Mickelsen Construction, Inc. v. Horrocks
299 P.3d 203
Idaho2013Background
- In 2009, Horrocks, owner of Sunshine Secretarial Services, guaranteed Accelerated Paving's debt to Mickelsen Construction to avoid a lien.
- Horrocks wrote a check for $34,980 on Sunshine's account payable to Mickelsen, allegedly to guarantee the debt.
- Accelerated Paving allegedly failed to pay, and the check bounced; funds were insufficient to cover the amount.
- Mickelsen filed suit in 2010 seeking to enforce the guaranty; defendants moved for summary judgment arguing a statute of frauds defense.
- District court found the check insufficient as a writing under Idaho Code 9-505 and held 9-506(2) not applicable, dismissing the action.
- Mickelsen timely appealed challenging the district court's reasoning and the scope of 9-506(2).
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Does the alleged guaranty fall under the statute of frauds (9-505(2))? | Mickelsen: the check or accompanying circumstances satisfy 9-505(2). | Horrocks/Sunshine: no sufficient writing showing a guaranty,/or misreading of pleadings. | Yes; the check alone did not clearly state a guaranty, so not enough to satisfy 9-505(2) at summary judgment. |
| Is the check a sufficient writing under 9-505(2)? | The check, payable to Mickelsen for the Accelerated debt, qualifies as a writing evidencing a promise to pay. | The memo and lack of explicit guaranty language render the writing inadequate. | No; the memo on the check did not clearly identify a principal obligor or the essential guaranty terms. |
| Was Idaho Code 9-506(2) properly considered, given Reed v. Samuels? | Complaint could allege a 9-506(2) claim (principal debtor/consideration) despite Reed. | No direct benefit to the promisee; Reed controls; claims cannot be under 9-506(2). | The Court overruled Reed to some extent but held Mickelsen did not plead a 9-506(2) claim, so district court's basis was wrong. |
| Can Mickelsen recover on a negotiable-instrument theory against Horrocks/Sunshine? | Check itself could support liability independent of 9-505/9-506. | Issue not raised below; appellate review cannot consider new theories. | Not addressed on appeal; issue not preserved for review. |
| Are attorney-fee awards proper on appeal? | Mickelsen seeks fees under 12-120(3) as prevailing party. | Defendants also seek fees as prevailing party. | Defendants awarded fees; Mickelsen not prevailing party. |
Key Cases Cited
- Magee v. Winn, 52 Idaho 553 (Idaho 1932) (guaranty within statute of frauds)
- Storer v. Heitfeld, 19 Idaho 170 (Idaho 1910) (guaranty vs. original contract under 9-506; writing required)
- Reed v. Samuels, 43 Idaho 55 (Idaho 1926) (creditor must part with value; consideration)
- Hoffman v. S V Co., Inc., 102 Idaho 187 (Idaho 1981) (memorandum must state contract essentials)
- Vincent v. Larson, 1 Idaho 241 (Idaho 1869) (consideration may be benefit or detriment to promisee)
- Violett v. Patton, 9 U.S. (5 Cranch) 142 (1809) (early consideration principles)
- Hudson v. Cobbs, 115 Idaho 1128 (Idaho 1989) (guaranty is collateral to primary obligation)
- Gebrueder Heidemann, K.G. v. A.M.R. Corp., 107 Idaho 275 (Idaho 1984) (interpretation of guaranty vs. principal debtor)
- Storer v. Heitfeld, 19 Idaho 170, 113 P. 80 (Idaho 1910) (mutual exclusivity of guaranty vs original promise)
- Brown v. City of Pocatello, 148 Idaho 802 (Idaho 2010) (liberal notice-pleading standard; avoid technical pleading errors)