Elsaesser v. Riverside Farms, Inc.

• Decision Date: 06 July 2022
• Docket Number: Docket No. 48701
• Citation: 513 P.3d 438
• Parties: Ford ELSAESSER, in his capacity as Personal Representative of the Estate of Victoria H. Smith, Plaintiff-Respondent, v. RIVERSIDE FARMS, INC., an Idaho corporation, Defendant-Appellant.
• Court: Idaho Supreme Court

513 P.3d 438

Ford ELSAESSER, in his capacity as Personal Representative of the Estate of Victoria H. Smith, Plaintiff-Respondent,

v.RIVERSIDE FARMS, INC., an Idaho corporation, Defendant-Appellant.

Docket No. 48701

Supreme Court of Idaho, Boise, April 2022 Term.

Opinion filed: July 6, 2022

Law Office of Vernon K. Smith, PC, Boise, for Appellant.

Givens Pursley, LLP, Boise, for Respondent.

MOELLER, Justice.

This appeal stems from an action in which the personal representative of the Estate of Victoria H. Smith (the "Personal Representative") sought to eject Riverside Farms, Inc., ("Riverside") from its real property, referred to by the parties as the "Chinden Property," after the term of Riverside's lease expired. Riverside argued that the Personal Representative lacked standing to bring the ejectment action because it is not the true owner of the land. The Personal Representative was earlier granted ownership of the "Chinden Property" pursuant to a Rule 70(b) judgment issued during the probate proceedings following Victoria's death. Riverside argues that the Rule 70(b) judgment was barred by res judicata because a prior action, which concerned removal of trees along an easement on the property, had already confirmed that the Personal Representative was not the true owner of the Chinden Property.

The district court determined that ejectment of Riverside was proper because the dismissal of the prior case did not preclude the Rule 70(b) judgment issued in the probate case. Riverside filed a motion asking the district court to reconsider its decision, but the district court declined to do so. Riverside appeals to this Court, arguing that the denial of its motion to reconsider was in error and renewing its argument that the personal representative lacked standing to seek removal of Riverside from the property because the Rule 70(b) judgment was barred by res judicata .

For the following reasons, we affirm the district court.

I. FACTS AND BACKGROUND

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,¹ and Vernon K. Smith ("Vernon"), a son of Victoria and the attorney for Riverside Farms, Inc. Relevant to this appeal are the following cases: Matter of Estate of Smith , 164 Idaho 457, 432 P.3d 6 (2018) (Ada County Case No. CV-IE-2014-15352) (the "Probate Case"), and Smith v. Smith (Ada County Case No. CV-OC-2015-2348). The factual background of these cases is summarized below only to the extent such facts are needed to provide context here.

Victoria H. Smith acquired real property during her lifetime, including a parcel known as the "Chinden Property." In 1990, Victoria prepared a holographic will leaving everything to her son, Vernon. 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 ). Victoria had previously given Joseph a portion of the Chinden Property. Years prior, Joseph had planted juniper trees along an access way the family had used. Eventually, Joseph acquired an easement to use that access way. Joseph refused to trim the trees when Vernon requested that he do so. Joseph claimed Vernon was planning to remove the juniper trees and sought a temporary restraining order to enjoin Vernon from removing them. The complaint stated that Vernon's ownership (through VHS) was being challenged by Joseph in the Probate Case. Vernon counterclaimed, arguing that the case should be dismissed because Joseph and his wife did not have standing to bring this case because the trees were not located on Joseph's property, but on property which belonged to VHS. The district court issued a notice of intent to dismiss for failure to prosecute. On January 19, 2017, the district court dismissed Joseph's claims with prejudice.

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. The Personal Representative was appointed and filed a motion for relief under Idaho Rule of Civil Procedure 70(b). On June 2, 2017, the magistrate court entered its order and judgment on the Personal Representative's motion. The order conveyed all of Victoria's real and personal property to the Personal Representative. Id. The judgment stated that the court vested "in the Personal Representative as of May 5, 2017, any and all real property of any kind or nature," including the Chinden Property. Vernon appealed, arguing that the court did not have jurisdiction to enter the Rule 70(b) judgment. Matter of Estate of Smith , 164 Idaho 457, 432 P.3d 6 (2018). This Court disagreed, affirming the district court's conclusion that the magistrate court properly vested ownership to all of the estate property in the Personal Representative. Id.

On February 22, 2019, the Personal Representative and Riverside entered into a lease whereby Riverside was allowed to lease the Chinden Property for a term "ending on March 31, 2020, together with any extensions as provided herein unless terminated earlier as provided herein." The Personal Representative notified Riverside multiple times in the weeks leading up to March 31 that it would not be renewing the lease. On March 23, 2020, Riverside responded with a letter stating that termination of the lease "was a precipitous move on [the Personal Representative's] part, and one we believe to be unlawful under the law." The Personal Representative again notified Riverside of its right to terminate the lease at the end of the term and eject Riverside. When the term of the lease expired, Riverside did not vacate the Chinden Property.

Over a year after this Court's decision in the Probate Case, on April 30, 2020, Vernon filed a motion in the Probate Case to correct the Rule 70(b) judgment. Vernon stated that the Personal Representative had begun a series of ejectment actions to remove those in possession of the real properties, including an action to eject Riverside which was farming the Chinden Property.² Vernon claimed the Rule 70(b) judgment was improper, and that he is a two-thirds owner of the real properties as Victoria's intestate heir.³ Specifically, Vernon argued that the judgment in Smith , which dismissed Joseph's claims with prejudice prior to the issuing of the 70(b) judgment in the Probate Case, precluded the magistrate court in the Probate Case from issuing the Rule 70(b) judgment. Vernon argued that the Smith judgment had "the effect of a final determination as a matter of law that the Chinden Property is vested in VHS Properties." The magistrate court held that the Smith judgment did "not operate as res judicata , claim preclusion or issue preclusion in this probate."

On April 23, 2020, the Personal Representative filed his complaint in district court seeking the ejection of Riverside and restitution of the premises and requesting attorney fees. Riverside answered the complaint, alleging that the Personal Representative did not have standing to bring the ejectment action because the Personal Representative is not the owner of the Chinden Property. Riverside asserted Vernon is a two-thirds owner and Joseph is a one-third owner because they are Victoria's heirs. On September 9, 2020, the Personal Representative filed a motion for partial judgment on the pleadings in which he asked the district court to conclude that the Personal Representative owned the Chinden Property (and, therefore, had the authority to eject Riverside) and that any such judgment be made final under Idaho Rule of Civil Procedure 54(b). Riverside opposed the motion, arguing that the district court's judgment in Smith was an adjudication confirming that VHS owns the Chinden Property (and all of Victoria's other properties). Riverside maintained that since the Personal Representative did not own the property, it could not eject Riverside from it. Riverside also argued that the Personal Representative failed to join VHS as a necessary and indispensable party in this action. The Personal Representative filed a reply memorandum arguing that Smith did not concern the ownership of the Chinden Property, but rather only mentioned that the ownership was being disputed in the Probate Case. In Riverside's response to the Personal Representative's reply memorandum, Riverside again asserted that res judicata prohibited the Rule 70(b) judgment.

On October 15, 2020, a hearing took place on the motion for partial judgment on the pleadings. The district court found Riverside's argument "specious," stating, "Riverside Farms was not a party to [Smith ], the claim in that case was seeking declaratory relief regarding the trimming of some trees which you answered and counterclaimed. ... There was no property interest put in issue by way of your counterclaim. ..." The district court held that VHS is not the owner of the Chinden Property. Riverside moved to reconsider, asking the district court to reconsider its analysis concerning application of the Rule 70(b) judgment, which the district court denied. On November 18, 2020, the district court entered its Decision and Order on Motion for Partial Judgment on the Pleadings and Motion to Certify Judgment Under I.R.C.P. 54(b). The district court concluded that the Personal Representative owned the property and granted the Personal Representative's motion for partial judgment on the pleadings with respect to the...