Lincoln Cty. v. Fidelity & Deposit Co. of Md.
632 P.2d 678
Idaho
1981
Check Treatment

LINCOLN COUNTY, Plaintiff-Respondent, v. FIDELITY AND DEPOSIT COMPANY OF MARYLAND, Defendant-Appellant, and Western Surety Company, Defendant.

No. 13327.

Supreme Court of Idaho.

Aug. 12, 1981.

632 P.2d 678

response may be made to a state‘s motion for summary disposition, so as to afford an opportunity to establish a material fact issue. We hold that the like twenty day period of time shall be allowed as under paragraph (b).

Secondly, Christensen argues that the trial court erred in not entering specific findings of fact and conclusions of law. I.C. § 19-4907 provides that where dismissal follows an evidentiary hearing, the court must make findings of fact and conclusions of law. There is no similar statutory provision applicable to summary dismissal, and we decline to judicially impose one.

By granting the summary dismissal, just as by granting summary judgment in the ordinary civil case, the court has determined that there exists no material issue of fact. Findings of fact and conclusions of law are not required in the summary judgment case, I.R.C.P. 52(a), because the court in granting summary judgment has ruled that there exists no material issue of fact requiring resolution. Written findings and conclusions in such a situation would simply be superfluous.

. The principle under I.C. § 19-4906(c) is the same; the court has determined as a matter of law that there is no issue of fact, and no purpose would be served by requiring written findings and conclusions.4

Christensen also argues that the trial court erred in not cоnducting an evidentiary hearing with him present. I.C. § 19-4907(b) provides that the petitioner should be produced at a hearing “where there are substantial issues of fact as to evidence in which he participated.” Since we have affirmed the trial court‘s decision that there were no material issues of fact, thе trial court did not err in refusing to conduct an evidentiary hearing with Christensen present.

Finally, Christensen argues that the trial court erred in refusing to admit him to bail pending the outcome of the postconviction proceedings. That issue has been rendered moot because of our decision to affirm. We note оnly that there is no statutory right to bail during the pendency of a post-conviction relief proceeding. While there is a statutory right to apply for admission to bail on appeal from a judgment of conviction, the only constitutional right to bail is as set forth in Art. I, § 6, which applies only prior to conviction. We nеed not, nor do we, pass upon Christensen‘s claim that he should have been bailable while his post-conviction proceeding was pending in district court, which was not at that time pursued in this Court. See

. He does ask that we set bail during the pendency of further proceedings in district court should we reverse and so rеmand. We do not reverse, and we do not address that issue.

The summary disposition of the district court is affirmed.

Gary D. Babbitt & Edwin V. Apel, Jr., Boise, for defendant-appellant.

William R. Hollifield, Twin Falls, ‍​​​​‌‌‌‌‌‌​​‌‌‌‌​‌‌‌‌​‌‌‌‌​‌​​​​‌‌​​​​‌‌‌​​​‌​​‌‍for plaintiff-respondent.

SHEPARD, Justice.

The single issue on this appeal is whether the action is barred by the statute of limitations. Defendant-appellant, Fidelity and Deposit Company of Maryland, issued performance bonds in increments of two yeаrs covering Myron Johnson, the treasurer and tax collector of Lincoln County during his terms of office (two years) from 1941 to 1971.1 Johnson left office in 1977 when it was discovered he had misappropriated funds and failed to collect delinquent taxes. Lincoln County brought action on the bonds. Fidelity and Deposit Company filed an I.R.C.P. 12(b)(6) motion to dismiss, or in the alternative for summary judgment, on the basis that the action was barred by the statute of limitations. The district court issued an order denying such motion and filed its certificate indicating that the issue presented a controlling question of law and the Supreme Court review of the otherwise unappealable denial of the motion would obviate lengthy and expensive litigation. This Court agreed and issued its order permitting appeal by certification. See I.A.R. 12(a). We reverse.

[1] It is clear that I.C. § 5-218(1) is the applicable statute of limitations in actions by a county against the surety of a defaulting county official.

;
;
.

I.C. § 5-218(1) was amеnded in 1974 to its present form and language. In its pre-1974 language, the statute provided for a three year statute of limitations. This Court has held that under the pre-1974 statutory language a cause of action against a surety accrues at the end of the official‘s term of office.

;
. This Court has never dealt with a situatiоn as presented here where an official has served several successive terms of office during which defalcations have occurred. Other jurisdictions have held, however, that a cause of action on the bond accrues at the end of each individual term during which a defalcation oсcurs notwithstanding that the official has served additional successive terms since each term of office is distinct and the fact that an official is his own successor is of no consequence. See
;
;
;
;
; 20 C.J.S. Counties § 160 (1940); 67 C.J.S. Officеrs § 293 (1978).

In the instant case a cause of action under pre-1974 I.C. § 5-218(1) accrued at the end of each of Johnson‘s individual terms. Fidelity‘s final bond on Johnson was for that term of office ending January 12, 1971. Thus, in the absence of other factors, the statute barred any claim on Fidelity‘s bond following January 12, 1974. The district court held and Lincoln County argues here that a judicial exception should be engrafted extending the otherwise governing statute of limitation to such time as the defalcation was or should have been discovered. That argument was made, discussed and rejected by a majority of the Court in

. We deem the pre-1974 statute to be clear and unambiguous. When the language of subsection (1) of thе pre-1974 statute is compared with the language of subsection (4) of that statute, it is clear that the legislature was aware of the discovery rule and determined ‍​​​​‌‌‌‌‌‌​​‌‌‌‌​‌‌‌‌​‌‌‌‌​‌​​​​‌‌​​​​‌‌‌​​​‌​​‌‍to make it applicable to causes of actions falling within subsection (4), but not to actions falling within subsection (1). We also note in passing the absеnce in the instant case of the policy considerations which impelled the decisions of this Court in
and
.

Lincoln County next argues that this Court should construe the pre-1974 statute as containing a discovery exception to the three year statute of limitations on the basis of the lаnguage contained in the 1974 amendatory legislation. That legislation provided: “The purpose of this act is to clarify the law with respect to the statute of limitations applied to bonds of public officials.” 1974 Idaho Sess. Laws ch. 240, § 1. Lincoln County argues that said language indicates that the legislature was annоuncing the then existing law rather than changing the then existing law. Following that legislative enactment, I.C. § 5-218(1) provides:

“An action upon a liability created by statute, other than a penalty or forfeiture. The cause of action in favor of the state of Idaho or any political subdivision thereof, upon a surety bond or undertaking provided for or required by statute shall not be deemed to have accrued against any surety on such bond or undertaking until the discovery by the state of Idaho or any political subdivision thereof of the facts constituting the liability.”

Such language is clearly a substantial departure from the pre-1974 statutory languagе and clearly engrafts a discovery rule upon the pre-1974 language. When a statute is amended, it is presumed that the legislature intended it to have a meaning different from that accorded to it before the amendment.

;
.

Lincoln County finally argues that the 1974 legislative amendment of I.C. § 5-218(1) is or should be retroactive in its аpplication. No statute is retroactive “unless expressly so declared.” I.C. § 73-101. Section 3 of ch. 240 of the 1974 Idaho Sess. Laws states:

“An emergency existing therefor, which emergency is hereby declared to exist, this act shall be in full force and effect on and after its passage and approval, and shall apply to all causes of action аgainst any surety on any such bond or undertaking, which said causes of action shall have been discovered by the state of Idaho or any political subdivision thereof within three (3) years immediately preceding the date of passage and approval of this act.”

Thus, the only express declaration оf retroactivity contained in the amendment of 1974 is to causes of action discovered within three years preceding the date of its passage, i. e., April 3, 1974. See also

.

We hold that the instant cause of action against Fidelity and Deposit Company of Maryland is barred by the statute of limitations. The orders and decisions of the trial court are reversed and the cause is remanded for further proceedings consistent herewith. Costs to appellant.

BAKES, C. J., and McFADDEN and DONALDSON, JJ., concur.

BISTLINE, Justice, dissenting.

The decision of the trial court should be affirmed. I am able to agree with the Court‘s statement that a cause of action on a surety bond such as that hеre involved accrues at the end of each individual term during which a defalcation has occurred, provided, however, only as applicable to discovered defalcations. I see the 1974 amendment to I.C. § 5-218(1) as urged by respondent county, and as apparently so viewed by the trial court. At the time of the amendment the legislature was obviously well aware of the judicial pronouncements applying the discovery rule, and I see in the language of the statement of purpose only legislative recognition of such coupled with legislative desire to go on record as declaring its intent—thus obviating future judicial debate on the issue. Even were that not the case, the 1974 amendment provides a clear indication of the legislative frame of mind, and should influence the Court into coming to the right determination. The interested legal scholar or practitioner will note with some concern that in

the Court looked to the “clear legislative intent of amended I.C. § 5-219(4),”2 for guidance and direction in reaching its determination in that case, even though the amendment was ‍​​​​‌‌‌‌‌‌​​‌‌‌‌​‌‌‌‌​‌‌‌‌​‌​​​​‌‌​​​​‌‌‌​​​‌​​‌‍conceded to have no applicability to a cause of action which had accrued prior to the amendment.

did not involve public monies surreptitiously taken, but city monies lost during the bank failures of the great depression. The fact that Justice Budge wrote the Court‘s unanimous opinion is of more than mere passing interest—keeping in mind that he wrote the dissenting opinions in the earlier cases of
and its predecessor,
.
is a short and wholly unenlightening opinion of one full pаge which makes no discussion whatever of the discovery rule, and does not disclose whether the defalcations were or were not discovered early on and within the three year time period. The case simply goes off on the basis of the
case. Justice Budge, however, in dissent, observed that “It is neсessary, therefore, to determine whether or not there is an exception,

whether there was such fraud or mistake, and whether the county had or was presumed to have had notice of such breach.”6 Citing a multitude of authority, some of which is directly quoted in his opinion, none of which was refuted or discussed in the opinion of the Court (a hardly acceptable state of affairs), he concluded (1) that if it appears that fraud is involved, the cause of action will not be deemed to have accrued until the facts have been discovered, (2) that a county official possessing public funds occupies the position of a fiduciary to the county, and (3) that where a public official appropriates public monies to his own use, and submits false and misleading reports, he should not be permitted by reason of his own wrongful acts to profit thereby, requiring “as supported by the great weight of authority” that the running of the statute is tolled until the discovery of the fraud.

, as is readily seen is of doubtful weight, having been decided in the days of a three member court with no two of the justices agreeing, and all three writing opinions.
stands no better, in fact, worse than
. Two members of the Court improperly7 held that the statute of limitations could be raised in bar of a claim of set-off—with which we have no concern, other than to note the error—and there was no claim of fraudulently concealed defalcations. Justice Budge in his opinion thoroughly decimated the other two opinions on the two propositions before the Court, observing with a jaundiced eye the view of one opinion that a

county official whоse defalcations are not discovered during his term “by reason of exceptional skill, or for any other reasons”8 ought to stand in better stead than the county official whose indebtedness to the county is discovered during the term.

It is my considered view that counsel for the county are entirely correct in thе assertion that the opinions of Justice Budge are the better reasoned. In fact, the other opinions in those early cases are unfortunately bereft of any reasoning whatever, and

simply purports to be premised upon
.

Concurring in Justice Budge‘s depiction of a county official‘s stand as a fiduciary, I add that much of that which I wrote in

and
is aрplicable, particularly the companion California cases of
,10 and
.11 I am also much influenced by that which Justice McFadden wrote in
as to the running of the statute of limitations where a fiduciary relationship exists:

“The question of when the statute of limitations commences to run in the guardian-ward relationship is one of first impression in Idaho. But this court has had occasion to decide the issue in analogous fiduciary contexts.

“In an action by a beneficiary against his trustee, the rule has long been that the period of limitation begins when the trust is terminated, disavowed or repudiated by the trustee, and such conduct is

unequivocably made known to the beneficiary.

;
;
;
.” (Emphasis added,
.)

Concluding, I submit that the Court may find that it has blithely placed too much reliance on the early Idaho cases without making any in-depth study as to their applicability. As a result the bonding company, which received a premium from the county and assumed the risks, escapes a substantial loss which in turn has to be absorbed by the county taxpayers. It is to be kept in mind that official bonds are required of most county officials, and that there are in Idaho 44 counties. Unlike assigned risks in the field of liability insurance, a bonding company is under no obligation to bond anyone. A compilation of statistics would prоbably show that bonding company losses to counties and to the state are less than ½ of 1%, if that high. And it is not to be forgotten that bonding companies ordinarily require indemnity agreements before they will execute an official bond.

With all of the foregoing in mind it is difficult to conceive that it was ever intended that bonding companies would escape liability where the officials whom they bonded were the unworthy but possessed of the “exceptional skill” referred to by Justice Budge. To so hold is to hand a windfall to the bonding companies at the expense of the defrauded public.

I respectfully dissent.

Earl F. McGILL, Plaintiff-Appellant, v. IDAHO BANK & TRUST CO., an Idaho Corporation, Defendant-Respondent.

No. 13201.

Supreme Court of Idaho.

Aug. 13, 1981.

632 P.2d 683

Notes

1
Western Surety bonded Johnson in two year increments from 1971-1979. Western Surety is a party below but not an appellant here.
.
4
In
, this Court noted that it would be helpful if the trial court stated its reasons for the intended dismissal when it acts under § 19-4906(b). We decline to make this a mandatory requirement under § 19-4906(c).
.
6
 (Budge, J., dissenting).
7
In
, Justice McFadden wrote for a unanimous Court:

“In

, this court was presented with the issue of whether a defendant‘s cross-demаnd, arising from the same transaction as the plaintiff‘s original claim, could be set off against the plaintiff‘s claim even though affirmative relief on the cross-claims was barred by the statute of limitations. This court held that such cross-demands, although barred as the basis for affirmative relief, could be set off against the plaintiff‘s claim.”
.

8
 (Budge, J., dissenting).