Court Opinion

ID: 4106100
Source: CourtListenerOpinion
Date Created: 2016-12-09 20:04:47.460262+00
Date Added: 2024-06-11T12:54:03.832252
License: Public Domain

IN THE SUPREME COURT OF THE STATE OF IDAHO
                                 Docket No. 43343

MARIAN G. HOKE, an individual, and                  )
MARIAN G. HOKE as trustee of THE                    )   Boise, August 2016 Term
HOKE FAMILY TRUST U/T/A dated                       )
February 19, 1997,                                  )   2016 Opinion No. 142
                                                    )
       Plaintiff-Respondent,                        )   Filed: December 8, 2016
                                                    )
v.                                                  )   Stephen W. Kenyon, Clerk
                                                    )
NEYADA, INC., a Nevada corporation,                 )
                                                    )
       Defendant-Appellant.                         )

_________________________________________

       Appeal from the District Court of the Third Judicial District of the State
       of Idaho, Canyon County. Hon. George A. Southworth, District Judge.

       The district court’s judgment and award of attorney’s fees are vacated.
       This case is remanded for further action consistent with this Opinion.

       Brian Webb Legal, Eagle, attorney for appellant.         Brian L. Webb
       argued.

     Morrow & Fisher, PLLC, Nampa, attorneys for respondent. Laura E.
     Burri argued.
                     ___________________________
W. JONES, Justice
                                    I. NATURE OF THE CASE
       NeYada, Inc. (“NeYada”), a Nevada corporation, appeals from the district court’s order
granting summary judgment to Respondent, Marian Hoke (“Hoke”), and declaring a lease (the
“Lease”) and an option to purchase (the “Option”) between the parties invalid and unenforceable.
In November 2014, Hoke executed the Lease and Option with NeYada for the transfer of an
interest in real property located in Canyon County, Idaho. A mere two months later, Hoke filed
suit seeking to invalidate the Lease and the Option alleging, inter alia, that neither document
complied with the statute of frauds. Both parties moved for summary judgment on that issue. The
district court held that the Lease and Option (together, the “Contract”) were invalid and
unenforceable because neither complied with the statute of frauds. Further, the district court held

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that the doctrine of part performance did not require the enforcement of the otherwise invalid
Contract.
                            II. FACTUAL AND PROCEDURAL BACKGROUND
        Hoke, an elderly widow living in Canyon County, Idaho, is the sole trustee of the Hoke
Family Trust. The Hoke Family Trust owns the property at issue, which is located at 16867
Portner Road, Nampa, Idaho (the “Property”). The Property consists of fourteen (14) mobile
home lots and thirteen (13) mobile homes situated on 1.96 acres of land.1
        The transaction between NeYada and Hoke was structured as a lease with an option to
purchase. The Lease and the Option were executed on November 7, 2014. The Lease was
“subject to and contingent upon the Lessor entering into a written agreement with NeYada, Inc.,
giving them the right to purchase the subject property.” The Option, a separate document,
granted NeYada the right to purchase the Property for $200,000, less a credit of $20 and a “credit
for 94.5% of all monthly lease payments paid to [Hoke] under the separate Land Lease . . . .”
        Upon the execution of the Lease and Option, an escrow account was opened with Idaho
Escrow. The escrow instructions contemplated that NeYada would pay Hoke $800 a month
towards the principal of $200,000 beginning on December 15, 2014. Hoke and NeYada further
agreed that Hoke owed NeYada $1,610 for prorated November rent, which she had already
collected from tenants.
        On November 15, 2014, Hoke turned over actual possession of the Property to NeYada
along with the bills of sale for the two mobile homes. Hoke also paid NeYada $1,610, per their
agreement. NeYada began managing the Property. It posted late notices and new leases on
tenants’ doors, opened new accounts, paid past-due taxes, registered the mobile homes in its
name, and hired a property management company. In sum, by executing the Lease and the
Option, NeYada became the landlord for the tenants of the Property, but still paid rent to Hoke.
        Shortly following the execution of the Contract, Hoke became concerned about the
transaction. She consulted with an attorney, and on December 1, 2014, Hoke’s counsel mailed a
letter to NeYada explaining that the Lease and Option were null and void because each, among
other deficiencies, violated the statute of frauds. Further, the letter demanded that NeYada cease

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  Hoke owned two of the thirteen mobile homes on the Property. Those two mobile homes were sold to NeYada in
the transaction. However, after invalidating the Contract, the district court ordered NeYada to return the mobile
homes to Hoke.

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and desist from any further actions pertaining to the Property. Hoke instructed the tenants of the
mobile homes on the Property to pay rent to her directly.
       Hoke filed her complaint on January 12, 2015, seeking to invalidate the Lease and Option
for, inter alia, violation of the statute of frauds. An answer and counterclaim were filed by
NeYada on February 25, 2015. Therein, NeYada sought to enjoin Hoke from accepting rent from
the mobile home tenants, claimed that Hoke breached the Lease and Option, and sought a
declaration that the Lease and Option were valid and enforceable.
       The parties each filed a motion for summary judgment. NeYada argued, inter alia, that
the property descriptions in the Lease and the Option complied with the statute of frauds, and
alternatively, that the doctrine of part performance took the matter outside of the statute of
frauds. Conversely, Hoke argued, inter alia, that the legal descriptions attached to the Lease and
Option were inadequate and void. On March 26, 2015, the parties met with the district court and
agreed to submit additional briefing on the issue of whether the legal descriptions of the Property
in the Lease and the Option were sufficient.
       After hearing oral argument on the parties’ competing motions for summary judgment,
the district court held that the Lease and Option were invalid and void due to noncompliance
with the statute of frauds. Specifically, the district court held that the descriptions of the Property
in the Lease and Option were inadequate. Further, the district court held that the doctrine of part
performance did not require the enforcement of the otherwise invalid Contract because the
claimed performance—NeYada’s rent payment—did “not constitute fully [sic] or even a
substantial portion of the payments to be made under the agreements.”
       On April 13, 2015, NeYada filed a motion to reconsider and to set aside judgment
arguing that regardless of whether the Option was enforceable, the Lease should be enforced
because “the standard to comply with the statute of frauds for a lease is entirely less strict than
the legal description required for . . . an option.” The district court denied the motion to
reconsider, holding that the Lease and Option comprised a single transaction. The district court
reasoned that because the Option was insufficient to satisfy the statute of frauds, the Lease was
also invalid under the statute of frauds.
       On June 2, 2015, Hoke filed a motion for turnover of the mobile home titles. NeYada
appealed the judgment and the denial of the motion to reconsider on June 16, 2015. Thereafter,
the district court granted Hoke’s request for costs and attorney’s fees, and also ordered NeYada

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to turn over the two mobile home titles to Hoke. In response, NeYada filed an amended notice of
appeal.
                                        III. ISSUES ON APPEAL
1.        Whether the district court erred by failing to specifically enforce the Contract via the
          doctrine of part performance.
2.        Whether the district court erred in awarding Hoke attorney’s fees and costs.
                                     IV. STANDARD OF REVIEW
                  The     standard    of    review      on    appeal    from       an    order
          granting summary judgment is the same standard that is used by the district court
          in ruling on the summary judgment motion. Baxter v. Craney, 135 Idaho 166,
          170, 16 P.3d 263, 267 (2000). All disputed facts are to be liberally construed in
          favor of the non-moving party, and all reasonable inferences that can be drawn
          from the record are to be drawn in favor of the non-moving party. Eagle Water
          Company, Inc. v. Roundy Pole Fence Company, Inc., 134 Idaho 626, 628, 7 P.3d
          1103, 1105 (2000). 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 movant is entitled to judgment as a matter of law. I.R.C.P.
          56(c).
Garner v. Bartschi, 139 Idaho 430, 433, 80 P.3d 1031, 1034 (2003).
                                            V. ANALYSIS
A.        The district court erred by failing to specifically enforce the Contract via the
          doctrine of part performance.
          The parties devoted a significant amount of briefing to the issue of whether the
description of the Property in the Lease and Option complied with the statute of frauds.
However, we decline to address that issue because this case is resolved by the application of the
doctrine of part performance. Accordingly, we do not express any opinion as to the district
court’s conclusion regarding the adequacy of the Property description found in the Lease,
Option, or combination thereof.
          In its memorandum decision and order, the district court held that NeYada’s actions did
not qualify as part performance sufficient to take the matter outside of the statute of frauds. The
district court referenced three instances that would weigh in favor of a finding of part
performance: (1) the transfer of actual possession of the Property; (2) Hoke paying NeYada
$1,610 (November’s prorated rent from the Property’s mobile home tenants); and (3) NeYada’s
lease payments to the escrow account. However, based primarily on the fact that Hoke’s payment
of one month’s rent—of a five year lease—did “not constitute fully [sic] or even a substantial

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portion of the payments to be made under the agreements,” the district court concluded that part
performance had not occurred. We disagree.
       Idaho Code section 9-504 provides that the statue of frauds “must not be construed to . . .
abridge the power of any court to compel the specific performance of an agreement, in case of
part performance thereof.” I.C. § 9-504.
           Under the doctrine of part performance, when an agreement to convey real
       property fails to meet the requirements of the Statute of Frauds, the agreement
       may nevertheless be specifically enforced when the purchaser has partly
       performed the agreement. Bear Island Water Association, Inc. v. Brown, 125
       Idaho 717, 722, 874 P.2d 528, 533 (1994). “What constitutes part performance
       must depend upon the particular facts of each case and the sufficiency of
       particular acts is matter of law.” Id. at 722, 874 P.2d at 533; (citing Boesiger v.
       Freer, 85 Idaho 551, 381 P.2d 802 (1963)). “The most important acts which
       constitute a sufficient part performance are actual possession, permanent and
       valuable improvements and these two combined.” Roundy v. Waner, 98 Idaho
       625, 629, 570 P.2d 862, 866 (1977).
Simons v. Simons, 134 Idaho 824, 827, 11 P.3d 20, 23 (2000). Acts constituting part performance
must be specifically referable to the alleged agreement. Id. (citing Boesiger v. Freer, 85 Idaho
551, 557, 381 P.2d 802, 805 (1963)).
       In Simons, the appellants and respondents were joint owners of certain property deeded to
them by their mother. 134 Idaho at 826, 11 P.3d at 22. The property was subject to foreclosure.
Id. The appellants agreed to quitclaim their interest in the property to the respondents, who
would then file Chapter 12 bankruptcy to save the property. Id. The agreement included an
understanding that, upon the satisfaction of the debt, the respondents would convey part of the
property back to the appellants. Id. Ten years later, the appellants were notified that the debt was
satisfied. Id. However, the respondents refused to convey part of the property back. Id. Before
this Court, the respondents argued that the agreement was barred by the statute of frauds due to,
inter alia, an inadequate property description. Id. at 827, 11 P.3d at 23. Notwithstanding the
statute of frauds argument, this Court applied the doctrine of part performance. Id. In doing so,
this Court noted that the appellants had fully performed their part of the agreement. Id.
Accordingly, this Court affirmed the district court’s specific enforcement of the agreement. Id.
       The district court erred in holding that NeYada’s actions did not qualify as part
performance. Case law clearly indicates that the action of the purchaser may remove a contract
from the strictures of the statute of frauds. Bear Island Water Ass’n, Inc. v. Brown, 125 Idaho
717, 722, 874 P.2d 528, 533 (1994); Hoffman v. S V Co., Inc., 102 Idaho 187, 191, 628 P.2d 218,
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222 (1981). Yet, the district court’s sole focus was on the seller, Hoke. Specifically, the district
court considered only Hoke’s turning over of possession, payment of November’s rent, and
acceptance of lease payments. The district court should have considered NeYada’s actions;
namely, opening an escrow account, managing the Property, and—most importantly—receiving
actual possession of the Property. All that remained to be done, under the agreement, was to
make monthly payments and to transfer title upon satisfaction of the purchase price. Both of
which were not scheduled to occur until a later time. Therefore, at the time this lawsuit was
initiated, NeYada’s performance was essentially complete. Indeed, at oral argument, Hoke’s
counsel admitted that NeYada took actual possession of the Property, and there was “probably
nothing” more NeYada could have done. Such an admission undercuts Hoke’s argument against
the application of the doctrine of part performance. NeYada, like the appellants in Simons,
satisfied its obligations. All that remained to be done was to make monthly payments and to
convey title. Accordingly, we vacate the district court’s holding that NeYada’s actions did not
qualify as part performance.
B.     Attorney’s Fees
       Hoke can no longer be considered the prevailing party for purposes of awarding costs and
attorney’s fees because we vacate the district court’s decision regarding part performance.
Accordingly, the district court’s award of attorney’s fees and costs is vacated.
                                        VI. CONCLUSION
       We vacate the district court’s holding regarding NeYada’s part performance, vacate the
district court’s award of attorney’s fees, and remand the case to the district court for further
action consistent with this Opinion.
       Justices EISMANN, BURDICK and HORTON CONCUR.
Chief Justice J. JONES, specially concurring.
       I fully concur in the Court’s opinion but wish to comment on the adequacy of the
property description in the Option to Purchase (Option). The Option states that it pertains to the
following-described property:
                         Legal Description to be attached as Exhibit “A”

       That certain mobile home park known as Hoke Mobile Home Park, consisting of
       14 mobile home lots, and 13 mobile homes, as more fully described in Exhibit
       “A” attached hereto.

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Exhibit “A” reads: 07-3N-2W NW PORTNER SUB TX2 IN LT 9,, TX 05292 & 05293 IN BLK
9.
        Those unfamiliar with property descriptions could probably not make heads or tails out of
this description. However, persons familiar with the various ways of describing property would
be able to determine that the subject property was located within Section 7 of Township 3 North
and Range 2 West. It might have been helpful if the description had indicated the county in
which Section 7 was located and the identity of the meridian that the range was west of, but
those items of information are not essential. There is only one Section 7 located in Township 3
North and Range 2 West in the State of Idaho and that Section 7 is located in Canyon County.
The description indicates that the property subject to the Option is located in Portner
Subdivision, more specifically tax lot 2 in lot 9 of the subdivision and tax lots 05292 and 05293
in block 9 of the subdivision. To obtain the exact descriptions of these tax lots, a person could
visit the Canyon County Assessor’s office or utilize the geographic information system on the
County Assessor’s website. The geographic information system displays the exact location and
dimensions of the three tax lots, shows that they are combined into parcel number 25544000 0,
states they are located in Portner Subdivision at 16867 Portner Rd., and indicates that the three-
lot parcel is 1.963 acres in area.2
        The description of the property in the Option is adequate to meet the requirements of the
statute of frauds. In Ray v. Frasure, 146 Idaho 625, 629, 200 P.3d 1174, 1178 (2009), we said
that “[a] description of real property must adequately describe the property so that it is possible
for someone to identify ‘exactly’ what property the seller is conveying to the buyer.” Although
the Option does not provide the metes and bounds descriptions of the tax lots, this Court has
indicated that a description that makes reference to “any record or external or extrinsic
description from which a complete description could be had” can satisfy the statutes of frauds.
Allan v. Kitchen, 16 Idaho 133, 143, 100 P. 1052, 1055 (1909). “A description contained in a
deed will be sufficient so long as quantity, identity or boundaries of property can be determined
from the face of the instrument, or by reference to extrinsic evidence to which it refers.” Ray,
146 Idaho at 629, 200 P.3d at 1178. “In order to make use of extrinsic evidence in a real estate

2
 The Lease Agreement, which is specifically referenced in the Option, states the area of the mobile home park to be
1.96 acres and indicates that it is located in Portner Subdivision in Nampa, Idaho. The Lease Agreement lists the 13
mobile homes located in Hoke Mobile Home Park, specifying that they are all located on parcel number 25544000
0. The geographic information system shows the exact locations of the mobile homes on that parcel.

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contract, the parties merely need to reference the extrinsic evidence in their contract or deed.” Id.
at 630, 200 P.3d at 1179.
       During my years of private law practice, I prepared many real estate purchase contracts,
including options to purchase. It was always preferable to obtain a metes and bounds description
or a description appearing in the recorded real county property records, such as a subdivision lot,
but when such was not immediately available, a tax lot would suffice because the county
assessor usually had a serviceable legal description on hand. The problem with tax lots is that
they can change over time and one would not want to rely on them for a permanent record.
However, they are serviceable and sufficient to identify property that is subject to a contract for
purchase, including an option to purchase, so that the parties can know with certainty what is
being sold and what is being purchased. The description in the Option is clearly sufficient for
that purpose.

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