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Indian Springs L.L.C., An Idaho Limited v. Terry and Rosanna andersen

September 14, 2012

INDIAN SPRINGS L.L.C., AN IDAHO LIMITED
LIABILITY COMPANY,
PLAINTIFF-RESPONDENT,
v.
TERRY AND ROSANNA ANDERSEN, HUSBAND AND WIFE,
DEFENDANTS-APPELLANTS,
AND
EVERETT AND MARGIE ELLS, HUSBAND
AND WIFE,
DEFENDANTS.



Appeal from the District Court of the Sixth Judicial District of the State of Idaho, in and for Power County. The Hon. Stephen S. Dunn, District Judge.

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

2012 Opinion No. 119

Stephen W. Kenyon, Clerk

The judgment of the district court is affirmed.

This is an appeal from Power County in which the appellants challenge a judgment ejecting them from real property purchased by the respondent at a mortgage foreclosure sale. The appellants' primary complaint is that the district court denied their claim for unjust enrichment under which they sought to recover damages for improvements they had made to the real property prior to the foreclosure sale. We affirm the judgment of the district court.

I.

Factual Background.

On July 2, 1996, Terry and Rosanna Andersen (the Andersens) and John and Julie Baker (the Bakers), contracted to purchase from D.M. and Shirley Thornhill (the Thornhills) real property known as Indian Springs Natatorium for the sum of $750,000. The buyers made a $100,000 down payment and signed a promissory note for the balance of the purchase price. The note was secured by a mortgage on the real property. Mr. Andersen, as trustee of the Andersen Living Revocable Trust (the Trust), later guaranteed the note. At closing, the property was deeded to the Bakers and to Terry Andersen as trustee of the Trust.

On September 30, 1997, AICO Recreational Properties, LLC, (AICO) and the Trust borrowed $149,720.69 from Everett and Ardis McKinney (the McKinneys) and gave them a real estate mortgage on the property to secure the debt. On January 23, 1998, the Bakers deeded their interest in the property to AICO, and on February 24, 1998, Mr. Andersen deeded the Trust's interest to AICO. On January 26, 1998, the McKinneys loaned an additional $40,000 and received another mortgage on the property as security for the loan.

In 2000, the McKinneys began making the payments owing to the Thornhills. They filed an action against AICO, the Andersens, and others to foreclose their mortgages, and on March 6, 2001, the court in that lawsuit entered a decree of foreclosure and order of sale. On March 29, 2001, AICO filed a petition under Chapter 11 of the bankruptcy code, and the petition was later converted to Chapter 7. On February 27, 2003, the real property was sold at a sheriff's sale pursuant to the McKinneys' judgment, and they were the purchasers. On May 14, 2004, the bankruptcy court ordered the real property, fixtures, and specific personal property of AICO abandoned as property of the estate. It granted possession of the real property and fixtures to the McKinneys, possession of the abandoned personal property to the Thornhills, possession of one mobile home on the property to Mrs. Andersen's parents, and possession of the other mobile home to a third party. On June 1, 2004, the McKinneys deeded the real property to Indian Springs Land Investment, LLC.

On September 27, 2005, the Thornhills assigned their promissory note and mortgage to Indian Springs, LLC, (Indian Springs), and on October 21, 2005, it filed a lawsuit to foreclose the mortgage. It named as defendants numerous parties, including the Andersens, AICO, the McKinneys, and Indian Springs Land Investment, LLC. On November 19, 2007, the district court in that case entered a judgment, decree of foreclosure, and order of sale. The court: (a)

granted Indian Springs a judgment in the total sum of $424,905.54 against the Andersens and certain other defendants; (b) decreed that the lien of Indian Springs's mortgage had priority over the liens or interests in the property of any of the named defendants; and (c) ordered the property sold to pay Indian Springs's lien. The Andersens appealed, and this Court affirmed the judgment on appeal. Indian Springs LLC v. Indian Springs Land Inv., LLC, 147 Idaho 737, 215 P.3d 457 (2009).

On January 14, 2008, the sheriff sold the real property at public auction, and Indian Springs made the highest bid. The sheriff gave Indian Springs a certificate of sale; the real property was not thereafter redeemed; and on January 15, 2009, the sheriff issued Indian Springs a sheriff's deed.

On March 3, 2009, Indian Springs filed this action seeking to evict the Andersens and Mrs. Andersen's parents from the real property pursuant to Idaho Code section 6-310, which applies to actions for forcible entry and unlawful detainer. The Andersens, representing themselves, filed an answer and counterclaim on March 31, 2009. Mrs. Andersen's parents also filed an answer and counterclaim, but they have not appealed the judgment.

On October 8, 2009, the district court held a court trial, but at the conclusion of the trial it stated that it needed additional evidence on one issue and additional authority on two other issues. It continued the matter until November 12, 2009, for further proceedings.

On October 14, 2009, the Andersens moved to dismiss the complaint on the ground that the complaint did not state a claim under section 6-310 because that statute only applies to actions seeking possession of land that does not exceed five acres in size and the complaint was not verified as required by Idaho Code section 6-318, which states that in ...


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