Opinion No. 99
from the District Court of the Fifth Judicial District of the
State of Idaho, Blaine County. Hon. Robert J. Elgee, District
judgment of the district court is affirmed in part, reversed
in part, and the case is remanded for further proceedings.
Thompson Smith Woolf & Anderson, PLLC, Idaho Falls, for
appellant Sondra Kantor. Marty R. Anderson argued.
Shoufler Miller Johnson, LLP, Boise, for respondent Robert
Kantor. Scot M. Ludwig argued.
one of two consolidated cases that Robert and Sondra Kantor
appealed to this Court; the other is Kantor v.
Kantor, Docket No. 42980. This appeal is from the
district court's dismissal of Sondra's claim that
Robert breached a Property Settlement Agreement (PSA) as a
sanction, its grant of summary judgment against her, and its
award of attorney fees to Robert. We affirm in part, reverse
in part, and remand the case for further proceedings.
FACTUAL AND PROCEDURAL BACKGROUND
and Sondra were married for forty-three years before they
divorced in 2012. As part of their divorce settlement, Robert
and Sondra entered into the PSA on April 25, 2012. The PSA
divided the parties' property, including their interests
in a number of business entities. The PSA did not result in
an entirely clean break between the parties, as a number of
Robert and Sondra's joint business ventures remained
intact. A judgment of divorce was entered on April 30, 2012.
This judgment did not incorporate the PSA.
this opinion will refer to other portions of the PSA, the
following terms are of particular importance to this appeal:
5. REAL PROPERTY:
The parties own real property located at 265 Golden Eagle
Drive, Hailey, Idaho.
5.01This real property shall be sold as soon as reasonably
5.02 Pending the sale or disposition of this real property,
Robert shall maintain the property and pay all utilities
provided to the property....
5.03 Each party shall provide to the other any information
either party receives that may be relevant to the ownership,
sale, rental or other disposition of said property.
28. DEBTS AFTER SIGNING OF AGREEMENT:
… In the event Robert shall obtain refinancing of
any debts for which Sondra has liability, Sondra shall
co-operate in any manner needed to conclude such refinancing
after review of the refinancing documents and terms by her
attorney and/or accountant.
29. MISCELLANEOUS PROVISIONS: …
28.03 [sic] If action is instituted to enforce any of the
terms of this Agreement, then the losing party agrees to pay
to the prevailing party all costs and attorneys' fees
incurred in that action.
case initially related to the parties' efforts to sell
the community residence which was the subject of Section 5 of
the PSA (the property). The parties owed Bank of America
approximately $3.4 million on a note secured by the property
and another bank $1 million on a home equity line of credit
(HELOC), which was secured by a second priority interest in
the property. At the time, Bank of America was subject to a
consent judgment in an action brought by the Department of
Justice. That consent judgment required Bank of America to
provide relief to qualifying customers in the form of loan
forgiveness and restructuring of debts. The other bank
completely forgave the parties' debt on the HELOC. This
litigation results from Robert's efforts to seek debt
forgiveness and/or restructuring of the $3.4 million
obligation to Bank of America which was secured by the
September of 2012, the parties contracted to sell the
property in a short sale for $2.4 million in a cash
transaction scheduled to close within 30 days, contingent
upon Bank of America's approval of the short sale. The
parties were asked to sign a document that extended the
period for the contingency to be satisfied to October 5,
2012. Sondra evidently perceived this as an opportunity to
apply leverage to secure Robert's compliance with other
terms of the PSA, and she sent him an email indicating that
she would not extend the contingency until a number of
demands were satisfied.
October 11, 2012, Robert responded to Sondra's demand by
filing a complaint seeking contract damages and injunctive
relief due to her failure to sign the extension agreement.
Sondra signed the required document later the same day. In
November of 2012, Sondra answered Robert's complaint and
counterclaimed for breach of contract, an accounting relating
to the parties' assets, and fraud. In that same month,
the short sale fell through. This was through no fault of the
parties; rather, Bank of America had failed to obtain a
February of 2013, the Kantors entered into a second agreement
with the prospective purchasers to sell the property for $2.4
million. Although Bank of America initially approved this
short sale in late March, whereby it would have waived a
deficiency in excess of $1.4 million, on April 3, 2013, it
revoked that approval because Robert was pursuing a loan
modification that had potential to result in even more of the
parties' debt being forgiven.
March, Robert moved for partial summary judgment, seeking a
declaration that Sondra had breached the PSA by failing to
timely sign the extension document and dismissal of
Sondra's counterclaims for breach of contract and fraud.
Robert's motion was heard on June 24, 2013. The district
court granted summary judgment dismissing Sondra's breach
of contract (Count I) and fraud (Count III) counterclaims and
held that Sondra was obligated to sign the short sale
extension document. Robert had argued that the attorney fees
he had incurred were damages resulting from Sondra's
failure to sign the short sale extension. The district court
So her not signing did not cause the contract -- and I want
that underlined, did not cause contract damages. It did
provoke a claim for fees, I'll rule on that, but
that's a judge issue, it's not a jury issue, so this
issue won't go to the jury. That's an issue for the
Court to determine who the prevailing party is and whether
someone gets fees under a contract, under the divorce
contract, or by statute or for some other reason.
18, 2013, Robert moved for an award of attorney fees and
costs totaling $19, 334.53 based upon the attorney fees
provision of the PSA.
action then morphed into a dispute over Robert's efforts
to obtain a loan modification from Bank of America. On August
7, 2013, the district court entered its order permitting
Sondra to amend her counterclaim. On August 9, 2013, Sondra
filed an amended answer and counterclaim alleging that, among
other things, Sondra had been damaged by Robert's
attempts to obtain a loan modification. The same day, both
parties sought injunctive relief. Sondra asked the district
court to prohibit Robert from further pursuit of the loan
modification and to require him to participate in the short
sale of the property. Robert asked that Sondra be prohibited
"from contacting Bank of America regarding the current
financing" of the property.
parties' respective motions for injunctive relief came
before the court on September 12, 2013. There, Robert
contended that a loan modification could reduce the
parties' $3.4 million debt to $1.5 million. Three
witnesses testified, including Sondra. She testified to her
trepidation about pursuing the loan modification, expressing
concern about letting Robert stay in the property
indefinitely and the potential tax consequences of debt
forgiveness. Following a recess, the parties announced a
stipulation withdrawing their respective motions. Sondra
agreed not to contact Bank of America in the four-month
period before the scheduled trial, and Robert agreed to
diligently pursue a loan modification from Bank of America.
The Court entered an order consistent with the parties'
stipulation on October 16, 2013.
October 9, 2013, Robert filed a Motion to Compel Recording of
Quitclaim Deed in which he asked that Sondra be required to
quitclaim her interest in the property to him. In his
supporting affidavit, Robert asserted that Bank of America
required that Sondra quitclaim her interest in the property
"to complete their loan modification review."
Sondra took prompt action to defeat the district court's
ability to grant such relief. The next day, Sondra
quitclaimed her interest in the property to her boyfriend, Al
LaPeter, in exchange for $100 "subject to" the
obligation to Bank of America.
October 17, 2013, Sondra submitted the PSA to the magistrate
court in the parties' divorce action and requested that
it be incorporated in a supplemental judgment. Proceedings
related to this motion gave rise to the companion case in
Docket No. 42980.
motion came before the district court for hearing on November
15, 2013. The district court stated: "What appears to me
to be evident is that she has moved her interest away from
herself in order to prevent the Court from ordering a
transfer of the property to Mr. Kantor." The court then
made it clear that it intended to exercise control over the
parties to achieve an end that it perceived to be in the
parties' best interests:
I've got a lot of cards that I can play in this. I can
say that people that want to play, I can see how this works,
and I can impose sanctions. I can throw out people's
defenses. I can throw out their cases. I can award
attorney's fees. I've got a lot of arrows, and I
don't want to sling them at anyone. I want to try and
get what's best for both parties.
I told [Sondra's attorney] in chambers, I said if this
goes forward, because the parties were having a discussion
about it, it is absolutely not going to harm --to the extent
I can prevent it, it's not going to harm Mrs. Kantor. Any
benefit that would flow to Mr. Kantor is going to flow half
to her because that's the purpose of the order. Whether
you call it an order of sale or a contract agreement to sell
the property, whatever you call it, that's the
purpose of it is to benefit both parties and to benefit them
district court then observed: "I can't order Mr.
LaPeter to quitclaim the property back to Mrs. Kantor, but I
can order that to the extent possible she has to obtain the
property from Mr. LaPeter, obtain a quitclaim deed, and
record a quitclaim deed to Mr. Kantor." The district
court entered an order to this effect on November 20, 2013.
November 18, 2013, Sondra delivered a quitclaim deed to
Robert's attorney. This document was of little practical
value in light of her earlier quitclaim deed to LaPeter. The
same day, LaPeter sent an email to the parties' attorneys
notifying them that he would not sign a deed to the property.
November 20, 2013, Robert filed a motion asking for an order
that Sondra be declared in contempt for her actions which
frustrated his ability to secure a loan modification and
imposing civil sanctions. This motion resulted in a bizarre
and disturbing response from the district court. On the same
date, the district court sent a lengthy email to the lawyers
for the parties and the judge assigned to the Kantors'
divorce action. This email stated, in part:
So with the consent and stipulation of Sondra, Mr. Kantor has
pursued a loan modification, which, if successful, would
result in B of A simply reducing the loan balance, and the
information presented to the court is that it would be in the
neighborhood of $1M or possibly more. … Mr. Kantor has
argued he is on the brink of a successful loan modification
arrangement with B of A, and has sought a Quitclaim Deed from
Sondra in order to accomplish this goal, for the apparent
benefit of both parties. After he filed a motion with this
Court requesting the Court order Sondra to quitclaim the
property to Bob, on October 10 of 2013, despite the
contractual agreement to sell the house, Sondra deeded the
house to a friend/confidant/person she apparently has a close
relationship with, one Al LaPeter. This, obviously,
frustrates the contractual obligation of Sondra to sell,
which would ordinarily simply result in a cause of action for
money damages; however, in this context it has also
(arguably) frustrated Mr. Kantor's ability to lower the
debt, and sell the house, and also provide both Bob and
Sondra Kantor a significant monetary gain. …
On November 15, after quite a bit of discussion in chambers,
and some argument on the record, the Court entered an order
directing Sondra to use her best efforts to re-obtain title
from Al LaPeter and Quit Claim her interest in the property
to Bob Kantor by 10am Monday November 18 so that Bob could
pursue a loan modification. By doing so, the Court was
hopeful it could alleviate Sondra's concerns regarding
"bank fraud", and, despite Sondra's efforts to
the contrary, fulfill all of the contract objectives and
allow Sondra to achieve some economic benefit in the process.
… The Court notes from an exhibit C attached to Mr.
Kantor's affidavit (a letter from [Sondra's
attorney]-who now represents both Sondra and Al
LaPeter) that Mr. LaPeter wishes to inspect the Kantor
residence as a tenant in common, requests unqualified access
to the property, and that he intends to use the property in
accordance with his rights as a property owner. …
I will tell you right now that I will not be party to a
contempt proceeding, and why I have, or will, choose an
alternate process. [Sondra's lawyer] knows full well I
cannot get at Mr. LaPeter by contempt proceedings. Mr.
LaPeter is not a party to the case, and he has not been
ordered to do, or not do, anything. Likewise, Sondra Kantor
has a built-in defense. She can argue that she begged and
pleaded for Mr. LaPeter to QuitClaim his interest back to
her, and that he has refused, and there is nothing the Court
can do about it. She is probably right. There is no reason to
proceed along contempt lines. In addition, it is clear to me
that I am probably operating at the outer limits of my
authority by even ordering Sondra Kantor to execute a
quitclaim deed to Bob Kantor for purposes of a loan
modification when the Court's jurisdiction over the
property is tenuous at best, particularly when the PSA
is not merged into the decree, (at least not yet.) I tried to
make the contract workable, but I cannot if one party chooses
to deliberately frustrate its objectives. … I wish
the parties to know, in advance, exactly what I intend to do
if Sondra and Mr. LaPeter choose to continue on the present
course. Sondra Kantor chose to quitclaim the property to
Mr. LaPeter, for whatever reasons. She also has a pending
counterclaim. If she chooses to resist the Court's
current order, either because she is unable to obtain title
from Mr. LaPeter, or because she chooses not to execute a
satisfactory quitclaim deed to Bob Kantor immediately, I
will summarily dismiss her counterclaim. Summarily. I will
not even await nor require a motion from Bob Kantor.
… She will not be allowed to ignore the Court's
order, either explicitly or implicitly, and maintain a
counterclaim. It will be dismissed with prejudice, as a
sanction, for the reasons set forth in this email, and Bob
Kantor may apply for attorney fees as the prevailing party in
the pending case against Sondra, and the case will be over.
Mr. Kantor could apply to the magistrate court for an order
merging and incorporating the PSA into the decree of divorce.
If that is accomplished, that court unquestionably has
jurisdiction over the property, and is probably well within
its authority to compel deeds between parties, regulate
negotiation of the secured debt on the property, hold parties
in contempt as necessary in order to enforce its
italics, capitalization, "QuitClaim" in original).
short, the district court recognized that it had issued an
order of dubious legality that could not be enforced by way
of contempt, yet insisted that if it were not honored the
district court would ...