MFG Financial Inc. v. Justin Vigos ( 2018 )

IN THE SUPREME COURT OF THE STATE OF IDAHO
Docket No. 44718
MFG FINANCIAL, INC., an Arizona )
corporation, ) Boise, November 2017 Term
)
Plaintiff-Respondent-Cross Appellant, ) 2018 Opinion No. 9
)
v. ) Filed: January 18, 2018
)
JUSTIN VIGOS, an individual, ) Karel A. Lehrman, Clerk
)
Defendant-Appellant-Cross Respondent. )
Appeal from the District Court of the Fourth Judicial District of the State of
Idaho, Ada County. Hon. Gerald F. Schroeder, Senior District Judge.
The decision of the district court is affirmed.
Ballard Law, PLLC, Rexburg and Barkley Smith Law, PLLC, Boise, for
appellant.
Eberle, Berlin, Kading, Turnbow & McKlveen, Boise, for respondent.
_______________________________________________
HORTON, Justice,
Justin Vigos appeals the decision of the district court in Ada County reversing an order
from the magistrate court granting his motion for summary judgment against MFG Financial,
Inc. (MFG). MFG initiated this action to recover damages from a breach of contract. In 2007,
Vigos purchased a vehicle from Karl Malone Toyota. The contract was assigned to Courtesy
Auto Credit (Courtesy). After some time, Vigos defaulted on the contract and the vehicle was
repossessed and sold at auction. Courtesy then allegedly assigned the contract to MFG who
initiated this action in 2015. After some discovery, the parties each filed a motion for summary
judgment. The magistrate court granted Vigos’s motion for summary judgment, finding that
MFG had not presented sufficient admissible evidence to show that it was a real party in interest.
MFG appealed to the district court. The district court reversed the decision of the magistrate
court. Vigos appeals, arguing that the district court applied the wrong standard when it failed to
first determine if evidence was admissible before considering it for purposes of summary
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judgment. MFG cross appeals, arguing that the district court erred when it failed to award it
attorney fees on appeal. We affirm.
I. FACTUAL AND PROCEDURAL BACKGROUND
In 2001, Vigos entered into a contract to purchase a vehicle from Karl Malone Toyota.
After selling the vehicle, Karl Malone Toyota assigned its rights in the contract to Courtesy. By
2009, Vigos was delinquent on his payments and the car was repossessed and sold at auction.
After the sale of the vehicle, there was still a deficiency on the account. In 2014, Courtesy
allegedly assigned its rights in the contract to MFG.
MFG brought this action to collect on the contract in September 2015. After some
discovery, each party filed a motion for summary judgment. Prior to the hearing on the motion
for summary judgment, MFG filed a motion for continuance in the hopes that they would be able
to depose Vigos before the hearing, as Vigos had previously been unavailable for deposition. The
magistrate court declined to hear arguments on the motion to continue. After a hearing, the
magistrate court granted Vigos’s motion for summary judgment. The magistrate also granted
Vigos attorney fees and costs of $16,113.50.
On April 25, 2016, MFG appealed the decision of the magistrate court granting summary
judgment. The district court reversed the magistrate court’s order granting Vigos’s motion for
summary judgment. In reversing the magistrate court, the district court held that MFG had
presented sufficient evidence to show that there was a genuine issue of material fact about
whether it was a real party in interest. Vigos timely appealed, arguing that the district court erred
in reversing the decision of the magistrate court. MFG cross appealed, arguing that the district
court erred when it failed to award it attorney fees on appeal.
II. STANDARD OF REVIEW
When this Court reviews the decision of a district court sitting in its capacity as an
appellate court, the standard of review is as follows: “The Supreme Court reviews
the trial court (magistrate) record to determine whether there is substantial and
competent evidence to support the magistrate’s findings of fact and whether the
magistrate’s conclusions of law follow from those findings. If those findings are
so supported and the conclusions follow therefrom and if the district court
affirmed the magistrate’s decision, we affirm the district court’s decision as a
matter of procedure.”
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Pelayo v. Pelayo, 154 Idaho 855, 858, 303 P.3d 214, 217 (2013) (quoting Bailey v. Bailey, 153
Idaho 526, 529, 284 P.3d 970, 973 (2012)). “Thus this court does not review the decision of the
magistrate court.” Id. at 859, 303 P.3d at 218. “Rather, we are procedurally bound to affirm or
reverse the decision of the district court.” Id. (quoting Bailey, 153 Idaho at 529, 284 P.3d at 973).
“In an appeal from an order granting summary judgment, this Court’s standard of review
is the same as that used by the trial court in ruling on the motion.” Shea v. Kevic Corp., 156
Idaho 540, 544, 328 P.3d 520, 524 (2014) (quoting Summers v. Cambridge Joint Sch. Dist. No.
432, 139 Idaho 953, 955, 88 P.3d 772, 774 (2004)). Summary judgment is proper, “if the movant
shows there is no genuine issue as to any material fact and the movant is entitled to judgment as
a matter of law.” I.R.C.P. 56(a).
III. ANALYSIS
On appeal, Vigos argues that the district court erred in reversing the magistrate court’s
grant of summary judgment. Vigos argues that the district court erred when it failed to first rule
on the admissibility of evidence before considering the motion for summary judgment. MFG
cross appeals, arguing that the magistrate court erred in awarding attorney fees to Vigos and that
the district court erred when it failed to award MFG attorney fees on appeal. These issues will be
discussed in turn.
A. The district court did not err when it reversed the magistrate court’s grant of summary
judgment.
Vigos argues that the district court erred when it reversed the magistrate court’s grant of
summary judgment because the district court failed to first rule on the admissibility of evidence
before considering the motion for summary judgment. The magistrate court granted summary
judgment in Vigos’s favor after ruling that the contract was not properly authenticated and that
MFG could not prove it was a real party in interest. The district court reversed, holding that there
was sufficient evidence presented by MFG to withstand a motion for summary judgment. The
district court is correct.
“The court must grant summary judgment if the movant shows that there is no genuine
dispute as to any material fact and the movant is entitled to judgment as a matter of law.”
I.R.C.P. 56(a). The moving party bears the “initial burden of establishing the absence of a
genuine issue of material fact.” Venable v. Internet Auto Rent & Sales, Inc., 156 Idaho 574, 581,
329 P.3d 356, 363 (2014). “The burden of proving the absence of material facts is upon the
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moving party.” Id. “This burden is onerous because even circumstantial evidence can create a
genuine issue of material fact.” Harris v. Dep’t of Health & Welfare, 123 Idaho 295, 298, 847
P.2d 1156, 1159 (1992) (internal quotations omitted). “Once the moving party establishes the
absence of a genuine issue, the burden shifts to the nonmoving party to show that a genuine issue
of material fact on the challenged element of the claim does exist.” Venable, 156 Idaho at 581,
329 P.3d at 363.
“When considering whether the evidence shows a genuine issue of material fact, the trial
court must liberally construe the facts, and draw all reasonable inferences in favor of the
nonmoving party.” Fragnella v. Petrovich, 153 Idaho 266, 271, 281 P.3d 103, 108 (2012).
“[A]dmissibility of evidence contained in affidavits and depositions in support of or in
opposition to a motion for summary judgment is a threshold matter to be addressed before
applying the liberal construction and reasonable inferences rule to determine whether the
evidence creates a genuine issue of material fact for trial.” Id.
Idaho Rule of Civil Procedure 17(a) states that, “[a]n action must be prosecuted in the
name of the real party in interest.” This Court has said,
The real party in interest is the one who has a real, actual, material or substantial
interest in the subject matter of the action, the primary object being to save a
defendant from further suits covering the same demand or subject matter, i.e., the
real party in interest is the person who can discharge the claim upon which the
suit is brought and control the action brought to enforce it, and who is entitled to
the benefits of the action, if successful, and can fully protect the one paying the
claim or judgment against subsequent suits covering the same subject matter, by
other persons.
Caughey v. George Jensen & Sons, 74 Idaho 132, 134–35, 258 P.2d 357, 359 (1953). “We
therefore hold that under Rule 17(a), I.R.C.P. . . . an assignee is the real party in interest to bring
an action, and that the assignor is not the real party in interest and has no standing to prosecute
an action on the chose in action.” McCluskey v. Galland, 95 Idaho 472, 474–75, 511 P.2d 289,
291–92 (1973).
Here, MFG attempted to submit a contract allegedly signed by Vigos. The magistrate
court found that MFG had failed to authenticate the contract and refused to consider it. In
granting Vigos’s motion for summary judgment, the magistrate court held that because MFG had
not presented a valid contract or shown the chain of title of that contract that MFG was not a real
party in interest. In reversing this grant of summary judgment, the district court agreed that the
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contract had not been properly authenticated but held that there was still sufficient evidence in
the record to survive summary judgment.
Vigos admits that he entered into a contract with Karl Malone Toyota. Vigos also admits
that this contract was assigned to Courtesy. MFG provided an affidavit of Jay Jeffs, a manager at
Courtesy, stating that on January 10, 2014, Vigos’s contract was assigned to MFG. Additionally,
MFG presented an affidavit of Mark Gasser, President of MFG, stating that it was assigned
Vigos’s contract. In his motion for summary judgment, Vigos does not deny that the contract
referenced by MFG was the contract he entered into with Karl Malone Toyota, but asserts that
the contract is hearsay and as such is not admissible. Further, Vigos has not shown any evidence
that there was not an assignment from Courtesy to MFG, only that he does not know of any
assignment. Because Vigos is the moving party in this case, he bears the burden of showing that
there is no genuine issue of material fact. Vigos has failed to meet this burden.
Based on the evidence in the record as discussed above, Vigos entered into a contract
with Karl Malone Toyota which was then assigned to Courtesy. MFG then presented an affidavit
from Jay Jeffs and Mark Gasser that the contract was assigned to MFG. Affidavits may be used
to support or defend a motion for summary judgment as long as they are “made on personal
knowledge, set out facts which would be admissible in evidence, and show that the affiant or
declarant is competent to testify on the matters stated.” I.R.C.P. 56 (c)(4).
Vigos did not object to either affidavit or ask that either be struck from the record. Vigos
instead focused on the documents used to show an assignment, arguing that they are
inadmissible. This focus on the attachments to the affidavit is misplaced. Because affidavits may
be used to show a genuine issue of material fact where the affiant is competent to testify on
matters stated, the affidavits by themselves show a genuine issue of material fact as to whether
there was a valid assignment. If there was a valid assignment, MFG is the real party in interest in
this case. Additionally, Vigos’s admission that he entered into a contract with Karl Malone
Toyota and that the contract was assigned to Courtesy creates a genuine issue of material fact
about whether the contract presented by MFG was the contract entered into by Vigos. As such,
the district court did not err when it reversed the magistrate court’s grant of summary judgment
in favor of Vigos because there is a genuine issue of material fact concerning the contract and
assignment to MFG.
B. Argument regarding the magistrate court’s award of attorney fees to Vigos is moot.
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MFG next argues that the magistrate court erred when it awarded Vigos attorney fees
because Vigos failed to cite to legal authority authorizing that award in his motion for attorney
fees and memorandum of costs. Because we affirm the district court’s reversal of the magistrate
court’s grant of summary judgment, this issue is moot and we do not consider it.
C. The district court did not err when it did not award attorney fees to MFG on appeal.
MFG argues that the district court erred when it failed to award it attorney fees on appeal
to that court. The district court erroneously believed that MFG had cross appealed the magistrate
court’s denial of its motion for summary judgment. Vigos concedes that the district court erred
when it failed to find MFG was the prevailing party. However, Vigos contends that MFG is only
entitled to an award of attorney fees if it ends up being the prevailing party for the entire case.
Vigos is correct.
In Portfolio Recovery Assocs., LLC. v. MacDonald, 162 Idaho 228, 395 P.3d 1261
(2017), a party appealed the district court’s decision upholding the magistrate court’s order
granting summary judgment. On appeal, the appellant sought an award of attorney fees under
Idaho Code section 12-120. Id. at ____, 395 P.3d at 1269. While this Court ruled in favor of the
appellant and reversed the grant of summary judgment, it did not award attorney fees on appeal.
Id. In declining to award attorney fees, this Court noted that, “[b]ecause the case is not yet
resolved, there is no prevailing party.” Id. However, we noted that if the appellant was ultimately
successful on remand that the court could then award reasonable attorney fees in connection with
the appeal.
Similar to Portfolio Recovery Associates, this case has not yet been resolved. Because
this case is not yet resolved, there is no prevailing party. As such the district court did not err
when it declined to award attorney fees. However, if MFG ultimately prevails on remand the
magistrate court may award reasonable attorney fees in connection with MFG’s appeal to the
district court.
D. Attorney fees on appeal.
Vigos requests attorney fees on appeal pursuant to Idaho Code section 12-120(1). MFG
requests attorney fees in this case pursuant to Idaho Code section 12-120(3) and the contract.
Each of these sections allows attorney fees to the prevailing party. Where a case is not yet
resolved there is no prevailing party. Portfolio Recovery Assocs., 162 Idaho at ____, 395 P.3d at
1269. Because this case is not yet resolved there is no prevailing party. Because there is no
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prevailing party we do not award attorney fees at this stage. However, should MFG prevail on
remand the magistrate court may award MFG reasonable attorney fees in connection with this
appeal.
IV. CONCLUSION
We affirm the decision of the district court.
Chief Justice BURDICK, and Justices BRODY, BEVAN and Justice Pro Tem
MELANSON CONCUR.
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