Court Opinion

ID: 9560885
Source: CourtListenerOpinion
Date Created: 2023-08-21 17:58:35.53151+00
Date Added: 2024-06-11T09:13:18.384671
License: Public Domain

*309JOHNSON, Justice,
concurring, concurring specially, concurring in the result, and dissenting.
I concur in the following parts of the Court’s opinion: I (Facts), III (Bad Faith Tort), IV (Fiduciary Duty), V (Defamation), VI(A) (Tortious Interference with Contract), VII (Punitive Damages), and X (Cross Appeal).
I concur specially in part II (Foreclosure Procedure). In my view, footnote 6 should point out the effect of affirmative defenses raised by the borrowers and found by the jury to have been established, but which were not the subject of counterclaims, i.e.: Bliss Valley (excuse), the Erkins (excuse), the Walkers (equitable estoppel and quasiestoppel), and the limited guarantors (waiver, estoppel, and duress). If Bliss Valley, the Erkins, and the Walkers establish the same affirmative defenses in a new trial, these defenses would defeat Idaho First’s recovery.
The claim of Idaho First against the limited guarantors was a legal claim for collection on the guaranties. The limited guarantors demanded and were entitled to a jury trial on this claim and on their affirmative defenses. Because the jury found the limited guarantors had established three affirmative defenses that were not the subject of counterclaims by the limited guarantors, we should affirm the judgment in favor of the limited guarantors against Idaho First on its legal claim to enforce the guaranties.
I dissent from part VI(B) (Interference with Prospective Economic Advantage). In my view, the elements for proving interference with prospective economic advantage should be coordinated with the elements for proving intentional interference with contract formulated in part VI(A). In Twin Falls Farm & City Distrib., Inc. v. D & B Supply Co., 96 Idaho 351, 359, 528 P.2d 1286, 1294 (1974), the Court ruled that one of the respondents had committed the common law tort of interference with prospective advantage. The Court cited Calbom v. Knudtzon, 65 Wash.2d 157, 396 P.2d 148 (1964) as authority for this ruling. Id. In Calbom, the Washington Supreme Court listed the elements of the tort of intentional and unjustified third-party interference with valid contractual relations or business expectancies:
(1) the existence of a valid contractual relationship or business expectancy; (2) knowledge of the relationship or expectancy on the part of the interferor; (3) intentional interference inducing or causing a breach or termination of the relationship or expectancy; and (4) resultant damage to the party whose relationship or expectancy has been disrupted. Ill will, spite, defamation, fraud, force, or coercion, on the part of the interferor, are not essential ingredients, although such may be shown for such bearing as they may have upon the defense of privilege.
396 P.2d at 151.
By requiring proof of either (1) an improper objective or purpose to harm the plaintiff, or (2) use of a wrongful means to cause injury to a prospective business relationship, the decision of the Court today implicitly overrules the portion of Twin Falls Farm delineating the tort of interference with prospective advantage in Idaho. I would follow the formulation in Twin Falls Farm, which coordinates with the elements of interference with contract stated in part VI(A).
I concur in the result of part VIII (Covenant of Good Faith and Fair Dealing). In my view, however, the trial court correctly defined good faith in Instruction No. 39 to mean “honesty in fact in the conduct or the transaction concerned.” This is the definition used in I.C. § 28-1-201(19), a portion of the Uniform Commercial Code (UCC) as enacted in Idaho. The loan transaction in this case included a security agreement subject to chapter 9 (Secured Transactions) of the UCC. The first count of Idaho First’s complaint was entitled “Foreclosure on Personal Property” and sought foreclosure “pursuant to Section 28-9-504, Idaho Code.” The security agreement was an integral part of the loan transaction.
All the parties in this case agree that one of the definitions of good faith in the UCC should be used. Idaho First argues that *310the definition of good faith contained in I.C. § 28-1-201(19) applies. The borrowers contend that the definition of good faith contained in I.C. § 28-2-103(l)(b) applies. (“ ‘Good faith’ in the case of a merchant means honesty in fact and the observance of reasonable commercial standards of fair dealing in the trade.”) This definition does not apply here because the security agreement is covered by chapter 9, not chapter 2, of the UCC. By the terms of I.C. § 28-1-201, the definitions stated there apply unless there is an additional definition contained in the applicable chapter of the UCC. There is no definition of good faith in chapter 9.
In my view, the application in this case of principles concerning good faith and fair dealing we have developed in employment cases is not appropriate. The subjective “good faith” required by I.C. § 28-1-201(19) is different from the requirement of good faith we have required in employment cases.
I dissent from part IX (Realignment of the Parties). I disagree with the holding that when legal and equitable issues are joined in a lawsuit, the trial court should first decide the equitable issues and then, if any independent legal issues remain, those issues should be tried to a jury, if one has been requested in a timely fashion. In my view, this impliedly overrules David Steed and Associates v. Young, 115 Idaho 247, 766 P.2d 717 (1988) {Steed I).
Steed I relied on Beacon Theatres, Inc. v. Westover, 359 U.S. 500, 79 S.Ct. 948, 3 L.Ed.2d 988 (1959) in holding that in a foreclosure action a defendant is entitled to a jury trial on compulsory legal counterclaims. In Steed I, the Court said:
Thus, it is irrelevant whether the legal issues are “incidental” to the equitable claims, since the right to a jury trial is specifically guaranteed under both Idaho Constitution art. 1 § 7 and I.R.C.P. 38(a). Further, in the instant case, the Bank has only claimed that the case beginning in equity must lie in equity, since the legal issues are “incidental” to the equitable, and both legal and equitable issues are “inextricably intertwined.” The Bank has made no showing of “imperative circumstances” in its case which would deprive it of equitable relief if the legal issues were tried to a jury. We can thus find no reason to deny Petitioner Steed his most precious constitutional right to trial by jury.
... Since the right to a trial by jury is “inviolate” under the Constitution of the State of Idaho, a party to an equity action has a right to a jury trial on the legal causes of action raised pursuant to his compulsory counterclaim, unless there is a clear showing of “imperative circumstances” which would cause the equity claimant “irreparable harm while affording a jury trial in the legal cause.” Beacon Theatres, Inc.
115 Idaho at 250-51, 766 P.2d at 720-21 (emphasis in original, footnote omitted).
State ex rel. McAdams v. District Court, 105 N.M. 95, 728 P.2d 1364 (1986), cited in the Court’s opinion, is contrary to Steed I because the New Mexico court employed the principal rejected in Steed I that “there is no right to jury trial of incidental legal issues in a foreclosure suit.” 728 P.2d at 1365 (emphasis in original).
Penmont Enter., Inc. v. Dysart, 340 So.2d 1285 (Fla.Dist.Ct.App.1977), cited in the Court’s opinion, is also contrary to Steed I because the Florida District Court of Appeals put the burden on the party seeking the jury trial to show “that the non-jury trial of the equitable issues in the cause prior to the jury trial of the legal issues presented by the counterclaim deprived the defendants of any legal right.” 340 So.2d at 1286. In Steed I, the Court put the burden on the party presenting the equitable claim to show clearly that the equity claimant would suffer irreparable harm if there were a jury trial of the legal claim.
Jaffe v. Albertson Co., 243 Cal.App.2d 592, 53 Cal.Rptr. 25 (1966), cited in the Court’s opinion, also is contrary to the rationale of Steed I. It would allow the trial court by the exercise of its discretion to try the equitable claim first to abrogate the right to trial by jury guaranteed in Steed I.
In my view, on remand the trial court should assess the character of the counterclaims. Those that are legal in nature should be entitled to a jury trial in which *311the jury is free to consider the factual issues free from any preemptive decision of the trial court in the equitable portion of the case.