Idaho First Bank v. Bridges, 426 P.3d 1278

Background

In 2006 the Bridges obtained a $1.5 million construction loan from Idaho First Bank (IFB) secured by a deed of trust that pledged their lease interest and any buildings to be constructed on leased State land in McCall (a 5,000 sq ft "cottage").
A separate 2008 $150,000 loan from IFB was secured by a deed of trust on the Bridges' Boise property; that deed contained a cross-collateralization clause and a mandatory arbitration provision.
The Bridges renewed their State lease in 2014; the new lease characterized buildings on the leased land as "Personal Property."
The Bridges defaulted in 2015; IFB sold the cottage and lease at foreclosure for $1,200,088 on September 15, 2015, then filed a second amended complaint on December 18, 2015 seeking a $344,377 deficiency under (a) UCC § 28-9-615 (personal property) and (b) Idaho trust-deed law § 45-1512 (real property).
The Bridges moved for summary judgment, arguing the cottage was real property so IFB had to foreclose under Title 45 and then bring any deficiency within three months of sale; the district court granted summary judgment and held IFB's deficiency claims time-barred and that the cottage is real property.
After appeal, IFB attempted to invoke the cross-collateralization clause on the Boise deed and demand arbitration; the Bridges moved to stay arbitration in district court, which denied the motion for lack of jurisdiction; the Bridges cross-appealed that denial and lost on appeal.

Issues

Issue	Plaintiff's Argument (IFB)	Defendant's Argument (Bridges)	Held
Is the cottage personal property (so UCC deficiency rules apply) or real property (so Title 45 foreclosure/3-month deficiency rule applies)?	The 2014 State lease classifies the building as personal property; thus IFB may seek deficiency under UCC § 28-9-615.	The cottage is affixed to land and treated as an "improvement" in the parties' deed of trust and other loan documents; it is real property and Title 45 governs.	Cottage is real property as a matter of law; Title 45 applies and IFB's deficiency claim is time-barred.
Was the 2014 lease "substantially valueless," permitting IFB to sue without foreclosing?	The lease was valueless, so § 45-1503(c) allows a judicial action without foreclosure.	Lease had substantial value and was integral to the cottage's value; IFB actually foreclosed and obtained sale proceeds.	Lease was not substantially valueless; foreclosure procedures and § 45-1512's three-month filing limit applied.
Can IFB's second amended complaint (deficiency claim) "relate back" to its earlier complaints under I.R.C.P. 15(c) to be timely?	Relation-back applies because the claims arise from the same transaction and pleadings can be amended to assert deficiency.	The deficiency cause did not exist when earlier complaints were filed (it arose only after foreclosure); relation-back would circumvent Title 45 timing and protections.	Relation-back under Rule 15(c) not allowed; the deficiency claim was a new cause of action that accrued only after foreclosure and is time-barred.
Could the district court grant relief to stay IFB's arbitration demand (after appeal) under Appellate Rule 13(b) jurisdictional provisions?	Bridges argued court had jurisdiction under I.A.R. 13(b)(6) or 13(b)(13) to stay arbitration pending appeal.	IFB argued the district court lacked jurisdiction and arbitration clause is enforceable; the arbitration issues belong to arbitrator.	District court lacked jurisdiction under 13(b)(6) and 13(b)(13) and, in any event, the motion to stay arbitration properly belongs to arbitration because a valid arbitration clause existed.

Key Cases Cited

Spencer v. Jameson, 147 Idaho 497 (explains fixture tests for converting personalty to realty)
Liberty Bankers Life Ins. Co. v. Witherspoon, 159 Idaho 679 (applies fixture analysis and related principles)
Miller v. Idaho State Patrol, 150 Idaho 856 (summary judgment standard)
Mitchell v. Flandro, 95 Idaho 228 (amendment that asserts a new cause of action does not relate back)
Brown v. Caldwell Sch. Dist. No. 132, 127 Idaho 112 (statutory interpretation: Legislature did not enact meaningless provisions)
ASARCO, LLC v. Union Pac. R. Co., 765 F.3d 999 (Rule 15(c) relation-back must respect statute of limitations and not deprive defendants of protections)
U.S. ex rel. Texas Portland Cement Co. v. McCord, 233 U.S. 157 (amendments may not create relation-back for claims that did not exist when original pleading filed)