Farmers National Bank v. Shirey

878 P.2d 762 BANK, Plaintiff-

FARMERS NATIONAL Counterdefendant-Respondent, Shirey, P. and Shauna Charles SHIREY Wife, Husband Defendants- Counterclaimants-Appellants. 20379.

No. Idaho, Supreme Boise, February 1994 Term.

June 1994. Rehearing Aug. Denied Welsh, P.A.,

Cosho, & Humphrey, Greener Nancy Hopkins Boise, appellants. for Jo Meier, argued. Joseph M. and Lezamiz, Twin & Hepworth, Nungester Hohnhorst, Falls, respondent. C. John argued. McDEVITT, F. Chief Justice.

CHAS. Shirey Appellants, Charles and Shauna the dis- (“Shireys”), from an summary granting trict Bank respondent, Farmers National favor of “Bank”). (the sought ob- Bank The dis- declaratory judgment from the tained a security declaring its interest trict superior specific property to be to that successfully per- Shireys. The also Bank the Shi- the district court dismiss suaded contract, breach of reys’ counterclaims of conversion, interference with intentional fraud, relationship, based contractual Shireys judicata. the doctrine res summary judgment, as- appeal the order of fact genuine of material serting that issue security interest is party’s as to which exists Shireys appeal the order superior. The also counterclaims, challenging dismissing their reliance on the doctrine the district court’s ruling. judicata as the basis

BACKGROUND 1984, Joseph and Allen August Carvel (the “Allens”), corporate en- entities and two Bank to agreement an with the tered into Bank, $185,000 from a loan of secure farm cattle and citing as collateral certain purchased from the equipment parties funds. three with the borrowed September at the Bank on met Agreement.” The “Dairy execute Sales stating provision agreement contained sales first secured “a the loan was to be equipment herein upon the cattle lien least three weeks before conveyed. Accordingly agreed it is between tions and order at objection parties security that Sellers’ interest the sale. The submitted no court, machinery said cattle and shall be subor- nor did to the sale to the security dinate to that interest of the Bank request submit their own ever issued to secure the above described loan.” stay collat- from until after the for relief properly financing The Bank filed a state- eral was sold. covering equip- ment both the cattle and the equipment were sold at The cattle and September ment on 1984. The on December 1987. auction financing covering equipment statement $272,376 application netted available for sale was filed on October $560,000 Af- owed to the Bank. debt years, ex- Over the next three Shireys claimed receiving ter notice that the By tended more credit to the Allens. Octo- collateral, the Bank set an interest in the 1987, ber the Allens’ total debt to the Bank $60,000 ac- approximately in a trust aside $560,000. approximately September was On count, remaining due from the the balance 28, 1987, Bank, the notified the which Allens Shireys according to the es- Allens to the Shireys, in turn notified the of their intent to crow, pending of the claim. On resolution payment cease on loan and to abandon the 1, 1988, February Shireys submitted two the dairy receiving operation. Upon the a writ- bankruptcy the additional creditors claims to Allens, release of the collateral from the ten identifying cred- themselves as secured temporary possession the Bank took of the $306,704. ob- itors entitled to The trustee collateral. 24,1989, April the jected to their claims. On Chapter bankruptcy The filed Allens hearing a set to Shireys moved to continue 1987, Fitzgerald ap- October and L.D. objection trustee’s in order to entertain the pointed trustee. When the Bank tendered an unsecured amend their secured claim to trustee, possession of the collateral to the the 1989, 22, May court sustained claim. On the requested posses- trustee the Bank to retain objection, the but allowed the pending sion distribution. On October entirety general claim. in its as a unsecured 1987, the Bank submitted written creditors’ dispute concerning to resolve the Unable trustee, identifying itself as a claims to the $60,000, action in the Bank initiated this the $560,958. secured creditor entitled to receive court, presiding, Judge Becker on the district Shireys filed a similar claim on Novem- declaratory sought Bank April 1988. The 1, 1987, identifying ber themselves as se- security superior interest was relief that its $306,184. to cured creditors entitled Shireys, entitling it to that claimed the expedite liquidation In order to of the col- $60,000, enjoin injunctive the and relief to possession, in its the Bank con-

lateral still Shireys interfering quiet pos- from pro- tacted the Allens and the trustee and the auction. of the collateral sold at session posed stipulations relieve the execution of 10, 1988, answer, filed June In their the Bank from the 11 362 automatic U.S.C. counterclaimed, claiming superior Shireys stay Chapter filing. invoked collateral, fiduciary breach of interest Bank, Allens, the trustee executed and Protec- duty, and violation of the Consumer then signed stipulations, and which were Act, alleging that the Bank committed tion ap- submitted to the court for re- The Bank filed a conversion and fraud. proval on November 1987. The court ply 1988. on June lifting approved stipulations, the auto- stay authorizing the Bank to sell matic 24, 1989, retaining new April after On the collateral. counsel, to amend Shireys filed a motion 25, 1987, granted the the counterclaim. The court thé Bank notified On November objection. The over the Bank’s action and the motion of the court’s claims of inten- amended counterclaim added to sell the collateral. Bank’s intention deceit, misrepresentation, breach of bankruptcy pro- tional Shireys’ attorney during the contract, good faith Decker, the covenant of having re- breach of ceedings, Mr. admitted dealing, interference with stipula- and fair tortious the notification as well as the ceived n Upona second motion for reconsideration damages for relationship, requested business prior Bank, jury Judge reversed for Wood profits, contained a demand lost 38(b). counterclaim, sum- May granting On pursuant trial to I.R.C.P. on the Shireys were allowed to file another on the conver- mary judgment counterclaim, yet on another amended claim. intentional interference claim and sion January Both claims contained decision, In the same memorandum reply jury trial. In its demand for summary motion for granted the Bank’s counterclaims the Bank continuous- amended counterclaim third amended judgment on the to a ly denied that the were entitled ruling judicata, of res the doctrine based on 20, 1990, jury Finally, April trial. in the entered United previously that orders jury Bank moved to strike the demand to res were entitled Bankruptcy Court States counterclaim. The dis- trial in the amended coun- to bar the and served judicata effect a date trict court denied the motion and set re- final order and This terclaim. jury trial. litigation. Sub- remainder of solved the January Bank moved for On costs court awarded sequently, the district summary judgment priori- issue of the on the Bank. The attorney fees to the ty competing security interests. The granting sum- Judge Becker’s order motion, ruling granted the that district court priority, of on the issue mary judgment priority as a matter of law the Bank had summary judg- granting Judge order Wood’s financing filed because its statements were counterclaim, and the award ment on the by Shireys. The prior to those filed attorney fees. priority district court extended the to include following issues This Court addresses after-acquired property funded the future appeal: on $500,000 advances of over under I.C. 28-9- his dis- Judge Wood abused I. Whether 312(7). Contemporaneously, the Bank rulings pre- reconsidering legal cretion summary judgment coun- moved for on the Judge viously Becker. made or, alternative, terclaim in the to dismiss the motion, hearing counterclaim. At the on the in dis- court erred II. the district Whether Shireys stipulated of the bad dismissal the doc- based on missing the counterclaim claims, fiduciary duty faith and breach of as judicata. trine of res the claim based on the Consumer well as abused III. the district court Whether Protection Act. The court denied the district denying, reconsidering and sua discretion motion, ruling genuine issues of Bank’s that jury trial. appellants’ sponte, demand summary judgment precluded material fact erred the district court IV. Whether or dismissal. of the summary judgment in favor granting 2,1991, day jury On March the first issues of conver- the counterclaim Bank on trial, suppressed the. the admission of sion, interference profits, and intentional lost “problem generated by loan reports” with contract. Shireys. Bank and offered Subse- Judge placed quently, Becker was on admin- court erred the district V. Whether by Magistrate istrative leave and succeeded summary judgment granting partial Wood, judge pro Barry R. district tem. On priority of the Bank on the issue motion, Judge Wood reconsidered the Bank’s security interests. competing denying Judge and reversed Becker’s order erred the district court VI. Whether Shireys’ the Bank’s motion to dismiss the attorney fees to the awarding costs profits. In the claim of entitlement to lost Bank. decision, court, on its same memorandum initiative, had own ruled that OF REVIEW STANDARD jury Upon the right to a trial. waived their appeal from with an When faced motion, also reconsidered the court deter this must summary judgment, Judge prior reversed Becker’s evidentia- depositions, and pleadings, mine whether the reports, ry ruling excluding problem loan affidavits, file, if together admissions Judge Becker’s but refused to reconsider any genuine issue as any, there is no priority. show summary judgment on the issue of 68 fact, precipitated order are suffi- moving party ceedings

material and that the entitled to a as a matter law. the doctrine application invoke the cient to 56(c). Dep’t Harris v. Health & I.R.C.P. third amend- judicata as a bar to their of res 295, 297, Welfare, 123 Idaho 847 P.2d Specifically, the ed counterclaim. (1992); Irrig. G & M Farms v. Funk not demonstrated that the Bank has contend Co., 514, 516-17, P.2d Idaho bankruptcy order meets the three that the non-moving party 853-54 is to as set out requirements judicata, of res given be the benefit of all favorable inferenc- Kolouch, Valley Radiology, P.A. v. Magic reasonably might es which be drawn from (1993), evidence, re- and all doubts are “identity identity,” of is- including “party against moving party. The mo- solved sues,” judgment.” and “final tion if is such must be denied the evidence conflicting be drawn inferences people might Identity if A Parties therefrom and reasonable Harris, reach different conclusions. 123 Ida- they were not Shireys assert that ho at 847 P.2d at 1159. party in the party privity with a or litigation. hold that the Shi We ANALYSIS bankruptcy action reys privities to the were I. represented by the registered as creditors trustee, party stipulation and HAD THE JUDGE WOOD AUTHORITY stay. THE PRIOR RUL- relieving TO RECONSIDER from the automatic OF BECKER UNDER INGS JUDGE Corp., 861 F.2d In re Met-L-Wood See 11(a)(2)(B) I.R.C.P. (7th Cir.1988); In re Dominelli (9th Cir.1987); In re Medomak F.2d 317 The assert that the doctrine Cir.1990). (1st Canning, 922 F.2d 901 prohibited Judge of “law of the case” Wood reconsidering previously from an issue decid Corp., 861 F.2d 1012 In In Met-L-Wood re Becker, by Judge Judge Becker’s' ed unless (7th Cir.1988), applied the circuit clearly dis decision was erroneous. We judicata a fraud chal- of res to bar doctrine 11(a)(2)(B) agree. of the Idaho Under Rule bankruptcy court lenge by to a the trustee Procedure, Rules of Civil a court recon prior in a authorizing the sale of assets order legal rulings judgment a final sider its before the unse- Chapter 11 case to the extent that case, Judge has been entered. In this Wood prior represented in the were rulings Judge Becker cured creditors reconsidered the of and, challenge entry judgment, a final that the before the of The court also ruled case. therefore, authority acted under the that it was on to the extent was barred “law of the case” is rule. The doctrine of in represented creditors not behalf of proceedings. Frazier inapposite to these The court based prior Cf. case. Id. at 1017. Co., 104, 106, 794 v. Neilsen & simple rule that a trustee holding on the (doctrine (Ct.App.1990) judgment a representative and the creditors’ “law of the case” similar to doctrine of stare in judicata against the trustee is res for or protecting against re-litigation of set decisis creditor, provid- by claim a suit on the same appellate stages tled issues different made the trust- no conflict of interest ed that case). In In re inadequate. representation ee’s (9th Cir.1987), 820 F.2d Dominelli II. in a that a trustee the ninth circuit ruled privity with a proceeding THE PROPERLY Chapter DISTRICT COURT was stipulation SUMMARY JUDGMENT GRANTED that a junior lienholder and IN FA- THE COUNTERCLAIM ON on behalf of the bank- signed by the trustee THE BANK BASED ON VOR OF bankruptcy approved rupt estate THE OF RES JUDICATA DOCTRINE usury defense to senior waiving a junior binding on claim was lienholder’s rul- Shireys challenge the trial court’s judicata The court held that pro- lienholder. bankruptcy order and the ing that the actions ty. claims in both junior subsequent ac- We hold that the barred the lienholder’s transaction, thus satis- damages usury same tion for based on the same arise out of the in- against competing fying predicating secured credi- element defense the second Canning, judicata. tor. Id. In In re Medomak 922 vocation of res (1st. Cir.1990), that a F.2d 895 the court held Group, 119 Idaho In v. Farmers Diamond trustee, compromise agreement between the (1990), reaffirm- P.2d 319 this Court fiduciary representative as the of the credi- pre- to claim approach ed the “transactional” tors, creditors, subordinating ap- and adverse clusion, stating valid and final “[a] pellant item creditors’ interest a secured claims extinguishes all rendered an action property authorizing the sale of the or series arising same transaction out of the property, binding appellants. on the out of which the cause of transactions appellants had court stressed Diamond, P.2d at at action arose”. hearing compromise notice of the on the a cause of action for 323. “The ‘sameness’ of objected priv- thereto. The court stated that purposes application of the doctrine of res ity may be established identification of by examining op- judicata is determined interests, representation even where of those Id underlying the two lawsuits”. erative fact interests is not authorized. Id at 901. The case, at P.2d at 322. this judicata court held that the doctrine of res bankruptcy operative underlying the facts appellants asserting any barred the from are the instant cause of action order and property adversary separate at a dairy agreement. comprised in the sale hearing priorities. to determine Id. case, bankruptcy petitioned purpose underlying the invocation of filing stay imposed by the relief from a privity between a trustee and creditors is bankruptcy petition by the Allens Confectionery illuminated Sanders Prod- as rights against the collateral exercise their (6th Financial, ucts Heller 978 F.2d 474 dairy agreement. In the defined sale Cir.1992). began The Sanders court stat- case, to enforce instant seek ing par- that creditors are to be considered alleged rights against collateral as their ties to a court order for res dairy agreement. Given defined in the sale Sanders, judicata purposes. 973 F.2d at underlying operative are the that the facts recognized 480-81. The court that the bank- cases, claims that could same for both all ruptcy strong preference code contains a brought in the first action are now have been involving final of all resolution claims the course, “identity of assuming, of the barred debtor, releasing and that creditors “from judgment” are parties” and “final elements judicata the bonds res would allow them also met. to launch collateral attacks on confirmed Shireys’ contained in the The claims plans, undermining necessary ability the counterclaim should have third amended bankruptcy courts to settle all of claims the bankruptcy in the court. been raised against the debtor.” Id. at 481. inherent bankruptcy proceedings themselves analysis Based on the above it is clear very the ly posed the issue at the heart of Shireys sign the fact that the did not the Shireys’ The fundamental counterclaim. stipulation relieving the Bank from auto- the bankruptcy to purpose Chapter of a 7 trustee, stay matic is irrelevant because the creditors, identify the amounts the determine they signed privity, with whom were in direct due, if are secured or ascertain the claims it. dispose of priority, unsecured and their accordingly. Any estate the assets of the Identity Subject B. Matter Shireys by the that their interest claim Shireys their also assert wrongfully or denied superior to the Bank’s action, ground in counterclaims this cause of to by uniquely Bank was addressable the fraud, ed in do not arise out of the same that forum. bankruptcy in transaction as the claims the and, action, therefore, Regarding claims for preclude application of the conversion, subject misrepresentation and judicata res for lack of matter identi- fraudulent 70 every privies only not offered

the law in that an for relief on as matter Idaho is action grounds “deemed to or claim the of fraud will not be and received to sustain defeat the ag discovery, by might the every have accrued until as matter but also which grieved constituting the party, litigated of the facts first in the and should have been 5-218(4). knowl fraud.” I.C. “[A]ctual suit. edge allegedly if fraud will inferred the Co., Murphy Irrigation & Joyce v. Land 35 aggrieved party could have it discovered (1922) 241, 549, 553, Idaho 208 P. 242-43 Kawai diligence.” the of due exercise Magic Valley Ra (quoted approval 610, 614, Longstreet, Farms v. 121 826 Idaho Kolouch, 434, diology, P.A. v. 123 436- Idaho Nancy 1322, (1992), Lee quoting P.2d 1326 (1993); Kawai 37, 107, 849 P.2d 109-10 Mines, Harrison, 546, 547, Inc. v. 95 Idaho Farms, 610, Longstreet, 121 Idaho Inc. v. (1973). 828, specific 511 P.2d 829 More (1992), and Dia 614, 1322, P.2d 1326 826 case, the facts of this before a claim of fraud Ins., 119 mond v. Farmers Idaho summary can be on a dismissed motion 319, (1990)). pro P.2d The rule judicata, on judgment a court must based nounced Marshall in the text cited question of there is first answer the whether Heyb Village Shireys was clarified later more than one conclusion as whether Co., 732, T. Security & urn S. 55 Idaho party alleging fraud due has exercised (1935) J., (Budge, dis 49 P.2d Id. See diligence discovering fraud. Budge distinguished cases senting). Justice Magic Valley Radiology, also P.A v. Ko upon claim arises the same where issue louch, upon different or demand from those based It not is clear that did former, action In the in an claim or demand. diligence discovering the na exercise due upon the same parties between same bankruptcy ture of the action in Bank’s Joyce demand, applies. claim or rule Therefore, question of court. no material type, same an action between the the second of sum precluding granting fact exists demand, parties upon different or Farms, Kawai judgment. mary 121 Ida Cf. Marshall applies, rule and the ho at at 826 P.2d only estoppel prior operates action as an light argue that facts did come to precise matters which were as to those issued, until after the court order Id. fact decided. been and could not have discovered However, Shireys prior to that date. final bank The ninth circuit has defined a notified record shows that were litiga ruptcy decision “one that ‘ends the as stipulation agreement prior to execu nothing for the and leaves tion on merits have tion the foreclosure and should judgment’.” the] court to do but [execute opportunity at that availed themselves of Casino, Inc., F.2d re Landmark Hotel & time to in the bank contest such execution (9th Cir.1989) Mar (quoting In re ruptcy court. Cir.1983)). tinez, (9th 262, That 721 F.2d that further held that an order court has Judgment Finality C. of stay is final grants relief the automatic from Kemble, argue that the The also In re purposes appeal. for judicata of res application inappropriate Cir.1985). is (9th In re See also F.2d precise point question or this Indus., Inc., because the F.2d American Mariner finally decided action was not resolved and (an (9th Cir.1984) denies order that action. See Marshall Un bankruptcy the stay is final relief from the automatic derwood, 1105, 1105 P. 38 Idaho appeal). purposes for the proper This is not the test case, “finality judgment” predicating In the for relief element order this judica of the doctrine of application stay the in favor from the automatic ta. by that law Idaho states clearly qualifies Well-established a final order as defined as Moreover, cen precedent. the parties federal case an action between the same

[I]n Shireys’ demand, all of underlying thesis the upon the or the for- tral same claim that adjudication and claims in the counterclaim was parties mer concludes v. An- City Id. Pocatello security in the was latter. Bank’s interest collateral (1984), derton, by Shireys’ selling 679 P.2d 647 inferior to Shireys’ applica- succinctly collateral the Bank violated the laid out the law this Court challenges the rights. theory, jury pro- This which trial in civil to a demand for ble security disposition of the interests made to held the failure ceedings. The that Court 38(b) stay, bankruptcy by lifting is a timely under I.R.C.P. make a demand have core matter which could and should right. at 372- a of the Id. waiver constituted court. bankruptcy have been resolved further The 679 P.2d at 649-50. Court Shireys’ claim to the collateral and coun- pleading which amended recognized that an agree- that Bank an terclaims breached right to de- revives the raises a new issue Shireys concerning the collat- only. ment with jury as to that new issue mand a trial eral, collateral, and wrongfully that, converted the stated notwith- Finally, the Id. Shireys’ rights, violated the should have been a party standing the of a to demand failure litigated bankruptcy in the court before action, discretion jury in an the court its or, stay very Bank at the was relieved by jury according to a trial latest, collateral, 39(b). before the Bank sold the at 649. Id. at 679 P.2d I.R.C.P. thus are under the of res barred doctrine case, amended In this the second third judicata. Shireys’ avenue for relief wholly dis- no additional counterclaims raise form leads to the federal district court present that were not tinct issues trial or- of an from the complaint answer. The amended der, not to our doors. inter- present such as business claims issues contract-related claims. ference and various III. jury trial Shireys’ for a Because the demand THE DID NOT DISTRICT COURT 38(b), the untimely according to I.R.C.P. ABUSE ITS IN DISCRETION STRIK- court did not abuse discretion trial THE ING DEMAND FOR SHIREYS’ jury I.R.C.P. denying a under either trial A JURY TRIAL 38(b) 39(b). 38(b) a According to I.R.C.P. or jury a must made within demand for trial The trial court raised the issue of days pleading. If this dead- ten of the last right sponte a jury pursuant to trial sua 39(a) met, right demand line is not to rule of the Idaho Rules of Civil 38(d). case, this waived. I.R.C.P. Procedure. found The court that neither jury they until Shireys did not trial party jury demand timely made demand for a trial counterclaim, 38(b). ten filed their first amended rule under The court further found pleading, their months after the last and thus right waiver of their jury waived. right trial was jury demand demand a not trial was revived appended The fact that the demand was pleading amended because the claims new does defeat an amended counterclaim arose out of the same as the transaction waiver, because the amended counterclaim pleadings. initial The court refused to then claims does no more than assert additional exercise its discretion in favor of the in the 39(b). arising forth out the transaction set demand under rule chal (inclu- 38(d) original pleading. I.R.C.P. action’s, See lenge arguing the trial court’s original new based on the sion of theories supplemental pleading an or amended which right not revive to demand transaction does to de right raises a new issue carries trial). 38(b) Thus, Shireys not enti- jury are jury according mand a trial to rule 38(b). jury See tled to a trial under I.R.C.P. the Idaho Rules of Civil Procedure. See Bradley, 89 Idaho Dist., Supply Steel Co. Allen Symms 91 Ida v. Thirteenth Judicial (1965). 394, 29, 39, 239, 679, 402 P.2d 399 681 ho P.2d Symms court that where the counter stated 38(b), Notwithstanding reply wholly I.R.C.P. and raise distinct issue 39(b) answer, trial court the discre complaint jury grants de from the I.R.C.P. issues reply jury any allow a trial on or all mand contained in the counterclaim or tion to discretion, party. timely upon the motion of a may be as to the former but not rec- intentional interference. The scant the district court this case denied the Shireys’ jury appeal not reveal that the Shi- demanding motion trial. Be- ord on does Shireys provide reys all of the essential elements cause the have failed to this established Robinson, 101 adequate appeal of the claims. See Lamb v. Court with an record on (lost (1980) 703, 705, intelligently from which the Court re- Idaho 620 P.2d being profits susceptible of ascer- view the soundness of the trial court’s discre- must be conduct, certainty within tionary pre- tained with reasonable trial must the time properly contemplation parties sumed to of the at have acted and sustained. Allred, 292, 293, contract); McLaughlin, Torix v. 100 Idaho Rutter v. of the (ele- (1980) (1980) (Court 606 P.2d 612 P.2d held that demonstration of presumed error will not be but ments of conversion include affirmatively right possess collateral and defendant’s must be shown on the record collateral); appellant, incomplete wrongful disposition Idaho an record is “[w]here Foods, Inc., Valley presented missing portions First Nat’l Bank v. Bliss this Court 283-84, 858-59 presumed support of that record are Idaho court.”) (1991) (elements of intentional interference action the trial knowledge existence of contract are

include interferant, part alleged IV. of the contract on causing of the intentional interference breach DID JUDGE WOOD NOT ABUSE HIS contract, injury). IN THE DISCRETION REVERSING MADE DECISIONS PREVIOUSLY V. BY JUDGE BECKER CONCERNING THE SHIREYS’ CLAIMS OF LOST THE PROPERLY DISTRICT COURT PROFITS, AND IN- CONVERSION JUDGMENT GRANTED SUMMARY TENTIONAL INTERFERENCE THE THE OF PRIORITY ON ISSUE IN THE WITH CONTRACT COUN- THE OF COMPETING SECURITY TERCLAIM INTERESTS Upon the Bank’s motion to reconsid decision, ruled that Judge Judge er Becker’s Wood The district court money to the in the trust Shireys ruled that could not recover Bank was entitled according to I.C. hypothetical profits” based on the theo fund as a matter of law “lost 28-9-312(5) that, collateral, the first ry because the Bank was had the Bank not sold the repossessed, kept, financing statement.1 The district Shireys would have to file its rejected Shireys’ argu operation implicitly profits and used it to earn from the because, priority in the cattle dairy, under article ment that the Bank’s U.C.C. Shireys’ once Shireys repossess be subordinated to the were not entitled to would addition, $185,000 it Judge repaid and that and retain the collateral. the initial fact, was, granted summary judgment repaid when the Bank renewed Wood to the loan, by extending priority the Allens’ Bank on the counterclaim issues conver interference, stating the future advances made sion and intentional implicitly any Similarly, the district court to come forward with Allens. failed rejected Shireys’ argument that the “new supporting evidence the issues. beyond Allens erroneously monies” advanced to the assert the district court $185,000 contemplated summary original were not granted the Bank’s motion for enjoy agreement and thus did judgment on these issues. We hold that the sale represented by the correctly acknowledged priority date district court the ab same concerning original financing statement. The any sence of material fact conversion, position, assert- challenge the district court’s profits, claim for lost 28-9-312(5)(a) superior exclusively properly filed holds a § delim- the first interest Idaho Code security priority competing its the of interests cred- all secured and unsecured claim over other clearly security that the where the facts establish as a matter of law. itors filed, properly providing interests have been that 54(d)(1)(B) Rules of Civil of the Idaho in rule legitimate priority the ing that the Bank’s as a awarded costs Bank’s The court long expired, has since and the Procedure. cattle attorney pursuant to priority equipment right in has fees illegitimate the matter of 12-120(3), original expired finding § with the renewal of the that the also I.C. upon alleged loan. commercial an claim was based stat- type identified transaction of § The district court relied on I.C. 28-9- statute triggered application of the ute which 312(7) priority to the to extend the Bank’s claim was denied. though their even in made Allens future advances in court erred the district Shireys argue that $500,000. amount of more than Idaho Code under attorney to the Bank awarding fees 28-9-312(7) provides § that future ad- “[i]f 12-120(3) this action was § because I.C. security interest is vances are made while a trans- or a commercial upon a contract based ..., by filing security interest perfected statute. We contemplated action as purposes of priority the same for the has disagree. (5) respect to the future ad- subsection with respect to the first vances as it does with properly awarded attor- The district provides § Idaho Code 28-9-204 advance.” 12-120(3) § ney pursuant fees to the I.C. security agree- obligations covered a recovery of provision provides for which other may ment include future advances or litigation in based attorney fees incurred statute value. The official comment to the party alleges any Where a upon contract. security agreement must so stresses that the relationship of a contractual the existence of provide. 12-120(3), as the type by section a embraced case, security agree- In this the Bank’s done, triggers Shireys have ment mentions “all and feed now livestock prevailing and a application of the statute acquired.” owned or hereinafter The district though even no liabil- party recover fees “after-acquired” equated the term with Twin ity was established. under a contract advances”, reasoning that the term “future Mid-Century Comm’n Co. v. Falls Livestock purchase the former. the latter was used Co., P.2d Ins. Thus, court, according to the district denied). (rev. (Ct.App.1989) security agreement “provided for” future ad- re- attorney fees Costs “after-acquired” vances. hold that We spondent. property clause is not sufficient to cover advances, future that a related clause in but JJ., SILAK, concur. BISTLINE security agreement, namely, that the se- curity payment interest “is to secure JOHNSON, J., dissenting. concurring and performance obligations of the liabilities and opinion except in all of the Court’s I concur Party every of Debtor to Secured of kind and (The Properly II Granted due, Part District Court ... description due or to become now Summary Judgment in the Counterclaim existing arising[,]” or hereafter is sufficient. the Bank Based on the Doctrine fact, Favor of coupled undisputed Given this with the Judicata). Res properly Bank the first fact that filed collateral, security interest the district ques- apparently considers The Court ruling that the Bank had court did not err law. privity question a of federal tion of a mat- priority interest the collateral as view, privity question my I do not. priority and that the extended ter law extensively reviewed The Court Idaho law. “future advances.” City subject St. privity Foster 888-90, Anthony, Idaho VI. Among eases re- 418-20 DID ERR THE COURT NOT DISTRICT Foster, Eckley, Idaho Kite v. viewed IN FEES TO AWARDING ATTORNEY (1929) closest to P. 868 seems 12-120(3) THE BANK I.C. UNDER Kite, that the held facts here. Court privity are not trust court determined the beneficiaries The district “Privity im- said: according to the trustee. prevailing parly Bank to be a derivation of title.” Id. at plies P.

at This illuminates for me that an 870. agency fiduciary relationship or is not suffi- privity concept

cient to establish under the (claim judicata preclusion) as this Court interpreted privity. has TROUT, J., except joins opinion concurs in JOHNSON, J.’s dissent as to Part II.

878 P.2d 773 LANDMARK, Alan Plaintiff- Counterdefendant-

Respondent, AGENCY, INC., MADER Defendant- Counterclaimant-Appellant.

No. 20403. Idaho, Supreme Moscow, April 1994 Term.

June 1994. Rehearing Aug. Denied Litteneker, Litteneker, L. & Edwin

Brown Clements, Lewiston, McNi- Brown & chols, Lewiston, appellant. Albers, Grangeville, respon- L.

Dennis dent.

McDEVITT, Justice. Chief

I AND PROCEDURE

FACTS (Landmark) an insur- Landmark Alan Agency, employed by Mader ance salesman

Case Details

Case Name: Farmers National Bank v. Shirey

Court Name: Idaho Supreme Court

Date Published: Jun 20, 1994

Citation: 878 P.2d 762

Docket Number: 20379

Court Abbreviation: Idaho