Washington Federal Savings v. Van Engelen
153 Idaho 648
Idaho2012Background
- Husband-and-wife developers controlled VED and NWD; VED and NWD contracted with Washington Federal for loans.
- In 2002 and 2005, the developers signed continuing guaranties; the Continuing Guaranty covered future advances to VED.
- 2002 loan repaid; 2005 NWD loans were obtained with assurances no personal guaranty; misidentification between entities occurred.
- In 2006–07 Washington Federal extended six loans to VED for Carriage Hill; VED defaulted and foreclosure occurred, leaving a deficiency of over $4.45 million.
- Washington Federal sued the Van Engelens personally under the Continuing Guaranty; district court granted summary judgment, defenses barred by statute of frauds and lack of consideration; Van Engelens appealed.
- This Court held defenses are not barred by the statute of frauds or lack of consideration, but found no genuine issues of material fact; fees on appeal awarded to Washington Federal.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Are defenses barred by the statute of frauds? | Van Engelen: defenses modify or negate guaranty within statute of frauds. | Van Engelen: affirmative defenses are beyond writing requirement or rely on equitable principles. | Not barred; defenses not modifying the guaranty fall outside statute. |
| Do defenses fail for lack of consideration? | Washington Federal contends defenses involve modification/creation, requiring consideration. | Defenses seek not new contract; no consideration issue applicable. | Defenses do not fail for lack of consideration. |
| Do defenses present genuine issues of material fact? | Waiver, estoppel, and other defenses create factual questions about intent and notice. | Defenses rely on misinterpretation of guaranty and notices; there are factual disputes. | No genuine issues of material fact; summary judgment affirmed for Washington Federal. |
| Is Washington Federal entitled to attorney's fees on appeal? | Washington Federal seeks fees under Idaho law as prevailing party. | Van Engelens argue against fee shifting on appeal. | Washington Federal entitled to attorney’s fees on appeal. |
Key Cases Cited
- Maroun v. Wyreless Sys., Inc., 141 Idaho 604 (2005) (corporate veil and entity separateness recognized)
- Great Plains Equip., Inc. v. N.W. Pipeline Corp., 132 Idaho 754 (1999) (consideration and contract modification principles)
- Ogden v. Griffith, 149 Idaho 489 (2010) (equitable estoppel principles and duty to speak)
- Cadle Co. v. Newhouse, 756 N.Y.S.2d 48 (N.Y. App. Div. 2002) (discussion of continuing guaranty scope (persuasive, not controlling))