Far W. Bank v. Robertson

• Decision Date: 16 November 2017
• Docket Number: No. 20150513-CA,20150513-CA
• Citation: 406 P.3d 1134
• Parties: FAR WEST BANK, Appellee, v. Mike L. ROBERTSON, Appellant.
• Court: Utah Court of Appeals

406 P.3d 1134

FAR WEST BANK, Appellee,

v.Mike L. ROBERTSON, Appellant.

No. 20150513-CA

Court of Appeals of Utah.

Filed November 16, 2017

Rehearing Denied December 11, 2017

Mike L. Robertson, Appellant Pro Se

Steven W. Call and Jonathan A. Dibble, Attorneys for AppelleeJudge Gregory K. Orme authored this Opinion, in which Judges J. Frederic Voros Jr. and Michele M. Christiansen concurred.¹

Opinion

ORME, Judge:

¶1 Following a trustee's sale, Appellee Far West Bank² initiated this action to obtain a deficiency judgment against pro se Appellant Mike L. Robertson, the sole debtor under a note that was foreclosed nonjudicially. Robertson asserted several counterclaims, and the parties filed cross-motions for summary judgment. Ruling in favor of Far West, the district court dismissed Robertson's counterclaims and found him liable for a deficiency, leaving the issue of the trust property's fair market value to be resolved at trial. Ultimately, the court found that Far West's credit bid at the trustee's sale exceeded the fair market value of the trust property, thus entitling Far West to a deficiency judgment for the difference between the amount bid and the amount owed. Robertson now appeals, challenging the district court's decision on summary judgment and arguing that it abused its discretion by excluding the testimony of his appraiser. We affirm and remand for the limited purpose of calculating Far West's attorney fees reasonably incurred on appeal.³

BACKGROUND⁴

¶2 On August 21, 2006, Robertson signed a promissory note (the First Note) in favor of Far West for a $230,000 revolving line of credit, which Robertson used to fund a business venture. While there is some dispute as to precisely which financial services were offered and when, the relevant details are clear enough. On that same day in August 2006, Robertson, as general partner of Round Peak Natural Seed Farms, Ltd., executed a deed of trust with a power of sale provision (the First Trust Deed) in favor of Far West as security for the First Note. A few months later, the parties agreed to modify the note by raising the credit line from $230,000 to $500,000.

¶3 Robertson signed a second promissory note (the Second Note) in favor of Far West on September 12, 2007, this time for a revolving credit line capped at $250,000. As security for the Second Note, Robertson, once again acting as general partner of Round Peak, provided Far West with a second deed of trust (the Second Trust Deed), which also contained a power of sale provision. The First and Second Trust Deeds (together, the Trust Deeds) each encumbered the same real property (the Property).

¶4 On February 19, 2009, Far West mailed Robertson a letter informing him that both notes were in default. Hoping to restructure the debt, Robertson initiated a series of negotiations with Far West that continued through May 1, 2009, on which date the parties finally signed an agreement. Under that agreement, Robertson would consolidate his debt under the First and Second Notes by signing a third note (the Consolidated Note) in the principal amount of $669,726.32 and an attendant loan agreement (the Consolidated Loan Agreement). The parties further agreed that the Consolidated Note would be secured by the Trust Deeds. Finally, the Consolidated Note and the Consolidated Loan Agreement each contained a clause stating that the instrument itself, together with the "loan documents" and the "related loan documents," were to be the final expression of the parties' agreement.

¶5 Less than two years later, Robertson again began missing payments. On January 13, 2011, the successor trustee (the Trustee)⁵ recorded notices of default under both Trust Deeds. When more than three months passed without any sign from Robertson of an intent to cure, the Trustee proceeded with the nonjudicial foreclosure process by recording a notice of trustee's sale for each of the Trust Deeds. The two notices of sale (together, the Notices of Sale) contained identical property descriptions, both of which were identical to the property descriptions contained in the notices of default. Robertson was timely served with each notice of default and notice of sale.

¶6 On June 1, 2011, Far West purchased the Property at the Trustee's sale for a total of $403,000, having credit-bid $268,000 on the First Trust Deed and $135,000 on the Second Trust Deed. Far West then commenced this action against Robertson for a deficiency judgment, alleging that its combined credit bids amounted to a sum greater than the fair market value of the Property but less than the amount owed.

¶7 Although Robertson had not sought any kind of relief in the district court prior to the Trustee's sale, his answer to Far West's complaint included a host of counterclaims, including claims for breaches of contract and the implied covenant of good faith and fair dealing.⁶ In support of his counterclaims, Robertson alleged not only that the Trustee's sale had been conducted in an unlawful manner, but also that the foreclosure process had been unlawful at its inception, as any default on his part was directly attributable to Far West's intentional, substantial breach of what he referred to as the parties' "ACH Agreement."

¶8 Elaborating on the latter claim, Robertson alleged that in the course of the parties' negotiations in connection with the First Note, Far West had granted him permission to initiate electronic credit and debit entries to Far West accounts for the purpose of facilitating electronic payments in connection with his business. While the loan documents relating to the First Note make no mention of this Automated Clearinghouse Agreement (the ACH Agreement),⁷ Robertson maintained that both parties had always understood the service to be integral to the operation of his business and to their contractual relationship. In response, Far West admitted that indeed it did sign an "ACH Origination Agreement" (the Origination Agreement), but not until much later, on October 14, 2008, as a separate agreement unrelated to the First and Second Notes. The Origination Agreement, which Robertson admits to signing in 2008, does not reference any business loan or trust deed; it does, however, provide that either party may terminate the agreement on ten days' notice. In any event, according to Robertson, the Origination Agreement had little practical effect other than to reaffirm the terms of what he insists was the parties' existing ACH Agreement.

¶9 Having argued that the ACH Agreement lay at the center of the parties' contractual relations from the beginning, Robertson alleged that Far West unilaterally terminated the ACH service on September 22, 2010, and, by doing so, breached the Consolidated Loan Agreement and intentionally rendered his continued performance under the Consolidated Note "impossible."⁸ Refining this argument on summary judgment, Robertson produced evidence that Far West had already terminated its ACH services once before, following his default on the First Note and the Second Note, but had agreed to resume the services on the condition that Robertson sign the Consolidated Note. Accordingly, Robertson argued that, while neitherthe Consolidated Note nor the attendant Consolidated Loan Agreement made any mention of ACH services, there remained a genuine issue of fact as to whether the parties intended to include those services as a term of their final agreement in 2009. He maintained that if the services were included, then Far West's act of termination in September 2010 amounted to substantial breach, excusing his continued performance under the Consolidated Note. The evidentiary lynchpin in Robertson's argument is an email from his loan officer, dated April 30, 2009, which reads, "Mike, [u]pon completion of the new loan documentation, we will reinstate your ACH line."

¶10 Upon consideration of the summary judgment motions filed by both parties, the district court ruled in favor of Far West, granting partial summary judgment on its deficiency claim and dismissing each of Robertson's counterclaims with prejudice. With respect to the former, the court concluded that Far West was entitled to any deficiency that might remain owing on the Consolidated Note because "[t]he foreclosures of the Trust Deeds were lawfully conducted in compliance with ... Utah law." With respect to Robertson's contract counterclaims, the court concluded that it could resolve the relevant issues without deciding whether the Consolidated Note and the Consolidated Loan Agreement comprised a complete integration, meaning the alleged ACH provision was of no effect.⁹ Instead, it reasoned that even if Far West was obligated to provide ACH services in connection with the loan, Robertson had produced no evidence that the loan officer intended to "reinstate" any agreement other than the Origination Agreement, and it stated that

[t]he [Origination Agreement] unequivocally provided that either party could cancel the agreement with[ ] ten ... days' notice. The facts are undisputed that Far West gave more than twenty ... days' notice of cancellation of the [Origination Agreement] to ... Robertson and therefore Far West fully complied with [its] terms ....^{[10 ]}

¶11 Having resolved all issues of liability on summary judgment, the court scheduled a trial for July 2, 2013, to address the narrow questions of "the balance owing under the [Consolidated Note]" and "the fair market value of the [Property]" as of the date of the Trustee's Sale.¹¹ At trial, Far West called Robertson's loan officer and an appraiser to testify as to each issue, respectively. For his part, Robertson testified on his own behalf, claiming that Far West had credit-bid a sum substantially lower than the Property's value. He also sought to introduce the testimony of his own appraiser. The court excluded that testimony, however, as Robertson had failed to identify the witness prior to trial.

¶12 Following trial, the district court found that the balance owed under the...