Houpt v. Wells Fargo Bank, Nat'l Ass'n

Decision Date09 March 2016
Docket NumberNo. 41990.,41990.
Citation160 Idaho 181,370 P.3d 384
CourtIdaho Supreme Court
Parties Charles W. HOUPT, and Gail N. Houpt, husband and wife, Plaintiffs–Appellants, v. WELLS FARGO BANK, NATIONAL ASSOCIATION, a California corporation, Defendant–Respondent, and First American Title Company, an Idaho corporation, Defendant, and S.R.C. Corporation, d/b/a Steve Regan Co.; Beard St. Clair Gaffney, PA; United State of America, Intervenors.

Peterson Moss Hall & Olsen, Idaho Falls, for appellants. Nathan M. Olsen argued.

Perry Law, P.C., Boise, for respondent. Trevor L. Hart argued.

SUBSTITUTE OPINION.

THE COURT'S PRIOR OPINION DATED DECEMBER 29, 2015, IS HEREBY WITHDRAWN.

BURDICK, Justice.

Charles and Gail Houpt (Houpts) appeal the Bonneville County district court's grant of summary judgment in favor of Wells Fargo Bank National Association (Wells Fargo Bank) and First American Title Company (FATCO). In district court Houpts argued that Wells Fargo Bank was not legally entitled to foreclose on property owned by Houpts and that damages were appropriate due to Wells Fargo Bank and FATCO's (collectively Wells Fargo) wrongful foreclosure action. The district court found that because no foreclosure sale had occurred, Wells Fargo was entitled to summary judgment as a matter of law. After denying Houpts' request for reconsideration, the district court entered judgment in favor of Wells Fargo and awarded attorney fees and costs. Houpts appeal. We affirm in part, vacate in part, and remand.

I. FACTUAL AND PROCEDURAL BACKGROUND

This appeal arises from a dispute regarding property owned by Houpts located at 1954 N. Yellowstone Highway, Idaho Falls, Idaho (Property). In March 1993, Houpts executed a promissory note to the American Bank of Commerce (Note). As security on the Note, Houpts granted a deed of trust in the Property to American Bank of Commerce, as beneficiary, and FATCO, as Trustee (Deed of Trust).1 Thereafter, over a period of time spanning from 1994 to 2004, American Bank of Commerce went through a series of mergers and transactions that resulted in Wells Fargo Bank obtaining the obligation owing under the Note and secured by the Deed of Trust.2 However, a written assignment of the Note and Deed of Trust designating Wells Fargo Bank as the beneficiary of such was not filed during this time.

Starting in November 2007, Houpts failed to make numerous payments on the Note and ceased all payments beginning November 10, 2009. Consequently, Wells Fargo Bank directed FATCO to foreclose on the Property and on October 18, 2010, FATCO filed a Notice of Trustee's Sale listing American Bank of Commerce as the current beneficiary and setting the date of the sale for February 17, 2011. The day before the scheduled trustee's sale, Houpts filed for Chapter 7 bankruptcy in the United States Bankruptcy Court for the District of Idaho. A year later Wells Fargo Bank was granted stay relief by the bankruptcy court and resumed foreclosure on the Property. Thereafter, on March 15, 2012, FATCO filed a new Notice of Trustee's Sale, stating, "Beneficial Interest is now held by Wells Fargo Bank, National Association, by merger agreement dated February 5, 2004." The date of the new sale was set for July 17, 2012.

On June 22, 2012, Houpts filed a Complaint and Motion for Preliminary Injunction stating that: (1) Wells Fargo Bank was not the beneficiary or other real party in interest of the Deed of Trust, and as such, Wells Fargo improperly initiated a nonjudicial foreclosure under I.C. § 45–1505 ; (2) the district court should grant a preliminary injunction to stop the foreclosure sale; and (3) Wells Fargo's actions constituted wrongful foreclosure. Wells Fargo answered by denying all claims made by Houpts and arguing that Wells Fargo Bank was the beneficiary of the Deed of Trust through merger and consolidation and, therefore, was exempted under 12 U.S.C. § 215(a) from being required to record a written assignment of the Deed of Trust prior to exercising its power of sale. Notwithstanding this argument, Wells Fargo Bank obtained a written assignment of the Note and Deed of Trust from Wells Fargo Northwest on August 24, 2012, and recorded the assignment with Bonneville County on September 4, 2012. Subsequently, on September 17, 2012, the district court, noting that Wells Fargo had recorded its assignment of the Deed of Trust, denied Houpts' motion for preliminary injunction but left open the possibility that Wells Fargo had committed a wrongful foreclosure.

Wells Fargo thereafter resumed foreclosure proceedings on the Property, but systematically postponed the sale in thirty day increments for various reasons. Then, on April 18, 2013, the bankruptcy court entered an order abandoning the Property as part of the bankruptcy estate, and two months later Houpts found a buyer for the Property outside of the foreclosure proceedings. The parties then filed a stipulation to accommodate the sale providing that Houpts could sell the property, distribute $19,156.65 of the proceeds to Wells Fargo Bank to reimburse for property tax payments, and deposit the remaining $139,500.45 with the Clerk of the Court to be distributed "according to the resolution of the priorities of valid liens or other considerations" (Stipulated Sale).3

The Stipulated Sale was completed, and on September 23, 2013, Wells Fargo moved for summary judgment arguing that Houpts' claims were mooted by completion of the Stipulated Sale. Two days later Houpts' bankruptcy case closed, and on November 12, 2013, Houpts filed a cross-motion for partial summary judgment requesting the district court to find that Wells Fargo Bank was not a named or successor beneficiary under the Deed of Trust and that Wells Fargo was liable for wrongful foreclosure. In reply, Wells Fargo argued that in addition to mootness, Houpts lacked standing to bring suit, and that under the doctrine of judicial estoppel, Houpts' claims should fail because Houpts failed to list their claims as assets on their bankruptcy schedules.

On January 7, 2014, the district court granted Wells Fargo's motion for summary judgment. The court ruled that Houpts' claims were moot because: (1) Wells Fargo Bank had recorded a written assignment of the beneficiary's interest in the deed of trust; and (2) Houpts voluntarily sold the Property outside the foreclosure proceedings. The parties then both filed cross-motions for reconsideration. Houpts argued that the district court erred in granting Wells Fargo summary judgment and that Wells Fargo had violated Idaho Code section 6–101. Wells Fargo argued that section 6–101 did not apply to nonjudicial foreclosures and asked for a ruling on the issues of judicial estoppel and standing.

The district court ruled in favor of Wells Fargo. In making its ruling the district court: (1) reiterated that Houpts' claims were moot because of the Stipulated Sale; (2) ruled that section 6–101 did not prevent Wells Fargo from recovering; and (3) found that judicial estoppel prevented Houpts from pursing their claims. The court then ordered the proceeds of the sale of the Property to be paid to Wells Fargo and, after making certain deductions, awarded costs and attorney fees to Wells Fargo. Houpts timely filed a notice of appeal.

II. STANDARD OF REVIEW

We review a district court's grant of summary judgment de novo, and apply the same standard used by the district court in ruling on the motion. Grazer v. Jones, 154 Idaho 58, 64, 294 P.3d 184, 190 (2013). Summary judgment is appropriate when "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). All reasonable inferences that can be drawn from the record are to be drawn in favor of the nonmoving party, and disputed facts are liberally construed in the nonmoving party's favor. Mackay v. Four Rivers Packing Co., 145 Idaho 408, 410, 179 P.3d 1064, 1066 (2008). If reasonable people could reach different conclusions or inferences from the evidence, summary judgment is inappropriate. Jenkins v. Boise Cascade Corp., 141 Idaho 233, 238, 108 P.3d 380, 385 (2005).

An award of attorney fees is a factual determination which is reviewed for abuse of discretion. Smith v. Mitton, 140 Idaho 893, 901, 104 P.3d 367, 375 (2004).

III. ANALYSIS

On appeal, Houpts argue that the district court committed error in granting summary judgment because: (1) the district court lacked jurisdiction to award Wells Fargo the proceeds from the Stipulated Sale; (2) Wells Fargo Bank was not the recorded beneficiary of the Deed of Trust when the foreclosure was first initiated, and therefore committed wrongful foreclosure; and (3) Houpts' separate claims against FATCO were never addressed. Houpts further allege that Wells Fargo should not have been awarded attorney fees and costs. Wells Fargo argues that Houpts lack standing to bring their claims and that the district court did not err in granting summary judgment or attorney fees and costs. We address each claim in turn.

A. Jurisdiction and Standing Arguments
1. Houpts have Standing

Wells Fargo argues that even though the district court did not consider the issue, this Court may affirm the district court's rulings on the ground that Houpts lack standing as the real party of interest. Houpts contend that since this argument is raised for the first time on appeal it should not be considered. We note that although Wells Fargo raised the issue of standing during the trial court proceedings it was never ruled on by the district court. "To raise an issue on appeal, the record must contain an adverse ruling to form the basis for assignment of error...." State v. Hoyle, 140 Idaho 679, 687 99 P.3d 1069, 1077 (2004) (citation omitted) (quotation marks omitted). However, issues of standing are jurisdictional, and "they can be raised at any time,...

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