Elsaesser v. Black Diamond Compost, LLC
| Decision Date | 08 July 2022 |
| Docket Number | Docket No. 48720 |
| Citation | 513 P.3d 447 |
| Parties | In the MATTER OF the Petition for RELEASE FROM a COMMON LAW LIEN. Ford Elsaesser, as Successor Personal Representative of the Estate of Victoria H. Smith, Petitioner-Respondent, v. Black Diamond Compost, LLC, Respondent-Appellant. |
| Court | Idaho Supreme Court |
Law Office of Vernon K. Smith, PC, Boise, for Appellant.
Vernon K. Smith argued. Givens Pursley LLP, Boise, for Respondent. Alexander P. McLaughlin argued.
Black Diamond Compost, LLC ("Black Diamond"), filed a "Claim of Ownership" with the Ada County Recorder's Office to notify the public of its ownership of compost and humus located on real property in Ada County. Black Diamond disputes the ownership of the land and deemed it necessary to notify the public that the compost and humus located on the real property belonged to it. Ford Elsaesser, personal representative of the Estate of Victoria H. Smith, attempted to sell the real property but could not secure "clear title" in a preliminary title report and claimed this was due to Black Diamond's Claim of Ownership. Elsaesser filed an action in the district court against Black Diamond, alleging the Claim of Ownership was a nonconsensual common law lien prohibited under Idaho Code section 45-811. The court agreed and ordered the release and discharge of the recorded Claim of Ownership. It also awarded Elsaesser a $5,000 civil penalty and granted his request for costs and attorney fees. Black Diamond timely appealed.
This matter has a long and convoluted backstory spanning multiple cases and appeals. The principal actors in this saga are Ford Elsaesser, the personal representative of the Estate of Victoria H. Smith (the "Personal Representative"),1 and Vernon K. Smith ("Vernon"), a son of Victoria and the attorney for Black Diamond. Three prior cases give context to this dispute: (1) Matter of Estate of Smith , 164 Idaho 457, 432 P.3d 6 (2018) (hereinafter "Probate Case"); (2) Elsaesser v. Gibson , 168 Idaho 585, 588, 484 P.3d 866, 869 (2021) () (hereinafter "Ejectment Action"); and (3) Smith v. Smith , Ada County Case No. CVOC-2015-2348, Fourth District Court. The factual background of these cases is summarized only to the extent that such facts are needed to provide context to the case at hand.
David Gibson, managing member of Black Diamond, entered into a joint-venture agreement with Victoria and Vernon. Through the agreement, Gibson was permitted to produce compost and humus on an approximately 33-acre2 portion of 520 acres of real property near Gowen Field (the "Gowen Property").
Ownership of the Gowen Property is disputed. Victoria acquired real property, including the Gowen Property, during her lifetime. In 1990, Victoria prepared a holographic will leaving everything to her son, Vernon, effectively disinheriting her other two children, Joseph Smith and Victoria A. Converse. She also executed a durable power of attorney, making Vernon her attorney-in-fact. Vernon later formed a limited liability company, VHS Properties, LLC ("VHS"), and transferred all of Victoria's personal and real property to VHS.
Several months after Victoria's death in September 2013, Vernon's brother, Joseph, filed a petition in the Probate Case for formal adjudication of Victoria's intestacy, claiming the will was invalid as a product of undue influence by Vernon. While the Probate Case was pending, Joseph and his wife Sharon also filed a separate action against Vernon—Smith v. Smith —in which they attempted to enjoin Vernon from removing juniper trees along an easement across VHS's property to which Joseph had rights. The district court dismissed Smith with prejudice on January 19, 2017. Vernon asserts that the dismissal of Smith effectively affirmed VHS's ownership of the Gowen Property.
In March 2017, the magistrate court in the Probate Case concluded that Victoria's will was invalid because it was a product of Vernon's undue influence. Accordingly, it ruled that Victoria died intestate. In June 2017, the court entered a judgment pursuant to Idaho Rule of Civil Procedure 70(b), which vested title to all of Victoria's real and personal property, including the Gowen Property, in the Personal Representative. Vernon disputed the Personal Representative's ownership of the properties formerly belonging to Victoria in a recent appeal: Elsaesser v. Riverside Farms, Inc. , ––– Idaho ––––, ––– P.3d ––––, 2022 WL 2444697 (2022). In that case, Riverside Farms (also represented by Vernon) had leased property from the Personal Representative and refused to vacate the property after the lease expired. The Personal Representative commenced an ejectment action, and Riverside Farms argued that the Personal Representative was not the true owner of the property because the Rule 70(b) judgment issued in the Probate Case was precluded by res judicata since Smith v. Smith was dismissed with prejudice.3 In an opinion released earlier this week, this Court determined the judgment in Smith v. Smith did not preclude the magistrate court in the Probate Case from issuing the Rule 70(b) judgment, thereby confirming that the Personal Representative is the owner of the Gowen Property and the other properties included in the Rule 70(b) judgment.
Black Diamond produced humus and compost on the Gowen Property for sixteen years beginning in 2004 under the joint venture agreement Victoria and Vernon entered into with Gibson. When the Personal Representative was granted permission from the district court in the Probate Case to sell the Gowen Property in December 2019, the Personal Representative sent Gibson a notice of termination of occupancy demanding Gibson vacate the Gowen Property by January 31, 2019. When Gibson refused to vacate the premises, the Personal Representative brought the Ejectment Action to have Black Diamond removed. On October 2, 2019, the district court entered judgment in the Personal Representative's favor and ordered Gibson to "immediately vacate and surrender possession" of the Gowen Property.4 The district court also issued a writ of assistance to the Ada County Sheriff, commanding him to remove David Gibson, his goods, and his chattels from the Gowen Property.
About a month later, the Personal Representative received permission from the magistrate court in the Probate Case to approve the sale of the Gowen Property for $13 million. The Personal Representative entered into a purchase and sale agreement on or about October 28, 2019. Gibson refused to vacate the Gowen Property, so the Personal Representative filed a motion for contempt in the Ejectment Action. The court denied the contempt motion, so the Personal Representative contacted the Sheriff who requested $80,000 to remove Gibson and his equipment. The magistrate court in the Probate Case approved the Personal Representative's motion to pay the $80,000 from the Estate of Victoria H. Smith. On June 25, 2020, counsel for the Personal Representative sent a letter to the Ada County Sheriff's Office which enclosed the $80,000 for the Sheriff to "eject Mr. Gibson and remove and store his equipment ." (Emphasis added). The Sheriff removed and stored Gibson's tools and equipment. However, the Sheriff did not remove the 350,000 cubic yards of humus and compost remaining on the Gowen Property.
On July 10, 2020, Black Diamond filed a document entitled "Claim of Ownership – In Crops-Compost-Humus Production" (the "Claim of Ownership") with the Ada County Recorder's Office. The document asserts that the compost and humus left behind is the personal property of Black Diamond and advises that anyone removing it "shall be liable to Claimant for the minimum market valuation of said agricultural commodity and crop-product in the sum of $17,500,000.00."
On July 28, 2020, counsel for the Personal Representative wrote to Black Diamond asking that Black Diamond work with him to coordinate removal of the compost and humus within 30 days. The letter stated that if Black Diamond failed to remove the compost and humus within the timeframe, it would be deemed abandoned. Vernon, as counsel for Black Diamond, responded with a seven-page letter outlining his grievances against the Personal Representative and his counsel's law firm. Black Diamond's response alleged that the Personal Representative improperly restricted the Sheriff from moving the compost to a 55-acre parcel originally contemplated by Gibson after his ejectment. Black Diamond suggested the Personal Representative have the purchaser make arrangements to transport the equipment being stored and the humus and compost remaining on the Gowen Property to that 55-acre parcel.
On August 14, 2020, counsel for the Personal Representative replied to Black Diamond, again asking Black Diamond to withdraw and release the Claim of Ownership. In response, counsel for Black Diamond sent another seven-page letter personally attacking the Personal Representative. Counsel for the Personal Representative replied on August 20, 2020, offering to contribute to the cost of removal if Black Diamond would provide a facility (or confirm the proposed 55-acre parcel was a permitted facility), confirm that the compost and humus could be lawfully transported to the facility, and release the Claim of Ownership. Black Diamond refused the offer.
On September 11, 2020, the Personal Representative filed a petition with the district court to release Black Diamond's Claim of Ownership. The Personal Representative alleged the Claim of Ownership created a cloud on the title, preventing the sale of the Gowen Property since the Personal Representative could not deliver marketable title. An order to show cause was issued to Black Diamond ordering Black Diamond to appear and "state why the [c]ourt should not issue an order releasing the [Claim of Ownership]." The hearing took place on March 3, 2021. In its...
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