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Dawson v. Cheyovich Family Trust

June 4, 2010

WAYNE DAWSON, PLAINTIFF-APPELLANT,
v.
CHEYOVICH FAMILY TRUST, VASA N. BACH FAMILY TRUST, DEFENDANTS, AND JOHN N. BACH, INTERVENOR-RESPONDENT.



Appeal from the District Court of the Seventh Judicial District of the State of Idaho, Teton County. The Honorable Jon J. Shindurling and Darren B. Simpson, District Judges.

The opinion of the court was delivered by: J. Jones, Justice.

2010 Opinion No. 65

The decision of the district court is affirmed in part and the case is remanded.

Wayne Dawson appeals from various district court orders that resulted in John N. Bach receiving a three-quarter interest in certain real property. We remand the case to the district court for it to rule on Dawson's I.R.C.P. 60(b)(6) motion.

I.

On December 18, 2001, attorney Alva Harris, purportedly on behalf of Wayne Dawson and Jack Lee McLean,*fn1 initiated a quiet-title action against the Cheyovich Family Trust and the Vasa N. Bach Family Trust. The complaint referred to a 1994 land transaction in which the Jack Lee McLean Family Trust, the Cheyovich Family Trust, the Dawson Family Trust, and the Targhee Powder Emporium each obtained an undivided one-quarter interest in a 40-acre parcel of real estate known as the ―Peacock Property.‖ In the complaint, Dawson claimed an undivided one-half interest in the Peacock Property that he claimed to have acquired through his interest in the Dawson Family Trust and the Targhee Powder Emporium.

The ―Targhee Powder Emporium‖ was an unregistered business entity used by John N. Bach to acquire various land interests in Teton County between 1992 and 2000. Bach v. Miller, 148 Idaho 549, 550, 224 P.3d 1138, 1139 (2010). At the time of the land transaction in 1994, Bach had taken no action to establish a legal entity under the name of the Targhee Powder Emporium or to file an assumed business name certificate. Id. However, on November 13, 2000, in apparent anticipation of the impending litigation, Alva Harris filed incorporation papers for Targhee Powder Emporium, Inc., and filed a certificate of assumed business name stating that the corporation would be doing business as the Targhee Powder Emporium, Ltd. See id. On November 21, 2000, Targhee Powder Emporium, through its Vice President Jack Lee McLean, transferred its purported interest in the Peacock Property to Wayne Dawson. The deed reflecting Dawson's interest was recorded in Teton County by Alva Harris. Just a year later, Harris brought the quiet-title complaint on Dawson's behalf alleging that ―Wayne Dawson... was in reality the de facto undisclosed principal known as ‗Targhee Powder Emporium, Ltd.'... at the time of the original purchase,‖ and that the Targhee Powder Emporium had transferred its interest to Dawson.*fn2 Accordingly, the complaint alleged that Dawson held a one-half interest, McLean held a one-fourth interest, and the Cheyovich Family Trust held the other one-fourth interest in the Peacock Property.

On January 7, 2002, Bach attempted to answer the complaint on behalf of the Cheyovich Family Trust, the Vasa N. Bach Family Trust, and the Targhee Powder Emporium. While the district court concluded that Bach was not entitled to represent any entity in the suit, it granted Bach's motion to intervene in the case as to his personal interests only. In his Complaint in Intervention, Bach claimed that he was the rightful owner of the Targhee Powder Emporium and, therefore, he asked the district court to declare that he was entitled to ―at least one-fourth‖ interest in the property.

Shortly thereafter, Bach initiated his own quiet-title action against Wayne Dawson and Jack Lee McLean in Teton County Case No. CV-02-208 claiming that he had an undivided one-fourth interest in the Peacock Property. Bach v. Bagley, No. 31717, 2010 WL 937270, at *2 (Idaho Mar. 17, 2010).*fn3 On February 23, 2004, the district court entered a default judgment in that case against Dawson quieting a one-fourth title in Bach and holding that Dawson had only an undivided one-fourth interest in the Peacock Property. Dawson did not appeal the default judgment.

Subsequently, in the case at bar, Bach moved on October 25, 2004, for the dismissal of the case with prejudice for lack of diligent prosecution. The district court, however, refused to dismiss the case because the plaintiffs' delay was attributable to the interim suit filed by Bach in Teton County Case No. CV-02-208.

On July 2, 2007, Bach again moved for dismissal of the case and for summary judgment on his counterclaims. On September 11, 2007, the district court ordered the dismissal of the plaintiffs' case with prejudice for lack of diligent prosecution and granted summary judgment in favor of Bach on all of his claims. The district court's memorandum opinion and its subsequent order quieting title were both signed by Judge Shindurling, but were authored in their entirety by Bach. Among other holdings, the memorandum opinion held that: (1) Bach was the rightful owner of the Targhee Powder Emporium; (2) the third-party defendants violated the ―Idaho Racketeering RICO Act and even the Federal RICO act‖; (3) ―all third party defendants ‗did steal, convert, destroy and deprive [Bach] of his dba names and business identities of TARGHEE POWDER EMPORIUM, LTD, UNLTD, and INC.'‖; (4) Bach was entitled to three-fourths interest in the Peacock Property by virtue of Dawson's default in Teton County Case CV-02-208, with the other quarter interest being retained by the Cheyovich Family Trust; (5) Dawson was barred from enforcing an oral agreement to sell his interest in the Peacock Property to Bach by the applicable statute of limitations; (6) there was a permanent injunction against all the third-party defendants prohibiting them, among other things, from bringing any further actions against Bach; and (7) Bach was entitled to sole interest in two other properties-a 33-acre parcel known as the ―Drawknife Property‖ and an 8.5-acre parcel known as the ―Zamona Casper Property.‖

On October 17, 2007, attorney Marvin M. Smith substituted into the case as the attorney of record for Dawson. Dawson then filed a Motion for Reconsideration and a Memorandum in Support of Motion for Reconsideration arguing, in pertinent part, that he had a meritorious defense because he never authorized Alva Harris to initiate the underlying lawsuit in 2001 and he was not aware of the lawsuit until he received a phone call on October 10, 2007, explaining that the opinion and judgment had been entered. Additionally, Dawson alleged a new set of facts surrounding the 1994 purchase of the Peacock Property. Specifically, Dawson alleged that Bach approached him about buying the Peacock Property with three other investors for $120,000, each investor contributing $30,000 for their quarter interest. Dawson agreed to contribute his $30,000 share. Bach obtained a power of attorney from Dawson, allowing Bach to sign the closing documents on behalf of Dawson. However, the sale receipts and closing documents indicate that the actual purchase price of the property was $60,000, with Dawson contributing $30,000, Jack Lee McClean contributing $15,000, and the Cheyovich Family Trust contributing $15,000. Dawson alleged that Bach did not contribute any money towards the purchase price, but obtained a one-quarter interest in the property.

Furthermore, Dawson brought a separate I.R.C.P. 60(b)(6) motion to set aside the district court's September 11, 2007, memorandum opinion and judgment on the basis that, among other things, the district court's judgment was directly contrary to the default judgment entered by Judge St. Clair in Teton County Case CV-02-208 which held that Dawson had only an undivided one-fourth interest in the Peacock Property. Moreover, Dawson brought a motion for sanctions against Bach, arguing that he improperly communicated with a represented party in violation of the Idaho Rules of Professional Conduct.

In its memorandum decision, the district court, now with Judge Darren B. Simpson presiding,*fn4 denied the plaintiffs' motion for reconsideration, holding that: (1) Dawson's lack of knowledge of the underlying lawsuit was not grounds to grant the motion for reconsideration, but instead served as grounds for an independent action against Harris, and (2) Dawson's interest in the Peacock Parcel was not new evidence sufficient to justify a reconsideration of the district court's ruling. The district court did not issue a ruling on Dawson's Rule 60(b)(6) motion, but denied plaintiffs' motion for sanctions against Bach. While the ...


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