Monday, January 17, 2011

Idaho Supreme Court -- Page v. Pasquali et al

This one goes back a month. On December 23, 2010, the Idaho Supreme Court decided Page v. Pasquali. It's a brief 5-0 decision affirming the district court's grant of summary judgment.

The facts are pretty simple. The Pages bought property in 1995 and assumed an existing debt for almost $50,000. They assumed a promissory note in favor of Pasquali. The Note was secured by a Deed of Trust. In 2002, the home was damaged by heavy snowfall and the Pages received a settlement check for approximately $29,000. Pasquali was the loss payee of the insurance policy. Pasquali sent approximately $21,000 to the lending company and sent $8,000 to the Pages. The Pages subsequently stopped paying the Note, filed bankruptcy, had their petition dismissed, and then the home was sold at a Trustee's sale. The Pages filed suit against Pasquali and Rupe claiming that they never defaulted and that the $21,000 payment should have counted as fifty-eight future monthly payments instead of being applies to the principal debt owed at the time of payment.

The Idaho Supreme Court affirms the district court's dismissal of the Pages of the complaint, finding that the Deed of Trust and Note are unambiguous. The Court finds that the Note clearly states that any prepayments made "shall be credited first on interest then due and the remainder on principal." The Note does not contemplate prepayments acting as future payments in any equivalent amount. Since the documents and their requirements are unambiguous, the Court finds that the district court properly found the Pages to be in default.

Additionally, the Court notes that the district court also relied on two other grounds for finding default: the failure to pay property taxes and the failure to maintain insurance. The Pages did not appeal from those two findings. So the Court reasons that even if the district court erred by finding that the $21,000 should have counted as future monthly payments, the Pages defaulted anyway.

The Idaho Supreme Court then awards attorney fees under 12-121 for a frivolous appeal by the Pages. The Pages' failure to argue the other grounds that the district court relied upon to find default justified the fees.

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