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Idaho Trust Bank v. Christian

Supreme Court of Idaho

May 23, 2013

IDAHO TRUST BANK, an Idaho corporation, f/k/a IDAHO TRUST NATIONAL BANK, Plaintiff-Respondent,
v.
MICHAEL R. CHRISTIAN, an individual, Defendant-Appellant.

2013 Opinion No. 61

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

The judgment of the district court is affirmed.

Barry L. Marcus, Marcus Christian Hardee & Davies, Boise, argued for appellant.

Fredric V. Shoemaker, Greener Burke Shoemaker Oberrecht, Boise, argued for respondent.

EISMANN, Justice.

This is an appeal out of Ada County from a summary judgment granted against the appellant in an action to recover on his personal guaranty. We affirm the judgment of the district court.

I. Factual Background.

On December 8, 2006, Trinity Investments, LLC (Borrower), an Idaho limited liability company, executed and delivered to Idaho Trust National Bank (Lender) a promissory note in the principal amount of $5, 625, 000.00 to develop a parcel of real property and construct townhouses upon it. Borrower was to make monthly payments of accrued interest and to pay the outstanding principal, plus accrued interest, on December 8, 2007. Borrower and Lender later entered into several agreements to change the terms of the note to reduce the principal and extend the date of maturity. The note was secured by a construction deed of trust on the real property being developed. Michael R. Christian (Guarantor) executed the promissory note as a member of Borrower, and he also signed a guaranty of Borrower's indebtedness to Lender.

Borrower ultimately defaulted on the loan, and Lender brought a lawsuit against it to recover on the promissory note. During that proceeding, they stipulated to have a receiver appointed to market and sell the real property that was the collateral for the note. The receiver was authorized to sell the townhouse units for 80% of their appraised value without court approval. Guarantor signed the stipulation appointing the receiver as attorney in fact for Borrower. By June 2011, the receiver had sold all of the remaining properties. Those sales did not generate sufficient funds to pay the sums owing on the note.

On May 13, 2011, Lender brought this action to recover from Guarantor the balance owing by Borrower on the note. The district court granted Lender's motion for summary judgment and denied Borrower's motion for reconsideration. On March 7, 2012, the district court entered judgment in favor of Lender against Guarantor in the sum of $1, 743, 448.01, plus interest in the amount of $7, 687.68. Guarantor timely appealed.

II. Did the District Court Err in Holding that the Guaranty Agreement Is Not Ambiguous?

Guarantor contends that Lender could not recover a deficiency judgment against Borrower because the property was sold by the receiver rather than by foreclosing on the deed of trust and that the guaranty is ambiguous as to whether it extends to debts not enforceable against Borrower. We need not decide whether Idaho Code section 45-1512 applies where the property subject to the deed of trust is not sold at a foreclosure sale but is sold by a receiver pursuant to the agreement of the grantor of the deed of trust. The guaranty states, "For good and valuable consideration, Guarantor absolutely and unconditionally guarantees full and punctual payment and satisfaction of the Indebtedness of Borrower to Lender, and the performance and discharge of all Borrower's obligations under the Note and the Related ...


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