FILED: March 27, 2002

GENT WELSH,
WILLIAM F. SCHROEDER,
and JOHN T. SCHROEDER,

Respondents,

v.

STANLEY W. CASE,
WREN CASE, LOVENE CASE,
Wren Case and Lovene H. Case,
Trustees of the Wren W. and Lovene H. Case Living Trust
dated November 2, 1992,

Appellants.

Appeal from Circuit Court, Union County.

Phillip A. Mendiguren, Judge.

Argued and submitted February 4, 2002.

George W. Kelly argued the cause and filed the briefs for appellants.

Martin Leuenberger argued the cause for respondents. With him on the brief was Carol DeHaven Skerjanec.

Before Landau, Presiding Judge, and Brewer and Schuman, Judges.

SCHUMAN, J.

Affirmed.

SCHUMAN, J.

To pay for professional services rendered in a bankruptcy matter, defendants gave promissory notes secured by a mortgage to plaintiffs, who were their attorneys and a consultant. When defendants defaulted, plaintiffs brought this foreclosure action. Defendants assign error to the trial court's denial of their request for a jury trial and to the court's rejection of their defenses challenging the enforceability of the mortgage. We affirm.

On de novo review, we find the following facts. Defendants (1) own farm property in Union County. In the fall of 1989, after four years of losing money, they found themselves nearly $600,000 in arrears on a loan from the federal government administered through the Farm Credit Service (the federal creditor). They retained the firm of William Schroeder, P.C., (2) and plaintiff Gent Welsh, a consultant, to help work out a debt restructure and avoid losing the farm. Negotiations did not succeed, and, in January 1990, the federal creditor sued to foreclose. Schroeder asked defendants for a fee deposit of $1,500 "to apply against cash advances by us and past and future time expended at our usual hourly rate." Defendants sent two checks, one for $500 to Welsh and one for $1,000 to Schroeder. When Schroeder tried to cash his check, the bank returned it due to insufficient funds.

Two months later, in March 1990, the federal creditor filed a motion for summary judgment in the foreclosure case. Schroeder informed defendants of this development, reminded them of the returned check, and asked for a payment of $3,500 to cover already-incurred expenses. He wrote, "Wheel[s] have now stopped turning to protect you further and will not turn again until you have made a deposit of an additional $3,500." He also told defendants that they should "arrange a substantial fund" if they intended for him to apply for protection under the bankruptcy laws. Later that month, Schroeder again wrote defendants, informing them that they were delinquent in their payments and that he would formally withdraw as their lawyer if he did not receive payment by March 28. On that date, he received a check from them for $20,000, which he deposited in a trust account.

On May 7, 1990, the federal creditor won a judgment of foreclosure against defendants. As planned, Schroeder and his associated Idaho firm, Schroeder & Lezamiz, filed a petition in the United States Bankruptcy Court for the District of Idaho, seeking protection under Chapter 12 of the Bankruptcy Code, a since-repealed chapter entitled "Adjustment of Debts of a Family Farmer with Regular Annual Income." 11 USC