case law student guide 2013

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Idaho Real Estate Commission 1 | P a g e

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Commission Core 2013

Course Approval #: C2013

Student Guide

Learning Objectives

By the end of this module you will be able to:

Describe the effects of a free look provision in a real estate purchase agreement Contrast a deed reserving geothermal resources to a deed reserving mineral rights Summarize the elements for setting aside an Idaho sheriffs sale Identify the parties who can void a real estate transaction involving community property Define a purchase money mortgage Identify the elements which determine the priority of two recorded purchase money

mortgages Differentiate between compensable and non-compensable property rights in a

condemnation action Define a constructive trust and recall when a court may apply this remedy Explain when the equitable remedy of rescission can and cannot be obtained

CASE LAW


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http://www.isc.idaho.gov/opinions/buku38561.pdf

Summary

Out of Jefferson County (East Idaho) Buku Properties, LLC (Buyer) entered into two land sale contracts to buy adjacent

properties, one owned by the Clarks and the other by the Petersons (both Sellers). Buyer put down $327,000 in earnest money for the property owned by the Clarks and

$25,000 for the piece owned by the Petersons. Both contracts provided that all but $10,000 of the earnest money was refundable until

closing and that Buyer had a 4 month window to be fully satisfied with the condition ofthe property.

Buyer became concerned about the impact of a possible Jefferson County zoning changethat would negatively impact the value of the property. Within the 4 month window,Buyer asked for an extension to resolve the zoning issue, and Sellers refused.

Buyer elected to cancel the contract and demanded refund of both earnest monies over$10,000, Sellers refused.

Buyer sued for return of earnest money and district court granted summary judgment infavor of Buyer. Sellers appealed.

Supreme Court Holding

The Supreme Court affirmed. The Court stated that the language in the Buyers ObligationClause permitting the Buyer to be fully satisfied with the condition of the property was a typeof free look provision permitting the Buyer to walk away from the sale. The Court construedBuyers request to extend the review period as an exercise of Buyers right to refuse to close.Therefore, Buyer was entitled to a refund of its earnest money (all but the $10,000) under each ofthe contracts.

Practical Application

Buyers may wish to consider putting free look provisions in real estate purchase agreementswhere there are large earnest money deposits or potential issues with the property. Sellers whoaccept contracts with these clauses should understand that the buyer is free to walk on the deal,and that the buyers unconditional right to walk is enforceable. However, large earnest moneydeposits may be an invitation to litigate, even if the contract language is clear and unambiguous,as the Court found here. You should advise the buyers and sellers to seek legal counsel beforesubmitting or accepting any offer with a free look provision, and also whenever a buyerattempts to exercise the free look and walk away.

Buku Properties LLC v. Clark

2013 Opinion No. 39 (February 2013)

Idaho Su reme Court
http://www.isc.idaho.gov/opinions/buku38561.pdfhttp://www.isc.idaho.gov/opinions/buku38561.pdfhttp://www.isc.idaho.gov/opinions/buku38561.pdf


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http://www.isc.idaho.gov/opinions/idatherm39108.pdf

Summary

Out of Bonneville County (East Idaho) In 1946, the Bells (Grantor) conveyed a piece of property near Grays Lake to the Manns

(Grantee), reserving all the oil, gas, and minerals, in, on, or under the surface. Geothermal resources were discovered on the property and Grantors successors leased

the same to Bedrock Geothermal, LLC. Grantees successors leased the same geothermal resources to Ida-Therm, LLC. Ida-Therm filed a declaratory action to determine the rightful owner of the geothermal

resources. The District Court found that the deed clause concerning subsurface rights was

unambiguous and encompassed the geothermal resources. Ida-Therm appealed to the Idaho Supreme Court.


The Idaho Supreme Court reversed, holding the term minerals - and whether it includedgeothermal resources - was ambiguous: geothermal resources have value separable from the

soil, but it is unclear if they have an easily recognizable, definite chemical composition; they arenot crystalline solids, yet are exploited for commercial value; and while some Idaho statutesrecognize geothermal resources as minerals, others do not.

After deciding that the mineral reservation in the Deed was ambiguous, the Court set out tointerpret its meaning. The Court agreed with the district judge there was no extrinsic (parol)evidence to indicate the grantors original intent. The Court resorted to the rule of constructionapplicable to ambiguous reservations in deeds: in general, the court views grants in a deedexpansively and reservations restrictively, so where there is any uncertainty or ambiguity in thelanguage used, the grantee should have the benefit of the doubt or the ambiguity. Applying thatrule here, the Supreme Court construed the grant in favor of the Bell Property Owners (the

grantees) and held as a matter of law that the geothermal resources were appurtenant to theproperty, and were not included as mineral rights reserved to the Reservation Owners (theGrantors). Accordingly, Ida-Therm, not Bedrock, was the rightful lessee of the geothermalresources.

Ida-Therm, LLC v. Bedrock Geothermal, LLC

2012 Opinion No. 147 (December 20, 2012)

Idaho Supreme Court
http://www.isc.idaho.gov/opinions/idatherm39108.pdfhttp://www.isc.idaho.gov/opinions/idatherm39108.pdfhttp://www.isc.idaho.gov/opinions/idatherm39108.pdf


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A Deed's reservation of mineral rights does not necessarily include geothermal resources.Reservations and exceptions in deeds are narrowly construed, and generally construed againstthe grantor. Consequently, an intent to reserve all subsurface rights should be clearly and

unambiguously expressed in the deed, or else risk being unenforceable.


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Phillips v. Blazier-Henry

2013 Opinion No. 45 (April 11, 2013)

Idaho Supreme Court

http://www.isc.idaho.gov/opinions/38666SUB.pdf

Summary

Out of Bonner County (North Idaho) Carole Blazier-Henry (Borrower) had signed a series of promissory notes with Chance

(Lender). The notes were secured by a deed of trust on a piece of real property owned byBorrower.

Borrower failed to make payments and Lender filed suit to foreclose or, in the alternative,for award of a money judgment.

Borrower failed to respond and Lender elected to take a default money judgment for$72,667, plus late fees and interest (instead of pursuing the foreclosure), and then leviedon the property to satisfy the judgment. A sheriffs sale was scheduled to satisfy the levy.

On the day of the sale, Lenders attorney failed to appear, incorrectly assuming, that thesheriff would enter a credit bid on behalf of her client for the amount of the judgment.

Jacobson, an unrelated third party, was the successful bidder and purchased the propertyat the sheriffs sale for $1,000.

When notified the property had sold for only $1,000, Lender filed a motion in districtcourt to have the sale set aside on the grounds of gross inadequacy of consideration. Thedistrict court granted the motion. Jacobson brought this appeal.


The Idaho Supreme Court reversed, holding that gross inadequacy of price, alone, does notprovide grounds to set aside a sheriffs sale. Inadequate price must be coupled with some slightadditional circumstance, such as an irregularity in the sale to void the sale. No suchcircumstance or irregularity was established here.

The Court advised that, absent instructions, a sheriff is not obligated to enter a credit bid onbehalf of a judgment creditor at a sheriffs sale. Chances misunderstanding of the law on thispoint did not constitute additional circumstance that warrant setting aside a sheriffs sale. Onthe contrary, the additional circumstance involved this case weighed against Chance, thejudgment creditor: Chance failed to take action to protect her own interests, first by failing to

submit a bid, and then by failing to take appropriate timely action to try to redeem the property.
http://www.isc.idaho.gov/opinions/38666SUB.pdfhttp://www.isc.idaho.gov/opinions/38666SUB.pdfhttp://www.isc.idaho.gov/opinions/38666SUB.pdf


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A low bid, even if a grossly inadequate price, is not sufficient grounds to set-aside a sheriffs salewithout accompanying circumstances favoring setting aside the sale. Such circumstances mayinclude irregularity in the sale, but a creditor's mistake of law, or the failure to take action to

protect its rights, does not constitute such circumstance.

Sheriffs sale practices can vary from county to county. Interested parties and theirrepresentatives should determine what those practice are and they may wish to consult aninformed expert. Do not assume the sheriffs office will automatically enter a credit bid onbehalf of the judgment creditor. Absent instructions, a sheriffs office has no obligation to - andprobably should not - enter a credit bid.


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New Phase Investments LLC v.Jarvis

2012 Opinion No. 101( June 29, 2012)

Idaho Supreme Court

http://www.isc.idaho.gov/opinions/newphase38447.pdf

Summary

Out of Idaho Falls, Bonneville County (East Idaho) Joshua and Rebecca Jarvis were married in 2006. In 2008, Joshua Jarvis (Jarvis) purchased a piece of ground as his sole and separate

property to build a spec home. But, given the marriage, it was community property. In order to build the spec house, Jarvis took out two sets of construction loans, both

secured by the property. The first loan, which was not signed by his wife, was obtainedthrough Snake River Funding, LLC and assigned to DAFCO, LLC (DAFCO). The

DAFCO deed of trust was recorded first. The second set of loans was through New PhaseInvestments, LLC. New Phase filed a second deed of trust.

The Jarvises then defaulted on all of the loans. In the foreclosure action that followed, DAFCO argued that it should have first priority

because its Deed of Trust was recorded first. New Phase argued that it should have firstpriority because the DAFCO Deed of Trust was not signed by the wife, as required byIdaho Code 32-912 which specifies that both a husband and wife must sign aninstrument encumbering their community property.

The district court held that the DAFCO Deed of Trust was void. DAFCO appealed.


The Supreme Court overturned the district court. The Supreme Court held that Idaho Code 32-912 was designed to protect non-signing spouses, not to protect creditors. Therefore, while aspouse can void a real estate document that such spouse did not sign, third parties cannot.


Only the non-signing spouse can void real estate transactions involving community property.Third parties cannot.
http://www.isc.idaho.gov/opinions/newphase38447.pdfhttp://www.isc.idaho.gov/opinions/newphase38447.pdfhttp://www.isc.idaho.gov/opinions/newphase38447.pdf


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Insight LLC v. Gunter

2013 Opinion No. 48 (April 16, 2013)

Idaho Supreme Court

http://www.isc.idaho.gov/opinions/gunterSUB.pdf

Summary

Out of Bonner County (North Idaho) Summit, Inc. (Buyer) owned a 142-acre parcel and the Gunters (Seller) owned an

adjoining 18-acre plot. Buyer agreed to purchase the Gunters parcel for $799,000 cash. Instead of proffering the cash, Buyer contacted Independent Mortgage Ltd. Co. (Lender)

to obtain a loan for the purchase price. Lender agreed to loan $616,000 but only if Buyergave both parcels as security for the IM Mortgage.

Buyer, without disclosing the IM Mortgage, advised the Seller it could not come up withthe entire purchase price and asked them to finance $200,000. The Seller agreed. Buyerasked the escrow company (EasyWay) to prepare a deed of trust for them (Sellers Deedof Trust).

Buyer signed the Lenders Mortgage on June 19, 2006 at IMs office. Later that day,Buyer signed the Sellers Deed of Trust at EasyWays office.

Both sets of documents were delivered to Sandpoint Title for recording. Per IMsinstructions, the Lenders Mortgage was recorded first at 4:17 p.m. and the Sellers Deedof Trust second at 4:18 p.m.

Buyer defaulted on its obligations to both Lender and Seller. The ensuing litigation concerned which lien had priority on the Sellers 18 acres. The

district court decided that the Sellers Deed of Trust had priority, even though it wasrecorded second. The court found that the IM Mortgage was not a purchase moneymortgage because the Lender knew about the Sellers Deed of Trust and therefore lackedgood faith required under the recording statute. Lender appealed.


Supreme Court overruled the district court on appeal. The Court held the IM Mortgage was apurchase money mortgage and that because it was the prior conveyance and first recorded,

IM had the superior lien.

The Court began its analysis referring to the applicable statutes. Idaho Code 45-112 providesthat a purchase money mortgage has priority over all other liens created against thepurchaser, subject to the operation of the recording laws. Idahos recording laws provide thatEvery conveyance of real property . . . is void as against any subsequent purchaser or mortgageeof the same property, or any part thereof, in good faith and for valuable consideration, whoseconveyance is first duly recorded. I.C. 55-812.
http://www.isc.idaho.gov/opinions/gunterSUB.pdfhttp://www.isc.idaho.gov/opinions/gunterSUB.pdfhttp://www.isc.idaho.gov/opinions/gunterSUB.pdf


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The Court held the IM Mortgage was a purchase money mortgage. First, the mortgage was givento enable the purchase of the property: the money was given to the escrow agent handling thesale (EasyWay), and it was given after IM examined the property to be purchased.

The IM Mortgage was a Purchase Money Mortgage

Second, the IM Mortgage and Gunters Deed of Trust were part of the same transaction. Eventhough each closed at different times and different locations, both were intended to be part of asingle transaction. The Court noted that under Idaho law, a land sale transaction concludes upondelivery of the deed. Here, before the deed was delivered to Summit, the proceeds anddocuments for both mortgages were delivered to the escrow and title company. The Court alsonoted that nothing in the law prevents more than one purchase money mortgage, and held thatIM Mortgageandthe Gunters Deed of Trustboth were purchase money mortgages for purposesof the priority statutes.

Third, and deciding the issue for the first time in Idaho, the Court ruled IMs taking of additionalsecurity (i.e., the 142 acres owned by Summit in addition to the 18 acres being deeded) did notdestroy the purchase money status of IMs mortgage. The Court emphasized that the loan wasprimarily intended to enable Summit to purchase the property, and therefore it was a purchasemoney mortgage.

Where both mortgages were purchase money mortgages, priority must be determined byoperation of the recording laws. Under the recording statute, a subsequent conveyance voids a

prior conveyance only if (1) the subsequent conveyance was made in good faith, i.e., withoutnotice, and (2) the subsequent conveyance is the first duly recorded. Idaho law definesconveyance as the instrument in writing by which any estate or interest in real property iscreated, alienated, mortgaged or encumbered. I.C. 55-813. A conveyance does not dependupon when it is recorded.

IMs Mortgage has priority under the Recording Statute

Here, the IM Mortgage was executed first and therefore was the prior conveyance. TheSummit deed of trust, executed later that same day, was the subsequent conveyance. As thesubsequent conveyance, the Gunters Deed of Trust could not take priority unless it was recordedfirst. It was not recorded first, and therefore, the Gunters Deed of Trust was junior to the IMMortgage.

The Court made a special effort to explain that knowledge of an actual andexisting encumbranceis required to defeat a partys good faith status, and that knowledge of an intentto encumber isnot knowledge of an actual encumbrance. Accordingly, a prior conveyance is necessarily madewithout knowledge of the subsequent conveyances, and for that reason, good faith regardingthe prior conveyance is irrelevant.


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Idaho is a race-notice-recording state (the first to record without actual notice of priorexistingencumbrances gets priority). The time of execution and recording are therefore critical. Here,had Summit signed (executed) IMs Mortgage earlier in the day, and signed the Gunters Deed of

Trust afterwards. If these documents had been signed in reverse order, IM would have hadnotice, and therefore lacked good faith to claim priority under the recording statute.

Parties and stakeholders should be aware of any escrow instructions regarding the order in whichinstruments in the transaction are to be created and recorded and should submit their owninstructions when seller financing is contemplated.


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First Federal Savings Bank of Twin Falls v. Riedesel Engineering, Inc.

2012 Opinion No. 120 (September 14, 2012)

Idaho Supreme Court

http://www.isc.idaho.gov/opinions/correction%20copy.pdf

Summary

Out of Twin Falls County (Magic Valley) Riedesel Engineering, Inc. (Claimant) was hired by and performed engineering services

for a developer of a subdivision in Twin Falls County. Claimant also filed a mechanics lien against the property. Claimants lien had a priority

date earlier than Lenders. The developer then granted First Federal Savings Bank (Lender) mortgages in the

property to secure promissory notes, which Lender duly recorded. When the developer went out of business, Lender brought an action to foreclose, naming

the developer and Claimant. Claimant counterclaimed, asserting that its mechanics lienhad priority. The district court found in favor of the Claimant. Lender appealed.


The Supreme Court reversed, holding that the Claimants lien was invalid because it was notproperly verified in accordance with the requirements of the mechanics lien statute. To be

valid and enforceable, a mechanics lien must comply with the requirement of I.C. 4507(4) thatthe claim of lien be verified by the oath of the claimant, his agent or attorney, to the effect thatthe affiant believes the same to be just. This requirement is met by a formal declaration madein the presence of an authorized officer, such a as a notary. Here, the notary block recited onlythat the notary had witnessed the claimants signature; it did not state that the claimant wassworn before the notary. The Court held that Claimants recital at the beginning of the claim, I[Claimant], being first duly sworn, depose and say . . . failed to substantially comply with theoath requirement, because it did not state that Claimant was sworn by a person authorized toadminister oaths. Absent a statement that the Claimant was sworn and by a person authorizedto administer oaths, the lien claim failed to satisfy statutes requirements, and was invalid.


The Court requires strict compliance with the requirement that the lien claim demonstrate theclaimant was sworn by a person authorized to administer oaths. Many notary blocks docontain sufficient verbiage, such as subscribed and sworn to by me this __ day. . . . However,if the notary purports only to witness the claimants signature, the lien claim will be deemed
http://www.isc.idaho.gov/opinions/correction%20copy.pdfhttp://www.isc.idaho.gov/opinions/correction%20copy.pdfhttp://www.isc.idaho.gov/opinions/correction%20copy.pdf


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invalid under this case. Also, it is not merely the recital that is required; the notary is actuallyrequired to take the oath. Thus, if the claim is signed on a date other than the date the claim isnotarized (which would demonstrate the oath was not given in the presence of the official), thelien claim could be held invalid.


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State of Idaho v. HI Boise, LLC

2012 Opinion No. 141 (November 19, 2012)

Idaho Supreme Court

http://www.isc.idaho.gov/opinions/38344-CORR.pdf

Summary

Out of Boise, Ada County (Treasure Valley) Dispute between the Idaho Transportation Department (Plaintiff) and HI Boise, LLC

(Defendant), the owner of a Holiday Inn at the junction of Interstate 84 & Vista. Plaintiff rebuilt the adjacent freeway interchange, added lanes, modified ramps and added

a 20-foot sound wall. The Defendants main access was from Vista but there were two other entrances. On the Defendants property, Plaintiff condemned a narrow strip for a new bike lane &

sidewalk but essentially left the main access alone. Plaintiff offered $38,177 based uponan appraisal. Defendant refused that offer.

Plaintiff filed a condemnation action and Defendant counterclaimed for $7.1 to $7.5million on a theory of inverse condemnation, specifically that the project backed uptraffic past the Defendants main access and the Holiday Inn was less visible because ofthe sound wall.

On summary judgment, the district court dismissed Defendants access and visibilityclaims, holding that damages due to mere changes in traffic flow are non-compensable,and that Idaho law provides no property right to continued visibility. Defendantappealed.


The Supreme Court affirmed the district court. The Court began by noting that access to anadjacent public street is a long-recognized right incident to land ownership. However, becausean owners right of street access is subservient to the primary rights of the public to travel on thestreets, the government may, in the exercise of its police powers, regulate that right. Therefore,no compensable taking occurs where the right of access is not destroyed or substantially

impaired, so long as the remaining access is reasonable. Moreover, the right of access does notinclude the right to any particular pattern of traffic flow. Thus, government action that merelyresults in a change in traffic flow, requiring traffic to reach a property by a more circuitous route,does not amount to a taking. Therefore, because HI Boise retained reasonable access to itsproperty - even if by a more circuitous route - no compensable taking occurred.

No property right in the continued flow of traffic
http://www.isc.idaho.gov/opinions/38344-CORR.pdfhttp://www.isc.idaho.gov/opinions/38344-CORR.pdfhttp://www.isc.idaho.gov/opinions/38344-CORR.pdf


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Although there was contemporaneous physical the taking - i.e., the narrow strip to build the bikelane - that taking was not the cause of the limitation of access, and therefore does not change theanalysis.

The Court also refused to recognize a property right to continued visibility of the property. Thecourt explained that, given a property owner does not have a property right in traffic flow aroundhis property, he cannot assert a property right in that same traffics ability to see his property.Citing a noted property law treatise, the Court explained that the right to visibility is denied,principally on the theory that one has no control over his neighbors property and thereforecould not prevent his neighbor, under most principals of property law, from erection barriers toprevent his right to be seen. Therefore, a taking by a public authority takes nothing from him.

No property right to visibility


Property ownership does not include a right to continued traffic flow along propertys adjacentpublic road, and does not include a right to continued visibility to the public. Where acontemporaneous physical property taking is not the cause of the decreased traffic or lostvisibility, such losses are not compensable as severance damages.


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A constructive trust is an equitable remedy and may be available to an otherwise rightful ownerwhere the legal title to the property is obtained through wrongful conduct, such as dishonest acts,taking advantage of a relationship of trust, or other circumstances that make it unconscionable

for the wrong-doer to keep the property for himself. A constructive trust differs from aresulting trust; a constructive trust does not require the wrong-doer/legal title owner to agree tocreate the trust.


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Bolognese v. Forte

2012 Opinion No. 141 (November 19, 2012)

Idaho Supreme Court

http://www.isc.idaho.gov/opinions/38472bologneseopinion.pdf

Summary

Out of Kootenai County (North Idaho) The Bologneses (Buyer), who lived in Las Vegas, purchased an older cabin on the shore

of Hayden Lake from the Fortes (Seller) in October 2005. In August 2006 year, Buyers adult daughter moved from Florida to live in the house,

intending to stay indefinitely. She moved out 11 months later due to various issues withthe house, including freezing pipes and cold floors.

About a year after purchasing the house, Buyer hired a contractor to see if the garagecould be enlarged. The contractor discovered several issues, including the fact that someof the previous improvements had been made without the proper building permits.

These issues had not been disclosed on the Sellers property disclosure. In October 2007, Buyer sued Seller seeking damages for violation of the Disclosure Act,

misrepresentation, and breach of contract. In the alternative, Buyer asked that the realestate contract be rescinded. The case went to trial before a jury on the Buyers claims,and the jury found against the Buyer on all claims. The district court separately ruled thatthe Buyer was not entitled to have the contract rescinded. Buyer appealed.


The Supreme Court affirmed the district court decision not to grant rescission of the contract.Since the jury had returned a verdict against the Buyers on each of their three claims: (1)violation of the Disclosure Act, (2) misrepresentation, and (3) breach of contract, a rescissioncould not be predicated on those claims.

The Buyers also asked the Court to grant rescission based on a mutual mistake of fact theory.However, the Court rejected this argument because Buyers did not assert it in their Complaint.
http://www.isc.idaho.gov/opinions/38472bologneseopinion.pdfhttp://www.isc.idaho.gov/opinions/38472bologneseopinion.pdfhttp://www.isc.idaho.gov/opinions/38472bologneseopinion.pdf


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Rescission is an equitable remedy. To obtain rescission, a buyer needs to prove there is noadequate remedy at law, meaning money damages will not make the buyer whole. If requestingrescission under the Property Condition Disclosure Act, a buyer should request rescission within

the three-day period provided by the Act. If asserting a claim of mutual mistake of fact, thecontract will only be rescinded if the mistake is so substantial and fundamental so as to defeatthe object of that party. If the judge will decide the issue of rescission separately from otherclaims tried to the jury, a buyer should be prepared to offer the court additional evidence relatedto the issue of rescission.


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Actions to Quiet Title - Statute of Limitations

Peterson v. Gentillon (2013 Supreme Court Opinion No. 30) (February 26, 2013)http://www.isc.idaho.gov/opinions/peterson38878.pdf (addressing the issue for the first time inthis quiet title action, the Supreme Court held that the five-year statute of limitations for actions

arising from contract (Idaho Code 5-216) does not apply to bar a claimant who has purchasedreal property, and is in possession of that property, from asserting a claim for specificperformance. A claim for specific performance does not begin to run until that possession hasbeen interrupted.)

Easements & Rights of Way

Trunnell v. Lomu (2012 Supreme Court Opinion No. 83) (May 31, 2012)http://www.isc.idaho.gov/opinions/tru37984.pdf (the Court holds that the defense of bona fide

purchaser for value is inapplicable to extinguish a public roadway; the only avenues throughwhich a validly created public roadway may be extinguished are set forth in Idaho Code 40-203, which establishes the exclusive avenues through which a public right of way may beabandoned.)

Paddison Scenic Properties, Family Trust, L.C. v. Idaho County (2012 Supreme Court OpinionNo. 76) (May 25, 2012) http://www.isc.idaho.gov/opinions/padd38154.pdf (collecting anddiscussing the development of common law dedication of public roadways, but ultimatelydismissing the case for lack of justiciable controversy.)

Capstar Radio Operating Company v. Lawrence (2012 Supreme Court Opinion No. 80) (May

29, 2012) http://www.isc.idaho.gov/opinions/cap38300.pdf (discussing elements for finding aneasement by implication, easement by necessity, and prescriptive easement.)

Ruddy-Lamarca v. Dalton Gardens Irr. Dist., (2012 Supreme Court Opinion No. 150(December 2012)http://www.isc.idaho.gov/opinions/ruddy39217.pdf(the scope of an otherwiseundefined express easement for a ditch is determined by its initial use; initial use for thispurpose does not include all area occupied during the construction of the easement, but is limitedto the physical dimensions of the actual pipeline. The scope of the secondary easement, i.e.,the right to enter and repair, must be reasonable, and what is reasonable may change overtime.)

Pioneer Irrigation District v. City of Caldwell (2012

Opinion No. 132) (Nov. 14, 2012)http://www.isc.idaho.gov/opinions/PioneerCORR.pdf (irrigation easements, ditch-owners right

to self help to remove encroachment.)

Machado v. Ryan (2012 Opinion 102) (June 29, 2012)http://www.isc.idaho.gov/opinions/machado37888.pdf (in this action to establish easement foraccess to newly constructed home and for snow removal, the Court discusses necessary elementsto establish claims of express easement; implied easement by necessity; easement implied by
http://www.isc.idaho.gov/opinions/peterson38878.pdfhttp://www.isc.idaho.gov/opinions/peterson38878.pdfhttp://www.isc.idaho.gov/opinions/tru37984.pdfhttp://www.isc.idaho.gov/opinions/tru37984.pdfhttp://www.isc.idaho.gov/opinions/padd38154.pdfhttp://www.isc.idaho.gov/opinions/padd38154.pdfhttp://www.isc.idaho.gov/opinions/cap38300.pdfhttp://www.isc.idaho.gov/opinions/cap38300.pdfhttp://www.isc.idaho.gov/opinions/ruddy39217.pdfhttp://www.isc.idaho.gov/opinions/ruddy39217.pdfhttp://www.isc.idaho.gov/opinions/ruddy39217.pdfhttp://www.isc.idaho.gov/opinions/PioneerCORR.pdfhttp://www.isc.idaho.gov/opinions/PioneerCORR.pdfhttp://www.isc.idaho.gov/opinions/machado37888.pdfhttp://www.isc.idaho.gov/opinions/machado37888.pdfhttp://www.isc.idaho.gov/opinions/machado37888.pdfhttp://www.isc.idaho.gov/opinions/PioneerCORR.pdfhttp://www.isc.idaho.gov/opinions/ruddy39217.pdfhttp://www.isc.idaho.gov/opinions/cap38300.pdfhttp://www.isc.idaho.gov/opinions/padd38154.pdfhttp://www.isc.idaho.gov/opinions/tru37984.pdfhttp://www.isc.idaho.gov/opinions/peterson38878.pdf


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prior use; and easement by prescription. Rejecting claim for express easement, Court held thatlanguage in a deed providing the conveyance is subject to easements of record, does not initself reserve an easement; such language is not evidence of a grantors intent to reserve orexcept an easement, but merely an attempt to create an exception to the grantors warranties oftitle and quiet enjoyment and thereby limit the grantors potential liability.)

Construction of Deeds

Marek v. Lawrence, (2012 Supreme Court Opinion No. 81) (May 30, 2012)http://www.isc.idaho.gov/opinions/mar38827.pdf(the district court erred in holding that the legaldescription in the deed was unambiguous as to the parties intent as to the location of theboundary, and further erred in considering extrinsic evidence (affidavit testimony and surveys)of where the parties believed that boundary to be. Either the deed is unambiguous, in whichcase no extrinsic evidence is necessary,or the parties intent is not clear from the deed, in which

case the deed is ambiguous and the parties intent becomes a question for the trier of fact. Therecord on appeal was not sufficient to determine which was true here, and case was sent back tothe district judge for further proceedings.)

Sale of Commercial Real Estate - Equitable Remedies

Clayson v. Zebe (2012 Supreme Court Opinion No. 107) (July 2, 2012) http://www.isc.idaho.gov/opinions/clayson38471.pdf (Plaintiff made substantial improvementsto a restaurant property before and after contracting to purchase it. He did not close, but

assigned his rights to defendant, who did purchase the property. Plaintiff sued defendant torecover his costs of improvements. Although there was no express agreement between theparties, the court found the parties conduct gave rise to an implied in fact contract forrepayment, and awarded plaintiff damages.)

Commercial Leases

Boise Mode, LLC v. Donahoe Pace & Partners, Ltd. (2013 Supreme Court Opinion No. 10)(January 10, 2013) http://www.isc.idaho.gov/opinions/boiseFIX.pdf (where commercial lease

unambiguously provided that tenant may not withhold for any reason the payment of rent, andconditioned its right to quiet enjoyment of the property upon keeping rent payments current,tenant could not maintain action for constructive eviction unless it was current with its rent.)
http://www.isc.idaho.gov/opinions/mar38827.pdfhttp://www.isc.idaho.gov/opinions/mar38827.pdfhttp://www.isc.idaho.gov/opinions/clayson38471.pdfhttp://www.isc.idaho.gov/opinions/clayson38471.pdfhttp://www.isc.idaho.gov/opinions/boiseFIX.pdfhttp://www.isc.idaho.gov/opinions/boiseFIX.pdfhttp://www.isc.idaho.gov/opinions/boiseFIX.pdfhttp://www.isc.idaho.gov/opinions/clayson38471.pdfhttp://www.isc.idaho.gov/opinions/mar38827.pdf


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Land Use - Government Takings

Buckskin Properties, Inc. v. Valley County (2012 Supreme Court Opinion No. 38) (March 29,2013) http://www.isc.idaho.gov/opinions/38830.pdf (holding that a government board maylawfully enter an agreement with a land developer for the funding and construction of a new

infrastructure; where developer enters such agreement, it cannot thereafter recover damages forregulatory taking.)

Enforcement of Contract to Sell Property

Tapadeera, LLC v. Knowlton (2012 Supreme Court Opinion No. 98) (June 29, 2012)http://www.isc.idaho.gov/opinions/tapadeera38498.pdf(Owners failure to subdivide its propertyin accordance with County ordinance did not render the contract to sell a parcel an illegalcontract. Although the County had and would continue to recognize property only as a single

parcel, and would deny permits to further develop it, the Countys ordinance does not prohibitthe sale of the property.)

Agricultural Exemption for Property Tax

Thompson Development, LLC v. Idaho Board of Tax Appeals (2012 Supreme Court OpinionNo. 135) (November 15, 2012)http://www.isc.idaho.gov/opinions/thompson39265.pdf(whetheragricultural use of real property in Moscow City would violate citys zoning ordinance wasirrelevant to propertys qualification for the agricultural exemption from property taxes.)

Accrual of Buyers Legal Malpractice Claim Against Their Real Estate Attorney

Reynolds v. Trout Jones Gledhill Fuhrman, P.A. (2013 Supreme Court Opinion No. 7) (January23, 2013) http://www.isc.idaho.gov/opinions/38933fix.pdf (Buyers brought a legal malpracticeaction against their attorney, seeking to recover for Sellers failure to refund earnest money paidby Buyers under negligently drafted real estate agreement. Held: the applicable statute oflimitation began to run at time seller refused Buyers demand for refund, not when district courtentered judgment holding seller liable for the refund, and thus the action was time-barred.)
http://www.isc.idaho.gov/opinions/38830.pdfhttp://www.isc.idaho.gov/opinions/38830.pdfhttp://www.isc.idaho.gov/opinions/tapadeera38498.pdfhttp://www.isc.idaho.gov/opinions/tapadeera38498.pdfhttp://www.isc.idaho.gov/opinions/thompson39265.pdfhttp://www.isc.idaho.gov/opinions/thompson39265.pdfhttp://www.isc.idaho.gov/opinions/thompson39265.pdfhttp://www.isc.idaho.gov/opinions/38933fix.pdfhttp://www.isc.idaho.gov/opinions/38933fix.pdfhttp://www.isc.idaho.gov/opinions/38933fix.pdfhttp://www.isc.idaho.gov/opinions/thompson39265.pdfhttp://www.isc.idaho.gov/opinions/tapadeera38498.pdfhttp://www.isc.idaho.gov/opinions/38830.pdf


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Abuse of Process Based in Improper Use of Lis Pendens

Berkshire Investments, LLC v. Taylor (2012 Supreme Court No. 86) (June 1, 2012)http://www.isc.idaho.gov/opinions/Berkshire%20Opinion.pdf(in this third appeal arising from a2002 real estate sale transaction, the Supreme Court upheld the award of damages against

attorney Thomas Maille based on claims of abuse of process and intentional interference with aprospective economic advantage. After losing the case, twice, Maille continued to litigate andalso filed a lis pendens, both for an improper purpose. Court noted the proper purpose of a lispendens is to provide constructive notice to third parties that an action affecting title to realproperty is pending, as authorized by Idaho Code 5-505. It is not properly used as some kindof lien to ensure payment; recording a lis pendens as leverage to demand money, property, orsome advantage may provide the basis for an abuse of process claim.)
http://www.isc.idaho.gov/opinions/Berkshire%20Opinion.pdfhttp://www.isc.idaho.gov/opinions/Berkshire%20Opinion.pdfhttp://www.isc.idaho.gov/opinions/Berkshire%20Opinion.pdf

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