant Eastern Idaho Agricultural Credit Association (Credit Association) to respondents Ira L. Neibaur and Monica D. Neibaur, husband and wife, on January 18, 1991 and November 25, 1991. The district court granted summary judgment in favor of respondents and Credit Association appealed. Credit Association seeks reversal of the district court's judgment granting respondents summary judgment and seeks entry of summary judgment in favor of Credit Association.

I. FACTS AND PRIOR PROCEEDINGS

On July 13, 1992, Credit Association ¹ filed a complaint for foreclosure against the following respondents who are the subject of this appeal ²: Ira Neibaur and Monica Neibaur, husband and wife, Darwin Neibaur (a single man), June Neibaur (a single woman), Darwin Neibaur, June Neibaur, Steve Neibaur, Burke Neibaur, Ira Neibaur, Renae Hartley, Corinne Jones, and Dana Lee Dorsey, dba Darwin Neibaur Farms, an Idaho general partnership, (collectively referred to as respondents).

Credit Association's complaint alleged that on or about January 18, 1991, Ira and Monica Neibaur executed a promissory note in favor of Credit Association and agreed to pay Credit Association the principal sum of $612,683 together with interest thereon at Credit Association's variable and differential interest rate. On November 25, 1991, Ira and Monica Neibaur executed another promissory note in favor of Credit Association and agreed to pay Credit Association the principal sum of $11,670 together with interest thereon at Credit Association's variable and differential interest rate. The amounts due under the January 18, 1991, and the November Credit Association's complaint alleged that $212,935.19 in combined principal remained outstanding and that interest continued to accrue under the January 18, 1991, and the November 25, 1991 promissory notes.

25, 1991 promissory notes, were due and payable in full on February 1, 1992.

Credit Association claimed that the January 18, 1991, and the November 25, 1991 promissory notes, were secured by two real estate mortgages and perfected security agreements.

In a letter dated January 21, 1992, that was addressed to Ira Neibaur and forwarded to Darwin Neibaur, Credit Association stated that the amounts owed under the January 18, 1991, and the November 25, 1991 promissory notes, "may be" distressed and provided a restructuring application and a copy of the restructuring policy. ³ The January 21, 1992 notice letter, stated that the restructuring application was due by March 12, 1992.

Credit Association's complaint alleged that neither Ira Neibaur nor Darwin Neibaur timely submitted an application to restructure and consequently, all restructure rights under the Agricultural Credit Act of 1987(Act) expired.

In a letter dated May 14, 1992, Credit Association demanded Ira and Monica Neibaur, June Neibaur, and Darwin Neibaur make payment in full for the amounts in default under the January 18, 1991 and the November 25, 1991 promissory notes. The May 14, 1992 letter, acknowledged that on April 24, 1992, Ira and Monica Neibaur submitted a restructure application to Credit Association that was dated April 8, 1992. Credit Association's May 14, 1992 letter, advised that the April 24, 1992 restructure application, was not timely submitted and therefore all restructure rights under the Act expired and Credit Association would not consider the April 24, 1992 restructure application.

On July 9, 1993, Credit Association filed a motion for summary judgment. On September 3, 1993, respondents filed a motion for summary judgment.

On May 31, 1994, the district court denied Credit Association's motion for summary judgment and granted respondents' motion for summary judgment. The district court held that Credit Association failed to follow federal provisions governing the restructuring of respondents' loan.

On June 14, 1994, Credit Association filed a motion to alter or amend judgment and/or for reconsideration pursuant to I.R.C.P. 59(e). On July 27, 1994, respondents filed a motion to strike the June 14, 1994 Affidavit of Gary L. Rainsdon.

On August 1, 1994, the district court heard oral argument regarding each party's pending motions. On August 2, 1994, the district court denied Credit Association's motion to alter or amend judgment and/or for reconsideration. The district court granted respondents' motion to strike the June 14, 1994 Affidavit of Gary L. Rainsdon. The district court entered judgment dismissing Credit Association's complaint for foreclosure without prejudice on August 2, 1994. The district court awarded attorney fees to respondents. Credit Association appealed to this Court.

II. STANDARD OF REVIEW

This Court reviews a district court's ruling on motion for summary judgment by applying the same standard properly applied by the district court when originally ruling on the motion. Farm Credit Bank of Spokane v. Stevenson, 125 Idaho 270, 272, 869 P.2d 1365, 1367 (1994). When faced with an appeal from summary judgment, this In Brown v. Perkins, 129 Idaho 189, 923 P.2d 434 (1996), this Court held that when both parties file a motion for summary judgment relying on the same facts, issues, and theories, the parties essentially stipulate that there is no genuine issue of material fact which would preclude the district court from entering summary judgment. Brown, 129 Idaho at 191, 923 P.2d at 436. In Wells v. Williamson, 118 Idaho 37, 794 P.2d 626 (1990), this Court recognized that when opposing parties file cross motions for summary judgment, based upon different theories, the parties should not be considered to have effectively stipulated that there is no genuine issue of material fact. Wells, 118 Idaho at 40, 794 P.2d at 629.

                Court must determine whether pleadings, depositions, and admissions on file, together with affidavits, show there was no genuine issue as to any material fact, and that the moving party was entitled to judgment as a matter of law.  City of Sun Valley v. Sun Valley Co., 128 Idaho 219, 221, 912 P.2d 106, 108 (1996).  The nonmoving party is to be given the benefit of all favorable inferences which reasonably might be drawn from the evidence and all doubts are to be resolved against the moving party.  Stevenson, 125 Idaho at 272, 869 P.2d at 1367.   This Court exercises free review over questions of law.  Downey Chiropractic Clinic v. Nampa Restaurant Corp., 127 Idaho 283, 285, 900 P.2d 191, 193 (1995)
                

The district court in the present case determined that Credit Association and respondents' cross motions for summary judgment were based upon different theories and that the district court would not consider the cross motions for summary judgment as stipulating there were no genuine issues of material fact. The district court stated:

The record reflects that EIACA is moving for summary judgment based on the theories that defendants Neibaur failed to timely submit a restructure application, defaulted on their loan, and foreclosure is permitted by law. Plaintiffs [sic] move for summary judgment on various theories including failure to follow federal loan restructure provisions, lack of consideration, and estoppel.

III. THE DISTRICT COURT DID NOT ERR IN RULING CREDIT ASSOCIATION FAILED TO COMPLY WITH RESTRUCTURING DISTRESSED LOANS PROCEDURES PURSUANT TO THE AGRICULTURAL CREDIT ACT

Credit Association argues that the district court erred in finding that Credit Association's January 21, 1992 notice letter, was prematurely sent. Credit Association contends that the January 21, 1992 notice letter, was sufficient to trigger respondents' right to 45 days notice that respondents' loan may be suitable for restructuring, prior to Credit Association beginning foreclosure proceedings.

Under 12 U.S.C.A. § 2202a(b)(1), once a qualified lender has determined that a loan made by a qualified lender is or has become a distressed loan, "the lender shall provide written notice to the borrower that the loan may be suitable for restructuring...." 12 U.S.C.A. § 2202a(b)(1) (1989). The qualified lender must provide notice that the loan may be suitable for restructuring and that the lender will review any such suitable loan for restructuring no "later than 45 days before any qualified lender begins foreclosure proceedings with respect to a loan outstanding to any borrower." 12 U.S.C.A. § 2202a(b)(2) (1989).

A distressed loan is defined by statute as

a loan that the borrower does not have the financial capacity to pay according to its terms and that exhibits one or more of the following...