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Kinghorn v. Clay
State: Idaho
Court: Supreme Court
Docket No: 38109
Case Date: 08/09/2012
Plaintiff: Kinghorn
Defendant: Clay
Preview:IN THE SUPREME COURT OF THE STATE OF IDAHO Docket No. 38109 KRYSTAL M. KINGHORN, f/k/a KRYSTAL ) M. BARRETT, ) ) Plaintiff-Respondent, ) ) ) v. ) ) KELLY N. CLAY, an individual, ) Defendant-Cross Defendant-Appellant, ) ) ) and ) ) BRP, INCORPORATED, ) Defendant-Cross Claimant-Respondent, ) ) ) and ) ) BANK OF COMMERCE, ) Defendant. )

Boise, May 2012 Term 2012 Opinion No. 117 Filed: August 9, 2012 Stephen Kenyon, Clerk

Appeal from the District Court of the Seventh Judicial District of the State of Idaho, Fremont County. Hon. Jon J. Shindurling, District Judge. The appeal is dismissed. Smith, Driscoll & Associates, Idaho Falls, for appellant. Douglas G. Bowen argued. Stoel Rives, LLP, Boise, for respondent BRP Incorporated. W. Christopher Pooser argued. _______________________________________________ HORTON, Justice. Krystal Kinghorn (Kinghorn) and Kelly Clay (Clay) agreed that Clay would co-sign for a loan for Kinghorn's benefit. In order to protect Clay in the event that Kinghorn defaulted on the loan, Kinghorn agreed to execute a quitclaim deed to real property that Clay could record if King defaulted. When Kinghorn defaulted, Clay recorded the deed and conveyed the property to BRP 1

Incorporated (BRP). Kinghorn filed suit, and the district court unwound the conveyance, holding at summary judgment that the deed was a mortgage and that Kinghorn had a right to redeem the property. BRP filed and prevailed upon a cross-claim against Clay for breach of its warranty deed. BRP later petitioned for a writ of attachment. The district court held that Kinghorn had not timely exercised her right to redeem and ordered Clay to foreclose the mortgage. Kinghorn and Clay stipulated that Kinghorn would purchase the property and that the court should perform an accounting and set off of their liabilities. The court found that a balance remained due to Clay, and entered judgment in his favor. Clay's attorney, Brian Smith (Smith), then moved to perfect an attorney's lien as to the judgment. Kinghorn deposited the amount due with the court, and after the court denied Smith's motion, the court awarded the deposited funds to BRP. Smith appeals the court's denial of the motion for lien, as well as the order for transfer of funds to BRP. We dismiss the appeal. I. FACTUAL AND PROCEDURAL BACKGROUND A bank required that Kinghorn obtain a cosigner in order to obtain a loan of $20,000 in addition to pledging a mobile home and the real property located at Lot 15, Block 6, Buffalo River Estates Division No. 2 in Fremont County. Clay and Kinghorn reached an agreement under which Clay agreed to be the cosigner, and in exchange, Kinghorn agreed to make timely loan payments and to issue to Clay a quitclaim deed to the real property. Kinghorn agreed that if she defaulted and Clay was required to make any payments, Clay could immediately record the quitclaim deed to the property. Kinghorn and Clay co-signed for the loan. Kinghorn timely paid the bank for over a year, but on March 2, 2007, the bank notified Clay that Kinghorn had defaulted and that he was liable for the debt. Clay cured the default, paid the outstanding balance on the loan and recorded the quitclaim deed. He then sold the property to BRP. Shortly thereafter, Kinghorn filed suit against Clay, BRP, and the bank, alleging (1) that Kinghorn had a right to redeem the property because the quitclaim deed to Clay was merely a mortgage, (2) constructive trust, (3) invalid transfer, (4) fraud, (5) breach of the covenant of good faith and fair dealing, and (6) ambiguous contract. 1 The district court eventually entered an order on summary judgment, holding that the quitclaim deed to Clay was a mortgage and that, by conveying the property to BRP, Clay had violated Kinghorn's right of redemption. The court also held that questions of material fact
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It appears that the district court dismissed all of Kinghorn's claims against the bank.

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remained as to whether BRP was a bona fide purchaser of the property. Finally, the court held that Clay was entitled to judgment as a matter of law with regard to Kinghorn's claims of fraud and ambiguous contract. In response to Kinghorn's subsequent motion for partial summary judgment, the district court held as a matter of law that BRP was not a bona fide purchaser. The court simultaneously granted Clay's motion seeking reconsideration on the grounds that Kinghorn had failed to timely exercise her right of redemption and ordered Clay to conduct a foreclosure sale. The district court ordered BRP to convey the real property to Clay. BRP responded by filing a cross-claim against Clay, asserting breach of the warranty in the deed. BRP eventually sought summary judgment on that claim, which the court granted. Meanwhile, Clay and Kinghorn entered into negotiations and filed with the district court a stipulation whereby they agreed that "for reasons of efficiency and expediency, they [would] perform an accounting between themselves and convey the property to the plaintiff without the need to unnecessarily incur attorney's fees and costs associated with filing a foreclosure action and holding a foreclosure sale." The stipulation provided that Clay would have no duty to convey the property to Kinghorn unless she paid all debts owed within six months of the close of the accounting. It also provided that the parties would file cross-motions for summary judgment regarding the claims they asserted in the accounting. Upon the cross-motions for summary judgment, the district court held that Kinghorn owed Clay $22,235.33. BRP moved for an award of the costs and fees incurred in enforcing its warranty deed against Clay. The district court held that Clay owed BRP $2,691 in attorney fees relating to its cross-claim and $30,000 in attorney fees relating to Clay's failure to defend under the warranty deed. The court subsequently entered judgment ordering Clay to pay BRP those amounts in addition to damages in the amount of $31,408.96. BRP filed a petition for writ of attachment pursuant to I.C.
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