First State Bank of Eldorado v. Rowe
| Decision Date | 28 February 2006 |
| Docket Number | No. 30099.,30099. |
| Parties | FIRST STATE BANK OF ELDORADO, Plaintiff-Respondent, v. James B. ROWE and Janet I. Rowe, husband and wife, Defendants-Appellants, and Household Finance Corp., III, an Idaho corporation, Defendant. Cary Van Etten, as the Butte County Sheriff, Plaintiff-Respondent, v. James Rowe and Janet Rowe, husband and wife, and Pro Indiviso, Inc., an Idaho corporation, Defendants-Appellants, and Darrell E. McDonald and Nancy McDonald, Richard (Rick) Reynolds and Jacqueline Reynolds, husband and wife, First Bank of Eldorado, an Illinois corporation, Defendants-Respondents. Cary Van Etten, as the Butte County Sheriff, Plaintiff-Counterdefendant, v. James Rowe and Janet Rowe, husband and wife, and Pro Indiviso, Inc., an Idaho corporation, Defendants-Counterclaimants-Cross Claimants, and Darrell E. McDonald and Nancy McDonald, Richard (Rick) Reynolds and Jacqueline Reynolds, husband and wife, First State Bank of Eldorado, an Illinois corporation, Defendants-Cross Defendants. |
| Court | Idaho Supreme Court |
Baker & Harris, Blackfoot, for appellants. Jared M. Harris argued.
Rigby, Thatcher, Andrus, Rigby & Moeller, Chtd., Rexburg, for respondents Darrel E. McDonald and Nancy McDonald; Blaser, Sorensen & Hansen, Chtd., Blackfoot, for respondents Richard Reynolds and Jacqueline Reynolds; and May, Sudweeks & Browning, LLP, Twin Falls, for respondent First State Bank of Eldorado. Gregory W. Moeller argued.
This case involves interpretation and application of the doctrine of fructus industriales, fruits of industry, to determine the rights to crops growing on property that is redeemed following foreclosure. Issues concerning attorney fees are also presented.
On September 22, 1999, First State Bank of Eldorado (FSB) filed an action for the foreclosure of property against James and Janet Rowe (the Rowes) and Household Finance Corp. III, an Idaho corporation and junior lien holder. The property is a residence and surrounding farmland (the Subject Property) located in Butte County, Idaho. FSB sought a money judgment, attorney's fees of $5,000.00 in the event of default or an exact amount to be proved at trial, and an order of foreclosure. A default judgment was entered on June 6, 2001, and a judgment of foreclosure followed, awarding FSB $286,415.51 and ordering a foreclosure sale.
On September 10, 2001, the Sheriff of Butte County sold the Rowes' property1 to FSB for a credit bid of $219,000.00. On November 13, 2001, FSB filed a writ of restitution seeking to remove the Rowes from their residence and the Subject Property. The Rowes objected to the writ. During hearing on the objection the Rowes arranged to rent the residence on the Subject Property from FSB for $400.00 per month.
On May 1, 2002, FSB leased the Subject Property to Richard and Jacqueline Reynolds (the Reynolds) for a six-month term ending October 31, 2002, the duration of the 2002 crop season. The Reynolds sublet approximately 90 acres of the Subject Property to Darrell and Nancy McDonald (the McDonalds) for a term also ending October 31, 2002. The Reynolds' lease provided that the total cost of rent would be reduced by any amounts spent to repair the existing irrigation system and/or pay outstanding electricity arrearages. The McDonalds' sublease provided a similar method of consideration.
The Reynolds and McDonalds paid the outstanding utility charges owing on the Subject Property and made significant repairs to the existing irrigation system. They also removed an existing hay crop and prepared their respective leaseholds for alternative crops. The Reynolds planted barley and the McDonalds planted seed potatoes.
On September 10, 2002, prior to the harvest of either crop, Pro Indivisio, Inc. (Pro Indivisio), an assignee of the Rowes, redeemed Tracts B, C, D and E of the Subject Property from FSB for $240,880.00. Shortly thereafter the Rowes, acting on behalf of Pro Indivisio, placed "no trespassing" signs on the property, installed gates blocking entrances, and notified the sheriff of their intent to assert ownership of the Subject Property. Butte County Sheriff, Cary Van Etten, (Sheriff) filed a declaratory judgment action to determine the rights of the parties and to preserve the peace and avoid further litigation against his office. As a part of this action the Sheriff obtained a temporary restraining order (TRO) against the Rowes and Pro Indivisio to prevent them from occupying the property. The TRO was amended on September 23, 2002, to allow the Rowes to occupy the residence.
On September 25, 2002, the Rowes filed for a writ of assistance and a writ of restitution regarding the foreclosure action. The McDonalds moved to intervene and objected to the Rowes' motion. The district court consolidated the sheriff's action and the foreclosure action and granted the McDonald's motion to intervene. The Rowes also filed a counterclaim against the Sheriff's declaratory judgment action and cross-claimed for damages against FSB, the Reynolds and the McDonalds.
The district court issued a preliminary injunction against the Rowes and Pro Indivisio, preventing either from entering the Subject Property. The court also ordered that the crops be harvested and sold by the Reynolds and McDonalds with the proceeds to be deposited with the court. The district court ruled that Pro Indivisio had possession of the property, subject to the Reynold's and McDonald's right to harvest the crops. The Reynolds and the McDonalds harvested their respective crops and deposited the proceeds with the court.
The Rowes moved that the trial on possession and ownership of the crops be bifurcated from the trial on damages. The district court granted the motion. The Rowes and Pro Indivisio moved for summary judgment on the issue of ownership and possession of the crops only. The McDonalds filed a cross-motion for summary judgment. The Sheriff subsequently filed a motion for summary judgment on the declaratory judgment action and counterclaims brought by the Rowes and Pro Indivisio. The district court granted the McDonald's motion in part, quieting title to the crops and any proceeds of the crops in their favor, but finding Pro Indivisio was entitled to possession of the Subject Property. The court granted the Sheriff's summary judgment motion on the declaratory judgment action and dismissed all counterclaims against him.
After the trial on possession of the crops was vacated, the Rowes and Pro Indivisio filed cross-claims on the remaining damages issue for fair rental value of the ground, sprinkler equipment, damage to a fence, encumbrance on an unpaid power bill, and treble damages for willful trespass. The Rowes and Pro Indivisio also sought damages against FSB for overpayment on the redemption amount and rents received from the Reynolds and the McDonalds following the period in which the property was redeemed. Following trial, the district court determined that the Rowes lacked standing to claim damages to the Subject Property and that Pro Indivisio had failed to establish compensable damages.
The Rowes and Pro Indivisio filed a motion for reconsideration. The district court denied this motion, finding FSB was entitled to the $9,000.00 in attorney's fees on the original default foreclosure action and $5,352.21 based on a memorandum of costs and attorney's fees filed with the court on May 20, 2002. The district court also granted attorney's fees to the Reynolds in the amount of $4,312.50 and to the McDonalds in the amount of $8,616.50 under I.C. § 12-121. Both parties were awarded costs as a matter of right in the amount of $47.00. The Rowes and Pro Indivisio appealed these awards, the prior foreclosure judgment, and the partial summary judgment on the issue of ownership and possession of the harvested crops.
The Rowes and Pro Indivisio argue that the district court erred in finding they were not entitled to immediate possession of the Subject Property upon redemption, including the unsevered crops. Additionally, they appeal the district court's ruling on the amount of redemption owed and the award of attorney's fees to the Reynolds and McDonalds. The Reynolds and the McDonalds seek an award of attorney's fees and costs on appeal.
THE ROWES LACK STANDING
Idaho Appellate Rule 4 states:
Any party aggrieved by an appealable judgment, order or decree, as defined in these rules, of a district court, the Public Utilities Commission or the Industrial Commission may appeal such decision to the Supreme Court as provided in these rules.
I.A.R. 4 (2004). A "party aggrieved" has been defined "as any party injuriously affected by the judgment." Fed. Land Bank of Spokane v. Parsons, 116 Idaho 545, 548, 777 P.2d 1218, 1221 (Ct.App. 1989) (citing Roosma v. Moots, 62 Idaho 450, 112 P.2d 1000 (1941)).
The Rowes assigned their right of redemption to Pro Indivisio. An assignment is a transfer of rights or property. Purco Fleet Servs., Inc. v. Idaho State Dep't of Finance, 140 Idaho 121, 125, 90 P.3d 346, 350 (2004) (citing Black's Law Dictionary 115 (7th ed.1999)). Id. at 126, 90 P.3d at 351. (quoting 6 Am.Jur.2d Assignment § 132 (1999) (emphasis added)).
The Rowes' assignment of their right of redemption to Pro Indivisio included all rights to title, ownership and possession of the Subject Property once redeemed. They cannot claim ownership or possession of the crops without a right to ownership or possession of the land upon which the crops are harvested. Consequently, they were not aggrieved by the district court's partial summary judgment and do not have standing to...
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