Appeal from the District Court of the Sixth Judicial District of the State of Idaho, in and for Bannock County. The Hon. Stephen S. Dunn, District Judge.
The opinion of the court was delivered by: Eismann, Justice.
The judgment of the district court is affirmed.
This is an appeal out of Bannock County from a summary judgment dismissing an action to enforce an oral agreement to guaranty the debt of another on the ground that the agreement is barred by the statute of frauds. We affirm the judgment of the district court.
In January 2009, Lesa Darlene Horrocks was one of the owners of Sunshine Secretarial Services, Inc., which was in the business of providing contract secretarial services, professional office space rental with in-house services, accounting, and management services. It subleased a common office space to Accelerated Paving, Inc., and, at times, provided it with secretarial and other services, such as copying and cleaning.
Accelerated Paving owed Mickelsen Construction, Inc., the sum of $34,980.00 for providing asphalt to an Accelerated Paving jobsite. Mickelsen Construction threatened to file a materialmen's lien against the real property on which the work was being done, and Accelerated Paving's vice president asked that it not do so because that would delay the receipt of payment for the construction job. The vice president offered to pay the debt with an American Express credit card, but Delwyn Mickelsen, the president of Mickelsen Construction, responded that it did not accept American Express credit cards. There is disagreement as to what happened next.
Mr. Mickelsen testified that Accelerated Paving's vice president said there was not enough credit on the card to fund the payment, but when Accelerated Paving received payment for the project it would pay down the balance so that there was enough credit to pay Mickelsen Construction with the credit card. Mickelsen Construction agreed not to file the lien if Accelerated Paving could find someone to guaranty the payment by the credit card. Ms. Horrocks agreed to do so and gave Mr. Mickelsen a check dated January 8, 2009, in the amount of $34,980.00 drawn on the account of Sunshine Secretarial Services and payable to Mickelsen Construction. Mr. Mickelsen told the general manager of Accelerated Paving that a bank in a nearby town had agreed to facilitate the transaction with the American Express card, and once funds were received from American Express the check would be returned to Ms. Horrocks. Accelerated Paving did not go to the bank to pay the debt with its credit card, and after not receiving payment Mickelsen Construction attempted twice to negotiate the check, but there were insufficient funds in Sunshine Secretarial's bank account.
Ms. Horrocks testified that she was asked by Accelerated Paving's vice president and general manager if she would facilitate a credit card payment to Mickelsen Construction. Sunshine Secretarial had a credit card machine that was capable of transacting with several credit cards including American Express credit cards. They told her that American Express had approved the transaction and asked her to use Sunshine Secretarial's credit card machine to run a $34,980.00 transaction and write a check to Mickelsen Construction for the same amount, with the understanding that American Express would pay Sunshine Secretarial that sum in the normal course of business. She ran the credit card through Sunshine Secretarial's credit card machine, and it appeared to her that the transaction had been approved by American Express. She then issued the check. Several days later, Accelerated Paving informed her that American Express had not approved the transaction. She never informed anyone that Sunshine Secretarial would accept Accelerated Paving's debt to Mickelsen Construction. The testimony of Accelerated Paving's vice president and general manager essentially agreed with that of Ms. Horrocks.
Accelerated Paving had filed bankruptcy. On June 30, 2010, Mickelsen Construction filed this action against Ms. Horrocks and Sunshine Secretarial alleging that they had agreed to guaranty the credit card payment and so issued the check. The Defendants filed a motion for summary judgment, arguing that the alleged guaranty was barred by the statute of limitations in Idaho Code section 9-505. In response, Mickelsen Construction argued that the check was a sufficient writing under the statute of frauds and, if not, that the transaction was governed by Idaho Code section 9-506 and therefore exempt from the statute of frauds. The district court held that the check was an insufficient writing and that section 9-506 did not apply because the Defendants did not receive any direct benefit as required by Reed v. Samuels, 43 Idaho 55, 249 P. 893 (1926). The court granted the motion for summary judgment and entered a judgment dismissing this action. Mickelsen Construction then timely appealed.
Did the District Court Err in Granting the Defendants' Motion for Summary Judgment?
In order to decide whether the district court erred in granting the Defendants' motion for summary judgment, it is first necessary to identify the cause of action alleged by Mickelsen Construction.
1. The only claim alleged in the complaint was that Ms. Horrocks agreed to guaranty the debt of Accelerated Paving.
The only claim alleged by Mickelsen Construction in its complaint was that Ms. Horrocks*fn1 agreed to guaranty Accelerated's debt. After identifying the parties, the complaint alleged as follows:
Mickelsen Construction, Inc. threatened to file a material lien against a project in which Accelerated Paving, Inc. was involved.
Alan Smith of Accelerated Paving, Inc. came to Delwyn Mickelsen and requested that Mickelsen Construction, Inc. not file the lien because that would prevent Accelerated Paving, Inc. from getting paid on the project. Alan Smith offered to pay by credit card but explained that he would have to use the project payment to pay the balance on his credit card before he could obtain the credit necessary to fund the credit card payment.
Mickelsen Construction, Inc. agreed not to file the lien on the condition that Alan Smith and Accelerated Paving, Inc. obtain someone to guarantee the payment by credit card which was offered by Alan Smith and Accelerated Paving, Inc..
Defendant Lesa D. Horrocks agreed to guarantee the credit card payment of Alan Smith and Accelerated Paving, Inc. and to do so wrote a check on the account of Sunshine Secretarial Services, Inc. and Lesa D. Horrocks in the amount of $34,980.00 on January 8, 2009. A copy of said check is attached hereto as Exhibit "A".
The check written by Lisa [sic] D. Horrocks on the account of Sunshine Secretarial Services, Inc. and Lesa D. Horrocks bounced and despite numerous demands the checking account on which the check was written never had sufficient funds for the check. Copies of letters from Idaho Central Credit Union dated January 26, 2009 and January 27, 2009 are attached hereto as Exhibit "B".
That the sum owed is a liquidated sum and plaintiff is entitled to interest at the rate of 12% per annum from and after January 8, 2009, and until a Judgment is entered in this matter.
Throughout the complaint, Mickelsen Construction alleges that it wanted someone to guaranty Accelerated's credit card payment and Ms. Horrocks agreed to do so. There is no allegation that she entered into any transaction other than as a guarantor. Even on appeal, it alleges that Ms. Horrocks agreed to guaranty that debt. In stating the facts in its initial brief, Mickelsen Construction wrote:
Mickelsen Construction agreed not to file the lien on the condition that Smith and Accelerated obtain someone to guarantee the payment by credit card which was offered by Smith and Accelerated. (R., p. 48) Defendant Horrocks leased space, provided secretarial services and provided other in-house services to Accelerated. (R., pp. 22, 23) Horrocks agreed to guarantee the credit card payment of Smith ...