Montierth v. DorssersAnnotate this Case
The holders of the second priority mortgage, Ray and Susan Montierth brought a foreclosure action against the holders of the first priority mortgage, Hendrik Dorssers and Justice Prevails, LLC, (collectively “Dorssers”), and a variety of other parties with an interest in the real property. In their pleadings, Dorssers asserted that their priority interest as the holder of the first priority mortgage still prevailed over all other encumbrances. In Dorssers view, a payment made by the debtor—years after the statute of limitations had run on the mortgage—revived the previously stale claim to foreclose their first priority mortgage and reinitiated the statute of limitations under Idaho Code section 5-238. However, on summary judgment the district court concluded that Idaho Code section 5-238 only applied when the payment was made prior to the lapse of the statute of limitations. Accordingly, the district court granted summary judgment to the Montierths after finding that no payment had been made by the obligor prior to the lapse of the statute of limitations and concluding that Dorssers’ mortgage was unenforceable as a matter of law. The district court subsequently denied Dorssers’ motion for reconsideration and objection to the proposed judgment. Thereafter, the district court entered a judgment and decree of foreclosure in favor of the Montierths, which specifically stated: “[t]hat the [Montierths’] lien interest is superior in time to all other parties’ liens, except the mortgage of Hendrik Dorssers and Justice Prevails, LLC, which is time barred and therefor [sic], unenforceable.” On appeal, Dorssers argue the district court erred: (1) in concluding that the partial payments did not extend the statute of limitations for enforcement of the first priority mortgage under Idaho Code section 5-238; (2) in the alternative, in concluding that a junior lien holder could quiet title to a senior lien holder; and (3) in issuing an order to quash the lis pendens they recorded after the appeal was filed. The Idaho Supreme Court reversed, finding the district court erred in its determinations: (1) to revive the statute of limitations the payment must have been made prior to the lapse of the statute of limitations; (2) the “transfer of money” was not a payment in recognition of the debt as a matter of law; and (3) the payment was not made by an obligor as a matter of law. In addition, the Court found the district court erred in striking the lis pendens. The matter was remanded for further proceedings.