Indian Springs v. Indian Springs Land Inv., 34623.

• Decision Date: 21 July 2009
• Docket Number: No. 34623.,34623.
• Citation: 147 Idaho 737,215 P.3d 457
• Court: Idaho Supreme Court
• Parties: INDIAN SPRINGS LLC, Assignee of D.M. & Shirley Thornhill, husband and wife, and an Assignee of Indian Springs Natatorium, Inc., an Idaho corporation, Plaintiffs-Respondents, v. INDIAN SPRINGS LAND INVESTMENT, LLC; Ron Bitton; Professional Escrow Services; The Everett & Ardis Mc Kinney Revocable Trust u/i/d September 25, 1998; AICO Recreational Properties, LLC; Recreational Properties A & B, a partnership; John K. Baker & Julie Baker, husband and wife, Everett W. McKinney & Ardis E. McKinney, husband and wife, Todd W. Andersen and Penny L. Andersen, husband and wife, Terry W. Andersen and Rosanna Andersen Trustees of the Terry W. Andersen and Rosanna Andersen Living Revocable Trust dated February 1, 2001; Glen C. Mahoney and Jane Doe Mahoney, husband and wife, John Does and Jane Does 1-10, Defendants, and Terry W. Andersen and Rosanna Andersen, husband and wife, Defendants-Appellants.

215 P.3d 457

147 Idaho 737

INDIAN SPRINGS LLC, Assignee of D.M. & Shirley Thornhill, husband and wife, and an Assignee of Indian Springs Natatorium, Inc., an Idaho corporation, Plaintiffs-Respondents, v. INDIAN SPRINGS LAND INVESTMENT, LLC; Ron Bitton; Professional Escrow Services; The Everett & Ardis Mc Kinney Revocable Trust u/i/d September 25, 1998; AICO Recreational Properties, LLC; Recreational Properties A & B, a partnership; John K. Baker & Julie Baker, husband and wife, Everett W. McKinney & Ardis E. McKinney, husband and wife, Todd W. Andersen and Penny L. Andersen, husband and wife, Terry W. Andersen and Rosanna Andersen Trustees of the Terry W. Andersen and Rosanna Andersen Living Revocable Trust dated February 1, 2001; Glen C. Mahoney and Jane Doe Mahoney, husband and wife, John Does and Jane Does 1-10, Defendants, and Terry W. Andersen and Rosanna Andersen, husband and wife, Defendants-Appellants.

No. 34623.

Supreme Court of Idaho, Boise, May 2009 Term.

July 21, 2009.

Rehearing Denied September 3, 2009.

Terry and Rosanna Andersen, Pocatello, pro se appellants argued.

Racine, Olson, Nye & Budge, & Bailey, Pocatello, for respondents. Scott J. Smith argued.

BURDICK, Justice.

This appeal arises from an action filed by Respondent Indian Springs, LLC against various defendants to foreclose a real estate mortgage on the property known as Indian Springs Natatorium, and to collect on the promissory note secured by the mortgage. Appellants Terry and Rosanna Andersen, acting pro se on behalf of themselves, individually; Recreational Properties A & B, LLC; Recreational Properties A & B, a partnership; the Terry W. Andersen and Rosanna Andersen Living Revocable Trust; and the Andersen Living Trust, appeal from the district court's award of summary judgment in favor of Indian Springs. The Andersens also appeal from the district court's denial of their post-summary judgment motions. We affirm.

I. FACTUAL AND PROCEDURAL BACKGROUND

On July 2, 1996, D.M. and Shirley Thornhill (the Thornhills) entered into an agreement to sell the real property known as Indian Springs Natatorium to Terry and Rosanna Andersen (the Andersens) and John and Julie Baker (the Bakers), d/b/a Recreational Properties A & B, a partnership, (hereafter A & B Partnership) for a sum of $750,000. The buyers made a down payment of $100,000 on the property, and Terry Andersen and John Baker, d/b/a A & B Partnership, signed a promissory note as security for repayment of the remaining $650,000. This note was later guaranteed by Terry Andersen as Trustee of the Andersen Living Revocable Trust. Although the note was not interest-bearing, it provided that in the event of default the entire unpaid balance would accrue interest at 12% per annum. The note also provided for a late charge of 5% of the amount of each delinquent payment. That same day, the buyers signed a real estate mortgage on the property to secure the note which was later recorded in Power County. The mortgagors were listed as "Terry W. Andersen, Trustee of Andersen Living Trust, and John K. Baker and Julie A. Baker, husband and wife." At closing, the property was deeded to Terry W. Andersen, as trustee of the Andersen Living Trust, and the Bakers. Indian Springs claims the buyers requested that the property be deeded this way. However, the Andersens argue that A & B was erroneously omitted from the deeds.¹ The Andersens claim they were never sent a copy of the deeds and, therefore, were not aware of the omission until later.

On January 23, 1998, the Bakers transferred their interest in the property by warranty deed to AICO Recreational Properties, LLC (AICO).² Terry Andersen is the manager of AICO. On February 24, 1998, Terry Andersen, acting as trustee,³ also transferred his interest in the property by quitclaim deed to AICO. Both transfers were recorded in Power County. Despite transferring their interests in the property, the Andersens and the Bakers were still obligated to pay the remaining balance on the property under the terms of the promissory note and real estate mortgage.

Upon learning of these transactions, the Thornhills sent Terry Andersen a notice of default for his attempted transfer of ownership interest in the property to AICO. Pursuant to the terms of the sales agreement, the buyers were required to obtain written permission from the Thornhills prior to selling any portion of the premises.⁴ The Thornhills later discovered that AICO had already mortgaged the property to a third party. The pertinent facts are as follows. On or about September 30, 1997, Todd Andersen, d/b/a AICO, and the Andersen Living Revocable Trust borrowed $149,720.69 from Everett and Ardis McKinney (the McKinneys), and gave the McKinneys a real estate mortgage on the property to secure the debt. This mortgage was recorded in Power County on January 26, 1998. Shortly thereafter, the same parties borrowed an additional $40,000 from the McKinneys and recorded a second mortgage on the property in Power County on April 1, 1998. In 2000, the McKinneys began making payments toward the Andersens' note and mortgage with the Thornhills. However, Todd Andersen, d/b/a AICO, and the Andersen Living Revocable Trust later defaulted on their payments to the McKinneys, and on March 6, 2001, a Decree of Foreclosure and Order of Sale was entered against them. Shortly thereafter on March 29, 2001, AICO filed for Chapter 11 bankruptcy, which was converted to a Chapter 7 bankruptcy. The Bankruptcy Court later ordered that AICO abandon its interest in the real property.

The McKinneys made regularly scheduled payments toward the Andersens' note and mortgage until March 2003, but thereafter, payments were sporadic. On February 24, 2005, the Thornhills demanded that all sums due under the note and mortgage were payable in full. However, payment was never received.⁵ The Thornhills subsequently assigned their interests in the note and the mortgage to Respondent Indian Springs, LLC (Indian Springs) on September 27, 2005. The assignment was recorded in Power County. On October 21, 2005, Indian Springs filed a complaint against various defendants to collect on the promissory note and to foreclose on the mortgage. Only the Andersens, individually; A & B Partnership; the Terry W. Andersen and Rosanna Andersen Living Revocable Trust; and the Andersen Living Trust responded to the complaint through counsel. On February 10, 2006, the district court entered default judgment against all defendants who had not answered.

On October 20, 2006, Indian Springs moved for summary judgment. The Andersens' counsel filed a motion in opposition on behalf of A & B Partnership and the Andersen Living Revocable Trust. On June 28, 2007, the district court granted Indian Springs's motion for summary judgment. In its order, the district court quieted title to the property in Indian Springs and awarded damages against A & B Partnership; Terry Andersen as trustee of the Andersen Living Revocable Trust; and the Andersens and the Bakers, in their individual capacities, for $270,637.50 plus interest, along with tax payments of $20,582.46.

On July 26, 2007, the Andersens, acting pro se, filed a Motion for Reconsideration, Joining of Indispensible Parties, and New Trial. The Andersens requested that the district court reconsider its award of summary judgment; join at least nine other indispensible parties, including Recreational Properties A & B, LLC (A & B LLC); and permit the Andersens to amend the pleadings to add a counterclaim for damages against D.M. Thornhill and Indian Springs in the amount of $870,000. After the Andersens filed this motion, their attorney requested leave to withdraw. The district court granted his request on August 9, 2007. Then on September 19, 2007, the district court denied the Andersens' motion for reconsideration.

On September 20, 2007, the Andersens filed a Motion to Dismiss Non-Defaulting Parties. A hearing on the motion was held on November 9, 2007, at which time the district court denied their motion. Then on November 19, 2007, the Andersens filed a Motion for Title Clarification, Rescission of Deeds, and Dismissal of Case. The district court also denied this motion at hearing. The Andersens now appeal from the district court's award of summary judgment in favor of Indian Springs and the court's denial of their post-summary judgment motions.

II. ANALYSIS

On appeal, the Andersens argue the district court erred in granting summary judgment because genuine issues of material fact remain as to title and damages. The Andersens also argue the district court erred by denying their post-summary judgment motions, including their Motion for Reconsideration, Joining of Indispensible Parties, and New Trial; Motion to Dismiss Non-Defaulting Parties; and Motion for Title Clarification, Rescission of Deeds, and Dismissal of Case.

Indian Springs, however, argues this appeal should be dismissed as to all claims made on behalf of the limited liability company, the partnership, and the two trusts because the Andersens are prohibited from representing the business entities and the trusts in a pro se capacity. In addition, Indian Springs contends that we should dismiss all claims the Andersens make as to their individual ownership interest in the property because they did not preserve the issue for appeal. Indian Springs also argues the Andersens, in their individual capacities, do not have standing on appeal to contest the district court's denial of their motion for reconsideration because they failed to object to Indian Springs's motion for summary judgment before summary judgment was entered. Finally, Indian Springs argues the district court properly granted summary judgment and properly denied the Andersens' post-summary judgment motions. We will begin by addressing Indian Springs's arguments as to why certain claims should be dismissed, and then we will address the Andersens' remaining claims on appeal.

A. The Andersens...