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Tapadeera, LLC and Cary v. Jay F. and Theresa Knowlton

June 29, 2012


Appeal from the District Court of the Fifth Judicial District of the State of Idaho, in and for Minidoka County. The Hon. Jonathan P. Brody, District Judge.

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

2012 Opinion No. 98

Stephen W. Kenyon, Clerk

The judgment of the district court is affirmed.

This is an appeal from a summary judgment granted on the ground that the defendants prevented the plaintiffs from performing a settlement agreement resolving the lawsuit and a cross-appeal from the court's order denying the plaintiffs an award of attorney fees. We affirm the summary judgment and the denial of attorney fees.


Factual Background.

Tapadeera, L.L.C., had owned an eight-acre parcel of property that had been platted as one lot. It had agreed to sell the lot, but the purchasers' lender only wanted a lien on two acres upon which the purchasers intended to place a modular home. Therefore, Tapadeera sold the property as two parcels--a two-acre parcel purchased with the loan proceeds and a six-acre parcel purchased apparently under a real estate contract. The purchasers had a modular home placed on the two-acre parcel, but they failed to make the payments due in both transactions. As a result, the lender foreclosed on the two-acre parcel, and Tapadeera regained title to the six-acre parcel.

In 2003, Jay and Theresa Knowlton, husband and wife, desired to acquire both parcels of property and to construct a home on the six-acre parcel. They purchased the two-acre parcel from the bank. By written contract dated September 16, 2003, Jay Knowlton contracted to purchase the six-acre parcel from Tapadeera, L.L.C., for the sum of $31,250.00.

After making several payments under the contract, Mr. Knowlton contacted Cary Hamilton, Tapadeera's president, to determine the amount necessary to pay the contract in full. Mr. Hamilton determined that the sum was $23,421.01, and on April 16, 2004, Mr. Knowlton gave Mr. Hamilton a check in that amount in exchange for the deed to the property.

Mrs. Knowlton recorded the deed, and the Knowltons stopped payment on the check when they discovered that they could not obtain a building permit for the six-acre parcel because it had been wrongly divided from the two-acre parcel. Tapadeera had not subdivided the lot into the two-acre and six-acre parcels, and so the county still considered them as being one platted lot. Because the modular home was on the lot as platted, the Knowltons could not construct a second home on it without subdividing the platted lot into two lots.

For over four years, neither party took any action regarding this transaction. The Knowltons did not seek to rescind the transaction, and Tapadeera did not seek to collect the balance owing under the real estate contract. On August 13, 2008, Tapadeera and Mr. Hamilton commenced this action, seeking to recover on one cause of action (the sale transaction) under six different theories.

The Knowltons moved for summary judgment, and on March 2, 2009, the court granted the motion with respect to two theories that it held were barred by the applicable statutes of limitations. It held that recovery on the dishonored check was barred by the three-year statute of limitations in Idaho Code section 28-3-118(3) and that recovery for fraud was barred by the three-year statute of limitations in Idaho Code section 5-218(4).

After the Knowltons had moved for summary judgment, Tapadeera and Mr. Hamilton filed an amended complaint, with court approval. In the amended complaint, they omitted the theories seeking recovery based upon the dishonored check and fraud, and they added the theory of a vendor's lien and sought foreclosure of it.

The case was set for trial to commence on September 9, 2009. On that date, the parties reached an agreement that they hoped would resolve the matter. They agreed that the trial would be postponed; that Mr. Hamilton would seek county permission to subdivide the platted lot into the two-acre and six-acre parcels; that Mr. Hamilton would prepare the application, obtain the necessary documents, and pay the costs of doing so; that the Knowltons would sign the application because they are the owners of the property; that they would support the application "by appearing at any hearings that might be necessary in front of the county commissioners or zoning commission or whatever"; and that they would "be supportive and assist [Tapadeera and Mr. Hamilton] and cooperate as necessary to get the subdivision approved." In addition, within thirty days after the county approved the subdivision application, the Knowltons would pay $23,421.00 in a cashier's check to Tapadeera's counsel through his trust account. If the Knowltons failed to make the payment within the thirty days, then Tapadeera could foreclose its vendor's lien, which was one of the causes of action alleged in its amended complaint.

Mr. Hamilton prepared the subdivision application and necessary documents, and the Knowltons signed the application, although the proposed amended plat was not attached when they signed it. The application was submitted on January 12, 2010, and it was heard by the planning and zoning commission, which voted to recommend approval of the application to the board of county commissioners with the conditions that the application must comply with the county subdivision ordinance and the irrigation district requirements for irrigation. The county required road access to both lots, and the irrigation district required that there be a means to deliver water to both lots. Easements were required for both the road access and the delivery of irrigation water.

The county had mailed notices of the hearing to forty-seven property owners, but due to a mistake it had not mailed a notice to the Knowltons. They learned of the hearing after it was over, and on February 22, 2010, they gave written notice to the county that they, as the ...

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