Opinion No. 18
from the District Court of the Fifth Judicial District of the
State of Idaho, Twin Falls County. Hon. Randy J. Stoker,
judgment of the district court is reversed.
Robinson & Tribe, Rupert, for appellants. Brent T.
Pursley LLP, Boise, for respondent. Kersti Kennedy argued.
JONES, Justice Pro Tem.
Paving Company, Inc., Northwest Sand & Gravel, Inc.,
Blackrock Land Holdings, LLC (collectively, "Gordon
Paving"), Brandon Hansen, an individual, Brian Hansen,
an individual, Carol Hansen GPC Nevada Trust, Craig Hansen
GPC Nevada Trust, Canyon Equipment and Truck Service, Inc.,
and Doe Entities owned by Brian, Brandon, and Craig Hansen
(collectively "Guarantors") appeal from the
judgment entered following the district court's denial of
their motion to set aside default in a breach of personal
guarantee action brought by AgStar Financial Services, ACA
("AgStar"). We affirm.
AND PROCEDURAL BACKGROUND
2007 and 2008, Gordon Paving borrowed $10 million from
AgStar. In addition to real and personal property collateral,
the indebtedness was secured by separate guarantee agreements
executed by Guarantors. By 2012, Gordon Paving had defaulted
and AgStar sued for foreclosure.
19, 2013, the district court entered a Judgment and Decree of
Foreclosure against Gordon Paving. AgStar purchased the real
property collateral at a foreclosure sale with credit bids
totaling $7, 200, 000. Following the sale, AgStar moved for
entry of a deficiency judgment for the difference between the
unpaid judgment as of the time of the sale and its credit
bids for the real property. The district court denied
AgStar's motion for a deficiency judgment, finding that
the reasonable value of the properties that AgStar purchased
by credit bids was nearly two million dollars greater than
Gordon Paving's indebtedness. Gordon Paving appealed to
this Court. In an Opinion issued on February 24, 2017, we
held that Gordon Paving's indebtedness to AgStar had been
fully satisfied and discharged. AgStar Financial Services
v. Northwest Sand and Gravel, Docket No. 42932
1, 2015, AgStar brought the present action against
Guarantors, advancing a number of theories, including breach
of personal guarantee. On July 8, 2015, AgStar filed its
Application for Entry of Default against Guarantors. On July
9, 2015, the district court entered default against all
15, 2015, Guarantors filed a motion to set aside the default
and moved to dismiss the action based on res
judicata. On October 19, 2015, the district court heard
the motions and denied the motion to set aside the default,
holding that Guarantors had not shown the existence of a
meritorious defense. The district court then entered a
judgment against Guarantors on the cause of action based on
breach of their personal guarantees. AgStar agreed to dismiss
the other claims with prejudice because the judgment on the
guarantees represented the total remaining amount due on
Gordon Paving's indebtedness. On November 12, 2015,
AgStar moved for an award of attorney fees and costs. On
December 18, 2015, the district court awarded AgStar attorney
fees and costs after Guarantors failed to file a timely
objection. Guarantors timely appealed.
may set aside an entry of default for good cause. I.R.C.P.
55(c). The power of a trial court to grant or deny relief
under Rule 55(c) is discretionary. McGloon v. Gwynn,
140 Idaho 727, 729, 100 P.3d 621, 623 (2004). "When a
default judgment is predicated upon an erroneously entered
default, the judgment is voidable." Id. Because
judgments by default are not favored, a trial court should
grant relief in doubtful cases ...