Thorn Creek Cattle Ass'n, Inc. v. Bonz

• Decision Date: 31 March 1992
• Docket Number: No. 18456,18456
• Court: Idaho Supreme Court
• Parties: THORN CREEK CATTLE ASSOCIATION, INC., acting by and through its last elected officers and Board of Directors as trustees for its former shareholders and creditors, Plaintiff-Respondent, v. Ronald T. BONZ and Ruth I. Bonz, husband and wife, Elbert L. Haye and Margaret T. Haye, husband and wife, Stanley V. Haye, Sr. and Joyce Ann Haye, husband and wife, Larry Hughes and Leslie L. Hughes, husband and wife, Stanley V. Haye, Jr. and Patricia E. Haye, husband and wife, and Jack A. Gibson, Defendants-Cross-Defendants-Appellants, and George J. Kawamoto and Florence F. Kawamoto, husband and wife, Defendants-Cross-Claimants. Boise, November 1991 Term

Page 1180

830 P.2d 1180

122 Idaho 42

THORN CREEK CATTLE ASSOCIATION, INC., acting by and through its last elected officers and Board of Directors as trustees for its former shareholders and creditors, Plaintiff-Respondent, v. Ronald T. BONZ and Ruth I. Bonz, husband and wife, Elbert L. Haye and Margaret T. Haye, husband and wife, Stanley V. Haye, Sr. and Joyce Ann Haye, husband and wife, Larry Hughes and Leslie L. Hughes, husband and wife, Stanley V. Haye, Jr. and Patricia E. Haye, husband and wife, and Jack A. Gibson, Defendants-Cross-Defendants-Appellants and George J. Kawamoto and Florence F. Kawamoto, husband and wife, Defendants-Cross-Claimants.

No. 18456.

Supreme Court of Idaho,

Boise, November 1991 Term.

March 31, 1992.

Rehearing Denied June 27, 1992.

Webb, Pedersen & Webb, Twin Falls, for defendants-cross-defendants-appellants. Lloyd J. Webb argued.

Hepworth, Nungester & Lezamiz, Twin Falls, for plaintiff-respondent. Jeffrey E. Rolig argued.

BISTLINE, Justice.

BACKGROUND

On January 10, 1985, the Haye Group and respondents Kawamoto contracted with Thorn Creek for the acquisition of 135 acres of unimproved property located at the intersection of U.S. 93 and I-84 in South Central Idaho. The Haye Group and Kawamotos intended to market the property for development. Pursuant to the land contract with Thorn Creek, the Haye Group paid $100,000.00 down and signed a promissory note secured by a mortgage for the remaining $600,000.00. No payments were ever made on the note.

After the formation of the contract, certain Thorn Creek shareholders filed a third-party complaint in Lincoln County, Idaho against Thorn Creek, other Thorn Creek shareholders, the Haye Group, and Kawamoto. In the third-party complaint, the shareholders sought to invalidate the land sale. The shareholders also filed a lis pendens against the property.

The Haye Group filed a cross-claim against Thorn Creek and its shareholders, alleging tortious interference with a contractual relationship, by allowing the lis pendens to be filed against the property, breach of contract, by failing to provide clear title to the property, and fraud and misrepresentation, in that the individuals handling the sale had fraudulently represented that they had authority to contract for the land sale.

On March 13, 1988, a partial disposition of the Lincoln County case was accomplished by way of a stipulation and order dismissing the above claims with prejudice.

On March 28, 1988, Thorn Creek sued the Haye Group and the Kawamotos for $743,694.74 in judgment, foreclosure of the mortgage, deficiency judgment, rescission of certain releases of property which were subject to the original contract, return of that property, and attorney fees and costs.

Kawamotos answered the complaint on May 18, 1988, denying certain allegations and asserting that Thorn Creek's recovery was limited to foreclosure of the mortgage. The Haye Group answered the complaint on May 27, 1988, generally denying the allegations and pleading nineteen affirmative defenses, including estoppel, failure to perform conditions precedent, unenforceability of the contract, failure to deliver clear title, impossibility of performance, frustration of performance by the contract seller-mortgagee, bad faith on the part of the contract seller-mortgagee, modification of the agreement, and waiver of the right to a deficiency judgment.

Also on May 27, 1988, the Haye Group filed a counterclaim against Thorn Creek and cross-claim against the shareholders who filed the Lincoln County lawsuit and other various individuals. A stipulation and order of dismissal with prejudice of the claims against Thorn Creek and the various individuals was entered on October 4, 1988. A stipulation and order of dismissal with prejudice against the shareholders and an individual shareholder was entered on February 23, 1989.

On February 9, 1989, the court issued a partial summary judgment granting a decree of foreclosure and an I.R.C.P. 54(b) certificate. The partial summary judgment in favor of Thorn Creek permitted foreclosure and precluded the Haye Group's defenses. The district court reserved for trial the issue of the property's fair market value and the appropriateness of a deficiency judgment in favor of Thorn Creek.

On February 23, 1989, Kawamoto's filed a cross-claim against the Haye Group, claiming that any deficiency awarded against them should result in a judgment in their favor against the Haye Group. The cross-claim was based on the theory that the property could have been surrendered to Thorn Creek without deficiency if the Haye Group would have been willing to do so. Thorn Creek had a writ of execution issued, and on March 13, 1989, the Jerome County, Idaho Sheriff sold the property described in the Thorn Creek complaint to Thorn Creek for $200,000.00. The certificate of sale and writ of execution were filed the next day.

The trial upon the issues of property value and deficiency judgment was held on July 6 and 7, 1989. Near the end of the trial, it was discovered that the property's legal description as it appeared in the foreclosure complaint, the partial summary judgment, the writ of execution, and the certificate of sale did not include the entire 135 acre parcel which was the subject of the land contract and mortgage.

On July 27, 1989, Thorn Creek moved to amend the complaint and decree of foreclosure, vacate the sale, and have an order issued to the sheriff to "resell" the property. On August 9, 1989, the district court granted the requested amendments and the order, and an amended partial summary judgment granting the decree of foreclosure and an I.R.C.P. 54(b) certificate was filed. A subsequent motion to reconsider the order allowing the amendments was denied.

On September 25, 1989, a second sheriff's sale of the property was held. Thorn Creek delivered an accurate amended notice of sheriff's sale to the sheriff. The sheriff signed that notice, but prepared his own amended notice of the sheriff's sale as publication of the sale, which incorrectly described two 40 acre parcels. The incorrect amended notice of the sheriff's sale and the amended writ of execution containing the correct legal description of the property were published at the same time.

After the sale, which was attended only by representatives of Thorn Creek, the sheriff executed an amended certificate of sale which contained an accurate legal description of the property. This legal description corresponded to that in the land contract, the amended writ of execution, and the amended notice of levy and real estate under execution, which were all recorded on August 18, 1989 in Jerome County.

On October 13, 1989, the Haye Group filed a motion requesting an amendment of the erroneous amended certificate of sale which had been issued September 25, 1989 by the sheriff. The Haye Group alleged that the sale proceedings were not appropriately conducted because the notice of sale contained the original erroneous description of the property rather that the amended description.

On October 24, 1989, the district court entered its findings of fact and conclusions of law. In the findings and conclusions, the district court determined that the fair market value of the property at the time of trial was $280,000.00, that the amount of debt due Thorn Creek as of February 9, 1989 was $803,565.44, that the property had been sold at a second sheriff's sale for $450,461.30, and that Thorn Creek was entitled to a deficiency judgment against the Haye Group and Kawamotos for the difference between the amount owed Thorn Creek and the sale price obtained. The court also awarded judgment to Kawamotos against the Haye Group.

On November 30, 1989, the district court denied the Haye Group's motion of October 13, 1989, regarding the invalidity of the sale. The court determined that any problems with the sale did not effect the deficiency judgment, and that the Haye Group's exclusive remedy for any improprieties was the damage claim feature of I.C. § 11-302. The court also ruled that Kawamotos and Thorn Creek were entitled to I.R.C.P. 11(a)(1) relief against counsel for the Haye Group.

Subsequent motions for reconsideration failed, and the notice of appeal was filed December 5, 1989. Kawamotos and Thorn Creek were each awarded attorney fees against the Haye Group.

ANALYSIS

The first issue we must address is whether this appeal was timely filed in light of the I.R.C.P. 54(b) certificate which the district court attached to the original and to the amended judgment entered in August of 1989. Since there was no appeal filed within 42 days of either of those judgments of the district court, the appeal would be untimely unless the I.R.C.P. 54(b) certificate was improperly issued by the district court.

Appellant Haye Group argues that the district court abused its discretion in appending the I.R.C.P. 54(b) certificate to the partial summary judgment. Specifically, the Haye Group points out that there was no request for certification, no hearings held on the issue, and no hardship, injustice, or compelling reason why the partial summary judgment should be final before the entire case was adjudged. In addition, the Haye Group contends that an improperly issued I.R.C.P. 54(b) certificate does not cut off the parties' right to appeal from final judgment.

The partial summary judgment granting a decree of foreclosure and the I.R.C.P. 54(b) certificate were filed February 14, 1989. The amended certified partial summary judgment was filed on August 9, 1989. A partial summary judgment, certified as final by the district court pursuant to I.R.C.P. 54(b), is appealable and, thus, the 42 day time period set forth in I.A.R. 14 for filing appeals begins to run from the "date evidenced by the filing stamp of the clerk of the court on" the certified partial summary judgment. I.A.R. 14; Walker v. Shoshone County, 112 Idaho 991, 993, 739 P.2d 290, 292 (1987). The Haye Group...