Grazer v. Jones

Citation294 P.3d 184
Decision Date29 January 2013
Docket NumberNo. 38852.,38852.
CourtUnited States State Supreme Court of Idaho
PartiesAllen F. GRAZER, an individual, Plaintiff–Appellant, v. Gordon A. JONES, an individual; Gordon A. Jones, Personal Representative of the Estate of Linda G. Jones, deceased, J & J Livestock, LLC, a Utah limited Liability company, Defendants–Respondents.

294 P.3d 184

Allen F. GRAZER, an individual, Plaintiff–Appellant,
Gordon A. JONES, an individual; Gordon A. Jones, Personal Representative of the Estate of Linda G. Jones, deceased, J & J Livestock, LLC, a Utah limited Liability company, Defendants–Respondents.

No. 38852.

Supreme Court of Idaho,
Pocatello, November 2012 Term.

Jan. 29, 2013.

[294 P.3d 187]

Hobbs & Olson, P.C., Salt Lake City, Utah, for Appellant.
Lincoln W. Hobbs argued.

Racine, Olson, Nye, Budge & Bailey, Chartered, Pocatello, for Respondents. Lane V. Erickson argued.

W. JONES, Justice.
I. Nature of the Case

A builder sued a homebuyer in a Utah state district court for failing to pay some charges for his home's construction; the homebuyer counterclaimed, alleging that the construction was defective. Shortly before the Utah state court rendered a judgment, the homebuyer sued the builder in an Idaho state district court, seeking to void the builder's allegedly fraudulent transfer of a ranch and appurtenant water shares in Franklin County, Idaho. The homebuyer also filed and recorded the Utah judgment in Franklin County, creating a lien on all of the builder's currently owned and after-acquired real

[294 P.3d 188]

property located there. The builder reversed the transfer, and therefore the ranch became subject to the lien. However, the homebuyer continued to prosecute the fraudulent-transfer action, and did not request a writ of execution.

A few months later, the builder declared bankruptcy. In a settlement agreement, the bankruptcy trustee agreed to lift the automatic stay on the homebuyer's fraudulent-transfer action, and also abandoned the ranch from the bankruptcy estate. The homebuyer's judgment lien was not discharged in the builder's bankruptcy, but apparently all in personam causes of action were discharged.

During the litigation in Idaho, the homebuyer filed a First Amended Complaint, which named the judgment debtor's son as a party for the first time. The homebuyer never sought to serve the son within the six-month period established by I.R.C.P. 4(a)(2). In response to the son's motion to dismiss the claims against him, the homeowner argued that filing a Second Amended Complaint triggered a new six-month period in which the son could be timely served. The district court disagreed, and dismissed the claims against the son.

The fraudulent-transfer action was repeatedly delayed, and after five years from the entry of the Utah judgment, the homebuyer's lien expired. The homeowner had never attempted to renew the judgment, and had never requested a writ of execution from the Idaho district court. The builder then moved for summary judgment, alleging that the homebuyer would be unable to obtain any relief because (1) the judgment lien had expired, and (2) any claims against the builder in personam were discharged in bankruptcy. The homebuyer filed a cross-motion for summary judgment, arguing that he was entitled to a writ of execution. The Idaho district court granted the builder's motion for summary judgment, denied the homebuyer's motion for summary judgment, and issued a final order from which the homebuyer timely appealed to this Court.

II. Factual and Procedural Background

The facts of this case are drawn primarily from the uncontested allegations of the plaintiff's Second Amended Complaint. Although the record contains inconsistent dates for many of the relevant events, none of these discrepancies affect the outcome.

In 1993, Gordon Jones began to build a house for Allen Grazer. Grazer refused to pay all of the money that Gordon 1 requested, so in 2002 Gordon sued Grazer in a Utah state district court. Grazer counterclaimed, alleging that Gordon's construction work was defective. In December of 2004, the Utah state district court judge scheduled a trial in the case for the following April.

Shortly thereafter, Gordon and his wife, Linda Jones,2 transferred a Franklin County, Idaho ranch (the “Ranch”) that they owned to J & J Livestock, LLC (“J & J”) by quitclaim deed. It appears that Gordon and Linda incorporated J & J merely to receive their property. In March of 2005, Gordon transferred the water shares appurtenant to the Ranch to Linda and their son, Jason Jones. Following a bench trial in April of 2005, the Utah district court judge stated that he intended to award a judgment in Grazer's favor.

Before the entry of judgment in the Utah state court, Grazer discovered that Gordon had conveyed property in Utah and Idaho. Grazer filed this action in May of 2005, and filed a Lis Pendens on the Ranch two days later. The original Complaint sought a declaratory judgment that the transfer of the Ranch to J & J was void ab initio, and in the alternative that the transfer was fraudulent. On July 7, 2005, the Utah judge then entered a nearly two-million-dollar judgment for Grazer. A few weeks later, at the request of Grazer's attorneys, Gordon and Linda caused J & J to re-convey the Ranch back to themselves in their personal capacities. That August, Jason filed a Notice of Interest, claiming

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a “portion” of the Ranch pursuant to an oral agreement under which he supposedly performed work on the property.

On September 23, 2005, pursuant to Idaho's Enforcement of Foreign Judgments Act (“EFJA”),3 Grazer filed and recorded the Utah judgment in Franklin County, Idaho. This created a lien on all of Gordon's real property located in the County. I.C. §§ 10–1110, 10–1302, 10–1306A.

In April of 2006, Gordon filed for Chapter 7 bankruptcy in Utah. Grazer filed a proof of claim based on the unpaid Utah state court judgment; of all of the claims against Gordon's bankruptcy estate, Grazer's claim was by far the largest. However, the Bankruptcy Trustee believed that Grazer was an unsecured creditor because he did not obtain a final judgment from the Utah state court, and therefore his liens were invalid.4 The Bankruptcy Trustee also calculated that the gross proceeds of the liquidation likely would be significantly less than $1,430,000. In order to avoid costly and protracted litigation regarding Grazer's status as a secured or unsecured creditor, in January of 2007 the Bankruptcy Trustee entered into a settlement agreement with Grazer, which the Utah bankruptcy court subsequently approved in an April 2007 order. Pursuant to this agreement, the Bankruptcy Trustee set aside a reserve fund to pay the administration costs of the estate and the claims of all of the other creditors; the rest of the property was abandoned from the bankruptcy estate. The automatic stay on Grazer's state-court litigation also was lifted. In January of 2009, the Utah bankruptcy court discharged Gordon's unsecured debt, but allowed for the enforcement of liens not avoided in the bankruptcy.

On July 31, 2009, Grazer filed a First Amended Complaint in the ongoing Idaho action, naming Jason as a party for the first time. On December 7, 2009, Grazer filed a Second Amended Complaint which again named Jason as a party. On February 9, 2010, a process server served Jason with a summons and the Second Amended Complaint. Jason specially appeared and moved to dismiss the claims against him due to lack of timely service; the district court granted his motion.

In February of 2011, Grazer filed a motion for summary judgment, arguing that he was entitled to a writ of execution. Gordon 5 simultaneously filed a cross-motion for summary judgment, alleging that Grazer could no longer obtain any relief in the Idaho district court. Gordon argued that Grazer's judgment lien had expired, and that Grazer could not pursue an action based on the underlying judgment as a result of Gordon's discharge in bankruptcy. Gordon further argued that Grazer had failed to timely execute on the Utah judgment. The district court agreed with Gordon, and granted summary judgment in his favor. The court held that Grazer's judgment lien expired on September 23, 2010—five years after Grazer recorded the judgment in Franklin County. The court also held that the five-year time period was not tolled by the bankruptcy proceedings, a holding that Grazer does not challenge in this appeal. The district court then entered a final judgment from which Grazer timely appealed.

III. Issues on Appeal

A. Did the district court properly grant summary judgment for Gordon?

B. Did the district court properly dismiss the claims against Jason due to untimely service of process?

C. Is Gordon entitled to attorney's fees in this appeal?

IV. Standard of Review

This is an appeal from a grant of summary judgment and a grant of a motion to dismiss, both of which implicate questions of statutory interpretation. “The interpretation of a statute is a question of law over

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which this Court exercises free review.” New Phase Invs., LLC v. Jarvis, 153 Idaho 207, 209, 280 P.3d 710, 712 (2012) (quoting Gonzalez v. Thacker, 148 Idaho 879, 881, 231 P.3d 524, 526 (2009)).

When reviewing a grant of summary judgment, this Court applies the same standard of review used by the district court in ruling on the motion. A grant of summary judgment is warranted where “the pleadings, depositions, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law.” I.R.C.P. 56(c). The moving party bears the burden of proving the absence of an issue as to any material fact. The facts must be liberally construed in favor of the non-moving party.

Sec. Fin. Fund, LLC v. Thomason, 153 Idaho 343, 346, 282 P.3d 604, 607 (2012) (case citations and quotation marks omitted). Furthermore, “Where the lower court reaches the correct result by an erroneous theory, this Court will affirm the order on the correct theory.” Markel Int'l Ins. Co. v. Erekson, 153 Idaho 107, 113, 279 P.3d 93, 99 (2012) (quoting Nampa & Meridian Irrigation Dist. v. Mussell, 139 Idaho 28, 33, 72 P.3d 868, 873 (2003)).

In an appeal from a grant of a motion to dismiss...

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