Van Berkem v. Mountain Home Development Co., No. 24525

• Court: Idaho Court of Appeals
• Writing for the Court: SCHWARTZMAN; PERRY
• Citation: 132 Idaho 639,977 P.2d 901
• Parties: John VAN BERKEM and Murial Van Berkem, husband and wife, and Frances B. Kirkwood, Plaintiffs-Respondents, v. MOUNTAIN HOME DEVELOPMENT COMPANY, aka Mountain Home Development Co., an Idaho corporation whose charter has been forfeited; Dan Weitz and Mark E. Adams, as statutory trustees of said forfeited corporation; and Weitz & Company, Inc., an Idaho corporation, Defendants-Appellants.
• Docket Number: No. 24525
• Decision Date: 02 April 1999

Page 901

977 P.2d 901 John VAN BERKEM and Murial Van Berkem, husband and wife, and Frances B. Kirkwood, Plaintiffs-Respondents,
v.
MOUNTAIN HOME DEVELOPMENT COMPANY, aka Mountain Home Development Co., an Idaho corporation whose charter has been forfeited; Dan Weitz and Mark E. Adams, as statutory trustees of said forfeited corporation; and Weitz & Company, Inc., an Idaho corporation, Defendants-Appellants. No. 24525. Court of Appeals of Idaho. April 2, 1999.

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Vernon K. Smith, Boise, for appellants.

Hall & Friedly, Mountain Home, for respondents. Jay R. Friedly, argued.

SCHWARTZMAN, Judge.

I.

FACTS AND PROCEDURE

On June 12, 1991, John and Murial Van Berkem and Frances B. Kirkwood (sellers) entered into an agreement with Mountain Home Development Company, Inc. (MHDC) for the sale of a parcel of real property. The agreement stated that MHDC would pay eighty thousand dollars ($80,000) for the property with twenty thousand dollars ($20,000) down and annual payments of twelve thousand dollars ($12,000) plus interest, due on September 15 of each subsequent year. In exchange, the sellers were required to place in escrow a warranty deed conveying the property to MHDC to be delivered when the purchase price was fully paid. The contract further provided that if additional payments were made, MHDC could then demand and receive advance conveyances of portions of the land in one-acre increments.

Sellers executed the required warranty deed and placed it in escrow. MHDC made the annual payments under the contract, without incident, through 1993. During 1994, MHDC suffered financial difficulties and a number of judgments against the company were subsequently recorded in the Elmore County Recorder's Office. On October 30, 1994, MHDC passed a corporate resolution to transfer all of its assets to Weitz & Company, Inc. (Weitz & Co.). In exchange, Weitz & Co. agreed to assume all "valid and undisputed Accounts Payable, and existing liens of record as of this date." However, MHDC then made the next payment under the land sale agreement on October 31, 1994. Dan Weitz, who was president of both corporations, subsequently signed a quit-claim deed conveying all of MHDC's interest in the subject property to Weitz & Co. Thereafter, on November 16, 1995, Weitz & Co. made the next annual payment under the land sale agreement. MHDC then formally assigned the land sale agreement to Weitz & Co. on November 17. The assignment was executed by Dan Weitz on behalf of both MHDC and Weitz & Co., and was placed in escrow along with a copy of a warranty deed which conveyed the property from MHDC to Weitz & Co.

Not having received the final payment due under the contract, the escrow company issued a notice of default on October 15, 1996. In response, Weitz & Co. sent a check for the final payment to the escrow company on November 14, but instructed that the payment be withheld from the sellers stating,

The previous Warranty Deed, created by the Sellers and placed in escrow with you, is no longer the correct document of conveyance, as that document should be destroyed as Mountain Home Development has no right to be within the chain of title as the rights it held under the contract were fully extinguished and replaced with Weitz & Company ... You are herewith instructed to advise the Sellers to prepare a Warranty Deed, reflecting conveyance to Weitz & Company, an Idaho corporation, and all funds tendered to you will then be available for disbursement[,] but only upon proper confirmation by you [that] the required conveyance under the terms of the Agreement are [sic] available for delivery.

Unwilling to issue a new deed, the sellers filed a complaint in the district court on April 15, 1997, requesting a judgment for the amount owing under the contract, plus interest, as well as costs and attorney fees. The complaint requested a decree ordering the sale of the property with the proceeds first applied to the amounts found owing to the sellers. The defendants, MHDC, Dan Weitz and Mark Adams, as trustees of MHDC, and Weitz & Co., filed an answer and cross-claim

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requesting that the court dismiss the sellers' claim and order "specific performance," i.e., the issuance of a warranty deed directly to Weitz & Co. The defendants also requested costs and attorney...