MONITOR FINANCE, L.C., a Utah limited liability company; and FIRST CAPITAL FUNDING, L.C., a Utah limited liability company, Plaintiffs/Respondents,
WILDLIFE RIDGE ESTATES, LLC, an Idaho limited liability company, Defendant/Appellant; M&S DEVELOPMENT, LLC, an Idaho limited liability company, Defendants. WILDLIFE RIDGE ESTATES, LLC, an Idaho limited liability company, Counter-Claimant/Appellant,
MONITOR FINANCE, L.C., a Utah limited liability company; and FIRST CAPITAL FUNDING, L.C., a Utah limited liability company, Counter-defendants/Respondents.
from the District Court of the Sixth Judicial District, State
of Idaho, Bannock County. Robert C. Naftz, District Judge.
judgment of the district court is affirmed.
Law PLC, Pocatello, for appellant. A. Bruce Larson argued.
& Larsen, Chartered, Pocatello, for respondents. Ron Kerl
case involves the judicial foreclosure of a deed of trust
encumbering real property in Pocatello, Idaho. Monitor
Finance, L.C., and First Capital Funding, L.C., (collectively
referred to as the Beneficiaries) are the holders of a deed
of trust, which encumbers the real property claimed to be
owned in fee simple by Wildlife Ridge Estates, LLC (Wildlife
to this judicial foreclosure action being brought, Wildlife
LLC filed suit against the Beneficiaries seeking to quiet
title to the real property, which is subject to the
Beneficiaries' deed of trust. In that previous action,
Wildlife LLC alleged that the Beneficiaries no longer
retained an interest in the property because the debt
underlying the promissory note had been paid in full. By
stipulation of the parties, that quiet title action was
ultimately dismissed with prejudice.
the Beneficiaries initiated this action to foreclose the deed
of trust based on their contention that the debt created by
the promissory note had not been paid and was in default. The
Beneficiaries moved the district court for summary judgment,
contending that Wildlife LLC's affirmative defenses and
counterclaim were barred by res judicata because the
previous quiet title action brought by Wildlife LLC had been
dismissed on its merits. The district judge granted the
Beneficiaries' motion and denied Wildlife LLC's
motion to reconsider. In doing so, the district court
summarily dismissed Wildlife LLC's counterclaim and
affirmative defenses. The district court ultimately entered
summary judgment in favor of the Beneficiaries. Wildlife LLC
now appeals that adverse summary judgment ruling, claiming,
among other things, that the district court misapplied the
doctrine of res judicata. For reasons set out in
this opinion, we affirm the district court's decisions.
FACTUAL AND PROCEDURAL BACKGROUND
December 29, 2005, Michael Millward (Millward) and Michael
Williams (Williams) entered into a written
agreement. That agreement provided, among other
things, that: M&S Development (M&S), a limited
liability company wholly owned by Millward and his wife,
would purchase real property (a forty lot subdivision in
Pocatello) for $230, 000. Following the payment, M&S
would "own 55% of the development." Millward and
Williams would then each pay $25, 000 to buy out a remaining
third-party's interest in the property, which would
result in M&S then owning 62.5% of the property, and
Williams owning the remaining 37.5%. M&S would form a
limited liability company for the development of the project,
with "each party" being a manager of the LLC. The
LLC that resulted from this agreement was Wildlife LLC.
Millward and Williams became the managing members of Wildlife
LLC upon its creation.
December 30, 2005, (the next day) the Beneficiaries loaned
Millward and M&S $244, 000 to finance the purchase of the
subject property. As evidence of the loan, Millward and
M&S made and issued a Trust Deed Note to the
Beneficiaries. Millward signed the Trust Deedon behalf of
M&S, the sole trustor. As a result of their actions, both
Millward and M&S were contractually obligated to repay
the loan described in the Trust Deed Note. Pioneer Title
Company (Pioneer) became the trustee and holder of the deed.
On June 13, 2006, M&S deeded the subject property to
March 3, 2008, the Trust Deed Note was modified to include
additional amounts loaned which totaled $217, 400 (the
modification). This additional loan was made in a series of
advances by the Beneficiaries to Millward and M&S.
Millward signed the modification on behalf of himself and
M&S. He also signed on behalf of Wildlife LLC to
acknowledge the modification. Williams, the other manager of
Wildlife LLC, did not sign the modification.
September 10, 2012, Millward filed for Chapter 7 Bankruptcy.
Millward's bankruptcy filing resulted in an automatic
stay precluding the commencement or active pursuit of an
action against him personally. See 11 U.S.C. §
362(a). M&S was listed as community property, 100% owned
by Millward and his wife, in the bankruptcy schedule. As a
result, any action against M&S was also stayed. See
March 12, 2015, Wildlife LLC filed an amended complaint in
Bannock County district court to quiet title to the property
(the first action). The suit named the Beneficiaries as
defendants. That action did not include Millward or M&S
as parties. In its amended complaint, Wildlife LLC alleged
that the debt secured by the Trust Deed Note had been fully
paid. As a result of the purportedly satisfied debt, Wildlife
LLC requested that it be awarded a judgment quieting title in
the property. Over a year later, Wildlife LLC stipulated to
the dismissal of its amended complaint, with prejudice. On
June 14, 2016, a judgment was entered dismissing Wildlife
LLC's action with prejudice. (Nine days later, on June
23, 2016, Millward's bankruptcy case was closed.)
October 7, 2016, the Beneficiaries filed the underlying
judicial foreclosure action, naming Wildlife LLC and M&S
as defendants. In their complaint, the Beneficiaries
requested a judicial foreclosure sale of the property in
order to satisfy the remaining debt under the promissory
note. Millward was not named as a defendant. Wildlife LLC
answered on November 4, 2016, alleging a number of
affirmative defenses, including a counterclaim asserting
fraud, and requesting declaratory and injunctive relief. The
Beneficiaries answered Wildlife LLC's counterclaim and
asserted that Wildlife LLC's counterclaim and affirmative
defenses were barred by res judicata, among other
defenses. Subsequently, the Beneficiaries moved the district
court for partial summary judgment, and on March 27, 2017,
the district court issued its decision (first decision)
granting that motion and dismissing Wildlife's
affirmative defenses and counterclaim based on res
March 30, 2017, the district court entered default against
M&S for its failure to appear. On April 13, 2017, the
Beneficiaries filed a second motion for summary judgment,
requesting that the remaining issues be determined by the
court. Those issues were whether an unpaid debt remained on
the promissory note and the reasonable value of the property
still encumbered by the deed of trust. Wildlife LLC opposed
that motion and, in addition, submitted a motion for
reconsideration in an attempt to reverse the district
court's first decision that dismissed its counterclaim
and affirmative defenses.
14, 2017, the district court issued a Memorandum Decision and
Order (second decision) denying Wildlife LLC's request
for reconsideration and finding that an unpaid debt remained
on the promissory note in the amount of $6, 814, 076.41. The
district court did not establish a value for the property at
district court entered a Judgment, Decree of Foreclosure and
Order of Sale. Wildlife LLC appeals from the district
court's decisions granting summary judgment, foreclosing
it from making its case, and allowing judgment to be entered
in favor of the Beneficiaries.
QUESTIONS PRESENTED ON APPEAL
Wildlife LLC's affirmative defenses and counterclaim
properly barred by the district court under the doctrine of
the district court properly reject Wildlife LLC's claim
that the Beneficiaries' foreclosure action was precluded
by the applicable statute of limitations?
the district court properly conclude that res
judicata did not apply to the Beneficiaries'
the Beneficiaries are the prevailing parties, are they
entitled to attorney's fees under I.A.R. 41, Idaho Code
section 12-120, or Idaho Code section 12-121?
STANDARD OF REVIEW
Court reviews a motion for summary judgment pursuant to the
same standards as the district court." Berkshire
Invs., LLC v. Taylor, 153 Idaho 73, 80, 278 P.3d 943,
950 (2012). "The court must grant summary judgment if
the movant shows that there is no genuine dispute as to any
material fact and the movant is entitled to judgment as a
matter of law." I.R.C.P. 56(a). "All reasonable
inferences that can be drawn from the record are to be drawn
in favor of the nonmoving party, and disputed facts are
liberally construed in the nonmoving party's favor."
Marek v. Hecla, Ltd., 161 Idaho 211, 214, 384 P.3d
975, 978 (2016). Questions of law are reviewed de
novo, and "[w]hether an action is barred by res
judicata is a question of law." Berkshire
Invs., 153 Idaho at 80, 278 P.3d at 950.
reviewing a trial court's decision to grant or deny a
motion for reconsideration, this Court utilizes the same
standard of review used by the lower court in deciding the
motion for reconsideration." Fragnella v.
Petrovich, 153 Idaho 266, 276, 281 P.3d 103, 113 (2012).
"When deciding the motion for reconsideration, the
district court must apply the same standard of review that
the court applied when deciding the original order that is
being reconsidered." Id. As such, this Court
reviews the district court's denial of Wildlife LLC's
motion for reconsideration under the summary judgment
Wildlife LLC's affirmative defenses and counterclaim were
correctly barred by the application of res judicata.
initial assignment of error, Wildlife LLC contends the
district court erred in granting the Beneficiaries'
motion for summary judgment and dismissing Wildlife LLC's
affirmative defenses and counterclaim. Wildlife LLC asserts
that the Beneficiaries, Millward, and M&S engaged in
fraud, which, if true, could preclude the Beneficiaries from
recovering on their claims. The district judge granted the
Beneficiaries' motion for summary judgment as to Wildlife
LLC's affirmative defenses and counterclaim, finding that
res judicata precluded Wildlife LLC from pursuing
doctrine of res judicata covers both claim
preclusion (true res judicata) and issue preclusion
(collateral estoppel)." Ticor Title Co. v.