Insight LLC v. Patrick Gunter
302 P.3d 1052
| Idaho | 2013Background
- Insight holds a mortgage secured by 160 acres of Summitt, Inc. property; Gunters hold a deed of trust on the 18-acre Gunters property.
- Summitt intended to buy the Gunters’ land for $799,000; closing involved EasyWay Escrow and Sandpoint Title.
- IM loan provided $616,000 to Summitt to purchase the Gunters’ property; Gunters financed the remaining $200,000.
- Closing sequence allocated records: Gunters’ deed of trust recorded first, then IM mortgage, then Gunters’ deed recorded.
- District court found the Gunters’ deed was first encumbrance on the Gunters property and that IM’s mortgage did not encumber the Gunters’ land until after closing; court treated closings as separate transactions and held IM not a good faith purchaser.
- On appeal, the court held IM’s mortgage was a purchase money mortgage and that its priority over the Gunters’ deed of trust depended on recording, with the Gunters not first to record.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the district court erred in finding IM had notice of the Gunters’ deed of trust. | Insight: IM had notice due to overall transaction. | Gunters: IM had actual notice of the Gunters’ deed. | No; district court’s notice finding was erroneous. |
| Whether the IM/Summitt mortgage was a purchase money mortgage. | IM mortgage enabled Summitt to purchase the Gunter property. | Court should treat IM mortgage as non-purchase-money? | The IM mortgage was a purchase money mortgage. |
| Which encumbrance has priority between IM mortgage and Gunters’ deed of trust. | IM as first record or initial encumbrancer. | Gunters were first encumbrancer due to single transaction or their knowledge. | IM mortgage has priority; Gunters’ deed of trust is junior. |
Key Cases Cited
- Skvorak v. Security Union Title Ins. Co., 140 Idaho 16 (Idaho 2004) (purchase money priority resolved by recording statutes; good faith irrelevant for subsequent encumbrancers)
- Pulse v. North American Land Title Co., 218 Mont. 275 (Mont. 1985) (illustrates purchase money mortgage concept)
- Liberty Parts Warehouse, Inc. v. Marshall County Bank & Trust, 459 N.E.2d 738 (Ind.Ct.App. 1984) (purchase money mortgage may secure part of price)
- Barmore v. Perrone, 145 Idaho 340 (Idaho 2008) (limits on timing of conveyance in purchase money context)
- Van Patten v. Van Patten, 784 P.2d 218 (Wyo. 1989) (recognizes concurrent or continuous transaction concepts)
- Payette River Prop. Owners Ass’n v. Bd. of Comm’rs of Valley Cnty., 132 Idaho 551 (Idaho 1999) (statutory interpretation guiding state recording rules)
- George W. Watkins Family v. Messenger, 797 P.2d 1385 (Idaho 1990) (statutory interpretation context)
- Estate of Skvorak v. Security Union Title Ins. Co., 140 Idaho 16 (Idaho 2004) (reaffirming purchase money mortgage priority framework)