IN THE SUPREME COURT OF THE STATE OF IDAHO

Docket No. 41178-2013

CHRISTINA J. GREENFIELD, ) ) Coeur d’Alene, April 2015 Term Plaintiff-Appellant, ) ) 2015 Opinion No. 47 v. ) ) Filed: May 21, 2015 ERIC J. WURMLINGER and ROSALYN D. ) WURMLINGER, husband and wife, ) Stephen W. Kenyon, Clerk ) Defendants-Respondents. ) )

Appeal from the District Court of the First Judicial District of the State of Idaho, in and for Kootenai County. Hon. Lansing L. Haynes, District Judge.

The judgment of the district court is affirmed.

Christina J. Greenfield, Post Falls, argued in her own behalf.

John C. Riseborough, Paine Hamblen LLP, Spokane, Washington, argued for respondents.

EISMANN, Justice. This is an appeal out of Kootenai County from a judgment holding that the defendants were not violating the subdivision CC&R’s by operating a bed and breakfast from their home or by having arborvitaes higher than six feet, and awarding them a judgment totaling $168,755.37 against the plaintiff for her conduct that caused them emotional distress. We affirm the judgment of the district court and award attorney fees on appeal. I. Factual Background.

This is an appeal from a judgment resolving a dispute between two neighbors. In 1994, Eric and Rosalynn Wurmlinger (Defendants) built their home in the Park Wood Place subdivision in Post Falls, Idaho, on a lot next to the home of Judy Richardson. The Defendants operated a bed and breakfast from their home, and they planted a row of arborvitaes near the property line between their lot and the lot owned by Ms. Richardson. In 2005, Christina Greenfield (Plaintiff) purchased the Richardson property. The following year, Plaintiff had an attorney write to the Defendants, stating that the operation of their bed and breakfast violated the subdivision’s protective covenants, conditions, and restrictions (CC&R’s) and that the height of the arborvitaes violated the height restriction on fences contained in the CC&R’s and the height restriction on hedges contained in a city ordinance. Thereafter, the dispute between Plaintiff and Defendants centered on the operation of Defendants’ bed and breakfast in their home and the height of their arborvitaes near the boundary between the two properties. On April 12, 2006, Post Falls sent Mr. Wurmlinger a letter stating that the city had received a complaint regarding a hedge on his property and that the city code required fences and hedges within a side yard setback to be no higher than six feet. The letter quoted the relevant ordinance and asked that the hedge be brought into compliance within thirty days. Defendants trimmed their arborvitaes to bring them into compliance, and in June 2006 the city amended its ordinance to remove the limitation on the height of hedges. Thereafter, Defendants allowed their arborvitaes to grow taller than six feet. By 2010, the arborvitaes had grown to a height of ten to twelve feet. In April 2010, Defendants returned from a vacation and discovered that about four to six feet had been cut from ten of their arborvitaes. It is undisputed that Plaintiff had her agent cut the trees. Plaintiff was charged criminally, but the charges were later dismissed. Thereafter, Defendants began experiencing vandalism to their property. Over a period of about eighteen months, there were fourteen incidents of paint being splashed or poured on improvements to their property, with the last incident occurring about four months before the jury trial in this case. On September 23, 2010, Plaintiff filed this action alleging four claims against Defendants. First, Plaintiff asked for a declaratory judgment that Defendants were violating the CC&R’s by operating the bed and breakfast, allowing their arborvitaes to grow higher than five feet, and obstructing a pedestrian easement across their property. She sought an injunction requiring Defendants to cease the alleged violations. Second, Plaintiff alleged that the plants and trees on Defendants’ property that blocked her view of the Spokane River constituted a nuisance. She sought damages and an order requiring Defendants to remove the offending foliage. Third, Plaintiff alleged that Defendants had agreed to maintain their foliage along the common boundary line at a height of six feet; that Plaintiff had the foliage trimmed to the agreed height

2 when Defendants breached that agreement; and that Defendants then contacted law enforcement which resulted in Plaintiff being charged with a misdemeanor. As a result, Plaintiff claimed that Defendants intentionally caused her emotional distress, for which she was entitled to recover damages. Fourth, Plaintiff alleged that Defendants breached their agreement with her and made false and defamatory statements about her to law enforcement, which negligently caused her emotional distress. She requested an award of damages on that claim. Defendants filed a counterclaim seeking damages for negligent or intentional infliction of emotional distress, common law trespass, and timber trespass. Prior to trial, Plaintiff’s claim for intentional infliction of emotional distress was dismissed upon Defendants’ motion for summary judgment. Plaintiff’s claims for nuisance and negligent infliction of emotional distress and Defendants’ claims were tried to a jury. It returned a special verdict finding that Plaintiff had failed to prove her claims of nuisance and negligent infliction of emotional distress. The jury also found that Defendants had proved their claim of negligent infliction of emotional distress, for which it awarded them $52,000 in damages, and their claim of timber trespass, for which it awarded them $17,000 in damages. The jury also found that Defendants had proved that Plaintiff committed a common law trespass, but Defendants did not prove any damages for that claim. Plaintiff’s action for a declaratory judgment that Defendants were in violation of the CC&R’s was tried to the district court, and it later entered a decision finding that Plaintiff had failed to prove that claim. The timber trespass damages were trebled to $51,000 pursuant to Idaho Code section 6- 202, and the court awarded Defendants court costs and a reasonable attorney fee totaling $65,755.37. It entered a judgment against Plaintiff in the amount of $168,755.37, and she timely appealed.

II. Did the District Court Err in Finding that Defendants Were Not Violating the CC&R’s?

Prior to the jury trial, the district court instructed the parties that it would determine the issues regarding Defendants’ alleged violations of the CC&R’s, but would do so based upon the evidence presented during the jury trial. After the jury returned its verdict, the court had a status conference with the parties, and it informed them that they could submit closing arguments in

3 writing regarding the alleged violations of the CC&R’s. Once they had done so, the court filed its decision finding that Plaintiff had failed to prove the alleged violations of the CC&R’s. With respect to the alleged violations of the CC&R’s, Plaintiff lists the following issues: a) Did the District Court err in its finding that the Respondents’ operation of their business, the River Cove Bed and Breakfast and wedding event facility did not violate the neighborhood CC&Rs? b) Did the District Court err in its finding that the Respondents’ operation of their business, the River Cove Bed and Breakfast and wedding event facility was “Not open to the public”? c) Did the District Court err in its finding that the Respondents’ operation of their business, the River Cove Bed and Breakfast and wedding event facility, qualifies as a “Home Occupation” and not a “Business” as so defined in the neighborhood CC&Rs? d) Did the District Court err in its finding that the Respondents’ lack of maintenance of the arborvitae hedge, which is located on or near the real property line that separates both properties, did not violate the neighborhood CC&Rs height restrictions and therefore refuse to enter an Injunction prohibiting the Respondents’ [sic] from allowing the arborvitae shrubs to exceed the height restrictions as set forth in the neighborhood CC&Rs?

Operation of the bed and breakfast. The CC&R’s provide that no lot within the subdivision can be used for any purpose except for a single family residence, but that “[h]ome occupations of family members, which have no exterior visibility, are not prohibited provided they are conducted totally within the residence, are not open to the public, have no employees and do not generate extra vehicular traffic or street parking.” Defendants’ house has six bedrooms, three of which they rent for their bed and breakfast. Initially, Defendants had weddings at their home which attracted a significant number of guests; they owned a boat and offered river cruises to those staying at their bed and breakfast; and they once set up a tent trailer to accommodate a couple who wanted to attend an athletic event in nearby Coeur d’Alene. In 2008, there was a wedding which resulted in nine cars parking on the street. That prompted a call from the city, which licenses home occupation businesses and requires that they comply with certain conditions. As a result, Defendants changed their wedding policy, and the district court found that they “now offer small nuptial exchange ceremonies that involve no more than eight individuals,” that the ceremonies are conducted in the residence, that those in the wedding party must stay in the bed and breakfast, and that any music is played very softly. The court found persuasive the testimony of neighbors who never heard any excessive noise coming from Defendants’ property.

4 Covenants that restrict the uses of land are valid and enforceable. Brown v. Perkins, 129 Idaho 189, 192, 923 P.2d 434, 437 (1996). However, “[b]ecause restrictive covenants are in derogation of the common law right of a person to use land for all lawful purposes, covenants are not to be construed to extend by implication any restriction not clearly expressed in the covenants.” Id. Rather, “[a]ll doubts and ambiguities are to be resolved in favor of the free use of land.” Id. Therefore, while clearly expressed restrictions will be upheld, “restrictions that are not clearly expressed will be resolved in favor of the free use of land.” Id. The district court found that the bed and breakfast had no exterior visibility. There was only a small plaque with the street address affixed to Defendants’ brick lamppost near their driveway, and the photographs introduced into evidence showed what appeared to be a home, not a commercial enterprise. The court found persuasive the testimony of a neighbor who lived across the street and did not know that the Wurmlingers operated a bed and breakfast in their home until Mr. Wurmlinger told him. The court found that the operation is conducted totally within the residence and that guests walking outside to use the hot tub or gather on the patio are normal activities for a residence. The court determined that the words “open to the public” in the CC&R’s meant that members of the public could simply walk in the front door, off the street, unannounced and without invitation, to ask for accommodations. Defendants’ bed and breakfast does not accept walk-up clientele, but only accepts people with advance reservations arranged over the telephone. It does not have street signs or directional signs inviting the public to walk in and obtain a room. The court found that the Wurmlingers had no employees, which fact was undisputed. Finally, the court found that since 2008 the bed and breakfast has not generated extra vehicular traffic or street parking. In her brief, Plaintiff cites testimony concerning the operation of the bed and breakfast prior to 2008. In the declaratory judgment claim in her complaint filed on September 23, 2010, she alleged that “[t]he Defendants’ operation of the Bed and Breakfast is [present tense] in violation of the CC&R’s”; she requested an order “declaring that the Defendants’ operation of the Bed and Breakfast in Parkwood Place is [present tense] a violation of the CC&R’s”; and she sought “an Injunction prohibiting the Defendant’s [sic] from operating the Bed and Breakfast, or any similar business, in Parkwood Place.” (Emphasis added.) The district court found that at the time the complaint was filed, the operation of the bed and breakfast was not in violation of the CC&R’s. Plaintiff also argues that Defendants repeatedly referred to the bed and breakfast as a

5 “business” and the evidence showed it was profitable. A “home occupation” by definition would be a business,1 and profitable home occupations are not excluded by the CC&R’s. Plaintiff also asserts that “a ‘Home Occupation’ [is] not a ‘Business’ as so defined in the neighborhood CC&Rs,” but she does not cite to any definition of “business” in the CC&R’s. However, the provision regarding home occupations prohibits “any trade or business of any kind,” and then excludes from that prohibition “[h]ome occupations of family members” that comply with certain conditions.2 In context, that would certainly indicate that a home occupation would be a trade or business. Arborvitaes. The CC&R’s provide that “[n]o lot, lots or parcels, shall ever be enclosed or fenced by any fence or structure exceeding five (5) feet in height.” Based upon the testimony of a surveyor, the district court found that Defendants have thirty-three arborvitaes on their property and that Plaintiff has two on hers. Plaintiff contended that the arborvitaes on Defendants’ property constituted a fence under the CC&R’s. The district court found that the relevant provision in the CC&R’s was unambiguous and that it did not provide that arborvitae or any other trees or landscaping constituted a fence. The restriction as to the height of fences was in a section of the CC&R’s titled “Building Restrictions” and in a subsection titled “Building Conditions,”3 and in the context there was nothing indicating that the word “fence” included foliage.

1 The word “occupation” in this context means “a person’s usual or principal work or business, especially as a means of earning a living; vocation.” Dictionary.com. Dictionary.com Unabridged. Random House, Inc. http://dictionary.reference.com/browse/occupation (accessed: April 30, 2015).

2 The relevant provision in the CC&R’s is as follows: 1. Residential Purposes: No lot shall be used except for single family residential purposes and amenities. . . . . a) No grantee under any conveyance, owner, tenant, or other person shall at any time conduct, or permit to be conducted on any lot, any trade or business of any kind, either commercial or religious, including, but not limited to, day care, school, nursery, out-patient, treatment, rehabilitation or recovery facilities, nor shall said premises be used for any other purpose whatsoever except for the purpose of a private dwelling or residence for one family. Home occupations of family members, which have no exterior visibility, are not prohibited provided they are conducted totally within the residence, are not open to the public, have no employees and do not generate extra vehicular traffic or street parking.

3 The provision in the CC&R’s is as follows: 2. Building Conditions: No building shall be erected except one detached single-family dwelling on each lot which does not exceed two and one half stories in height, together with a private attached garage for not less than two cars. No dwelling, building or other structure shall be moved on to any lot; new construction being required. No tent, trailer, mobile home, boat or other

6 “A trial court’s findings of fact will not be set aside on appeal unless they are clearly erroneous.” Camp v. East Fork Ditch Co., Ltd., 137 Idaho 850, 856, 55 P.3d 304, 310 (2002). In applying that principle, the appellate court cannot reweigh the evidence, judge the credibility of the witnesses, or substitute its view of the facts for that of the trial court. Argosy Trust ex rel. Andrews v. Wininger, 141 Idaho 570, 572, 114 P.3d 128, 130 (2005). It is the responsibility of the trial court to judge the credibility of witnesses and weigh conflicting evidence. Bream v. Benscoter, 139 Idaho 364, 367, 79 P.3d 723, 726 (2003). The appellate court’s role is simply to determine whether there is evidence in the record that a reasonable trier of fact could accept and rely upon in making the factual finding that is challenged on appeal. Miller v. Callear, 140 Idaho 213, 216, 91 P.3d 1117, 1120 (2004). Plaintiff does not argue in her brief that the district court’s findings are clearly erroneous. She argues that Defendants called their bed and breakfast a “business” and that such business “creates excessive traffic, constant noise, and intrusions from unwelcome patrons who stray onto adjacent properties, block driveways, mail boxes, and causes street congestion.” She cites nothing in the record supporting her accusations. “This Court will not search the record for error. We do not presume error on appeal; the party alleging error has the burden of showing it in the record.” Id. at 218, 91 P.3d at 1122 (citation omitted). Plaintiff has failed to show that the district court erred in finding that she had failed to prove that Defendants were violating the CC&R’s.

III. Did the District Court Err in Finding that Defendants’ Planting of Trees and Shrubs that Block Plaintiff’s View of the River Did Not Constitute a Nuisance?

In her complaint, Plaintiff alleged that “[t]he Defendants have planted shrubs and trees upon their real property which block the Plaintiff’s view of the Spokane River and which infringe upon the Plaintiff’s real property,” and she alleged that such conduct constituted a nuisance. Plaintiff asserts various issues on appeal that can be grouped as asserting that the

vehicle or structure shall be used or allowed for human habitation on a temporary or permanent basis on any lot at any time. No lot, lots or parcels, shall ever be enclosed or fenced by any fence or structure exceeding five (5) feet in height. Approval from the Architectural Control Committee shall be required for all fences.

7 district court erred in finding that Defendants’ planting of trees and shrubs that block her view of the river did not constitute a nuisance. She lists as issues the following: o) Did the District Court err in its finding that Respondents’ [sic] did not purposely and or negligently plant large trees and or shrubs to intentionally block Appellant’s view of the Spokane River, which infringes upon Appellant’s real property, obstructs her free use of property and interferes with her comfortable enjoyment of life and property? p) Did the District Court err in its finding that the large trees and or shrubs that were planted intentionally to block Appellant’s granted view of the Spokane River, which infringes upon Appellant’s real property, obstructs her free use of property, and interferes with her comfortable enjoyment of life and property, should be abated by the Respondents’ [sic] and ordered an injunction prohibiting future obstructions of Appellant’s view of the Spokane River, and not interfere with her comfortable enjoyment of life and property? . . . . z) Did the District Court Honorable Judge Lansing Haynes err by failure to Order an Abatement requiring the Respondents’ [sic] to remove any and all shrubs and trees located at or near the parties [sic] common property line which obstruct the Appellant’s free use of property, and interferes with the Appellant’s comfortable enjoyment of life and property? aa) Did the District Court Honorable Judge Lansing Haynes err by failure to Enter an Injunction prohibiting the Respondents’ [sic] from planting any trees, shrubs, or other vegetation which blocks the Appellant’s view of the Spokane River or otherwise obstructs the Appellant’s free use of property, and interferes with the Appellant’s comfortable enjoyment of life and property?

The district court did not make any findings regarding whether Defendants’ actions constituted a nuisance. That issue was submitted to the jury for its decision. On the special verdict form, the jury was asked, “Did the defendants’ maintenance of the arborvitae and/or operation of the bed and breakfast constitute a nuisance?” The jury unanimously answered that question, “No.” With respect to Plaintiff’s nuisance claim, the court only ruled on her motion for a judgment notwithstanding the verdict. One of the issues she raised in that motion was that the jury should have determined that Defendants maliciously planted the shrubs and trees for the purpose of annoying her and blocking her view. In denying the motions, the district court ruled that “[t]he jury was presented with testimony as to the reasons for planting the arborvitae and other trees” and that “there was substantial and competent evidence to support the jury’s verdict in this matter.”

8 On appeal, Plaintiff argues that after she had an attorney write to Defendants about the height of their arborvitaes, Defendants began planting other bushes and trees on their property out of spite in order to block Plaintiff’s view of the river. She also contends that Defendants agreed to keep their arborvitaes trimmed to a height of six feet, but allowed them to grow higher out of spite. She argues that Defendants’ actions in planting the bushes and trees had no beneficial use to them and that their failure to keep them trimmed to a height of six feet in violation of Mr. Wurmlinger’s agreement shows that the plantings were done solely to annoy her. Plaintiff’s contention that Defendants agreed to keep the arborvitae trimmed to a height of six feet is based upon their response to a letter sent them by Plaintiff’s attorney. On April 12, 2006, Post Falls sent Mr. Wurmlinger a letter stating that the city had received a complaint regarding a hedge on his property and that the city code required fences and hedges within a side yard setback to be no higher than six feet. Defendants trimmed the arborvitae, and by a letter dated May 8, 2006, the city responded that the pruning satisfied the city. The letter also stated, “It is important that you maintain this height.” On May 10, 2006, Plaintiff’s attorney sent Defendants a letter stating, among other things, that the height of the arborvitae violated the CC&R’s restriction on the height of side fences. On May 17, 2006, Mr. Wurmlinger responded in writing to the attorney’s letter and stated with respect to the height of the arborvitae as follows: In point 4, it cites that we have large shrubs which are higher than 5 ft. The C.C. & R states that fences and enclosing structures not be higher than 5 ft. Our shrubbery and trees are living plants and do not fall in that category of the C.C. & R’s. We recently pruned all of our shrubs which enhanced the view from our neighbors property to the North. The City of Post Falls was satisfied by my pruning. We certainly will control and maintain the shrubbery to its current level (See attached letter from the City of Post Falls regarding pruning and shrubbery).

Plaintiff called Mr. Wurmlinger as her first witness, and during her questioning of him she asked with respect to the letter, “Did you agree to maintain the shrubs at a 6-foot height in a letter dated May 17th, 2006?” He answered, “I agreed to do what the city told me I had to do at the time.” The following month, the city amended its ordinance so that the height restriction no longer applied to hedges. In denying Plaintiff’s motion for a judgment notwithstanding the verdict, the district court did not decide whether or not Defendants’ actions constituted a nuisance. “[T]he court

9 cannot weigh the evidence when ruling on a motion for judgment notwithstanding the verdict.” Phillips v. Erhart, 151 Idaho 100, 106, 254 P.3d 1, 7 (2011). The court merely found that there was substantial and competent evidence to support the jury’s verdict. When reviewing a trial court’s denial of a motion for a judgment notwithstanding the verdict, “we determine whether there was sufficient evidence to justify submitting the claim to the jury, viewing as true all adverse evidence and drawing every legitimate inference in favor of the party opposing the motion for a directed verdict.” Todd v. Sullivan Constr. LLC, 146 Idaho 118, 124, 191 P.3d 196, 202 (2008). The jury could have reasonably found that Defendants did not plant the bushes and trees for the purpose of maliciously annoying Plaintiff by blocking her view of the river. The district court did not err in holding that the evidence was of a sufficient quantity and probative value that reasonable minds could conclude that the verdict of the jury was proper.

IV. Did the District Court Err in Failing to Find that Defendants’ Actions Caused Plaintiff Emotional Distress?

In her complaint, Plaintiff alleged that Defendants negligently caused her emotional distress. The jury was asked, “Did the defendants’ maintenance of the arborvitae and/or operation of the bed and breakfast, and/or defendants’ alleged defamatory statements to neighbors or police negligently inflict emotional distress on plaintiff?,” and the jury unanimously answered that question, “No.” Plaintiff states as an issue on appeal: l) Did the District Court err in its finding that the Respondents’ violation of the neighborhood CC&Rs by operating a business, the River Cove Bed and Breakfast and wedding event facility, and the arrest of the Appellant after trimming said [sic] arborvitae hedge, along with constant harassment, including many false allegations of crimes reported by the Respondents, did not cause extreme negligent emotional distress on the Appellant?

The district court did not make any such finding, and Plaintiff did not raise this issue as part of her motion to set aside the judgment or to grant her a judgment notwithstanding the verdict. Therefore, there was no ruling by the district court on this issue. It was the jury who concluded that Plaintiff had failed to prove her claim of negligent infliction of emotional distress. In her brief on appeal, Plaintiff recounts her version of the evidence, but she does not contend that there was insufficient evidence to support the jury’s verdict. It was up to the jury to decide what witnesses were credible, the weight to be given their testimony, and the reasonable

10 inferences to be drawn from the evidence. State v. Thomas, 157 Idaho 916, 919, 342 P.3d 628, 631 (2015). “The presumption is in favor of an impartial and considerate action on the part of a jury, and we must be convinced affirmatively before we could, by any rule of law, be permitted to question such presumption.” Cox v. Northwestern Stage Co., 1 Idaho 376, 386 (Terr. Sup. Ct. 1871). There was conflicting evidence in this case, and it was up to the jury to decide the credibility of the witnesses and the weight to be given their testimony. Plaintiff has not pointed to anything indicting that the members of the jury did not faithfully perform their duty when they concluded that Plaintiff had failed to prove her claim of negligent infliction of emotional distress.

V. Did the District Court Err in Finding that Plaintiff Committed a Timber Trespass and in Awarding Damages?

Idaho Code section 6-202 sets forth a cause of action for timber trespass.4 With respect to this cause of action, the district court instructed the jury as follows: INSTRUCTION NO. 18 On the defendants’ claim that plaintiff damaged their trees and arborvitae, the defendants have the burden of proof on each of the following propositions: 1. That defendants owned certain trees and/or arborvitae; and 2. That the trees and/or arborvitae were located on the defendants’ property; and 3. That plaintiff damaged or destroyed said trees and/or arborvitae; and 4. That defendants have sustained damages. You will be asked the following question on the jury verdict form: Did plaintiff damage or destroy defendants’ arborvitae and/or spruce tree?

4 Idaho Code section 6-202 states as follows:

Any person who, without permission of the owner, or the owner’s agent, willfully and intentionally enters upon the real property of another person which property is posted with “No Trespassing” signs or other notices of like meaning, spaced at intervals of not less than one (1) notice per six hundred sixty (660) feet along such real property; or who willfully and intentionally cuts down or carries off any wood or underwood, tree or timber, or girdles, or otherwise willfully and intentionally injures any tree or timber on the land of another person, or on the street or highway in front of any person’s house, village, or city lot, or cultivated grounds; or on the commons or public grounds of or in any city or town, or on the street or highway in front thereof, without lawful authority, is liable to the owner of such land, or to such city or town, for treble the amount of damages which may be assessed therefor or fifty dollars ($50.00), plus a reasonable attorney’s fee which shall be taxed as costs, in any civil action brought to enforce the terms of this act if the plaintiff prevails.

11 If you find from your consideration of all the evidence that each of these propositions has been proved, then you should answer this question “Yes.” If you find from your consideration of all the evidence that any of these propositions has not been proved, then you should answer this question “No.”

INSTRUCTION NO. 19 Any person who willfully, intentionally, and without permission of the owner, girdles or otherwise injures any tree on the land of another person, without lawful authority, is liable to the owner of such land for the amount of actual damages which may be assessed therefor.

INSTRUCTION NO. 20 If the jury decides that the defendants are entitled to recover from the plaintiff on their counterclaim for damage to the defendants’ trees and/or arborvitae, the jury must determine the amount of money that will reasonably and fairly compensate the defendants for any actual damages proved to be proximately caused by the plaintiffs actions. The elements of actual damage to defendants’ trees and arborvitae are: The difference between the fair market value of the tree or the arborvitae immediately before the occurrence, and its fair market value without repair after the occurrence and, the loss of utility or contribution of that tree or arborvitae to defendants’ real property.

INSTRUCTION NO. 21 The term “fair market value” means the cash price at which a willing seller would sell and a willing buyer would buy the subject property, in an open marketplace free of restraints, taking into account the highest and most profitable use of the property. It presumes that the seller is desirous of selling, but is under no compulsion to do so, and that the buyer is desirous of buying, but is under no compulsion to do so. It presumes that both parties are fully informed, knowledgeable and aware of all relevant market conditions and of the highest and best use potential of the property, and are basing their decisions accordingly.

On the special verdict form, the jury unanimously answered “Yes” to the questions: “Based upon the evidence presented to you, do you find that the arborvitae are trees?” and “Did defendants prove that plaintiff committed timber trespass?” The jury assessed damages for the timber trespass in the sum of $17,000. Plaintiff lists various issues asserting that the district court erred in finding that she committed a timber trespass and in awarding damages. She lists the issues as follows: f) Did the District Court err in its finding that the arborvitae shrubs that form a hedge, as mentioned above, are to be considered trees?

12 . . . . g) Did the District Court err in its finding that the arborvitae hedge is solely located on the Respondents’ property when a mutual ownership was evident on both surveys? h) Did the District Court err in its finding that Appellant should be accused and assessed damages for intentionally and willfully committed Timber Trespass to the property of Respondents wherein I.C. § 6-202 allowing for treble damages would have applied when a dual ownership of the arborvitae (shrub) hedge, which is located on or near the adjoining property line of both the Appellant and Respondents, is evident? i) Did the District Court err in its finding that the Appellant should be assessed “Timber” damages for property (arborvitae hedge) that she equally owns, after the Appellant trimmed said arborvitae hedge to the agreed upon height, which was previously cut four years prior to the same height by the Respondent at which time it was neither damaged or destroyed? j) Did the District Court err in its finding that the Appellant has intentionally, willfully or negligently damaged and/or destroyed the ten (10) arborvitae shrubs in question? . . . . n) Did the District Court err in its finding that the Respondents’ Survey was properly signed and introduced into evidence? . . . . r) Did the District Court err in allowing excessive awards of damages and attorney fees to the Respondents’ [sic]? s) Did the District Court err in determining whether damages were correctly assessed in accordance with the finding for and the allowable amount of awards of damages and attorney fees to the Respondents?

The district court did not make any findings regarding whether Plaintiff committed a timber trespass or the amount of damages. Those issues were submitted to the jury for its decision. The court only ruled upon Plaintiff’s motion to set aside the judgment under Rule 60(b) for fraud upon the court because Defendants’ counsel submitted a survey into evidence that the surveyor had not signed and dated. She also argued that absent such survey, the evidence would show that some of the arborvitae were on her property. The district court held that Idaho Code section 54-1215(1)(b), which requires a surveyor to seal, sign, and date all surveys presented to a client, was not an evidentiary rule of admissibility. The court stated that the jury heard testimony about the methods used by the surveyor and how his measurements, recordings, and findings were accurately transferred to the survey. The court concluded that offering the survey into evidence did not constitute fraud upon the court. The court also held that there was substantial and competent, albeit conflicting,

13 evidence presented to the jury as to the location of the arborvitaes. Plaintiff testified that she had her brother-in-law cut the arborvitaes down to a height of six feet. The court therefore denied the motion to set aside the judgment for fraud upon the court based upon offering the survey into evidence and her motion for a judgment notwithstanding the verdict based upon Plaintiff’s contention that at least some of the arborvitaes were on her property. Defendants presented expert testimony that the difference between a shrub and a tree is that a shrub is capable of growing to a height of only fifteen feet, while a tree is capable of growing taller and that the species of arborvitaes planted by Defendants was capable of growing to a height of twenty feet. Defendants presented expert testimony of a surveyor showing where the arborvitaes were in relation to the parties’ common boundary line, and Plaintiff presented expert testimony as to her contention in that regard. The district court did not err in holding that the evidence was of a sufficient quantity and probative value that reasonable minds could conclude that the verdict finding Plaintiff liable for timber damages was proper. Plaintiff contends that the district court erred in assessing damages, but it did not do so. The jury determined damages pursuant to the evidence and jury instructions to which Plaintiff did not object. The issue of whether the damages were excessive was never presented to the district court. Therefore, there is no basis for concluding that the district court erred in allowing an allegedly excessive award of damages. This Court will not review an alleged error by the trial court where the record does not show that the court ever ruled on the issue. Ada Cnty. Highway Dist. v. Total Success Invs., LLC, 145 Idaho 360, 368–69, 179 P.3d 323, 331–32 (2008).

VI. Did the District Court Err in Submitting to the Jury Defendants’ Claim of Negligent Infliction of Emotional Distress?

In their initial counterclaim, Defendants alleged the claims of intentional infliction of emotional distress and negligent infliction of emotional distress. Later, at Defendants’ request, the district court entered an order dismissing with prejudice Defendants’ counterclaim of negligent infliction of emotional distress. Defendants later changed attorneys, and they filed an amended answer and counterclaim in which they alleged a claim of intentional infliction of emotion distress, but not negligent infliction of emotional distress. Plaintiff alleges as an issue on appeal,

14 k) Did the District Court Honorable Judge Lansing Haynes err in his finding that the Respondents’ asserted legal claims for “Negligent Infliction of Emotional Distress” during the trial were properly disclosed, when in fact, the District Court Honorable Judge Lansing Haynes had previously dismissed the Respondents’ original claim of Negligent Infliction of Emotional Distress on March 22, 2011 with Prejudice?

The district court held a pretrial conference one week before trial. Prior to that conference, the parties filed written statements of the issues to be tried. In their statement, Defendants alleged that Plaintiff “harassed them with unfounded complaints to the police, harassed their guests, trespassed on their property, and made defamatory comments about them to others.” During the pretrial conference, the court asked Defendants’ counsel whether the claim that Plaintiff harassed Defendants was an infliction of emotional distress claim. Defendants’ counsel stated that it was, and the court asked, “Is this an intentional and/or negligent infliction?” Defendants’ counsel answered, “We propose instructions on both.” The court then asked Plaintiff if there was any record she wanted to make, and she responded, “No, your Honor.” The court then stated that Defendants’ counterclaims were intentional and/or negligent infliction of emotional distress, common law trespass, and timber trespass. The court again asked Plaintiff if she wanted to make any record on that, and she again stated that she did not. The court then stated: “So with those clarifications, it looks like we have some consensus on what is the existence of the defendants’ claims. Anything about the claims or issues that the Court’s brought up to this point that plaintiff would like to get clarified or remark about?” Plaintiff responded, “No, your Honor.” At the conclusion of the presentation of evidence at the trial, the district court gave the parties its proposed jury instructions. They included an instruction that addressed “defendants’ counterclaim of negligent infliction of emotional distress against the plaintiff” and set forth the elements that Defendants must prove to recover on that claim. During the jury instruction conference, the court asked, “Does the plaintiff have any objection to [the] Court’s proposed jury instructions or special verdict form or the failure to give any of plaintiff’s proposed instructions?” and told Plaintiff, “Now is the time to make those objections.” Plaintiff responded, “No, your Honor.” The order dismissing with prejudice Defendants’ counterclaim of negligent infliction of emotional distress was not a final judgment because it did not resolve all claims in this case and

15 was not certified as final pursuant to Rule 54(a)(1) of the Idaho Rules of Civil Procedure. I.R.C.P. 54(a) (2010). It was simply an interlocutory order that could later be modified, amended, or reversed. In re Doe, 156 Idaho 103, 107, 320 P.3d 1262, 1266 (2014). Although Defendants’ amended counterclaim did not allege a claim for negligent infliction of emotional distress, “[w]hen issues not raised by the pleading are tried by express or implied consent of the parties, they shall be treated in all respects as if they had been raised in the pleadings.” I.R.C.P. 15(b). By failing to object at the pretrial conference that Defendants’ claim of negligent infliction of emotional distress was to be tried to the jury, Plaintiff consented that such issue would be tried. The district court did not err in submitting that claim to the jury.

VII. Did the District Court Err in Instructing the Jury?

Plaintiff contends that the district court erred in instructing the jury. She states as issues on appeal: m) Did the District Court err in its finding that the jury instructions and the special verdict form were properly amended and submitted within the time frame as specified under I.R.C.P. 51(a)(l)? y) Did the District Court Honorable Judge Lansing Haynes err by giving the jury improper instructions?

At the conclusion of the presentation of evidence at the trial, the district court gave the parties its proposed jury instructions. During the jury instruction conference, the court asked, “Does the plaintiff have any objection to [the] Court’s proposed jury instructions or special verdict form or the failure to give any of plaintiff’s proposed instructions?” and told Plaintiff, “Now is the time to make those objections.” Plaintiff responded, “No, your Honor.” By failing to object, Plaintiff cannot raise as an issue on appeal the court giving or failing to give any jury instruction. Saint Alphonsus Diversified Care, Inc. v. MRI Assocs., LLP, 148 Idaho 479, 491, 224 P.3d 1068, 1080 (2009).

VIII. Was Plaintiff Denied Her Constitutional Rights?

Plaintiff lists as issues on appeal the following:

16 q) Did the District Court err in denying Appellant’s invocation of the Fourteenth Amendment right to Due Process, which prohibits state and local governments from depriving persons of life, liberty, or property without certain steps being taken to ensure fairness and to recognize her substantive and procedural rights? t) Did the District Court err by depriving Appellant her rights by violating 42 USC § 1983—Civil action for deprivation of rights and due process?

Plaintiff contends that she was denied due process of law because: 1.) Judge Haynes allowed Appellants [sic] attorney to quit within eight (8) weeks prior to trial, leaving Appellant vulnerable for bias and prejudice. Appellant informed the judge that trial deadlines had passed and that she could not afford another attorney; 2.) Judge Haynes should have insisted on a site evaluation so the jury could visually see the condition of the arborvitae, the property layout of the homes and proximity of where the river, park, and homes were located in relationship to one another; 3.) Judge Haynes did not allow Appellants [sic] timely disclosed witness Leonard Benes to testify on behalf of Appellant, a crucial factor to the Appellants [sic] defense [citation to record]; 4.) Judge Haynes allowed the Respondents to submit evidence at trial that was never disclosed to Appellant and was in violation of the November 8, 2012, deadline per Court Order [citation to record]; 5.) Judge Haynes allowed the Jury Instructions to be altered from their original state as quoted within the Idaho Codes; 6.) Judge Haynes did not grant Injunctions to Appellant for Abatement and PWP CC&R violations as requested.

(Citations to record omitted.) Due process requires the opportunity upon reasonable notice for a fair hearing before an impartial tribunal. Miller v. St. Alphonsus Reg’l Med. Ctr., Inc., 139 Idaho 825, 835, 87 P.3d 934, 944 (2004). Plaintiff’s alleged due process violations contain only two citations to the record. The first is the district court’s refusal to permit Plaintiff to call Leonard Benes as a witness. When the city sent a letter to Mr. Wurmlinger regarding the height of the arborvitaes, he took pictures of arborvitaes growing on other lots in the subdivision that were taller than six feet, including arborvitaes growing on Mr. Benes’s lot. Plaintiff contended that she wanted his testimony to prove that the hedge was a fence. The court refused to allow his testimony because Mr. Benes was untimely disclosed as a witness and Plaintiff wanted him to testify regarding photographs that had not been admitted into evidence or timely disclosed as exhibits. Plaintiff has not presented any argument or authority showing that the failure to permit Mr. Benes to testify violated due process.

17 The second citation to the record involves evidence that the district court should not have permitted Defendants to submit during the trial because it was untimely disclosed. In support of that alleged error, Plaintiff cites to two pages of a pretrial motion in limine she filed to exclude a list of items of evidence because they were irrelevant, hearsay, or lacked authentication and because “the List of Exhibits was introduced after the Pre-trial Order for discovery [was] allowed.” Plaintiff did not cite to any place in the record indicating that the court ever ruled on the motion or how it ruled, nor did she cite to any place in the record showing that any of such evidence was admitted during the trial. We will not consider assignments of error not supported by argument and authority in the opening brief and citations to the relevant parts of the appellate record supporting the argument. Cummings v. Stephens, 157 Idaho 348, 362, 336 P.3d 281, 295 (2014); VanderWal v. Albar, Inc., 154 Idaho 816, 822, 303 P.3d 175, 181 (2013). Therefore, we will not address Plaintiff’s other assertions regarding due process violations.

IX. Did the District Court Err in Awarding Attorney Fees to Defendants?

Plaintiff listed as an issue on appeal, r) Did the District Court err in allowing excessive awards of . . . attorney fees to the Respondents’ [sic]?

She did not present any argument or authority regarding that issue. “We will not consider assignments of error not supported by argument and authority in the opening brief.” Hogg v. Wolske, 142 Idaho 549, 559, 130 P.3d 1087, 1097 (2006).

X. Did the District Court Err in Failing To Recuse Itself?

Plaintiff contends that the district judge was biased against her. Her list of assignments of error are the following: u) Did the District Court Judge Lansing Haynes express an “appearance of partiality” against Greenfield during the proceedings? v) Did the District Court Honorable Judge Lansing Haynes err by not disqualifying himself, as well as his law clerk, Schuyler A. Pennington, from the court proceedings do [sic] to their affiliation with the Knights Of Columbus, an inclusive Catholic organization of men, wherein Eric Wurmlinger is also affiliated

18 with such organization, therefore causing prejudicial bias within the judicial outcome of the case? w) Did the District Court Honorable Judge Lansing Haynes err by allowing the Defendants ‘Unclean hands’ to mislead the trial court into believing that certain Trial Exhibits were factual, wherein said exhibits were submitted “Incomplete” or contained “Unacceptable” information? x) Did the District Court base its findings upon unsubstantiated and incompetent evidence from the Respondents’ [sic], and did that evidence support the district courts [sic] conclusions of law wherein the Appellant was prejudiced by said evidence? . . . . bb) Did the District Court Honorable Judge Lansing Haynes commit Fraud Upon the Court as witnessed and verified by the Appellant on December 30, 2013, after Appellant viewed her case file, wherein the Honorable Judge Lansing Haynes commented in his case file notes “The only issue that concerns me is the N.I.E.D. (Negligent Infliction of Emotional Distress) claim being dismissed ... We can play up the former counsel’s decision and the no objection to putting it to the jury later on” wherein Judge Haynes openly admits by acknowledging concerns and states “We can Play up ...” the N.I.E.D. claim that Judge Haynes had dismissed with prejudice a year and a half prior to trial?

“Judicial rulings, standing alone, do not constitute a valid basis for a claim of bias or partiality.” State v. Hairston, 133 Idaho 496, 508, 988 P.2d 1170, 1182 (1999). “Whether it is necessary for a judicial officer to disqualify himself in a given case is left to the sound discretion of the judicial officer himself.” Bradbury v. Idaho Judicial Council, 149 Idaho 107, 113, 233 P.3d 38, 44 (2009). In the absence of a motion for disqualification, we will not review the issue of whether a judge should have disqualified himself or herself because there is no decision by the judge and no factual record developed from which grounds for disqualification can be discerned. Idaho Dep’t of Health & Welfare v. Doe, 150 Idaho 563, 568, 249 P.3d 362, 367 (2011). In this case, the only issue raised by Plaintiff to the trial court involved the court’s membership in the Knights of Columbus. Both the court and Mr. Wurmlinger were members of that organization. Although Plaintiff did not move for disqualification, she raised the issue in her motion for reconsideration of the denial of her motions to set aside the judgment and to grant a judgment notwithstanding the verdict. Judge Haynes explained that he was not a parishioner of the same church as Mr. Wurmlinger; that he had attended mass there a couple times a year, but his only contact with Mr. Wurmlinger was hearing him say “Good morning” when handing the judge a church bulletin and the judge responding “Thank you” when he took it; that he and Mr. Wurmlinger were members of separate councils of the Knights of Columbus; that the councils do

19 not hold joint meetings; that the judge had not been to a meeting of the council for three years; and that neither he nor members of his family had ever served on any committees with the Wurmlingers. Assuming that the Plaintiff raising the issue could be construed as a motion for disqualification, Judge Haynes did not err in denying that motion.

XI. Are Defendants Entitled to an Award of Attorney Fees on Appeal?

Defendants seek an award of attorney fees on appeal pursuant to the provisions of the CC&R’s, Idaho Code section 6-202, and Idaho Code section 12-121. Article III, Section 1 of the CC&Rs provides that, “In any suit or action brought to reinforce these covenants, the prevailing party shall be entitled to recover costs and reasonable attorney fees from the other party.” Idaho Code section 6-202 provides that a person who commits a timber trespass may be assessed “a reasonable attorney’s fee which shall be taxed as costs, in any civil action brought to enforce the terms of this act if the plaintiff prevails.” Idaho Code section 12-121 provides for the award of attorney fees to the prevailing party in any civil action, but in normal circumstances this Court will only award attorney fees on appeal under the statute “when this court is left with the abiding belief that the appeal was brought, pursued or defended frivolously, unreasonably or without foundation.” Minich v. Gem State Developers, Inc., 99 Idaho 911, 918, 591 P.2d 1078, 1085 (1979). Defendants are entitled to an award of attorney fees on appeal in defending against the alleged violations of the CC&R’s under Article III, Section 1, of that document. They are also entitled to an award of attorney fees on appeal for defending their award of damages for timber trespass pursuant to Idaho Code section 6-202. Also, because we find that Plaintiff’s remaining issues on appeal were pursued frivolously, unreasonably, or without foundation, Defendants are entitled to an award of attorney fees for defending those issues pursuant to Idaho Code section 12-121.

XII. Conclusion.

We affirm the judgment of the district court, and we award respondents costs and attorney fees on appeal.

20 Chief Justice BURDICK, Justices J. JONES, W. JONES, and HORTON CONCUR.

21 IN THE SUPREME COURT OF THE STATE OF IDAHO

Docket No. 41825

FEDERAL NATIONAL MORTGAGE ) ASSOCIATION, ) ) Plaintiff-Respondent, ) ) v. ) ) RUSSELL HAFER, ) ) Defendant-Appellant, ) ) and ) ) Boise, May 2015 Term JOHN DOES 1-10 as occupants of the ) premises located at 402 South Lodestone ) 2015 Opinion No. 56 Avenue, Meridian, Idaho 83642, ) ) Filed: June 22, 2015 Defendants. ) ______) Stephen W. Kenyon, Clerk ) RUSSELL and SANDRA HAFER, ) ) Third Party Plaintiffs-Appellants, ) ) v. ) ) AMERICAN HOME MORTGAGE ) SERVICES, INC., and DOES 1-10, ) ) ) ______)

Appeal from the District Court of the Fourth Judicial District of the State of Idaho, Ada County. Hon. Timothy L. Hansen, District Judge.

The judgment of the district court is vacated and the case is remanded.

Townsend Law, P.C., Boise, for appellants. Jeffrey R. Townsend argued.

Perkins Coie, Boise, for respondent American Home Mortgage Servicing, Inc. Tonn K. Petersen argued.

1 RCO Legal, P.C., Boise, for respondent Federal National Mortgage Association. Lewis N. Stoddard argued. ______

J. JONES, Justice The Federal National Mortgage Association (“FNMA”) purchased Russell Hafer’s home1 at a non-judicial foreclosure sale and filed an eviction suit when Russell and his wife, Sandra, refused to vacate. The Hafers claim that the foreclosure sale was invalid because their loan servicer, American Home Mortgage Services, Inc., now known as Homeward Residential, Inc. (“Homeward”), agreed to modify the terms of Russell’s loan just prior to instituting foreclosure proceedings. They claim that Russell was therefore not in default at the time of the sale. The Hafers filed a third-party complaint against Homeward, stating eleven causes of action and asking the district court to quiet title in Russell. FNMA and Homeward filed a joint motion for summary judgment, arguing that there was no agreement to modify the loan terms because Russell did not sign and return a permanent loan modification agreement to Homeward by the specified deadline. The district court granted the motion in favor of FNMA and partially granted the motion in favor of Homeward, holding that there was no agreement between Homeward and Russell modifying Russell’s loan because no Homeward representative signed an agreement. The Hafers make two arguments on appeal. First, they argue that the district court erred in considering the question whether an agreement had to be signed by a Homeward representative when that issue was not raised in the joint motion for summary judgment. Second, they argue that the district court erred substantively in concluding that there was no agreement to modify Russell’s loan absent a signature from a Homeward representative. I. FACTUAL AND PROCEDURAL BACKGROUND Congress passed the Emergency Economic Stabilization Act in response to the economic crisis of the late 2000s. PL 110–343, Div. A, 122 Stat. 3765 (2008). The Act was designed to mitigate the effects of the recession by, among other things, “preserv[ing] home ownership.” 12 U.S.C. § 5201. To that end, it authorized the Secretary of the Treasury to “implement a plan that seeks to maximize assistance for homeowners,” encourage mortgage servicers to take advantage of existing options to minimize foreclosures, and “use loan guarantees and credit enhancements

1 While both Russell and Sandra Hafer are parties to this action, the real property appears to be Russell’s separate property.

2 to facilitate loan modifications to prevent avoidable foreclosures.” Id. § 5219(a)(1). In 2009, the Secretary exercised this authority by implementing a number of programs, including the Home Affordable Modification Program (“HAMP”).2 HAMP is an attempt to preserve home ownership by incentivizing mortgage loan servicers to enter into loan modification agreements with home owners at risk of foreclosure. Under the program, loan servicers enter into agreements with the Department of the Treasury to identify home owners who are at risk of foreclosure, but who may be able to stay in their homes with reduced mortgage payments. After contacting home owners who may benefit from the program, the servicer requests financial information to determine whether the home owner meets eligibility conditions for participation. If the home owner meets those initial eligibility conditions, the servicer provides the home owner with a Trial Period Plan (“TPP”), temporarily suspending payments under the original loan agreement and requiring payments at a revised rate determined by a formula promulgated by the Department of the Treasury. If the home owner successfully makes payments in accord with the TPP and provides additional documents establishing eligibility for a permanent loan modification, the servicer provides the home owner with a Permanent Modification Agreement (“PMA”). The Department of the Treasury pays servicers a fee for each such loan permanently modified. Russell Hafer purchased the home in Meridian that is the subject of this action in January 2007. The purchase was financed through a loan secured by a deed of trust in favor of FNMA. Homeward has acted as servicer of the promissory note and trust deed. In August of 2010, Sandra was contacted by a Homeward representative who suggested that Russell may be eligible to participate in HAMP. Russell had previously fallen behind on payments and obtained loan modifications, which may have precipitated this contact. According to Sandra, the representative recommended that Russell fall behind on his mortgage payments to ensure his eligibility. Russell did so and then submitted an application to participate in HAMP in October of 2010. In March of 2011, Russell was approved for a TPP. Homeward sent Russell a letter dated March 15, 2011, informing him of his eligibility and instructing him that to secure a permanent modification he

2 For a description of the operation of HAMP, see U.S. Dep’t of Treasury, Supplemental Directive 09-01: Introduction to the Home Affordable Modification Program (April 6, 2009), available at https://www.hmpadmin. com/portal/programs/docs/hamp_servicer/sd0901.pdf. See also Wigod v. Wells Fargo Bank, N.A., 673 F.3d 547, 556–57 (7th Cir. 2012) (outlining the operation of HAMP).

3 must make all of his TPP payments and submit all required documents. Russell made all of his TPP payments and submitted all documents requested by Homeward. Homeward approved Russell for a permanent modification and sent a PMA on June 28, 2011, which Russell completed and returned to Homeward. According to the transmittal letter, the PMA was due back to Homeward on July 13. Homeward first claimed that it did not receive the PMA until July 14 and later claimed that the PMA was improperly notarized. The Hafers claim that the first PMA was properly notarized and was delivered to Homeward on July 13. They support that claim with an affidavit from a notary public who claims to have notarized the document, and an attached UPS “Proof of Delivery” notice stating that a shipment sent by the Hafers was delivered to Homeward at 9:06 a.m. on July 13. It is undisputed that Homeward then sent a second PMA to Russell, but the parties disagree as to when the second PMA was sent and when it was due back to Homeward. Homeward claims that it was sent on July 14 and was due back no later than July 21. The Hafers claim that they were not told a second PMA was being sent until around July 26, did not receive it until around July 30, and that it was not due back until August 31. The second PMA was properly notarized on August 2 and was delivered to Homeward on August 3. By that time, Homeward had closed the loan modification file and sent a letter to Russell, dated July 26, stating that he was ineligible for participation in HAMP for failure to deliver a properly executed PMA. Homeward also sent a letter to Russell, dated July 30, asking him to begin the process of qualifying for a HAMP modification again. Russell did not do so. The trustee of the deed of trust, Northwest Trustee Services, Inc., executed a notice of default on August 2, 2011. The notice was recorded the next day, a notice of a trustee’s sale was issued on August 16, and the property was purchased by FNMA at the sale on December 15. FNMA filed a “Post Foreclosure Eviction Complaint for Ejection and Restitution of Property” in February of 2012. The Hafers answered and filed a third-party complaint against Homeward, asserting eleven causes of action: (1) Because Homeward contracted with Russell to modify his loan, Russell was not in default when the foreclosure sale occurred and the foreclosure sale was void. (2) Homeward improperly foreclosed on Russell’s loan while he was being considered for participation in HAMP. (3) Homeward breached its contract to modify Russell’s loan by foreclosing on the loan and selling the property.

4 (4) Homeward violated the covenant of good faith and fair dealing.3 (5) When he stopped making payments after completing the TPP, Russell relied to his detriment on assurances from Homeward that his loan terms would be modified. (6) It is unconscionable to allow Homeward to benefit from its false assurances that Homeward would not proceed with foreclosure while Russell was being considered for participation in HAMP. (7) Homeward violated the Idaho Consumer Protection Act by initiating foreclosure proceedings after assuring Russell that there was no need to make his normal mortgage payments because he was under consideration for participation in HAMP. (8) Fraud (9) Negligence (10) Negligent infliction of emotional distress (11) Intentional infliction of emotional distress The Hafers asked the district court to quiet title in Russell, enforce the terms of Homeward’s contract to modify Russell’s loan, enjoin Homeward from foreclosure proceedings, award special and general damages, and make a variety of findings. In answering FNMA’s complaint, the Hafers argued that the notices of both the foreclosure and trustee’s sale were deficient and that the trustee’s sale was void because it was a result of fraud, mistake, and breach of contract. They requested a jury trial. Homeward and FNMA submitted a joint motion for summary judgment in February of 2013. Homeward argued that while Russell was offered a permanent loan modification, he failed to accept the offer because he failed to submit either the first or second PMA timely and properly notarized. According to Homeward, because there was no contract to modify the loan terms, Russell was in default and the foreclosure was proper. FNMA argued that the trustee’s deed was properly recorded and that Idaho Code section 45-1510 provides that that fact constitutes prima facie evidence of compliance with the relevant notice requirements, evidence that the Hafers did nothing to rebut. FNMA also argued that any impropriety on the part of Homeward is irrelevant to FNMA’s right to possession of the property. After a hearing, the district court issued a memorandum decision and order addressing the joint motion for summary judgment. The court granted summary judgment dismissing eight of the Hafers’ eleven claims against Homeward, refusing to grant summary judgment only as to the

3 In their complaint, the Hafers titled their fourth cause of action “unclean hands,” but then in the text alleged both an equitable unclean hands theory and a violation of the covenant of good faith and fair dealing. In its memorandum decision, the district court utilized the unclean hands title for the count but discarded the unclean hands theory and ruled upon the covenant of good faith and fair dealing theory, denying summary judgment.

5 second, sixth, and seventh. As to the claims it left in the case, the court concluded there was a disputed question of fact whether the letter dated July 30 from Homeward to Russell, suggesting that Russell may qualify for participation in HAMP and asking him to begin the application process anew, communicated that Russell was being considered for HAMP and that Homeward would not foreclose while he was under consideration. The district court granted summary judgment in favor of FNMA as to its claim for possession based on its conclusion that Russell was in default under the promissory note and deed of trust. The district court entered judgment in favor of FNMA and certified the judgment as final under I.R.C.P. 54(b). The Hafers timely filed a notice of appeal. The district court then entered judgment dismissing the Hafers’ first, third, fourth, fifth, ninth, tenth, and eleventh causes of action against Homeward, with prejudice, and dismissing the Hafers’ eighth cause of action without prejudice. The judgment was certified as final under I.R.C.P. 54(b). The Hafers timely filed an amended notice of appeal.4 II. ISSUES ON APPEAL 1. Whether the district court erred in granting summary judgment dismissing the Hafers’ first, third, and fourth causes of action against Homeward. 2. Whether the district court erred in granting summary judgment in favor of FNMA. 3. Whether the Hafers are entitled to attorney fees on appeal under Idaho Code section 12- 120(3). III. STANDARD OF REVIEW When reviewing an order for summary judgment, this Court applies the same standard of review as was used by the trial court in ruling on the motion for summary judgment. See Cristo Viene Pentecostal Church v. Paz, 144 Idaho 304, 307, 160 P.3d 743, 746 (2007). Summary judgment is proper if “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). “If there is no genuine issue of material fact, only a question of law remains, over which this Court exercises free review.” Cristo, 144 Idaho at 307, 160 P.3d at 746. “It is axiomatic that upon a motion for summary judgment the non-moving party may not rely upon its pleadings, but must come forward with evidence by way of affidavit or otherwise which contradicts the evidence submitted by the moving party, and

4 On appeal, the Hafers argue that the district court erred in dismissing their first, third, and fourth causes of action, and in granting summary judgment in favor of FNMA. They do not address the district court’s dismissal of their fifth, eighth, ninth, tenth, and eleventh causes of action.

6 which establishes the existence of a material issue of disputed fact.” Zehm v. Associated Logging Contractors, Inc., 116 Idaho 349, 350, 775 P.2d 1191, 1192 (1989). This Court liberally construes all disputed facts in favor of the nonmoving party, and all reasonable inferences drawn from the record will be drawn in favor of the nonmoving party. Cristo, 144 Idaho at 307, 160 P.3d at 746. If reasonable persons could reach differing conclusions or draw conflicting inferences from the evidence presented, then summary judgment is improper. McPheters v. Maile, 138 Idaho 391, 394, 64 P.3d 317, 320 (2003). Gray v. Tri-Way Const. Servs., Inc., 147 Idaho 378, 383, 210 P.3d 63, 68 (2009). IV. DISCUSSION A. The district court erred in dismissing the Hafers’ first, third, and fourth causes of action against Homeward. The Hafers’ first, third, and fourth causes of action—their claim that Homeward improperly foreclosed when Russell was not in default, their breach of contract claim, and their claim for violation of the covenant of good faith and fair dealing5—presuppose the existence of an agreement between Homeward and Russell to modify the terms of Russell’s loan. Likewise, the Hafers defend against FNMA’s claim for possession on the ground that an agreement with Homeward modified Russell’s loan so that he was not in default at the time of the foreclosure sale. The district court dismissed the Hafers’ claims and granted summary judgment in favor of FNMA because it concluded that “the Hafers have not demonstrated a genuine issue of material fact as to whether a binding contract to modify the loan was executed.” The court pointed to the fact that the Hafers had presented no evidence that a Homeward representative signed and returned a PMA to Russell. The court relied on a single provision of the PMA to conclude that, absent a signature from a Homeward representative, Homeward did not agree to modify Russell’s loan: the Loan Documents will not be modified unless and until (i) the Lender accepts this Agreement by signing and returning a copy of it to me, and (ii) the Modification Effective Date (as defined in Section 3) has occurred.

5 “The covenant [of good faith and fair dealing] requires that the parties perform, in good faith, the obligations imposed by their agreement, and a violation of the covenant occurs only when either party violates, nullifies or significantly impairs any benefit of the contract.” Shawver v. Huckleberry Estates, L.L.C., 140 Idaho 354, 362, 93 P.3d 685, 693 (2004).

7 The central dispute between the parties concerns whether Homeward made an offer to modify Russell’s loan that Russell accepted, even if Homeward never signed a PMA.6 In support of their claim that Homeward made an offer that Russell accepted by completing his TPP payments and returning the documents requested by Homeward, the Hafers cite Homeward’s repeated statements that it was making an offer that could be accepted in that manner. In the March 15, 2011, letter approving Russell to enter a TPP, he is informed by Homeward that “[t]o qualify for a permanent modification, you must make the following trial period payments in a timely manner . . . . After all trial period payments are timely made and you have submitted all the required documents, your mortgage will be permanently modified.” The same letter provided that “[t]o accept this offer,” Russell needed only make his first TPP payment. Next, in the letter accompanying the first PMA, dated June 28, 2011, Homeward congratulates Russell on his eligibility for a loan modification. He is informed that if he makes his remaining TPP payments, if any, Homeward “will modify your mortgage loan and waive prior late charges that remain unpaid.” The letter outlines a two-step process for “How to Accept This Offer.” The first step instructs Russell that [t]o accept this offer, you must sign and return both copies of the Modification Agreement to us in the enclosed, pre-paid envelope by 07/13/2011. If the Modification Agreement has notary provisions at the end, you must sign both copies before a notary public and return the notarized copies to us. Step two informs Russell of the need to continue making any remaining TPP payments. It is only when one looks to the fine print of the PMA accompanying the June 28, 2011, letter that one finds any indication that Homeward might yet claim the unilateral right to refuse to modify Russell’s loan no matter how compliant Russell had been. Section 3 of the PMA states that: If my representations and covenants in Section 1 continue to be true in all material respects and all preconditions to the modification set forth in Section 2 have been met,

6 The Hafers also argue that the district court should not have considered the question whether a signature from a Homeward representative was required to form a contract because that issue was not raised in the joint motion for summary judgment. The Hafers are correct that the district court erred in raising the issue sua sponte. “[A] district court may not decide an issue not raised in the moving party’s motion for summary judgment.” Harwood v. Talbert, 136 Idaho 672, 678, 39 P.3d 612, 618 (2001). “The party against whom the judgment will be entered must be given adequate advance notice and an opportunity to demonstrate why summary judgment should not be entered.” Id. (internal quotation marks omitted). Whether a signature from Homeward on a PMA was required before a contract would be formed, even if the PMA was signed, notarized, and timely delivered by Russell, is a different issue than whether Russell managed to return a PMA to Homeward signed, notarized, and by the due date. The Hafers were not given notice that they needed to address the former issue when Respondents moved for summary judgment arguing that there was no dispute of fact regarding the latter. As a result, the district court erred in granting summary judgment on an issue not raised in Respondents’ joint motion for summary judgment. Because we hold that the district court erred substantively in its analysis, however, we need not rule on this ground.

8 the Loan Documents will automatically become modified on July 1, 2011 (the “Modification Effective Date”) and all unpaid late charges that remain unpaid will be waived. Section 2 is titled “Acknowledgements and Preconditions to Modification.” One of those preconditions, Section 2B, provides that the loan documents will not be modified “unless and until the Lender accepts this Agreement by signing and returning a copy of it to me, and the modification Effective Date (as defined in Section 3) has occurred.” These various statements appear to be conflicting. On the one hand, Russell was repeatedly told that he had received an offer for a loan modification that he could accept by making all of his TPP payments and providing all requested documents. If Russell did so, Homeward promised that his loan “will be permanently modified.” On the other hand, the PMA appears to condition any modification of the loan on the signature of a Homeward representative. In determining that the PMA was not effective, absent a signature from a Homeward representative, the district court looked only to its Section 2B. It did not address any of the language in the letter accompanying the PMA, or the language in the earlier letter dated March 15, 2011. A large number of courts in a variety of jurisdictions have addressed similar issues involving HAMP modifications and have reached varying conclusions. See Tammy J. Raduege, Annotation, Enforceability of Trial Period Plans (TPP) Under the Home Affordable Modification Program (HAMP), 88 A.L.R. Fed. 2d 331 (2014) (“Many homeowners have entered into TPPs and have been disappointed when the loan servicer refused to make a permanent modification and instead foreclosed on the home. This scenario has led to a deluge of mostly federal litigation where frustrated homeowners assert state law claims seeking to enforce the TPP agreement. Courts have varied widely in their holdings on these claims.”).7 In one of the

7 Many of these cases involve questions not at issue here. For instance, some courts have dismissed contract-based claims arising out of HAMP due to a failure of consideration. See, e.g., Senter v. JPMorgan Chase Bank, N.A., 810 F. Supp. 2d 1339, 1346–49 (S.D. Fla. 2011). But see, e.g., Sutcliffe v. Wells Fargo Bank, N.A., 283 F.R.D. 533, 552– 53 (N.D. Cal. 2012) (holding that home owners incur additional obligations under TPPs and those obligations may constitute adequate consideration). In their reply in support of summary judgment, Respondents alleged that there was a failure of consideration, but did not do so in their initial memorandum in support of summary judgment. The district court did not address the consideration argument in its order and Respondents do not press it on appeal. Some courts have also dismissed contract-based claims arising out of HAMP on the ground that the absence of a statutory, private right of action to enforce HAMP precludes such claims. See, e.g., Schwartz v. Chase Home Fin., LLC, No. CV-10-2120-PHX-FJM, 2011 WL 1933738, at *1 (D. Ariz. May 19, 2011). But see, e.g., Stagikas v. Saxon Mortgage Servs., Inc., 795 F. Supp. 2d 129, 135–36 (D. Mass. 2011) (noting that, even if HAMP does not include a private right of action to enforce the terms of the program, servicers who participate in HAMP may yet enter into contracts enforceable under state law). See also Wigod v. Wells Fargo Bank, N.A., 673 F.3d 547, 576–85

9 leading cases, Wigod v. Wells Fargo Bank, N.A., 673 F.3d 547 (7th Cir. 2012), Wells Fargo refused to grant a permanent loan modification to a home owner, Wigod, who had completed all of the requirements of the TPP and timely returned all requested documents. Id. at 558. In refusing to modify the loan, Wells Fargo relied on language nearly identical to the language relied upon by Homeward in this case. Id. at 563. On appeal from the grant of Wells Fargo’s motion to dismiss, the Seventh Circuit held that Wells Fargo made an offer for a loan modification that Wigod accepted by making the TPP payments and delivering the appropriate documents to Wells Fargo. Id. The court emphasized that Wells Fargo repeatedly characterized the TPP as an offer for a loan modification that could be accepted by making the TPP payments and providing the requested documents. Id. at 561–62. As to the provision cited by Wells Fargo, the court held that Wells Fargo’s reading as permitting it to simply refuse to sign a PMA and modify the loan would nullify Wells Fargo’s obligation to “send [Wigod] a Modification Agreement” if she “compl[ied] with the requirements” of the TPP and if her “representations . . . continue to be true in all material respects.” Under Wells Fargo’s theory, it could simply refuse to send the Modification Agreement for any reason whatsoever—interest rates went up, the economy soured, it just didn’t like Wigod—and there would still be no breach. Under this reading, a borrower who did all the TPP required of her would be entitled to a permanent modification only when the bank exercised its unbridled discretion to put a Modification Agreement in the mail. In short, Wells Fargo’s interpretation of the qualifying language in section 2 turns an otherwise straightforward offer into an illusion. Id. at 563 (internal citations omitted). See also Corvello v. Wells Fargo Bank, NA, 728 F.3d 878, 883 (9th Cir. 2013), as amended on reh’g in part (Sept. 23, 2013) (with facts nearly identical to Wigod, holding that the signature provision “cannot convert a purported agreement setting forth clear obligations into a decision left to the unfettered discretion of the loan servicer”).8

(7th Cir. 2012) (analyzing and rejecting various theories according to which the absence of a private right of action in HAMP might preclude state law contract claims arising out of HAMP modifications). Respondents made this argument briefly in their memorandum in support of summary judgment, but the district court did not address it because it held that there was no contract in the first instance. Respondents do not press this argument on appeal. Because the district court did not pass on either argument below and neither argument was raised or briefed on appeal, we do not consider them here. 8 Corvello reversed two consolidated cases. The district court in this case relied heavily on one of the district court cases later reversed in Corvello—Lucia v. Wells Fargo Bank, N.A., 798 F. Supp. 2d 1059 (N.D. Cal. 2011) rev’d sub nom. Corvello v. Wells Fargo Bank, NA, 728 F.3d 878 (9th Cir. 2013), as amended on reh’g in part (Sept. 23, 2013).

10 We find the reasoning in Wigod persuasive. “Formation of a valid contract requires a meeting of the minds as evidenced by a manifestation of mutual intent to contract. This manifestation takes the form of an offer followed by an acceptance.” Justad v. Ward, 147 Idaho 509, 512, 211 P.3d 118, 121 (2009) (internal citations omitted). “An offer is a manifestation of willingness to enter into a bargain, so made as to justify another person in understanding that his assent to that bargain is invited and will conclude it.” Intermountain Forest Mgmt., Inc. v. Louisiana Pac. Corp., 136 Idaho 233, 237, 31 P.3d 921, 925 (2001) (internal quotation marks omitted) (quoting Restatement (Second) of Contracts § 30(2) (1981)). The existence and nature of the offer “is judged by its objective manifestations, not by any uncommunicated beliefs, mental reservations, or subjective interpretations or intentions of the offeror.” 17A Am. Jur. 2d Contracts § 49 (footnotes omitted). “[T]he offeror controls the terms of acceptance, and an acceptance is often defined as a manifestation of assent to the terms of an offer, made by the offeree in the manner invited or required by the offer. The offeror may prescribe conditions as to the mode of acceptance.” Id. § 92 (footnotes omitted). “Generally the determination of the existence of a sufficient meeting of the minds to form a contract is a question of fact to be determined by the trier of facts.” Shields & Co. v. Green, 100 Idaho 879, 882, 606 P.2d 983, 986 (1980). Here, Homeward clearly communicated to Russell that it was making an offer. The March 15, 2011 letter sent by Homeward explicitly characterizes itself as doing so and instructs Russell how to accept. It promises that Russell’s loan “will be permanently modified” if he timely makes his TPP payments and submits the documents requested by Homeward. It does not contain the slightest hint that Homeward can unilaterally, for any reason or none, refuse to grant a permanent modification even if Russell made all of his TPP payments, remained eligible for a permanent modification, and submitted all of the documents requested by Homeward. The letter clearly conditions the permanent modification on compliance with the program, not on the whim of Homeward. Likewise, the June 28, 2011 letter accompanying the PMA promises a permanent modification if Russell returns the PMA signed and notarized by the appropriate date, having made all of his TPP payments. It also makes no mention of Homeward having unbridled discretion to refuse a permanent loan modification. If Homeward made an offer for a permanent loan modification that was accepted by Russell when he completed his TPP payments and timely delivered all requested documents, the

11 PMA cannot unilaterally walk back Homeward’s existing obligation to modify the loan. That is so even if the signature provision is read as an unambiguous attempt to provide Homeward with unbridled discretion to refuse a permanent modification. To the extent that Homeward’s communications with Russell are conflicting and ambiguous, the signature provision should be construed against Homeward. “[I]f two clauses relating to the same thing are so repugnant that they cannot stand together, the first will be received and the later one rejected, especially when the latter is inconsistent with the general purpose and intent of the instrument and would nullify it.” Morgan v. Firestone Tire & Rubber Co., 68 Idaho 506, 518, 201 P.2d 976, 983 (1948). The letter Homeward sent to Russell on March 15, 2011 states: “The Making Home Affordable Program was created to help millions of homeowners refinance or modify their mortgages. As part of this program, we—your mortgage servicer—and the Federal Government are working to offer you options to help you stay in your home.” The June 28 letter contained almost identical language. A provision that permits Homeward to unilaterally and arbitrarily refuse to grant a permanent modification and foreclose on a home owner who qualifies, has made all TPP payments, and has submitted all of the required paperwork is inconsistent with the goal of helping home owners to modify their loans and stay in their homes. This is also a contract of adhesion drafted by Homeward. A contract of adhesion is “an agreement between two parties of unequal bargaining strength, expressed in the language of a standardized contract, written by the more powerful bargainer to meet its own needs, and offered to the weaker party on a ‘take-it-or- leave-it basis.’” Lovey v. Regence BlueShield of Idaho, 139 Idaho 37, 43, 72 P.3d 877, 883 (2003). Ambiguities in a contract of adhesion should be construed against the drafter. See Farm Bureau Ins. Co. of Idaho v. Kinsey, 149 Idaho 415, 419, 234 P.3d 739, 743 (2010) (“Because insurance policies are contracts of adhesion that are not usually subject to negotiation between the parties, any ambiguity in a policy is construed strongly against the insurer.”). See also Werry v. Phillips Petroleum Co., 97 Idaho 130, 136, 540 P.2d 792, 798 (1975) (“Where there is doubtful language in a contract, it will be interpreted most strongly against the party who provided that language.”).9

9 Though not dispositive, Department of Treasury guidance on HAMP suggests that servicers are not intended to have unfettered discretion to refuse a modification to a home owner who is eligible, completes the TPP program, and submits all required documents. According to the Department, “[i]f the borrower complies with the terms and conditions of the Trial Period Plan, the loan modification will become effective on the first day of the month following the trial period as specified in the Trial Period Plan.” U.S. Dep’t of Treasury, Supplemental Directive 09- 01: Introduction to the Home Affordable Modification Program 18 (April 6, 2009), available at

12 Respondents rely primarily on this Court’s decision in Intermountain Forest Management, Inc. v. Louisiana Pacific Corporation, 136 Idaho 233, 31 P.3d 921 (2001), for the proposition that Homeward did not offer to modify Russell’s loan. Intermountain Forest Management’s (“IFM”) President, Gary Briggs, and a Louisiana Pacific Corporation (“LPC”) employee, Laurie Stone, were discussing a logging contract when Briggs suggested terms, Stone recorded those terms on an unsigned contract, and Briggs signed without making changes. Id. at 234–35, 31 P.3d at 922–23. Briggs was aware at the time that Stone was not authorized to sign the contract and that it would need to be reviewed, approved, and signed by a supervisor, but the contract was never executed by a representative of LPC. Id. When IFM sued for breach of contract, this Court affirmed the district court’s grant of summary judgment dismissing the claim. Id. at 236, 31 P.3d at 924. IFM argued that when Stone presented the unsigned contract to Briggs, doing so constituted an offer that Briggs accepted by signing. Id. at 237, 31 P.3d at 925. This Court noted that a communication does not constitute an offer “if the person to whom it is addressed knows or has reason to know that the person making it does not intend to conclude a bargain until he has made a further manifestation of assent.” Id. (quoting Restatement (Second) of Contracts § 26 (1981)). The Court held that “[t]he undisputed facts in the record reasonably support the district judge’s conclusion that the presentation of the contract to Briggs for a signature was not an offer and Briggs was not justified in assuming his assent would conclude the bargain . . . .” Id. According to Respondents, because the PMA included the provision requiring a signature from a Homeward representative, Russell “had reason to know that Homeward did not intend to conclude a bargain until Homeward had made a further manifestation of assent.” The facts of this case are clearly distinguishable from those in Intermountain Forest. In Intermountain Forest, Briggs knew when presented with the unsigned contract that the purported offeror, Stone, was not authorized to make an offer. Id. at 238, 31 P.3d at 926. There was simply no question that

https://www.hmpadmin.com/portal/programs/docs/hamp_servicer/sd0901.pdf (emphasis added). Likewise, the Department states that: The servicer must execute and return a copy of the fully executed modification agreement to the borrower promptly, but no later than 30 calendar days after receipt of the agreement executed by the borrower, and the borrower’s compliance with all conditions set forth in the trial period plan notice and Section 1 of the modification agreement. U.S. Dep’t of Treasury, Making Home Affordable Program: Handbook for Services of Non-GSE Mortgages 131 (March 3, 2014), available at https://www.hmpadmin.com/portal/programs/docs/hamp_servicer/mhahandbook_ 44.pdf (emphasis added).

13 Briggs, the purported offeree, was not justified in understanding that his assent would conclude the bargain. Because both parties knew that Stone was not authorized to make an offer, Stone was not making an offer. Here, the communications were coming directly from Homeward to Russell. Russell had no reason to believe that Homeward was not authorized to offer a modification of his loan, or that Homeward was doing anything other than making such an offer when it explicitly stated that it was doing so and instructed Russell how to accept. Homeward argues that “[t]here was no binding contract because, simply, there was no meeting of the minds.” According to Homeward, the fact that it sent a second PMA to Russell shows that it did not believe that a contract was formed when Russell returned the first PMA. Likewise, the fact that Russell attempted to return the second PMA shows that he did not believe that a contract was formed when he returned the first PMA. As a result, Homeward claims, there could have been no meeting of the minds as required to form a contract.10 “An offer is judged by its objective manifestations, not by any uncommunicated beliefs, mental reservations, or subjective interpretations or intentions of the offeror.” 17A Am. Jur. 2d Contracts § 49. Likewise, “[a] response to an offer amounts to an acceptance if an objective, reasonable person is justified in understanding that a fully enforceable contract has been made, even if the offeree subjectively does not intend to be legally bound.” Justad, 147 Idaho at 512, 211 P.3d at 121 (quoting 17A Am. Jur. 2d Contracts § 91). Whether there was a meeting of the minds is an objective inquiry that does not focus on the subjective beliefs or intentions of Russell or Homeward. As discussed above, Homeward’s communications with Russell strongly suggested that it was making an offer for a permanent loan modification that Russell could accept by making his TPP payments and providing all documents requested by Homeward. If he did those things, an objective, reasonable person would be justified in understanding Russell as having accepted. That is so even if Homeward subjectively thought that Russell did not accept and even if Russell later thought he might be required to submit a second PMA. Homeward made an offer for a permanent loan modification in its letter of March 15, 2011, and instructed Russell that to accept he needed to complete his TPP payments and submit all of the documents requested by Homeward. If Russell accepted in the manner dictated by Homeward, Homeward cannot subsequently assert the right to unilaterally refuse a permanent

10 This argument is addressed only to the effect of the first PMA.

14 loan modification. The district court erred in concluding that the signature provision of the PMA entitled Homeward to do so. Respondents further contend that they were entitled to summary judgment because, even if Homeward made an offer for a permanent loan modification, there is no genuine dispute that Russell failed to accept it because he did not return a properly notarized PMA by the deadline. Respondents make two arguments. They first contend that the first PMA arrived at their office a day late. They then argue that, even if the document was timely returned, it was not properly notarized. They do not contend that Russell had not signed it in the proper place. The summary judgment record is remarkably incomplete and confused when it comes to the key documents at issue in this case. In support of summary judgment, Cindi Ellis, the Vice President of Homeward, submitted an affidavit including three attachments. The attachments are identified in the affidavit as being (A) the letter sent by Homeward, dated March 15, notifying Russell of his eligibility for a TPP; (B) the first PMA sent by Homeward on June 28 and returned on either July 13 or 14 and the accompanying letter; and, (C) the second PMA, mailed by Homeward either on or after July 14 and returned to Homeward, signed and notarized by Russell, on August 3. The affidavit misidentifies attachments B and C, however. Attachment C is the letter dated July 26 from Homeward to Russell, notifying him that he is not eligible for participation in HAMP for failure to timely return a properly notarized PMA. Though Attachment B includes a letter dated June 28, 2011, congratulating Russell on his eligibility for a HAMP modification and referencing an attached PMA, the PMA included as part of Attachment B is signed by Russell on July 26 and was notarized August 2. That document is apparently the second PMA. The first PMA is not part of the record, despite what Ellis’ affidavit claims, and neither is any letter accompanying the second PMA. During oral argument before the Court, Homeward’s counsel advised that the first PMA and the transmittal letter for the second PMA were not in Homeward’s files and could not be found. The first PMA was due back to Homeward no later than July 13, 2011. Respondents claim that it was not received until July 14. To support their claim that the PMA was late, Respondents cite Cindi Ellis’ affidavit as claiming that Homeward’s business records reflect the PMA was received on July 14. Ellis did not include those records as an attachment to her affidavit and they are not included by Respondents elsewhere in the record. In support of their claim that the PMA was delivered on July 13, the Hafers both submitted affidavits in which they

15 testify that they sent the PMA to Homeward by UPS overnight delivery on July 12. Sandra attached a UPS notice of delivery of the shipment to Homeward at 9:06 a.m. on July 13, 2001. In her affidavit, Sandra testifies that she was informed by Homeward in a phone call on July 26 that it had not received the PMA but that in a subsequent conversation Homeward “acknowledged that they received the [PMA], but that it was not properly notarized.” Respondents do not address this evidence. Respondents also argue that there is no genuine dispute of fact that the first PMA was improperly notarized. As an initial matter, it is not clear that to accept Homeward’s offer Russell was required to have the PMA notarized. While the letter of June 28, 2011, instructs Russell that the attached PMA must be notarized, the March 15, 2011, letter provided that Russell’s loan “will be permanently modified” if he timely made his TPP payments and “submitted all the required documents.” There is no dispute that Russell made all of his TPP payments and submitted all of the documents required by Homeward, including the PMA, even if that document was not notarized.11 Even assuming that Russell was required to have his signature notarized in order to accept Homeward’s offer, the Respondents do not so much as gesture at an explanation concerning how the document was improperly notarized. Because the first PMA is not in the record, there is no direct evidence as to how the document was notarized. Instead, Respondents cite only Cindi Ellis’ affidavit as claiming that Homeward’s business records state that the first PMA was improperly notarized. She makes the conclusory statement that the document “was not properly notarized and was therefore invalid.” No supporting business records are included in the summary judgment record. In oral argument before the Court, Homeward’s counsel was unable to explain how the notarization of the first PMA was improper. Since Homeward appears to have lost the first PMA, and since Homeward does not say how the notarization is improper, there is no competent evidence in the record to indicate that there was any infirmity in the notarization of the first PMA. The Hafers claim in separate affidavits that Russell signed the first PMA in front of a notary public on July 8, 2011. Russell states that he believes he signed in the correct area and that the document was properly notarized. The Hafers also introduced an affidavit from a

11 Department of Treasury guidance on HAMP states: “Note: the borrower is not required to have the Agreement notarized.” U.S. Dep’t of Treasury, Supplemental Directive 09-01: Introduction to the Home Affordable Modification Program 15 (April 6, 2009), available at https://www.hmpadmin.com/portal/programs/docs/hamp _servicer/sd0901.pdf.

16 notary public, Clela N. Hoadley, who states she notarized a document for Russell on July 8, 2011, and that she has “never been accused of improperly notarizing a document, or notarizing a document in the wrong place.” As to the second PMA, the parties disagree only as to whether it was timely returned to Homeward. Though they agree it was returned to Homeward on August, 3, 2011, they disagree as to when it was due. According to Respondents, the second PMA was sent to the Hafers on July 14 and was due July 21. Though what appears to be the second PMA is in the record,12 the letter that accompanied the second PMA is not. Because the letters that accompanied the PMAs, and not the PMAs themselves, provided the relevant deadlines, there is no direct evidence as to when the second PMA was due. Cindi Ellis’ affidavit claims that the second PMA was due by July 21. According to Sandra, the letter accompanying the second PMA directed them to return it by August 31. Homeward argues that the Hafers might be confusing two documents in claiming that the second PMA was due August 31. The Hafers acknowledge that Homeward sent Russell a letter, dated July 30, notifying him that he may be eligible to participate in HAMP and asking him to start the process of qualifying for a permanent modification anew. That letter states that the financial information he needed to provide to qualify was due August 31. According to Homeward, the Hafers might have confused the deadline for return of the second PMA with the deadline for return of the new application for a HAMP modification. There is simply no way to sustain the judgment in favor of Homeward on the Hafers’ first, third and fourth causes of action. Therefore, we vacate the judgment in favor of Homeward on the first, third and fourth causes of action, and remand the case for further proceedings consistent with this opinion. B. The district court erred in granting summary judgment in favor of FNMA. The Hafers argue that the district court erred in granting summary judgment in favor of FNMA because Russell’s agreement with Homeward resolved his default. They claim that, as a result, Russell was not in default at the time of the non-judicial foreclosure sale, the sale was invalid, and FNMA is not entitled to possession of the property. Respondents argue that the

12 The second PMA appears to be signed by Russell and properly notarized.

17 district court properly granted summary judgment on FNMA’s claim for possession because the trustee’s sale was final and cannot now be invalidated.13 Idaho Code section 45-1505 provides, in part, that a trustee may foreclose a trust deed by advertisement and sale under this act if . . . (2) [t]here is a default by the grantor or other person owning an obligation the performance of which is secured by the trust deed or by their successors in interest with respect to any provision in the deed which authorizes sale in the event of default of such provision. In Taylor v. Just, 138 Idaho 137, 59 P.3d 308 (2002), this Court held that Idaho Code section 14- 1505(2) “requires that the default exist at the time of the sale. It states that the trustee may foreclose a trust deed if there ‘is’ a default by the grantor, not if there ‘has been a default by the grantor.’” Id. at 140, 59 P.3d at 311. In Taylor, because the home owners had resolved their default by agreement prior to the foreclosure sale, the Court held that the foreclosure sale was not authorized by statute and was void. Id. at 141, 59 P.3d at 312. The March 15, 2011, letter provides that Russell’s “existing loan and loan requirements remain in effect and unchanged during the trial period.” With respect to foreclosure, Homeward states that “if [Russell] makes [his] new payments timely, we will not conduct a foreclose sale” (emphasis in original). Homeward claims that it may proceed to foreclose on the loan, though, if Russell is “notified in writing that [he] failed to comply with the terms of the trial period plan or do[es] not qualify for a permanent loan modification.” The letter is clear, then, that Russell’s present default was not resolved during the TPP period, and that the possibility of foreclosure was contingent on his failure to successfully complete TPP payments or qualify for a permanent loan modification. There is no dispute that Russell completed his TPP payments and qualified for a permanent loan modification. In a “Frequently Asked Questions” section of the letter, in response to the question when Russell would know if his loan would be permanently modified, Homeward states that Russell will be sent a PMA “detailing the terms of the modified loan” when he completes his TPP payments. Coupled with Homeward’s assurance that Russell’s loan “will be permanently modified” if he completes his TPP payments, remains qualified, and

13 Below, the Hafers also argued that the notice of default and notice of trustee’s sale did not meet the requirements of Idaho Code sections 45-1505(3) and 45-1506. The district court rejected this argument. It determined that the trustee’s deed was properly recorded and included recitals addressed to the relevant notice requirements. “When the trustee’s deed is recorded in the deed records of the county where the property described in the deed is located, the recitals contained in the deed . . . shall be prima facie evidence in any court of the truth of the recitals and the affidavits.” I.C. § 45-1510(1). The district court held that the Hafers did not identify the manner in which notice was deficient and did nothing to rebut the prima facie evidence of compliance with the notice requirements. On appeal, the Hafers do not argue that the district court erred by so holding.

18 submits the required documents, the letter suggests that the loan is modified when Russell completes the TPP, is informed he is qualified, and returns the PMA to Homeward. All of that happened here, prior to the foreclosure sale. Respondents cite Spencer v. Jameson, 147 Idaho 497, 211 P.3d 106 (2009), for the proposition that “under the Idaho Trust Deeds Act, the legislature did not intend for a sale to be set aside once a trustee accepts a bid as payment in full unless there are issues surrounding the notice of the sale.” The section of Idaho’s Trust Deeds Act addressed to finality, and the section discussed in Spencer, is Idaho Code section 45-1508, which provides that [a] sale made by a trustee under this act shall foreclose and terminate all interest in the property covered by the trust deed of all persons to whom notice is given under section 45-1506, Idaho Code, and of any other person claiming by, through or under such persons and such persons shall have no right to redeem the property from the purchaser at the trustee’s sale. The failure to give notice to any of such persons by mailing, personal service, posting or publication in accordance with section 45-1506, Idaho Code, shall not affect the validity of the sale as to persons so notified nor as to any such persons having actual knowledge of the sale. Furthermore, any failure to comply with the provisions of section 45-1506, Idaho Code, shall not affect the validity of a sale in favor of a purchaser in good faith for value at or after such sale, or any successor in interest thereof. In Taylor, this Court determined the foreclosure sale “was void for failure to comply with Idaho Code § 45-1505(2), which requires that there be a default in order to sell the real property secured by a deed of trust” and that Idaho Code section 45-1508 did not suggest that the sale was nevertheless final. Id. at 142, 59 P.3d at 313. Spencer does not conflict with this view of Idaho Code section 45-1508. Spencer involved a foreclosure sale in which the original owners of property challenged the sale of that property on the ground that the bidder failed to comply with Idaho Code section 45-1506(9), which requires full payment of the bid at the time of sale. Spencer, 147 Idaho at 503–04, 211 P.3d at 112–13. This Court held that the sale was final and valid despite that failure, though the terms of Idaho Code section 45-1508 might initially have suggested otherwise. Id. Spencer is irrelevant to this Court’s prior holding in Taylor that, where there is no default at the time of a foreclosure sale, the sale is not a “sale made by a trustee under this act” and so is not valid. The district court granted summary judgment to FNMA, based on its conclusion that there was no valid agreement between Russell and Homeward to modify his loan in accordance with the terms of the first PMA. There is certainly evidence in the record to support the proposition that Russell and Homeward did enter into a valid agreement to modify the loan. That

19 is an issue to be determined on remand. Because the district court erred in granting summary judgment to Homeward, it also erred in granting summary judgment in favor of FNMA. We therefore vacate the judgment in favor of FNMA and remand the case for further proceedings consistent with this opinion. C. The Hafers are not entitled to fees on appeal under Idaho Code section 12-120(3). The Hafers request fees on appeal under Idaho Code section 12-120(3), claiming that the present dispute arose out of a commercial transaction. That section provides that “[i]n any civil action to recover on . . . any commercial transaction unless otherwise provided by law, the prevailing party shall be allowed a reasonable attorney’s fee to be set by the court, to be taxed and collected as costs.” I.C. § 12-120(3). The statute defines “commercial transaction” to mean “all transactions except transactions for personal or household purposes.” Id. “This Court has interpreted I.C. § 12-120(3) to mandate the award of attorney fees on appeal as well as at trial.” Farm Credit Bank of Spokane v. Stevenson, 125 Idaho 270, 275, 869 P.2d 1365, 1370 (1994). In Bajrektarevic v. Lighthouse Home Loans, Inc., 143 Idaho 890, 155 P.3d 691 (2007), this Court held that a breach of contract claim involving the refinancing of a home loan was not a commercial transaction under Idaho Code section 12-120(3) because the transaction was for “personal or household purposes.” Id. at 893, 155 P.3d at 694. The transaction at issue here was to modify the Hafers’ home loan and is likewise for “personal or household purposes.” It was therefore not a commercial transaction under Idaho Code section 12-120(3) and that statute does not authorize fees on appeal. V. CONCLUSION We vacate the judgment in favor of Homeward on the Hafers’ first, third, and fourth causes of action, as well as the judgment in favor of FNMA on its claim for possession, and remand the case for further proceedings consistent with this opinion. The Hafers’ request for attorney fees pursuant to Idaho Code section 12-120(3) is denied. Costs are awarded to the Hafers.

Chief Justice BURDICK, and Justices EISMANN, W. JONES, and HORTON CONCUR.

20

IN THE SUPREME COURT OF THE STATE OF IDAHO Docket No. 41897

ROBERT HUMPHRIES and BECKY ) HUMPHRIES, husband and wife ) ) Plaintiffs-Appellants, ) Twin Falls, November 2015 Term ) v. ) 2016 Opinion No. 5 ) EILEEN BECKER, an individual; ALLEN ) Filed: January 22, 2016 and JANE BECKER, husband and wife, ) ) Stephen W. Kenyon, Clerk Defendants-Respondents, ) ) and ) ) SHEILA B. ADAMS, an individual; JERRY ) HINES, an individual; CENTURY 21 ) RIVERSIDE REALTY, an Idaho general ) partnership; JOHN DOES 1-10; and ) CORPORATIONS XYZ and/or other legal ) entities, ) ) Defendants. ) ______

Appeal from the District Court of the Fifth Judicial District of the State of Idaho, Cassia County. Hon. Jonathan Brody, District Judge.

The district court’s ruling on summary judgment as to Eileen Becker is vacated. The district court’s ruling on summary judgment as to Allen Becker and Jane Becker is affirmed. The award of attorney fees to Eileen Becker is vacated. The district court’s grant of attorney fees and costs to Allen and Jane Becker is affirmed and we further grant attorney fees and costs on appeal to Allen and Jane Becker.

Worst, Fitzgerald & Stover, PLLC, Twin Falls, attorneys for appellant. Kirk Melton argued.

Wright Brothers Law Office, PLLC, Twin Falls, attorneys for respondent. Brooke Redmond argued. ______

W. JONES, Justice I. NATURE OF THE CASE

1

This appeal arises out of a transfer of real property located in Cassia County, Idaho (the “Property”). Buyers, Robert and Becky Humphries (“Appellants” or the “Humphries”), accuse seller, Eileen Becker (“Eileen”), her son, Allen Becker (“Allen”), and daughter-in-law, Jane Becker (“Jane” and collectively, “Respondents”) of: (1) fraud though misrepresenting, concealing, and/or failing to disclose material information with regards to (a) the sources of water to the Property and (b) the Property’s sprinkler/irrigation system; and (2) violating the Idaho Condition Disclosure Act codified in Idaho Code section 55-2501, et. seq. (the “Disclosure Act”). Appellants also challenge the district court’s grant of attorney fees to Respondents. Both Appellants and Respondents seek attorney fees on appeal.

II. FACTUAL AND PROCEDURAL BACKGROUND The Property at issue consists of a 2,500 square foot house on a one-acre lot located at 1063 S. Hwy. 27 in Burley, Idaho. While the Property itself is not used for farming purposes, it is located in an area where farming is prevalent. Across the street from the Property is a large farm (the “Farm”), which Allen sold to Lake Mead Enterprises in 2006. The Farm is currently being leased to a local farmer, Brent Bean. 1. Sprinkler/Irrigation System The Property includes a sprinkler/irrigation system, which was originally wired to be automatic. However, of the seven sprinkler heads, only five are currently connected to the computer system needed to run them automatically. It would cost between $100 and $1000 to fully automate the Property’s sprinkler system. 2. Water Sources At all relevant times, the Property has drawn water from two separate sources. The first source of water is a shared well (the “Shared Well”) located on an adjacent property owned by Allen and Jane (the “Shared Well Property”). The Shared Well provides water sufficient for all inside uses and limited outside uses. The Shared Well does not provide water to the Property’s sprinkler/irrigation system and is not connected to do so. The underground water line—a one- inch line—that connects the Shared Well with the Property was not designed to transport enough water to run the sprinkler/irrigation system, which would require at least a three-inch line. The second source of water to the Property is an underground line that connects to a well and pivot located on the Farm (the “Farm Well”). The Farm Well provides all water used for the Property’s sprinkler/irrigation system. The Farm Well is entirely owned by Lake Mead

2

Enterprises, which left control of the well to Brent Bean for so long as he leases the Farm. Since his lease began in 2006, Brent Bean has allowed the owners of the Property to utilize water from the Farm Well free of charge. All parties agree, however, that the owners of the Property have no legal right to water from the Farm Well, and that Brent Bean could cut off the water supply from the Farm Well at his discretion. There are two possible sources of water for the Property’s sprinkler/irrigation system other than the Farm Well. First, the Property’s sprinkler/irrigation system could be connected to the Shared Well for an estimated $7,000 plus labor costs. While this would technically allow the sprinkler/irrigation system to function, the amount of water provided by the Shared Well would not be sufficient to simultaneously run the sprinklers and provide water inside the house. Second, the owners of the Property could drill an additional well on the Property. A new well would provide enough water to sustain the sprinkler/irrigation system, however drilling such a well would cost an estimated $30,000. 3. The Sale From 1982 until late 2008, the Property served as the primary residence of Allen and Jane. Over the course of 26 years they became highly familiar with the Property, including the sources of water to the Property and its sprinkler/irrigation system. During that time, Allen’s mother Eileen resided on the Shared Well Property, which she owned. In 2008, Eileen, who was approaching 80 years of age, decided to leave the Shared Well Property and move to an assisted living facility. Because the Property and the Shared Well Property were of roughly equivalent value, Eileen agreed to trade ownership of the Shared Well Property to Allen and Jane in exchange for ownership of the Property, which she intended to sell in order to fund her assisted living expenses. At no point did Eileen ever live on the Property. Unlike Allen and Jane, she knew very little about the Property generally. In order to aid with the sale of the Property, Eileen hired local realty company Century 21 Riverside Realty. She was represented during the sale by real-estate agents Sheila Adams (“Adams”) and Jerry Hines (“Hines”). On October 7, 2008, Adams met with all three of the Beckers in order to assist Eileen in filling out an RE-25 Seller’s Property Condition Disclosure Form (the “Disclosure Form”) mandated by the Idaho Association of Realtors, and to gather information necessary to draft a listing to post on a multiple listing service (the “MLS Listing”). RE-25 Seller’s Property Condition Disclosure Forms and MLS listings are documents drafted by

3

the seller of a piece of property or his or her realtor containing basic information about the property. These documents are provided to potential purchasers and are relied on by those purchasers in determining whether or not to make an offer. There is some debate over what was said at the October 7, 2008, meeting. Allen testified that at that meeting he explicitly told Adams that there were two sources of water for the Property—the Shared Well and the Farm Well—and that the Shared well was not connected to the sprinkler/irrigation system. Adams, on the other hand, testified that: (1) one of the Beckers told her that the Shared Well could supply water for the property’s sprinklers and that the Farm Well was not necessary to meet the Property’s water needs; (2) Allen had told her that the use of the Farm Well would not continue after the sale; and (3) no one told her that the sprinkler/irrigation system was not connected to the Shared Well. Adams further testified that she did not find out that the Shared Well was not connected to the sprinkler/irrigation system until well after the sale had occurred. Neither Allen nor Adams recalled if anything was said at the October 7, 2008 meeting regarding whether the sprinkler system was fully automatic. The Disclosure Form contains only one section providing information on the sources of water to the Property. The section consists of three rows: (1) “Domestic Water”; (2) “Irrigation Water”; and (3) “Property Sewer.” For each row the seller has five possible boxes which he or she can check: (1) “Public System”; (2) “Community System”; (3) “Private System”; (4) “Cistern”; and (5) “Other.” In the Disclosure Form, “Private System” is checked for all three rows. The Disclosure Form was signed and initialed by Eileen. It was also signed by the Humphries. The Disclosure Form was not signed by Allen or Jane. Shortly after the October 7, 2008 meeting, Adams drafted the MLS Listing. In the section of the MLS Listing providing information on water sources, Adams wrote “Shared Well” and “Well shared with Becker home to the South on agreement being drawn.” There is no mention of the Farm Well in the MLS Listing. In the section of the MLS Listing regarding lawn sprinklers, Adams wrote “Auto” and “Full.” On or around October 7, 2008, Eileen authorized Adams to post the MLS Listing, however Eileen was not provided with the MLS Listing and she did not review it. Neither Allen, nor Jane ever reviewed or were provided with the MLS Listing prior to its posting. In mid-October 2008, Allen and Jane moved to Yuma, Arizona. Thereafter, they had no further meetings with Eileen’s real estate agents. Allen and Jane did, however, field calls from

4

Jerry Hines (who at that point had replaced Sheila Adams as lead agent on the sale) when he was unable to get in touch with Eileen. Allen testified that on a couple of occasions Hines told him about offers on the Property that he then conveyed to Eileen; however, all decisions regarding those offers were made by Eileen and not Allen or Jane. During the winter of 2008, Hines was contacted by the Humphries’ real-estate agent, Marvis Brice. He provided Brice with the Disclosure Form and the MLS Listing, which were in turn provided to the Humphries. Neither Brice nor the Humphries were ever informed by Adams or the Beckers of the existence of the Farm Well. At the time of purchase, Brice and the Humphries believed that all water, including the water for the sprinkler/irrigation system, came from the Shared Well. In early 2009, having reviewed the MLS Listing and the Disclosure Form, and having visited the house on multiple occasions, the Humphries submitted an offer to buy the Property, which Eileen accepted. Throughout this process the Humphries never met or spoke with Eileen directly; communicating exclusively through their respective real estate agents. Shortly thereafter, the Humphries hired an inspector to review the Property. The inspector did not test the sprinkler system due to the cold weather. Following the inspection, the Humphries negotiated a price reduction based on certain deficiencies identified by the inspector. The Humphries and Eileen finalized the sale on February 10, 2009, for $161,000. Allen and Jane never spoke directly to the Humphries or their agents prior to closing on the Property. Contemporaneously with the sale closing, the Humphries entered into a water rights agreement with Allen and Jane regarding access to water from the Shared Well (the “Joint Well Use Agreement”). The Joint Well Use Agreement provides that “[b]uyer shall have the right to use the water produced by the well located on the Becker property for domestic purposes.” The Joint Well Use Agreement does not define “domestic purposes,” and at no point does the Joint Well Use Agreement make any reference to sprinklers, irrigation, or the Farm Well. Despite the lack of language regarding irrigation or sprinklers in the Joint Well Use Agreement, the Humphries’ real estate agent, Marvis Brice, assured the Humphries that under the Joint Well Use Agreement, water would be provided for their garden and their yard. 4. The Lawsuit It was not until the spring following the sale of the Property that the Humphries discovered the existence of the Farm Well. During the preceding winter Allen had opened the

5

valves connecting to the Farm Well in order to avoid any damage to the pipes. Accordingly, when the Farm turned its water on for the spring season, the sprinklers on the Property started running. When the sprinklers didn’t automatically shut off, Robert Humphries contacted Allen to ask how they operate. It was at that time that Allen explained to Robert that the sprinklers were connected to the Farm Well and not to the Shared Well. Allen further explained that while the Humphries had no right to the water from the Farm Well, Brent Bean would be willing to allow them to use the water for free. He suggested that the Humphries provide Bean with a $100 gift certificate at the end of the farming season as a thank you for using his water. Robert Humphries was “surprised and shocked” at this revelation; however, the Humphries refrained from taking legal action that summer in order to test the arrangement. After a number of occasions in which Brent Bean threatened to shut off their access to the Farm Well, including once when the Humphries suggested building a fence along their property line, the Humphries decided to sue. On July 1, 2011, the Humphries filed a complaint against Eileen, Marvis Brice and Advantage 1 Realty, LLC (Brice’s agency).1 The complaint asserted that Eileen had engaged in fraud and misrepresentation for statements made in relation to the sources of water to the Property and that therefore the sale should be rescinded. On May 1, 2012, after the completion of discovery, the Humphries successfully moved to amend their complaint to add Allen and Jane as defendants to the action. In the amended complaint, the Humphries alleged that Allen and Jane had acted as Eileen’s agents during the sale, imputing to them a duty to disclose the true sources of the sprinkler/irrigation water. The amended complaint also contained new allegations of fraud and misrepresentation with respect to statements in the MLS Listing regarding whether the sprinkler/irrigation system was automatic. On June 27, 2012, the Beckers moved for summary judgment on all claims. They argued that: (1) the Beckers were not liable for any misrepresentation in the MLS Listing because (a) they had accurately explained the existence of the second well to Adams at the October 7, 2008 meeting, and (b) they had never reviewed the MLS Listing prior to it being posted and accordingly they were unaware of its contents; (2) they had never made any affirmative representation that the Shared Well would provide sprinkler/irrigation water to the Property; (3)

1 All claims against Marvis Brice and Advantage 1 Realty, LLC were settled out of court.

6

there was never any intent to defraud or deceive; (4) the Humphries relied on the advice of their real estate agent and not on the MLS Listing or Disclosure Form in forming their inaccurate belief that the Shared Well was the only source of water to the Property; (5) the Humphries failed to plead or raise any issues regarding the amount of damages; (6) the Beckers disclosed all relevant facts to their real estate agents, and are not responsible for any failure by those agents to disclose required information; (7) Allen and Jane were not Eileen’s agents; and (8) the Humphries’ complaint failed to plead fraud with particularity. On December 13, 2012, the district court entered an order granting the Becker’s motion for summary judgment. The court held that: (1) The Humphries had pled fraud with sufficient particularity with regards to statements in the MLS Listing and Disclosure Form; (2) the Beckers did not make any false representations in either the MLS Listing or the Disclosure Form; (3) any duty that the Beckers may have had to disclose the existence of the Farm Well was satisfied by the Joint Well Use Agreement; (3) the representation in the MLS Listing that the sprinkler system was automatic could not serve as the basis for fraud; and (4) the Disclosure Form did not violate the Disclosure Act. Regarding the sources of water, the district court identified only two affirmative representations provided by the Humphries that might serve as the basis for fraud: (1) the boxes on the Disclosure Form that Eileen had marked “private system”; and (2) the representations in the MLS Listing that water was provided by a “shared well.” Because both the Shared Well and the Farm Well are private systems and shared wells, the court reasoned, those statements were not false. The court further concluded that even if the characterization of the water source as a “shared well” was “potentially misleading,” the representation in the Joint Well Use Agreement that the Shared Well was for “domestic purposes” was sufficient to satisfy any duty to disclose that may have arisen. With regard to the sprinkler system, the court held that the representation in the MLS Listing that the sprinkler/irrigation system was fully automatic was not material. The court reasoned that the minimal cost to reattach the sprinklers would not be regarded as important by a reasonable party in the sale of a $160,000 piece of property. Finally, the court held that Eileen satisfied the Disclosure Act by delineating the sources of water as “private systems,” which is more than what is required under the law.

7

On January 2, 2013, the Humphries moved for reconsideration of the district court’s summary judgment order, arguing that the district court had misapplied the summary judgment standard by failing to draw all reasonable inferences in their favor. On February 15, 2013, having reconsidered the issues, the district court entered an order confirming its original order of summary judgment. On March 21, 2014, the district Court granted $57,128.93 to the Beckers for costs and attorney fees. The Humphries now appeal.

III. ISSUES PRESENTED ON APPEAL 1. Did the district court err in finding that, as a matter of law, no issue of material fact existed as to the Humphries’ fraud claims? 2. Did the district court err in finding that, as a matter of law, no issue of material fact existed as to the Humphries’ Idaho Property Condition Disclosure Act claims? 3. Did the district court err in granting attorney fees to the Beckers? 4. Are the Humphries entitled to attorney fees and costs on appeal? IV. STANDARD OF REVIEW A. Summary Judgment

On appeal from the grant of a motion for summary judgment, this Court utilizes the same standard of review used by the district court originally ruling on the motion. Summary judgment is proper “if 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). When considering whether the evidence in the record shows that there is no genuine issue of material fact, the trial court must liberally construe the facts, and draw all reasonable inferences, in favor of the nonmoving party.

Golub v. Kirk-Hughes Dev., LLC, 158 Idaho 73, 75–76, 343 P.3d 1080, 1082–83 (2015) (quoting Conner v. Hodges, 157 Idaho 19, 23, 333 P.3d 130, 134 (2014)).

V. ANALYSIS A. The district court did not err in finding that, as a matter of law, no issue of material fact existed with respect to the Humphries’ fraud claims against Allen and Jane. 1. Allen and Jane did not serve as Eileen’s agents with respect to the sale of the Property. An agent is a person who has been authorized to act on behalf of a principal towards the performance of a specific task or series of tasks. Knutsen v. Cloud, 142 Idaho 148, 151, 124 P.3d 1024, 1027 (2005). An agency relationship is created through the actions of the principal who

8

either: (1) expressly grants the agent authority to conduct certain actions on his or her behalf; (2) impliedly grants the agent authority to conduct certain actions which are necessary to complete those actions that were expressly authorized; or (3) apparently grants the agent authority to act through conduct towards a third party indicating that express or implied authority has been granted. Bailey v. Ness, 109 Idaho 495, 497, 708 P.2d 900, 902 (1985). Agency relationships are limited in scope to the express, implied, and apparent authority granted by the principal.2 Only acts by the agent that are within the scope of the agency relationship affect the principal’s legal liability. RESTATEMENT (THIRD) OF AGENCY § 1.01 (AM. LAW INST. 2006). In addition, where an agency relationship exists, the principal has a right to control the agent. Where a party acts in concert with the principal but is not under his or her control, an agency relationship does not arise. Knutsen, 142 Idaho at 151, 124 P.3d at 1027. There were two acts performed by Allen and Jane that Appellants allege serve as the basis for an agency relationship. First, Allen and Jane passed certain information between Eileen and Eileen’s real estate agent. Second, Allen and Jane provided information to Eileen and Adams regarding the Property so that they could draft the Disclosure Form and MLS Listing. Neither of these acts was sufficient to create an agency relationship with respect to the sale. At no point does it appear that Allen and Jane were under Eileen’s control or that she had any right to direct their actions. Rather, the alleged facts indicate that Allen and Jane acted as independent third parties. That Eileen may have benefitted from their actions is not enough to create an agency relationship. Appellants cite a number of cases for the proposition that an agent’s knowledge is imputed to the principal. See, e.g., Allen v. Phoenix Assur. Co., 14 Idaho 728, 95 P. 829 (1908); J.I. Case Co. v. Bird, 51 Idaho 725, 726, 11 P.2d 966, 967 (1932). These cases are cited for the purpose of establishing that even if Eileen were unaware of the continued use of the Farm Well or the manual nature of the sprinkler/irrigation system, Allen’s awareness of those things should be imputed to her. Because no agency existed, such imputation would be improper. Eileen had knowledge only to facts of which she was actually informed.

2 This Court has previously viewed the question of whether an agency relationship exists as a question of fact for the jury to determine. John Scowcroft & Sons Co. v. Roselle, 77 Idaho 142, 146, 289 P.2d 621, 623 (1955). Whether facts sufficient to constitute an agency relationship exist is indeed a question of fact for the jury, however, whether a given set of facts are sufficient to constitute an agency relationship is a question of law appropriate for this Court’s consideration.

9

2. As a matter of law, no issue of material fact existed with respect to the Humphries’ fraud claims against Allen and Jane. Summary judgment is appropriate only if the evidence in the record shows that there is no genuine issue of material fact raised in the pleadings and that the moving party is therefore entitled to judgment as a matter of law. Infanger v. City of Salmon, 137 Idaho 45, 47, 44 P.3d 1100, 1102 (2002). If the evidence reveals no disputed issues of material fact, then only a question of law remains, over which this Court exercises free review. Id. Appellants have alleged two different types of fraud on appeal: (1) fraud arising out of an affirmative misrepresentation; and (2) fraud arising out of the breach of a duty to disclose. Fraud is composed of nine separate elements: “(1) a statement of fact; (2) its falsity; (3) its materiality; (4) the speaker’s knowledge of its falsity; (5) the speaker’s intent to induce reliance; (6) the hearer’s ignorance of the falsity of the statement; (7) reliance by the hearer; (8) the hearer’s right to rely; and (9) consequent and proximate injury.” Country Cove Dev., Inc. v. May, 143 Idaho 595, 600, 150 P.3d 288, 293 (2006). Omission of information may constitute fraud when a duty to disclose exists. Sowards v. Rathbun, 134 Idaho 702, 707, 8 P.3d 1245, 1250 (2000); G & M Farms v. Funk Irrigation Co., 119 Idaho 514, 522, 808 P.2d 851, 859 (1991); Tusch Enterprises v. Coffin, 113 Idaho 37, 43, 740 P.2d 1022, 1028 (1987);. A party may be under a duty to disclose: (1) if there is a fiduciary or other similar relationship of trust and confidence between the two parties; (2) in order to prevent a partial statement of the facts from being misleading; or (3) if a fact known by one contracting party and not the other is so vital that if the mistake were mutual the contract would be voidable, and the party knowing the fact also knows that the other does not know it. Sowards, 134 Idaho at 707, 8 P.3d at 1250. With respect to fraud, it is the court that determines whether, as a matter of law, the facts asserted would give rise to a duty to disclose. Printcraft Press, Inc. v. Sunnyside Park Util., Inc., 153 Idaho 440, 452, 283 P.3d 757, 769 (2012). We hold that Allen and Jane are not liable to Appellants for any affirmative misrepresentations made in the Disclosure Form or the MLS Listing and Allen and Jane had no relationship with Appellants such that a duty to disclose could have arisen. First, Appellants have not provided evidence that either Allen or Jane made any affirmative statements of fact—false or otherwise—to the Humphries or their agents regarding the sprinkler/irrigation system or the sources of water to that system. The only alleged 10

affirmative misrepresentations that were made to the Humphries or their agents with respect to the sprinkler/irrigation system, and the sources of water thereto, were made by: (1) Eileen, through the Disclosure Form; and (2) Sheila Adams, through the MLS Listing. Neither the Disclosure Form nor the MLS Listing were drafted or signed by Allen or Jane. At no point did either of them attest to the veracity of those documents to the Humphries. Accordingly, it cannot be said that the Humphries reasonably relied on any affirmative misrepresentation of fact made to them by Allen or Jane. Second, Allen and Jane did not have any duty to the Humphries to disclose the existence of the Farm Well. With respect to the sale, Allen and Jane themselves were neither parties to the contract nor were they Eileen’s agents. Accordingly, no duty could arise under the first and third theories of fraud by omission. The fact that a third-party to a sale has knowledge of a material fact is not sufficient to create a duty to disclose. The knowledge must be held by the party entering the contract for a duty to arise. Likewise, Allen and Jane did not make any statement of fact to the Humphries which could constitute “a partial statement of the facts.” Where no partial statement of fact was made, a duty to disclose cannot arise under the second theory of fraud by omission. Conversely, Allen and Jane did have a contractual relationship with the Humphries with respect to the Joint Well Use Agreement, which was signed and verified by Allen. Misleading partial statements of fact in the Joint Well Use Agreement could serve as the basis for a duty to disclose. We hold that the Joint Well Use Agreement did not contain any misleading partial statements of facts. It stated only that water would be provided for domestic uses. It never stated or implied that the Shared Well would provide water sufficient for irrigation purposes; nor did it contain any implication that the Shared Well was the only source of water to the property. Because the Joint Well Use Agreement did not serve to mislead as to the sources of water to the Property, it did not create a duty to disclose the existence of the Farm Well. B. The district court erred in finding that, as a matter of law, no issue of material fact existed as to the Humphries’ fraud claims against Eileen. 1. Appellants have raised an issue of material fact as to whether certain statements made in the MLS Listing constituted fraud. Under section 54-2093(1) of the Idaho Code “a client . . . whether buyer or seller, shall not be liable for a wrongful act, error, omission or misrepresentation of his broker or his broker’s

11

licensees unless the client had actual knowledge of or reasonably should have known of the wrongful act, error, omission or misrepresentation.” I.C. § 54-2093(1) (emphasis added). Under the “Water” heading in the MLS Listing, Adams wrote “Shared Well.” A jury could find that the use of a singular noun in this statement is misleading because it implies that there is a single shared well and not two separate wells each of which is “shared.” In the section of the MLS Listing entitled “Lawn Sprinklers,” Adams wrote “Auto” and “Full.” A jury could find that this statement is also misleading because it implies a fully functioning automatic sprinkler system, not a disconnected sprinkler system that could be automatic with an additional $100 to $1000 investment. Eileen argues that she never saw the MLS Listing—a fact that is not disputed—so she neither could have “had actual knowledge” of, nor “reasonably should have known of” the misrepresentations contained therein. However, Eileen was present at the October 7, 2008 meeting—another fact that is not disputed—at which the Beckers provided Adams with information for the purpose of drafting the MLS listing. Drawing all facts and inferences in favor of the non-moving party, the district court should have adopted Adams’ account of that meeting as fact, including her testimony that the Beckers told her that the Shared Well would serve as the one and only source of water for the irrigation system. The district court further should have inferred, for the purposes of summary judgment, that because Eileen was present at the October 7, 2008 meeting, she heard and understood everything that was said to Adams. Accordingly, Eileen should have known that Adams would only list the Shared Well as a source of water in the MLS Listing, and that she would not list the Farm Well, which she was allegedly told would not continue to provide water. With all facts and inferences drawn in favor of the non-moving party, a jury could find that Eileen “should have known” that the MLS Listing would misrepresent the sources of water to the Property. With respect to whether the sprinkler/irrigation system was automatic, on the other hand, Appellants did not provide any evidence in the record with respect to what Adams was told at the October 7, 2008 meeting. Without such evidence, there is no basis on which Eileen “should have known” that the MLS would include misrepresentations to that extent. We hold that the district court erred in its finding that no issue of material fact existed as to whether the statement in the MLS Listing that water was provided by a “Shared Well” could constitute fraud. The district court did not err in finding that no issue of material fact existed as

12

to whether the statement in the MLS Listing that the sprinklers were “Auto” or “Full” could constitute fraud. 2. Appellants have raised an issue of material fact as to whether Eileen is liable for statements made in the Disclosure Form. As stated above, fraud is composed of nine separate elements: “(1) a statement of fact; (2) its falsity; (3) its materiality; (4) the speaker’s knowledge of its falsity; (5) the speaker’s intent to induce reliance; (6) the hearer’s ignorance of the falsity of the statement; (7) reliance by the hearer; (8) the hearer’s right to rely; and (9) consequent and proximate injury.” Country Cove Dev., Inc. v. May, 143 Idaho 595, 600, 150 P.3d 288, 293 (2006). The party bringing the allegation of fraud must provide evidence sufficient to prove each element. Quemada v. Arizmendez, 153 Idaho 609, 615, 288 P.3d 826, 832 (2012). On the Disclosure Form, Eileen checked three boxes indicating a “Private System” in the separate categories of “Domestic Water,” “Irrigation Water,” and “Property Sewer.” The options other than “Private System,” that were available to Eileen on the Disclosure Form were “Public System,” “Community System,” “Cistern,” and “Other.” Appellants allege that Eileen should have checked the box marked “Other” in order to indicate the existence of multiple systems, and that checking “Private System” constituted fraud. On summary judgment, the district court held that the Disclosure Form was not false or misleading because the Farm Well is a “private system”; and, furthermore, if the Disclosure Form was false or misleading, Eileen did not know it to be so. In coming to these conclusions, the district court erred by not taking all facts and inferences in favor of the non-moving party. Taking Adams’ testimony as fact for the purposes of summary judgment, Eileen knew that the Shared Well and Farm Well were separate systems, and further knew that the Humphries would not have any right to the water from the Farm Well. Indeed, Adams testified that at the October 7, 2008 meeting, the Beckers informed her that the use of water from the Farm Well would not continue after the sale. At the same time, Allen testified that at the meeting he told Adams that the Shared Well was not connected to the sprinkler/irrigation system. If both of these facts are taken as true, then the court must infer that Eileen knew as of the October 7, 2008, meeting that neither potential source of water would serve the sprinkler/irrigation system. If Eileen knew that there was no source of water to the sprinkler/irrigation system, yet she still checked “Private System” with respect to irrigation water then a jury could find that she made a false statement (i.e. she implied that there was a source of sprinkler/irrigation water when in fact 13

there was no source). The fact that Brent Bean decided to allow the Humphries to use his water is not relevant to this determination, because at the time the Disclosure Statement was signed no source of water for the sprinkler/irrigation system existed. 3. This court need not address whether the sprinkler/irrigation system was material to the sale of the Property. As provided above, Eileen is not liable for false or misleading statements made in the MLS Listing unless she “should have known” that they would be in the MLS Listing. Because Appellants have not provided evidence that the Beckers told Adams that the sprinklers were automatic, there is no material issue of fact as to whether or not Eileen knew statements to that effect would be included. Accordingly, this Court need not review whether an automatic sprinkler system was material to the sale. C. The district court erred in finding that no issue of material fact existed regarding whether Eileen violated the Disclosure Act. Appellants argue that by failing to convey that there were two sources of water to the Property, the Disclosure Form provided by Eileen did not satisfy the Disclosure Act. Idaho Code section 55-2502 provides that the purpose of the Disclosure Act is to “require sellers of residential real property as defined in this chapter to disclose certain defects in the residential real property to a prospective buyer.” I.C. § 55-2502. Idaho Code section 55-2508 provides an example disclosure form that, by definition, meets all of the requirements of the Disclosure Act. The example disclosure form contains only a single line with respect to the sources of water, requiring the seller to disclose “problems” with any “Well.” I.C. § 55-2508. It follows from Idaho Code section 55-208 that while sources of water to the Property do not necessarily have to be disclosed in a disclosure form, any problems or defects with those sources of water would need to be expressly listed. Taking all facts and inferences in favor of Appellants, Eileen was not only aware that the Humphries would have no right to water from the Farm Well, and that the Shared Well did not provide sprinkler/irrigation water, but she also believed that the water from the Farm Well would no longer be provided to the Property. A jury could find that the lack of a right to water from a given water source constitutes a problem with that water source. Further, not having any access at all to water for sprinkler/irrigation purposes could certainly constitute a problem with the Property that would need to be disclosed. We hold that the district court erred in granting summary judgment with

14

regard to whether or not the information in the Disclosure Form was sufficient to satisfy the Disclosure Act. D. The grant of attorney fees and costs as to Allen and Jane is affirmed, however, the grant of attorney fees to Eileen is hereby vacated unless and until she prevails at trial. “Where there is a valid contract between parties which contains a provision for an award of attorney fees and costs, the terms of that contractual provision establish a right to an award of attorney fees and costs.” Farm Credit of Spokane v. W.W. Farms, Inc., 122 Idaho 565, 569, 836 P.2d 511, 515 (1992). Likewise, attorney’s fees on appeal can be awarded to a prevailing party pursuant to a purchase and sale agreement. Bolognese v. Forte, 153 Idaho 857, 867, 292 P.3d 248, 258 (2012). The real estate contract for the sale of the Property, entered into between Eileen and the Humphries, contains the following language: If either party initiates or defends any arbitration or legal action or proceedings which are in any way connected with this agreement, the prevailing party shall be entitled to recover from the non-prevailing party reasonable costs and attorney’s fees, including such costs and fees on appeal. This language is sufficient to mandate attorney’s fees in any suit between the parties to that sale contract. We hold that Allen and Jane properly prevailed at the district court; however, they are not parties to the underlying sale contract. Because they are not parties to the sale contract, they are not entitled to the benefits of the contract, including fees under the language cited above. Thus the district court erred in granting them attorney’s fees under the language of the sale contract. The district court did not err, however, in granting attorney’s fees and costs to Allen and Jane under Idaho Code section 12-120(1). Under Idaho Code section 12-120(1) reasonable attorney’s fees are permitted as part of costs to the prevailing party where the underlying pleading requests under $35,000 in damages. Allen and Jane are the prevailing parties on summary judgment, which is hereby affirmed with respect to them. The pleading specified that the amount requested was under $35,000. Accordingly, attorney’s fees and costs were properly granted to Allen and Jane by the district court. Because attorney’s fees were proper with respect to Allen and Jane under Idaho Code section 12-120(1), attorney’s fees on appeal are proper under Idaho Code section 12-120(5),

15

which provides that in all instances where a party is entitled to reasonable attorney’s fees under Idaho Code section 12-120, that party is also entitled to attorney’s fees on appeal. Conversely, while Eileen was eligible for attorney’s fees under the provisions of the sale contract, the grant of attorney’s fees to Eileen by the district court is hereby vacated as she is no longer the prevailing party. No attorney’s fees on appeal are granted to either Eileen or Appellants at this time. The district court may award attorney’s fees accrued in relation to this appeal at the conclusion of this case. Appellants are directed to pay Allen and Jane’s costs on appeal. Eileen is directed to pay Appellants’ costs on appeal.

VI. CONCLUSION We hereby vacate the district court’s ruling on summary judgment as to Eileen. We uphold the district court’s ruling on summary judgment as to Allen and Jane. We uphold the district court’s grant of attorney’s fees and costs to Allen and Jane and further grant attorney’s fees and costs to Allen and Jane on appeal. We vacate the district court’s grant of attorney’s fees to Eileen. Chief Justice J. JONES and Justice HORTON, CONCUR. Justice EISMANN, specially concurring. I concur in the majority opinion. The Idaho Property Disclosure Act provides that “[n]either the transferor or transferor’s agents shall be liable for any error, inaccuracy or omission of any information delivered pursuant to this chapter if the error, inaccuracy or omission was not within the personal knowledge of the transferor.” I.C. § 55-2511(1). However, the Act does not preempt other claims for relief based upon the common law. I.C. § 55-2514. Under the common law: An owner is presumed to know the boundaries of his own land, the quantity of his acreage, and the amount of water available. If he does not know the correct information, he must find out or refrain from making representations to unsuspecting strangers. “Even honesty in making a mistake is no defense as it is incumbent upon the vendor to know the facts.”

Sorenson v. Adams, 98 Idaho 708, 715, 571 P.2d 769, 776 (1977). Justice BURDICK joins in this special concurrence.

16

IN THE SUPREME COURT OF THE STATE OF IDAHO

Docket No. 42063

COUNTRYWIDE HOME LOANS, INC., ) ) Plaintiff-Counterdefendant-Third Party ) Defendant-Respondent, ) ) Boise, November 2015 Term v. )

RALPH E. SHEETS, JR. and DEBRA ) 2016 Opinion No. 46 SHEETS, as individuals with an interest in ) the property legally described as: SEE FILE ) Filed: April 26, 2016 FOR DESCRIPTION, ) ) Stephen Kenyon, Clerk Defendants-Counterclaimants-Third ) Party Plaintiffs-Appellants, ) ) v. ) ) BANK OF AMERICA, N.A., successor by ) merger and name change to BAC HOME LOANS, f/k/a COUNTRYWIDE HOME ) LOANS, INC., and BAC HOME LOAN ) SERVICING, L.P., f/k/a COUNTRYWIDE ) HOME LOAN SERVICING, LP, and ) RECONTRUST COMPANY, N.A., ) ) Third Party Defendants-Respondents. )

Appeal from the District Court of the Third Judicial District of the State of Idaho, Adams County. Hon. Bradly S. Ford, District Judge.

The judgment of the district court is affirmed.

John Curtis Hucks, New Meadows, for appellants.

Routh Crabtree Olsen, P.C., Boise and Murr Siler & Accomazzo, P.C., Denver, Colorado, for respondents. Daniel Delaney argued.

______

HORTON, Justice. This is a case involving a dispute over a mistakenly released deed of trust, which secured a 2004 residential mortgage between Ralph Sheets and the lender, Bank of America, N.A., f/k/a Countrywide Home Loans, Inc. (Countrywide); the servicer of the loan; and the trustee who

1

executed the mistaken release (companies collectively referred to as “Bank of America”). The district court granted summary judgment reinstating the deed of trust and dismissing Sheets’ counterclaims. We affirm. I. FACTUAL AND PROCEDURAL BACKGROUND In December of 2004, Sheets borrowed $65,250 from Countrywide. He executed a promissory note, secured by a deed of trust to his home in New Meadows.1 Between December of 2004 and April of 2009, Sheets timely paid the amounts due on the note. In 2008, Countrywide sent Sheets a letter telling Sheets that he “may” qualify for a lower interest rate on a refinancing loan and estimating he had $88,056 equity in the home. Around this time, Bank of America acquired and merged with Countrywide.2 In the late spring of 2009, Sheets applied for a new loan (the 2009 Refinancing). The loan application indicated that the loan would be for the principal sum of $87,500 at an interest rate of 5.125%. However, Sheets claimed that he was orally promised a loan of $108,000 at a lower interest rate in subsequent telephone conversations with a loan officer, Paul Campbell. Closing on the new loan was scheduled for October 27, 2009. Sheets testified that the title company agent at the closing would not let him execute the documents because they were “bad” and incomplete. Thus, the 2009 Refinancing did not close. Sheets arrived home and found proposed closing documents, but he did not sign the documents because he did not agree with the terms contained therein. Sheets testified that, based upon his previous conversations with Campbell, he understood that Bank of America had agreed to not include a requirement for an escrow payment. On November 9, 2009, the trustee of the deed of trust, ReconTrust Company, N.A. (ReconTrust), erroneously recorded a full reconveyance of the deed of trust securing Sheets’ original note. How the erroneous reconveyance came to be recorded is not clear. Bank of America claims that it caused the reconveyance to be recorded because it mistakenly proceeded as if the 2009 Refinancing had closed. Sheets claims that Bank of America had a darker, ulterior motive which it subsequently tried to conceal by failing to turn over relevant evidence in discovery. Sheets does not explain what this ulterior motive might be.

1 Ralph Sheets’ wife, Debra Sheets, had no personal liability under the note and deed of trust. Although she is a named defendant in this action, it appears that Ralph Sheets is the only party with a liability to Bank of America. As such, we refer to the defendants in this action as “Ralph Sheets” or “Sheets.” 2 Sheets has been inconsistent in his claims of the date of merger, alternatively asserting that it took place in April of 2009 and the fall of 2008. The date of merger is not established in the record.

2

For some time after the reconveyance was recorded, the status of Sheets’ loan was confused. Sheets claimed he repeatedly tried to contact Bank of America representatives who failed to timely respond and that he tried to make loan payments in November and December of 2009. At the end of November, Sheets’ online banking statement incorrectly stated that he had two obligations to Bank of America: the original 2004 loan, with a balance of $43,263.84; and a new loan with a balance of $87,750. Sheets hired counsel in late November of 2009 to assist him with the matter. On January 25, 2010, Bank of America sent Sheets a notice of its intent to accelerate his obligation and foreclose the deed of trust if Sheets did not bring his account current and pay late fees. On March 29, 2010, Bank of America sent Sheets a letter asking Sheets to stipulate to rescinding the reconveyance. The next day, Bank of America filed a complaint against Sheets seeking reinstatement of the deed of trust. On May 25, 2010, Bank of America sent Sheets a notice of its intent to commence foreclosure proceedings. Sheets filed an answer, counterclaim, demand for jury trial, and third party complaint against the third-party defendants in this action. He brought counterclaims for: (1) breach of contract; (2) specific performance; (3) violation of the Idaho Consumer Protection Act; (4) violation of the federal Fair Credit Reporting Act; (5) slander of credit; and (6) violation of Idaho Code section 45-1502. In 2012, Bank of America filed two motions for summary judgment, seeking reinstatement of the deed of trust and dismissal of Sheets’ counterclaims. The district court ruled in favor of Bank of America on all issues. When considering Bank of America’s motion for summary judgment on its complaint, the district court determined that the terms of the deed of trust were dispositive and that it was clear that Sheets was not entitled to reconveyance of the trust deed until he fully paid the underlying note which the trust deed secured. The district court alternatively granted summary judgment on the theory of unjust enrichment, reasoning that it would be inequitable for Sheets to obtain the benefit of the reconveyance. The district court dismissed Sheets’ counterclaims, finding that a valid contract did not exist between Sheets and Bank of America because there was no written contract complying with the statute of frauds and no evidence of a meeting of the parties’ minds as to the terms of the alleged contract. Based upon this determination, the district court denied Sheets’ request for specific performance because no contract existed. Sheets timely appealed.

3

II. STANDARD OF REVIEW “When reviewing a grant of summary judgment, this Court employs the same standard as the district court.” Idaho Youth Ranch, Inc. v. Ada Cnty. Bd. of Equalization, 157 Idaho 180, 182, 335 P.3d 25, 27 (2014). 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). “When considering a motion for summary judgment, this Court liberally construes the record in a light most favorable to the party opposing the motion and draws all reasonable inferences in that party’s favor.” Kepler-Fleenor v. Fremont Cnty., 152 Idaho 207, 210, 268 P.3d 1159, 1162 (2012). When “the evidence reveals no disputed issues of material fact, then only a question of law remains, over which this Court exercises free review.” Stonebrook Const., LLC v. Chase Home Fin., LLC, 152 Idaho 927, 930, 277 P.3d 374, 377 (2012) (quoting Lockheed Martin Corp. v. Idaho State Tax Comm’n, 142 Idaho 790, 793, 134 P.3d 641, 644 (2006)). III. ANALYSIS Sheets contends that the district court erred by granting summary judgment in Bank of America’s favor and dismissing his counterclaims. We address these claims in turn. A. The district court properly granted summary judgment rescinding the reconveyance. The district court granted summary judgment in favor of Bank of America’s complaint on the theory of unjust enrichment because allowing Sheets to gain a benefit from the erroneous reconveyance would be inequitable.3 It determined that unclean hands did not bar Bank of America from equitable relief. It reasoned that, although Bank of America “clearly acted without oversight and without awareness of the actions of its agents,” such conduct did not amount to conduct that was “inequitable, unfair and dishonest, or fraudulent and deceitful,” which is necessary for application of the doctrine of unclean hands. Sheets contends that two documents created by Bank of America’s agents, which he refers to as the Beltran and Wigner Documents, were false and bar Bank of America from seeking equitable relief. Bank of America responds that Sheets’ insinuation that Bank of America’s mistaken reconveyance was part of an undefined “sinister scheme” is unsupportable.

3 The district court also granted Bank of American’s request for summary judgment for rescission of the reconveyance on an alternative theory, determining that the substance of Bank of America’s claim was for a declaratory judgment and that under the terms of the deed of trust and note Sheets was not entitled to reconveyance until he paid off his loan. We do not reach this alternative ground for relief because we affirm the district court’s grant of summary judgment on the equitable theory of unjust enrichment.

4

“Unjust enrichment occurs where a defendant receives a benefit which would be inequitable to retain without compensating the plaintiff to the extent that retention is unjust.” Vanderford Co. v. Knudson, 144 Idaho 547, 557, 165 P.3d 261, 271 (2007). “The substance of an action for unjust enrichment lies in a promise, implied by law, that a party will render to the person entitled thereto that which in equity and good conscience belongs to the latter.” Smith v. Smith, 95 Idaho 477, 484, 511 P.2d 294, 301 (1973). “The elements of unjust enrichment are that (1) a benefit is conferred on the defendant by the plaintiff; (2) the defendant appreciates the benefit; and (3) it would be inequitable for the defendant to accept the benefit without payment of the value of the benefit.” Teton Peaks Inv. Co., LLC v. Ohme, 146 Idaho 394, 398, 195 P.3d 1207, 1211 (2008). Here, Sheets borrowed money from Bank of America, used the money to purchase property for his own benefit and pledged that property to Bank of America as security for repayment of the loan. It would be inequitable for Sheets retain that property without requiring that he fulfill his promise to repay the loan. Therefore, the district court correctly determined that Sheets would be unjustly enriched if the reconveyance was not rescinded.4 To avoid this result, Sheets has raised the defense of unclean hands. The unclean hands doctrine “stands for the proposition that a litigant may be denied relief by a court of equity on the ground that his conduct has been inequitable, unfair and dishonest, or fraudulent and deceitful as to the controversy in issue.” Ada Cnty. Highway Dist. v. Total Success Investments, LLC, 145 Idaho 360, 370, 179 P.3d 323, 333 (2008) (quotations omitted) (quoting Gilbert v. Nampa Sch. Dist. No. 131, 104 Idaho 137, 145, 657 P.2d 1, 9 (1983)). For the doctrine to apply, “[t]he conduct must be intentional or willful, rather than merely negligent.” Grazer v. Jones, 154 Idaho 58, 68, 294 P.3d 184, 194 (2013). In determining if the clean hands doctrine applies a court has discretion to evaluate the relative conduct of both parties and to determine whether the conduct of the party seeking an equitable remedy should, in the light of all the circumstances, preclude such relief. A trial court’s decision to afford relief based on the unclean hands doctrine, or to reject its application, will not be overturned on appeal absent a demonstration that the lower court abused its discretion.

4 Such a decision is consistent with the equitable decisions of other courts. See, e.g., Holiday Hospitality Franchising, Inc. v. States Res., Inc., 232 S.W.3d 41, 52-54 (Tenn. Ct. App. 2006) (reinstating a mistakenly released deed of trust on summary judgment under the “equitable lien” theory); Cameron State Bank v. Sloan, 559 S.W.2d 564, 568 (Mo. Ct. App. 1977) (deciding that “negligence on the part of the bank” in mistakenly releasing a deed of trust did “not permit appellants to gain an unconscionable advantage”).

5

Ada Cnty. Highway Dist., 145 Idaho at 371, 179 P.3d at 334 (alterations omitted) (quoting Sword v. Sweet, 140 Idaho 242, 251, 92 P.3d 492, 501 (2004)). The three-part test for abuse of discretion asks whether the district court “(1) correctly perceived the issue as one of discretion; (2) acted within the outer boundaries of its discretion and consistently with the legal standards applicable to the specific choices available to it; and (3) reached its decision by an exercise of reason.” Sun Valley Potato Growers, Inc. v. Texas Refinery Corp., 139 Idaho 761, 765, 86 P.3d 475, 479 (2004). The district court did not abuse its discretion in rejecting Sheets’ unclean hands defense. The district court explicitly recognized that this was a discretionary decision. The district court identified the relevant legal principles, which require the conduct to be “inequitable, unfair and dishonest, or fraudulent and deceitful as to the controversy in issue.” The district court provided a reasoned analysis, explaining why Bank of America’s conduct did not meet the requisite standard. In doing so, the district court analyzed both the Beltran and Wigner Documents which Sheets relied upon in support of his claim that Bank of America had unclean hands. The Beltran Document is entitled “Disbursement Authorization Checklist” and certifies that the requirements for the 2009 Refinancing were satisfied and that the loan should be funded. The district court found that the document was obviously incorrect because the 2009 Refinancing did not close. The Wigner Document is a loan quality checklist, which appears to be a post-closing checklist and that shows the 2009 loan was closed. The district court reasoned that, although the documents demonstrated Bank of America’s “corporate failings” and lack of oversight, they did not evidence “inequitable, unfair and dishonest, or fraudulent and deceitful” conduct. We are unable to conclude that this finding was erroneous.5

5 Sheets argues that a series of discovery disputes prevented him from accessing information from various Bank of America agents who could have helped clarify what precipitated the reconveyance and failed 2009 Refinancing. Bank of America responds by arguing Sheets waived his discovery arguments by failing to object before the district court. Sheets replies that he did file a motion to compel, much of which the district court dismissed after determining that Bank of America did not have the requested information. “The trial court has broad discretion in determining whether or not to grant a motion to compel.” Nightengale v. Timmel, 151 Idaho 347, 351, 256 P.3d 755, 759 (2011). The district court did not abuse its discretion by only partially granting Sheets’ motion to compel. The district court denied much of the relief Sheets sought because Sheets’ requests were broad and did not comply with the Idaho Rules of Civil Procedure. The district court noted that it was “sympathetic to the Sheets’ frustration at trying to recover information from an entity such as Countrywide and its association with the entity of Bank of America,” but it was limited by Sheets’ broad requests and Bank of America’s representations that it did not have the information. The record does not show that Sheets made further attempts to refine his discovery requests. We are unable to conclude that the district court abused its discretion with regard to Sheets’ motion to compel.

6

Sheets has not shown that the district court erred by refusing to apply the doctrine of unclean hands as a bar to the Bank of America’s claim for relief. Thus, we affirm the district court’s grant of summary judgment in favor of Bank of America on its claim for relief from the reconveyance. B. The district court properly granted summary judgment dismissing Sheets’ counterclaims. Sheets advanced counterclaims with respect to an alleged agreement to refinance Sheets’ loan.6 These counterclaims involve a breach of contract claim and a specific performance claim. The district court determined that a valid contract did not exist between Sheets and Bank of America because there was no written contract that would comply with the statute of frauds and there was no evidence of a meeting of the minds as to the terms of the alleged contract. Sheets contends that Bank of America committed in writing to loan Sheets money “by approving and scheduling a closing for the 2009 Refinancing.” Bank of America responds that there is no written contract and that the parties never had a meeting of the minds as to important terms of the alleged contract. Bank of America is correct on both counts. Summary judgment was appropriate because the alleged contract to lend money in the 2009 Refinancing is not evidenced by a signed writing. Idaho’s Statute of Frauds is set forth at Idaho Code section 9–505, and provides in relevant part: In the following cases the agreement is invalid, unless the same or some note or memorandum thereof, be in writing and subscribed by the party charged, or by his agent. Evidence, therefore, of the agreement cannot be received without the writing or secondary evidence of its contents: . . . . 5. A promise or commitment to lend money or to grant or extend credit in an original principal amount of fifty thousand dollars ($50,000) or more, made by a person or entity engaged in the business of lending money or extending credit. Sheets has not met his burden to present a writing signed by an agent of Bank of America committing to loan him money. Sheets directs our attention to Bajrektarevic v. Lighthouse Home Loans, Inc., 143 Idaho 890, 155 P.3d 691 (2007), in support of his claim that this Court may look to the conduct of the parties to determine whether a contract existed. However, that case does not

6 Sheets’ appeal does not challenge the dismissal of certain counterclaims, including those asserting claimed violations of the Idaho Consumer Protection Act and the federal Fair Credit Reporting Act, slander of credit, and violation of Idaho Code section 45-1502.

7

support his assertion that a commitment to lend money may be implied from the parties’ conduct, without the requisite written document. The district court also correctly determined that there was no evidence of a meeting of the minds between Sheets and Bank of America sufficient to establish an enforceable contract. “Formation of a valid contract requires a meeting of the minds as evidenced by a manifestation of mutual intent to contract.” Justad v. Ward, 147 Idaho 509, 512, 211 P.3d 118, 121 (2009). “For a contract to exist, a distinct understanding that is common to both parties is necessary.” Wandering Trails, LLC v. Big Bite Excavation, Inc., 156 Idaho 586, 592, 329 P.3d 368, 374 (2014). “An enforceable contract must be complete, definite, and certain in all of the contract’s material terms.” Id. Here, the loan application stated the loan was for the principal amount of $87,500 with an interest rate of 5.125%. However, Sheets claimed that he was orally promised a loan of $108,000 at a lower, but unspecified, interest rate in subsequent telephone conversations with loan officer, Paul Campbell. The $20,500 discrepancy in the loan amount is unexplained. The proposed closing documents that Sheets received from Bank of America did not contain terms that Sheets found acceptable. In the absence of evidence of any agreement as to material terms, including the principal sum to be loaned and the interest rate to be paid thereon, the district court correctly determined that a meeting of the minds did not occur. The district court denied Sheets’ request for specific performance because it determined no contract existed between the parties. It is axiomatic that a court may not order specific performance of a contract that does not exist. Therefore, the district court properly dismissed Sheets’ counterclaim. C. We award Bank of America attorney fees on appeal. Bank of America requests appellate attorney fees under the terms of the deed of trust and Idaho Code sections 12-123, 12-120, and 12-121. We grant Bank of America’s request for attorney fees under Idaho Code section 12-121. That statute allows an award of “reasonable attorney’s fees to the prevailing party . . . .” I.C. § 12-121. Attorney fees are awarded to the prevailing party only if “the Court determines that the action was brought or pursued frivolously, unreasonably or without foundation.” Baker v. Sullivan, 132 Idaho 746, 751, 979 P.2d 619, 624 (1999). Sheets’ appeal meets this standard.

8

Sheets has alleged Bank of America engaged in some sort of scheme to defraud him without a shred of evidence to support that claim. There is simply no evidence of inequitable, unfair, dishonest, fraudulent, or deceitful conduct needed to support his claim that Bank of America had unclean hands. Likewise, there is no evidence supporting Sheets’ counterclaims for breach of contract and specific performance. Although he had no evidence to support his defense to Bank of America’s action or his counterclaims, Sheets has maintained this action and failed to pay on his loan for six years, apparently hoping to obtain a windfall due to Bank of America’s error in 2009. We find Sheets’ appeal to have been pursued frivolously, unreasonably, and without foundation. Thus, we award Bank of America attorney fees under Idaho Code section 12-121. IV. CONCLUSION We affirm the district court’s decision granting summary judgment to Bank of America on its claim to void the mistakenly recorded reconveyance and the district court’s judgment dismissing Sheets’ counterclaims. We award attorney fees and costs on appeal to Bank of America.

Chief Justice J. JONES and Justices EISMANN, BURDICK and W. JONES, CONCUR.

9

IN THE SUPREME COURT OF THE STATE OF IDAHO

Docket No. 42192

VIRGIL ADAMS, ) ) Plaintiff-Appellant, ) ) v. ) ) KIMBERLEY ONE TOWNHOUSE ) Boise, June 2015 Term OWNER’S ASSOCIATION, INC., an Idaho )

corporation; RICHARD MORGAN, ) 2015 Opinion No. 57 ANTHONY DAMER, JOANNE SPRINGER, )

JIM GREER, JON MARTIN, ANNE HAY, ) Filed: June 22, 2015 DAVID RICKS, DOUG McWHORTER, )

CARA BROWN, BOB HAY, PAM HARDER, ) Stephen W. Kenyon, Clerk and KEN DUNBAR, members of the Board of ) Directors of KIMBERLEY ONE ) TOWNHOUSE OWNER’S ASSOCIATION, ) INC., ) ) Defendants-Respondents. ) ______)

Appeal from the District Court of the Fourth Judicial District of the State of Idaho, Ada County. Hon. Cheri C. Copsey, District Judge.

The judgment of the district court is affirmed.

Trout Law, PLLC, Boise, for appellant. Kim J. Trout argued.

Anderson, Julian & Hull, LLP, Boise, for respondents. Phillip J. Collaer argued.

______

J. JONES, Justice Virgil Adams appeals the district court’s order granting summary judgment in favor of Kimberley One Townhouse Owner’s Association, Inc. (Association). Adams purchased a townhouse, subject to a declaration of covenants, conditions, and restrictions (1980 Declaration) that did not specifically restrict an owner’s ability to lease his or her unit. Subsequently, the Association amended the 1980 Declaration to provide that an owner could not rent a unit for a period of less than six months. Adams argues the amendment constitutes an invalid restraint on

1 the free use of his land and that he did not have notice of the possibility of such a restriction under the general provision allowing “amendment” in the 1980 Declaration. We affirm. I. FACTUAL AND PROCEDURAL BACKGROUND In 1980, the developer of the Kimberley One Townhouses Subdivision (Subdivision) recorded the 1980 Declaration, and the Association was formed to provide certain controls for the Subdivision. The 1980 Declaration described real property containing forty residential lots and provided that all the lots “shall be held, sold and conveyed subject to the covenants, conditions, restrictions and easements [(CC&Rs)1] herein contained which are for the purpose of protecting the value and desirability of, and which shall run with, the real property.” The 1980 Declaration defined the permitted “Use and Regulation of Uses” for the lots within the Subdivision, providing that “each lot shall be used for single family residential purposes only, on an ownership, rental or lease basis.” The 1980 Declaration also contemplated the possible need for future amendments to that document by providing that the “Declaration may be amended . . . by an instrument signed by not less than ninety percent (90%) of the Lot Owners.”2 In 2003, Adams purchased Lot 13 in the Subdivision, subject to the CC&Rs contained in the 1980 Declaration. The record does not clearly reveal who occupied Adams’ unit during many of the years leading up to this case. During the pendency of this action, Adams has lived out of the country. But, it appears he lived in his Kimberley One unit from 2006 to 2007; his parents lived there in the period leading up to the short-term renting; and he began renting the unit as a vacation property in the summer of 2012, planning to use it himself during future summers. When Adams began renting his unit as a vacation property, the short-term renters precipitated complaints from owner-occupants of other units within the Subdivision, such as renters taking produce from an owner’s garden, excessive noise, and parking violations. These complaints were addressed at an Association board meeting in October 2012, the minutes from which were provided to each owner, including Adams. After receiving the meeting minutes,

1 Throughout this opinion, we use “CC&Rs” to abbreviate “covenants, conditions, and restrictions,” as a general term. When referring to the specific documents at issue in this case that contain CC&Rs, we refer to those documents as the “1980 Declaration,” “2007 Amendment,” and “2013 Amendment.” 2 In 2007, the Association recorded an Amended and Restated Declaration (2007 Amendment). The 2007 Amendment was adopted by the vote of more than ninety percent of the lot owners, as required by the 1980 Declaration, and Adams voted for its approval. The only change the 2007 Amendment made that is relevant to the current action was to reduce the vote required to amend the declaration from ninety percent to sixty-six and two- thirds percent. The provision regarding “Use and Regulation of Uses” remained the same as in the 1980 Declaration. 3 Adams’ property is also referred to as “Unit 1275.”

2 Adams apologized for the problems and promised to remedy the situation. However, at its next meeting the board noted that there continued to be problems with the short-term renters and decided to move forward with a proposed amendment to the CC&Rs (2013 Amendment). Adams communicated with the Association members through email to strongly oppose the amendment. His attorney attended the annual meeting on his behalf and provided comments during the discussion. The 2013 Amendment passed by an affirmative vote of eighty-nine percent. This amendment changed the permitted use of lots within the Subdivision by providing that units may be rented “only in strict accordance with the following” conditions: (a) the owner must execute a written document with the renter; (b) the document must be approved in advance by the board; (c) advertising for the unit must be approved by the board; (d) no rentals for fewer than six months will be approved; (e) no subleasing is permitted; (f) owner must provide contact information to the board; and (g) the board has discretion to grant exceptions to these rental requirements and to create house rules for their enforcement. When Adams continued to engage in short-term renting subsequent to the 2013 Amendment, the board enacted house rules that imposed a $300 fine for each day a unit is rented in violation of the short-term lease requirements and a $100 fine for each day a unit is advertised in violation of those requirements. Shortly after the Association notified Adams he was in violation of the 2013 Amendment, he brought a declaratory judgment action seeking to invalidate that amendment. He also sought attorney fees. The Association moved for summary judgment and Adams filed a cross-motion for summary judgment. During a hearing on both motions the district court ruled from the bench, granting the Association’s motion and denying Adams’ motion. The court entered judgment against Adams and awarded costs and fees to the Association. Adams timely appealed. II. ISSUES ON APPEAL 1. Whether the 2013 Amendment provisions restricting rental activity are invalid. 2. Whether either party is entitled to attorney fees. III. ANALYSIS A. Standard of Review. The standard of review on appeal from a grant of summary judgment is well-settled. [T]his Court utilizes the same standard of review used by the district court

3 originally ruling on the motion. Summary judgment is proper “if 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). When considering whether the evidence in the record shows that there is no genuine issue of material fact, the trial court must liberally construe the facts, and draw all reasonable inferences, in favor of the nonmoving party. If the evidence reveals no disputed issues of material fact, then only a question of law remains, over which this Court exercises free review. Conner v. Hodges, 157 Idaho 19, 23, 333 P.3d 130, 134 (2014) (internal case citations omitted). On discretionary matters, “[a] district court does not abuse its discretion when it (1) correctly perceives the issue as discretionary, (2) acts within the bounds of discretion and applies the correct legal standards, and (3) reaches the decision through an exercise of reason.” Agrisource, Inc. v. Johnson, 156 Idaho 903, 914, 332 P.3d 815, 826 (2014) (quotation marks omitted). B. The district court correctly determined the validity of the 2013 Amendment. Adams argues the rental restrictions are invalid because: (1) they do not properly reflect the intent of the parties with respect to their original agreement; (2) Adams had an unrestricted, enforceable right to rent his property under the original agreement; (3) the CC&Rs must be construed in favor of the free use of land rather than in favor of the Association; and (4) the restriction allows for arbitrary discretionary enforcement by the Association. “Covenants that restrict the uses of land are valid and enforceable.” Jacklin Land Co. v. Blue Dog RV, Inc., 151 Idaho 242, 246, 254 P.3d 1238, 1242 (2011). However, because restrictions on the free use of property are at odds with the common law right to use land for all lawful purposes, the Court will enforce such restrictions only when clearly expressed. Sky Canyon Props. v. Golf Club at Black Rock, LLC, 155 Idaho 604, 606, 315 P.3d 792, 794 (2013). All doubts in that regard should be “resolved in favor of the free use of land.” Id. “Therefore, while clearly expressed restrictions will be upheld, restrictions that are not clearly expressed will be resolved in favor of the free use of land.” Jacklin Land, 151 Idaho at 246, 254 P.3d at 1242 (internal quotation marks omitted). This Court applies contract principles to interpret restrictive covenants. Sky Canyon, 155 Idaho at 606, 315 P.3d at 794. “Whether a contract is ambiguous is a question of law over which the Court exercises free review.” Best Hill Coal. v. Halko, LLC, 144 Idaho 813, 817, 172 P.3d 1088, 1092 (2007). To determine whether ambiguity exists, “the court must view the agreement as a whole to determine the intent of the parties at the time of contracting. If a covenant is

4 unambiguous, the court must apply its plain meaning as a matter of law.” Id. (internal citation omitted). Courts may not rewrite contracts, nor will equity “intervene to change the terms of a contract unless it produces unconscionable harm, is unlawful or violates public policy.” Shawver v. Huckleberry Estates, 140 Idaho 354, 365, 93 P.3d 685, 696 (2004). Neither party argues the 1980 Declaration or either subsequent amendment is ambiguous. Thus, we determine the intent of the parties from the language contained in that document. The provisions in question here are those relating to use of the property as a rental and to amendment of the declaration. The issue essentially boils down to whether the provision broadly allowing the “Declaration [to] be amended” authorizes the Association to restrict rental use of the property when there were previously no express restrictions on such use. Adams’ ownership of his unit is clearly subject to all the CC&Rs contained in the 1980 Declaration and he does not dispute this fact. The section of the 1980 Declaration titled “Use and Regulation of Uses,” provides that “each lot shall be used for single family residential purposes only, on an ownership, rental or lease basis.”4 Another section of the 1980 Declaration, titled “Amendment,” provides that during the first thirty years of its existence, the “Declaration may be amended . . . by an instrument signed by not less than ninety percent (90%) of the Lot Owners.”5 The district court found that the amendment provision was, in substance, “a method of abrogating and modifying” the declaration. It found “amend,” when given its plain and ordinary meaning, clearly included the change made to the declaration in this case.6 Adams argues the modification in the 2013 Amendment amounted to the addition of a new burden, which should be distinguished from the amendment of an existing burden, with the former being precluded under a general amendment provision. He argues that “amend” should be limited to smaller changes and changes to covenants and restrictions that are already addressed in the declaration. This Court’s reasoning in Shawver is instructive to the issue. There, purchasers entered

4 There are a few other incidental references to rental activity in the 1980 Declaration as well. For example, one section provides that an owner may delegate his right to enjoy the common areas of the subdivision to “his tenants.” Another section provides the permitted way for an owner to “advertise a dwelling unit for rent.” 5 The required percentage vote was later changed to two-thirds of the owners. Adams does not argue that the 2013 Amendment did not comply with the procedure required by the declaration, only that it exceeded the scope of what could be validly changed pursuant to an “amendment.” 6 Adams places much import on the court’s language that suggests “amend” and “change” are essentially synonymous, and he devotes several pages of briefing to discussion of dictionary definitions of the two terms as well as the definitions of many other terms that contain the word “change,” but are otherwise irrelevant to the issue at hand. We find Adams’ argument on this matter unpersuasive, as there is no meaningful distinction in the context at hand between “change” and “amend.”

5 into a purchase and sale agreement containing an acknowledgement that the purchasers had obtained and reviewed a copy of the Original CC&Rs. 140 Idaho at 358, 93 P.3d at 689. The Original CC&Rs contained a provision for the amendment of the CC&Rs, which provided: “Any amendment to these [CC&Rs] shall be approved in writing by at least seventy-five percent of the lot owners.” Id. at 358, 361, 93 P.3d at 689, 692. After the Original CC&Rs were recorded, the purchasers submitted building plans that met the size requirements of the Original CC&Rs, but the developer returned them, informing the purchasers their plans were not approved. Id. at 358, 93 P.3d at 689. The developer subsequently recorded Amended CC&Rs7 that, among other things, increased the minimum size requirements. Id. at 358–59, 93 P.3d at 689–90. The purchasers filed suit against the developer for breach of contract and argued, among other things, that the lot they were under contract to purchase should be subject only to the Original CC&Rs, which were those in effect when the parties executed the purchase and sale agreement. Id. at 359–62, 93 P.3d at 690–93. We rejected the purchasers’ arguments that they should be bound only by the Original CC&Rs, reasoning: This argument is inconsistent with the language of the Sale Agreement. Under the express terms of the Sale Agreement, the [purchasers] agreed to purchase property governed by restrictive covenants, which could be amended by written consent of seventy-five percent of the existing lot owners. Such agreements are valid under the law. See 20 Am.Jur.2d Covenants § 236 (1995) (“[T]he restrictive agreements in a tract of land may provide for a method of abrogating or modifying such agreements, as, for example, by vote of a certain proportion of the property owners.”). The [purchasers] had no right under the Sale Agreement to override the amendment provision or to avoid compliance in the event amendments were properly adopted. Courts do not possess the roving power to rewrite contracts in order to make them more equitable. The [purchasers’] position that the Sale Agreement was subject only to the original recorded CC&Rs is contrary to the agreement they made. Id. at 361–62, 93 P.3d at 692–93 (internal citation and quotation marks omitted). We further stated that the Court would not use its powers of equity to relieve a party of terms it agreed to “unless it produces unconscionable harm, is unlawful or violates public policy.” Id. at 365, 93 P.3d at 696. “There is doubtless a point when a party has changed his or her position in reliance upon the covenants in effect to a degree that enforcement of an amendment would be precluded, but that point was not demonstrated in this case.” Id.

7 The developer recorded Amended CC&Rs twice. The first time it did not have the vote required by the Original CC&Rs to amend, so the amendment was invalid. The developer later recorded Amended CC&Rs that did have the required vote. Shawver, 140 Idaho at 359–60, 93 P.3d at 690–91.

6 In Best Hill, we upheld an amendment that added a new restriction, not previously included in the CC&Rs. There, one of the members of a subdivision bound by CC&Rs owned eleven lots within the subdivision. 144 Idaho at 815, 172 P.3d at 1090. That owner wanted to subdivide a portion of its land within the subdivision into thirty-five new lots, but several other owners within the subdivision objected. Id. at 816, 172 P.3d at 1091. The owners voted to amend the CC&Rs to provide a new restriction, limiting the density within the subdivision so that no new lot could be less than two acres in size, which prevented the owner from subdividing the land as it had planned. Id. The amendment provision in the CC&Rs provided that “[t]hese restrictive covenants may be altered, amended or deleted in whole or in part, if agreed to in writing by seventy-five percent (75%) majority of the then parcel owners.” Nordstrom v. Guindon, 135 Idaho 343, 347, 17 P.3d 287, 291 (2000).8 In Best Hill, this Court upheld the validity of the new restriction and referred to that addition throughout the opinion as an “amendment.” See, e.g., 144 Idaho at 816, 172 P.3d at 1091. Adams argues Idaho has not addressed the distinction between adding a new restriction to CC&Rs and amending an existing restriction, and he cites to several out-of-state cases to support his proposed distinction. Indeed, there is a split of authority among the states as to whether a new restriction on rental activity may be reasonably added under a general amendment provision, or whether a new restriction is per se unreasonable. E.g., compare Wilkinson v. Chiwawa Cmtys. Ass’n, 327 P.3d 614, 622 (Wash. 2014) (holding a new restriction on short-term rental activity invalid, reasoning “homeowners cannot force a new restriction on a minority of unsuspecting Chiwawa homeowners unrelated to any existing covenant.”) with McElveen-Hunter v. Fountain Manor Ass’n, 386 S.E.2d 435, 435–36 (N.C. Ct. App. 1989) (upholding an amendment that added a new restriction against rentals of less than one year, reasoning that the plaintiff purchased the units subject to the rights of other owners to restrict their occupancy and with notice before buying the units that the declaration was subject to change). We find Idaho’s approach to CC&R amendments to be more consistent with that line of cases which do not draw a bright-line distinction between the addition of new restrictions and the modification of existing restrictions. We do, of course, agree with the Shawver Court that there is a point at which an amendment to CC&Rs will go too far, and have too adverse an effect on

8 The Best Hill Court did not provide the language of the amendment provision but noted that Guindon dealt directly with the same CC&Rs from the same subdivision as Best Hill. Best Hill, 144 Idaho at 815 n.1, 172 P.3d at 1090 n.1.

7 those bound by it, in which case the amendment would be precluded. See 140 Idaho at 365, 93 P.3d at 696. However, the fact that a restriction was not previously addressed in the CC&Rs prior to an amendment does not automatically mean that amendment has gone too far, as shown by Best Hill. The amendment in the case at hand has not reached the tipping point. Shawver generally suggests that parties should be bound by the terms to which they agree, including a term allowing the significant future alteration of the agreement, unless a term produces unconscionable harm. The record reflects that Adams had only been renting his unit as a vacation property for a few months when the Association began discussing an amendment. We are not faced with a situation where Adams was permitted to engage in short-term renting for ten years and then, all of a sudden, an amendment no longer permitted such use. Additionally, he is still permitted to rent his property as long as he complies with the terms of the new amendment. Even prior to the amendment, the rental activity was limited by the declaration to allow rentals or leases “for single family residential purposes only.” In substance, the 2013 Amendment simply narrowed what may be considered a “single family residential purpose.” That term implies a certain degree of long-term or stable occupancy of the residence, rather than it being used as a hotel as Adams had. The 2013 Amendment simply provided clarity to that term. Although the amendment requires Adams to change how he uses his property, Shawver shows that significant changes are permitted under a general amendment provision in CC&Rs. There, the purchaser executed the purchase agreement in reliance on the Original CC&Rs providing a certain minimum size requirement. Here, Adams executed his warranty deed in reliance on the 1980 Declaration having no restrictions on his ability to use his unit as a vacation rental. There, although the CC&Rs were amended to change the size requirements, preventing the purchasers from building the house they designed in reliance on the Original CC&Rs, the Court held the purchasers to their agreement, which included the general right of the owners to amend. Likewise, here, although Adams purchased his home in reliance on his ability to rent it as he pleased, he is bound by the 1980 Declaration as a whole, which included the general right of the owners to amend. Adams argues the amendment deprived him of the benefit of his bargain by failing to give effect to the provision that expressly allowed him an unrestricted right to rent his unit. However, as we stated in Shawver, preventing the Association from amending as it sees fit does not give effect to the amendment provision in the declaration. Adams agreed to the entire

8 1980 Declaration, including the amendment provision, and allowing him to now avoid compliance with that provision is inconsistent with the bargain he made. Adams argues that to allow amendments of the type in this case creates a slippery slope that provides no protection for owners in the minority voting position. However, this disadvantage to those in minority voting position was apparent from the 1980 Declaration at the time of the original purchase. Under the 1980 Declaration, ten percent of the homeowners could be bound by an amendment they did not want if the majority had the requisite ninety percent of the vote to support the change. This fact is obvious and unambiguous on the face of the agreement, and if Adams was not willing to agree to the amendment term, he was free to walk away from the transaction. Finally, Adams argues the 2013 Amendment is invalid because it allows arbitrary enforcement and discriminatory application. He contends the Association sought to impose the new restrictions solely on his unit. He bases this argument on the fact that it was problems with the rental of his unit that prompted the Association’s discussion of a possible amendment. Indeed, the meeting minutes from the first board meeting where the problem was discussed listed as an agenda item, “Unit 1275 Rental Issues: This unit is now being rented by the day, week, or month. This has created a number of problems.” Additionally, the deposition of one of the board members confirmed that it was Adams’ short-term rental that led to the board’s broader discussion at that first meeting regarding security and other issues associated with short-term rentals. The 2013 Amendment provides that “all of the properties described above [(which includes all units in the subdivision)] shall be held, sold, and conveyed subject to the [CC&Rs] herein contained.” Further, the provision specifically addressing rental activity expressly provides that it applies to “each lot” in the Subdivision. Although it was Adams’ conduct that precipitated the need for the amendment, there is nothing in the language of the 2013 Amendment that could reasonably be interpreted to apply only to Adams’ unit. All the rental restrictions facially apply equally to all units within the Subdivision. Adams further argues the board’s discretion to grant exceptions to the rental restrictions shows that the amendment does not apply equally to all units. He argues the board provided itself with such discretion to allow it to enforce the rental restriction “solely against Appellant, Mr. Adams.” However, there is nothing in the record to suggest, nor does Adams argue, that the board has engaged in any conduct amounting to discriminatory enforcement. It is illogical to

9 assume the board would not equally restrict all owners from short-term rentals, as it is likely that similar problems would arise no matter which owner was renting his or her unit. Even if Adams assumes the rental restrictions will only be enforced against him, the assumption that a provision of the CC&Rs will likely be breached in the future does not give rise to a cause of action. See Indep. Sch. Dist. of Boise City v. Harris Family Ltd. P’ship, 150 Idaho 583, 588, 249 P.3d 382, 387 (2011). Therefore, Adams’ argument that the 2013 Amendment is invalid because it is arbitrary and discriminatory is without merit. The Association’s position is more consistent with Idaho’s approach to CC&R amendments, as evidenced by the Court’s strong language in Shawver and the fact that the Court in Best Hill allowed the addition of a new restriction under a general amendment provision. Therefore, we hold that the district court properly determined the 2013 Amendment was validly made within the scope of the plain language of the amendment provision. C. Attorney Fees. 1. The district court did not abuse its discretion in awarding attorney fees below. Pursuant to a provision in the declaration allowing attorney fees to the prevailing party in an action to enforce the CC&Rs, the district court awarded attorney fees to the Association. On appeal, Adams argues the attorney fees below were inappropriately ordered because this was not an enforcement action but a declaratory judgment action. The district court did not abuse its discretion in ordering attorney fees under the CC&R provision. “In any civil action the court may award reasonable attorney fees . . . to the prevailing party or parties as defined in Rule 54(d)(1)(B), when provided for by any statute or contract.” I.R.C.P. 54(e)(1). The applicable declaration provision in this case provides that: “In the event suit is brought to enforce the covenants contained herein, the prevailing party shall be entitled to be awarded his reasonable attorneys fees in addition to allowed costs.” In awarding fees to the Association, the district court reasoned that the declaration constituted a contract and that attorney fees may be awarded if agreed to under contract. The court further reasoned that this action constituted an enforcement action because, by determining the validity of the 2013 Amendment, it is essentially an action related to the enforcement of the rental restriction. It also noted that, although Adams was now arguing that attorney fees were inappropriate because the action was not an enforcement action, in his complaint Adams requested attorney fees under the enforcement provision of the declaration.

10 The action in this case appropriately resulted in the award of attorney fees below. Although Adams titled his complaint an action for declaratory judgment, he also characterized the action in various places as an “existing controversy as to the validity and enforceability of the [2013 Amendment]” and as entitling Adams to attorney fees “as the prevailing party in the enforcement of the original covenants.” (Emphasis added). In addition to these characterizations of the action, Adams alleged that he was entitled to attorney fees under the provision in the declaration allowing fees to the prevailing party in an action to enforce the declaration. Further, Adams argues on appeal that he is entitled to attorney fees “aris[ing] from the fee provisions of the CC&R’s.” In substance, this action was brought in response to the Association’s attempt to enforce the 2013 Amendment and was an attempt by Adams to prevent enforcement of the 2013 amendment and to enforce the use provisions of the previous versions of the declaration. Therefore this action was properly characterized as one “to enforce the [CC&Rs],” and the award of attorney fees below was not an abuse of discretion. 2. Attorney fees on appeal. The Association argues it is also entitled to attorney fees on appeal, authorized pursuant to the same declaration provision discussed above. Applying the same reasoning as stated above with respect to the attorney fees at the district court, the Association is entitled to attorney fees on appeal pursuant to the declaration. IV. CONCLUSION We affirm the judgment of the district court and award the Association costs and attorney fees on appeal.

Chief Justice BURDICK, and Justices EISMANN, W. JONES, and HORTON CONCUR.

11

IN THE SUPREME COURT OF THE STATE OF IDAHO No. 42614

SAFARIS UNLIMITED, LLC, a Georgia ) limited liability company, ) Twin Falls, June 2015 Term ) Plaintiff-Respondent, ) 2015 Opinion No. 70 ) v. ) Filed: July 17, 2017 ) MIKE VON JONES, ) Stephen W. Kenyon, Clerk ) Defendant-Appellant. ) ______)

Appeal from the District Court of the Fifth Judicial District of the State of Idaho, Twin Falls County. Hon. Randy J. Stoker, District Judge.

The judgment of the district court is vacated and this case is remanded for further proceedings. Costs on appeal, but not attorney’s fees, are awarded to appellant.

Jeffrey E. Rolig P.C., Twin Falls, attorney for appellant.

Worst, Fitzgerald & Stover, PLLC, Twin Falls, attorneys for respondent. Louis V. Spiker argued. ______W. JONES, Justice I. NATURE OF THE CASE Appellant Mike Von Jones arranged to hunt big game in Zimbabwe, Africa, with HHK Safaris (Pvt) Ltd (“HHK”). Jones went on the hunt and received an invoice for $26,040.00 from Respondent Safaris Unlimited LLC (“Safaris Unlimited”). Jones then refused to pay Safaris Unlimited for the hunt. As a result, Safaris Unlimited filed a suit for breach of contract. Jones responded that he arranged and engaged in the hunt with HHK, not Safaris Unlimited, and therefore he had no contractual relationship with Safaris Unlimited for payment. He further alleged that he was entitled to offset any amount owed for the hunt with the value of certain trophy items from the hunt and an earlier hunt. Safaris Unlimited moved for summary judgment.

1 The district court granted its motion and entered judgment in favor of Safaris Unlimited. Jones appeals to this Court. We vacate and remand.

II. FACTUAL AND PROCEDURAL BACKGROUND Safaris Unlimited is a Georgia limited liability company. HHK is a private limited corporation organized under the laws of Zimbabwe. The chain of ownership is as follows: (1) Safaris Unlimited is owned entirely by C. Martin Wood, III; (2) Wood owns fifty percent of Bulawayo Trading Company (Pvt) Limited (also a private limited corporation organized under the laws of Zimbabwe); and (3) Bulawayo Trading Company owns forty percent of HHK. Jennifer Ryan is the general manager of Safaris Unlimited, and Graham Hingeston is one of the owners and the day-to-day manager of HHK. Safaris Unlimited operates as a broker or booking agent for HHK. Other than the actual hunting services provided by HHK, Safaris Unlimited coordinates and assists on all details of the hunt, such as accommodations, transportation, and permits. According to Hingeston, HHK requires that the client pay Safaris Unlimited for the services provided by HHK in all instances. In exchange for the client’s agreement to pay Safaris Unlimited, HHK provides the hunting services. HHK does not provide hunting services except with Safaris Unlimited, and Safaris Unlimited only conducts business with HHK. As explained by Ryan, “In the normal course of business, Safaris Unlimited is entitled to the difference between HHK’s cost to provide safari and big game hunting services and the price charged the client by Safaris Unlimited.” Ryan attached to her affidavit the service agreement between Safaris Unlimited and HHK. Particularly relevant here, the financial management agreement of the parties provides: Whereas HHK is in the hunting safari business and agrees to engage SU [Safaris Unlimited] as a financial service agent for the sole purpose of coordinating safari bookings and payments from booking agents, companies and individuals worldwide. . . . SU shall be fully responsible for collection of all deposits, remaining balances and trophy fees. Deposits shall be collected for confirmation of a safari. Remaining balances of daily rates shall be collected prior to commencement of the safari and trophy fees shall be collected within 10 days of the completion of the safari. All funds collected on behalf of HHK shall be forwarded timely on request.

From November 22, 2012, to December 1, 2012, Jones engaged in a safari and hunt of big game with HHK in Zimbabwe. According to Jones’s interrogatory responses, he shot a trophy elephant, a tuskless elephant, and a buffalo on the 2012 hunt. Jones has engaged in two

2 earlier hunts with HHK, one in 2010 and one in 2011. For both of these earlier hunts, Jones paid Safaris Unlimited with a cashier’s check after receiving an invoice from Safaris Unlimited. To arrange the 2012 hunt, Jones directly contacted Hingeston with HHK. Jones testified, “Yes, I was aware that [HHK] used [Safaris Unlimited] for a booking agent . . . previously. But not on the 2012 hunt.” In his deposition, Jones explained that the 2012 hunt was “different” than the two earlier hunts because he “had no contact with [Safaris Unlimited] whatsoever.” In the two earlier hunts, Jones identified his contact with Safaris Unlimited as his payment to Safaris Unlimited for the hunts with HHK and possibly some contact with Ryan. Although Jones could not remember “for sure,” he testified in his deposition that Hingeston had him contact Ryan on at least one of the two previous hunts. According to Jones, this contact was probably an email about the invoice for the hunt. After the 2012 hunt, on December 6, 2012, Ryan emailed Jones an invoice in the amount of $26,550.00. In response via email, Jones disputed a charge on the invoice (for a cameraman) and also informed Ryan that he had “some serious issues with the quality of service” on the 2012 hunt. Ryan then emailed Jones a new invoice for $26,040.00, removing the disputed charge. Over the next two months, Ryan sent Jones four emails asking him to pay the amount owed for the hunt. In Ryan’s last email, she informed Jones that she would be turning over his account to Safaris Unlimited’s attorneys for collection. Jones did not respond to these four emails. On May 1, 2013, counsel for Safaris Unlimited sent a demand letter to Jones for payment. On June 28, 2013, Safaris Unlimited filed a complaint against Jones for breach of contract and sought $26,040.00 in damages plus interest. On January 6, 2014, Jones answered. Jones admitted that Safaris Unlimited sent an invoice. He also admitted that he had not paid the invoice. He denied, however, that he owed the invoiced amount to Safaris Unlimited. He alleged that Safaris Unlimited was not the real party in interest and that Safaris Unlimited was acting as the collection agency for the real party in interest, HHK, in violation of the Idaho Collection Agency Act (ICAA). As an affirmative defense, he asserted that he was entitled to offset the amount owed with (1) the value of trophy- sized elephant tusks and a buffalo trophy from the 2012 hunt and (2) trophy animals and tusks from the earlier hunt in 2010. According to Jones, he did not receive these trophy items after the hunts.

3 On July 14, 2014, Safaris Unlimited moved for summary judgment. Along with other evidence, as discussed above, Safaris Unlimited presented another invoice for the 2012 hunt. This second invoice was issued by Safaris Unlimited for a total amount of $26,040.00, and it had a signature on the bottom from “M. Von Jones.” A licensed professional hunter employed by HHK stated in an affidavit that he presented Jones with this invoice at the end of the 2012 hunt. He also claimed that Jones signed the invoice in his presence. Relying on this invoice, Safaris Unlimited argued that Jones was contractually obligated to pay Safaris Unlimited for the hunt. Safaris Unlimited contended that HHK, as a third party, provided the consideration for Jones’s obligation to pay Safaris Unlimited. Safaris Unlimited also argued that it was not subject to the ICAA, but, even if it was, Safaris Unlimited qualified for an exemption. Finally, Safaris Unlimited argued that Jones was not entitled to any offset for the value of certain trophy items because federal and international regulations prohibited the use of the trophy items for commercial purposes. On August 18, 2014, Jones responded in opposition to Safaris Unlimited’s motion. Jones argued that he had a contract with HHK, not Safaris Unlimited. Citing to his deposition testimony, Jones denied that he viewed or signed the second invoice. He claimed that the second invoice did not create any contractual relationship with Safaris Unlimited. He also argued that Safaris Unlimited was acting as a collection agency and was not subject to an exemption to the ICAA. Lastly, Jones argued that he was entitled to substantial offsets. He contended that he was entitled to an offset for the 2012 hunt for the following reason: Unfortunately, contrary to what had been agreed, [Jones] was forced to share the camp with nine South Africans, who were extremely noisy, drunk and overbearing most of the time. The South Africans consumed all the food and drank all the Cokes and other drinks. The camp also ran out of diesel fuel. [Jones] left the site early.1

1 An email exchange between Hingeston and Jones indicates that Hingeston informed him: “Also just to let you know we have some South Africans that are scheduled to hunt 23–29 there for Buff.” Jones responded: “I’m ok with South Africans as long as they are not a bunch of loud, arroga [sic] jackasses as I have unfortunately on occasion encountered in the past.” According Jones’s deposition, Jones verified with Hingeston either through email or on the phone that there would be two “decent” South Africans on the hunt for three days. Also according to Jones, “these South Africans have a reputation for being drunks and total a-holes if you’re in a camp with them.” On the hunt, Jones stated that the nine South Africans “were loud,” “took videos all day,” “got drunk at night,” and “consumed all the food.” Jones stated:

I complained from day one. I said, what the hell is going on here? I was supposed to have two South Africans here, and we’ve got nine. And we’re up all night. I can’t sleep. I can’t do anything. I said, what’s going on? Well, somehow they found out that these guys were going to be there for

4

Jones also contended that “he has not received tens of thousands of dollars worth [sic] of ivory from the 2010 and 2012 hunts.” He argued that whether Safaris Unlimited or HHK could sell the trophies was irrelevant because he was deprived of the value and benefit of those items. On September 2, 2014, the district court heard oral argument on Safaris Unlimited’s motion for summary judgment. The district court then pronounced its decision on the record. The district court summarily found that the facts were undisputed. The district court then determined: Safari is owned by Mr. Wood, and Safari owns 50 percent of the Bulawayo Company, which owns 40 percent of the HHK Company, clearly related entities in this case, which I think satisfy the criteria under the Idaho Collection[ ] [Agency] Act which allows Safaris to bring this lawsuit in their name, albeit the hunting party, if you will, was HHK.

In short, the district court ruled that Safaris Unlimited did not violate the ICAA by seeking payment from Jones for the hunting services provided by HHK. Next, the district court determined the amount owed by Jones: There seems to be no dispute as to the value of the hunt: The 26,000 and some odd dollars are set forth in the invoice. I come to that conclusion for two reasons. Number one, though I agree that the mere presentation of an invoice to a party with their responding signature doesn’t, in and itself, establish a contract, in this case that establishes a, I think, an acknowledgment that that is a reasonable and fair billing. And when you couple that with the emails that took place later between Mr. Jones and Ms. Ryan, the only dispute that Mr. Jones raises over that invoice really relates to the offset claims that he’s making. So I find that the $26,000 obligation is owed subject to any offset claim which I’m going to talk about here in a second.

Thus, the district court determined that Jones was obligated to pay $26,040.00 for the hunt. Finally, the district court turned to the offset allegations. With regard to an offset for Jones’s dissatisfaction due to South Africans at the camp, the district court determined that there was no legal basis for that offset. The district court reasoned: “There’s no representation made in the record by Safaris or HHK or anybody else that this would be a quiet camp or that it would be a camp free of any of the things he’s complaining about . . . .” With regard to 2012 trophy items, the district court determined that Jones failed to raise an obligation on behalf of Safaris Unlimited or HHK to transport the trophy items. Specifically, the district court recognized that there was no affirmative allegation that Jones was promised shipment as a part of the invoice.

like seven days. And that is not what [Hingeston] indicated to me. So it was a miserable hunt. I got the animal. But it was a miserable hunt. Absolutely the worst hunt I’ve been on in my life.

5 The district court acknowledged that it did not know whether there was a separate contract for shipment, but it concluded that the burden was on Jones to present evidence for this affirmative defense. The district court clarified: [I]f I had before me a contractual provision or agreement that said Safari or HHK is obligated to ship these tusks back at their cost, and that didn’t occur, I would agree that that would certainly amount to an offset in this case. But that’s a separate contractual relationship, I think, beyond the offset. I think it’s a counterclaim issue.

Similarly, with regard to the 2010 trophy items, the district court stated: [T]here is no counterclaim before the Court, there’s no third party claim before the Court. If there is a contractual dispute there, it’s just not raised in this case, and I have to decide this matter based upon the record that I have today. I find that there is no merit to that argument.

In summary, the district court rejected Jones’s attempts to offset the amount he owed to Safaris Unlimited. The district court then orally granted summary judgment to Safaris Unlimited on all issues. On October 27, 2014, the district court entered an amended judgment providing that Safaris Unlimited would recover $26,040.00 plus interest and $20,285.99 in attorney’s fees for a total judgment of $52,005.37. Jones appeals to this Court.

III. ISSUES ON APPEAL 1. Whether the district court erred by granting Safaris Unlimited’s motion for summary judgment. 2. Whether either party is entitled to attorney’s fees on appeal. IV. STANDARD OF REVIEW “On appeal from the grant of a motion for summary judgment, this Court utilizes the same standard of review used by the district court originally ruling on the motion.” Arregui v. Gallegos-Main, 153 Idaho 801, 804, 291 P.3d 1000, 1003 (2012). Summary judgment is proper “if 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.” [Idaho Rule of Civil Procedure] 56(c). “When considering whether the evidence in the record shows that there is no genuine issue of material fact, the trial court must liberally construe the facts, and draw all reasonable inferences, in favor of the nonmoving party.” Dulaney v. St. Alphonsus Reg’l Med. Ctr., 137 Idaho 160, 163, 45 P.3d 816, 819 (2002). “If the evidence reveals no disputed issues of material fact, then only a question of law remains, over which this Court exercises free review.” Lapham v. Stewart, 137 Idaho 582, 585, 51 P.3d 396, 399 (2002).

Conner v. Hodges, 157 Idaho 19, 23, 333 P.3d 130, 134 (2014).

6 V. ANALYSIS A. The district court improperly granted summary judgment to Safaris Unlimited. Jones contends that the district court erred by granting summary judgment to Safaris Unlimited. He submits three arguments in support of his position. First, Jones argues that he had a contract with HHK, not Safaris Unlimited. Second, Jones argues that the district court erroneously determined that he was not entitled to offset any amount owed with the value of trophy items from the 2010 and 2012 hunts. Third, Jones argues that Safaris Unlimited is acting as a debt collection agency subject to the ICAA. In response to Jones’s first argument, Safaris Unlimited contends that the invoice presented by the professional hunter and signed by Jones establishes a contract between Jones and Safaris Unlimited. In response to Jones’s second argument, Safaris Unlimited contends that Jones failed to properly assert his offset claims because he failed to establish any obligation on behalf of Safaris Unlimited to deliver the trophy items. Finally, in response to Jones’s third argument, Safaris Unlimited asserts that it is not attempting to collect the debt of another and, even if it was, it qualifies for an exemption to the ICAA. “The elements for a claim for breach of contract are: (a) the existence of the contract, (b) the breach of the contract, (c) the breach caused damages, and (d) the amount of those damages.” Mosell Equities, LLC v. Berryhill & Co., 154 Idaho 269, 278, 297 P.3d 232, 241 (2013). Here, Safaris Unlimited’s complaint unequivocally stated that it had an express or implied contract with Jones for the 2012 hunt. Safaris Unlimited made similar assertions in its memorandum in support of its motion for summary judgment. Neither the complaint nor summary judgment memorandum alleged that Safaris Unlimited had an agreement with HHK or an assignment of debt to enforce a contract between Jones and HHK. Instead, Safaris Unlimited contended throughout these proceedings that it sought payment for the 2012 hunt because it had an enforceable contract with Jones. The existence of a contract is a genuine issue of material fact. “As to contract disputes at summary judgment, ‘[w]hen the existence of a contract is in issue, and the evidence is conflicting or admits of more than one inference, it is for the jury to decide whether a contract in fact exists.’” Nix v. Elmore Cnty., 158 Idaho 310, 314, 346 P.3d 1045, 1049 (2015) (alteration in original) (quoting Johnson v. Allied Stores Corp., 106 Idaho 363, 368, 679 P.2d 640, 645 (1984)). “‘Formation of a valid contract requires that there be a meeting of the minds as

7 evidenced by a manifestation of mutual intent to contract.’ Whether a contract has been formed ‘is generally a question of fact for the trier of fact to resolve.’” Bettwieser v. N.Y. Irrigation Dist., 154 Idaho 317, 323, 297 P.3d 1134, 1140 (2013) (quoting Thomas v. Thomas, 150 Idaho 636, 645, 249 P.3d 829, 838 (2011)). In this case, contrary to Safaris Unlimited’s argument on appeal, the purported signature of Jones at the bottom of an invoice is not sufficient to show any kind of contract between Jones and Safaris Unlimited for the 2012 hunt. Based upon the record at the time of summary judgment, Safaris Unlimited failed to prove the existence of a contract with Jones for the 2012 hunt. Due to the lack of evidence in the record, the district court erred by granting summary judgment to Safaris Unlimited for its breach of contract claim. The district court also erred by granting Safaris Unlimited’s motion for summary judgment as to Jones’s offset claims for the trophy items from the 2010 and 2012 hunts. An offset does not need to be pled as a counterclaim. We vacate the district court’s grant of summary judgment to Safaris Unlimited and remand for further proceedings. B. We decline to award attorney’s fees on appeal at this time. Both parties request attorney’s fees on appeal. Jones contends that he is entitled to attorney’s fees under Idaho Code section 12-120(3). Safaris Unlimited contends that it is entitled to attorney’s fees under Idaho Code sections 12-120(1) and 12-120(3). Idaho Code sections 12- 120(1) and 12-120(3) both mandate an award of attorney’s fees to the prevailing party. Med. Recovery Servs., LLC v. Bonneville Billing & Collections, Inc., 157 Idaho 395, 401, 336 P.3d 802, 808 (2014); Pinnacle Eng’rs, Inc. v. Heron Brook, LLC, 139 Idaho 756, 761, 86 P.3d 470, 475 (2004). In this case, any determination of the prevailing party is “premature” because the Court does “not yet know who will prevail in this action.” Spokane Structures, Inc. v. Equitable Inv., LLC, 148 Idaho 616, 621, 226 P.3d 1263, 1268 (2010). Therefore, we vacate the district court’s award of attorney’s fees to Safaris Unlimited. At the conclusion of this litigation in district court, the court may in its discretion award attorney’s fees to the eventual prevailing party and may consider, to the extent it deems proper in its discretion, an award attorney’s fees for this appeal.

VI. CONCLUSION We vacate the judgment of the district court and remand for further proceedings. Costs, but not attorney’s fees, to Jones on appeal.

8 Chief Justice BURDICK, Justices EISMANN, J. JONES and HORTON CONCUR.

9

IN THE SUPREME COURT OF THE STATE OF IDAHO

Docket No. 41077

SHERMAN STORAGE, LLC, ) ) Plaintiff-Appellant, ) Boise, January 2015 Term ) v. ) 2015 Opinion No. 101 ) GLOBAL SIGNAL ACQUISITIONS II, ) Filed: November 2, 2015 LLC, ) ) Stephen Kenyon, Clerk Defendant-Third Party Plaintiff- ) Respondent, ) ) v. ) ) THE WALLACE FAMILY TRUST; MARY ) JO WALLACE, Trustee of THE WALLACE ) FAMILY TRUST, ) ) Third Party Defendant. )

Appeal from the District Court of the First Judicial District of the State of Idaho, Kootenai County. Hon. John P. Luster, District Judge.

The judgment of the district court is affirmed.

Erik P. Smith, PC, Coeur d’Alene, for appellant. Erik P. Smith argued.

Witherspoon Kelley, Coeur d’Alene, for respondent. Joel P. Hazel argued. ______

HORTON, Justice. Sherman Storage, LLC (Sherman) brought this action against Global Signal Acquisitions II, LLC (Global) seeking to eject Global from a strip of land and seeking contract damages and mesne profits. Sherman appeals from the district court’s judgment in Global’s favor and its order that Sherman pay a substantial sum for Global’s attorney fees. We affirm. I. FACTUAL AND PROCEDURAL BACKGROUND This dispute relates to a strip of land that is part of a cell tower site located in the City of Coeur d’Alene. The site is primarily located on Lot 4, Block 22, Glenmore Addition to Coeur

1

d’Alene (Lot 4), but it extends to the west into a vacated street right-of-way adjacent to Lot 4. The disputed strip of land is the western portion of the cell tower site that is situated on the former 24th Street right-of-way. The disputed strip extends westerly 12.33 feet into the former right-of-way and is fifty feet wide. In 1987, Gary A. Wallace and Mary Jo Wallace established the Wallace Family Trust (the Trust). In 1988, the Trust acquired Lot 4 from the Idaho Transportation Department.1 Lot 4 was located on the east side of 24th Street, which ran in a north-south direction. At this time, Mary Jo Wallace already owned the lots on the other side of 24th Street, having acquired Lots 1 through 12, Block 21, Glenmore Addition in 1982, when the property passed to her by inheritance upon her mother’s death. In 1989, the City of Coeur d’Alene vacated the portion of 24th Street between Lots 1 and 12, Block 21 on the west and Lots 3 and 4, Block 22 on the east. By operation of law,2 the lots on each side of 24th Street re-acquired the adjoining half of the vacated right-of-way. Thus, a portion of 24th Street right-of-way, including the entirety of the disputed strip, reverted to Lot 4. The strip is located in the vacated right-of-way on the edge of the former 24th Street, but it is not located on the former roadway. In June of 1996, the Trust agreed to lease property to Sprint Spectrum L.P. (Sprint) for a cell tower site in a document entitled PCS Site Agreement (the PSA).3 The PSA stated that the lease was for approximately 2,500 square feet of land along with an access easement. The PSA provided that the lease was for the site “shown on Exhibit A.” Exhibit A depicted the site as a trapezoid. The west boundary line of the site is shown as located 17 feet from the centerline of 24th Street and running adjacent to, and parallel to, 24th Street for 50 feet. The north boundary line of the site is shown as extending 35 feet east from the northern terminus of the west boundary line (on the east edge of 24th Street) at a 90 degree angle. The south boundary line is

1 The Trust acquired Lot 3, Block 22, Glenmore Addition to Coeur d’Alene at the same time (Lot 3). 2 Idaho Code section 50-311 provides in pertinent part: [W]henever any street, avenue, alley or lane shall be vacated, the same shall revert to the owner of the adjacent real estate, one-half ( ½ ) on each side thereof, or as the city council deems in the best interests of the adjoining properties, but the right of way, easements and franchise rights of any lot owner or public utility shall not be impaired thereby. The city ordinance vacating 24th Street did not provide an alternate allocation of ownership, as it simply stated that the “vacated property shall revert to the adjacent property owners.” 3 After the cell tower was constructed, multiple amendments and agreements were executed over the years, including agreements to co-locate other providers, agreements affirming the location of the cell tower site, and an agreement to extend the lease term until 2041.

2

likewise shown as a perpendicular line from the edge of 24th Street, extending 50 feet east from the southern terminus of the west boundary line on the east edge of 24th Street. The east boundary line is depicted as a straight line, running southeast from the eastern terminus of the north boundary line to the eastern terminus of the south boundary line. Although the PSA described the lease site as being “shown on Exhibit A,” the PSA also provided that “[i]f requested by [Sprint], [the Trust] agrees promptly to execute and deliver to [Sprint] a recordable Memorandum of this Agreement in the form of Exhibit B. . . .” The PSA explicitly and repeatedly provided that the attached exhibits were part of the parties’ agreement. Sprint evidently requested the Trust to execute a memorandum of their agreement, as Exhibit B is attached to the PSA. Unfortunately, the description of the lease site in Exhibit B differs from that in Exhibit A. Although Exhibit B states that the lease site is “within the property of [the Trust] which is described in Exhibit A,” it also contains the contradictory statement that the leased premises are “east of and adjacent to the abandoned 24th St. right of way. . . .” The genesis of this litigation lies in these differing descriptions, as the eastern boundary of the abandoned 24th Street right of way is 30 feet from the centerline of 24th Street, not the 17 feet depicted in Exhibit A. In the summer of 1996, Sprint constructed the cell tower and fenced in approximately a 35’ x 35’ fenced square area directly adjacent to the curb of 24th Street. Although the size of the fenced-off area has increased over the years, it has not exceeded the area described in Exhibit A to the PSA and the western fence has not moved from its location adjacent to the curb of 24th Street.4 On January 31, 1997, Sprint recorded a Record of Survey “for the purpose of

4 The location of the western fence line was a critical fact in dispute. Sherman challenges the district court’s factual finding that “[t]he location of the Cell Tower Site has not changed since originally built, though fencing and access has changed, resulting in a 40’ x 40’ enclosure.” Although Sherman is correct that the aspects of the site changed over time, the critical inquiry is whether the disputed strip was bounded at the time of the original construction of the cell tower site. We view the district court’s statement as addressing this claim. We have carefully examined Sherman’s citations to the record on this critical point and compared them with those relied upon by Global. Although some of Sherman’s citations do not support its claim that the fence was relocated, Sherman does correctly direct us to significant testimony in support of its position. In Mary Jo Wallace’s deposition testimony, she twice testified that she had seen the cell tower site following its construction in 1996 and that there was a significant gap between the 24th Street curb and the fence on the western boundary of the cell tower site. Wallace estimated the gap as “almost a car’s width.” Global presented conflicting evidence, including a survey performed shortly after the site was constructed, to show that the western fence was constructed adjacent to the 24th Street curb and that its location had not changed. As it is the district court’s role, not ours, to weigh conflicting evidence and judge witness credibility, State, Dep’t of Transp. v. Grathol, 158 Idaho 38, 45, 343 P.3d 480, 487 (2015), we accept the trial court’s finding that the western boundary of the cell tower site was unchanged.

3

monumenting” the lease site. The survey showed the lease site as occupying a portion of the 24th Street right-of-way. In August of 2002, Mary Jo Wallace entered into an agreement to sell Lots 1-12 in Block 21 to Sherman’s predecessor in interest, Sherman Self Storage Inc. (Sherman Inc.). The agreement described the property to be purchased, in pertinent part, as including “vacated roadways all of 24th St. (60’),” despite the fact that the eastern half of 24th Street had reverted to Lots 3 and 4, owned by the Trust. On September 19, 2002, Mary Jo Wallace executed a warranty deed conveying Lots 1-12 in Block 21 along with “vacated 24th Street, that attached by operation of law,” which had the effect of conveying the western half of the vacated 24th Street. The differing descriptions found in the sales agreement and the warranty deed also contributed to the instant controversy. On June 7, 2005, Sprint assigned its interest in the lease to Global as part of a transaction wherein Global’s parent company acquired approximately 10,000 cell tower sites. On April 7, 2006, by way of warranty deed, Sherman Inc. transferred to Sherman Lots 1-12, Block 21 and “those portions of . . . vacated 24th Street, that attaches [sic] by operation of law.” On June 7, 2006, Sherman Inc. quitclaimed its interest in the east half of 24th Street to Sherman. This appeal relates to two cases before the district court. In 2003, Sherman Inc. brought an action against Mary Jo Wallace, individually (the 2003 Litigation). In this action, Sherman Inc. sought to quiet title in the east half of the vacated 24th Street right-of-way, including the strip of land at issue in this appeal. In 2006, Sherman Inc. and Mary Jo Wallace entered into a settlement agreement. Notwithstanding the fact that the Trust owned Lots 3 and 4, Wallace agreed to transfer her interest in the east half of the vacated 24th Street to Sherman Inc. In turn, Sherman Inc. agreed that Wallace would “have an easement to access the existing cell tower on her remaining property consistent with the existing easement for that purpose, as set forth [in the 1997 Record of Survey.]” The district court entered a final order quieting title to the east half of 24th Street in Sherman Inc.’s favor as against Mary Jo Wallace. On May 19, 2009, Sherman filed an action against Global, seeking to eject Global from the disputed strip (the 2009 Litigation). Global moved for summary judgment, seeking dismissal of Sherman’s action because the Trust, not Sherman, held title to the east half of 24th Street. Thereafter, the Trust conveyed “the easterly ½ of vacated 24th Street” to Sherman by warranty deed. No money changed hands in this transaction. In May of 2010, Sherman purchased Lots 3

4

and 4 from the Trust for $300,000. Following this purchase, Sherman amended its complaint to add claims for mesne profits and breach of the PSA. The district court subsequently consolidated the 2003 and 2009 Litigation. The district court granted partial summary judgment in favor of Sherman, holding that the PSA unambiguously established that “the lease site is to the east of and adjacent to the abandoned 24th Street right of way.”5 The district court conducted a trial without jury starting on June 4, 2012. The district court then issued a memorandum decision, finding in favor of Global. The district court made a number of conclusions of law; however, there are three that are dispositive of Sherman’s appeal from the district court’s decision that it was not entitled to relief. First, the district court found that Sherman’s action for ejectment was barred by laches. Second, although the district court determined that Sherman’s contract action failed for other reasons, it held that “[e]ven if Sherman successfully proved its claims . . . Sherman did not prove that it is entitled to damages.” Finally, the district court denied Sherman’s claim for mesne profits on the basis that Sherman failed to prove “Global’s profits derived from the subject property.” The district court thereafter found that Global was the prevailing party and awarded $9,846.80 in costs and $250,000 in attorney fees. Sherman timely appealed. After Global undertook to collect on the judgment for attorney fees and costs, Sherman paid those sums rather than post a supersedeas bond. II. STANDARD OF REVIEW This Court reviews a district court’s decision following a bench trial to ascertain “whether the evidence supports the findings of fact, and whether the findings of fact support the conclusions of law.” Borah v. McCandless, 147 Idaho 73, 77, 205 P.3d 1209, 1213 (2009). “Since it is the province of the trial court to weigh conflicting evidence and testimony and to judge the credibility of witnesses, this Court will liberally construe the trial court’s findings of fact in favor of the judgment entered” and “will not set aside a trial court’s findings of fact unless the findings are clearly erroneous.” Id. “This Court exercises free review over matters of law.” Id. “We review a trial court’s decision on laches and unclean hands for an abuse of discretion.” Garcia v. Pinkham, 144 Idaho 898, 899, 174 P.3d 868, 869 (2007). “Abuse of

5 This grant of partial summary judgment was clearly erroneous. The conflicts between Exhibits A and B to the PSA render the PSA ambiguous as to the location of the lease site. Despite this error, the decision of the district court may be affirmed without necessity of a remand.

5

discretion is determined by a three part test which asks whether the district court ‘(1) correctly perceived the issue as one of discretion; (2) acted within the outer boundaries of its discretion and consistently with the legal standards applicable to the specific choices available to it; and (3) reached its decision by an exercise of reason.’ ” Id. (quoting Sun Valley Potato Growers, Inc. v. Texas Refinery Corp., 139 Idaho 761, 765, 86 P.3d 475, 479 (2004)). The award of attorney fees is also reviewed for an abuse of discretion. Taylor v. Maile, 146 Idaho 705, 712, 201 P.3d 1282, 1289 (2009). III. ANALYSIS Although the parties raise a number of issues on appeal relating to the merits of the district court’s rejection of Sherman’s claims, we find three issues to be dispositive. For that reason, we will only address the following issues relating to Sherman’s claims for relief: (1) the district court’s decision that laches barred Sherman’s equitable action for ejectment; (2) the district court’s determination that Sherman failed to prove contract damages; and (3) the district court’s determination that Sherman failed to prove mesne profits. We then turn our attention to the district court’s award of attorney fees and costs to Global. Finally, we consider the parties’ requests for attorney fees incurred on appeal. A. The district court did not abuse its discretion when it found that laches barred Sherman’s ejectment claim. The district court determined that Sherman was estopped by laches from ejecting Global from the disputed strip because the Trust failed to bring a claim between 1996 and 2010. Sherman argues that the district court should have denied Global its equitable defense because it has unclean hands and that the district court erred in applying estoppel by laches because Global failed to prove that the Trust knew of the encroachment. “The clean hands doctrine ‘stands for the proposition that a litigant may be denied relief by a court of equity on the ground that his conduct has been inequitable, unfair and dishonest, or fraudulent and deceitful as to the controversy in issue.’ ” McVicars v. Christensen, 156 Idaho 58, 63–64, 320 P.3d 948, 953–54 (2014) (quoting Ada Cnty. Highway Dist. v. Total Success Invs., LLC, 145 Idaho 360, 370, 179 P.3d 323, 333 (2008) (citation omitted)). An appellant bears the burden of showing the district court committed error, the “[e]rror must be affirmatively shown on the record,” and “[i]f the record is inadequate to review the appellant’s claims, the Court will not presume error below.” Garcia, 144 Idaho at 899, 174 P.3d at 869.

6

The district court implicitly rejected Sherman’s unclean hands argument by applying laches.6 “In such instances, we will examine the record to determine whether there is substantial and competent evidence to support the district court’s implicit factual findings.” Borah, 147 Idaho at 80, 205 P.3d at 1216. The district court’s factual findings are owed deference unless clearly erroneous. City of Idaho Falls v. Fuhriman, 149 Idaho 574, 576, 237 P.3d 1200, 1202 (2010). “It is not this Court’s role to reweigh evidence.” Frontier Dev. Grp., LLC v. Caravella, 157 Idaho 589, 595, 338 P.3d 1193, 1199 (2014). Sherman argues that Global and its predecessor, Sprint, engaged in a pattern of “duplicitous conduct” designed to avoid providing the Trust notice of the encroachment on the 24th Street right-of-way. However, the district court found that Mary Jo Wallace viewed the cell tower site following its construction in 1996. Thereafter, the Trust signed additional agreements regarding the site, accepted rental payments and extended the term of the PSA. There is substantial evidence supporting the district court’s finding that the Trust had knowledge of the encroachment. Mary Jo Wallace testified that she saw the site following its construction, although the district court’s findings indicate that she was mistaken as to the original location of the western fence. There was substantial evidence that the location of the western fence remained unchanged following the construction at the cell tower site. Global introduced a 1996 construction drawing depicting a 35’ x 35’ square, surrounded by a six foot high fence that occupied a portion of the 24th Street right-of-way. On January 31, 1997, Sprint recorded a Record of Survey “for the purpose of monumenting a lease site” in Kootenai County. This Record of Survey, prepared by professional land surveyor Doug Black, depicted the lease site as occupying a portion of the 24th Street right-of-way. Randy LaBeff, the engineer who drafted the construction drawings for the cell tower site, testified that it was to be constructed adjacent to the 24th Street curb and he was “as confident as you can be” that his construction plans called for the lease site to be placed as located by Black’s site survey. LaBeff further testified that the cell tower site was built in a location consistent with the plans he drew up. Another surveyor, Walter Dale, testified that he found Black’s original survey monuments that

6 It is not surprising that the district court did not explicitly refer to “unclean hands.” Apart from noting that Global asserted that Sherman had unclean hands, Sherman did not use the words in its trial brief or proposed findings of fact and conclusions of law. Indeed, Sherman’s Notice of Appeal contains its first explicit written reference to “unclean hands” on the part of Global. We view Sherman’s claims that Global acted “duplicitously” and “deceitfully” in its dealings with the Trust as the basis for its claim that Global had unclean hands. Thus, we focus on the district court’s factual finding that the Trust had knowledge of the encroachment.

7

were placed in 1996 and that the lease site was 17.7 feet from the centerline of 24th Street in accordance with Black’s original survey. The district court found that Sherman was barred by laches based upon the information possessed by the Trust and its dealings with Sprint and Global. Sherman does not challenge the proposition that the conduct of a predecessor in interest may result in the application of laches.7 Given that Sherman purchased the property in question in the course of this litigation with full notice of the encroachment, we can discern no error in the district court’s focus on the Trust’s knowledge of the encroachment and subsequent conduct. We have described the doctrine of laches as follows: [L]aches is an affirmative defense and the party asserting the defense has the burden of proof. Whether or not a party is guilty of laches is a question of fact. The necessary elements to maintain a defense of laches are: (1) defendant’s invasion of plaintiff’s rights; (2) delay in asserting plaintiff’s rights, the plaintiff having had notice and an opportunity to institute a suit; (3) lack of knowledge by the defendant that plaintiff would assert his rights; and (4) injury or prejudice to the defendant in the event relief is accorded to plaintiff or the suit is not held to be barred. Because the doctrine of laches is founded in equity, in determining whether the doctrine applies, consideration must be given to all surrounding circumstances and acts of the parties. The lapse of time alone is not controlling on whether laches applies. Thomas v. Arkoosh Produce, Inc., 137 Idaho 352, 359, 48 P.3d 1241, 1248 (2002) (citations omitted). Distilled to its essence, Sherman’s challenge is predicated upon Mary Jo Wallace’s recollection of the location of the western fence. The district court’s finding that she had seen the site following its construction and that the location was unchanged was based upon substantial evidence. The district court, not surprisingly, found it significant that, despite the Trust’s

7 The district court cited Almo Water Co. v. Darrington, 95 Idaho 16, 501 P.2d 700 (1972), as a case where this Court considered whether the conduct of predecessors would result in laches being applied to bar a successor’s water claim. However, the Almo Court did not decide whether laches may apply to a party based upon its predecessor’s conduct because it found that there was no reliance on the earlier conduct. Id. at 20, 501 P.2d at 704. Other Idaho cases have likewise suggested, without explicitly holding, that a predecessor’s conduct may result in laches being applied to a successor. See e.g. Devil Creek Ranch, Inc. v. Cedar Mesa Reservoir & Canal Co., 123 Idaho 634, 635–36, 851 P.2d 348, 349–50 (1993); Argyle v. Slemaker, 107 Idaho 668, 669–70, 691 P.2d 1283, 1284–85 (Ct. App. 1984); see also Infanger v. City of Salmon, 137 Idaho 45, 52, 44 P.3d 1100, 1107 (2002) (Kidwell J., dissenting) (stating cases from other jurisdictions “hold that successors in interest may be estopped by the actions of their predecessors, at least where the successor had notice of the facts giving rise to the estoppel.”).

8

knowledge of the actual location of the cell tower cite, the Trust entered into additional agreements8 and continued to accept rental payments9 without objection. The district court explicitly recognized that whether to apply laches was committed to its discretion. Citing to Thomas, the district court correctly articulated the legal standards governing a claim of laches. The district court’s decision to apply laches was within the bounds of its discretion. The district court cogently articulated its reason for finding that each of the four elements of laches had been established. Sherman has not shown that the district court abused its discretion. B. There is no ground for reversing the district court’s rejection of Sherman’s claim for breach of contract because Sherman has not challenged the district court’s finding that it had failed to establish contract damages. Sherman devotes much briefing to its claim that the district court erred in finding that there was no material breach of the PSA. However, “where a judgment of the trial court is based upon alternate grounds, if the judgment can be affirmed on one of the grounds the fact that the alternative ground may have been in error is of no consequence and may be disregarded.” Fischer v. Fischer, 92 Idaho 379, 382, 443 P.2d 463, 466 (1968). The district court held that “[e]ven if Sherman successfully proved its claims, which it did not, Sherman did not prove that it is entitled to damages.” As the plaintiff, Sherman bore the burden of proving the damages occasioned by Global’s purported breach of contract with reasonable certainty. Harris, Inc. v. Foxhollow Const. & Trucking, Inc., 151 Idaho 761, 770, 264 P.3d 400, 409 (2011). Sherman has not challenged the district court’s finding that it did not prove contract damages. The failure to do so is fatal to its claim that the district court erred by denying it relief for breach of contract. La Bella Vita, LLC v. Shuler, 158 Idaho 799, 806, 353 P.3d 420, 427 (2015) (failure to address alternative ground for summary judgment fatal to appeal).

8 Two agreements are particularly noteworthy. On May 10, 2005, the Trust signed an Estoppel Certificate that agreed: No default exists under the Lease on the part of Tenant, and, to Landlord’s knowledge, no event or condition has occurred or exists which, with notice or the passage of time or both, would constitute a default by Tenant under the Lease. On November 17, 2008, in exchange for a signing bonus, the Trust entered into an agreement to extend the lease term to 2041. 9 Between 1996 and 2010, the Trust accepted rental payments totaling $172,786.40.

9

C. The district court’s rejection of Sherman’s claim for mesne profits must be affirmed because Sherman has not challenged the district court’s determination that it failed to prove mesne profits. “Mesne profits is most often defined as the value of the use or occupation of the land during the time it was held by one in wrongful possession and is commonly measured in terms of rents and profits.” Dumas v. Ropp, 98 Idaho 61, 62, 558 P.2d 632, 633 (1977). The district court held that “Sherman did not establish Global’s profits derived from the subject property.” Sherman has not challenged this conclusion on appeal. Accordingly, we affirm the district court’s denial of Sherman’s claim for mesne profits. D. The district court’s award of attorney fees and costs to Global is affirmed. The district court awarded Global $9,846.80 in costs and $250,000 in attorney fees pursuant to the terms of the PSA and Idaho Code section 12-120(3). On appeal, Sherman argues the district court’s award of attorney fees and costs should be vacated. Before turning to the merits of this claim, we first consider Global’s contention that Sherman waived this issue when it paid the judgment for attorney fees. Generally, the satisfaction of a judgment may terminate the right to appeal from the judgment. People ex rel. Neilson v. Wilkins, 101 Idaho 394, 396, 614 P.2d 417, 419 (1980). However, if satisfaction of the judgment is involuntary, the right to appeal is not lost. In re SRBA, 149 Idaho 532, 538 n. 1, 237 P.3d 1, 7 n. 1 (2010); Int’l Bus. Machs. Corp. v. Lawhorn, 106 Idaho 194, 197, 677 P.2d 507, 510 (Ct. App. 1984). Thus, when a party pays an award to avoid a sheriff’s sale, the satisfaction of the judgment is involuntary and the issue is still ripe for judicial review. In re SRBA, 149 Idaho at 538 n. 1, 237 P.3d at 7 n. 1. Here, Sherman’s payment of attorney fees and costs was involuntary. Thus, we may consider the merits of this issue. “The award of attorney fees rests in the sound discretion of the trial court and the burden is on the person disputing the award to show an abuse of discretion.” Idaho Military Historical Soc’y, Inc. v. Maslen, 156 Idaho 624, 631, 329 P.3d 1072, 1079 (2014) (quoting Nampa & Meridian Irr. Dist. v. Washington Fed. Sav., 135 Idaho 518, 525, 20 P.3d 702, 709 (2001)). “[I]ssues that are not argued and supported as required by the Appellate Rules are deemed to have been waived.” Bettwieser v. New York Irr. Dist., 154 Idaho 317, 326, 297 P.3d 1134, 1143 (2013). The Idaho Appellate Rules provide: “The argument shall contain the contentions of the appellant with respect to the issues presented on appeal, the reasons therefor, with citations to authorities, statutes and parts of the transcript and the record relied upon.” I.A.R. 35(a)(6).

10

Sherman’s brief states: “For Sherman’s analysis on the issues and basis for the attorney’s fees claim, please see Sherman’s ‘Memorandum in Support of Objection to Attorney’s Fees and Costs.’ ” The citation to a memorandum filed in the district court falls well short of the requirement that a party support a claim of error with argument and authority. We therefore affirm the district court’s award of attorney fees and costs. E. Global is entitled to attorney fees on appeal. Global requests attorney fees on appeal under the terms of the PSA and Idaho Code section 12-120(3). “Attorney fees may be awarded if authorized by statute or contract.” Stibal v. Fano, 157 Idaho 428, 435, 337 P.3d 587, 594 (2014). The PSA provides the following contractual basis for an award of attorney fees: The prevailing party in any action or proceeding in court . . . to enforce the terms of this Agreement is entitled to receive its reasonable attorneys’ fees and other reasonable enforcement costs and expenses from the non-prevailing party. As the prevailing party, Global is entitled to an award of attorney fees on appeal. IV. CONCLUSION We affirm the district court’s judgment in favor of Global and its award of attorney fees and costs. We award attorney fees and costs on appeal to Global.

Chief Justice J. JONES and Justices EISMANN, BURDICK and W. JONES CONCUR.

11

IN THE SUPREME COURT OF THE STATE OF IDAHO

Docket No. 41113

NEIGHBORS FOR THE PRESERVATION ) OF THE BIG AND LITTLE CREEK ) COMMUNITY, an unincorporated ) corporation; PEOPLE FOR PAYETTE’S ) FUTURE, INC., an Idaho nonprofit ) Boise, December 2014 Term corporation; JOSEPH BERCIK and BETTY ) BERCIK; CODY BURLILE and ) 2015 Opinion No. 93 CHRISTINA BURLILE; DE BURLILE and ) LORI PRATT; LINDA BURLILE; JORDAN ) Filed: September 25, 2015 CARY and HARMONY CARY; LARRY ) DAHNKE and SUSAN DAHNKE; DALE ) Stephen Kenyon, Clerk DELLINGER; RAY DENIG and JACKIE ) DENIG; RICHARD EVEY and SUSAN ) EVEY; KANE HUDDLESTON and JOYCE ) HUDDLESTON; LUKE HUDDLESTON; ) JOHN JEFFRIES and JO AN JEFFRIES; ) JERRY KORN; LEON KORN; CAMERON ) MAHLER and CINDY MAHLER; ) KIMBERLY CHRISTENSEN; CYRIL ) ROLAND; GREG SEMON and TERRI ) SEMON; ROGER SMITH and MARY ) VIVIAN SMITH; ELIZABETH STEPHENS; ) DICK TOWNER and SUE TOWNER; JOHN ) WALGENBACH and DENISE MORGAN; ) DEBORAH WEBER; and ENRIQUE ) YBARRA, JR., ) ) Petitioners, ) ) and ) ) JOHN (JACK) BURLILE; H-HOOK, LLC, ) an Idaho limited liability company; ) CLIFFORD MORGAN and MARY ) MORGAN; THOMAS PENCE; IRENE ) ROLAND; TOM ROLAND and MARCIA ) ROLAND; JAMES UNDERWOOD, JR.; and ) JEFFERY WEBER, ) ) Petitioners-Appellants, ) ) v. )

1

) BOARD OF COUNTY COMMISSIONERS ) OF PAYETTE COUNTY, ) ) Respondent, ) ) and ) ) ALTERNATE ENERGY HOLDINGS, INC., ) ) Intervenor-Respondent. ) ______)

Appeal from the District Court of the Third Judicial District of the State of Idaho, Payette County. Hon. Molly J. Huskey, District Judge.

The decision of the district court is affirmed.

Andersen Banducci, PLLC, and Williams Bradbury, P.C., Boise, for appellants. Wade L. Woodard argued.

Payette County Prosecutor’s Office, Payette, for respondent Board of County Commissioners of Payette County.

Spink Butler, LLP, Boise, for intervenor-respondent Alternate Energy Holdings, Inc. Thomas H. Clark argued. ______

HORTON, Justice. The Payette County Board of Commissioners (the Commissioners) approved a conditional rezone of a parcel of land from agricultural to industrial, subject to a development agreement, in connection with a project to build a nuclear power plant. Various parties appealed the approval to the district court. The district court upheld the Commissioners’ actions. H-Hook, LLC (H-Hook), a neighboring landowner, appeals from the district court’s decision. We affirm. I. FACTUAL AND PROCEDURAL BACKGROUND In late 2009, Alternate Energy Holdings Inc. (AEHI) looked to Payette County (the County) as the proposed site of a nuclear power plant. AEHI contracted to purchase approximately 5000 acres of property located off Big Willow and Stone Quarry Roads in the County. The property was zoned Agricultural. Because the property needed to be rezoned in order to accomplish AEHI’s objectives, AEHI started two proceedings. 1. Proceedings to revise the County’s Comprehensive Plan.

2

First, AEHI sought changes to the County’s comprehensive plan. AEHI submitted an application to amend the comprehensive plan to change the designation of the subject property from Agriculture 1, 2, and Mixed to Industrial. H-Hook’s principal, Michael Humphreys, testified in opposition to the amendment of the comprehensive plan. H-Hook’s attorney argued that the comprehensive plan did not contain the statutorily required plans for power plant sites and utility transmission corridors. See I.C. § 67-6508(h); Sprenger, Grubb & Assocs., Inc. v. City of Hailey, 133 Idaho 320, 322, 986 P.2d 343, 345 (1999). The County amended the comprehensive plan, designating the subject property as Industrial and adding the following language: Energy producers who wish to locate electric, gas, or other energy production facilities in Payette County must apply to the Payette County Planning and Zoning Department and each application will be considered on an individual basis in accordance in accordance [sic] with the Local Land Use Planning Act (I.C. § 67-6500 et seq), Payette County Code and this plan. Prior to this amendment, the comprehensive plan had only identified providers of electricity, natural gas, home heating fuel and propane and had provided the following limited statement regarding future energy and communication trends: Power, gas, telephone, cable, newspaper, and post and parcel services will continue to be offered to all developed portions of the county, as needed. Despite regional growth trends, consumption of electrical power is actually declining due to enhanced technological efficiency in transmission and distribution. Only one sentence in the comprehensive plan arguably related to utility transmission corridors. (“Telephone lines generally coincide with major electrical transmission lines.”) 2. Proceedings regarding the conditional rezone and development agreement application. On June 22, 2010, AEHI submitted a Rezone and Development Agreement Application to the County’s Planning and Zoning Commission. In this application, AEHI proposed the rezone “of approximately 500 acres from A (agricultural) to I-2 (heavy industrial) zoning.” AEHI submitted a draft development agreement in support of the application. The draft development agreement was available for public review in the Planning and Zoning office. In November of 2010, the County made the application and supporting documents available to the public on a website. The County also made digital and hard copies available to the public in advance of the first hearing before the Planning and Zoning Commission. That hearing, originally scheduled for December 2, 2010, was continued to December 9, 2010. The Planning and Zoning Commission recommended approval of AEHI’s applications.

3

H-Hook and other interested parties appealed the Planning and Zoning Commission’s decision to the Commissioners. The draft development agreement was further revised, and released to the public along with the County staff report on May 26, 2011, eleven days prior to the June 6, 2011 hearing before the Commissioners. The revisions to the proposed development agreement were color-coded to facilitate the public’s understanding of the revisions. H-Hook and its attorney provided written testimony to the Commissioners. After receiving extensive public testimony, the Commissioners approved AEHI’s application. The Commissioners issued their findings of fact, conclusions of law, and order on August 29, 2011. The Commissioners found that the proposed zoning was compatible with surrounding land uses and that the 500 acre parcel that would be rezoned would be contained within a larger 5000 acre parcel, resulting in a buffer zone from neighboring properties. On September 23, 2011, a number of parties sought judicial review of the Commissioners’ decision. The district court granted AEHI’s motion to intervene in the judicial review proceedings. The district court reached three conclusions that are the subject of this appeal. First, the district court rejected H-Hook’s contention that the comprehensive plan was invalid due to the absence of statutorily required components regarding power plant siting and power transmission corridors. Second, the district court determined the Commissioners’ approval of the rezone did not constitute spot zoning because the rezone was in accordance with the County’s amended comprehensive plan. Third, the district court determined the County did not violate H-Hook’s due process rights by denying H-Hook an adequate opportunity to present objections to AEHI’s application. The district court issued its Order on Appeal and Order of Remand on May 2, 2013. H-Hook timely appealed. II. STANDARD OF REVIEW The Local Land Use Planning Act (LLUPA) permits an affected person to seek judicial review of an approval or denial of a land use application, as provided in the Idaho Administrative Procedures Act (IDAPA). I.C. § 67-6521(1)(d). “This Court has stated that for the purposes of judicial review of LLUPA decisions, where a board of county commissioners makes a land use decision, it will be treated as a government agency under IDAPA.” In re Jerome Cnty. Bd. of Comm’rs, 153 Idaho 298, 307, 281 P.3d 1076, 1085 (2012). When a district court acts in its appellate capacity pursuant to IDAPA, “we review the district court’s decision as a matter of procedure.” Williams v. Idaho State Bd. of Real Estate Appraisers, 157 Idaho 496, 502, 337 P.3d 655, 661

4

(2014) (quoting Jasso v. Camas Cnty., 151 Idaho 790, 793, 264 P.3d 897, 900 (2011)). When doing so, we conduct an independent review of the agency record. [Dry Creek Partners, LLC v. Ada Cnty. Comm’rs, ex rel. State, 148 Idaho 11, 16, 217 P.3d 1282, 1287] (2009). This Court will affirm a district court’s decision upholding a zoning board’s action unless the party contesting the zoning board’s decision demonstrates that (1) the board erred in a manner specified in Idaho Code section 67–5279(3), and (2) the board’s action prejudiced its substantial rights. Id. Idaho Code section 67–5279(3) provides that a board’s decision will only be overturned where its findings, inferences, conclusions, or decisions are: (a) in violation of constitutional or statutory provisions; (b) in excess of the statutory authority of the agency; (c) made upon unlawful procedure; (d) not supported by substantial evidence on the record as a whole; or (e) arbitrary, capricious, or an abuse of discretion. I.C. § 67–5279(3). 917 Lusk, LLC v. City of Boise, 158 Idaho 12, 14, 343 P.3d 41, 43 (2015). “There is a strong presumption that [a] zoning board’s actions were valid and that it has correctly interpreted its own zoning ordinances.” Hawkins v. Bonneville Cnty. Bd. of Comm’rs, 151 Idaho 228, 231, 254 P.3d 1224, 1227 (2011). “This Court exercises free review over questions regarding whether the board has violated a statutory provision, which is a matter of law.” In re Jerome Cnty. Bd. of Comm’rs, 153 Idaho at 308, 281 P.3d at 1086. “Due process issues are generally questions of law, and this Court exercises free review over questions of law.” Neighbors for a Healthy Gold Fork v. Valley Cnty., 145 Idaho 121, 127, 176 P.3d 126, 132 (2007). III. ANALYSIS The issues presented in this appeal are whether: (1) this Court has jurisdiction to consider a challenge to the validity of the comprehensive plan; (2) the comprehensive plan is invalid because it is missing components required by Idaho Code section 67-6508; (3) the rezone was illegal spot zoning; and (4) the notice and hearing procedures employed by the County were defective. A. This Court has jurisdiction to consider a challenge to the comprehensive plan. AEHI and the County raise a new issue not presented to the district court. They contend that due to the lack of a statutory grant of authority for judicial review of an amendment to a comprehensive plan, this Court lacks jurisdiction to decide this question. H-Hook argues that it has a statutory right to judicial review of a conditional rezone and that AEHI and the County waived this argument by not presenting it below.

5

We can easily dispense with H-Hook’s second argument. “Whether a court lacks jurisdiction is a question of law that may be raised at any time. . . .” State v. Dieter, 153 Idaho 730, 733, 291 P.3d 413, 416 (2012) (quoting State v. Jones, 140 Idaho 755, 757, 101 P.3d 699, 701 (2004)). In the absence of a statutory grant of authority, the courts lack jurisdiction to conduct judicial review of local government actions under LLUPA. Taylor v. Canyon Cnty. Bd. of Comm’rs, 147 Idaho 424, 433, 210 P.3d 532, 541 (2009). Under LLUPA there is a right to judicial review for an “affected person aggrieved by a final decision . . . .” I.C. § 67–6521(1)(d). Idaho Code section 67-6521(1)(a)(iii) defines an “affected person” as a person having a “bona fide interest in real property which may be adversely affected by . . . [a]n approval or denial of an application for conditional rezoning pursuant to section 67-6511A.”1 Idaho Code section 67- 6511A specifically addresses rezoning agreements, such as the rezone in the present case, that are based upon a development agreement. H-Hook’s challenge to the amended comprehensive plan is a component of its attack on the County’s decision to grant AEHI’s application for conditional rezone. Idaho Code section 67- 6521 grants jurisdiction to the district court and this Court to conduct judicial review of that decision. As H-Hook’s argument regarding the validity of the comprehensive plan is merely a subsidiary issue related to its challenge to the conditional rezone, we conclude that we have jurisdiction to decide this issue. B. The comprehensive plan is not invalid for lacking components required by Idaho Code section 67-6508(h). H-Hook argues the rezone was invalid because the County’s amended comprehensive plan does not contain the statutorily required “analysis” for “power plant sites” and “utility transmission corridors” as required in Idaho Code section 67-6508(h). AEHI responds the comprehensive plan met Idaho Code section 67-6508(h)’s requirement to show “general” plans for power plant sites and utility transmission corridors. “[A] valid comprehensive plan is a precondition to the validity of zoning ordinances.” Sprenger, Grubb & Assocs., Inc. v. City of Hailey, 133 Idaho 320, 322, 986 P.2d 343, 345 (1999). “[A] valid comprehensive plan must contain each of the components as specified in § 67-

1 This language was added to Idaho Code section 67-6521 in 2010, prior to the petition for judicial review filed in this case on September 23, 2011. 2010 Idaho Sess. L. ch. 175, § 3, p. 361.

6

6508, unless the plan articulates a reason why a particular component is unneeded.” Id. Idaho Code section 67-6508 provides: It shall be the duty of the planning or planning and zoning commission to conduct a comprehensive planning process designed to prepare, implement, and review and update a comprehensive plan, hereafter referred to as the plan. . . . The plan shall consider previous and existing conditions, trends, compatibility of land uses, desirable goals and objectives, or desirable future situations for each planning component. The plan with maps, charts, and reports shall be based on the following components as they may apply to land use regulations and actions unless the plan specifies reasons why a particular component is unneeded.2 Idaho Code section 67-6508 also provides a list of such components that must be addressed in a comprehensive plan. In particular, Idaho Code section 67-6508(h) outlines the requirements of the public services, facilities, and utilities component, requiring: (h) Public Services, Facilities, and Utilities--An analysis showing general plans for sewage, drainage, power plant sites, utility transmission corridors, water supply, fire stations and fire fighting equipment, health and welfare facilities, libraries, solid waste disposal sites, schools, public safety facilities and related services. “Statutory interpretation begins with ‘the literal words of the statute, and this language should be given its plain, obvious, and rational meaning.’” Seward v. Pac. Hide & Fur Depot, 138 Idaho 509, 511, 65 P.3d 531, 533 (2003) (quoting Jen–Rath Co. v. Kit Mfg. Co., 137 Idaho 330, 335, 48 P.3d 659, 664 (2002)). H-Hook focuses on the statutory reference to “analysis,” which suggests that the comprehensive plan should contain a certain measure of detailed consideration of the subject. In our view, the requirement of a “general plan” diminishes the degree of required “analysis.” “General” means “concerned or dealing with universal rather than particular aspects” and “concerned with main elements rather than limited details.” Merriam Webster’s Collegiate Dictionary 484 (19th ed. 1993). As previously noted, the County responded to H-Hook’s attorney’s objection to the comprehensive plan’s silence as to power plant siting by amending the comprehensive plan. The amendment was not extensive: Energy producers who wish to locate electric, gas, or other energy production facilities in Payette County must apply to the Payette County Planning and Zoning Department and each application will be considered on an individual

2 Idaho Code section 67-6508 has been amended twice during the pendency of this case. 2011 Idaho Sess. L. ch. 89, § 2, p. 193; 2014 Idaho Sess. L. ch. 93, § 4, p. 255. Neither amendment is pertinent to this case. For the sake of convenience this opinion will cite to the current version of Idaho Code section 67-6508.

7

basis in accordance in accordance [sic] with the Local Land Use Planning Act (I.C. § 67-6500 et seq), Payette County Code and this plan. H-Hook contends that this provision does not meet the requirements of Idaho Code section 67- 6508(h) because it merely states that the County will plan on an ad hoc basis. In support of its argument, H-Hook directs us to our decision in Sprenger, Grubb & Assocs., Inc. In Sprenger, this Court considered the City of Hailey’s comprehensive plan, which completely lacked two components (land use map and property rights) required by Idaho Code section 67-6508. 133 Idaho at 321–22, 986 P.2d at 344–45. Because Idaho Code section 67-6508 mandated that comprehensive plans contain these components, this Court decided that a rezoning ordinance was invalid. Id. at 322, 986 P.2d at 345. This case differs from Sprenger. As amended, the comprehensive plan addresses power plant siting, albeit on a case-by-case basis. Although we acknowledge that this language provides little guidance, it would be extraordinarily difficult, if not impossible, to develop detailed plans for the many different types of power plants (i.e., natural gas, coal, wind, solar, hydroelectric, biomass, geothermal, nuclear) that may be proposed, particularly since the size of such projects can be widely variable. We agree with the district court that the amended comprehensive plan satisfied the requirements of Idaho Code section 67-6508(h) as to power plant siting. The comprehensive plan contains no meaningful discussion of power transmission corridors, simply stating: “Telephone lines generally coincide with major electrical transmission lines.” However, we view the requirement regarding power transmission corridors as relating to high voltage power lines. The duty to analyze the location and possible routing of such lines is only triggered by a notification from “the public utilities commission concerning the likelihood of a federally designated national interest electric transmission corridor.”3 I.C. § 67-6508(p). There is nothing in the record to suggest that the County has received such notice.

3 Idaho Code section 67-6508(p) provides: (p) National Interest Electric Transmission Corridors—After notification by the public utilities commission concerning the likelihood of a federally designated national interest electric transmission corridor, prepare an analysis showing the existing location and possible routing of high voltage transmission lines, including national interest electric transmission corridors based upon the United States department of energy’s most recent national electric transmission congestion study pursuant to sections 3681 and 12212 of the energy policy act of 2005. “High- voltage transmission lines” means lines with a capacity of one hundred fifteen thousand (115,000) volts or more supported by structures of forty (40) feet or more in height.

8

Considering the “strong presumption that the zoning board’s actions were valid,” we conclude that the amended comprehensive plan satisfies Idaho Code section 67-6508(h)’s “general plans” requirement. C. The district court correctly found that the rezone was not illegal spot zoning. The district court held that the Commissioners’ approval of the rezone did not constitute spot zoning because the rezone was in accordance with the County’s amended comprehensive plan. On appeal, H-Hook contends the rezone is impermissible type one spot zoning because, under the amended comprehensive plan, power plant siting does not have to follow any sort of comprehensive planning analysis: instead the Commissioners are permitted to use an ad hoc approach. H-Hook also argues that the district court erroneously concluded that type two spot zoning can never occur if the zoning was consistent with the comprehensive plan. “A claim of ‘spot zoning’ is essentially an argument the change in zoning is not in accord with the comprehensive plan.” Evans v. Teton Cnty., 139 Idaho 71, 76, 73 P.3d 84, 89 (2003). There are two types of “spot zoning.” Type one spot zoning may simply refer to a rezoning of property for a use prohibited by the original zoning classification. The test for whether such a zone reclassification is valid is whether the zone change is in accord with the comprehensive plan. Type two spot zoning refers to a zone change that singles out a parcel of land for use inconsistent with the permitted use in the rest of the zoning district for the benefit of an individual property owner. This latter type of spot zoning is invalid. Id. at 76–77, 73 P.3d at 89–90 (internal citations omitted). Here, the rezone was not invalid type one spot zoning. The rezone was in compliance with the comprehensive plan’s designation of the land due to the amendment of the comprehensive plan to designate the property as Industrial. Because the rezone was in accord with the comprehensive plan, it was not impermissible type one spot zoning. H-Hook also contends that the rezone is quintessential type two spot zoning because it singles out the proposed site for an industrial nuclear power use when the proposed site is surrounded by mostly agricultural land. The Commissioners found AEHI’s proposed zoning was consistent with surrounding uses, stating: The zoning proposed is compatible with surrounding uses and zones. The surrounding uses include agriculture, confined animal feeding operations (CAFO), a county landfill and residential. The surrounding agricultural property is not deemed prime agricultural. Clay Peak Landfill is located approximately three miles northwest of the subject property. There are four (4) CAFOs within five miles. In addition, the proposed facility is over three miles away from the

9

nearest residence. There is a five hundred (500) acre parcel that the rezoning affects, however, a buffer zone is included in the proposed rezone to ensure the facility is enclosed by ___ thousand acres of agriculturally zoned property. According the [sic] application and testimony, the buffer zone will provide habitat for wildlife and grazing animals. The comprehensive plan provides that the Industrial use designation “encompasses existing industrial operations, such as CAFOs and the Clay Peak Landfill.” Thus, there are five industrial uses within five miles of the proposed site. The Commissioners’ factual determination is entitled to deference when supported by substantial and competent evidence. See In re Jerome Cnty. Bd. of Comm’rs, 153 Idaho 298, 307, 281 P.3d 1076, 1085 (2012). We agree with the district court’s conclusion that the conditional rezone did not constitute impermissible type two spot zoning. D. The notice and hearing procedures followed by the County were adequate. The district court determined that H-Hook had an adequate opportunity to present and respond to evidence related to AEHI’s application although the district court did not specifically address H-Hook’s claim that it failed to have adequate opportunity to review revisions to the development agreement. H-Hook argues the development agreement was the most critical part of AEHI’s application and H-Hook was denied adequate time to review revisions to it, resulting in a due process violation. “Since decisions by zoning boards apply general rules to ‘specific individuals, interests or situations,’ and are ‘quasi-judicial in nature’ they are subject to due process constraints.” Cowan v. Bd. of Comm’rs of Fremont Cnty., 143 Idaho 501, 510, 148 P.3d 1247, 1256 (2006) (quoting Chambers v. Kootenai County Bd. of Comm’rs, 125 Idaho 115, 118, 867 P.2d 989, 992 (1994)). We have described the flexible nature of due process as: Due process is not a concept to be rigidly applied, but is a flexible concept calling for such procedural protections as are warranted by the particular situation. The U.S. Supreme Court has stated that identification of the specific dictates of due process generally requires consideration of three distinct factors: first, the private interest that will be affected by the official action; second, the risk of an erroneous deprivation of such interest through the procedures used, and the probable value, if any, of additional or substitute procedural safeguards; and, third, the Government’s interest, including the function involved and the fiscal and administrative burdens that the additional or substitute requirements would entail. Neighbors for a Healthy Gold Fork v. Valley Cnty., 145 Idaho 121, 127, 176 P.3d 126, 132 (2007) (internal quotations omitted). The procedural due process “requirement is met when the defendant is provided with notice and an opportunity to be heard. The opportunity to be heard

10

must occur at a meaningful time and in a meaningful manner in order to satisfy the due process requirement.” Id. (citation omitted) In its Rezone Application, AEHI proposed the rezone “of approximately 500 acres from A (agricultural) to I-2 (heavy industrial) zoning.” In support of its Rezone Application, AEHI submitted a draft development agreement. A development agreement is an agreement “between the county and the developer, which affects the use or development of the parcel of property which is the subject of a rezone or development request.” Payette County Code § 8-5-11A; see also I.C. § 67-6511A. H-Hook directs our attention to Johnson v. City of Homedale, 118 Idaho 285, 796 P.2d 162 (Ct. App. 1990) and Fischer v. City of Ketchum, 141 Idaho 349, 109 P.3d 1091 (2005). In both cases, applications to Planning and Zoning Commissions were found to be invalid for lack of notice because the applications did not contain necessary components when submitted. Johnson, 118 Idaho at 287, 796 P.2d at 164 (invalidating a special use permit application because it failed to contain a concept plan and narrative statement, which were required to be included by Owyhee County Ordinance); Fischer, 141 Idaho at 354–55, 109 P.3d at 1096–97 (invalidating conditional use permit application because it did not contain a certification of an avalanche attenuation device by a licensed engineer, which was required by Ketchum Zoning Code). The development agreement in the present case is not similar to the missing components in Johnson and Fischer for two reasons. First, a draft of AEHI’s proposed development agreement was initially provided in AEHI’s Rezone and Development Agreement Application filed on June 22, 2010, and was available for public review.4 In November, the County placed the application, including the draft development agreement, on a website dedicated to providing the public with access. Though the draft development agreement did not originally contain the County’s revisions, a draft development agreement with revisions was made available on November 24, 2010, eight days before the scheduled December 2, 2010, hearing before the Planning and Zoning Commission. These eight days provided adequate time for H-Hook to review the development agreement, especially since it already had access to an earlier version.

4 H-Hook argues this original development agreement was deficient because it did not contain the conditions of approval, which it argues are “the most essential part of the development agreement.” However, it makes sense that the conditions of approval would not be included in AEHI’s original Rezone Application because they were meant to be negotiated with the County. The conditions of approval first appear in the record when the draft development agreement was released on May 26, 2011, eleven days prior to the June 6, 2011 hearing. H-Hook does not explain why there was insufficient time to review the conditions of approval prior to the June 6, 2011 hearing. We are satisfied that eleven days was sufficient time to review the eight and one-half pages of conditions.

11

The County’s efforts to make information available to the public were especially apparent in proceedings before the Commissioners. The revised draft development agreement was made public on May 26, 2011, eleven days prior to the June 6, 2011 hearing. This version of the development agreement was color coded. Changes made by the county prosecutor were shown in red, changes made as a result of comments received during the December, 2010 hearings before the Planning and Zoning Commission were shown in blue, “clean up” changes were printed in green, and changes made as a result of a third party review were reflected in purple. The requirements for a development agreement are set by ordinances that a county’s governing board adopts. I.C. § 67-6511A. Development agreements are not required for conditional rezones under the County’s zoning ordinances. Payette County Code section 8-5-11 is silent as to a time frame for providing a development agreement, stating: “at any time during any stage of the development process, a development agreement may be required by the board of county commissioners, recommended by the commission or it may be requested by the developer.” Unlike Johnson and Fischer, there is simply no requirement in the County’s zoning ordinances that a conditional rezone application contain a development agreement. Our decision in Neighbors for a Healthy Gold Fork is particularly instructive in considering H-Hook’s due process claim. There, we held that the procedural due process rights of parties opposing a proposed planned unit residential development were not violated when the neighbors received a copy of a modified plan twelve days before a hearing. 145 Idaho at 126, 128, 176 P.3d at 131, 133. This Court held the modifications did not violate the neighbors’ due process rights because their attorney “had adequate time to at least have some review of the Modified Plan. Further, there [was] no testimony or other evidence in the record to support [the neighbors’] contention that their experts’ opinions were rendered valueless by virtue of the modifications.” Id. at 128, 176 P.3d at 133. This Court also noted that the neighbors had an opportunity to be heard as their attorney presented testimony and exhibits at the hearing. Id. H-Hook’s ability to respond to the revisions in the draft development agreement is similar to the neighbors’ ability to respond to the modified plan in Neighbors for a Healthy Gold Fork. Though the draft development agreement did not originally contain the County’s revisions, a draft development agreement with revisions was made available eight days before the December 2, 2010, proceeding before the Planning and Zoning Commission. These eight days

12

provided adequate time for H-Hook to review the document, especially since it had previous access to the earlier draft development agreement. Notably, although H-Hook’s principal, Humphreys, testified before the Commissioners and identified problematic aspects of the development agreement, he did not contend that he lacked adequate time to review the development agreement. In a letter dated June 7, 2011, Humphreys again commented on aspects of the development agreement without stating that he had any issue with the amount of time that he had to review the document. We conclude that H- Hook’s claimed due process violation is without merit. E. No party is awarded attorney fees on appeal. H-Hook, the County, and AEHI all request attorney fees under Idaho Code section 12- 117. Under Idaho Code section 12-117 this Court “shall award the prevailing party reasonable attorney’s fees, witness fees and other reasonable expenses, if it finds that the nonprevailing party acted without a reasonable basis in fact or law.” Idaho Code section 12-117 requires that an entity and a state agency be adverse parties. Lake CDA Invs., LLC v. Idaho Dep’t of Lands, 149 Idaho 274, 284, 233 P.3d 721, 731 (2010). “If the agency does not participate in the merits of the appeal . . . , then it and the person are not adverse parties, even if the agency made the decision being appealed.” Id. H-Hook has not prevailed in this appeal and is therefore not entitled to an award of attorney fees. AEHI is not adverse to the County; indeed, their respective attorneys signed the same brief. Therefore, AEHI is not entitled to an award of attorney fees. Although H-Hook did not prevail, we are unable to conclude that the pursuit of this appeal was unreasonable. Therefore, we do not award the County attorney fees. IV. CONCLUSION We affirm the district court’s decision on judicial review. We award AEHI and the County costs on appeal.

Chief Justice J. JONES, Justices EISMANN, BURDICK and Justice Pro Tem WALTERS, CONCUR.

13

IN THE SUPREME COURT OF THE STATE OF IDAHO

Docket No. 41604

KARA ALEXANDER, ) ) Plaintiff-Respondent, ) Pocatello, May 2015 Term ) and ) 2016 Opinion No. 17 ROBBY ROBINSON, ) ) Filed: February 26, 2016 Plaintiff, ) ) Stephen Kenyon, Clerk v. ) VIANNA STIBAL, an individual, NATURE ) PATH INC., an Idaho corporation, and ) THETAHEALING INSTITUTE OF ) KNOWLEDGE, ) ) Defendants-Appellants. )

Appeal from the District Court of the Seventh Judicial District of the State of Idaho, Bonneville County. Hon. William H. Woodland, Senior District Judge.

The district court’s order denying Stibal’s motion for JNOV on the contract claim is reversed. The judgment of the district court is vacated and the case is remanded for proceedings consistent with this opinion.

Thompson Smith Woolf Anderson Wilkinson & Birch, PLLC, Idaho Falls, for appellants. Michelle Wodynski argued.

Pike Herndon Stosich & Johnston, PA, Idaho Falls, for respondent. Alan Fred Johnston argued. ______

HORTON, Justice. This appeal arises from a case in which Kara Alexander sued Vianna Stibal for fraud, breach of contract, and punitive damages. A jury awarded Alexander $111,000 on her contract claim, $17,000 on the fraud claim, and $500,000 in punitive damages. During the trial, the district court denied Stibal’s motion for a directed verdict on the fraud and breach of contract claims. Following trial, Stibal moved for a new trial and for judgment notwithstanding the verdict (JNOV). The district court denied these post-trial motions, but reduced the punitive damages award to $384,000 pursuant to Idaho Code section 6-1604. On appeal, Stibal challenges

1

the district court’s rulings on the contract, fraud, and punitive damages issues. We affirm in part, reverse in part, and remand for proceedings consistent with this opinion. I. FACTUAL AND PROCEDURAL BACKGROUND Stibal is the owner and operator of Nature Path, Inc. and the ThetaHealing Institute of Knowledge (THInK). Stibal teaches ThetaHealing, a self-discovered methodology that she claims results in healing and general health. At the times relevant to this case, Stibal operated out of the Idaho Falls area, but she markets her products, trainings, and classes worldwide. Students can take classes from Stibal and, following a course of study, be authorized to teach her methods. Alexander and her significant other, Robby Robinson, were among Stibal’s students. Alexander began studying ThetaHealing in New York in 2006, taking classes from an instructor licensed by Stibal. Alexander’s educational background included a bachelor’s degree for which she “double- majored in art and biology as a medical illustrator” and some graduate work in neuroscience. Before temporarily relocating to Idaho Falls to study with Stibal, Alexander was self-employed as a medical illustrator. At the time of trial, Robinson worked part-time as a pilot. In the beginning of 2008, THInK announced that it would offer a newly-created doctoral degree in ThetaHealing. The degree was promoted on THInK’s webpage, the yellow pages, online course descriptions, email, and online videos: it was referred to as a “PhD,” “Doctorate of Ministry,” and a “Doctorate.” Alexander and Robinson were already in Idaho Falls taking classes from Stibal at this time. Following the announcement that the doctoral degree was available, they decided to take additional classes to obtain the degree. Eventually, Alexander and Robinson were awarded plaques announcing their receipt of “a Doctorate of Ministry in ThetaHealing.” Alexander testified that she took three additional courses in the summer of 2008 in order to obtain the doctorate degree. In the fall of 2008, students of ThetaHealing, including Alexander and Robinson, began to question the validity of their doctoral degrees. In November of 2011, Alexander and Robinson filed a complaint against Stibal, alleging breach of contract and fraud. Stibal moved for summary judgment, which the district court denied.1 Alexander and Robinson moved for leave to amend their complaint to include a claim for punitive damages, which was also denied. After a new district judge was assigned to the case, they renewed their motion to amend the complaint to

1 When denying the motion for summary judgment, the district court held that Alexander could only claim damages incurred after THInK announced the doctorate program.

2

include a prayer for punitive damages. This motion was granted. The jury trial began on July 23, 2013. Because Robinson was unable to attend the trial due to a work-related scheduling conflict, the district court dismissed his claims. The issues at trial before the jury, as framed by Alexander’s complaint, were whether Stibal: (1) fraudulently misrepresented instances of healing, and (2) breached a contract with Alexander. Alexander’s breach of contract claim alleged that Stibal “breached the contract by not providing a valid doctorate degree to” Alexander. Alexander testified that Stibal said THInK was in “the process of accreditation.” Stibal testified that she informed her students that the school was not accredited and characterized the doctorate degree as a “little award” to show students that their work was appreciated. Stibal’s daughter, Bobbi Lott, also testified that students were informed that the program was not accredited. Alexander’s complaint alleged four fraudulent factual assertions by Stibal: (1) “that she healed herself from cancer;” (2) “that she pulled herself out of a coma in Italy;” (3) “that she healed herself from heart disease;” and (4) “that her healing abilities can make liquids in containers, such as gasoline in a vehicle or beverages in a refrigerator[,] refill themselves.” At trial, there was evidence of other purportedly fraudulent statements made by Stibal. These included Stibal’s representations that she was in good health and her claim to have healed her grandson’s lung. At trial, a great deal of evidence was presented regarding Stibal’s claim to have cured herself of cancer. By Stibal’s account, in 1995 she was diagnosed with cancer in her right femur and was cured using the ThetaHealing technique. Stibal claimed that her doctors told her that her leg might need to be amputated, she needed to undergo chemotherapy, and she had sarcoma and possibly lymphoma. Stibal’s medical records were introduced at trial. These records include the results of a biopsy which indicated a suspicion of cancer but were not diagnostic. Alexander’s expert witness, Dr. Christian Shull, testified that the medical records reflect that Stibal was not definitively diagnosed with any form of cancer and that it would have been inappropriate for any doctor to advise her to undergo chemotherapy or suggest amputating the leg. Stibal’s expert witness, Dr. Phillip Beron, also testified that the records did not show a diagnosis and that it would not have been appropriate to administer chemotherapy or amputate the leg. Stibal’s ex- husband, Blake McDaniel, testified that Stibal was not definitively told that she had cancer, that

3

her leg slowly healed, and that he had confronted her about her claim to have been diagnosed with cancer. The district court denied Stibal’s motion for a directed verdict with regard to Alexander’s claims of fraud and breach of contract. The jury awarded Alexander $17,000 on her fraud claim, $111,000 for breach of contract, and $500,000 in punitive damages. On August 5, 2013, the district court entered a judgment of $628,000 in Alexander’s favor. Stibal moved for a new trial and for JNOV. The district court denied these post-trial motions, but reduced the punitive damage award to $384,000. Stibal timely appealed. II. STANDARD OF REVIEW “When a court reviews a motion for j.n.o.v. under I.R.C.P. 50(b), the motion is treated as a delayed motion for a directed verdict and the same standard is applied for both.” Olson v. EG&G Idaho, Inc., 134 Idaho 778, 781, 9 P.3d 1244, 1247 (2000). “In reviewing a decision to grant or deny a motion for directed verdict or a judgment notwithstanding the verdict, this Court applies the same standard as that applied by the trial court when originally ruling on the motion.” Waterman v. Nationwide Mut. Ins. Co., 146 Idaho 667, 672, 201 P.3d 640, 645 (2009). This Court determines: whether there was sufficient evidence to justify submitting the claim to the jury, viewing as true all adverse evidence and drawing every legitimate inference in favor of the party opposing the motion for a directed verdict. This test does not require the evidence be uncontradicted, but only that it be of sufficient quantity and probative value that reasonable minds could conclude that a verdict in favor of the party against whom the motion is made is proper. Where a non-moving party produces sufficient evidence from which reasonable minds could find in its favor, a motion for directed verdict should be denied. April Beguesse, Inc. v. Rammell, 156 Idaho 500, 509, 328 P.3d 480, 489 (2014) (quoting Enriquez v. Idaho Power Co., 152 Idaho 562, 565, 272 P.3d 534, 537 (2012)). “A trial court has broad discretion in ruling on a motion for a new trial.” Blizzard v. Lundeby, 156 Idaho 204, 206, 322 P.3d 286, 288 (2014). When considering a claimed abuse of discretion, we consider: (1) whether the trial court correctly perceived the issue as one of discretion; (2) whether the trial court acted within the outer boundaries of its discretion and consistently with the legal standard applicable to the specific choices available to it; and (3) whether the trial court reached its decision by an exercise of reason. Id. (quoting Burggraf v. Chaffin, 121 Idaho 171, 173, 823 P.2d 775, 777 (1991)). “The trial court is in a far better position to weigh the demeanor, credibility, and testimony of witnesses, and the

4

persuasiveness of all the evidence. Appellate review is necessarily more limited. While we must review the evidence, we are not in a position to ‘weigh’ it as the trial court can.” Quick v. Crane, 111 Idaho 759, 770, 727 P.2d 1187, 1198 (1986). “The standard of review for punitive damages is to determine if the trial court abused its discretion in allowing the jury to consider punitive damages.” Vendelin v. Costco Wholesale Corp., 140 Idaho 416, 430, 95 P.3d 34, 48 (2004). The decision to award punitive damages is a factual question for the jury. Id. This Court conducts “a de novo review of the constitutionality of the amount of a punitive damages award.” Weinstein v. Prudential Prop. & Cas. Ins. Co., 149 Idaho 299, 338, 233 P.3d 1221, 1260 (2010). III. ANALYSIS On appeal Stibal argues that the district court erred by: (1) denying her motions for directed verdict, JNOV, and new trial on the contract claim; (2) denying her motions for directed verdict, JNOV, and new trial on the fraud claim; (3) permitting Alexander to amend her complaint to include a request for punitive damages; (4) denying Stibal’s motion for a new trial on punitive damages; (5) failing to properly reduce the award of punitive damages; and (6) failing to grant a new trial based upon other claimed errors occurring during trial. We address these issues in turn. A. The district court erred by denying Stibal’s motion for JNOV on the breach of contract claim. The district court denied Stibal’s motions for a directed verdict, JNOV, and new trial on the breach of contract claim. Because our decision regarding the district court’s denial of Stibal’s motion for JNOV is dispositive, we do not reach the parties’ remaining arguments concerning the contract claim. When denying Stibal’s motion for JNOV, the district court found that the evidence clearly showed THInK was not accredited in any fashion and that Stibal marketed the doctoral degree as something more than a mere award. The district court found that, although Alexander acknowledged that the degree was not the sort of degree held by a college professor, substantial evidence showed Stibal promised to deliver a “valid” doctoral degree. “An agreement that is so vague, indefinite and uncertain that the intent of the parties cannot be ascertained is unenforceable, and courts are left with no choice but to leave the parties as they found them.” Griffith v. Clear Lakes Trout Co., 143 Idaho 733, 737, 152 P.3d 604, 608 (2007) [Griffith I]. “[W]here a contract is too vague, indefinite, and uncertain as to its essential

5

terms, and not merely ambiguous, there has been no ‘meeting of the minds’ which is necessary for contract formation and courts will ‘leave the parties as they found them.’ ” Silicon Int’l Ore, LLC v. Monsanto Co., 155 Idaho 538, 551, 314 P.3d 593, 606 (2013) (quoting Griffith I, 143 Idaho at 737, 152 P.3d at 608). Thus, “[a] court cannot enforce a contract unless it can determine what it is.” Id. at 547, 314 P.3d at 602 (quoting 1 Arthur L. Corbin, Corbin on Contracts § 4.1 (rev. ed. 1993)). However, “[m]ere disagreement between the parties as to the meaning of a term is not enough to invalidate a contract entirely; the applicable standard is reasonable certainty as to the material terms of a contract, not absolute certainty relative to every detail.” Griffith I, 143 Idaho at 737, 152 P.3d at 608. The law does not favor the destruction of contracts because of uncertainty. Id. For purposes of reviewing the motion for JNOV, we accept the truth of Alexander’s description of the nature of the degree that she was offered. The difficulty is that Alexander’s description of the type of degree she understood she was to receive is vague at best. Alexander understood that the title of the degree was “Doctorate of Ministry in ThetaHealing.” However, Alexander was unable to describe the nature of the degree that she would receive beyond her belief that it would be “valid” and not merely honorary based upon Stibal’s representation that THInK was “in the process of accreditation.” Alexander’s testimony clearly established that she understood that the degree was not the sort of academic degree that one might obtain from a university. Given the vagueness of the terms which formed the basis for Alexander’s contract claim, there was simply no substantial evidence which might support a finding that there was the requisite meeting of the minds to support the formation of a contract for something other than a certification that Alexander had mastered the art of ThetaHealing. Because the terms of the purported contract were too uncertain for a court to enforce, we conclude that the district court erred in denying Stibal’s motion for JNOV on the contract claim. B. The district court did not err by denying Stibal’s motions for directed verdict, JNOV and new trial on Alexander’s fraud claim. The district court denied Stibal’s motion for a directed verdict seeking dismissal of Alexander’s claim that Stibal fraudulently represented instances of healing. Following the trial, the district court denied Stibal’s motions for JNOV and a new trial on the fraud claim. On appeal, Stibal argues that Alexander failed to prove all the elements of fraud by clear and convincing evidence. Specifically, Stibal argues that Alexander failed to present clear and convincing evidence of all the elements of fraud with regard to three alleged misrepresentations:

6

Stibal’s recovery from the coma in Italy, curing herself of heart disease, and curing herself of cancer. As a preliminary matter, we must decide which of Stibal’s statements may be considered in supporting Alexander’s claim of fraud. Idaho Rule of Civil Procedure 9(b) requires fraud to be pleaded with particularity: “In all averments of fraud . . . the circumstances constituting fraud . . . shall be stated with particularity.” “This rule requires the alleging party to specify what factual circumstances constitute fraud or mistake.” Brown v. Greenheart, 157 Idaho 156, 164, 335 P.3d 1, 9 (2014). Alexander’s complaint alleged four fraudulent assertions by Stibal: (1) “that she healed herself from cancer,” (2) “that she pulled herself out of a coma in Italy,” (3) “that she healed herself from heart disease,” and (4) “that her healing abilities can make liquids in containers, such as gasoline in a vehicle or beverages in a refrigerator[,] refill themselves.” At trial, Alexander presented evidence of other purportedly fraudulent statements by Stibal, including her claims to be in good health and that she healed her grandson’s lung. For purposes of reviewing the district court’s rulings on Stibal’s motions relating to the fraud claim, we will only consider those statements advanced in Alexander’s complaint. Further, because of the general nature of the jury’s verdict regarding the fraud claim,2 we will only address one of the allegedly fraudulent assertions—that Stibal cured herself of cancer. The nine elements of a fraud claim are: “(1) a statement or a representation of fact; (2) its falsity; (3) its materiality; (4) the speaker’s knowledge of its falsity; (5) the speaker’s intent that there be reliance; (6) the hearer’s ignorance of the falsity of the statement; (7) reliance by the

2 The jury’s verdict regarding the fraud claim consisted of answers to the following questions: QUESTION NO. 5: Did any of the Defendants commit fraudulent misrepresentation against the Plaintiff regarding Vianna Stibal’s claims of healing? ANSWER: Yes QUESTION NO. 6: In what amount was the Plaintiff damaged by the Defendants’ fraudulent misrepresentation regarding healing? ANSWER: $17,000.00 In Rockefeller v. Grabow, 139 Idaho 538, 543, 82 P.3d 450, 455 (2003), we considered a similar verdict: In this case, the jury rendered a general verdict, answering “yes” to the question, “Did Rockefeller breach his fiduciary duty to the Grabows?” The jury was not asked to determine whether Rockefeller had breached his fiduciary duty in each or all of the ways alleged by the Grabows. “The verdict being general, it is impossible to determine the basis on which the jury arrived at it.” Brown v. Hardin, 31 Idaho 112, 116, 169 P. 293, 295 (1917). A general verdict is not a determination that all of the claims or theories upon which it could be based have been proven. It is merely a determination that at least one of such claims or theories has been proven. Therefore, we will uphold a general jury verdict if there is any theory upon which it can be based.

7

hearer; (8) justifiable reliance; and (9) resultant injury.” Bank of Commerce v. Jefferson Enters., LLC, 154 Idaho 824, 833, 303 P.3d 183, 192 (2013). 1. The district court did not err in denying Stibal’s motions for directed verdict and JNOV. The district court denied Stibal’s motion for a directed verdict, apparently reasoning that there were factual issues in dispute on the fraud issue. Later, the district court also denied Stibal’s motion for JNOV on the fraud claim with regard to the cancer story, finding sufficient evidence of each element of fraud. As previously noted, when reviewing the district court’s decision on these motions, we consider whether reasonable minds could conclude that all elements of fraud were established after drawing every legitimate inference in favor of Alexander. First, there was substantial evidence that Stibal made a statement or representation of fact that she cured herself of cancer. In her book Go Up And Seek God, Stibal states that she was diagnosed with cancer in her right femur in 1995 and cured herself instantaneously by means of ThetaHealing. Stibal further claimed that her doctors told her that the leg might need to be amputated, she needed to undergo chemotherapy, and that she had sarcoma and possibly lymphoma. Second, there was evidence produced at trial that Stibal’s claim that she had been diagnosed with cancer was false. Her medical records contained biopsy results that indicated a suspicion of cancer, but were not diagnostic. Alexander’s expert witness, Dr. Shull, testified that the medical records showed that Stibal was not definitively diagnosed with lymphoma, sarcoma, or any other form of cancer and that it would not have been appropriate for a physician to tell her to undergo chemotherapy or suggest amputating the leg. Likewise, Stibal’s expert witness, Dr. Beron, testified the records did not evidence a diagnosis and that it would not have been appropriate to start chemotherapy or amputate the leg. Stibal’s ex-husband testified that Stibal was not definitively told that she had cancer, that her leg slowly healed, and that he had confronted her regarding her claim to have been diagnosed with cancer. Third, there was evidence that the cancer statement was material. Alexander testified that without Stibal’s claim to have cured herself of cancer and similar healing claims, she “would not . . . have taken one theta class, not one theta session.”

8

Fourth, given the testimony from the expert witnesses and her ex-husband, there was substantial evidence that Stibal knew her representation to have instantaneously cured her cancer was false. Fifth, there is substantial evidence that Stibal intended for hearers to rely on the representation that she had cured herself of cancer. Stibal used the claim to promote the instantaneous healing effects of ThetaHealing to induce people to take classes. Sixth, there is substantial evidence that Alexander was ignorant of the falsity of Stibal’s cancer claim. Her testimony clearly reflects that she believed Stibal’s claims on her website and in her book. Seventh, there was substantial evidence of Alexander’s reliance on Stibal’s claim regarding cancer. Alexander testified that the cancer story was “[e]xtremely important” to ThetaHealing and that she relied on Stibal’s account when making her decision to take ThetaHealing classes. The eighth element, that of justifiable reliance, is the most difficult to evaluate, given the inherent improbability of Stibal’s claim. Our determination that sufficient evidence exists when every legitimate inference is made in favor of Alexander serves to underscore the deferential standard of review that we are constrained to follow on appeal. Under section 544 of the Restatement (Second) of Torts, “[t]he recipient of a fraudulent misrepresentation of intention is justified in relying upon it if the existence of the intention is material and the recipient has reason to believe that it will be carried out.” “Whether the recipient has reason for this belief depends upon the circumstances under which the statement was made, including the fact that it was made for the purpose of inducing the recipient to act in reliance upon it and the form and manner in which it was expressed.” Restatement (Second) of Torts § 544, comment a (1965). Gray v. Tri-Way Const. Servs., Inc., 147 Idaho 378, 386, 210 P.3d 63, 71 (2009). Alexander testified that the cancer claim was important to her decision to take Stibal’s classes. Evidently, Stibal was persuasive in her claims. Alexander was just one of many who apparently believed Stibal’s claims, as her classes were widely attended by people from all over the world. Stibal wrapped her claim of healing powers in scientific terms, explaining that the healing power was a function of theta wave brain activity. We conclude that there was substantial evidence that Alexander justifiably relied on Stibal’s representations. Ninth, and finally, there was substantial evidence of resultant injury. Alexander’s testimony establishes that she took classes in ThetaHealing, traveling from the East Coast to

9

Idaho Falls to take classes from Stibal so that she could learn to heal in the manner that Stibal claimed to have mastered. As a result, she incurred significant expenses and paid substantial sums to Stibal for the classes in ThetaHealing. Because substantial evidence was presented as to all nine elements of fraud which reasonable minds could accept, the district court did not err in denying Stibal’s motions for directed verdict and JNOV. 2. The district court did not abuse its discretion in denying Stibal’s motion for a new trial. The district court denied Stibal’s motion for a new trial on the fraud claim. Stibal’s claim of error on appeal as to this ruling primarily relies on the same claims we have just addressed, namely that Alexander failed to prove the elements of fraud by clear and convincing evidence. “There is a qualitative difference between a trial judge’s role in deciding whether a new trial is justified based on the insufficiency of the evidence under Rule 59(a)(6), and whether a new trial is justified based on the amount of the jury’s award of damages under Rule 59(a)(5) . . . .” Carrillo v. Boise Tire Co., 152 Idaho 741, 749, 274 P.3d 1256, 1264 (2012) (quoting Harger v. Teton Springs Golf & Casting, LLC, 145 Idaho 716, 718, 184 P.3d 841, 843 (2008)). As Stibal does not challenge the amount of fraud damages, we do not address Rule 59(a)(5). Under Rule 59(a)(6) a court may grant a new trial for “[i]nsufficiency of the evidence to justify the verdict.” “Under Rule 59(a)(6), the trial judge must weigh the evidence and determine (1) whether the verdict is against his or her view of the clear weight of the evidence; and (2) whether a new trial would produce a different result.” Id. (emphasis original) (quoting Harger, 145 Idaho at 719, 184 P.3d at 844). The district court followed the requirements of Rule 59(a)(6). The district court weighed the evidence and found that Stibal’s claim to have healed herself of cancer was proven to be a fraudulent misrepresentation by clear and convincing evidence. Next, the district court determined that, in its view, “a different verdict is unlikely.” Based upon these findings, Stibal has not demonstrated that the district court abused its discretion when it denied her motion for a new trial.

10

C. We affirm an award of punitive damages, but the amount of punitive damages must be reduced. Stibal challenges the district court’s (1) decision to submit punitive damages to the jury; (2) denial of her motions for JNOV and new trial regarding punitive damages; and (3) the amount by which the district court reduced punitive damages. 1. The district court did not abuse its discretion in submitting punitive damages to the jury. The district court allowed Alexander to amend her complaint to seek punitive damages, referencing the “commercial atmosphere” of Stibal’s enterprise. On appeal, Stibal argues that the district court abused its discretion in permitting the amendment because ThetaHealing is entitled to protection as a religion. “I.C. § 6-1604(1) provides the appropriate evidentiary standard for cases involving punitive damages.” Akers v. D.L. White Const., Inc., 156 Idaho 37, 52, 320 P.3d 428, 443 (2014). Regarding leave to amend a complaint, Idaho Code section 6-1604(2) provides: [A] party may, pursuant to a pretrial motion and after hearing before the court, amend the pleadings to include a prayer for relief seeking punitive damages. The court shall allow the motion to amend the pleadings if, after weighing the evidence presented, the court concludes that, the moving party has established at such hearing a reasonable likelihood of proving facts at trial sufficient to support an award of punitive damages. The standard for an actual punitive damage award is in Idaho Code section 6-1604(1): In any action seeking recovery of punitive damages, the claimant must prove, by clear and convincing evidence, oppressive, fraudulent, malicious or outrageous conduct by the party against whom the claim for punitive damages is asserted. Such punitive damage awards “are not favored in the law . . . .” Akers, 156 Idaho at 53, 320 P.3d at 444. However, punitive damages may be imposed to further the State’s legitimate interests in punishing and deterring unlawful conduct. Id. When considering Alexander’s motion to amend her complaint, the question before the district court was whether there was a “reasonable likelihood” that Alexander would be able to “prove, by clear and convincing evidence, oppressive, fraudulent, malicious or outrageous conduct.” I.C. § 6-1604(1), (2). As Stibal points out, the district court initially denied Alexander’s motion, reasoning that it would be difficult to establish a harmful state of mind because faith is integral to ThetaHealing. The new district judge assigned to the case granted Alexander’s renewed motion to amend her complaint, reasoning that the “commercial

11

atmosphere” of ThetaHealing was such that punitive damages might be justified. The district court later indicated that the decision rested, in part, upon the medical evidence which showed that Stibal had not been diagnosed with cancer. Idaho Code section 6-1604 does not prohibit the trial court from reconsidering earlier rulings. Instead, it provides that the trial court cannot permit a party to amend its pleadings to advance a claim for punitive damages until satisfied that a sufficient quantum of evidence exists to support the claim. In this case, the district court did just that. The district court ruled that there was a reasonable likelihood that Alexander could prove oppressive, fraudulent, or outrageous conduct in light of the evidence presented that Stibal vigorously marketed her business based upon claims of instantaneous healing. We have stated that one situation where punitive damages are appropriate “is when the defendant is engaged in deceptive business practices operated for profit posing danger to the general public.” Umphrey v. Sprinkel, 106 Idaho 700, 710, 682 P.2d 1247, 1257 (1983). The district court did not abuse its discretion in granting Alexander leave to amend her complaint to include a claim for punitive damages. 2. The district court did not err in denying Stibal’s motion for JNOV and did not abuse its discretion in denying Stibal’s new trial motion. The district court denied Stibal’s post-trial motions for JNOV and new trial on the punitive damages claim. The district court weighed the evidence and found the jury’s award of punitive damages was necessary to deter Stibal’s false claims that she used to “vigorously market” her ThetaHealing classes. The district court stated Stibal’s claim to have cured herself of cancer “was indisputably false” and that “[e]ven if she were merely enthusiastic in her own beliefs, she was most reckless in her preying on susceptible people.” On appeal, Stibal argues that the evidence was insufficient to provide clear and convincing evidence supporting an award of punitive damages. She challenges the jury’s findings based on conflicting evidence. For instance, as to the knowledge of falsity elements, she argues that a layperson could reasonably believe she had cancer if she had a growth similar to Stibal’s and that Alexander should have known Stibal could not instantaneously cure ailments. The parties’ arguments on this subject largely deal with the weight of the evidence. However, it is not this Court’s role to weigh the evidence; rather, our duty is to apply the standards of review governing JNOV and new trial motions. Idaho Code section 6-1604(1) authorizes an award of punitive damages for fraudulent conduct. Thus, in light of our decision to

12

affirm the district court’s denial of Stibal’s motion for JNOV as to the fraud claim, we affirm the district court’s denial of her similar motion regarding the punitive damages claim. Regarding the new trial motion, the district court correctly weighed the evidence and determined the verdict was not against the clear weight of the evidence. Implicit in the district court’s decision is its view that a new trial would not produce a different result. Borah v. McCandless, 147 Idaho 73, 80, 205 P.3d 1209, 1216 (2009) (holding that this Court may recognize implicit factual findings of the district court that are supported by substantial and competent evidence). We are unable to conclude that the district court abused its discretion by denying Stibal’s motion for a new trial on the punitive damages issue. 3. The award of punitive damages must be reduced. The jury awarded $500,000 in punitive damages, but the district court reduced the amount of the award to $384,000 pursuant to Idaho Code section 6-1604(3). The amount of $384,000 represented three times the sum of the jury’s breach of contract and fraud damage awards, which equaled $128,000.3 Our reversal of the district court’s decision regarding Stibal’s motion for JNOV on the contract claim necessitates further analysis. Idaho Code section 6-1604(3) limits the amount of punitive damages that may be awarded as follows: “No judgment for punitive damages shall exceed the greater of two hundred fifty thousand dollars ($250,000) or an amount which is three (3) times the compensatory damages contained in such judgment.” Since Alexander’s compensatory damages for fraud are $17,000, Idaho Code section 6-1604(3) authorizes an award of up to $250,000 in punitive damages. However, a punitive damage award of $250,000 presents constitutional implications.4 When faced with an unconstitutionally high punitive damage award, other courts have remanded for a new trial if additional factual findings are needed or ordered a remittitur when no additional factual findings are needed. S. Union Co. v. Irvin, 563 F.3d 788, 792 n.4 (9th Cir. 2009) (stating

3 We note that the district court’s reduction of the punitive damages claim to three times the combined award for the contract and fraud claims was inconsistent with its decision at trial that Alexander could seek punitive damages only for fraudulent misrepresentation of healing. The district court did not explain the basis for this about-face. Our decision regarding the contract claim renders this inconsistency irrelevant. 4 In Weinstein v. Prudential Prop. & Cas. Ins. Co., 149 Idaho 299, 337–41, 233 P.3d 1221, 1259–63 (2010), this Court recognized that United States Supreme Court precedent held that the Due Process Clause of the Fourteenth Amendment provides limits on the amount of punitive damages that may be awarded. The United States Supreme Court recently emphasized that this Court is bound by its decisions interpreting the United States Constitution and federal statutes: “The Idaho Supreme Court, like any other state or federal court, is bound by this Court’s interpretation of federal law.” James v. City of Boise, Idaho, ___ U.S. ___, ___, 136 S. Ct. 685, 686 (2016).

13

that “[w]hen a punitive damage award exceeds the constitutional maximum, we decide on a case- by-case basis whether to remand for a new trial or simply to order a remittitur.”); Arellano v. Primerica Life Ins. Co., Co., 332 P.3d 597, 608 (Ariz. Ct. App. 2014) (ordering a remittitur of punitive damages). Here, because no additional factual findings are necessary, we are able to conduct “a de novo review of the constitutionality of the amount of a punitive damages award.” Weinstein v. Prudential Prop. & Cas. Ins. Co., 149 Idaho 299, 338, 233 P.3d 1221, 1260 (2010). “When reviewing punitive damage awards, we consider three guideposts: ‘(1) the degree of reprehensibility of the defendant’s misconduct; (2) the disparity between the actual or potential harm suffered by the plaintiff and the punitive damages award; and (3) the difference between the punitive damages awarded by the jury and the civil penalties authorized or imposed in comparable cases.’ ” Id. (quoting State Farm Mut. Auto. Ins. Co. v. Campbell, 538 U.S. 408, 418 (2003)). First, “[p]erhaps the most important indicium of the reasonableness of a punitive damages award is the degree of reprehensibility of the defendant’s conduct.” Id. (quoting BMW of N. Am., Inc. v. Gore, 517 U.S. 559, 575 (1996)). With respect to this factor, the United States Supreme Court instructs courts to consider whether: the harm caused was physical as opposed to economic; the tortious conduct evinced an indifference to or a reckless disregard of the health or safety of others; the target of the conduct had financial vulnerability; the conduct involved repeated actions or was an isolated incident; and the harm was the result of intentional malice, trickery, or deceit, or mere accident. Id. (quoting State Farm Mut. Auto. Ins. Co., 538 U.S. at 419). Here, the harm that was caused was economic, rather than physical. As the district court phrased it, Stibal’s claim to have cured her cancer “was indisputably false” and that “[e]ven if she were merely enthusiastic in her own beliefs, she was most reckless in her preying on susceptible people.” Although the harm was economic, we note that Stibal’s marketing plan appears to have targeted a vulnerable and desperate audience, evincing indifference to, and reckless disregard for, the health of those who looked to ThetaHealing when dealing with life- thretening illnesses. The district court weighed the evidence and found the jury’s award of punitive damages was necessary to deter Stibal’s false claims that she used to “vigorously market” her healing method. Thus, the first guidepost weighs in favor of affirming an award of punitive damages as the record before us demonstrates that Stibal relied on her fraudulent claim of self-healing to successfully market ThetaHealing.

14

“The second and perhaps most commonly cited indicium of an unreasonable or excessive punitive damages award is its ratio to the actual harm inflicted on the plaintiff.” Weinstein, 149 Idaho at 339, 233 P.3d at 1261 (quoting BMW of N. Am., Inc., 517 U.S. at 580). “[E]xemplary damages must bear a ‘reasonable relationship’ to compensatory damages.” Id. (alteration in original) (quoting BMW of N. Am., Inc., 517 U.S. at 580). “[T]he proper inquiry is ‘whether there is a reasonable relationship between the punitive damages award and the harm likely to result from the defendant’s conduct as well as the harm that actually has occurred.’ ” Id. (quoting BMW of N. Am., Inc., 517 U.S. at 581). The harm issue gauges harm to Alexander, not to others in similar situations. Id.; Philip Morris USA v. Williams, 549 U.S. 346, 353 (2007). “The Supreme Court has been ‘reluctant to identify concrete constitutional limits on the ratio between harm, or potential harm, to the plaintiff and the punitive damages award.’ ” Weinstein, 149 Idaho at 339, 233 P.3d at 1261 (quoting State Farm Mut. Auto. Ins. Co., 538 U.S. at 424). “However, ‘few awards exceeding a single-digit ratio between punitive and compensatory damages, to a significant degree, will satisfy due process.’ ” Id. (quoting State Farm Mut. Auto. Ins. Co., 538 U.S. at 425). “[T]he maximum single-digit ratio (9:1) that the Supreme Court suggested would rarely withstand constitutional scrutiny, and it is roughly nine times the ratio (4:1) that ‘might be close to the line of constitutional impropriety.’ ” Hall v. Farmers Alliance Mut. Ins. Co., 145 Idaho 313, 323, 179 P.3d 276, 286 (2008) (quoting State Farm Mut. Auto. Ins. Co., 538 U.S. at 425). Although the Supreme Court has imposed no rigid benchmark for punitive damages, it has reasoned the 4:1 ratio is close to the line of constitutional impropriety because of “a long legislative history, dating back over 700 years and going forward to today, providing for sanctions of double, treble, or quadruple damages to deter and punish.” State Farm Mut. Auto. Ins. Co., 538 U.S. at 425. Here, if Alexander were awarded $250,000 in punitive damages, the ratio of punitive damages to compensatory damages would be approximately 15:1. This ratio significantly exceeds the line of constitutional impropriety. However, we cannot ignore the district court and jury’s findings that Stibal’s stories were indisputably false and that Stibal used them to vigorously market her business. This conduct was sufficiently reprehensible as to warrant punitive damages in an amount greater than a ratio of 4:1. “The third indicium is ‘the difference between [the punitive damages awarded] and the civil penalties authorized or imposed in comparable cases.’ ” Weinstein, 149 Idaho at 340, 233

15

P.3d at 1262 (alteration in original) (quoting BMW of N. Am., Inc., 517 U.S. at 575) (alteration in original). Stibal does not provide argument on this issue and Alexander argues this issue is not relevant. We deem the third indicium to be irrelevant to this case. We conclude that an award of $250,000 in punitive damages would be unconstitutional and that punitive damages in the amount of $100,000, approximately a ratio of 6:1, is the maximum which is constitutionally permissible under the facts of this case. Thus, upon remand, the district court is instructed to reduce the punitive damage award to $100,000. D. Stibal has waived her claim that ThetaHealing is a protected religion. On appeal, Stibal argues that it was fundamental error for the district court to permit the claim for punitive damages to go to the jury because ThetaHealing should be protected as a religion. We do not consider Stibal’s religion arguments because “[i]t is well established that in order for an issue to be raised on appeal, the record must reveal an adverse ruling which forms the basis for an assignment of error. Hence, issues not raised below but raised for the first time on appeal will not be considered or reviewed.” Smith v. State, 146 Idaho 822, 841, 203 P.3d 1221, 1240 (2009) (quoting Whitted v. Canyon Cnty. Bd. of Comm’rs, 137 Idaho 118, 121, 44 P.3d 1173, 1176 (2002)). Stibal’s reliance on the doctrine of fundamental error is misplaced. We do not consider such claims in appeals in civil cases. In re Doe, 156 Idaho 682, 687, 330 P.3d 1040, 1045 (2014). E. Stibal is not entitled to a new trial based on other claimed errors at trial. Stibal’s motion for new trial advanced other claims of error which the district court did not address. Stibal argues that the district court had a duty to grant a new trial on these issues under Rules 59(a)(1) and (7) because various prejudicial errors of law occurred. Under Idaho Rule of Civil Procedure 59(a)(1), a “new trial may be granted” for “[i]rregularity in the proceedings of the court, jury or adverse party or any order of the court or abuse of discretion by which either party was prevented from having a fair trial.” Under Rule 59(a)(7) a “new trial may be granted” for “[e]rror in law, occurring at the trial.” “The district court must disclose its reasoning for granting or denying the motion for a new trial unless its reasoning is obvious from the record.” Palmer v. Spain, 138 Idaho 798, 802, 69 P.3d 1059, 1063 (2003). In this case, the district court did not disclose its reasoning in denying a new trial on some of these issues, but its reasoning is obvious from a review of the record. We will address Stibal’s claimed errors in turn.

16

1. Error regarding the district court computation of damages. The entirety of Stibal’s argument on this point is that: “The Court failed to apply the appropriate standard as it relates to the computation of contract [sic] both contract and punitive damages.” Our decision regarding Stibal’s motion for JNOV resolves the first aspect of this claim and our determination that we can decide the appropriate measure of punitive damages resolves the second. Any error by the district court is no longer a basis for a grant of a new trial. 2. The district court did not err in admitting ThetaHealing videos. Overruling relevancy and foundation objections from Stibal, the district court admitted various videos of Stibal promoting ThetaHealing. Stibal’s motion for a new trial relied, in part, on her claim that the videos were irrelevant and admitted without proper foundation. On appeal, Stibal again argues that the videos were irrelevant and admitted without proper foundation. First we consider the relevancy issue. “This Court reviews a trial court’s decision regarding the admission of evidence for an abuse of discretion.” U.S. Bank Nat. Ass’n N.D. v. CitiMortgage, Inc., 157 Idaho 446, 451, 337 P.3d 605, 610 (2014). However, “[t]he question of relevancy is not a discretionary matter as there is no issue of credibility or finding of fact for the trial court to resolve prior to deciding to admit or reject the evidence.” Lubcke v. Boise City/Ada Cnty. Hous. Auth., Worrell, 124 Idaho 450, 466, 860 P.2d 653, 669 (1993). As a consequence, this Court reviews a district court’s decision on relevancy de novo. April Beguesse, Inc. v. Rammell, 156 Idaho 500, 516, 328 P.3d 480, 496 (2014). “All relevant evidence is admissible . . . . Evidence which is not relevant is not admissible.” I.R.E. 402. “ ‘Relevant Evidence’ means evidence having any tendency to make the existence of any fact that is of consequence to the determination of the action more probable or less probable than it would be without the evidence.” I.R.E. 401. We find the videos to be relevant for several reasons. The videos helped the jury understand the concept of ThetaHealing. Alexander testified that the videos represented how Stibal represented ThetaHealing to her and that they were “very consistent” with how Stibal described and promoted ThetaHealing. Alexander also testified that the healing stories contained in the videos were “extremely consistent” with how Stibal had described stories of healing to Alexander. One of the videos, made in 2010, prompted Alexander to first begin to question the veracity of Stibal’s claim to have cured herself of cancer. Alexander saw the video after it was

17

posted on the internet by Stibal. The video showed a medical record saying Stibal was “suspicious for lymphoma, but not diagnostic.” Stibal takes issue with the fact that the videos were created after the representations that Alexander relied upon in taking the classes were made. This argument misses the mark. The videos were not relevant because Alexander relied on them; rather, they were relevant to demonstrate the nature of the claims that Stibal was advancing. “Authentication or identification of documentary evidence is a condition precedent to its admissibility.” Harris, Inc. v. Foxhollow Const. & Trucking, Inc., 151 Idaho 761, 770, 264 P.3d 400, 409 (2011) (citing I.R.E. 901). One example of authentication or identification that complies is “[t]estimony of a witness with knowledge that a matter is what it is claimed to be.” I.R.E. 901(b)(1). Foundation “is a matter within the trial court’s discretion.” Harris, Inc., 151 Idaho at 770, 264 P.3d at 409. Alexander testified that Stibal was the speaker in the videos. We are unable to conclude that the district court abused its discretion by finding sufficient foundation for the admission of the videos. 3. Stibal’s argument that the district court erred by preventing her from presenting evidence that ThetaHealing works is waived. Before trial, Stibal brought a motion in limine arguing the evidence presented at trial should be limited to the specific factual instances that were pled in Alexander’s fraudulent healing claim. The district court agreed. Later, using similar reasoning, the district court did not allow Stibal to present testimony about past healings or conduct demonstrations in the courtroom. This ruling affected both parties. For example, Stibal was not allowed to have a witness testify that ThetaHealing cured his Type I diabetes, and Alexander was not allowed to present Stibal’s former daughter-in-law’s testimony regarding events that she described in her book ShadyHealing. Stibal argues that this ruling effectively did not allow Stibal to present a case. We do not reach the merits of Stibal’s arguments. Stibal only presents argument generally stating the district court erred in its ruling, but she provides no authority in support of her claim that the district court erred. As a result, Stibal waives this argument. See H.F.L.P., LLC v. City of

18

Twin Falls, 157 Idaho 672, 686, 339 P.3d 557, 571 (2014) (“issues on appeal are not considered unless they are properly supported by both authority and argument.”).5 4. The district court did not err in allowing impeachment testimony about Stibal’s character for truthfulness. Over objection, the district court allowed Stibal’s ex-husband to testify that he did not think Stibal was a truthful person. Stibal argues that this was error. Idaho Rule of Evidence 608(a) provides: The credibility of a witness may be attacked or supported by evidence in the form of opinion or reputation, but subject to these limitations: (1) the evidence may refer only to character for truthfulness or untruthfulness, and (2) evidence of truthful character is admissible only after the character of the witness for truthfulness has been attacked by opinion or reputation evidence or otherwise. Under “this rule, testimony by one witness that another witness was, or was not, telling the truth when they made a particular statement is not admissible evidence. Whether a witness was being truthful at the time the witness made a statement is for the jury, not another witness, to determine.” State v. Raudebaugh, 124 Idaho 758, 768, 864 P.2d 596, 606 (1993). Here, Stibal challenges the admission of testimony regarding her character for truthfulness. However, the rule makes it clear that Stibal’s testimony could be attacked by way of opinion testimony regarding character for truthfulness. Stibal also argues the testimony should have been excluded because of the fact that she had been divorced from the witness for fifteen years rendered his testimony irrelevant. We disagree. The ex-husband’s testimony related to the time Stibal claimed to have been diagnosed with cancer prior to curing herself. 5. Any error in the admission of Stibal’s medical records was harmless. Over Stibal’s attorney’s objection based upon an absence of foundation, the district court admitted all of Stibal’s health records because Alexander’s expert’s opinions were based upon his review of the records. Stibal’s attorney was specific in his objection, indicating that he had “zero problem with records associated with the cancer diagnosis being admitted” and that his objection went to other health records. The district court stated that “they’re admissible assuming that Dr. Shull can establish that he’s, in fact, reviewed them and then can make an explanation of

5 Even if Stibal had presented authority in support of her claim, it would not have assisted her. We have affirmed the judgment for fraudulent misrepresentation on the basis of Stibal’s representations regarding her cancer diagnosis. The efficacy of ThetaHealing is not relevant to Stibal’s false claim that she had been diagnosed with cancer, that doctors told her that the leg might be amputated and that she needed to begin chemotherapy.

19

their meaning.” There was no indication that Dr. Shull was able to authenticate the records— only that he had reviewed them in formulating his opinion. Idaho Rule of Evidence 703 provides, in pertinent part: “Facts or data that are otherwise inadmissible shall not be disclosed to the jury by the proponent of the opinion or inference unless the court determines that their probative value in assisting the jury to evaluate the expert’s opinion substantially outweighs their prejudicial effect.” As the district court made no finding that Stibal’s medical records were necessary for the jury’s evaluation of Dr. Shull’s testimony, the district court may have erred. Stibal’s attorney specifically indicated that he did not object to introduction of the medical records relating to Stibal’s cancer diagnosis. As that is the claim upon which our decision affirming the verdict for fraudulent misrepresentation and punitive damages is grounded, we find any error to be harmless. 6. Stibal has waived her argument that the fraud claim was barred by the statute of limitations. Stibal argues the fraudulent healing claim was barred by the three-year statute of limitations established by Idaho Code section 5-218(4). Alexander responds that Stibal is raising this issue for the first time on appeal. Alexander is correct. Thus, we will not address this claim. Smith v. State, 146 Idaho 822, 841, 203 P.3d 1221, 1240 (2009). F. Neither party is awarded attorney fees or costs on appeal. Stibal asks for attorney fees on appeal pursuant to Idaho Code section 12-121. Alexander likewise requests attorney fees on appeal, citing case law that holds that an award of attorney fees is appropriate when the appellant merely asks this Court to second-guess the jury or trial court. Since Stibal has prevailed on the breach of contract issue and partially prevailed on the punitive damages issue and Alexander has prevailed on her fraudulent misrepresentation claim and partially prevailed on the punitive damages issue, we find that neither party has prevailed on appeal and therefore no attorney fees will be awarded. For the same reason, neither party is awarded costs on appeal. See Van Brunt v. Stoddard, 136 Idaho 681, 690, 39 P.3d 621, 630 (2001). IV. CONCLUSION We reverse the district court’s order denying Stibal’s motion for JNOV on the contract claim. We vacate the district court’s judgment and remand with directions for the district court to enter a new judgment reflecting our ruling on the contract claim and the reduction in punitive damages to $100,000. No costs or fees are awarded on appeal.

20

Chief Justice J. JONES and Justices EISMANN, BURDICK and W. JONES CONCUR.

21

THE SUPREME COURT OF THE STATE OF IDAHO Docket No. 41993

LIBERTY BANKERS LIFE INSURANCE ) COMPANY, an Oklahoma insurance ) company, ) ) Boise, August, 2015 Term Plaintiff-Appellant, ) ) 2016 Opinion No. 2 v. ) ) Filed: January 6, 2016 WITHERSPOON, KELLEY, ) DAVENPORT & TOOLE, P.S., a ) Stephen W. Kenyon, Clerk Washington corporation, ) ) Defendant-Respondent, ) ) and ) ) THE POINT AT POST FALLS, LLC, an ) Idaho limited liability company; POST ) FALLS LANDING MARINA, LLC, an ) Idaho limited liability company; and JOHN ) and JANE DOES 1-100, ) ) Defendants. ) ______)

Appeal from the District Court of the First Judicial District of the State of Idaho, Kootenai County. Hon. Benjamin R. Simpson, District Judge.

The summary judgment ruling of the district court with regard to judicial estoppel is vacated, the judgment of the district court with regard to respondent’s first priority security interest is hereby vacated and the district court’s judgment with regard to the Marina is vacated. This case is remanded for further proceedings consistent with the Opinion.

Stoel Rives, LLP, Boise, and Lukins & Annis, P.C., Coeur d’Alene, attorneys for appellant. Christopher Pooser argued.

John F. Magnuson, Coeur d’Alene, attorney for respondent. ______

W. JONES, Justice 1

I. NATURE OF THE CASE This appeal involves the competing security interests of Liberty Bankers Life Insurance Company (“Liberty” or “Appellant”) and Witherspoon, Kelley, Davenport, & Toole, P.S. (“Witherspoon” or “Respondent”) in certain real and personal property located in Post Falls, Idaho (“Post Falls Landing” and the “Marina” respectively), which were formerly owned by the Point at Post Falls, LLC and Post Falls Landing Marina, LLC (collectively, “The Point”).

II. FACTUAL AND PROCEDURAL BACKGROUND In September of 2001, The Point, a business entity associated with Harry A. Green, purchased thirty-four acres of real property in Post Falls, Idaho. Witherspoon provided legal representation to The Point during the purchase. In September of 2004, to secure payment of legal fees and costs, The Point granted Witherspoon a promissory note in the principal amount of $164,171.85 (“Witherspoon’s Original Promissory Note”). Witherspoon’s Original Promissory Note was secured by a deed of trust to Post Falls Landing (“Witherspoon’s Original Deed of Trust”). Witherspoon’s Original Deed of Trust was recorded on October 4, 2004, in Kootenai County. On August 26, 2005, Liberty and The Point entered into an agreement (the “Original Loan Agreement”) by which Liberty would loan $3,934,390 to The Point in exchange for a promissory note in the amount of the loan (“Liberty’s Original Promissory Note”), which was secured by a deed of trust to Post Falls Landing (“Liberty’s Original Deed of Trust”). Liberty’s Original Deed of Trust provides that “[n]o release of the conveyance [of the Post Falls property], or of the lien, security interest or assignment created and evidenced hereby, shall be valid unless executed by Beneficiary.” As a condition to the Original Loan Agreement, Witherspoon entered into an agreement subordinating Witherspoon’s Original Deed of Trust to Liberty’s Original Deed of Trust (the “Original Subordination Agreement”). The Original Subordination Agreement stated that “[Liberty’s Original Deed of Trust] and any renewals or extensions thereof, shall unconditionally be and remain at all time [sic] a lien or charge on [Post Falls Landing], prior and superior to the lien or charge of [Witherspoon’s Original Deed of Trust].” (emphasis added). The Original Subordination Agreement was recorded on August 26, 2005.

2

Thereafter, Liberty subsequently modified its loan agreement with The Point six times. Witherspoon executed additional subordination agreements in conjunction with each of these loan modifications. On August 30, 2006, and December 11, 2006, Liberty agreed to extend additional funds to The Point. These funds were used to construct the Marina. The Marina consists of 142 boat slips, a floating convenience store, and fuel pumps. The Point began operating the Marina in the summer of 2008. On or around April 30, 2010, Liberty and The Point entered into a seventh modification of their loan agreement (the “Seventh LMA”). Under the Seventh LMA, the parties agreed to increase the outstanding principal balance of Liberty’s Original Promissory Note from $6,786,108.10 to $9,290,000.00 and to extend its maturity date to June 30, 2011. Like all of the previous loan modifications, the Seventh LMA was secured by Liberty’s Original Deed of Trust. The Seventh LMA was recorded on September 3, 2010. On August 6, 2010, Witherspoon entered into the third modification of Witherspoon’s Original Deed of Trust. This modification granted Witherspoon a security interest in the Marina and its improvements, including any rents, income, profits, insurance proceeds, and accounts receivable. On September 7, 2010, Witherspoon perfected its security interest in the Marina by filing a UCC financing statement. On August 10, 2010, Witherspoon entered into a final amended subordination agreement with The Point (the “Final Subordination Agreement”). The Final Subordination Agreement stated that “[Liberty’s original Deed of Trust] shall unconditionally be and remain at all time [sic] a lien or charge on [Post Falls Landing], prior and superior to the lien or charge of [Witherspoon’s Original Deed of Trust].” Unlike the prior subordination agreements, the Final Subordination Agreement did not include the “and any renewals or extensions thereof” language. The Final Subordination Agreement was recorded on September 3, 2010. On June 30, 2011, Liberty’s Original Promissory Note—secured by Liberty’s Original Deed of Trust—matured. On August 12, 2011, Liberty directed the successor trustee of Liberty’s Original Deed of Trust to foreclose on Post Falls Landing. On August 18, 2011, the successor trustee recorded a notice of default. In September of 2011, Liberty and The Point entered into an eighth modification of their loan agreement (the “Eighth LMA”). Under the terms of the Eighth LMA, Liberty agreed to

3

reduce the amount of Liberty’s Original Promissory Note to $6,744,156.69 and to execute a release of Blocks A, D, and E of the Post Fall Landing property from Liberty’s Original Deed of Trust (the “Partial Release of Lien”). The Point, in turn agreed to issue a new promissory note in the amount of $2,545,843.31 (“Liberty’s New Promissory Note”), which would be secured by a new deed of trust (“Liberty’s New Deed of Trust”) on Blocks A, D, and E. This would have the effect of dividing Liberty’s $9.29 million dollar loan to The Point into two separate loans (a construction loan and a non-construction loan).1 In this respect, the Eighth LMA stated: 23. The Loan and indebtedness evidenced by [Liberty’s Original Promissory Note] shall continue to be secured by [Liberty’s Original Deed of Trust] encumbering [Post Falls Landing]. . . . 24. Contemporaneously with the execution of this Agreement, [The Point] is executing construction and development loan documents evidenced by [Liberty’s New Promissory Note] in the original principal amount of $2,545,843.31, payable to [Liberty] . . . , secured by, among other things, a deed of trust encumbering [Blocks A, D, and E]. . . . Since [Blocks A, D, and E are] part of [Post Falls Landing], Lender shall execute a Partial Release of Lien to release of [Blocks A, D, and E] from [Liberty’s Original Deed of Trust] securing [Liberty’s Original Promissory Note] modified by this agreement in exchange for a principal payment of $750,000.00 which shall be advanced by Lender under the $2,545,843.31 Promissory Note.

Liberty and The Point both executed the Eighth LMA, but it was never recorded. The Point executed Liberty’s New Promissory Note and Liberty’s New Deed of Trust, which also were never recorded. Liberty never executed the Partial Release of Lien. On December 19, 2011, The Point filed for bankruptcy, which automatically stayed the trustee’s sale of the Point at Post Falls. On December 20, 2011, Liberty filed suit against Green, individually as a guarantor, to recover the debt owed to Liberty. Liberty v. Green, Kootenai County Case No. CV-11-10121. On April 18, 2012, Liberty filed a proof of claim in The Point’s first bankruptcy proceeding and attached the Eighth LMA in support of its claim. In Liberty’s motion for relief from the automatic stay, filed July 12, 2012, Liberty stated that “On September 8, 2010, the parties agreed to and executed an Eighth Loan Modification Agreement . . . .”

1 The separation of the loan into construction and non-construction components was performed in accordance with a September 26, 2007, Consent Order between Liberty and the State of Florida Officer of Insurance Regulation.

4

On September 6, 2012, the Point’s bankruptcy proceeding was dismissed. The trustee rescheduled the foreclosure sale, which was pursued in accordance with the Seventh LMA, for October 8, 2012. As the date of the foreclosure sale approached, The Point moved to intervene in Liberty v. Green and enjoin the sale. In a memorandum decision and order, filed October 4, 2012, the district court granted both motions, but conditioned the injunction of the foreclosure sale on The Point posting an $875,000 bond. The district court acknowledged in its order that there was a substantial likelihood that the Eighth LMA, rather than the Seventh LMA, would govern the foreclosure. The Point did not post the bond required to enjoin the trustee’s sale. On October 17, 2012, Witherspoon sent a letter to the trustee asserting its first priority security interest on the Marina. In the letter, Witherspoon acknowledged that: “We understand that, if completed, the effect of the Foreclosure Sale will be elimination of our second priority lien against [Post Falls Landing].” The trustee’s sale took place on November 14, 2012, which resulted in the conveyance of the real property of Post Falls Landing, including Blocks A, D, and E, to Liberty in exchange for a credit bid of $3,404,000.00. On February 5, 2013, Liberty filed an action against Witherspoon seeking a judicial declaration that the Marina was a fixture on Post Falls Landing real property, a judicial declaration that the trustee’s deed conveyed to Liberty all interest in the Marina, and entry of a decree quieting title to the Marina in Liberty’s name. Witherspoon answered and filed counterclaims seeking declaratory relief that: (1) Liberty’s Original Deed of Trust had been null and void at the time of the foreclosure sale for failing to comply with the terms of the Eighth LMA; (2) the foreclosure sale had failed to comply with the terms of the Eighth LMA; (3) Witherspoon did not subordinate any security interest or rights with respect to the Eighth LMA; (4) Liberty was estopped from denying the enforceability of the Eighth LMA; (5) Witherspoon has a prior and perfected security interest in the Marina under the Final Subordination Agreement and its UCC filing; (6) Liberty has no right, title, interest or claim in or to the Marina; and (7) Liberty’s deeds of trust were procured in violation of Idaho law through fraudulent or deceptive means. Witherspoon also filed claims of breach of contract, conversion, and slander. On September 10, 2013, Witherspoon moved for partial summary judgment. On October 15, 2013, the district court issued a memorandum decision and order granting in part and

5

denying in part Witherspoon’s motion. The district court ruled that Liberty was judicially estopped from denying the enforceability of the Eighth LMA due to its previous representations in bankruptcy court and in Liberty v. Green. The district court found genuine issues of material fact as to each of the other issues. Following a two-day bench trial, the district court held that the Final Subordination Agreement did not apply to any renewals, extensions, or modifications of Liberty’s Original Deed of Trust—a category that includes Liberty’s New Deed of Trust. Accordingly, the court reasoned that Witherspoon’s Original Deed of Trust was not subordinate to Liberty’s New Deed of Trust. Under the terms of the Eighth LMA, Blocks A, D, and E of Post Falls Landing were only going to secure Liberty’s New Deed of Trust (and were to be released from Liberty’s Old Deed of Trust). The court reasoned, therefore, that Witherspoon held first priority to those blocks at the time of the sale. Having determined that Witherspoon had first priority to Blocks A, D, and E of Post Falls Landing at the time of the sale, the court concluded that Liberty had unintentionally purchased those blocks subject to Witherspoon’s first priority interest. As to the Marina, the district court determined that it was personal property to which Witherspoon retained a first priority interest. The district court further determined that Witherspoon’s claim that it was an intended beneficiary of the Eighth LMA was moot due to the court’s other findings. On January 22, 2014, Liberty moved for reconsideration. Specifically, Liberty asked the district court to reconsider: (1) whether the Marina was a fixture or personal property; (2) the scope and effect of Witherspoon’s subordination agreements; (3) the legal effect of the Eighth LMA on Liberty’s security interest in Post Falls Landing; and (4) whether Witherspoon was barred under the doctrine of laches from pursuing its causes of action against Liberty. On February 27, 2014, the district court issued an order denying Liberty’s motion. It noted that Bradford Phillips, Liberty’s CEO and President, had taken inconsistent positions on whether the Seventh or Eighth LMA was the binding agreement. Furthermore, though Liberty had argued that it had never received the original documents from Green, which would have been necessary to foreclose under the Eighth LMA, Green had testified to the contrary. The district court found Green’s testimony to be credible and Phillips’s testimony to lack credibility, reasoning that while Phillips had a “large stake in the outcome of this case,” Green had “nothing to lose” by returning the original documents and had “no stake in the outcome.” Indeed, even if it

6

had not received them, “Liberty could have compelled Mr. Green to produce such documents but chose not to do so.” On March 12, 2014, the district court issued a final judgment and decree quieting title to Post Falls Landing to Liberty, subject to Witherspoon’s first priority interest on Blocks A, D, and E. The district court also ruled that Witherspoon had a perfected first priority security interest in the Marina. On March 21, 2014, Liberty filed a notice of appeal.

III. ISSUES ON APPEAL 1. Whether the district court abused its discretion in finding that judicial estoppel barred Liberty from contesting the enforceability of the Eighth LMA. 2. Whether Liberty’s entry into the Eighth LMA, Liberty’s New Promissory Note, or Liberty’s New Deed of Trust had the effect of releasing Blocks A, D, and E from Liberty’s Original Deed of Trust. 3. Whether Liberty’s non-judicial foreclosure was void for failing to comply with Idaho law. 4. Whether Witherspoon could move to enforce the Eighth LMA as a third party beneficiary. 5. Whether the district court erred by ruling that the Marina was personal property. IV. STANDARD OF REVIEW A. Summary Judgment

On appeal from the grant of a motion for summary judgment, this Court utilizes the same standard of review used by the district court originally ruling on the motion. Summary judgment is proper “if 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). When considering whether the evidence in the record shows that there is no genuine issue of material fact, the trial court must liberally construe the facts, and draw all reasonable inferences, in favor of the nonmoving party.

Golub v. Kirk-Hughes Dev., LLC, 158 Idaho 73, 75–76, 343 P.3d 1080, 1082–83 (2015) (quoting Conner v. Hodges, 157 Idaho 19, 23, 333 P.3d 130, 134 (2014)). When an action, as here, will be tried before the court without a jury, the trial court as the trier of fact is entitled to arrive at the most probable inferences based upon the undisputed evidence properly before it and grant the summary judgment despite the possibility of conflicting inferences. Resolution of the possible conflict between the inferences is within the responsibilities of the fact finder. This Court exercises free review over the entire record that was before the district judge to determine whether either side was entitled to judgment as a matter of law and reviews the inferences drawn by the district judge to determine whether the record reasonably supports those inferences. 7

Big Wood Ranch, LLC v. Water Users’ Ass’n of Broadford Slough & Rockwell Bypass Lateral Ditches, Inc., 158 Idaho 225, 229, 345 P.3d 1015, 1019 (2015) (quoting P.O. Ventures, Inc. v. Loucks Family Irrevocable Tr., 144 Idaho 233, 237, 159 P.3d 870, 874 (2007)). B. Bench Trial Review of a trial court’s conclusions following a bench trial is limited to ascertaining whether the evidence supports the findings of fact, and whether the findings of fact support the conclusions of law. Since it is the province of the trial court to weigh conflicting evidence and testimony and to judge the credibility of witnesses, this Court will liberally construe the trial court’s findings of fact in favor of the judgment entered. This Court will not set aside a trial court’s findings of fact unless the findings are clearly erroneous. If the trial court based its findings on substantial evidence, even if the evidence is conflicting, this Court will not overturn those findings on appeal. Additionally, this Court will not substitute its view of the facts for that of the trial court. This Court exercises free review over matters of law.

Id. at 230, 345 P.3d at 1020 (citations omitted). C. Motion to Reconsider When a district court decides a motion to reconsider, “the district court must apply the same standard of review that the court applied when deciding the original order that is being reconsidered.” Fragnella v. Petrovich, 153 Idaho 266, 276, 281 P.3d 103, 113 (2012). If the original order was within the trial court’s discretion, then so is the decision to grant or deny the motion to reconsider. Id. When we review a trial court’s decision to grant or deny a motion for reconsideration, we use the same standard of review the lower court used in deciding the motion for reconsideration. Id.

Westby v. Schaefer, 157 Idaho 616, 621, 338 P.3d 1220, 1225 (2014).

V. ANALYSIS Liberty’s appeal challenges five rulings by the district court, one at the summary judgment stage and four after the bench trial. The single issue from the summary judgment stage is whether the district court properly invoked judicial estoppel against Liberty. Of the four bench trial issues, three involve Liberty’s and Witherspoon’s competing security interests in Post Falls Landing and the effect of the Eighth LMA on those interests. The fifth and final issue is whether the Marina is personal property or a real property fixture to Post Falls Landing. Each issue will be addressed in turn below. Ultimately, the judgments of the district court are vacated and the case is remanded for further proceedings. A. The district court abused its discretion in finding that judicial estoppel barred Liberty from contesting the enforceability of the Eighth LMA.

8

“The doctrine of judicial estoppel was adopted by this Court in Loomis v. Church, 76 Idaho 87, 277 P.2d 561 (1954).” Sadid v. Idaho State Univ., 154 Idaho 88, 96, 294 P.3d 1100, 1108 (2013). There, this Court stated: It is quite generally held that where a litigant, by means of such sworn statements, obtains a judgment, advantage or consideration from one party, he will not thereafter, by repudiating such allegations and by means of inconsistent and contrary allegations or testimony, be permitted to obtain a recovery or a right against another party, arising out of the same transaction or subject matter.

Loomis v. Church, 76 Idaho at 93–94, 277 P.2d at 565; see also, Doe v. Doe, 158 Idaho 614, 617, 349 P.3d 1205, 1208 (2015). In short, “[j]udicial estoppel precludes a party from advantageously taking one position, then subsequently seeking a second position that is incompatible with the first.” Id. (quoting McCallister v. Dixon, 154 Idaho 891, 894, 303 P.3d 578, 581 (2013)).2 “The doctrine of judicial estoppel sounds in equity and is invoked at the discretion of the court.” McCallister, 154 Idaho at 894, 303 P.3d at 581. In this case, at the summary judgment stage, the district court ruled that Liberty was “estopped from denying the enforceability of the Eighth [LMA].” The district court primarily based this conclusion on Phillips’s testimony that: “I view the loan, the Eighth Modification Agreement, as a binding agreement.” In addition, the district court noted that Liberty was “on notice” via the decision in Liberty v. Green that the Eighth LMA “was likely the enforceable agreement,” and that Liberty had “made representations regarding the Eighth [LMA]” in its motion for relief from the automatic stay in The Point’s bankruptcy proceedings. Liberty argues on appeal that the district court abused its discretion to invoke judicial estoppel. First, Liberty contends that the district court failed to recognize the distinction between a “binding” agreement and an “enforceable” one. Liberty submits that it has consistently maintained the position that the Eighth LMA was binding, but not enforceable, because while the Eighth LMA was properly entered into by the relevant parties, the terms of the agreement were not performed—Liberty’s New Deed of Trust with respect to Blocks A, D, and E and the Partial Release of Lien were never provided as required by the Eighth LMA. Second, Liberty argues that the district court failed to find that Liberty obtained a judgment, advantage, or consideration,

2 “The policy behind judicial estoppel is to protect ‘the integrity of the judicial system, by protecting the orderly administration of justice and having regard for the dignity of the judicial proceeding.’” Hoagland v. Ada Cty., 154 Idaho 900, 912, 303 P.3d 587, 599 (2013) (quoting A & J Constr. Co. v. Wood, 141 Idaho 682, 685, 116 P.3d 12, 16 (2005)).

9

from any assertion that the Eighth LMA was binding. Third, Liberty highlights that for an advantage to be considered, it must have been gained in an actual judicial proceeding. Witherspoon submits that the following facts show that Liberty has taken inconsistent positions: (1) Liberty advised the State of Florida that it entered into the Eighth LMA to comply with regulations before Liberty and The Point actually signed the Eighth LMA; (2) Liberty represented to The Point upon its default under the Seventh LMA that the execution of the Eighth LMA was necessary for Florida regulators; (3) Liberty confirmed the Eighth LMA with the State of Florida after the agreement’s execution; (4) Liberty represented in Liberty v. Green that the Seventh LMA was the governing agreement; (5) Liberty’s proof of claim in The Point’s bankruptcy proceeding included the Eighth LMA; (6) Liberty’s motion for relief from the automatic stay in The Point’s bankruptcy proceeding represented that the Eighth LMA was the governing document; and (7) Phillips testified in Liberty v. Green that the Eighth LMA was binding. Based on these facts, Witherspoon contends that Liberty has taken numerous incompatible positions by which it has gained two advantages: (1) Liberty’s representations to the State of Florida regarding the Eighth LMA allowed Liberty to put its concerns with the State of Florida to rest: and (2) by representing in Liberty v. Green that the Seventh LMA governed, Liberty was able to move forward with the trustee’s sale under the Seventh LMA as The Point was unable to post bond to enjoin the sale. We find that the district court abused its discretion by invoking judicial estoppel because it failed to apply the appropriate legal standard. When reviewing a district court’s discretionary decision, this Court inquires: (1) [W]hether the trial court correctly perceived the issue as one of discretion; (2) whether the trial court acted within the outer boundaries of its discretion and consistently with legal standards applicable to the specific choices available to it; and (3) whether the trial court reached its decision by an exercise of reason. McCallister, 154 Idaho at 894, 303 P.3d at 581 (quoting Riley v. W.R. Holdings, LLC, 143 Idaho 116, 121, 138 P.3d 316, 321 (2006)). In this case, the district court did not apply the correct legal standard in finding judicial estoppel because it failed to find that Liberty had obtained “a judgment, advantage, or consideration” from its inconsistent position. See Doe, 158 Idaho at 617, 349 P.3d at 1208. The primary inconsistent position cited by the district court was Phillips’s testimony that the Eighth LMA was “binding” in Liberty v. Green, which was in contrast to Liberty’s contention in these proceedings that the Seventh LMA was the binding and enforceable

10

agreement. However, the district court failed to make any findings as to how this statement conferred an advantage to Liberty in that proceeding. Furthermore, the “advantages” alleged by Witherspoon are not of the type that give rise to judicial estoppel. Witherspoon first claims that Liberty obtained an advantage with the State of Florida by representing to the State that the Eighth LMA had been executed. This benefit, however, is not directly connected to any sworn statement made by Liberty, and Liberty’s interaction with the state of Florida was not through any judicial process. Judicial estoppel applies only to positions taken in relation to judicial proceedings. See Sadid, 154 Idaho at 96, 294 P.3d at 1108 (stating that judicial estoppel does not apply in administrative proceedings). Witherspoon next claims that Liberty obtained an advantage by representing in Liberty v. Green that the Seventh LMA governed. This may be true, however the inconsistent position relied on by the district court was Phillips’s testimony that the Eighth LMA was binding, not the Seventh LMA. Liberty’s representation in Liberty v. Green that the Seventh LMA governed is actually consistent with its position in the current proceedings, and therefore cannot be the basis for judicial estoppel. Accordingly, we hold that the district court erred by granting partial summary judgment to Witherspoon on the issue of judicial estoppel. B. The Eighth LMA did not have the effect of releasing Blocks A, D, and E from Liberty’s Original Deed of Trust. The central issue before this Court is whether the execution of the Eighth LMA served to release Blocks A, D, and E from Liberty’s Original Deed of Trust such that those blocks secured only Liberty’s New Deed of Trust at the time of the foreclosure sale. This determination controls the priority of Liberty’s and Witherspoon’s respective security interests in those blocks, and whether Liberty was able to purchase them free and clear of encumbrances. The district court made four relevant rulings on this issue. First, as a preliminary matter, the district court determined that Witherspoon never agreed to subordinate Witherspoon’s Original Deed of Trust to Liberty’s New Deed of Trust. Second, the district court found that, in accordance with Idaho Code section 45-108, entry into the Eighth LMA in and of itself had the effect of releasing Blocks A, D, and E from Liberty’s Original Deed of Trust and securing those blocks under Liberty’s New Deed of Trust. Third, the district court concluded that because entry into the Eighth LMA had the effect of releasing Blocks A, D, and E from Liberty’s Original Deed of Trust, and because Witherspoon had not subordinated Witherspoon’s Original Deed of 11

Trust to Liberty’s New Deed of Trust, Witherspoon’s Original Deed of Trust was “valid against and superior to all rights, liens and claims acquired by Liberty as to [Blocks A, D, and E.]” Finally, the district court determined that Liberty was authorized, as the holder of a junior interest in Blocks A, D, and E (under Liberty’s New Deed of Trust) and a senior interest in the remainder of the property (under Liberty’s Old Deed of Trust), to foreclose on the entire property; however, as the credit-bid purchaser, Liberty took the property subject to Witherspoon’s senior security interest on Blocks A, D, and E. For the following reasons, we hold that the district court erred in determining that Blocks A, D, and E had been released from Liberty’s Original Deed of Trust and then sold subject to Witherspoon’s Original Deed of Trust. 1. The express language of the Eighth LMA did not release Blocks A, D, and E from Liberty’s Original Deed of Trust. “This Court’s ‘primary objective when interpreting a contract is to discover the mutual intent of the parties at the time the contract is made.’ The parties’ intent should be ascertained from the contract’s language.” Hap Taylor & Sons, Inc. v. Summerwind Partners, LLC, 157 Idaho 600, 610, 338 P.3d 1204, 1214 (2014) (quoting Straub v. Smith, 145 Idaho 65, 69, 175 P.3d 754, 758 (2007)). “In the absence of ambiguity, the document must be construed in its plain, ordinary and proper sense, according to the meaning derived from the plain wording of the instrument.” Potlatch Educ. Ass’n v. Potlatch Sch. Dist. No. 285, 148 Idaho 630, 633, 226 P.3d 1277, 1280 (2010) (quoting C & G, Inc. v. Rule, 135 Idaho 763, 765, 25 P.3d 76, 78 (2001)). “If the terms of a contract are clear and unambiguous, the interpretation of their meaning and legal effect are questions of law.” Opportunity, LLC v. Ossewarde, 136 Idaho 602, 605, 38 P.3d 1258, 1261 (2002). Here, the relevant language of the Eighth LMA contains clear and unambiguous terms that do not release Blocks A, D, and E from the original deed of trust. The Eighth LMA states in Paragraph 23 that “[t]he Loan and indebtedness evidenced by [Liberty’s Original Promissory Note] shall continue to be secured by [Liberty’s Original Deed of Trust] encumbering [Post Falls Landing].” The Eighth LMA states in Paragraph 24, that The Point “is executing construction and development loan documents evidenced by [Liberty’s New Promissory Note] in the original principal amount of $2,545,843.31, payable to [Liberty] . . . . secured by, among other things, a deed of trust encumbering [Blocks A, D, and E].” (emphasis added). In contrast, Paragraph 24 also states that Liberty “shall execute a Partial Release of Lien to release of [Blocks A, D, and E] 12

from [Liberty’s Original Deed of Trust] securing [Liberty’s Original Promissory Note].” (emphasis added). These terms make it clear that it was not the Eighth LMA itself, but rather the additional documentation—specifically the Partial Release of Lien—that would serve to release Blocks A, D, and E from Liberty’s Original Deed of Trust. The Eighth LMA merely served to memorialize the agreement of the parties to execute this additional documentation. Based on the evidence in the record, however, Liberty failed to fulfill its obligations in this regard. While the Point executed a new promissory note (Liberty’s New Promissory Note) secured by a new deed of trust (Liberty’s New Deed of Trust), Liberty did not execute the Partial Release of Lien, which would release Blocks A, D, and E from the Original Deed of Trust. Accordingly, even though the Eighth LMA is an enforceable contract, the district court erred by equating enforceability of the Eighth LMA with the performance of the obligations therein. 2. Idaho Code section 45-108 does not apply to deeds of trust. Idaho Code section 45-108 provides that “[a] lien may be created by contract, to take immediate effect, as security for the performance of obligations not then in existence, which lien, if not invalid on other grounds, shall be valid as against all persons.” I.C. § 45-108. The district court applied Idaho Code section 45-108, holding that the parties’ entry into the Eighth LMA in and of itself served to create Liberty’s New Deed of Trust and release Blocks A, D, and E from Liberty’s Original Deed of Trust. This was error. Idaho Code section 45-108 does not provide for the creation of deeds of trust. Idaho Code section 45-108 expressly provides for the creation of “liens.” I.C. 45-108. Deeds of trust are not “liens” for the purposes of this statute. This is evident from Idaho Code section 45-101, which is part of the same chapter as Idaho Code section 45-108, wherein a lien is defined as “a charge imposed in some mode other than by a transfer in trust upon specific property by which it is made security for the performance of an act.” I.C. § 45-101 (emphasis added). As stated by the Court in Chavez v. Barrus: “Under Idaho law, a lien is a charge upon property to secure payment of a debt and transfers no title to the property subject to the lien.” 146 Idaho 212, 221, 192 P.3d 1036, 1045 (2008) (citing I.C. § 45-101) (emphasis added). In contrast to a lien, a deed of trust “convey[s] real property to a trustee in trust to secure the performance of an obligation of the grantor or other person named in the deed to a beneficiary.” I.C. § 45-1502(3). When a deed of trust is executed and delivered, the legal title of the property passes to the trustee.” Sims v. ACI Nw., Inc., 157 Idaho 906, 911, 342 P.3d 618, 623 (2015)

13

(citations omitted) (quoting ParkWest Homes, LLC v. Barnson, 154 Idaho 678, 684, 302 P.3d 18, 24 (2013)). Accordingly, the lien priority rule in Idaho Code section 45-108 does not extend to deeds of trust.3 Second, Idaho Code section 45-108 does not apply because, as discussed above, the terms of the Eighth LMA did not seek to create a new security interest by contract to take immediate effect. The Eighth LMA established Liberty and The Point’s agreement to engage in further action which included the creation of a new deed of trust. The agreement itself did not create Liberty’s New Deed of Trust, which was drafted and signed by The Point at a later date. Likewise it did not serve to release Liberty’s Original Deed of Trust with respect to Blocks A, D,

3 Witherspoon suggests that Brown v. Bryan, 6 Idaho 1, 51 P. 995 (1898), stands for the proposition that deeds of trust are covered under Idaho Code section 45-108. In Brown, this Court explained that Idaho Code sections 45-101 and 45-108, along with other relevant statutes, served as:

rules to govern all liens created by contract between creditors on the one side and debtors on the other, by which property is set apart as security for the payment of debt, or hypothecated for the performance of an act, and providing the remedy for the enforcement of the right, or lien of the one party as against the other.

6 Idaho at 12, 51 P. at 999. A “transfer in trust,” which was exempt from Idaho Code section 45-108 by way of the definition in Idaho Code section 45-101, referred to instruments that would “create trusts, but at the same time absolutely convey the title from the grantor, thus doing something more than the mere hypothecation of property for the payment of debt.” Id. at 13, 51 P. at 999. “A deed of trust, conveying absolutely and irrevocably the title of the grantor, is exempted from the operation of [Idaho Code section 45-101 and 45-108].” Id. After reviewing the language in the deed of trust in question in Brown, this Court determined that the deed of trust “hypothecated the real estate in controversy, as security for the payment, to the bank, of the debt therein named.” Id. The deed of trust was “in effect, a mortgage.” Id. As a mortgage, the deed of trust was not a “transfer in trust.” Id. Therefore, the deed of trust in question was not exempt from Idaho Code sections 45-101 and 45-108. Id. Based on Brown, it would appear that deeds of trust that absolutely convey title are exempt under Idaho Code sections 45-101 and 45-108, but deeds of trust that are essentially mortgages are not exempt under these statutes. With the Idaho Trust Deeds Act in 1957, however, the legislature “effectively overruled” Brown. Frazier v. Neilsen & Co., 115 Idaho 739, 741, 769 P.2d 1111, 1113 (1989). The Idaho Trust Deeds Act indicates that mortgages and deeds of trust should be treated as separate instruments. The Court explained in Frazier:

Because the legislature has created a separate scheme for deeds of trust, the rationale for Brown v. Bryan, that mortgages and deeds of trust are functional equivalents, is undercut. The legislature obviously intended separate treatment; therefore, they are not functionally the same. A mortgage and a deed of trust are also separately defined. Compare I.C. § 45-901 with I.C. § 45- 1502(3). Further, in I.C. § 45-1502(5), the use of deeds of trust is limited inter alia to real property not exceeding twenty acres. If the legislature intended deeds of trust to operate as mortgages under I.C. §§ 6-101 et seq., then the bulk of the Trust Deeds Act, and in particular I.C. §§ 45-1502(3) and (5), are mere verbiage without meaning.

Id. at 741, 769 P.2d at 1113. Accordingly, the rationale in Brown that certain deeds of trusts are essentially mortgages and must be treated as such is no longer accurate and Brown cannot serve as support for Witherspoon’s position that Idaho Code section 45-108 includes certain deeds of trust.

14

and E. The execution of a Release of the Lien would still have been necessary for Witherspoon to have had the first priority. 3. Liberty’s New Deed of Trust could not have provided the basis for the foreclosure sale. It is undisputed that Liberty’s New Deed of Trust was never recorded. The Idaho Code is clear that a trustee can only foreclose by advertisement and sale where “[t]he trust deed. . . [is] recorded in mortgage records in the counties in which the property described in the deed is situated.” I.C. § 45-1505. Therefore, the district court’s reasoning undercuts its conclusion. If the Eighth LMA in and of itself released Blocks A, D, and E from Liberty’s Original Deed of Trust, and Liberty’s New Deed of Trust (which was secured by Blocks A, D, and E) was never recorded, then the trustee would not have a recorded deed of trust as to Blocks A, D, and E which could provide the basis to foreclose by advertisement and sale. The sale itself would thereby have been improper, and the district court’s conclusion that Liberty legally purchased Blocks A, D, and E would still have been error. C. The Court will not address whether Liberty’s non-judicial foreclosure is void for failing to comply with Idaho law. In its trial brief, Witherspoon argued that Liberty’s non-judicial foreclosure was void for failing to give notice of default under the terms of the Eighth LMA. The district court did not explicitly rule on the validity of the foreclosure and trustee’s sale. Nor did the district court grant declaratory relief to Witherspoon to re-notice the sale with respect to Blocks A, D, and E. It is not clear how the parties expect the Court to resolve this foreclosure issue without an adverse ruling from the district court. “Even though an issue was argued to the court, to preserve an issue for appeal there must be a ruling by the court.” Saint Alphonsus Diversified Care, Inc. v. MRI Assocs., LLP, 148 Idaho 479, 491, 224 P.3d 1068, 1080 (2009). Here, neither party sought a ruling on the validity of the foreclosure sale. “This Court does not review an alleged error on appeal unless the record discloses an adverse ruling forming the basis for the assignment of error.” Id. (quoting Ada Cnty. Highway Dist. v. Total Success Invs., LLC, 145 Idaho 360, 368– 69, 179 P.3d 323, 331–32 (2008)). Accordingly, this Court declines to address this issue. D. Witherspoon is not an intended beneficiary of the Eighth LMA and has no right to enforce that agreement. “Idaho case law is clear that the party claiming to be a third-party beneficiary must show that the contract expressly indicates that it was made for his or her direct benefit.” De Groot v.

15

Standley Trenching, Inc., 157 Idaho 557, 562–63, 338 P.3d 536, 541–42 (2014). “The mere mention of a third party in a contract does not render that party a third-party beneficiary absent a showing that the contract was made for that party’s direct benefit.” Id. at 562, 338 P.3d at 541. Witherspoon points to the following language in the Eighth LMA to demonstrate that it was an intended beneficiary: “This Agreement shall be binding upon, and shall inure to the benefit of, the parties’ respective heirs, representatives, successors and assigns.” Witherspoon submits that it is a “representative” of The Point and a “‘successor’ or ‘assign’ to Liberty in that Witherspoon succeeded to a secured interest in the very property described in the Eighth LMA by virtue of its Deed of Trust.” Witherspoon’s arguments here stretch the meaning of third-party beneficiary beyond recognition. The language identified by Witherspoon does not indicate in any way that the Eighth LMA was made for the direct benefit of Witherspoon. Witherspoon’s capacity as legal representative for The Point does not qualify it as an intended beneficiary. Its role as legal representative is wholly separate from its claim to a security interest in Post Falls Landing. Similarly, Witherspoon is not a successor to or assign of Liberty. Any interest Witherspoon had in the property is derived from its own deed of trust, not from Liberty’s. Witherspoon thus has no grounds to claim that it is a third party beneficiary of the Eighth LMA. E. The district court erred in its determination that the Marina was entirely personal property. The final issue in this case is the district court’s determination that the Marina was personal property and not a fixture to the Post Falls Landing real property. The district court found the following facts regarding the Marina. The Marina consisted of 142 boat slips, a floating convenience store, and fuel pumps. The Marina was contemplated as a feature of the Post Falls Landing development. The fuel tanks were located on adjacent real property, and the tanks service the pumps via submerged fuel lines. The power and water lines service the slips via lines connected to the adjacent real property. The Marina was connected to the upland property through one ramp connection and through gas, water, and electrical lines. As originally proposed, the Marina was to have five ramp connections to the upland property. The Marina was designed to “pull apart” and “unplug.” The Marina was built for Post Falls Landing, but it was designed so it could be located anywhere. Green’s intent was not for the Marina to be a permanent amenity of Post Falls Landing. The dock was designed to pull apart “in case the Department of Lands didn’t issue a permit or pulled some of the stunts that Jim Brady pulled.”

16

To determine whether an article is a fixture, three factors are considered: “(1) annexation to the realty, either actual or constructive; (2) adaptation and application to the use or purpose to which that part of the realty to which it is connected is appropriated; and (3) intention to make the article a permanent accession to the freehold.” Rowan v. Riley, 139 Idaho 49, 55, 72 P.3d 889, 895 (2003) (quoting Rayl v. Shull Enters., Inc., 108 Idaho 524, 527, 700 P.2d 567, 570 (1984)). Based on these facts, the district court found that the adaptation and annexation prongs indicated that the Marina was a fixture. Specifically, the district court found that the annexation prong was satisfied because the Marina was connected to the real property through one ramp connection and gas, water, and electrical lines and the adaptation prong was satisfied because the Marina was useful to the adjunct real property “as a marina was contemplated as a part of the overall development.” Recognizing the importance of the intent factor, however, the district court found that The Point did not “necessarily intend” to make the Marina a permanent fixture. “Essentially,” the district court explained, “Mr. Green designed a dock which could be relocated and pulled apart because he did not trust the Department of Lands and its agent Jim Brady.” The district court based its finding on Green’s testimony that he intended to build a non-permanent Marina. We hold that the district court erred by improperly focusing on the subjective evidence of Green’s intent without adequately considering the objective circumstances. Whether an article constitutes a fixture to real property is normally a mixed question of law and fact. Steel Farms, Inc. v. Croft & Reed, Inc., 154 Idaho 259, 268, 297 P.3d 222, 231 (2011) (citing Rayl, 108 Idaho at 527, 700 P.2d at 570). “However, application of the three-part test becomes a pure question of law when only one reasonable conclusion may be drawn from the evidence.” Rayl, 108 Idaho at 527, 700 P.2d at 570. In Rayl, the Court explained the intent factor as follows: The intention sought is not the undisclosed purpose of the annexor, but rather the intention implied and manifested by his act. Thus, the intent should be determined from the surrounding circumstances at the time of installation, and not necessarily from testimony as to the subjective intent of the installer and his frame of mind at the time of installation. [T]he inquiry is not strictly as to the intention of the person himself who annexed the chattel to the freehold . . . . The inquiry is as to what intention must be imputed to him in the light of all the circumstances, when tested by the common understanding of those familiar with the subject.

17

108 Idaho at 528, 700 P.2d at 571 (alterations in original) (citations omitted) (internal quotation marks omitted). The Court of Appeals has listed nine factors useful in objectively determining intent: (1) the nature of the article; (2) the manner of annexation to the land; (3) the injury to the land, if any, by its removal; (4) the completeness with which the chattel is integrated with the use to which the land is being put; (5) the relation which the annexer has with the land such as licensee, tenant at will or for years or for life or fee owner [sic]; (6) the relation which the annexer has with the chattel such as owner, bailee or converter; (7) the local custom respecting treating such chattel as personal property or a fixture; (8) the time, place and degree of social, economic and cultural development, (e.g., a luxury in one generation is a necessity in another . . . ); and (9) all other relevant facts surrounding the annexation.

Everitt v. Higgins, 122 Idaho 708, 712, 838 P.2d 311, 315 (Ct. App. 1992) (omission in original)

(quoting R. BOYER, SURVEY OF THE LAW OF PROPERTY 329 (3rd ed. 1981)). The evidence of intent relied upon by the district court—Green’s statement that he did “not necessarily” intend the Marina to be a permanent amenity—was not objective. The district court should have focused on the objective circumstances in relation to each individual piece of the Marina. Accordingly, we vacate the district court’s judgment on this issue and remand for the district court to make a separate determinations for each Marina structure based on objective evidence of intent as to each.

VI. CONCLUSION We vacate the summary judgment ruling of the district court with regard to judicial estoppel, vacate the judgment of the district court with regard to Witherspoon’s first priority security interest to Blocks A, D, and E in Post Falls Landing, and vacate the district court’s judgment with regard to the Marina and remand for further proceedings on that issue. Costs to Liberty. Justices EISMANN, BURDICK and HORTON, CONCUR. J. JONES, Chief Justice, concurring in part and in the result. I concur with the Court’s analysis of the Marina issue in Part E of Section V, but depart from the Court’s analysis in Parts A through D. With respect to Parts A−D, I concur in the result reached by the Court, which, as I understand it, would vacate and remand for an almost complete do-over. While I think the district court tried to do the right thing by quieting title in Blocks A,

18

D, and E in Liberty, subject to Witherspoon’s first-recorded deed of trust, the route taken by the district court was legally flawed. In order to understand how this case went off of the legal rails, it is necessary to briefly consider how the case proceeded. Liberty filed the action seeking to quiet title to the Marina. In its first amended answer, Witherspoon raised a number of affirmative defenses, including unclean hands4 and that Liberty’s claims were “barred” by defects in the foreclosure proceedings. Witherspoon also counterclaimed against Liberty, seeking declaratory relief and claiming entitlement to relief as a third-party beneficiary of the Eighth LMA. In its claim for declaratory relief, Witherspoon alleged that Liberty was estopped from denying the enforceability of the Eighth LMA, that the new deed of trust called for in the Eighth LMA superseded the original deed of trust, that Liberty improperly foreclosed under the original deed of trust, and that Witherspoon had not subordinated its prior deed of trust to the Eighth LMA and the new deed of trust called for therein. When Witherspoon moved for partial summary judgment declaring the Eighth LMA to be binding and enforceable, it reiterated these themes in its legal memorandum. While claiming estoppel, it did not identify a specific estoppel theory, nor did it specifically invoke its unclean hands theory. The district court apparently chose to invoke judicial estoppel to hold that Liberty could not deny the enforceability of the Eighth LMA. This holding was in error and, as it turns out, superfluous because the district court determined, following trial, that the Eighth LMA was valid and binding between Liberty and The Point. However, premature invocation of judicial estoppel appears to have obscured or obviated the need to address the unclean hands defense and whether Liberty foreclosed against Blocks A, D and E under the wrong deed of trust. The district court’s invocation of judicial estoppel is perhaps understandable in light of the fact that Liberty had, indeed, signed the Eighth LMA, and had received the executed promissory note and deed of trust for Blocks A, D and E, but nevertheless chose to foreclose

4 “The unclean hand doctrine (also known as the clean hands doctrine) ‘stands for the proposition that a litigant may be denied relief by a court of equity on the ground that his conduct has been inequitable, unfair and dishonest, or fraudulent and deceitful as to the controversy in issue.’” Kirkman v. Stoker, 134 Idaho 541, 544, 6 P.3d 397, 400 (2000) (quoting Gilbert v. Nampa Sch. Dist. No. 131, 104 Idaho 137, 145, 657 P.2d 1, 9 (1983)). The present case is clearly a case in equity, both starting and ending as a proceeding to quiet title. Anderson v. Whipple, 71 Idaho 112, 121−22, 227 P.2d 351, 356 (1951), overruled on other grounds by David Steed & Assoc., Inc. v. Young, 115 Idaho 247, 766 P.2d 717 (1988).

19

under the original deed of trust. However, it would have been better to have denied Witherspoon’s motion for partial summary judgment and let the matter fully play out at trial. Because the judicial estoppel theory was directed specifically at the question of enforceability of the Eighth LMA and not at the issue of whether it or some other theory prevented Liberty from claiming priority over Witherspoon’s previously-recorded deed of trust, the district court found another reason to grant priority to Witherspoon. That resulted in application of Idaho Code section 45-108, which, as the Court correctly determines, has no application here. The foregoing recitation is certainly not intended to be a comprehensive analysis, as there are still a number of matters that will need to be addressed by the district court on remand. It is hoped that the following analysis of the issues raised in Parts A−D will be helpful in that respect. With regard to Section V.A, I agree that the district court incorrectly ruled on summary judgment that Liberty was judicially estopped from denying the enforceability of the Eighth LMA. However, this error is immaterial in light of a subsequent factual determination made by the court in its order denying Liberty’s motion to reconsider following trial. In that order, the district court, considering conflicting trial testimony, determined that the Eighth LMA was the binding agreement between Liberty and The Point. Liberty’s President, while acknowledging having signed the Eighth LMA, denied having received the executed security documents—the new promissory note and new deed of trust pertaining to Blocks A, D and E. On the other hand, Harry Green, President of The Point, testified that he provided the notarized Eighth LMA and ancillary security agreements to Liberty. The district court determined that Mr. Green’s testimony was more credible, that the Eighth LMA was the binding agreement between the parties and, somewhat by inference, that the foreclosure against Blocks A, D and E was improper under the original deed of trust. Although not mentioned by the district court, the Eighth LMA, itself, sheds light on the issue. Green signed this document in Spokane on September 1, 2011, according to the notary public acknowledging his signature. Green testified that he provided it to Liberty, along with the acknowledged security agreements. Liberty’s president signed the Eighth LMA in Texas on September 8, 2011, according to the notary public acknowledging the same. The agreement specifically says, “[c]ontemporaneously with the execution of [the Eighth LMA], [The Point] is executing construction and development loan documents evidenced by a note in the original

20

principal amount of $2,545,843.31 . . . secured by, among other things, a deed of trust encumbering [Blocks A, D and E].” Contemporaneous means “occurring . . . at the same time.” Black’s Law Dictionary (10th ed. 2014). Liberty, having acknowledged that the new note and new deed of trust were signed contemporaneously with the Eighth LMA and presumably available at the time it executed that document, cannot very well claim otherwise. Whether Liberty is judicially estopped from contesting the enforceability of the Eighth LMA is beside the point. The district court subsequently ruled that the Eighth LMA was the binding agreement between the parties and Liberty did not appeal that determination. With regard to Section V.B, I concur with the Court’s conclusions that the Eighth LMA did not, by its terms, release Blocks A, D, and E from Liberty’s original deed of trust and that Idaho Code section 45-108 does not apply to deeds of trust. Therefore, the Court correctly vacated the district court’s holding quieting title to Blocks A, D and E in Liberty subject to Witherspoon’s deed of trust. I agree with the Court’s finding that the Eighth LMA required Liberty to execute a Partial Release of Lien to release Blocks A, D, and E from Liberty’s original, modified deed of trust and that “Liberty failed to fulfill its obligations in this regard.” It is clear from the record that Liberty received the signed Eighth LMA, along with the new promissory note and new deed of trust, and that Liberty executed the Eighth LMA a week after The Point did so. Upon receipt of these documents, the ball was in Liberty’s court. It was Liberty’s contractual obligation to record the new deed of trust and file the Partial Release of Lien. The Eighth LMA does not specify a date for the performance of those acts, but in the context of the agreement it appears that it should have been accomplished immediately upon its receipt of the Eighth LMA and related security documents. In any event, Liberty was required to do so within a reasonable period of time. VanderWal v. Albar, Inc., 154 Idaho 816, 822, 303 P.3d 175, 181 (2013). It did not and, indeed, has never done so. However, just because the new deed of trust and Partial Release of Lien were not recorded does not necessarily mean that Liberty had a legal right to foreclose its original deed of trust, as modified, with respect to Blocks A, D, and E. The Eighth LMA specifically called for a new deed of trust against Blocks A, D, and E and for release of the original deed of trust against that same property. Because the new deed of trust was executed by The Point and delivered to Liberty, it became the operative security instrument between those two parties with respect to

21

Blocks A, D and E. A deed of trust must be recorded to provide notice to other parties, but it is effective between the parties themselves, even if not recorded. If the Eighth LMA and new deed of trust superseded the original deed of trust under which Liberty purportedly foreclosed on Blocks A, D and E, how could it use that deed of trust as the basis for the foreclosure? It would certainly seem that the superseding deed of trust, executed and delivered pursuant to the Eighth LMA, should have been the basis for the foreclosure. As the Court points out, in order to foreclose by advertisement and sale, the trust deed must be “recorded in mortgage records in the county in which the property described in the deed is situated.” I.C. § 45-1505(1). This would obviously mean the current trust deed, rather than a superseded one. That did not occur here, as Witherspoon repeatedly argued to the district court before, during, and after trial. Nevertheless, the fact remains that the district court erroneously relied upon Idaho Code section 45-1085 in determining that Witherspoon’s deed of trust had priority over Liberty’s and, therefore, the Court correctly vacated that holding. This critical issue must be determined in further proceedings upon remand. With regard to Parts C and D of Section V, there was no adverse ruling by the district court from which an appeal may be taken. Witherspoon certainly raised both issues—that Liberty’s non-judicial foreclosure was void for having been conducted under a superseded deed of trust and that Witherspoon was a third-party beneficiary6 of the Eighth LMA—but neither issue was addressed by the district court in any of its rulings. It is not for this Court to decide either issue. Rather, those issues must be determined in the first instance by the district court upon remand. When the district court takes up this case on remand, it is my view that the issue of who has the priority claim to Blocks A, D, and E should take into account the following salient facts:

5 Reading between the lines of the district court’s decision, it appears that the determination of this issue was influenced by the court’s judicial estoppel holding. While it may well be that judicial estoppel has application to the broader question of whether Liberty may be estopped from asserting priority over Witherspoon, that broader issue was not addressed by the district court. 6 Witherspoon’s third-party beneficiary argument does seem to be somewhat weak, but that is a matter for the district court to determine on remand. Of interest is the fact that Liberty is before the Court seeking relief as a third- party beneficiary of the subordination agreement between Witherspoon and The Point. Contrary to the district court’s assumption that the subordination agreement was between Liberty and Witherspoon, the agreement was actually between Witherspoon and The Point. If the issue of judicial estoppel is raised again on remand, it does not appear that a contractual relationship is required for that theory. A&J Construction Co., Inc. v. Wood, 141 Idaho 682, 686, 116 P.3d 12, 16 (2005).

22

1. Witherspoon’s deed of trust on The Point property was recorded on October 4, 2004, prior to any of the Liberty trust deeds. The Witherspoon deed of trust secured the payment of a promissory note in the original sum of $164,171.85, together with “all such further sums as may hereafter be loaned or advanced by [Witherspoon].” 2. On August 26, 2005, Liberty and The Point entered into their original loan agreement. The Point executed a deed of trust securing payment of a note in the amount of $3,934,390. Apparently at Liberty’s request, Witherspoon entered into an agreement with The Point to subordinate the priority of its deed of trust to Liberty’s deed of trust “and any renewals or extensions thereof.” 3. The Point and Liberty entered into six modifications of the loan agreement and in each instance Liberty required Witherspoon to execute a subordination agreement with The Point. 4. Liberty and The Point entered to the Seventh LMA on September 1, 2010. However, the effective date of the agreement was April 30, 2010. As a condition of the agreement, Liberty required Witherspoon to enter into an additional subordination agreement. Unlike the previous subordination agreements, the August 10, 2010 subordination agreement did not extend to any renewals or extensions of the indebtedness secured by Liberty’s deed of trust. 5. On September 1, 2011, The Point executed the Eighth LMA, which had an effective date of April 30, 2010, identical to the Seventh LMA. Liberty executed the Eighth LMA on September 8, 2011. The Eighth LMA recited that it represented “the final agreement between the parties herein.” 6. Although Liberty apparently had in its possession the executed deed of trust against Blocks A, D and E called for pursuant to the Eighth LMA, it chose to foreclose on that property under the original deed of trust. Although the parties can litigate as they choose on remand, it seems to me that this case boils down to whether Liberty prosecuted its foreclosure under a superseded deed of trust, whether the subordination agreement executed by Witherspoon in conjunction with the Seventh

23

LMA remained effective,7 whether Liberty is precluded from claiming priority by virtue of equitable doctrines raised by Witherspoon, and the effect, if any, of the fact that both the Seventh LMA and Eighth LMA have the very same effective date.

7 It seems to me that little consideration was given to the actual subordination agreement, as shown by the fact that Liberty was assumed to be a contracting party. A subordination agreement does not change the dates of recording of trust deeds but, rather, pertains to the priority of payment. “[T]he general thrust of a subordination agreement . . . is the subordination of the right to receive payment of certain indebtedness (the ‘subordinated debt’) to the prior payment of certain other indebtedness (the ‘senior debt’) of the same debtor.” Blickenstaff v. Clegg, 140 Idaho 572, 581, 97 P.3d 439, 448 (2004). But for the subordination agreement, Witherspoon would have priority.

24

IN THE SUPREME COURT OF THE STATE OF IDAHO

Docket No. 42063

COUNTRYWIDE HOME LOANS, INC., ) ) Plaintiff-Counterdefendant-Third Party ) Defendant-Respondent, ) ) Boise, November 2015 Term v. )

RALPH E. SHEETS, JR. and DEBRA ) 2016 Opinion No. 46 SHEETS, as individuals with an interest in ) the property legally described as: SEE FILE ) Filed: April 26, 2016 FOR DESCRIPTION, ) ) Stephen Kenyon, Clerk Defendants-Counterclaimants-Third ) Party Plaintiffs-Appellants, ) ) v. ) ) BANK OF AMERICA, N.A., successor by ) merger and name change to BAC HOME LOANS, f/k/a COUNTRYWIDE HOME ) LOANS, INC., and BAC HOME LOAN ) SERVICING, L.P., f/k/a COUNTRYWIDE ) HOME LOAN SERVICING, LP, and ) RECONTRUST COMPANY, N.A., ) ) Third Party Defendants-Respondents. )

Appeal from the District Court of the Third Judicial District of the State of Idaho, Adams County. Hon. Bradly S. Ford, District Judge.

The judgment of the district court is affirmed.

John Curtis Hucks, New Meadows, for appellants.

Routh Crabtree Olsen, P.C., Boise and Murr Siler & Accomazzo, P.C., Denver, Colorado, for respondents. Daniel Delaney argued.

______

HORTON, Justice. This is a case involving a dispute over a mistakenly released deed of trust, which secured a 2004 residential mortgage between Ralph Sheets and the lender, Bank of America, N.A., f/k/a Countrywide Home Loans, Inc. (Countrywide); the servicer of the loan; and the trustee who

1

executed the mistaken release (companies collectively referred to as “Bank of America”). The district court granted summary judgment reinstating the deed of trust and dismissing Sheets’ counterclaims. We affirm. I. FACTUAL AND PROCEDURAL BACKGROUND In December of 2004, Sheets borrowed $65,250 from Countrywide. He executed a promissory note, secured by a deed of trust to his home in New Meadows.1 Between December of 2004 and April of 2009, Sheets timely paid the amounts due on the note. In 2008, Countrywide sent Sheets a letter telling Sheets that he “may” qualify for a lower interest rate on a refinancing loan and estimating he had $88,056 equity in the home. Around this time, Bank of America acquired and merged with Countrywide.2 In the late spring of 2009, Sheets applied for a new loan (the 2009 Refinancing). The loan application indicated that the loan would be for the principal sum of $87,500 at an interest rate of 5.125%. However, Sheets claimed that he was orally promised a loan of $108,000 at a lower interest rate in subsequent telephone conversations with a loan officer, Paul Campbell. Closing on the new loan was scheduled for October 27, 2009. Sheets testified that the title company agent at the closing would not let him execute the documents because they were “bad” and incomplete. Thus, the 2009 Refinancing did not close. Sheets arrived home and found proposed closing documents, but he did not sign the documents because he did not agree with the terms contained therein. Sheets testified that, based upon his previous conversations with Campbell, he understood that Bank of America had agreed to not include a requirement for an escrow payment. On November 9, 2009, the trustee of the deed of trust, ReconTrust Company, N.A. (ReconTrust), erroneously recorded a full reconveyance of the deed of trust securing Sheets’ original note. How the erroneous reconveyance came to be recorded is not clear. Bank of America claims that it caused the reconveyance to be recorded because it mistakenly proceeded as if the 2009 Refinancing had closed. Sheets claims that Bank of America had a darker, ulterior motive which it subsequently tried to conceal by failing to turn over relevant evidence in discovery. Sheets does not explain what this ulterior motive might be.

1 Ralph Sheets’ wife, Debra Sheets, had no personal liability under the note and deed of trust. Although she is a named defendant in this action, it appears that Ralph Sheets is the only party with a liability to Bank of America. As such, we refer to the defendants in this action as “Ralph Sheets” or “Sheets.” 2 Sheets has been inconsistent in his claims of the date of merger, alternatively asserting that it took place in April of 2009 and the fall of 2008. The date of merger is not established in the record.

2

For some time after the reconveyance was recorded, the status of Sheets’ loan was confused. Sheets claimed he repeatedly tried to contact Bank of America representatives who failed to timely respond and that he tried to make loan payments in November and December of 2009. At the end of November, Sheets’ online banking statement incorrectly stated that he had two obligations to Bank of America: the original 2004 loan, with a balance of $43,263.84; and a new loan with a balance of $87,750. Sheets hired counsel in late November of 2009 to assist him with the matter. On January 25, 2010, Bank of America sent Sheets a notice of its intent to accelerate his obligation and foreclose the deed of trust if Sheets did not bring his account current and pay late fees. On March 29, 2010, Bank of America sent Sheets a letter asking Sheets to stipulate to rescinding the reconveyance. The next day, Bank of America filed a complaint against Sheets seeking reinstatement of the deed of trust. On May 25, 2010, Bank of America sent Sheets a notice of its intent to commence foreclosure proceedings. Sheets filed an answer, counterclaim, demand for jury trial, and third party complaint against the third-party defendants in this action. He brought counterclaims for: (1) breach of contract; (2) specific performance; (3) violation of the Idaho Consumer Protection Act; (4) violation of the federal Fair Credit Reporting Act; (5) slander of credit; and (6) violation of Idaho Code section 45-1502. In 2012, Bank of America filed two motions for summary judgment, seeking reinstatement of the deed of trust and dismissal of Sheets’ counterclaims. The district court ruled in favor of Bank of America on all issues. When considering Bank of America’s motion for summary judgment on its complaint, the district court determined that the terms of the deed of trust were dispositive and that it was clear that Sheets was not entitled to reconveyance of the trust deed until he fully paid the underlying note which the trust deed secured. The district court alternatively granted summary judgment on the theory of unjust enrichment, reasoning that it would be inequitable for Sheets to obtain the benefit of the reconveyance. The district court dismissed Sheets’ counterclaims, finding that a valid contract did not exist between Sheets and Bank of America because there was no written contract complying with the statute of frauds and no evidence of a meeting of the parties’ minds as to the terms of the alleged contract. Based upon this determination, the district court denied Sheets’ request for specific performance because no contract existed. Sheets timely appealed.

3

II. STANDARD OF REVIEW “When reviewing a grant of summary judgment, this Court employs the same standard as the district court.” Idaho Youth Ranch, Inc. v. Ada Cnty. Bd. of Equalization, 157 Idaho 180, 182, 335 P.3d 25, 27 (2014). 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). “When considering a motion for summary judgment, this Court liberally construes the record in a light most favorable to the party opposing the motion and draws all reasonable inferences in that party’s favor.” Kepler-Fleenor v. Fremont Cnty., 152 Idaho 207, 210, 268 P.3d 1159, 1162 (2012). When “the evidence reveals no disputed issues of material fact, then only a question of law remains, over which this Court exercises free review.” Stonebrook Const., LLC v. Chase Home Fin., LLC, 152 Idaho 927, 930, 277 P.3d 374, 377 (2012) (quoting Lockheed Martin Corp. v. Idaho State Tax Comm’n, 142 Idaho 790, 793, 134 P.3d 641, 644 (2006)). III. ANALYSIS Sheets contends that the district court erred by granting summary judgment in Bank of America’s favor and dismissing his counterclaims. We address these claims in turn. A. The district court properly granted summary judgment rescinding the reconveyance. The district court granted summary judgment in favor of Bank of America’s complaint on the theory of unjust enrichment because allowing Sheets to gain a benefit from the erroneous reconveyance would be inequitable.3 It determined that unclean hands did not bar Bank of America from equitable relief. It reasoned that, although Bank of America “clearly acted without oversight and without awareness of the actions of its agents,” such conduct did not amount to conduct that was “inequitable, unfair and dishonest, or fraudulent and deceitful,” which is necessary for application of the doctrine of unclean hands. Sheets contends that two documents created by Bank of America’s agents, which he refers to as the Beltran and Wigner Documents, were false and bar Bank of America from seeking equitable relief. Bank of America responds that Sheets’ insinuation that Bank of America’s mistaken reconveyance was part of an undefined “sinister scheme” is unsupportable.

3 The district court also granted Bank of American’s request for summary judgment for rescission of the reconveyance on an alternative theory, determining that the substance of Bank of America’s claim was for a declaratory judgment and that under the terms of the deed of trust and note Sheets was not entitled to reconveyance until he paid off his loan. We do not reach this alternative ground for relief because we affirm the district court’s grant of summary judgment on the equitable theory of unjust enrichment.

4

“Unjust enrichment occurs where a defendant receives a benefit which would be inequitable to retain without compensating the plaintiff to the extent that retention is unjust.” Vanderford Co. v. Knudson, 144 Idaho 547, 557, 165 P.3d 261, 271 (2007). “The substance of an action for unjust enrichment lies in a promise, implied by law, that a party will render to the person entitled thereto that which in equity and good conscience belongs to the latter.” Smith v. Smith, 95 Idaho 477, 484, 511 P.2d 294, 301 (1973). “The elements of unjust enrichment are that (1) a benefit is conferred on the defendant by the plaintiff; (2) the defendant appreciates the benefit; and (3) it would be inequitable for the defendant to accept the benefit without payment of the value of the benefit.” Teton Peaks Inv. Co., LLC v. Ohme, 146 Idaho 394, 398, 195 P.3d 1207, 1211 (2008). Here, Sheets borrowed money from Bank of America, used the money to purchase property for his own benefit and pledged that property to Bank of America as security for repayment of the loan. It would be inequitable for Sheets retain that property without requiring that he fulfill his promise to repay the loan. Therefore, the district court correctly determined that Sheets would be unjustly enriched if the reconveyance was not rescinded.4 To avoid this result, Sheets has raised the defense of unclean hands. The unclean hands doctrine “stands for the proposition that a litigant may be denied relief by a court of equity on the ground that his conduct has been inequitable, unfair and dishonest, or fraudulent and deceitful as to the controversy in issue.” Ada Cnty. Highway Dist. v. Total Success Investments, LLC, 145 Idaho 360, 370, 179 P.3d 323, 333 (2008) (quotations omitted) (quoting Gilbert v. Nampa Sch. Dist. No. 131, 104 Idaho 137, 145, 657 P.2d 1, 9 (1983)). For the doctrine to apply, “[t]he conduct must be intentional or willful, rather than merely negligent.” Grazer v. Jones, 154 Idaho 58, 68, 294 P.3d 184, 194 (2013). In determining if the clean hands doctrine applies a court has discretion to evaluate the relative conduct of both parties and to determine whether the conduct of the party seeking an equitable remedy should, in the light of all the circumstances, preclude such relief. A trial court’s decision to afford relief based on the unclean hands doctrine, or to reject its application, will not be overturned on appeal absent a demonstration that the lower court abused its discretion.

4 Such a decision is consistent with the equitable decisions of other courts. See, e.g., Holiday Hospitality Franchising, Inc. v. States Res., Inc., 232 S.W.3d 41, 52-54 (Tenn. Ct. App. 2006) (reinstating a mistakenly released deed of trust on summary judgment under the “equitable lien” theory); Cameron State Bank v. Sloan, 559 S.W.2d 564, 568 (Mo. Ct. App. 1977) (deciding that “negligence on the part of the bank” in mistakenly releasing a deed of trust did “not permit appellants to gain an unconscionable advantage”).

5

Ada Cnty. Highway Dist., 145 Idaho at 371, 179 P.3d at 334 (alterations omitted) (quoting Sword v. Sweet, 140 Idaho 242, 251, 92 P.3d 492, 501 (2004)). The three-part test for abuse of discretion asks whether the district court “(1) correctly perceived the issue as one of discretion; (2) acted within the outer boundaries of its discretion and consistently with the legal standards applicable to the specific choices available to it; and (3) reached its decision by an exercise of reason.” Sun Valley Potato Growers, Inc. v. Texas Refinery Corp., 139 Idaho 761, 765, 86 P.3d 475, 479 (2004). The district court did not abuse its discretion in rejecting Sheets’ unclean hands defense. The district court explicitly recognized that this was a discretionary decision. The district court identified the relevant legal principles, which require the conduct to be “inequitable, unfair and dishonest, or fraudulent and deceitful as to the controversy in issue.” The district court provided a reasoned analysis, explaining why Bank of America’s conduct did not meet the requisite standard. In doing so, the district court analyzed both the Beltran and Wigner Documents which Sheets relied upon in support of his claim that Bank of America had unclean hands. The Beltran Document is entitled “Disbursement Authorization Checklist” and certifies that the requirements for the 2009 Refinancing were satisfied and that the loan should be funded. The district court found that the document was obviously incorrect because the 2009 Refinancing did not close. The Wigner Document is a loan quality checklist, which appears to be a post-closing checklist and that shows the 2009 loan was closed. The district court reasoned that, although the documents demonstrated Bank of America’s “corporate failings” and lack of oversight, they did not evidence “inequitable, unfair and dishonest, or fraudulent and deceitful” conduct. We are unable to conclude that this finding was erroneous.5

5 Sheets argues that a series of discovery disputes prevented him from accessing information from various Bank of America agents who could have helped clarify what precipitated the reconveyance and failed 2009 Refinancing. Bank of America responds by arguing Sheets waived his discovery arguments by failing to object before the district court. Sheets replies that he did file a motion to compel, much of which the district court dismissed after determining that Bank of America did not have the requested information. “The trial court has broad discretion in determining whether or not to grant a motion to compel.” Nightengale v. Timmel, 151 Idaho 347, 351, 256 P.3d 755, 759 (2011). The district court did not abuse its discretion by only partially granting Sheets’ motion to compel. The district court denied much of the relief Sheets sought because Sheets’ requests were broad and did not comply with the Idaho Rules of Civil Procedure. The district court noted that it was “sympathetic to the Sheets’ frustration at trying to recover information from an entity such as Countrywide and its association with the entity of Bank of America,” but it was limited by Sheets’ broad requests and Bank of America’s representations that it did not have the information. The record does not show that Sheets made further attempts to refine his discovery requests. We are unable to conclude that the district court abused its discretion with regard to Sheets’ motion to compel.

6

Sheets has not shown that the district court erred by refusing to apply the doctrine of unclean hands as a bar to the Bank of America’s claim for relief. Thus, we affirm the district court’s grant of summary judgment in favor of Bank of America on its claim for relief from the reconveyance. B. The district court properly granted summary judgment dismissing Sheets’ counterclaims. Sheets advanced counterclaims with respect to an alleged agreement to refinance Sheets’ loan.6 These counterclaims involve a breach of contract claim and a specific performance claim. The district court determined that a valid contract did not exist between Sheets and Bank of America because there was no written contract that would comply with the statute of frauds and there was no evidence of a meeting of the minds as to the terms of the alleged contract. Sheets contends that Bank of America committed in writing to loan Sheets money “by approving and scheduling a closing for the 2009 Refinancing.” Bank of America responds that there is no written contract and that the parties never had a meeting of the minds as to important terms of the alleged contract. Bank of America is correct on both counts. Summary judgment was appropriate because the alleged contract to lend money in the 2009 Refinancing is not evidenced by a signed writing. Idaho’s Statute of Frauds is set forth at Idaho Code section 9–505, and provides in relevant part: In the following cases the agreement is invalid, unless the same or some note or memorandum thereof, be in writing and subscribed by the party charged, or by his agent. Evidence, therefore, of the agreement cannot be received without the writing or secondary evidence of its contents: . . . . 5. A promise or commitment to lend money or to grant or extend credit in an original principal amount of fifty thousand dollars ($50,000) or more, made by a person or entity engaged in the business of lending money or extending credit. Sheets has not met his burden to present a writing signed by an agent of Bank of America committing to loan him money. Sheets directs our attention to Bajrektarevic v. Lighthouse Home Loans, Inc., 143 Idaho 890, 155 P.3d 691 (2007), in support of his claim that this Court may look to the conduct of the parties to determine whether a contract existed. However, that case does not

6 Sheets’ appeal does not challenge the dismissal of certain counterclaims, including those asserting claimed violations of the Idaho Consumer Protection Act and the federal Fair Credit Reporting Act, slander of credit, and violation of Idaho Code section 45-1502.

7

support his assertion that a commitment to lend money may be implied from the parties’ conduct, without the requisite written document. The district court also correctly determined that there was no evidence of a meeting of the minds between Sheets and Bank of America sufficient to establish an enforceable contract. “Formation of a valid contract requires a meeting of the minds as evidenced by a manifestation of mutual intent to contract.” Justad v. Ward, 147 Idaho 509, 512, 211 P.3d 118, 121 (2009). “For a contract to exist, a distinct understanding that is common to both parties is necessary.” Wandering Trails, LLC v. Big Bite Excavation, Inc., 156 Idaho 586, 592, 329 P.3d 368, 374 (2014). “An enforceable contract must be complete, definite, and certain in all of the contract’s material terms.” Id. Here, the loan application stated the loan was for the principal amount of $87,500 with an interest rate of 5.125%. However, Sheets claimed that he was orally promised a loan of $108,000 at a lower, but unspecified, interest rate in subsequent telephone conversations with loan officer, Paul Campbell. The $20,500 discrepancy in the loan amount is unexplained. The proposed closing documents that Sheets received from Bank of America did not contain terms that Sheets found acceptable. In the absence of evidence of any agreement as to material terms, including the principal sum to be loaned and the interest rate to be paid thereon, the district court correctly determined that a meeting of the minds did not occur. The district court denied Sheets’ request for specific performance because it determined no contract existed between the parties. It is axiomatic that a court may not order specific performance of a contract that does not exist. Therefore, the district court properly dismissed Sheets’ counterclaim. C. We award Bank of America attorney fees on appeal. Bank of America requests appellate attorney fees under the terms of the deed of trust and Idaho Code sections 12-123, 12-120, and 12-121. We grant Bank of America’s request for attorney fees under Idaho Code section 12-121. That statute allows an award of “reasonable attorney’s fees to the prevailing party . . . .” I.C. § 12-121. Attorney fees are awarded to the prevailing party only if “the Court determines that the action was brought or pursued frivolously, unreasonably or without foundation.” Baker v. Sullivan, 132 Idaho 746, 751, 979 P.2d 619, 624 (1999). Sheets’ appeal meets this standard.

8

Sheets has alleged Bank of America engaged in some sort of scheme to defraud him without a shred of evidence to support that claim. There is simply no evidence of inequitable, unfair, dishonest, fraudulent, or deceitful conduct needed to support his claim that Bank of America had unclean hands. Likewise, there is no evidence supporting Sheets’ counterclaims for breach of contract and specific performance. Although he had no evidence to support his defense to Bank of America’s action or his counterclaims, Sheets has maintained this action and failed to pay on his loan for six years, apparently hoping to obtain a windfall due to Bank of America’s error in 2009. We find Sheets’ appeal to have been pursued frivolously, unreasonably, and without foundation. Thus, we award Bank of America attorney fees under Idaho Code section 12-121. IV. CONCLUSION We affirm the district court’s decision granting summary judgment to Bank of America on its claim to void the mistakenly recorded reconveyance and the district court’s judgment dismissing Sheets’ counterclaims. We award attorney fees and costs on appeal to Bank of America.

Chief Justice J. JONES and Justices EISMANN, BURDICK and W. JONES, CONCUR.

9

IN THE SUPREME COURT OF THE STATE OF IDAHO

Docket No. 42112

ERIC RYAN KAWAMURA, ) ) Pocatello, May 2015 Term Defendant-Appellant, ) ) 2015 Opinion No. 82 v. ) ) Filed: August 24, 2015 JESSICA SARA KAWAMURA, ) Plaintiff-Respondent. ) Stephen Kenyon, Clerk )

Appeal from the District Court of the Sixth Judicial District of the State of Idaho, Bannock County. Hon. David C. Nye, District Judge. Hon. Gaylen L. Box, Magistrate Judge.

The district court’s decision is affirmed.

Shawn Anderson, Esq., Pocatello, for appellant.

Lowell N. Hawkes, Chartered, Pocatello, for respondent. ______

HORTON, Justice. This is an appeal from the district court sitting in its intermediate appellate capacity. The magistrate court presiding over the divorce of Jessica and Eric Kawamura concluded that the residence located at 1540 Gwen Drive in Pocatello was Eric’s separate property. The district court reversed, holding that the magistrate court improperly considered parol evidence to reach its conclusion. We affirm the decision of the district court to the extent that it reversed the magistrate court’s determination of the character of the property. I. FACTUAL AND PROCEDURAL BACKGROUND Jessica and Eric married on August 4, 2001, in Las Vegas. They concealed their marriage from their families for one year before having a “marriage” ceremony on August 4, 2002, which was attended by family members. During the course of their marriage, Jessica and Eric lived in three homes. When the couple married, Eric owned a home located at 319 North Johnson Street in Pocatello (the Johnson Home). In 2002, Eric sold the Johnson Home and purchased a home located at 636 Highland Boulevard in Pocatello (the Highland Home). The warranty deed to the

1

Highland Home conveyed the property to Eric alone. The Highland Home was purchased with proceeds from the Johnson Home sale and a cashier’s check in the amount of $52,090.37. Eric’s grandparents provided the funds for the cashier’s check. At trial, although it was undisputed that the money from Eric’s grandparents was a gift, the parties disputed whether the gift was to Eric alone or to both Eric and Jessica. The magistrate court found the money was a gift to Eric alone. The third home—the subject of this appeal—is located at 1540 Gwen Drive in Pocatello (the Gwen Home). The purchase price for this home was $172,291 and was paid with the proceeds from the sale of the Highland Home and a loan of $78,750 from Eric’s parents.1 The warranty deed, dated December 17, 2008, conveyed the property to “Eric Kawamura and Jessica Kawamura, husband and wife.” At closing, Eric and Jessica placed their initials on the warranty deed next to their names as “Grantee.” After Jessica filed this divorce action, the case proceeded to trial on issues relating to the characterization and division of the parties’ property. The magistrate court found that the Gwen Home was Eric’s separate property because it was purchased with the proceeds the sale of the Johnson Home. Although the magistrate court recognized that a portion of the purchase price of the Gwen residence was paid with the loan from Eric’s parents, the magistrate court did not discuss the legal significance, if any, of that fact. Indeed, apart from recognizing that “the parties’ community property and debt should be divided in a substantially equal manner as required by Idaho Code § 32-712,” the magistrate court’s memorandum decision is utterly silent as to any statute or case law that it may have considered in reaching its legal conclusions. The magistrate court held that there was no community interest in the Gwen Home. The court reasoned that although the loan from Eric’s parents was partially repaid from Eric’s salary, which was community property, there was no claim for community reimbursement because the value of the home had dropped from $172,291 to $165,000. Jessica appealed. On appeal, the district court reversed and remanded, holding that the magistrate court should have found that warranty deed language conveying the Gwen Home to Jessica and Eric as husband and wife was conclusive as to the character of the property. The district court further concluded that the magistrate court erred in its determination that there was

1 The loan from Eric’s parents was interest-free. At trial, the parties disputed the amount of the loan that had been repaid. Jessica testified that automatic payments were deducted from Eric’s paycheck at the rate of $800 per month. Eric testified that he made $400 payments twenty-six times per year. Eric’s mother testified that $43,550 was owed on the loan at the time of trial, while Jessica testified that $45,575 was owed. The magistrate court did not make a finding regarding the balance of the loan.

2

no community interest in the Gwen Home because the payments made on the home were made from community property which increased the equity in the home. Eric timely appealed to this Court. II. STANDARD OF REVIEW “When reviewing the decision of the district court acting in its appellate capacity, this Court directly reviews the district court’s decision.” Kraly v. Kraly, 147 Idaho 299, 302, 208 P.3d 281, 284 (2009). The Supreme Court reviews the trial court (magistrate) record to determine whether there is substantial and competent evidence to support the magistrate’s findings of fact and whether the magistrate’s conclusions of law follow from those findings. If those findings are so supported and the conclusions follow therefrom and if the district court affirmed the magistrate’s decision, we affirm the district court’s decision as a matter of procedure. Pelayo v. Pelayo, 154 Idaho 855, 858, 303 P.3d 214, 217 (2013) (quoting Bailey v. Bailey, 153 Idaho 526, 529, 284 P.3d 970, 973 (2012)). “This Court exercises free review over conclusions of law.” Barrett v. Barrett, 149 Idaho 21, 23, 232 P.3d 799, 801 (2010). The characterization of property as either community or separate presents a mixed question of law and fact. Kraly, 147 at 303, 208 P.3d at 285. Although the manner and method of acquisition of property are questions of fact for the trial court, the characterization of an asset in light of the facts found is a question of law over which we exercise free review. Id. III. ANALYSIS Eric challenges two aspects of the district court’s decision. First, he challenges the district court’s determination that the magistrate court erred by considering parol evidence in order to determine the separate or community property character of the Gwen Home. Eric further argues that the district court erred in its alternative analysis. In this alternative analysis, the district court decided that if the Gwen Home was Eric’s separate property, the community would be entitled to reimbursement for equity in the home resulting from the use of community funds to pay down the loan from Eric’s parents. The magistrate court did not find the deed to the Gwen Home to be ambiguous; rather, it characterized the fact that Eric and Jessica were named as grantees as “some evidence of the nature of the Gwen property.” The district court reversed, holding the magistrate court erred by

3

considering parol evidence because the deed was unambiguous.2 This conclusion was based upon a recent statement from this Court which, as will be discussed, was erroneous. In Hall v. Hall, 116 Idaho 483, 777 P.2d 255 (1989), this Court considered whether the magistrate court erred in determining that real property, purchased with community funds and deeded to husband and wife, was “part community in nature and part separate.” Id. There, husband’s grandmother claimed that the property was worth substantially more than the purchase price and that “the value above the purchase price was meant to be a gift to the husband alone.” Id. at 484, 777 P.2d at 256. This Court found that the magistrate court erred by admitting the grandmother’s testimony, stating: Where possible, the court should give effect to the intention of the parties to a deed. Where the language of a deed is plain and unambiguous the intention of the parties must be determined from the deed itself, and parol evidence is not admissible to show intent. Oral and written statements are generally inadmissible to contradict or vary unambiguous terms contained in a deed. If the language in the deed is ambiguous, then evidence of all the surrounding facts and circumstances is admissible to prove the parties’ intent. The parol evidence rule does not preclude the use of extrinsic evidence to explain the parties’ intent when the provisions of a writing are ambiguous. Where, as here, the consideration clause clearly recites that the transfer was made “For Value Received,” parol evidence is not admissible to contradict the deed by attempting to show the transfer was in part a “gift” rather than “for value.” Id. (internal citations and footnote omitted). Subsequent decisions from this Court make it clear that it is a mistake to interpret Hall as holding that an unambiguous deed is conclusive as to the character of property acquired by that deed. In Kraly, 147 Idaho 299, 208 P.3d 281, during the course of the parties’ brief marriage, husband used the proceeds of the sale of his separate property to purchase a parcel of real property. Id. at 301, 208 P.3d at 283. The warranty deed conveyed the property to Mr. and Mrs.

2 The district court defined the question before it as one of transmutation of Eric’s separate property by operation of the warranty deed. Although it does not alter the outcome of this appeal, the district court inaccurately defined the question before it. “Transmutation” is defined as: “A change in the nature of something: esp., in family law, the transformation of separate property into marital property, or of marital property into separate property.” Black’s Law Dictionary 1638 (9th ed. 2009); see also Ustick v. Ustick, 104 Idaho 215, 223, 657 P.2d 1083, 1091 (Ct. App. 1983) (“Transmutation is a broad term used to describe arrangements between spouses which change the character of property from separate to community and vice versa.”). “The character of an item of property as community or separate vests at the time of its acquisition.” Matter of Freeburn’s Estate, 97 Idaho 845, 849, 555 P.2d 385, 389 (1976). As there is nothing in the record suggesting that the parties took any action evidencing an intention to change the character of the Gwen Home from separate to community or vice versa following its acquisition, the facts of this case do not present a question of transmutation.

4

Kraly as “husband and wife.” We rejected wife’s claim that because “the warranty deed unambiguously identifies the … property as community property” it was “dispositive as to the property’s character.” Id. at 302, 208 P.3d at 284. Instead, we described the analysis employed to determine the character of property: Whether a specific piece of property is characterized as community or separate property depends on when it was acquired and the source of the funds used to purchase it. The character of property vests at the time the property is acquired. Property acquired during a marriage is presumed to be community property. The presumption can be overcome if the party asserting the separate character of the property carries his burden of proving with reasonable certainty and particularity that the property acquired during marriage is separate property. Id. at 303, 208 P.3d at 285 (internal citations and footnote omitted). In Barrett, 149 Idaho 21, 232 P.3d 799, we considered a case where, in the course of refinancing her separate property, wife executed a quitclaim deed to herself and her husband as tenants by the entirety. The magistrate judge presiding over their subsequent divorce action agreed with husband’s contention that this transmuted the property from separate to community. The magistrate court found the deed to be unambiguous and excluded extrinsic evidence as to wife’s intent. Id. at 22, 232 P.3d at 800. The district court remanded the case for the magistrate court to consider parol evidence in its determination whether husband had met his burden of proving transmutation. Id. at 22–23, 232 P.3d at 800–01. We affirmed the decision of the district court. In our discussion, we noted that we had occasionally made statements regarding the effect of deeds that had “obscured” the governing rule of law. Id. at 24, 232 P.3d at 802. Our decision in Barrett largely relied on our previous decision in Winn v. Winn, 105 Idaho 811, 673 P.2d 411 (1983). We explained that in Winn, a case involving a property purchase concluded some months after the marriage using separate property of the husband, the Court considered a variety of factors to be considered in the absence of the parties’ “actual, articulated intent”: (1) whether the community was liable for payment on the loan; (2) the source of the payments toward the loan; (3) the basis of credit upon which the lender relied in making the loan; (4) the nature of the down payment; (5) the names on the deed; and (6) who signed the documents of indebtedness. Id. at 814–15, 673 P.2d at 414–15. This Court explained: [t]he presence or absence of any or all of the above listed factors is relevant in determining the character of the credit by which a loan is obtained. None is conclusive. We deliberately refrain from selecting one item as dispositive. Such an approach is too rigid in light of our ultimate purpose of determining the likely intent of the

5

spouses and in consideration of the highly individualistic and often complex fact situations presented. Id. at 815, 673 P.2d at 415. The fact that Winn involved the purchase of new property rather than the question of whether existing property was transmuted does not change the analysis here. Winn was clear in its holding that evidence beyond the deed itself could be introduced to determine the character of property even where that determination might differ from the language of the deed. Barrett, 149 Idaho at 24, 232 P.3d at 802. Unfortunately, in a decision authored after Barrett, this author spawned further confusion by serving up erroneous dicta which the district court relied upon in deciding Jessica’s appeal: Although unnecessary to the determination of this appeal, we feel it is important to reiterate the limited scope of our holding in Barrett v. Barrett, 149 Idaho 21, 232 P.3d 799 (2010). In that case we held that “the language of a deed executed in the course of refinancing does not conclusively determine the character of property for purposes of a divorce action.” Id. at 24, 232 P.3d at 802. That is a narrow exception to the general requirement that deeds are to be interpreted by their plain language. This Court recognized that when a deed is executed at the behest of a bank during refinancing, it is not necessarily a completely accurate portrayal of the grantor’s intent. Barrett should not be interpreted as allowing extrinsic evidence in other situations where the deed is unambiguous. Garrett v. Garrett, 154 Idaho 788, 791 n.1, 302 P.3d 1061, 1064 n.1 (2013). Today, we reiterate our decisions in Barrett and Winn and repudiate the dicta in Garrett. However, as the character of property is a question of law to be decided upon the facts found by the trial court, we affirm the district court’s decision reversing the magistrate court’s conclusion of the character of the Gwen Home on alternative grounds. The Gwen home was purchased during the course of the marriage. Thus, it was presumptively community property. The community was liable to repay the loan from Eric’s parents. The community was the source of the funds used to make payment on the loan. Eric and Jessica were named as grantees in the deed to the Gwen Home, a fact that they acknowledged at the time of its acquisition by their initials on the deed. The only evidence favoring Eric’s claim that the Gwen Home was Eric’s separate property is the fact that his separate property was the source of the down payment on the home. This single fact is insufficient to overcome the presumption that the Gwen Home was community property.3 In light of this holding, we do not

3 Eric likely has a claim against the community for reimbursement of his separate estate for separate property that can be traced to the down payment on the Gwen Home. Matter of Freeburn’s Estate, 97 Idaho 845, 850, 555 P.2d 385, 390 (1976).

6

reach the district court’s alternative analysis that would apply if the Gwen Home were separate property. IV. CONCLUSION For the foregoing reasons, we affirm the district court’s decision to reverse the magistrate court’s conclusion that the Gwen Home was Eric’s separate property. We award costs on appeal to Jessica. Chief Justice J. JONES and Justices EISMANN and BURDICK, CONCUR. W. Jones, J. specially concurring: Although I agree that the decision of the district court should be affirmed, I write to clarify that I adhere to my dissent in Barrett v. Barrett, 149 Idaho 21, 26, 232 P.3d 799, 804 (2010). This case could similarly be interpreted based entirely on the fact that the deed was unambiguous and the black letter law in real property transactions is that parol evidence is not admissible for interpreting an unambiguous deed. Thus, I would affirm the decision of the district court that the magistrate court improperly considered parol evidence. “When an instrument conveying land is unambiguous, the intention of the parties can be settled as a matter of law using the plain language of the document and without using extrinsic evidence.” Camp Easton Forever, Inc. v. Inland Nw. Council Boy Scouts of Am., 156 Idaho 893, 899–900, 332 P.3d 805, 811–12 (2014); Porter v. Bassett, 146 Idaho 399, 404, 195 P.3d 1212, 1217 (2008). In this case, when Eric and Jessica bought the Gwen property, the deed issued that property to “Eric Kawamura and Jessica Kawamura, husband and wife.” Both Eric and Jessica placed their initials on the warranty deed next to their names as “Grantee.” Because there is no ambiguity in the interpretation of the deed, no extrinsic evidence is necessary beyond the language of the deed. Therefore, the property conclusively belongs to “Eric Kawamura and Jessica Kawamura, husband and wife.” This Court has very subtly changed what has been the law of Idaho regarding property for the last hundred years. In conveyances of real property, where a deed is unambiguous and clear it is conclusive and parol evidence is not admissible to alter or vary its terms. The first rule of construction to be applied to a written instrument in order to determine what is intended by it is that resort shall be had to the language of the instrument itself, and if the expressed meaning is plain on the face of the

7

instrument it will control. The intention must be ascertained from the language of the deed itself where that is not ambiguous.

Meir-Nandorf v. Milner, 34 Idaho 396, 201 P. 720, 721 (1921) (quotations and citations omitted).

In a divorce case the court must deal with determining the nature of the property (separate or community), as well as the distribution of the property (to husband or wife). The majority seems to be inappropriately attempting to merge the considerations for determining the division of marital property with the interpretation of an unambiguous property deed. This is a mistake. The assignment of property in a marital divorce is a different consideration from the question of whether a deed is ambiguous. Indeed, the Majority goes further than it did in the Barrett case where the consideration of outside evidence only applied to a refinancing situation. As I emphasized in my dissent in Barrett, unambiguous deeds are to be determined by what they say. The Court muddied the waters of property law in Barrett, by allegedly creating a “narrow exception” to the general rule, and now goes further by indicating that Barrett was not a narrow holding at all. The question now becomes whether this Court will say that all real estate transactions by all parties, regardless of the financing, are examined for the intent of the parties regardless of the clarity of the deeds. Additionally, as I pointed out in my dissent in Barrett, the Court still fails to give an explanation as to why property transactions that involve husbands and wives should be treated differently than deeds between complete strangers or between husbands and wives in situations other than divorce. Although implied, the majority fails to state that this holding applies only to the interpretation of deeds between married couples. The implications of allowing parol evidence in interpreting unambiguous property deeds will lead to uncertainty in all property transactions. This uncertainty will affect all parties involved in real property transactions, including lending institutions and title insurance companies. Therefore, I would affirm the decision of the district court that the magistrate improperly considered parol evidence in its interpretation of the Gwen property deed. Because this deed was unambiguous, its interpretation need go no further than the language of the deed itself. As stated in the deed, the Gwen home was not Eric’s separate property, but belonged to both “Eric Kawamura and Jessica Kawamura, husband and wife.”

8

IN THE SUPREME COURT OF THE STATE OF IDAHO

Docket 42161

JANET RICE, individually, and as successor ) in interest of EUGENE RICE, deceased, and ) REAL PROPERTIES, LLC, an Idaho limited ) liability company, ) ) Plaintiffs-Counterdefendants- ) Respondents, ) ) v. ) Boise, September 2015 Term )

DENNIS SALLAZ and REAL HOMES, LLC, ) 2015 Opinion No. 96 an Idaho limited liability company, )

) Filed: September 25, 2015 Defendants-Appellants, )

) Stephen W. Kenyon, Clerk and ) ) GLENN TREFREN and TRADESMAN ) CONTRACTORS AND CONSTRUCTION, ) LLC, an Idaho limited liability company, ) ) Defendants-Counterclaimants- ) Appellants. ) ______)

Appeal from the District Court of the Third Judicial District of the State of Idaho, Canyon County. Hon. Juneal C. Kerrick, District Judge.

The judgment of the district court is affirmed in part and vacated in part, and the case is remanded.

Vernon K. Smith, Boise, for appellants.

J. Kahle Becker, Boise, for respondents.

______

J. JONES, Chief Justice Defendant Dennis Sallaz and Defendants/Counterclaimants Glenn Trefren and Tradesman Contractors and Construction, LLC, (collectively “Appellants”) appeal the district

1

court’s holding they could not recover breach of contract damages or obtain equitable relief for the failure of Plaintiff/Counterdefendant Real Properties, LLC, to pay the full purchase price under an agreement for the sale and purchase of Real Homes, LLC. Although the district court found that the contract between Sallaz and Trefren, as sellers, and Real Properties, as buyer, was valid, it held that Real Properties’ performance of the contract was excused because of a material breach by the sellers. The Court held that equitable relief was not available because of the existence of the contract. I. FACTUAL AND PROCEDURAL BACKGROUND Dennis Sallaz and Renee Baird married in 1996. After having separated in the fall of 2003, they divorced on July 28, 2005. The property and debt issues were hotly contested, tried before the court on four separate occasions between November of 2005 and July of 2006, and determined in a written decision entered on October 30, 2007. Among the assets at issue in the divorce trial were Real Homes, LLC, and the real property thought to be owned by that entity. Sallaz and Baird presented conflicting evidence, including different forms of the operating agreement and various other documents, that made it unclear who had an ownership interest in Real Homes. The original articles of organization for Real Homes were filed on January 19, 2001, listing Sallaz as the registered agent and Baird as the manager. In 2003, Sallaz filed amended and restated articles of organization, listing himself as a member and signing the document as “owner.” An operating agreement introduced into evidence by Baird, signed and dated January 19, 2001, provided that she was the 100% owner of Real Homes. Another version offered by Sallaz provided that he owned 50% of Real Homes with the other 50% being owned by Glenn Trefren, each purportedly having contributed $25,000 in value.1 This document was signed by both Sallaz and Trefren but included no date on the signature page or otherwise. With the exceptions of the names of initial contributors and the signatures, the operating agreements provided by Sallaz and by Baird were essentially identical. Both versions provided that Real Homes would dissolve upon the occurrence of any of a number of specified events, including the “sale of all or substantially all of the LLC’s assets.”

1 The judge in the divorce case found that “[t]he evidence at trial established that Mr. Trefren did not make such a contribution.”

2

In February 2001, Real Homes purchased five acres of land and divided it into four lots referred to as lots 1A, 1B, 2A, and 2B. Real Homes purchased interests in two additional lots in 2002, referred to by the parties as the Smith Property. In 2004, Lot 1B was transferred from Real Homes to Sallaz and Baird as individuals, and Baird began to reside in a home on that lot after she and Sallaz separated. On February 16, 2005, Trefren, purportedly acting as a member of Real Homes, executed a quitclaim deed to grant all real property owned by Real Homes to Tradesman, his own LLC. This deed purported to include the transfer of Lot 1B to Tradesman, even though that lot had apparently already been transferred to Baird in 2004.2 Sallaz is an attorney and was the long-time counsel for plaintiffs, Eugene and Janet Rice and their LLC, Real Properties.3 On January 4, 2006, Sallaz formed Real Properties for the Rices. Two days later, on January 6, 2006, Sallaz and Trefren entered into a contract with Real Properties titled “Purchase Agreement for Sale of Interest in Real Homes, LLC.” This contract identified Trefren and Sallaz as “Seller” and Real Properties as “Buyer.” The agreement recited that it was purportedly for the sale to Real Properties of (1) 100% of the ownership interest in Real Homes from Trefren and Sallaz as individuals, and (2) “all right, title and interest in and to all real property owned by Real Homes, LLC as set forth on Exhibit A attached hereto.” Attachment A to the agreement described the four lots (1A, 1B, 2A, and 2B) purchased by Real Homes in 2001 as well as the Smith Property.4 The contract was signed by Sallaz as an individual “Co-Owner,” Trefren as an individual “Co-Owner,” and Trefren as a “Co-Owner” on behalf of Real Homes. Eugene Rice signed as manager of Real Properties. In exchange for 100% of the interest in Real Homes, Real Properties was to pay $250,000 in the manner specified in the agreement. The Rices paid from their personal funds approximately $68,000 of the purchase price. Under the agreement, Sallaz and Trefren warranted among other things that: (1) they owned 100% of Real Homes; (2) they “have good and marketable title to said Ownership Interest

2 With respect to this particular parcel, on February 27, 2009, Sallaz in his individual capacity quitclaimed his interest in Lot 1B to Real Homes. Also acting in his individual capacity, Sallaz quitclaimed his interest in Lot 1B to Baird on March 2, 2009. 3 Eugene Rice is now deceased. 4 As noted above, at the time the purchase agreement was entered into, Real Homes did not own any real property, the same having been deeded to Tradesman by Trefren on February 16, 2005. In their opening brief on appeal, Appellants assert that Mr. Trefren was concerned about Baird’s dealings with the assets of Real Homes and that “he proposed, and Dennis Sallaz agreed, to have the assets of Real Homes transferred to Tradesman . . . which action put those assets out of Baird’s reach.”

3

being sold and transferred hereunder with absolute right to sell, assign and transfer same to Buyer free and clear of all liens, pledges, security interests or encumbrances and without any breach of any agreement to which he is a party;” (3) “all real properties owned by Real Homes, LLC, and being transferred herein are free and clear of all encumbrances;” and (4) “Real Homes, LLC has free and clear title to [the described] real properties and Sellers shall execute any and all documents requested by Buyer to transfer all interest therein to Buyer.” On March 2, 2006, Trefren recorded four separate quitclaim deeds dated January 6, 2006. The first purported to convey Lots 1A, 2A, and 2B from Tradesman to Real Properties. The second purported to also convey Lots 1A, 2A, and 2B from Real Homes to Real Properties. The third purported to convey the Smith Property from Tradesman to Real Properties. The fourth purported to also convey the Smith Property from Real Homes to Real Properties. The purchase and sale agreement was not disclosed to Baird until April 2006, at the divorce trial. On March 6 and 10, 2006, respectively, Sallaz assigned his interest in the purchase and sale agreement to an attorney representing him in another case in the amount due that attorney and to Trefren in any remaining amount owing Sallaz under the agreement. Following trial, the judge hearing the divorce case found that the version of the operating agreement offered by Baird was the original operating agreement for Real Homes, meaning that she was the 100% owner at the time of formation. The court further found that Baird’s full ownership meant that any changes to the operating agreement without her approval were void and that she, therefore, retained her 100% interest in Real Homes, including all its assets and liabilities. These assets were thought to include Lots 1A, 2A, 2B, and the Smith Property. The divorce judge also noted that there were potential third-party claims to Real Homes and its assets but that the court could not rule on those claims in the divorce action. The Rices, Real Properties and Real Homes brought the current action against Baird, Sallaz, Trefren, and Tradesman,5 seeking among other things: (1) to declare the validity of the

5 In their brief, Respondents contend that Sallaz, their personal attorney, urged the Rices to bring this action against him in order to quiet title to the property that Real Homes purportedly sold to Real Properties. According to Respondents, “[t]his case was initiated by the Rices and Real Properties, LLC at the request and direction of Dennis Sallaz and his assignee, Glenn Trefren.” As support for this contention, Respondents cite to a letter in the record written by Sallaz to plaintiffs’ former counsel, the attorney who filed this action against Sallaz, Trefren, and Tradesman, advising that “[b]oth Trefren and myself are willing and supporting Defendants and stand ready to participate to the max.” For his part, Sallaz contended that he and the Rices “were the best of friends jointly suing my ex-wife, Renae Baird, to quiet title on the Real Homes, LLC properties.” He also said that he “was still Rice’s best and only friend and attorney up to 2011,” and that “[i]t was I, who after many conversations with Rice about the

4

purchase and sale agreement; (2) to quiet title in the subject real property in Real Properties; (3) unjust enrichment damages; and (4) damages for breach of the purchase and sale agreement. By the time of trial, plaintiffs’ only remaining claim was count 5, alleging breach of the purchase and sale agreement.6 Baird had been removed as a defendant after the Rices agreed not to pursue any claim they may have had against Lot 1B where Baird had been living. Sallaz filed an answer with a number of affirmative defenses. Trefren and Tradesman filed an answer asserting a three- count counterclaim. The district court held a bench trial on Real Properties’ breach of contract claim and Trefren’s and Tradesman’s counterclaims. The district court found that Real Properties’ count 5 sought damages for Sallaz’ and Trefren’s alleged breach of warranties in the agreement that they had good and marketable title to the membership interests in Real Homes and the absolute right to transfer those interests. This alleged breach was primarily premised on Real Properties’ argument that Baird had a 100% ownership interest in Real Homes, as found by the court in the divorce action. The defendants moved to dismiss count 5, arguing Real Properties failed to prove that Baird was a member of Real Homes at the time of the agreement. The district court granted defendants’ motion, finding, contrary to the decision in the divorce case, that the operating agreement offered by Sallaz showing that he and Trefren were the 50/50 owners of Real Homes represented the actual ownership interests in that entity.7

necessary quiet title action, recommended that we engage my attorney . . . to represent all three of us in the Real Homes, LLC property sale and purchase and quiet title action.” He contended, however, that the attorney who filed the complaint recommended that Sallaz and Trefren be designated as defendants, rather than plaintiffs, contrary to Sallaz’ original concept. 6 As written, count 5 in the complaint was brought as an alternative claim, premised on a situation where the court would find “the purchase and sale agreement invalid or unenforceable.” Count 5 designated Real Homes as a defendant, whereas it had been a plaintiff for the declaratory and quiet title claims. The trial court found that count 5 should have been premised on the court finding the purchase and sale agreement was “valid and enforceable,” because the claim is based on a breach of that agreement. The parties do not appeal this finding and we will not disturb it. 7 The district court made this finding in its memorandum decision entered on February 28, 2014. The court could not have known at the time that this Court would enter a final decision in the Baird/Sallaz divorce case six months later, affirming the district court’s intermediate appellate decision affirming the magistrate judge’s findings of fact, conclusions of law, and decision in the divorce action. Sallaz v. Sallaz, 157 Idaho 342, 336 P.3d 275 (2014). In that appeal, Sallaz did not challenge the findings of fact and conclusions of law regarding the division of community property and indebtedness. Rather, he raised a specious claim that there had never been a valid marriage between the two, in spite of the fact that he had never previously raised the issue in the divorce action and had, indeed, sworn under oath that the parties were married. Id. at 347, 336 P.3d at 280. In their opening brief on appeal in this case, the Appellants grudgingly acknowledged the Court’s decision in the divorce case, saying “the Idaho Supreme Court upheld the existence of that marriage, including the community property interests that Ms. Baird derived from her ‘ownership’ of Real Homes, on what can only be characterized as a pseudo-common law basis.”

5

In count 1 of the counterclaim, Trefren claimed Real Properties breached the purchase and sale agreement by failing to pay the agreed amount of $250,000. The district court agreed that Real Properties breached the agreement but also found that Real Properties was excused from performance because a material breach by defendants defeated the fundamental purpose of the contract. The court found that Real Homes had sold all or substantially all of its assets upon the execution of the purchase and sale agreement, which required the LLC to be wound up under the terms of its operating agreement. It further found that Idaho law does not authorize the transfer of interests in the winding up of an LLC. The court reasoned that because the transfer of the ownership interest was not authorized under Idaho law, the defendants breached the covenant that they had the “absolute right to sell, assign and transfer the same to Buyer … without any breach of any agreement to which” they were a party and, in fact, were not authorized to transfer their member interests in Real Homes to Real Properties. The court, therefore, dismissed count 1. However, the court found that the transfer of the ownership interests in Real Homes took place as a factual matter, despite being unauthorized, meaning Real Properties had control of Real Homes after the agreement was executed. In count 3 of the counterclaim, Trefren and Tradesman claimed they were entitled to recover for unjust enrichment if they could not recover damages for Real Properties’ breach of the purchase and sale agreement. The district court determined that Trefren and Tradesman could not pursue equitable relief because of the existence of a valid contract. The district court dismissed count 2 and that ruling has not been appealed. Following the district court’s decision, the defendants filed a motion for reconsideration, which was denied. They filed a timely appeal. II. ISSUES PRESENTED ON APPEAL 1. Whether the district court erred in holding that Real Properties’ performance of the purchase agreement was excused. 2. Whether the district court erred in dismissing Counterclaimants’ unjust enrichment claim. 3. Whether an award of attorney fees to any party is appropriate. III. STANDARD OF REVIEW When reviewing the decision of a trial court following a bench trial, this Court limits its review to “whether the evidence supports the findings of fact, and whether the findings of fact support the conclusions of law.” City of Meridian v. Petra Inc., 154 Idaho 425, 434–35, 299 P.3d

6

232, 241–42 (2013) (quoting Shore v. Peterson, 146 Idaho 903, 907, 204 P.3d 1114, 1118 (2009)). The Court does not set aside the trial court’s findings of fact unless clearly erroneous. Id. at 435, 299 P.3d at 242. However, the Court exercises free review over the trial court’s conclusions of law and may draw its own legal conclusions from the trial court’s findings. Id. The interpretation of an unambiguous contract and whether the terms thereof have been violated are questions of law. Id. In an unambiguous contract, its terms must be given their plain and ordinary meaning. Id. Whether a valid contract has been formed is generally a question of fact. Thomas v. Thomas, 150 Idaho 636, 645, 249 P.3d 829, 838 (2011). IV. ANALYSIS A. The district court erred in dismissing the Counterclaimants’ claim for breach of contract. The district court found the purchase and sale agreement was a valid contract on its face. It found that the express language of that agreement, together with the evidence adduced at trial, showed the obligations of the parties were to (1) transfer 100% of the interests of Sallaz and Trefren in Real Homes to Real Properties in exchange for Real Properties’ payment of $250,000, and (2) transfer all real property owned by Real Homes to Real Properties, for which no additional payment was required. The court found Real Properties did not perform its obligation to pay the purchase price as agreed. However, it also found that Real Properties was excused from such performance because Sallaz and Trefren materially breached the agreement by warranting they had the absolute right to sell 100% of their interests in Real Homes when, in fact, Idaho law prevented the transfer of those interests because Real Homes was required by the terms of the transaction to be wound up. Essentially, the court found the execution of the agreement triggered dissolution for Real Homes because it amounted to a sale of all or substantially all of that entity’s assets, and Idaho law does not authorize the transfer of ownership interests in the winding up of an LLC. Sallaz and Trefren argue they did not receive full payment despite performing all of their obligations under the agreement (1) to transfer their interests in Real Homes, and (2) to cause the real property described in the agreement to be transferred to Real Properties. Appellants argue the district court erred in finding the execution of the agreement to be a dissolution event because (1) Real Homes did not transfer any property to Real Properties, as it did not actually own the property at the time of the execution, so the property transfer could not have amounted to the

7

transfer of all of Real Homes’ assets, and (2) a property-development entity such as Real Homes may, in the ordinary course of its business, acquire several properties and then liquidate its assets and this common business practice should not result in an unexpected, involuntary dissolution.8 Real Properties argues that Real Homes is the only entity that may have had a claim with respect to the real property transferred to Real Properties under the agreement, and Sallaz and Trefren failed to assert any such claims on behalf of Real Homes below. Once a party to a contract has proven another’s breach of that contract, the breaching party has the burden of pleading and proving affirmative defenses that may legally excuse performance. Idaho Power Co. v. Cogeneration, Inc., 134 Idaho 738, 747, 9 P.3d 1204, 1213 (2000). “A material breach is more than incidental and touches the fundamental purpose of the contract, defeating the object of the parties entering into the agreement.” Borah v. McCandless, 147 Idaho 73, 79, 205 P.3d 1209, 1215 (2009). “If a breach of contract is material, the other party’s performance is excused.” J.P. Stravens Planning Assocs., Inc. v. City of Wallace, 129 Idaho 542, 545, 928 P.2d 46, 49 (Ct. App. 1996) (citing Ervin Constr. Co. v. Van Orden, 125 Idaho 695, 700, 874 P.2d 506, 511 (1993)). “[W]hether there was a breach of the terms of a contract is a question of fact. Whether such a breach is material is also a factual question.” Borah, 147 Idaho at 79, 205 P.3d at 1215 (internal citations omitted). During the relevant periods, the LLCs in this case were governed by the Idaho Limited Liability Company Act, Idaho Code sections 53-601 through 53-672.9 The Act provided, “[a] limited liability company is dissolved and its affairs shall be wound up … upon the occurrence of events specified in writing in the articles of organization or an operating agreement.” I.C. § 53- 642 (repealed effective 2010). The Act authorized those responsible for winding up an LLC to perform a number of enumerated actions. I.C. § 53-644(2) (repealed effective 2010). This list of actions does not expressly include the authorization to transfer membership interests in the

8 Appellants make only very brief argument on this latter point, which is unconvincing. It is the language contained in their own operating agreement that requires dissolution upon the sale of all assets. Therefore, it is unreasonable for them to argue such a sale cannot result in dissolution. They do cite to one case in support of this argument, Blaine Cnty. Title Assoc. v. One Hundred Bldg. Corp., 138 Idaho 517, 521, 66 P.3d 221, 225 (2002). However, the page to which they cite shows the Court very generally relying in part on a standard business practice in making its decision. The case does not at all speak to the specific practices at issue here and does not appear to support Appellants’ position. 9 This Act was subsequently replaced by the Idaho Uniform Limited Liability Act, which became effective July 1, 2010. I.C. §§ 30-6-101 et seq. In 2015, the Idaho Legislature repealed the Uniform Act, effective July 1, 2017. 2015 Idaho Sess. Laws ch. 243, § 2. No party argues the district court erred in applying the Idaho Limited Liability Company Act.

8

winding up of an LLC. See id. The district court concluded Real Homes dissolved upon the execution of the agreement because its operating agreement provided that it would dissolve upon the sale of all or substantially all its assets, and executing the agreement amounted to such an event. The court therefore found that under Idaho Code section 53-642 this event required Real Homes to be wound up. But the record does not support the district court’s conclusion that Real Homes was dissolved by the execution of the purchase and sale agreement. The court’s conclusion is problematic for several reasons. First, the court raised the theory of dissolution sua sponte. Evidence was not adduced at trial that was aimed at proving dissolution, nor did either party mention the possibility of dissolution in their written closing arguments.10 Second, the logical sequence of executing the purchase and sale agreement and the quitclaim deeds makes the sale of the land recited in the agreement superfluous and of no legal effect. The purchase and sale agreement appears to be the document by which the parties intended to transfer the interests in Real Homes to Real Properties. There is not a separate document in the record purporting to officially transfer the ownership interests. At the moment the parties executed that agreement, all equity interest of Sallaz and Trefren in Real Homes transferred to Real Properties and, consequently, all assets owned by Real Homes at that time passed to Real Properties, including any real property. Therefore, any recitation or execution of other documents purporting to transfer real property from Real Homes to Real Properties was superfluous. Any such recitation or execution was merely duplicative of the transfer that had already occurred with the transfer of the ownership interests. Once the agreement was signed, neither of its previous owners had any legal authority to transfer any property owned by Real Homes to Real Properties, because they no longer had the power to act on behalf of Real Homes. Third, and most importantly, it is clear that Real Homes no longer owned any of the real property described in the agreement. Real Homes had deeded all of its real property to Tradesman on February 16, 2005. Therefore, there was no actual transfer of any property owned by Real Homes when the agreement was executed, because Real

10 Although the district court raised the issue sua sponte, that problem was not raised by Appellants in their opening brief. When Appellants raised it in their reply brief it was mentioned only in passing and without argument or authority.

9

Homes owned no property as of that day.11 Additionally, even if there had been a dissolution event, the district court erred in concluding that one cannot legally transfer an ownership interest in an LLC after an event of dissolution. In reaching this conclusion, the court relied only on the language of Idaho Code section 53-644, which provided: (2) The persons winding up the business or affairs of the limited liability company may, in the name of, and for and on behalf of, the limited liability company: (a) Prosecute and defend suits; (b) Settle and close the business of the limited liability company; (c) Dispose of and transfer the property of the limited liability company; (d) Discharge the liabilities of the limited liability company; and (e) Distribute to the members any remaining assets of the limited liability company. I.C. § 53-644 (repealed effective 2010). Nothing in this section indicates that it is an exhaustive list of all actions permitted during the winding up of an LLC. It simply provides a number of actions that are expressly authorized to be taken by the LLC. This section speaks only to those actions that may be taken “in the name of, and for and on behalf of, the limited liability company.” Id.; see also Howard v. Perry, 141 Idaho 139, 143, 106 P.3d 465, 469 (2005). Here, the transaction to sell Sallaz’ and Trefren’s ownership interests was not an action taken for or on behalf of Real Homes, but was executed by each of them as individuals. Therefore, section 53- 644 does not apply. Because there was no dissolution event of Real Homes in 2006 and because Sallaz and Trefren would not have been prevented from selling their ownership interests regardless,12 the district court erred in determining Sallaz and Trefren materially breached the purchase agreement

11 It is worth noting that Real Homes’ transfer of all its property to Tradesman the prior year could have amounted to a dissolution event in 2005. There was testimony at trial regarding various cash amounts held by Real Homes at various times, so it is unclear whether the transfer of all the real property in 2005 would have amounted to substantially all of Real Homes’ assets. 12 Although Trefren and Sallaz were not precluded from transferring their ownership interests in Real Homes, the Court is concerned that Trefren and Sallaz purported to sell those interests while appearing to represent that Real Homes owned several parcels of property—none of which it actually owned. The price Real Properties was willing to pay for Real Homes was presumably based on the value of the property that was to accompany the acquisition. As a practical matter, Real Properties acquired nearly everything it was promised in the agreement—100% ownership of Real Homes and several parcels of property described in the agreement, excepting Lot 1B. However, the purchase agreement represented that Real Homes then owned all of the described real property free and clear of encumbrances and that it would be conveyed to Real Properties by Real Homes, not by Tradesman.

10

by transferring their interests. The district court determined that the purchase and sale agreement was valid and that Real Properties had breached the agreement by failing to pay the full purchase price. However, the district court erred in holding that Real Properties’ performance was excused and we therefore vacate such holding. Real Properties had asserted twenty-four affirmative defenses in its answer to the counterclaim, including quasi-estoppel, judicial estoppel, impossibility, breach of warranty of marketable title, lack of adequate consideration, intentional misrepresentation and fraud.13 It appears that some of these defenses were the subject of proof at the trial of this matter before the district court and such defenses will necessarily be the subject of further consideration on remand to the district court. B. Counterclaimants’ “unjust enrichment” claim. Trefren and Tradesman argue in count 3 of their counterclaim that if they are not entitled to breach of contract damages under count 1 they are entitled to recover on the theory of unjust enrichment. The district court dismissed this claim, reasoning that they could not recover for unjust enrichment where there is an express contract over the same subject matter. The court stated that it could not apply unjust enrichment where there was an enforceable contract, and it reiterated that it had found an enforceable contract in this case. Count 3 of the counterclaim alleges, That as a result of Defendant’s transfer of all right, title and interest in and to Real Homes, LLC and all property owned by Real Homes, LLC, and Plaintiff’s failure to pay and subsequent breach of the Purchase Sale Agreement, Plaintiff’s (sic) have been unjustly enriched as a result thereof, and the contract and all property transfers should be set aside with the parties being returned to their respective pre Purchase Sale Agreement positions. Based on this language, it appears that one, or possibly both, of the defendants sought rescission of the purchase agreement based on an unjust enrichment theory. However, following trial Trefren moved to amend count 3 “to conform to the evidence presented on the counterclaims.” The gist of the motion was to amend count 3 to seek quantum meruit recovery. In its memorandum decision, the district court observed that “Trefren had indicated an intention to

13 In their brief on appeal, Respondents state that they were asserting claims against Sallaz, personally, for legal malpractice and breach of fiduciary duty in connection with the Real Homes, Real Properties transaction in Ada County Case No. CV0C-2011-7253. The Court notes that on July 21, 2014, an Ada County jury found that Sallaz had acted as the Rices’ attorney in that transaction, had committed legal malpractice, and had breached his fiduciary duty, but assessed damages at zero. That case has been appealed to this Court and is currently pending as Docket No. 42698.

11

seek “restitution damages, based on unjust enrichment,” rather than rescission, and that count 3 was “apparently asserted by Trefren only.” However, the thrust of the motion to conform with the evidence was sought to assert a quantum meruit claim. It is not clear whether Trefren intended to abandon the unjust enrichment claim. The district court denied the motion to amend to conform with the evidence, finding: even if the implied-in-fact contract remedy applied here, Trefren has not identified evidence in the record demonstrating the reasonable value of the property he provided to Real Properties, LLC or Roy Rice under the alleged contract. In addition, even if the implied-in-fact contract remedy applied here, Trefren has not identified any evidence in the record demonstrating the reasonable value of the property—his interest in Real Homes, LLC—which he provided to Real Properties, LLC or to Roy Rice under the alleged contract. While the above finding appears to have been directed toward the quantum meruit theory that Trefren wished to pursue, it may also have application to any unjust enrichment claim made by Trefren. In order to make a claim for unjust enrichment, a party must show “(1) there was a benefit conferred upon the defendant by the plaintiff, (2) appreciation by the defendant of such benefit; and (3) acceptance of the benefit under circumstances that would be inequitable for the defendant to retain the benefit without payment to the plaintiff for the value thereof.” Med. Recovery Servs., LLC v. Bonneville Billing and Collections, Inc., 157 Idaho 395, 398, 336 P.3d 802, 805 (2014). However, whether or not Trefren presented a valid claim for unjust enrichment at trial is a matter for the district court to determine on remand. Remand is necessary with regard to count 3 because the district court premised dismissal of that claim on its holding on count 1— that the purchase contract was not enforceable by virtue of excuse of performance. Because we have vacated that holding, we must necessarily vacate the ground for dismissal of count 3. In Bates v. Seldin, the Court clarified the law regarding the interplay of unjust enrichment and express contract. 146 Idaho 772, 776–77, 203 P.3d 702, 706–07 (2008). The Court stated: Appellants argue that the doctrine of unjust enrichment is inapplicable where a contract exists between the parties. Appellants’ analysis, however, is incorrect. An award for unjust enrichment may be proper even though an agreement exists. The existence of an express agreement does not prevent the application of the doctrine of unjust enrichment. Only when the express agreement is enforceable is a court precluded from applying the equitable doctrine of unjust enrichment in contravention of the express contract. Once the jury determined that the contract was not enforceable because Appellants had proved an affirmative defense, the jury properly considered Respondents’ claim of unjust enrichment.

12

Id. at 776–77, 203 P.3d at 706–07 (internal citations omitted). Thus, because the availability of unjust enrichment depends upon the resolution of any related breach of contract claims, an unjust enrichment claim cannot be resolved before the contract claims. Thomas, 150 Idaho at 644, 249 P.3d at 837. Whether Trefren presented evidence establishing any claim for unjust enrichment will depend on the district court’s resolution of the breach of contract claim on remand. The district court’s dismissal of count 3 is vacated and the case is remanded for further proceedings. C. The issue of attorney fees is remanded for further proceedings. Appellants sought attorney fees at the district court under Idaho Code sections 12-120(3) and 12-121 and Idaho Rule of Civil Procedure 54, and they seek attorney fees on appeal under Idaho Code section 12-120(3). Respondents seek attorney fees on appeal under Idaho Appellate Rules 40 and 41, but have failed to cite a statutory basis for a fee award. The district court did not expressly rule on the issue of attorney fees, perhaps because it dismissed all claims by each party. Appellants are entitled to attorney fees only if they were the “prevailing party” under Idaho Code section 12-120(3) or section 12-121. “In this case, any determination of the prevailing party is ‘premature’ because the Court does ‘not yet know who will prevail in this action.’” Safaris Unlimited, LLC v. Von Jones, 158 Idaho 846, 353 P.3d 1080, 1085 (2015) (quoting Spokane Structures, Inc. v. Equitable Inv., LLC, 148 Idaho 616, 621, 226 P.3d 1263, 1268 (2010)). For the same reason, the Court declines to award either party attorney fees on appeal. At the conclusion of this litigation in district court, the court may in its discretion award attorney fees to the eventual prevailing party and may consider, to the extent it deems proper, an award of attorney fees for this appeal. Id. at 851, 353, P.3d at 1085. V. CONCLUSION We affirm the judgment of the district court, save and except the dismissal counts 1 and 3 of the counterclaim, which we vacate and remand to the district court for further proceedings. Neither party is awarded attorney fees on appeal. Costs to Appellants.

Justices EISMANN, BURDICK, W. JONES and HORTON CONCUR.

13

IN THE SUPREME COURT OF THE STATE OF IDAHO

Docket No. 42163

PHH MORTGAGE, ) ) Plaintiff-Third Party Defendant- ) Counterdefendant-Respondent, ) Boise, December 2015 Term ) v. ) 2016 Opinion No. 51

CHARLES NICKERSON and DONNA ) NICKERSON, ) Filed: April 27, 2016 ) Defendant-Counterclaimant-Third Party ) Stephen Kenyon, Clerk Complainant-Appellant, ) ) and ) ) COLDWELL BANKER MORTGAGE, a ) d/b/a of PHH MORTGAGE, and JP ) MORGAN CHASE BANK, NA. )

Third Party Defendants-Respondents. ) )

Appeal from the District Court of the Second Judicial District of the State of Idaho, Clearwater County. Hon. Michael J. Griffin, District Judge.

The judgment of the district court is affirmed.

Charles and Donna Nickerson, Orofino, pro se appellants.

Just Law Inc., Idaho Falls, for respondent PHH Mortgage. Elisa S. Magnuson argued.

Moffatt, Thomas, Barrett, Rock & Fields, Chartered, Idaho Falls, for respondent JP Morgan Chase Bank, N.A. Jon A. Stenquist argued.

______

HORTON, Justice. Charles and Donna Nickerson appeal from the grant of summary judgment in favor of PHH Mortgage and J.P. Morgan Chase Bank. The suit involved an action for judicial foreclosure of a loan by PHH Mortgage against the Nickersons, and third-party claims against J.P. Morgan Chase by the Nickersons. We affirm.

1

I. FACTUAL AND PROCEDURAL BACKGROUND In October of 2002, Charles and Donna Nickerson (the Nickersons) purchased approximately 50 acres of land in Clearwater County, Idaho. The Nickersons executed a promissory note and a Deed of Trust in favor of Coldwell Banker Mortgage1 in the principal sum of $285,000. The district court determined that the original loan to the Nickersons was made by Coldwell Banker Mortgage and was originally serviced by Mortgage Service Center. In December of 2002, the note was assigned to Fannie Mae, and J.P. Morgan Chase acquired the note in November of 2007, at which point Chase Home Financial began servicing the loan. In February of 2010, Mortgage Service Center resumed responsibility for loan servicing, and in June of 2010, Chase assigned the note to PHH. As of December 1, 2013, the amount due on the note, including interest, was $340,339.84. On January 10, 2011, PHH filed a complaint against the Nickersons claiming that the Nickersons had defaulted on their loan and seeking to foreclose. On August 12, 2011, the Nickersons answered the complaint. On February 1, 2012, the Nickersons filed an amended answer, counterclaim, and third-party complaint against Chase. The Nickersons’ answer, counterclaim, and third party complaint alleged, among other things: breach of the covenant of good faith and fair dealing, breach of note, breach of 12 U.S.C. § 2605, breach of the federal fair debt collection practices act, breach of the federal fair credit reporting act. In addition to these claims, the Nickersons also sought an award of punitive damages. On October 16, 2012, PHH and Chase each filed motions for summary judgment. On November 16, 2012, the district court granted in part and denied in part PHH’s motion for summary judgment and granted Chase’s motion for summary judgment. In granting Chase’s motion for summary judgment, the district court concluded, “Chase’s motion for summary judgment should be granted as to all of the Nickersons’ third party claims for failure to present any evidence to support the elements of those third party claims, and/or the claims are not proper because the cited statutes do not apply to the facts of this case.” In its partial denial of PHH’s motion for summary judgment, the district court stated: “PHH’s motion for summary judgment should be granted as to all of the Nickersons’ counterclaims for failure to present any evidence to support the elements of those counterclaims, and/or the counterclaims are not proper because the cited statutes do not apply to the facts of this

1 Coldwell Banker Mortgage is a subsidiary of PHH Mortgage.

2

case. Summary judgment should also be granted as to the Nickersons’ affirmative defense. . . .” However, the district court determined there was a genuine issue of material fact as to whether the Nickersons were in default in 2010 when PHH acquired its interest in the Nickersons’ loan. On December 5, 2012, the Nickersons filed a motion to reconsider. The motion stated that supporting documentation would soon be filed; however, on February 5, 2013, the district court denied the motion because the Nickersons had not presented a supporting memorandum following the motion. On February 25, 2013, the Nickersons’ attorney moved to withdraw. On May 15, 2013, the district court granted the withdrawal motion, and on August 19, 2013, the Nickersons filed a notice of appearance pro se. On November 12, 2013, PHH filed a second motion for summary judgment, again contending that the Nickersons were in default and that they had not presented evidence to the contrary. On December 17, 2013, the Nickersons filed their own motion for summary judgment, supported by the affidavit of Charles Nickerson. PHH moved to strike the affidavit, and the district court granted the motion in part. The district court set the hearing on the cross-motions for summary judgment for February 11, 2014. On February 5, 2014, the Nickersons filed an unsuccessful motion to continue the hearing. On April 4, 2014, the district court issued its order and final judgment granting PHH’s motion for summary judgment and denying the Nickersons’ motion for summary judgment. The district court concluded that the Nickersons had not presented evidence to support their conclusory allegation that they had not defaulted on their loan obligation. Following judgment, the Nickersons filed three motions to reconsider and a motion for leave to amend their answer, counterclaim, third-party complaint and demand for a jury trial. On May 6, 2014, the district court issued an order denying the Nickersons’ motions to reconsider, ruling them either untimely or inapplicable to a final judgment. On May 15, 2014, the Nickersons filed a “Motion for Justice” in Clearwater County Idaho, and on May 16, 2014, the Nickersons filed a motion to suppress and strike the depositions of Charles and Donna Nickerson, which had been taken on October 3, 2012, prior to the initial motion for summary judgment. On May 16, 2014, the Nickersons filed their notice of appeal. Subsequently, on June 6, 2014, the Nickersons filed a motion for relief with the district court. On June 11, 2014, the

3

district court denied the Nickersons’ motions for justice and relief. The district court treated the motions as motions to reconsider and concluded that the Nickersons still had not presented any admissible evidence that would create a genuine issue of material fact. On October 6, 2014, the Nickersons returned to the district court and filed a motion for relief from judgment or order. The Nickersons argued for relief under Idaho Rules of Civil Procedure 60(b)(1)-(3), and (6). Two weeks later, the Nickersons followed up by filing a motion to set aside judgment based on supplemental evidence of fraud on the court, filed October 21, 2014, and an edited motion to set aside judgment filed October 22, 2014. Those motions were both based on a claim of fraud under Idaho Rule of Civil Procedure 60(b)(3). The Nickersons argued they were entitled to relief based on: mistakes by the court; surprise due to the actions and withdrawal of their former counsel; excusable neglect due to their reliance on their former counsel; new evidence showing PHH did not have standing to pursue foreclosure; fraud regarding PHH’s chain of title, the amount of default, and coercion of the Nickersons at closing; and misconduct of the opposing parties regarding the depositions of the Nickersons and the submission of a fraudulent affidavit. The district court denied the Nickersons’ motions, concluding that the Nickersons failed to present admissible evidence to support their claims. The Nickersons now present the same arguments on appeal before this Court. II. STANDARD OF REVIEW “In an appeal from an order granting summary judgment, this Court’s standard of review is the same as that used by the trial court in ruling on the motion.” Summers v. Cambridge Joint Sch. Dist. No. 432, 139 Idaho 953, 955, 88 P.3d 772, 774 (2004). “Under Idaho Rule of Civil Procedure (IRCP) 56, summary judgment is proper ‘if 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.’ ” Edged In Stone, Inc. v. Nw. Power Sys., LLC, 156 Idaho 176, 180, 321 P.3d 726, 730 (2014) (quoting I.R.C.P. 56(c)). “If the evidence reveals no disputed issues of material fact, then summary judgment should be granted.” ParkWest Homes, LLC v. Barnson, 154 Idaho 678, 682, 302 P.3d 18, 22 (2013). “The Court should liberally construe all disputed facts in favor of the non-moving party.” Edged In Stone, 156 Idaho at 180, 321 P.3d at 730. “Inferences that can be reasonably made from the record are made in favor of the non-moving party.” Hoagland v. Ada Cnty., 154 Idaho 900, 907, 303 P.3d 587, 594 (2013).

4

“[W]hen the district court grants summary judgment and then denies a motion for reconsideration, ‘this Court must determine whether the evidence presented a genuine issue of material fact to defeat summary judgment.’ This means the Court reviews the district court’s denial of a motion for reconsideration de novo.” Bremer, LLC v. E. Greenacres Irrigation Dist., 155 Idaho 736, 744, 316 P.3d 652, 660 (2013) (quoting Fragnella v. Petrovich, 153 Idaho 266, 276, 281 P.3d 103, 113 (2012)). “The decision to grant or deny a motion under I.R.C.P. 60(b) is committed to the discretion of the trial court.” Printcraft Press, Inc. v. Sunnyside Park Utilities, Inc., 153 Idaho 440, 448, 283 P.3d 757, 765 (2012). A trial court’s decision whether to grant relief pursuant to I.R.C.P. 60(b) is reviewed for abuse of discretion. The decision will be upheld if it appears that the trial court (1) correctly perceived the issue as discretionary, (2) acted within the boundaries of its discretion and consistent with the applicable legal standards, and (3) reached its determination through an exercise of reason. A determination under Rule 60(b) turns largely on questions of fact to be determined by the trial court. Those factual findings will be upheld unless they are clearly erroneous. If the trial court applies the facts in a logical manner to the criteria set forth in Rule 60(b), while keeping in mind the policy favoring relief in doubtful cases, the court will be deemed to have acted within its discretion. Id. at 448–49, 283 P.3d at 765–66 (quoting Eby v. State, 148 Idaho 731, 734, 228 P.3d 998, 1001 (2010)). III. ANALYSIS The Nickersons argue the district court erred in a number of respects, including: granting summary judgment in favor of PHH; denying the Nickersons’ motion for summary judgment; denying the Nickersons’ motion for a continuance; not instructing the Nickersons to amend their pleadings to include fraud at the summary judgment hearing and later denying the Nickersons’ motion to amend their pleadings; denying the Nickersons’ motions for reconsideration; and denying the Nickersons’ Rule 60(b) motions for relief. These issues are discussed in turn. A. The district court did not err when it granted PHH’s second motion for summary judgment and denied the Nickerson’s motion for summary judgment. On November 14, 2013, PHH filed a second motion for summary judgment. PHH presented affidavits from Ron Casperite and Brandie S. Watkins and incorporated all previously filed documents in the record. The Nickersons’ motion for summary judgment against PHH was supported by the Affidavit of Charles Nickerson. In their motion, the Nickersons argued that PHH did not have standing to bring the complaint because: the documents claiming ownership

5

were fraudulent; the complaint referenced the wrong property; the note was not indorsed to PHH; the Deed of Trust was invalid and fraudulent; PHH initiated foreclosure proceedings prior to having a beneficial interest in the property; and no default existed. In response, PHH filed a motion to strike portions of the Affidavit of Charles Nickerson. The district court granted PHH’s motion, striking thirteen of the twenty-three paragraphs contained in Mr. Nickerson’s affidavit. The district court denied the Nickersons’ motion for summary judgment concluding that: the Nickersons had not shown prejudice due to the error in the legal description of the property in the complaint and that the Deed of Trust contained the correct description; the claim that PHH did not have standing was not supported by any evidence; the Nickersons did not allege fraud as an affirmative defense and the Nickersons had not presented any admissible evidence of fraud; the Nickersons had not presented any authority in support of their contention that a note cannot be assigned; and the Nickersons’ claim that they were not in default was conclusory and not supported by any evidence. On appeal, the Nickersons have waived most of the arguments advanced before the trial court in support of their motion for summary judgment and have only presented the same arguments they presented to the district court in opposition to PHH’s motion for summary judgment. The Nickersons argue that the transaction history provided by Chase and the illustrative loan history provided in the second affidavit of Ronald E. Casperite showed conflicting amounts due under the loan in 2009 and 2010, thus creating a genuine issue of material fact as to whether they were in default. We disagree. It is axiomatic that upon a motion for summary judgment the non-moving party may not rely upon its pleadings, but must come forward with evidence by way of affidavit or otherwise which contradicts the evidence submitted by the moving party, and which establishes the existence of a material issue of disputed fact. However, a mere scintilla of evidence or only slight doubt as to the facts is insufficient to withstand summary judgment; there must be sufficient evidence upon which a jury could reasonably return a verdict resisting the motion. Conclusory assertions unsupported by specific facts are insufficient to raise a genuine issue of material fact precluding summary judgment. Grabicki v. City of Lewiston, 154 Idaho 686, 690, 302 P.3d 26, 30 (2013) (internal quotations and citations omitted). “[O]nce the moving party has met its burden, the adverse party must present affirmative evidence that demonstrates the existence of a genuine issue of material fact.” Kootenai Cnty. v. Harriman-Sayler, 154 Idaho 13, 17, 293 P.3d 637, 641 (2012).

6

The Nickersons have not shown the existence of admissible evidence necessary to withstand PHH’s motion for summary judgment. Although the Nickersons did present the affidavit of Mr. Nickerson, the district court struck the majority of its contents and the Nickersons have not challenged that order on appeal. The Nickersons’ assertion that PHH has not provided any evidence of a valid claim of ownership of the debt lacks support in the record. The Nickersons did not present any other affidavits to the district court in response to PHH’s motion for summary judgment and merely drew legal conclusions based on the evidence submitted by PHH that are not supported by the record. Because the only evidence presented supports PHH’s claim that the Nickersons were in default, the district court did not err when it granted summary judgment to PHH on this issue. 1. The district court did not abuse it discretion when it denied the Nickersons’ motion to continue. On December 20, 2014, the district court set the hearing on the cross-motions for summary judgment for February 11, 2014. The Nickersons’ motion to continue the hearing asked that it be delayed until March 11, 2014. The Nickersons asserted the continuance was necessary due to work and extreme weather conditions and that they were not able to research and prepare for the summary judgment hearing and additional motions filed by PHH. PHH objected, arguing that none of PHH’s motions required additional time for research and the February 11, 2014, hearing date was set in order to afford the Nickersons adequate time to prepare for argument. The district court denied the Nickersons’ motion. The Nickersons’ appeal from the denial of their motion is based on the claim that Idaho Rule of Civil Procedure 7(b)(4) provides that, unless the parties stipulate to a telephonic hearing, summary judgment hearings must be in person and that they did not stipulate to a hearing by telephone. The decision whether to grant a motion to continue is committed to the sound discretion of the trial court. Everhart v. Washington Cnty. Rd. & Bridge Dep’t, 130 Idaho 273, 275, 939 P.2d 849, 851 (1997). The notice of hearing on the cross-motions for summary judgment provided notice to the parties that it would be conducted by telephone. The Nickersons’ motion to continue did not contain an objection to the hearing being conducted telephonically. The Nickersons appeared by telephone and fully presented their arguments. We do not reach the merits of the Nickersons’ claim that the district court erred by holding a telephonic hearing because any error did not affect the Nickersons’ substantial rights. Idaho Rule of Civil Procedure 61 requires that “[t]he court at every stage of the proceeding must disregard any error or defect in

7

the proceeding which does not affect the substantial rights of the parties.” Taylor v. AIA Services Corp., 151 Idaho 552, 559, 261 P.3d 829, 836 (2011). Thus, the Nickersons have not shown error in the district court’s denial of their motion to continue the hearing on the cross-motions for summary judgment. 2. The district court did not err by failing to instruct the Nickersons during the summary judgment hearing to amend their pleadings to include the affirmative defense of fraud. The Nickersons alleged fraud in their response to PHH’s motion for summary judgment. PHH argued that the Nickersons failed to state with particularity all circumstances of fraud, did not assert fraud as an affirmative defense, provided no facts or evidence to establish a prima facie case for fraud, and failed to fulfill their burden to support their claim that a genuine issue of material fact existed. In denying the Nickersons’ motion for summary judgment, the district court explained, “The Nickersons argue that PHH committed fraud, however, they did not allege fraud in their pleadings. No admissible evidence of fraud has been presented to the court. . . . The defendants did not allege fraud as an affirmative defense.” On appeal, the Nickersons argue that, under Idaho Rule of Civil Procedure 15(b) and our decision in McKee Bros., Ltd. v. Mesa Equip., Inc., 102 Idaho 202, 628 P.2d 1036 (1981), the district court should have instructed the Nickersons to amend their pleadings to include the affirmative defense of fraud. We disagree. “The only issues considered on summary judgment are those raised by the pleadings.” Esser Elec. v. Lost River Ballistics Techs., Inc., 145 Idaho 912, 919, 188 P.3d 854, 861 (2008). “I.R.C.P. 8(c) requires that the affirmative defense of fraud be set forth in the defendant's answer.” McKee Bros., 102 Idaho at 202, 628 P.2d at 1036. “Rule 9(b) requires that claims of fraud and mistake be pleaded with particularity. I.R.C.P. 9(b). This rule requires the alleging party to specify what factual circumstances constitute fraud or mistake.” Brown v. Greenheart, 157 Idaho 156, 164, 335 P.3d 1, 9 (2014). The Nickersons did not plead fraud in their answer nor in their amended answer. The Nickersons did not raise the issue of fraud during PHH’s and Chase’s first motions for summary judgment. The Nickersons’ reliance on our decision in McKee Bros. is misplaced. There, the district court “concluded that the defendant might be able to establish the necessary elements of fraud. . . .” McKee Bros., 102 Idaho at 202, 628 P.2d at 1036. As such, the district court granted the defendant leave to amend the answer to include a claim of fraud. Id. We affirmed, explaining

8

that a district court is “within its authority in conditioning the denial of summary judgment on the amendment of defendant’s answer.” Id. Here, the district court did not conclude the Nickersons might be able to establish the elements of fraud; rather, it expressly explained that the Nickersons had not presented any admissible evidence of fraud. Further, although a district court has the authority to condition denial of a motion for summary judgment upon amendment upon the non-moving party’s pleadings, there is no corollary rule that the failure to do so is an automatic ground for reversal. Therefore, we find that our holding in McKee Bros. is not a basis for finding the district court erred. The Nickersons’ reliance on Idaho Rule of Civil Procedure 15(a) is likewise misplaced. “Under I.R.C.P. 15(a) a party may amend his pleading once as a matter of course at any time before a responsive pleading is served. Once an answer has been filed, however, a party may amend a pleading only by leave of court.” DAFCO LLC v. Stewart Title Guar. Co., 156 Idaho 749, 755, 331 P.3d 491, 497 (2014) (internal citations and quotations omitted). In the absence of any apparent or declared reason—such as undue delay, bad faith or dilatory motive on the part of the movant, repeated failure to cure deficiencies by amendments previously allowed, undue prejudice to the opposing party by virtue of the allowance of the amendment, futility of amendment, etc.—the leave sought should, as the rules require, ‘be freely given.’ Of course, the grant or denial of an opportunity to amend is within the discretion of the District Court, but outright refusal to grant the leave without any justifying reason appearing for the denial is not an exercise of discretion; it is merely abuse of that discretion and inconsistent with the spirit of the Federal Rules. Clark v. Olsen, 110 Idaho 323, 326, 715 P.2d 993, 996 (1986) (quoting Foman v. Davis, 371 U.S. 178, 182 (1962)). “Timeliness alone is not a sufficient reason to deny a motion to amend.” DAFCO LLC, 156 Idaho at 756, 331 P.3d at 498. “The time between filing the original complaint and the amended complaint is not decisive. . . . [T]imeliness is important in view of the Foman factors such as undue delay, bad faith, and prejudice to the opponent.” Carl H. Christensen Family Trust v. Christensen, 133 Idaho 866, 871, 993 P.2d 1197, 1202 (1999). “Appropriate factors to consider include whether the proposed amendment would delay upcoming hearings or trial, whether the motion to amend comes after court-imposed deadlines have passed, and whether substantial work has already been completed.” DAFCO LLC, 156 Idaho at 756–57, 331 P.3d at 498–99. Here, the Nickersons’ original answer was filed August 12, 2011. The hearing on the cross-motions for summary judgment was held on February 11, 2014. The Nickersons’ proposed

9

amended answer, counterclaim, and third party complaint is over 300 pages long and contains twenty-six affirmative defenses and twenty-two causes of action, including new causes of action that were not previously pled. Taking into account these circumstances, the district court did not err by not instructing the Nickersons to amend their pleadings to include a claim of fraud. B. The district court did not err when it denied the Nickersons’ motions for reconsideration. Following the district court’s April 4, 2014, judgment and order granting PHH’s second motion for summary judgment, the Nickersons filed three motions to reconsider. The district court denied the Nickersons’ motions to reconsider, stating that “IRCP 11 requires motions to reconsider interlocutory orders be filed within 14 days of the filing of the order(s) in question. The court’s Judgment of April 4, 2014 was a final judgment not an interlocutory order. The defendants’ motions to reconsider were not filed timely.” On appeal, the Nickersons argue that the district court erred in refusing to reconsider its rulings based solely on timeliness. We disagree. “Pro se civil litigants are not accorded special latitude merely because they chose to proceed through litigation without the assistance of an attorney. Further, pro se litigants are held to the same standards and rules as those represented by an attorney.” Colafranceschi v. Briley, 159 Idaho 31, 34, 355 P.3d 1261, 1264 (2015) (internal quotations and citations omitted). Motions to reconsider must be filed within fourteen days of the final judgment. I.R.C.P. 11(a)(2)(B). The district court issued its final judgment on April 4, 2014, and the Nickersons did not file their motions to reconsider until April 22, 2014, eighteen days after final judgment. The district court did not err when it denied the Nickersons’ motions for reconsideration. C. The district court did not abuse its discretion when it denied the Nickersons’ Rule 60(b) motions to set aside judgment. We initially observe that the Nickersons’ Rule 60(b) motions were an evident attempt to bypass this appeal. The Nickersons filed their notice of appeal on May 16, 2014. It was not until October 6, 2014, that the Nickersons filed their Rule 60(b) motions with the district court. The arguments advanced in these motions had previously been presented to the district court. Likewise, the arguments contained in these motions are the same arguments that the Nickersons have advanced before this Court on appeal. We have held that “[a]n I.R.C.P. 60(b) motion may be used to obtain relief from a final judgment; however, it should not be used as a substitute for a timely appeal.” Maynard v. Nguyen, 152 Idaho 724, 726, 274 P.3d 589, 591 (2011).

10

Nevertheless, we will address the merits of the district court’s denial of the Nickersons’ Rule 60(b) motions. 1. The district court did not err when it denied the Nickersons’ Rule 60(b)(1) motion based upon “mistake.” The district court denied the Nickersons’ Rule 60(b)(1) motion, which claimed mistake, concluding, “IRCP 60(b)(1), when referring to ‘mistake’, refers to mistakes made by the party not the court. The Nickersons have the right to appeal this case based upon their perceived mistakes made by the court, but that is not a basis for relief pursuant to IRCP 60(b)(1).” The district court went on to explain that the mistake must be one of fact and not law. On appeal, the Nickersons argue the district court abused its discretion when it erroneously asserted that Rule 60(b)(1) does not apply to mistakes of the district court. The Nickersons are correct to the extent that mistake may be that of either a party or the court. However, the district court properly concluded that only mistakes of fact are subject to a Rule 60(b)(1) motion, not mistakes of law. “Mistake or inadvertence referred to in Rule 60(b)(1) applies primarily to errors or omissions committed by an attorney or by the court that are not apparent in the record. Any claim of mistake must be a mistake of fact and not a mistake of law.” Berg v. Kendall, 147 Idaho 571, 576–77, 212 P.3d 1001, 1006–07 (2009) (citation omitted). The Nickersons present nine arguments under the heading “Mistake.” However, all nine of the Nickersons’ claims of mistake present claimed legal mistakes, not mistakes of fact. Therefore, the district court did not err when it denied the Nickersons’ Rule 60(b)(1) motion. 2. The district court did not err when it denied the Nickersons’ Rule 60(b)(1) motion based on “surprise.” The Nickersons argue that “since the Nickersons relied on what their attorney was telling them, and their attorney did not tell them the true status of their case, the Nickersons were irrefutably surprised by the summary judgments that resulted in dismissal of their counterclaims and third party complaint.” The Nickersons’ argument of surprise is misplaced. The Nickersons’ former attorney prepared and defended against PHH’s and Chase’s first motions for summary judgment filed on October 16, 2012. There, the district court ruled in favor of the Nickersons and denied PHH’s motion for summary judgment seeking a declaration of default and order for foreclosure. The Nickersons filed their notice of appearance pro se on August 19, 2013, and thereafter have fully

11

participated in all matters before the district court. The Nickersons’ motion for relief from judgment or order was filed “in response to the Amended Judgment filed on June 24, 2014. . . .” The district court’s judgment resulted from PHH’s second motion for summary judgment on the issue of foreclosure. The Nickersons’ former attorney was not involved in the hearing on this motion and the resulting judgment. The district court did not err when it denied the Nickersons’ Rule 60(b)(1) motion on the issue of surprise. 3. The district court did not err when it denied the Nickersons’ Rule 60(b)(1) motion based on “excusable neglect.” The Nickersons’ claim of “excusable neglect stems from the fact they were purposefully deceived regarding the proceedings by their attorney. . .Therefore, all negligence for not knowing the true status of their case and for not participating in the proceedings that resulted in dismissal of their counterclaims and third party complaint is excusable and the Nickersons must be granted relief from the orders dismissing those claims.” As noted, the Nickersons’ Rule 60(b) motions do not relate to the initial motions for summary judgment and the dismissal of the Nickersons’ counterclaims and third-party complaint. The Nickersons have not presented a cogent explanation as to how any misrepresentation by their former attorney affected the proceedings on PHH’s second motion for summary judgment. In short, they have not demonstrated any connection between their claimed excuse and any subsequent neglect. We are unable to find that the district court erred when it denied the Nickersons’ Rule 60(b)(1) motion based on this ground. 4. The district court did not err when it denied the Nickersons’ Rule 60(b)(2) motion based on “new evidence.” On appeal, the Nickersons argue they provided new evidence to the district court, “and any evidence the District Court claims is not new, is evidence the District Court declined to consider and refused to consider because of the timing of when it was presented, and thus, in the context of a 60(b) motion, it is new relevant evidence that must be considered in the determination of this case.” The Nickersons’ argument has no legal basis, as the evidence presented in support of their motion was evidence which was previously presented to the district court or which could have been discovered earlier in the exercise of due diligence. The Nickersons’ motion was based on alleged “Qualified Written Requests” the Nickersons sent to both PHH and Chase, which the Nickersons claimed “irrefutably denies PHH’s standing to foreclose and provides a basis for

12

determining PHH maliciously pursued a wrongful, fraudulent foreclosure against the Nickersons.” However, in the very next line of their motion, the Nickersons stated, “Since the court already had this evidence in its chambers prior to rendering judgment but ruled it was presented too late, it also demonstrates this Court has an extreme prejudice against the Nickersons which evidently precludes the Nickersons from getting justice in this Court.” The Nickersons make no effort to explain to this Court why, in the exercise of due diligence, this evidence could not have been timely discovered and presented to the district court for its consideration in connection with the second motion for summary judgment. Thus, we can find no basis for concluding that the district court erred when it denied the Nickersons’ Rule 60(b)(2) motion. 5. The district court did not err when it denied the Nickersons’ Rule 60(b)(3) motions on the basis of “fraud.” The district court concluded: Their argument is that plaintiffs’ counsel knowingly and falsely presented evidence to the court that they were the holder of the note the Nickersons promised to pay. . . .This court concludes that the Nickersons have not presented sufficient evidence to support their claim for relief. . . .The Nickersons claim that counsel for PHH knowingly and falsely presented false and inadmissible evidence to the court in support of their motion for summary judgment. . . .The Nickersons have presented no evidence that counsel for the [sic] PHH committed fraud upon the court by knowingly and falsely presenting false evidence to the court. . . .The Nickersons allege that PHH committed fraud upon the court by knowingly presenting a false document signed by Kristen Bailey to the court. . . .The Nickersons have presented no evidence that counsel for PHH committed fraud on the court by knowingly submitting false evidence in support of their motion for summary judgment. In this appeal, the Nickersons have not directed this Court’s attention to any evidence which might tend to support their claims of fraud. Absent such evidence, we can find no error in the district court’s denial of the Nickersons’ Rule 60(b)(3) motions on the basis of fraud. 6. The district court did not err when it denied the Nickersons’ Rule 60(b)(3) motions on the basis of “misconduct.” In denying the Nickersons’ motion to set aside judgment based on misconduct, the district court concluded: [T]he Nickersons claim they should be granted relief due to misconduct by opposing counsel. Opposing counsel presented excerpts from depositions to be considered in the motions for summary judgment. The Nickersons claim that the depositions should not have been considered by the court. This is an issue on

13

appeal. The Nickersons have not presented sufficient evidence to support their claim that opposing counsel knowingly presented false evidence (the depositions of the Nickersons) to the court. On appeal, the Nickersons argue that the district court erroneously ignored the misconduct and opposing counsel violated the Idaho Rules of Civil Procedure regarding the handling and filing of the depositions of Charles and Donna Nickerson. However, the Nickersons have only cited to their motion to suppress those depositions, which the district court considered and denied. This is insufficient to demonstrate that the district court erred when it denied the Nickersons’ Rule 60(b)(3) motion based upon a claim of misconduct. D. The Nickersons raise several issues on appeal that are not properly before this Court. “This Court does not review an alleged error on appeal unless the record discloses an adverse ruling forming the basis for the assignment of error.” Ada Cnty. Highway Dist. v. Total Success Investments, LLC, 145 Idaho 360, 368, 179 P.3d 323, 331 (2008). “ ‘This Court will not search the record for error. We do not presume error on appeal; the party alleging error has the burden of showing it in the record.’ ” VanderWal v. Albar, Inc., 154 Idaho 816, 822, 303 P.3d 175, 181 (2013) (quoting Miller v. Callear, 140 Idaho 213, 218, 91 P.3d 1117, 1122 (2004)). 1. The Nickersons’ challenge to the denial of their motion to amend their pleadings is waived. On April 22, 2014, the Nickersons filed a motion for leave to amend their answer, counterclaim, third-party complaint, and demand for a jury trial. The Nickersons argue that the district court abused its discretion when it denied their motion. However, the Nickersons fail to provide a citation to the record showing the district court’s decision on the issue, much less address the basis for that decision. Thus, we will not address the Nickersons’ claim that the district court erred by denying the motion to amend their pleadings. 2. The Nickersons’ challenge to the district court’s decisions regarding their Motion to Strike the Second Affidavit of Ronald E. Casperite and Motion to Suppress and Strike the Depositions of Charles and Donna Nickerson are waived. On March 26, 2014, the Nickersons filed an objection to the Second Affidavit of Ronald E. Casperite. The Nickersons argue that the affidavit was fraudulent because the notary did not sign the affidavit. On May 16, 2014, the Nickersons filed a motion to suppress and strike the depositions taken of both Charles and Donna Nickerson. The Nickersons argue there were errors and irregularities in the manner the testimony was transcribed, prepared, signed, certified, sealed,

14

endorsed, transmitted, and filed. However, once again the Nickersons fail to cite to any adverse ruling in the record for this Court to consider. Thus, these issues are waived. 3. The Nickersons’ argument concerning a Sheriff’s Certificate of Sale is not properly before this Court. The Nickersons take issue with the district court’s second amended judgment. There was no discussion of this issue at the district court level and the Nickersons have not pointed to any adverse ruling, objection, or motion in the record for this Court to consider. It appears the Nickersons are asking this Court to answer the legal question, “Is the purchaser of the foreclosed property granted possession upon production of Sheriff’s Certificate of Sale?” It would be inappropriate for this Court to issue an advisory opinion on this hypothetical issue. Therefore, we will not further address this claim. E. Chase is entitled to an award of attorney fees on appeal. Chase requests attorney fees on appeal pursuant to Idaho Code section 12-121. PHH has not requested an award of attorney fees. Chase contends that the Nickersons have maintained this appeal frivolously, raised issues not implicated by the pleadings, failed to support their arguments with citations to relevant law, failed to offer cogent argument relevant to the third- party claims asserted against Chase, and have wasted the time and resources of the parties and the courts of Idaho. We agree. Idaho Code section 12-121 states, “In any civil action, the judge may award reasonable attorney’s fees to the prevailing party or parties. . . .” I.C. § 12-121. “To receive an I.C. § 12–121 award of fees, the entire appeal must have been pursued frivolously, unreasonably, and without foundation.” Snider v. Arnold, 153 Idaho 641, 645–46, 289 P.3d 43, 47–48 (2012). “Such circumstances exist when an appellant has only asked the appellate court to second-guess the trial court by reweighing the evidence or has failed to show that the trial court incorrectly applied well-established law.” City of Boise v. Ada Cnty., 147 Idaho 794, 812, 215 P.3d 514, 532 (2009). “Ordinarily, attorney fees will not be awarded where the losing party brought the appeal in good faith and where a genuine issue of law was presented.” Nelson v. Nelson, 144 Idaho 710, 718, 170 P.3d 375, 383 (2007). We hold that the Nickersons have pursued this appeal frivolously, unreasonably, and without foundation. Thus, Chase is entitled to an award of attorney fees incurred on appeal. Because PHH and Chase have prevailed in this appeal, they are entitled to an award of costs as a matter of right.

15

IV. CONCLUSION We affirm the judgment of the district court and the district court’s denial of the Nickersons’ Rule 60(b) motions to set aside the judgment. We award attorney fees on appeal to Chase and costs on appeal to PHH and Chase.

Chief Justice J. JONES and Justices EISMANN, BURDICK and W. JONES, CONCUR.

16

IN THE SUPREME COURT OF THE STATE OF IDAHO Docket No. 42333

MARY E. PANDREA, a single person, ) individually and as Trustee of the Kari A. ) Clark and Mary E. Pandrea Revocable ) Trust u/a dated April 9, 2002, ) Boise, December 2015 Term ) Plaintiff-Counterdefendant-Appellant, ) 2016 Opinion No. 39 ) v. ) Filed: March 25, 2016 ) KENNETH J. BARRETT and DEANNA L. ) Stephen W. Kenyon, Clerk BARRETT, husband and wife, ) ) Defendants-Counterclaimants- ) Respondents. ) ______)

Appeal from the District Court of the First Judicial District of the State of Idaho, Bonner County. Hon. John P. Luster, District Judge.

The judgment of the District Court is affirmed. Costs on appeal are awarded to respondents.

Mary E. Pandrea, Sandpoint, appellant pro se.

Kenneth Barrett and Deanna Barrett, Birmingham, MI, respondents pro se.

______

W. JONES, Justice I. NATURE OF THE CASE Mary E. Pandrea appeals a district court decision out of Bonner County regarding the partition of approximately twenty-three acres of real property owned jointly by Pandrea and her sister. Pandrea asserts that the partition greatly prejudiced her and thus that the district court improperly partitioned the property in kind rather than by sale. She appeals several district court decisions denying motions she made for reconsideration and to amend her complaint. The orders and judgment of the district court are affirmed.

II. FACTUAL AND PROCEDURAL BACKGROUND

1 Harry and Edith Clark owned approximately 250 to 300 acres of land in Bonner County. The parties in this case were two of their eight children, who grew up on the land in the 1940s. Before Harry Clark died, he and Edith set up a trust and placed the land in it. After Harry Clark’s death, the land in the trust was subdivided so the parcels could be sold to support Edith. In 1981, Mary Pandrea, the appellant in this matter (“Pandrea”), purchased one parcel comprising approximately five acres and including a shop, cabin, and other improvements (“Parcel 1”). She then gave her sister, Kari Clark (“Clark”), a one-half undivided interest in that parcel as a tenant in common with her. Id. About ten years later, Clark purchased an adjoining parcel, comprising approximately fifteen acres (“Parcel 2”); and Clark then purchased another parcel contiguous to Parcel 2 comprising a little over five acres (the “Clark Parcel”). Clark then gave Pandrea a one- half undivided interest in Parcel 2 as a tenant in common with Clark. In 2002, Clark and Pandrea placed Parcels 1 and 2 into the Kari A. Clark and Mary E. Pandrea Revocable Trust (the “Trust”), naming themselves as co-trustees. Clark also placed the Clark Parcel into the Trust. The sisters’ relationship then deteriorated. On June 21, 2010, Clark executed quitclaim deeds on behalf of the trust which conveyed Parcel 1 from the trust to Clark and Pandrea (each obtaining a one-half undivided interest as tenants in common), conveyed Parcel 2 solely to Clark, and conveyed the Clark parcel solely to Clark. Approximately one month later, the Trust was dissolved. On May 11, 2011, Pandrea filed a complaint seeking a partition of and accounting for the property. After Pandrea filed her complaint, Clark executed another deed which corrected the transfer of Parcel 2 to give Clark and Pandrea each a one-half undivided interest in it as tenants in common.1 So by the time of trial in July of 2011, both Parcels 1 and 2 were owned jointly by Clark and Pandrea, each possessing a one-half undivided interest as tenants in common with regard to each parcel. Before trial, Pandrea amended her complaint, and the amended complaint sought partition of the land by sale, claiming that physical partition would result in prejudice; and the complaint further sought that Clark account for the proceeds of the Trust, having unilaterally controlled Trust property. Clark filed a counterclaim against Pandrea, also seeking an accounting, but asking for partition in kind rather than by sale. At some point during the litigation, Pandrea changed her position and joined Clark in requesting partition in kind and

1 Clark claims that the transfer of Parcel 2 solely to her was a scrivener’s error. 2 opposing sale of the Parcels. Neither party disputed that Pandrea had expended funds to maintain and improve the Parcels, so the only monetary issues addressed at trial were the amount of reimbursement to which Pandrea was entitled and value of the improvements she made. The district court found that the Parcels’ combined value was between $100,000 and $130,000. It further found that Pandrea expended $14,749.12 in improving and maintaining Parcels 1 and 2 during the course of her co-tenancy. However, the court denied more than $400,000 of Pandrea’s other alleged expenses because either there was insufficient evidence to find that they were made to maintain or improve the Parcels or for the Trust’s benefit, or they were incurred for the purpose of the instant litigation and thus deemed costs defined by Rule 54(d). There was also a dispute regarding Pandrea’s remodel of a log cabin on Parcel 2. The district court resolved it by finding that $18,380.63 expended by Pandrea to remodel the cabin did in fact improve it. Finally, the court determined that Clark expended $312.66 toward the benefit of the Parcels. With the above facts, the district court went on to partition the property. It followed Idaho Code section 6-501, noting that it “allows for the partition of property, and provides that a forced sale of the property is only appropriate if another partition cannot be made without great prejudice to the owners.” It concluded that both parties sought to avoid a forced sale of the properties because both wanted to retain their family property. The court ultimately found that the most equitable way to partition the property was into two parcels, one comprising nine acres and adjacent to land already owned by Clark and the other comprising eleven acres including the cabin. Clark would receive the former, and Pandrea the latter. Clark was also to receive an easement benefitting her parcel and burdening Pandrea’s parcel. The court found that its partition “account[ed] for all the expenditures made by Pandrea and Clark” and that therefore “no additional monies must be paid.” The partition had been proposed by Pandrea and ran generally north-south. The court formalized its order in a written decision titled Decision Re: Court Trial (“Partition Order”). The court then ordered Pandrea to present for its approval a legal description of the new parcels consistent with its order, noting that “access to the nine acres and the Clark parcel shall be by easement.” Pandrea then presented a description, but Clark objected, claiming that, contrary to the court’s order, Pandrea had described the new parcels such that, rather than a dividing line running north to south, “she has allocated to herself all of the bottom-land and all

3 hundreds of feet of waterfront associated with the historical Parcels[.]” Clark claimed that all of the valuable, useful, or desirable areas of land were allocated to Pandrea, leaving Clark with only the steep terrain and cliffs. Clark requested a hearing for the court to settle the matter. At the hearing, the court noted that no party was asking it to reconsider its decision, but rather to draw the partition line consistently with its judgment. It found that the “proposed record of survey submitted for judgment by Pandrea varied significantly from the proposal adopted by the [c]ourt.” The variations were that Pandrea’s presented legal description did not include an access easement, but rather suggested access by a logging road coming from a county road, and also that the proposed description included no river frontage when that adopted by the court included a reasonable amount of such frontage. Accordingly, the court ordered that Clark now prepare a new survey and legal description more consistent with its order and submit it for the court’s approval. Clark’s surveyor discovered discrepancies between what the court and parties believed the parties owned. He found that a corner of the land that was to be allocated to Clark was not owned by either party, and that Pandrea and Clark owned more land than previously thought. Clark prepared a new legal description of the land division reflecting the new survey but still using the court’s 11:9 ratio to divide it. In April of 2013, Pandrea filed a motion asking the court to reconsider its Partition Order.2 In it, Pandrea raised issues regarding quieting title to both parcels in her name, certain breaches of fiduciary duty by Clark, and slander of title. The court first considered whether the motion to reconsider was properly brought. It found that the Partition Order was not in fact a final judgment and as such a motion to reconsider the interlocutory order was proper. However, the court also found that while a motion to reconsider can be based on new evidence, the new issues described above “were not the issues that were litigated or set forth in the original complaint and those are not issues that can properly be considered by this Court on a motion for reconsideration.” The court also considered and rejected claims by Pandrea that the easement burdening her parcel was improper and that the proposed partition may violate county zoning laws. The court ordered that Clark prepare another survey consistent with its order but reflecting the new understanding of the property size.

2 At some point around this time, Pandrea’s relationship with her attorney deteriorated and she elected to represent herself. This dispute between Pandrea and her attorney does not have bearing on the present action. 4

On August 30, 2013, Pandrea moved to amend her complaint to add new defendants. Around the same time, a previously uninvolved neighbor, John Thornton (Thornton), moved to intervene in the matter. He alleged that the easement the court awarded to Clark could not be accessed without also crossing his property, which he did not authorize, and thus that the easement was improper. Thornton’s motion was denied, but Pandrea adopted his argument regarding the easement. The court noted that the motion to file an amended complaint amounted to an attempt to “broaden the scope of the existing lawsuit to add claims, revise original claims, and to add additional defendants.” Part of these new claims was that Clark had improperly granted a lien on the jointly held property to Kenneth and Deanna Barrett—the respondents in this matter (“Respondents”). The court denied Pandrea’s motion to amend her complaint, noting that I.R.C.P. 15 allows amendments to which the other party objects only with leave of the court when justice so requires. The court recognized that whether or not to grant the motion to amend was within its discretion, but suggested potential bad faith or dilatory conduct on Pandrea’s part, and further noted the significant prejudice to Clark should the motion be granted. Clark then had a survey of the Parcels conducted and prepared legal descriptions of the Parcels and the easement in accordance with the court’s order in its decision on Pandrea’s motion to reconsider. At a hearing dated January 17, 2014, the district court accepted these legal descriptions as consistent with its judgment. During that hearing, the court again considered and rejected Pandrea’s arguments that the easement was improper. On January 24, 2014, the court issued its Revised Judgment and Decree of Partition (the “1/24/14 Judgment”). The 1/24/14 Judgment granted Pandrea and Clark respectively full undivided ownership in one each of the new parcels: Pandrea was granted 12.739 acres of property on generally the South portion of the land (“Parcel A”); and Clark was granted 10.423 acres of property on generally the North portion of the land (“Parcel B”), along with an easement “for ingress and egress” benefitting Parcel B and burdening Parcel A. On February 7, 2014, Pandrea filed a motion requesting the court reconsider the 1/24/14 Judgment. In the related supporting affidavit, she again noted her objection to the easement granted to Clark. She claimed the easement negatively impacted the value of her Parcel, which caused her significant prejudice. According to Pandrea, this meant that the partition implemented by the court is in violation of Idaho Code section 6-512, which requires partition by sale in the

5 face of great prejudice. The court considered this motion a return to Pandrea’s position at the very outset of the case, before she agreed to the partition in kind: Initially Pandrea sought a court-ordered sale of the jointly owned property. At trial she agreed with Clark that the property should be split and provided a proposed partition that the Court largely adopted. She refused to prepare the decree as directed by the Court. A series of legal challenges to the Court’s decision ensued, primarily focused on her objection to the easement. The Court rejected an earlier post-trial effort to amend her complaint and pursue claims that were not included in her initial complaint. Now, Pandrea wants to return to her original stance that a partition of the property cannot be made without great prejudice to the owners. There comes a time for finality in a trial court’s ruling and for an aggrieved party to pursue an appeal if they so desire. The court denied her motion substantively, but also recognized that it was procedurally defective: Rule 11(a)(2)(B) provides for review of an interlocutory order, not for reconsideration of a final judgment. While this court could properly consider the motion as a motion to amend the judgment under Rule 59(e) or a motion for relief from a final judgment under Rule 60(b) a showing of good cause must be made to justify consideration of new evidence. Lowe v. Lynn, 103 Idaho 259, 646 P.2d 1030 (Ct. App. 1982). The Court recognizes its discretion to grant relief from a final judgment under certain provisions of the civil rules, however, this court is not satisfied that a basis for that relief has been established. Pandrea timely filed her notice of appeal. Twice this Court conditionally dismissed Pandrea’s appeal due to issues regarding the legibility of certain exhibits. Ultimately this Court accepted Pandrea’s appeal. On November 25, 2014, the Barretts filed a notice of substitution, taking the place of Clark. In the time between the trial and the appeal, the Barretts had purchased from Clark the property she received in the partition (Parcel B), and Clark assigned this action to them. This Court ordered the Barretts be substituted for Clark.

III. ISSUES ON APPEAL 1. Whether the district court erred in denying Pandrea’s motion for reconsideration of its Partition Order. 2. Whether the district court abused its discretion by denying Pandrea’s motion for leave to amend her complaint to add defendants, additional and novel claims, and to revise original claims. 3. Whether the district court abused its discretion by denying Pandrea’s motion to reconsider its Revised Judgment and Decree of Partition that was in actuality a motion to amend the judgment or for relief from it. IV. STANDARD OF REVIEW

6

The inquiry upon reviewing a trial court’s order partitioning real property of tenants in common is: “[D]id the court act erroneously upon the facts presented?” Richardson v. Ruddy, 15 Idaho 488, 495, 98 P. 842, 844 (1908). “When a district court decides a motion to reconsider, ‘the district court must apply the same standard of review that the court applied when deciding the original order that is being reconsidered.’” Westby v. Schaefer, 157 Idaho 616, 621, 338 P.3d 1220, 1225 (2014) (quoting Fragnella v. Petrovich, 153 Idaho 266, 276, 281 P.3d 103, 113 (2012)). “When we review a trial court’s decision to grant or deny a motion for reconsideration, we use the same standard of review the lower court used in deciding the motion for reconsideration.” Id. Therefore, this Court reviews a district court’s denial of a motion to reconsider its partition of real property for clear error. “[C]lear error will not be deemed to exist if the findings are supported by substantial and competent, though conflicting, evidence.” State Dep’t of Health & Welfare v. Roe, 139 Idaho 18, 21, 72 P.3d 858, 861 (2003). On the other hand, a “Rule 59(e) motion to amend a judgment is addressed to the discretion of the court. An order denying a motion made under Rule 59(e) to alter or amend a judgment is appealable, but only on the question of whether there has been a manifest abuse of discretion.” Barmore v. Perrone, 145 Idaho 340, 344, 179 P.3d 303, 307 (2008) (quoting Coeur d’Alene Mining Co. v. First Nat’l Bank of N. Idaho, 118 Idaho 812, 823, 800 P.2d 1026, 1037 (1990)). A district court’s decision regarding a motion to amend the complaint once trial has begun is “necessarily left to the sound discretion of the trial judge, and in the absence of a showing of the abuse of such discretion the ruling of the trial court should not be set aside on appeal.” Gates v. Pickett & Nelson Const. Co., 91 Idaho 836, 841, 432 P.2d 780, 785 (1967) (overruled on other grounds, Smith v. State, 93 Idaho 795, 473 P.2d 937, 942 (1970)). To determine whether a district court abused its discretion, this Court uses a three-factor test. Fox v. Mountain W. Elec., Inc., 137 Idaho 703, 711, 52 P.3d 848, 856 (2002). The three factors are: (1) whether the trial court correctly perceived the issue as one of discretion; (2) whether the trial court acted within the boundaries of this discretion and consistent with the legal standards applicable to the specific choices available to it; and (3) whether the trial court reached its decision by an exercise of reason. Id.

7

Finally, this court exercises free review over questions of law such as the interpretation of the rules governing motions to reconsider. Boise Mode, LLC v. Donahoe Pace & Partners Ltd., 154 Idaho 99, 103, 294 P.3d 1111, 1115 (2013).

V. ANALYSIS A. The district court’s Partition Order was not clearly erroneous, and its decision on Plaintiff’s motion for reconsideration of same was similarly not clearly erroneous. 1. The district court’s Partition Order was not clearly erroneous because it was supported by substantial and competent evidence. In the district court’s Partition Order, it noted that both parties argued that partition could be made in kind rather than by sale without prejudicing either Pandrea or Clark. The court carefully considered the parties’ arguments regarding how the property should be divided. Clark advocated for a division that would essentially put the parties in the same position they were in before forming the Trust. The district court found that “this resolution does not resolve the issue of reimbursement to Pandrea for the expenses she incurred improving and maintaining the [property].” Instead, the district court found that Pandrea’s proposal—to give Clark nine acres contiguous to the Clark Parcel, while giving Pandrea the remaining eleven acres including the log home and improvements she made but burdened by an access easement for Clark—was the most equitable. This conclusion was supported by substantial and competent evidence. Pandrea began with only five acres, but had expended tens of thousands of dollars to improve the property, while Clark had expended only hundreds, and Pandrea had to pay the property tax. The district court did not act erroneously on the facts presented, and therefore its Partition Order was not error and is affirmed. 2. The district court’s order denying Pandrea’s re-filed motion to reconsider the court’s Partition Order was not clearly erroneous because it was supported by substantial and competent evidence. Pandrea asserts that the district court erroneously denied her motion for it to reconsider its Partition Order. The crux of Pandrea’s argument regarding this assertion of error revolves around Clark’s encumbrance of the whole property (rather than merely of her own one-half undivided interest as a tenant in common). Clark granted Respondents a lien on the entire property in order to secure a $10,000 loan to fund her defense in this action. That was modified so that the lien was only on Clark’s one-half undivided interest. Pandrea alleged this amounted to

8 slander of title, for which the remedy was to quiet title to the entire Property in her name. The district court noted the strange nature of the entirely novel claim now brought by Pandrea: Ms. Pandrea is asking that she get all of the property. That wasn’t even consistent with the original pleadings. I’m not even sure how the Court would even begin to consider that kind of a motion for reconsideration because that is asking the Court basically to redesign a lawsuit that was filed, that was litigated and was decided. The court went on to explain: “A motion to reconsider certainly can consider new evidence, but it doesn’t really change the four corners of the lawsuit that was originally brought in front of the Court and that seems to be what a lot of the argument is doing.” It continued to note that any of Pandrea’s arguments regarding Clark’s misconduct as a trustee were irrelevant because by the time the Pandrea filed the case, the Trust was dissolved and Pandrea herself noted that she and Clark were co-tenants rather than co-trustees. Nevertheless, the court considered Pandrea’s arguments regarding whether the lien granted to Respondents by Clark had any bearing on its initial Partition Order, and thus on the motion to reconsider that decision. Clark responded that the lien-granting was innocent error; that she attempted to only encumber her one-half undivided interest in the property, which there is no disagreement would have been proper. Further, Clark claimed that she corrected the error resulting in no prejudice: Respondents relinquished their interest to any security in Pandrea’s one-half undivided interest in the property. Finally, Clark asserted this motion amounted to an action for slander of title which was never plead and is thus improper. Ultimately, the district court concluded that as to any alleged slander of title or breach of fiduciary duty by Clark, “those issues were not the issues that were litigated or set forth in the original complaint and those are not issues that can properly be considered by this Court on a motion for reconsideration.” The court noted the prejudice to Clark who never had a chance to address or present evidence regarding any of these claims. Pandrea argues on appeal that she was unaware of the slander of title up until that point and the new discovery justifies the action’s consideration. Pandrea’s brief on appeal contains two legal arguments to that effect3: (1) Idaho Code section 6-507—which mandates that defendants must set forth in their answers the nature and extent of the respective interests in the property— meant that the slander of title would affect her final rights after the partition; and (2) Porter v.

3 The rest of this section of her brief is devoted to attempting to establish slander of title. Because the district court did not consider the slander of title claim, it would not be appropriate for this Court to consider it substantively. 9

Bassett, 146 Idaho 399, 406, 195 P.3d 1212, 1219 (2008), stands for the proposition that “damages for slander of title were appropriate even after the improper conveyance had been corrected.” Both of Pandrea’s legal arguments are unavailing, and her novel claim brought in a motion to reconsider is improper for two additional reasons. First, neither legal argument made by Pandrea can provide her with the relief she seeks. Idaho Code section 6-507 is unavailing to Pandrea because it only requires disclosure of liens on the property to be partitioned held by the defendant, rather than those liens that encumber the defendant’s interest. Idaho Code section 6-507 has not yet been reviewed by this Court, but its language is unambiguous. It provides: The defendants who have been personally served with the summons and a copy of the complaint, or who have appeared without such service, must set forth in their answers fully and particularly, the origin, nature and extent of their respective interests in the property, and if such defendants claim a lien on the property by mortgage, judgment or otherwise, they must state the original amount and date of the same, and the sum remaining due thereon, also whether the same has been secured in any other way or not; and if secured, the nature and extent of such security, or they are deemed to have waived their right to such lien. I.C. § 6-507. This statute contains nothing requiring setting forth liens against the defendant’s interest. The language “and if secured, the nature and extent of such security” could mislead one to believe it requires such disclosure, but that provision refers to any security that is on “same,” which in turn refers back to any lien claimed by the defendant on the property. Therefore, the statute requires setting forth the nature of any security interest that someone holds which secures a lien held by the defendant on the property, rather than a lien held by another on the defendant’s interest in the property. But even were this statute read to require the disclosure Pandrea argues for, it still does not provide her with relief. The relief for a violation of this section is that the defendants “are deemed to have waived their right to [the undisclosed] lien.” Id. This language is further evidence that this statute does not require disclosure of other liens on the property because it would not make sense for the defendants to be able to waive a lien not held by them. Further, even if Clark could waive the lien supposedly held by Respondents, that would not make any difference, as Respondents already waived any potential lien covering Pandrea’s interest in the property. Therefore, this statute is unavailing for Pandrea. Porter is similarly unavailing for Pandrea. In that case, the plaintiffs filed an action for slander of title, but the district court dismissed that claim before the trial. Porter v. Bassett, 146 10

Idaho 399, 406, 195 P.3d 1212, 1219 (2008). This Court found that the plaintiffs “adequately pled a cause of action for slander of title, and [defendants] did not raise any objections to [plaintiffs’] slander of title claim in their cross-motion for summary judgment; therefore, [plaintiffs] are entitled to a trial upon the issue.” Id. What is noteworthy about that case and distinguishable from the instant case is that the plaintiffs properly pled slander of title and were denied the right to litigate it at trial. Here, not only did Pandrea fail to adequately plead slander of title, but the case had already proceeded through litigation. Nothing about Porter means that Pandrea should be allowed to bring this new claim at the late stage at which it was brought. Beyond presenting no adequate legal basis to support her argument, Pandrea is not allowed to assert her novel claim for two additional reasons: (1) the plain language of the rule governing motions to reconsider bars it; and (2) it would result in undue prejudice to Clark, whose position Respondents have assumed. The plain language of the rules governing motions to reconsider indicates that novel claims are not allowed. Idaho Rule of Civil Procedure 11 contemplates motions to reconsider, and it provides in pertinent part: A motion for reconsideration of any interlocutory orders of the trial court may be made at any time before the entry of final judgment but not later than fourteen (14) days after the entry of the final judgment. A motion for reconsideration of any order of the trial court made after entry of final judgment may be filed within fourteen (14) days from the entry of such order; provided, there shall be no motion for reconsideration of an order of the trial court entered on any motion filed under Rules 50(a), 52(b), 55(c), 59(a), 59(e), 59.1, 60(a), or 60(b). The rule plainly allows reconsideration of an interlocutory order. It plainly does not consider deciding an entirely new claim not previously raised.4 Allowing Pandrea to add a new claim of which Clark was not on notice after the trial already occurred would be greatly prejudicial to Clark who did not have a chance to prepare to defend such a claim. It was therefore not clearly erroneous for the district court to deny Pandrea’s motion to reconsider which added new causes of action. B. The district court did not abuse its discretion by denying Pandrea’s motion to amend her complaint to add parties and new causes of action.

4 Indeed, if the rule operated as Pandrea desires, there would be no reason for the rules which allow a plaintiff to amend his or her complaint to add claims in limited circumstances. If a plaintiff could merely make a motion to reconsider which includes a new claim, the rules allowing for additional supplementary claims would be superfluous. “[T]he Court must give effect to all the words and provisions of the statute so that none will be void, superfluous, or redundant.” State v. Schulz, 151 Idaho 863, 866, 264 P.3d 970, 973 (2011). 11

Pandrea claims that the district court erroneously denied her motion to amend her complaint. The district court found that Pandrea had not established a basis for the relief she sought. Pandrea alleges that the district court did not find one of: specific prejudice to Clark; bad faith by Pandrea; or futility of the amendment. Therefore, she claims, a Ninth Circuit case requires reversal of the denial. The extra-jurisdictional case cited to by Pandrea does not control the decision here, but even if it were controlling, it does not mandate reversal because the district court did make the necessary findings. Second, under the proper test for this Court to review the denial of the motion to amend (abuse of discretion), the district court’s denial survives scrutiny. First, the Ninth Circuit case cited to by Pandrea does not control. Pandrea cites Bowles v. Reade, 198 F.3d 752 (9th Cir. 1999), for the proposition that the district court’s belief that her motion was untimely as well as its alleged failure to identify specific prejudices or clear futility or bad faith warrants reversal of its denial of her motion to amend. Putting aside the fact that that case is non-controlling, in fact her assertion is exactly contrary to the district court’s carefully considered conclusion. The district court did not deny her motion solely based on untimeliness as Pandrea claims. While it did note that it considered her motion untimely, it also noted that “[t]he court recognizes that Rule 15(a) does not restrict a movant to a specific time frame within which to file a motion to amend[.]” It went on to consider the merits of her claim. As to the merits of her motion, the district court made specific findings exactly opposite to what Pandrea represents in her brief: rather than fail to find specific prejudice, the court found that the “important focus . . . is upon the prejudice suffered by Clark [who] is in her seventies and has limited financial resources.” It went on to note specifically how those things coupled with added delay would prejudice Clark. Second, rather than failing to find bad faith on Pandrea’s part, the court specifically referenced and quoted a decision by this Court dealing with denying motions to amend for bad faith or dilatory conduct, and several times characterized Pandrea’s actions as “an effort to simply delay the entry of the judgment of partition.” Finally, while not expressly labelling the new claim clearly futile, the district court did question its validity. In any case, the district court’s analysis met the standard articulated in Bowles. In that case, the district court did not make any specific findings of prejudice, bad faith, or futility. The court merely explained that it denied The Plans’ motion because they knew that Ms. Reade was acting in her capacity as trustee of the Robert B. Reade Trust. This explanation, however, does not satisfy the district court’s duty to make

12

findings supported by the record showing that the motion was prejudicial to the defendant, was made in bad faith, or was futile. Bowles, 198 F.3d at 758. In this case though, the district court made specific findings supported by the record at least as to two of the three independent grounds for denying a motion to amend identified by the Ninth Circuit. Additionally, under the precedent laid out by this Court, the district court clearly did not abuse its discretion in denying Pandrea’s motion to amend. This Court has made it clear that while a motion to amend a complaint should be liberally granted, that liberality may be constrained in the face of bad faith or dilatory conduct by the moving party, prejudice to the opposing party, or the claim to be added being invalid. See Smith v. Great Basin Grain Co., 98 Idaho 266, 272, 561 P.2d 1299, 1305 (1977); Hessing v. Drake, 90 Idaho 67, 71–72, 408 P.2d 180, 182 (1965); Black Canyon Racquetball Club, Inc. v. Idaho First Nat’l Bank, N.A., 119 Idaho 171, 175, 804 P.2d 900, 904 (1991). In the present case the district court did not abuse its discretion. First, it correctly perceived the issue as one of discretion. It noted that “[i]t is within the district court’s sound discretion to decide whether to allow a party to amend its complaint after a responsive pleading has been served.” Next, it acted within the bounds of its discretion and consistently with the applicable legal principles. It noted the proper rule governing the proceeding, and identified limitations therein laid out by this Court and performed its analysis accordingly. Finally, it acted within an exercise of reason, denying the motion to amend for many permissible reasons as are described above in more detail. Therefore, the district court did not abuse its discretion by denying Pandrea’s motion to amend her complaint and that order is affirmed. C. The district court did not abuse its discretion by denying Pandrea’s motion to reconsider its Revised Judgment and Decree of Partition. Pandrea claims that the district court erred by not reconsidering its Revised Judgment and Decree of Partition. Pandrea’s sole argument regarding this issue is that the district court should have granted her Motion for Reconsideration of Final Judgment and Decree of Partition and Clarification because the court’s final partition resulted in great prejudice to her in violation of Idaho Code section 6-501. She presented new surveys and affidavits purporting to show that the easement granted to Clark greatly diminished the value of her new Parcel. She claims the prejudice to her from the diminished value means the partition the court ultimately ordered violated Idaho Code section 6-501 which states that an action may be brought “for a sale of such

13 property, or a part thereof, if it appears that a partition cannot be made without great prejudice to the owners.” I.C. § 6-501. She also claims it violates Idaho Code section 6-512 which states that a court may partition by sale if another partition would result in great prejudice and otherwise that the court “must order a partition according to the respective rights of the parties as ascertained by the court.” I.C. § 6-512. Pandrea’s argument on appeal fails. Pandrea did not bring her motion under Rule 59(e) or 60(b), but rather under 11(a)(2)(B) as a motion for reconsideration of an interlocutory order. This was procedurally improper as the judgment was a final judgment rather than an interlocutory order. However the trial court recognized that it should have been brought under 59(e) or 60(b) and analyzed it accordingly. This was the correct thing to do. See Obray v. Mitchell, 98 Idaho 533, 538, 567 P.2d 1284, 1289 (1977) (“The Idaho Rules of Civil Procedure do not provide for a petition to reconsider a memorandum decision. As such, the trial court correctly treated appellant’s petition as a motion to alter or amend judgment pursuant to I.R.C.P. 59(e).”). Pandrea has two factual arguments as to why the district court should have granted her motion. First, she argues the new appraisal shows her new parcel is worth significantly less due to the easement. Second, she argues that the Bonner County building codes mean the easement prevents her from building on her parcel adjacent to the easement further diminishing her parcel’s value. The trial court did not abuse its discretion by denying either a Rule 59(e) motion to amend final judgment, or a Rule 60(b) motion for relief from final judgment. As to the Rule 59(e) motion, the court acted within its discretion by holding there was insufficient grounds to grant such a motion. The court recognized its discretion. It then acted within the bounds of its discretion according to the law. The court was aware of the size of the easement relative to the size of Pandrea’s parcel when it entered its final judgment. It had considered these factors in granting the easement. Rather than a situation where both parties were to receive equivalent parcels, the district court here partitioned the parcels equitably based on unequal starting parcel sizes and unequal financial contributions. It is accurate that the easement did diminish the value of Pandrea’s parcel, but the district court clearly recognized this and noted that it had, on several previous occasions, considered the issue of the easement. Further, the court had available to it Pandrea’s claim that the “Bonner County Planning and Building [office] verified that Pandrea’s new Parcel 1 would be burdened as the second easement did not comply with the setback

14 requirements” which would prevent a building permit. That claim is supported in the record only by an affidavit from Pandrea herself. The only statement in the record from that office is that it declined to comment until litigation was over. It was not outside of the court’s discretion to find these claims unworthy of granting the Rule 59(e) motion. Finally, the district court reached its conclusion by an exercise of reason. As discussed above, it considered all ramifications to the values of the new parcels. Ultimately, it determined that the case was best served by avoiding even more delay, the case having been filed nearly three years prior. There is simply no reason to conclude the district court abused its discretion by denying a Rule 59(e) motion. Similarly, the district court did not abuse its discretion by denying a Rule 60(b) motion for relief from final judgment. “A Rule 60(b) motion permits a district court to grant relief from a judgment based on mistake, or newly discovered evidence, or fraud, or misrepresentation, or misconduct, or void or satisfied judgments if filed within six months.” First Bank & Trust of Idaho v. Parker Bros., 112 Idaho 30, 32, 730 P.2d 950, 952 (1986). The rule “requires a showing of good cause and specifies particular grounds upon which relief may be afforded.” Id. The moving party must establish the good cause and that one of the specific grounds applies. Id. Pandrea claims that the good cause is the great prejudice to her which resulted from the judgment. She has not specified into which grounds for 60(b) relief her argument fits. Because she has not shown newly discovered evidence,5 fraud, a void judgment, or a satisfied or released judgment, Pandrea’s claim could only fall into the mistake category. When a party moves for relief from a court’s determination regarding distributions of property on the grounds of mistake, “such mistake must be factual rather than legal.” Puphal v. Puphal, 105 Idaho 302, 306, 669 P.2d 191, 195 (1983). There is nothing in this case to suggest the court made any factual errors. It does not bear repeating the analysis for why the district court did not abuse its discretion because it is precisely the same as that performed under the Rule 59(e) analysis above. Because the district court recognized its discretion, acted within the bounds of that discretion, and exercised reason, the district court did not err by denying a Rule 60(b) motion for relief from judgment. Accordingly, that order is affirmed.

5 There were the alleged newly discovered issues from Bonner County, but as discussed above, the district court did not err by not considering those. 15

VI. CONCLUSION The orders and judgment of the district court are affirmed. Costs to respondents. Chief Justice J. JONES, Justices EISMANN, BURDICK and HORTON CONCUR.

16