Peasley Transfer & Storage Co. v. Smith

• Decision Date: 12 March 1999
• Docket Number: No. 24442,24442
• Citation: 132 Idaho 732,979 P.2d 605
• Court: Idaho Supreme Court
• Parties: PEASLEY TRANSFER & STORAGE CO., an Idaho corporation, Plaintiff-Counterdefendant-Respondent, v. Victoria H. SMITH, Defendant-Counterclaimant--Cross Claimant-Appellant, and Sharon K. Smith; Ada County, a political subdivision of the State of Idaho; THE Ada County Sheriff's Department and its sheriff, Vaughn Killeen, Defendants-Cross Defendants-Respondents, and Vernon K. Smith, Defendant-Counterclaimant. Boise, September 1998 Term

Page 605

979 P.2d 605

PEASLEY TRANSFER & STORAGE CO., an Idaho corporation, Plaintiff-Counterdefendant-Respondent, v. Victoria H. SMITH, Defendant-Counterclaimant--Cross Claimant-Appellant and Sharon K. Smith; Ada County, a political subdivision of the State of Idaho; THE Ada County Sheriff's Department and its sheriff, Vaughn Killeen, Defendants-Cross Defendants-Respondents and Vernon K. Smith, Defendant-Counterclaimant.

No. 24442.

Supreme Court of Idaho,

Boise, September 1998 Term.

March 12, 1999.

Rehearing Denied July 9, 1999.

Vernon K. Smith, Jr., Boise, for appellant. Greg H. Bower, Ada County Prosecuting Attorney, Alexander C. Yewer, Deputy Prosecuting Attorney, Boise, for respondent Ada County. Alexander C. Yewer argued.

SILAK, Justice. Justice SCHROEDER and Justices Pro Tem JOHNSON, WOOD and MEEHL, CONCUR.

ON REVIEW

SILAK, Justice

This is a review of a Court of Appeals decision concerning a warehouseman's lien, and related issues of a sheriff's liability when executing a writ of execution on personal property and a claim of conversion.

I. FACTS AND PROCEDURAL BACKGROUND

In their divorce action in February 1991, Vernon K. Smith (Vernon) and Sharon K. Smith (Sharon) were each awarded certain separate property it

In their divorce action in February 1991, Vernon K. Smith (Vernon) and Sharon K. Smith (Sharon) were each awarded certain separate property items and a share of the community property. Sharon was awarded a monetary judgment secured by a "judicially declared lien" ¹ in all of the community property awarded to Vernon.

On April 23, 1991, in an effort to collect on her judgment, Sharon obtained a writ of execution directed to the Ada County Sheriff's Department. Pursuant to the writ, the sheriff was instructed to seize property in accordance with a detailed list of the specific community property awarded to Vernon in the divorce proceeding. The sheriff took possession of the property on May 1, 1991, engaging Peasley Transfer & Storage Co. (Peasley) to pick up the items and to store the property pending an execution sale. On May 15, 1991, prior to the date of sale, Vernon's mother, Victoria H. Smith (Victoria), asserted an interest in some of the property levied upon. She filed a third party claim of exemption, authorized under section 11-203 of the Idaho Code, with the magistrate division of the district court in the divorce action and with the Ada County Sheriff's Office. Prior to the filing of Victoria's third party claim, there was no indication that the property was not Vernon's. Victoria's interest in the personal property was grounded upon an unrecorded, unnotarized bill of sale dated April 10, 1991, from Vernon to Victoria. The bill was signed pursuant to a power of attorney granted by Vernon to counsel who was representing Vernon at the time.

On June 20, 1991, Sharon's counsel notified the sheriff to release to Vernon all the property levied upon pursuant to the filing of a bankruptcy proceeding by Vernon. The sheriff, on the same day, prepared a letter authorizing Peasley to release to Vernon, or his agent, the property subject to the execution, which was being stored at Peasley's warehouse. The sheriff paid all storage costs incurred from May 1, 1991 to June 21, 1991. Peasley attempted unsuccessfully to have Vernon pick up the property and pay for storage costs that continued to accrue after June 21, 1991. On September 3, 1991, the sheriff sent the June 20, 1991 release letter to counsel representing Vernon in the bankruptcy proceeding. The sheriff stated in the letter that Vernon had refused to come by the sheriff's office to sign for and pick up the June 20, 1991 release letter despite several phone conversations between the sheriff's office and Vernon.

On September 20, 1991, at the request of his attorney representing him in the bankruptcy proceeding, Vernon responded to the sheriff's September 3, 1991 letter. In the letter, Vernon asserted that the sheriff, upon receiving the third party claim, had a duty to return the property or incur liability for the cost of continued storage unless an appropriate bond was posted by Sharon. Vernon also stated that the release letter was invalid because it authorized release to Vernon and not Victoria. On September 24, 1991, Vernon wrote a letter to Peasley informing Peasley that he would not be responsible for any storage costs accruing after June 21, 1991.

Peasley initiated this action against Vernon in October 1992 seeking recovery of storage costs. Peasley amended its complaint in April 1993 seeking recovery of its storage costs from Victoria, as well as from Ada County, the Ada County Sheriff's Department and Sheriff Vaughn Killeen (County Defendants). Additionally, Peasley requested authority to foreclose its warehouseman's lien to satisfy the outstanding indebtedness. On July 9, 1993, Victoria filed a third party claim of exemption under I.C. § 11-203, claiming exemption of property again being seized by the sheriff under a writ of execution issued against Vernon around June 9, 1993 and served on Vernon on June 28, 1993. In a memorandum decision filed September 14, 1993, the magistrate judge granted summary judgment in favor of Peasley, holding that Peasley held a valid warehouseman's lien. The magistrate further held any deficiency after the sale could be recovered from either Victoria or Sharon, and that Peasley could not look to the County Defendants for a deficiency since the sheriff had acted pursuant to a letter of instruction and a valid writ of execution and since Ada County had acted in compliance with the statutes applicable to the lawful writ of execution and section 31-2211 of the Idaho Code. Consequently, the magistrate dismissed the County Defendants from the action and awarded attorney fees to Peasley.

The only remaining cause of action, Victoria's cross-claim against Sharon, was tried to the magistrate on September 20, 1993. On October 4, 1993, the magistrate found that Vernon had made a bona fide sale of the property to Victoria, but that Sharon had not acted improperly in causing an execution on the property because she had neither actual nor constructive notice of Vernon's transfer to Victoria. The magistrate further held that since Sharon acted in good faith she should be absolved from liability for storage costs and for any deficiency remaining following foreclosure of Peasley's warehouseman's lien. The magistrate found that Victoria had notice of the release of the property and therefore had a duty to retrieve the property. Finally, the magistrate deemed Victoria's cross-claim to be frivolous and without foundation, and awarded attorney fees and costs to Sharon. On October 19, 1993, the magistrate issued a judgment and decree of foreclosure in favor of Peasley against Victoria for storage costs, and foreclosing Peasley's warehouseman's lien.

Victoria appealed from the summary judgment against her and in favor of Peasley, the judgment and attorney fee award entered in favor of Sharon on the cross-claim, and an order dated April 20, 1994, granting Sharon an award for advancement of attorney fees and costs on appeal to the district court. By memorandum decision dated August 17, 1994, the district court affirmed the magistrate's rulings. Victoria filed a timely appeal. In an unpublished substitute opinion of the Court of Appeals dated October 3, 1997,

                the magistrate's decision was reversed in part, vacated in part, and remanded.   See Peasley v. Smith, No. 22027, --- Idaho ----, --- P.2d ----, 1997 WL 612709 (Idaho Ct.App. Oct. 3, 1997) (Substitute Opinion).  The Court of Appeals held:  (1) that the magistrate erred in dismissing the County Defendants from the action pursuant to Peasley's summary judgment because there were disputed questions of material fact relating to the timeliness of their actions in releasing the property;  (2) that the magistrate erred in granting summary judgment in favor of Peasley because the sheriff was not a legal possessor of the property at the time of delivery to Peasley and thus did not possess a valid warehouseman's lien;  (3) that Sharon's good faith in submitting the writ of execution would not absolve her from liability for conversion of Victoria's property;  and (4) that attorney fees should not have been awarded to Peasley or Sharon at trial or on appeal to the district court by order or in the form of an advancement.  The County Defendants filed a timely petition for review to this Court which was granted.  Neither Sharon nor Peasley submitted a brief in support of their positions, and neither Sharon nor Peasley argued their positions at the review hearing
                

II. ISSUES ON APPEAL

The County Defendants raise the following issues in their petition for review:

A. Whether the magistrate erred in holding that Peasley had a valid warehouseman's lien against the property seized by the Ada County Sheriff under a writ of execution which was regular on its face even though the property seized was not the judgment debtor's.

B. Whether the magistrate in the original divorce action had legal authority to impose a judicial lien on the community property awarded to Vernon to secure the judgment awarded to Sharon.

C. Whether issues decided by the Court of Appeals are res judicata for the County Defendants on remand.

The following issues are also raised on appeal:

D. Whether the magistrate erred in dismissing the County Defendants from the action pursuant to Peasley's motion for summary judgment.

E. Whether the magistrate erred in finding for Sharon on Victoria's cross-claim.

F. Whether the awards of attorney fees were proper.

III. STANDARD OF REVIEW

In cases that come before this Court on a petition for review of a Court of Appeals decision, this Court gives serious consideration to the views of the Court of Appeals but directly reviews the decisions of the trial court. See Marshall v. Blair, 130 Idaho 675, 679, 946 P.2d 975, 979 (1997) (citing Schiewe v. Farwell, 125 Idaho 46,...