331 P.3d 491
Idaho2014Background
- In March 2008 Joshua Jarvis purchased Bonneville County real property that was actually community property but was deeded to him as his separate property; his wife Rebecca did not sign the deed of trust.
- Snake River Funding made a $268,000 loan secured by a deed of trust prepared/closed by AmeriTitle; Stewart Title issued a title policy to Snake River; Snake River later assigned the deed of trust to DAFCO LLC.
- Rebecca’s failure to join was asserted as a title defect; Snake River and DAFCO sought coverage/payment under the title policy; Stewart declined to pay and instead pursued litigation/remediation under the policy’s remedial provisions.
- New Phase Investments later contested priority in separate litigation; the Idaho Supreme Court held DAFCO’s deed of trust was voidable but valid and first in priority (New Phase Investments v. Jarvis).
- DAFCO sued Stewart and AmeriTitle for breach of the title policy, breach of an express/implied contract to obtain Rebecca’s joinder, and estoppel; Stewart and AmeriTitle moved for summary judgment and prevailed.
- DAFCO’s motion to file a third amended complaint (adding good-faith, negligence, and other claims) was denied as untimely and prejudicial; the Supreme Court affirmed and awarded fees to Stewart and AmeriTitle.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| 1. Did the district court err granting summary judgment for Stewart Title? | Stewart breached policy/good-faith by not paying policy face value when defect discovered. | Stewart properly exercised contractual alternative: litigation/remediation under policy and acted diligently. | Affirmed — Stewart complied with policy (pursued remedial litigation diligently); no breach or bad faith. |
| 2. Did the district court err granting summary judgment for AmeriTitle? | AmeriTitle prepared documents and acted as agent for Stewart; DAFCO may be in privity or third-party beneficiary. | No privity with DAFCO; AmeriTitle acted as closing agent/scrivener for Snake River/Stewart only; no contract obligating it to obtain Rebecca’s signature for DAFCO. | Affirmed — DAFCO failed to show privity or contractual duty; summary judgment for AmeriTitle proper. |
| 3. Did the district court err denying DAFCO’s motion to file a third amended complaint? | Proposed amendments raised viable claims (good faith, negligence) and should be allowed. | Amendments were untimely, would prejudice defendants, and reopen a long-resolved case. | Affirmed — district court did not abuse discretion: denial based on undue delay, prior amendments, case management, and prejudice. |
| 4. Are attorney fees recoverable? | DAFCO claimed fees under I.C. § 12-120(3). | Stewart and AmeriTitle sought fees under Closing Instructions and Idaho statutes. | Affirmed — prevailing defendants entitled to fees under I.C. § 12-120(3); court awarded fees to Stewart and AmeriTitle. |
Key Cases Cited
- Mortensen v. Stewart Title Guar. Co., 149 Idaho 437, 235 P.3d 387 (Idaho 2010) (standard of review for summary judgment).
- Idaho First Nat. Bank v. Bliss Valley Foods, Inc., 121 Idaho 266, 824 P.2d 841 (Idaho 1991) (implied covenant of good faith cannot contradict the contract).
- Wing v. Martin, 107 Idaho 267, 688 P.2d 1172 (Idaho 1984) (privity required to sue on a contract).
- Black Canyon Racquetball Club, Inc. v. Idaho First Nat. Bank, N.A., 119 Idaho 171, 804 P.2d 900 (Idaho 1991) (standard for reviewing denial of leave to amend).
- Foman v. Davis, 371 U.S. 178 (U.S. 1962) (factors for granting leave to amend).
- Quick v. Crane, 111 Idaho 759, 727 P.2d 1187 (Idaho 1986) (remand required where trial court fails to state reasons for discretionary denial of amendment).