Case Title: Black Diamond Alliance, LLC. v. Sherry Kimball Trustees sale

Citation: 

Docket Number: 35189

State: idaho

Court: Idaho Supreme Court (civil)

Date: 2010-03-25T00:00:00Z

Document:
1 
 
Appeal from the District Court of the Seventh Judicial District of the State  
of Idaho, Bonneville County.  Hon. Gregory S. Anderson, District Judge. 
 
The decision of the district court is affirmed.  Attorneys fees and costs are 
awarded to Respondent. 
 
Wright, Johnson, Tolson & Wayment PLLC, Idaho Falls, for Appellant.  David 
Anthony Johnson argued.                                        
 
Just Law Office, Idaho Falls, for Respondent. Kipp Lee Manwaring argued. 
____________________________________ 
W. JONES, Justice 
FACTS AND PROCEDURAL HISTORY 
Sherry Kimball purchased a house in Idaho Falls, Idaho on August 30, 1988.  On January 
15, 2004, Kimball refinanced her home through Wells Fargo Bank, who later assigned the 
promissory note and deed of trust to Fremont Investment & Loan.  Beginning September 1, 
2006, Kimball fell behind on her monthly mortgage payments.  On October 23, 2006, Fremont 
sent a notice informing Kimball that her loan was in default and that it intended to foreclose 
upon her property if she did not cure the default within thirty days.  In January of 2007, when 
Kimball failed to cure the default, Fremont began a non-judicial foreclosure proceeding and on 
January 22, 2007, Just Law, Inc. was appointed as successor trustee of the deed of trust.   
The initial trustee‟s sale (first trustee‟s sale) to dispose of Kimball‟s property was 
scheduled for May 29, 2007, and Kimball admitted receiving proper notification of the sale.  On 
the morning of the scheduled sale, Kimball alleges she entered into an agreement with Fremont 
IN THE SUPREME COURT OF THE STATE OF IDAHO 
 
 
Docket No.  35189 
 
 
BLACK DIAMOND ALLIANCE, LLC. 
 
                                 Plaintiff/Respondent,                                                                                     
v.                                                       
                                                         
SHERRY KIMBALL, 
                                                        
                                        Defendant/Appellant. 
 
)
)
)
)
)
)
)
)
)
) 
Boise, February 2010 Term 
 
2010 Opinion No. 35 
 
Filed:  March 25, 2010 
 
Stephen W. Kenyon, Clerk 
 
 
2 
whereby she agreed to make a $3,000 partial payment of the past due balance in exchange for 
deferment of the sale until June 18, 2007.  The Trustee, however, verbally announced at the time 
and place of the first trustee‟s sale that it had been rescheduled for June 12, 2007, at 11:00 a.m. 
and would be held at First American‟s office in Idaho Falls.   
At the second trustee‟s sale, Black Diamond, a company that purchases and sells 
distressed properties, purchased Kimball‟s property for $112,500.  On June 13, 2007, the day 
after the sale, Black Diamond placed a pamphlet and note on Kimball‟s door indicating that it 
had purchased her house.  The Trustee‟s Deed was recorded on June 14, 2007, and sent to Black 
Diamond on June 15, 2007.   
Kimball claims she was surprised by the sale of her property because she alleges that in 
exchange for the payment of $3,000, Fremont promised to give her until June 18, 2008, to pay 
the balance of the note.  Kimball also alleges Fremont informed her that the trustee‟s sale had 
been cancelled and alleges that the Trustee confirmed the cancellation.  Kimball attended neither 
of the scheduled trustee‟s sales because she claims there was no need to attend a cancelled sale 
and received no notice of the rescheduled sale.    
Black Diamond commenced this action by filing a complaint on July 6, 2007, and it filed 
an amended complaint on August 17, 2009.  In its amended complaint, Black Diamond sought a 
writ of ejectment in order to remove Kimball from her property, a writ of restitution, and 
attorney fees and costs.  On November 7, 2007, Kimball filed an answer and a counterclaim; 
Kimball claimed the trustee‟s sale was invalid because she did not receive notice of the second 
sale and her forbearance agreement with Fremont.  Black Diamond subsequently filed a reply 
wherein it asserted as a defense that it was a bona fide purchaser for value.   
On January 18, 2008, Black Diamond filed a motion for summary judgment on all 
claims.  In its memorandum, Black Diamond argued that the first trustee‟s sale had been 
postponed, not cancelled, and consequently Kimball received adequate notice through the oral 
announcement made at the scheduled time and place of the first trustee‟s sale.  Additionally, 
Black Diamond asserted that it was entitled to summary judgment on Kimball‟s unjust 
enrichment claim and as a defense, asserted that it was a bona fide purchaser for value.  Kimball 
filed a response to the motion for summary judgment on February 15, 2008.  In her response, 
Kimball again argued the first trustee‟s sale had been cancelled, not postponed; Black Diamond 
was not a bona fide purchaser; and noted discovery was still pending on the bona fide purchaser 
 
3 
issue.  A hearing was held on March 6, 2008, and the district court, on March 12, 2008, granted 
Black Diamond‟s summary judgment motion.   
Kimball then filed a motion for reconsideration, and Black Diamond filed a 
memorandum in response.  The district court, on March 15, 2008, granted Kimball‟s motion for 
reconsideration and vacated the court‟s earlier grant of summary judgment.  In so doing, the 
district court found there was a material question of fact as to whether Fremont agreed to cancel 
the first trustee‟s sale or merely to postpone it.   
On June 4, 2008, Black Diamond filed a motion for reconsideration and subsequently 
filed a memorandum in support of its motion.  Kimball filed a response to Black Diamond‟s 
motion for reconsideration and on August 25, 2008, Black Diamond filed a motion and 
memorandum for partial summary judgment, seeking summary judgment on the issue of whether 
Black Diamond was a bona fide purchaser for value.  Kimball filed a response to the motion.  On 
October 24, 2008, the district court granted Black Diamond‟s motion for reconsideration on the 
first issue, whether Kimball received adequate notice of the second trustee‟s sale, and the court 
awarded Black Diamond summary judgment on the second issue, whether it was the bona fide 
purchaser for value.  Black Diamond moved for summary judgment on Kimball‟s remaining 
claim of unjust enrichment and on January 15, 2009, the district court granted Black Diamond‟s 
motion.  Kimball filed a notice of appeal on January 23, 2009.   
ISSUES ON APPEAL 
1. Whether Kimball received adequate notice of the rescheduled trustee‟s sale.   
2. Whether Black Diamond was a bona fide purchaser for value.   
3. Whether attorney fees should be awarded to Black Diamond on appeal. 
STANDARD OF REVIEW 
The Supreme Court reviews a district court's decision on summary judgment 
using the same standard as that properly employed by the trial court when 
originally ruling on the motion.  Summary judgment is appropriate only when the 
pleadings, depositions, affidavits and admissions on file show that there is no 
genuine issue of material fact and the moving party is entitled to judgment as a 
matter of law.  
Zollinger v. Carrol, 137 Idaho 397, 399, 49 P.3d 402, 404 (2002) (citations omitted).  “The 
interpretation of a statute is a question of law over which we exercise free review.”  State v. 
Schwartz, 139 Idaho 360, 362, 79 P.3d 719, 721 (2003). 
 
 
4 
ANALYSIS  
I. 
Kimball received adequate notice of the trustee’s sale.   
Kimball claims that Idaho Code section 45-1506(8), as applied to this case, violates her 
due process rights under the Fourteenth Amendment of the United States Constitution and 
Article I, section 13 of the Idaho State Constitution.  Kimball argues that under both 
constitutions the right to due process is guaranteed, requiring meaningful notice before judicial 
action can be taken against an individual or her property.  Given that she was informed that the 
first trustee‟s sale had been cancelled, Kimball argues the verbal announcement made on May 
29, 2008, without more, deprived her of reasonable notice and an opportunity to be heard.   
Black Diamond claims Kimball‟s counsel, David Johnson, stipulated at the summary 
judgment hearing held on March 6, 2008, that the first trustee‟s sale had been postponed, not 
cancelled.  Black Diamond therefore claims disposition of the action rests upon the construction 
of Idaho Code section 45-1506(8).  Black Diamond asserts that when a sale is postponed, under 
Idaho Code section 45-1506(8), the trustee need only announce at the time and place of the 
original sale, the date and time of the rescheduled sale.  Black Diamond argues that the trustee 
complied with these requirements when “[o]n May 29, 2009 at 11:00 a.m. – the date and time of 
the originally scheduled sale – the trustee‟s crier announced postponement of the sale and gave 
the date and time of the rescheduled sale – June 12, 2009 at 11:00 a.m.”   
Kimball‟s principal argument is that she was deprived of due process because she did not 
receive notice of the postponed sale date.  Kimball states she “is not challenging the 
constitutionality of Idaho Code § [45-1506(8)] as a whole, but only as to the facts and 
circumstances of this case.”  Since due process requirements pertain when there is a state actor 
and since the only action of the state in this case was passage of Idaho Code section 45-1506 and 
since Kimball does not assert that this code section is constitutionally defective, it is not apparent 
how a due process violation may have occurred in this case.  A facial review of the statute does 
not reveal that the Legislature enacted a constitutionally deficient notice provision in Idaho Code 
section 45-1506(8).  
 
Subsection 8 provides that a trustee sale must be held at the time and place designated in 
the notice of sale (or notice of rescheduled sale where the original sale was barred by a stay as 
provided in Idaho Code section 45-1506A) but that the trustee may postpone the sale upon 
request of the beneficiary “by publicly announcing at the time and place originally fixed for the 
 
5 
sale, the postponement to a subsequent date and hour.”  If a deed of trust obligor wanted to 
protect his or her interests, he or she would attend the initial sale and be present to hear of any 
postponement and act accordingly to protect those interests at the later date.  On the other hand, 
if the obligor did not show up at the initially scheduled sale, one might assume that he or she 
essentially waived any notice of a postponed sale.  This is where the distinction between a 
canceled sale and a postponed sale becomes important. 
 
The statute does not eliminate the need for a new notice in the event that a sale is 
canceled, rather than merely being postponed to a subsequent date in accordance with the 
requirements of Idaho Code section 45-1506(8).  Were the Legislature to have specifically 
provided in the statute that no notice of a new sale had to be given where the original sale was 
unconditionally canceled, Kimball might have a viable argument.  However, that is not the case 
here. 
In her affidavit opposing Black Diamond‟s motion for summary judgment, Kimball 
stated three times that the sale had been canceled.  The court initially entered summary judgment 
against her but granted reconsideration based on her contention that the sale was canceled, rather 
than merely being postponed.  This appeared to be a winning argument.  Inexplicably, Kimball‟s 
counsel did not follow up with this same argument in subsequent proceedings.  It is not entirely 
clear whether counsel stipulated that the issue was to be decided on the basis of a postponement 
rather than a cancelation, but what is clear is that this argument was not advanced on appeal to 
this Court.  Unfortunately, Kimball‟s best argument was simply not pursued on appeal and this 
Court is not, therefore, in a position to act upon a ground not presented on appeal. Our decision 
disposes with the case and renders consideration of the remaining non-attorney fee issues 
unnecessary.  
III. 
This Court awards Black Diamond attorney fees on appeal under Idaho Appellate 
Rule 11.2.   
Black Diamond requests costs and attorney fees on appeal under Idaho Appellate Rules 
41 and 35(b)(5) and Idaho Code sections 12-120(3) and -121.1  Kimball has not requested 
attorney fees on appeal.   
                                                 
1 On December 10, 2008, Black Diamond filed an amended motion for costs and fees, an amended memorandum of 
costs, and a motion for bond on appeal;Black Diamond sought attorney fees under Idaho Code sections 12-120(3) 
and 12-121.  On December 19, 2008, Kimball filed an objection to the amended motion for attorney fees and costs.  
The district court held that attorney fees were not warranted under Idaho Code section 12-120(3) because the case 
did not involve a “commercial transaction.”  Additionally, the court denied attorney fees under Idaho Code section 
 
6 
Black Diamond claims it is entitled to attorney fees under Idaho Code section 12-120(3) 
because of “the nature of the underlying commercial transaction . . . .”  In support of its position, 
Black Diamond argues that this Court in Taylor v. Just, 138 Idaho 137, 142–43, 59 P.3d 308, 
313–14 (2002), found a challenge to the validity of a trustee‟s sale to be an effort to recover on a 
commercial transaction.   
Kimball argues that attorney fees should not be awarded under Idaho Code section 12-
120(3) because there is no contractual privity between the parties, and the property was not 
commercial in nature.   
Under Idaho Code section 12-120(3), “In any civil action to recover on . . . any 
commercial transaction . . . the prevailing party shall be allowed a reasonable attorney's fee to be 
set by the court . . . .”  “The term „commercial transaction‟ is defined to mean all transactions 
except transactions for personal or household purposes.”  I.C. § 12-120(3).   
This Court declines to award attorney fees under Idaho Code section 12-120(3) because 
this was not an action to recover on a commercial transaction.  The district court properly 
interpreted this case to be analogous to PHH Mortgage Services Corp. v. Perreira, 146 Idaho 
631, 641, 200 P.3d 1180, 1190 (2009).  In that case, this Court distinguishes Taylor on material 
grounds.  In PHH Mortgage Services Corp., this Court stated:  
In Taylor v. Just, both parties agreed that the action was to recover on a 
commercial transaction because the plaintiff had bid at the foreclosure sale in 
order to obtain the property for resale.  This case was brought by PHH to eject the 
Perreiras and Anestos from their residence, and the Perreiras counterclaim sought 
to contest the foreclosure sale of their residence.  This was not an action to 
recover in a commercial transaction.  See Bajrektarevic v. Lighthouse Home 
Loans, Inc., 143 Idaho 890, 893, 155 P.3d 691, 694 (2007) (action involving the 
refinancing of plaintiff's home was not a commercial transaction).  Therefore, 
PHH cannot recover attorney fees on appeal pursuant to that statute, even if they 
were the prevailing party on appeal. 
Id.   Likewise, this case was not an action to recover on a commercial transaction.   
This Court awards attorney fees to Black Diamond under I.A.R. 11.2.  Kimball‟s counsel 
framed the issue in the district court and this Court as what notice is required for a postponed 
sale and the law on that issue is clearly stated in Idaho Code section 45-1506(8).  Accordingly, 
                                                                                                                                                             
12-121 because it found Kimball‟s defense not to have been frivolous, unreasonable, or without foundation.  The 
district court awarded Black Diamond $440.30 in costs as a matter of right under Idaho Rule of Civil Procedure 
54(d)(1)(A), and the court denied a request for discretionary costs under Idaho Rule of Civil Procedure 54(D)(1)(D).   
 
7 
this appeal was frivolously pursued, and the Court exercises its discretion to award Black 
Diamond attorney fees under I.A.R. 11.2 to be paid personally by Kimball‟s counsel. 
CONCLUSION 
For the foregoing reasons, this Court finds that Kimball received adequate notice of the 
trustee‟s sale and that her due process rights were not violated.  This Court awards Black 
Diamond attorney fees on appeal under Rule 11.2 to be paid by Kimball‟s counsel personally.    
Costs to Black Diamond. 
Chief Justice EISMANN and Justices BURDICK, J. JONES and HORTON CONCUR.