                 IN THE SUPREME COURT OF THE STATE OF IDAHO

                                        Docket No. 39274

DONALD E. STEUERER,                     )
                                        )
    Plaintiff-Respondent,               )                     Pocatello, August 2013 Term
                                        )
v.                                      )                     2013 Opinion No. 102
                                        )
N.E.M. RICHARDS, a.k.a. NICKY           )                     Filed: October 2, 2013
RICHARDS,                               )
                                        )                     Stephen W. Kenyon, Clerk
    Defendant-Appellant.                )
_______________________________________ )

       Appeal from the District Court of the Fifth Judicial District of the State of Idaho,
       Lincoln County. Hon. John K. Butler, District Judge.

       The judgment of the district court is affirmed.

       The Simms Law Firm, Hailey, for appellant. Christopher P. Simms argued.

       Williams, Meservy & Lothspeich, LLP, Jerome, for respondent. Robert E.
       Williams argued.
                             _____________________

J. JONES, Justice.
       This is an appeal from a judgment holding that two deeds executed by Donald Steuerer in
favor of N.E.M. Richards were not intended as absolute conveyances, but instead were intended as
mortgages to secure loans made by Richards to Steuerer.
                                      I.
                     FACTUAL AND PROCEDURAL BACKGROUND
       Steuerer purchased two lots in the City of Shoshone (the Property) in December of 1987 for
$3,000. In 1990, Steuerer took up residence on the Property and became acquainted with Richards,
who lived across the street. Richards “suffers from various physical and mental disabilities and had
been treated for such disabilities at the VA Hospital since approximately 1998. These disabilities
have an impact on her ability to recall and organize her thoughts.” Between 1990 and 1997
Steuerer and Richards would visit each other from time to time.
       In 1997, Steuerer was in need of funds and asked Richards to loan him some money.



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Richards agreed to loan Steuerer $5,000. Richards made an initial payment of $400 to Steuerer
on February 25, 1997. On February 26, Steuerer executed and recorded a warranty deed
conveying a half interest in the Property to Richards. Richards paid additional funds for the
benefit of Steuerer on May 8, 2000, and Steuerer contemporaneously executed a quitclaim deed
to the Property in favor of Richards. The parties later disputed (1) how much Richards had paid
to or for the benefit of Steuerer and (2) whether the deeds were intended as absolute conveyances
or whether these were lending transactions whereby the deeds were intended to be mortgages to
secure repayment of the loans.
         Steuerer filed suit against Richards in September of 2010, seeking to quiet title to the
Property. He alleged that the deeds were intended as mortgages rather than absolute
conveyances. Richards claimed that the deeds were absolute conveyances and that she therefore
owns the Property. The matter was tried in July of 2011. On September 8, 2011, the district court
issued its Judgment, holding that: (1) the deeds executed by Steuerer to the Property were intended
by the parties to be mortgages to secure loans made by Richards to Steuerer; (2) Steuerer must pay
to Richards $9,285.11 plus prejudgment interest of $7,395.88; and (3) upon payment of the
monetary award, Richards must re-convey the Property to Steuerer. Richards appealed to this
Court.
         On appeal, Richards states that she “does not argue the findings of fact are clearly
erroneous, but instead argues the District Court’s conclusions of law are not sustained by the
facts found.” Therefore, the following findings are extracted from the district court’s decision.
         7.      It appears from the testimony of Richards and Steuerer that their
         recollections of the events are not necessarily reliable, as to the amounts loaned and
         when. . . . The court further finds that in February 1997 Richards agreed to loan
         $5,000.00 to Steuerer and that Richards would pay the money to Steuerer in
         monthly payments. Based on the evidence, the court can only find that the amount
         paid by Richards to Steuerer over six (6) months totaled $2,500.00. . . . The court
         finds that of the $5,000.00, Richards paid $2,500.00 to Steuerer.

         8.     [T]he first payment by Richards to Steuerer was on February 25, 1997. A
         Warranty Deed dated February 24, 1997 was prepared, whereby Steuerer conveyed
         to Richards a one-half interest in the subject property. The deed was notarized and
         recorded on February 26, 1997. The deed was signed by both Steuerer and
         Richards. Steuerer testified that the purpose of the deed was to be collateral for the
         $5,000 loan from Richards. Richards testified in her deposition that the purpose of
         the deed “was to have some kind of collateral.”




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          9.       Both parties were of the expectation and agreement that the amounts paid to
          Steuerer by Richards would be repaid by Steuerer and, upon repayment, Richards
          would re-convey her interest in the subject property to Steuerer. The parties did not
          agree as to a definite time for repayment, other than to agree that Steuerer would
          repay the monies as soon as possible or when he could. Richards, prior to the filing
          of this lawsuit, has never made a demand for repayment. There was no agreement
          as to any interest to be paid and it was not a topic of discussion in the original
          agreement.

          10.     Prior to June 20, 2011, the last time that Steuerer personally paid any real
          property taxes on the subject property was on April 2, 1997, in the amount of
          $201.58. This was for the 1994 property taxes, which were delinquent and the
          payment was inclusive of the tax, interest, and penalties owed to Lincoln County. In
          May 2000, Steuerer was delinquent in the payment of his property taxes on the
          subject property for the prior years of 1995 to 1999. Richards brought the property
          taxes current by her payments to Lincoln County dated May 8, 2000 and
          December 20, 2000.

          11.     On May 8, 2000, the same day that Richards paid part of the delinquent
          property taxes on the subject property, Steuerer executed a Quitclaim Deed to the
          subject property, wherein he conveyed his remaining interest in the subject property
          to Richards. The deed was notarized and recorded on May 8, 2000. As with the
          Warranty Deed, the Quitclaim Deed was signed by both Steuerer and Richards. The
          testimony of Steuerer and Richards is again in conflict as to the reason for the
          quitclaim deed; however, what is clear is that it was executed contemporaneously
          with Richards’ agreement to pay the property taxes on the subject property.
          Richards testified that the purpose of the quitclaim deed was the same as the
          warranty deed, as collateral or “something to assure me that he was going to pay me
          back.”
                                                II.
                                        ISSUES ON REVIEW
   I.        Did the district court fail to recognize proper legal presumptions and apply all
             applicable substantive legal standards when it construed the deeds in this case as
             mortgages?
   II.       Did the district court fail to adequately address Richards’ equitable arguments?
   III.      Is either party entitled to attorney fees on appeal?
                                            III.
                                     STANDARD OF REVIEW
          This Court limits its review of a trial court’s decision to determining “whether the
evidence supports the findings of fact, and whether the findings of fact support the conclusions
of law.” Shore v. Peterson, 146 Idaho 903, 907, 204 P.3d 1114, 1118 (2009). When reviewing a




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trial court’s conclusions of law, “this Court is not bound by the legal conclusions of the trial
court, but may draw its own conclusions from the facts presented.” Id.
        “It is a well-settled rule of law that where one asserts that a deed shall be given a
        different construction from that clearly appearing on its face, claiming that it is a
        mortgage, he must show by clear and convincing evidence that a mortgage, and
        not a sale with the right to repurchase, was intended.” Shaner v. Rathdrum State
        Bank, 29 Idaho 576, 583, 161 P. 90, 92 (1916). “The question as to whether the
        evidence is clear and convincing, that a conveyance absolute on its face is in
        reality a mortgage, is primarily for the trial court.” Gem–Valley Ranches, Inc. v.
        Small, 90 Idaho 354, 363, 411 P.2d 943, 948 (1966).
Hogg v. Wolske, 142 Idaho 549, 553–54, 130 P.3d 1087, 1091–92 (2006).
                                                 IV.
        A.      The district court properly considered the appropriate legal presumptions and
                applied the substantive law warranted by the facts of the case.
        On appeal, Richards does not argue that the deeds executed by the parties in this case
were not intended as mortgages. Rather, Richards argues that the district court failed to recognize
legal presumptions and failed to apply the complete body of substantive law to the facts. The
district court framed the issue below as follows: “the legal question is whether . . . the Warranty
Deed, executed on February 25, 1997, and the Quitclaim Deed, executed [on] May 8, 2000, were
intended as a conveyance of title or a mortgage.” In laying out the applicable standards, the
district court stated:
        “It is settled law of this state that a deed, absolute in form, the terms of which are
        not ambiguous, may constitute a mortgage.” Jaussaud v. Samuels, 58 Idaho 191,
        [202,] 71 P.2d 426, 431 (1937). It is undisputed that [Steuerer] signed a warranty
        deed and quitclaim deed at different times over to [Richards]. “Where an
        instrument in writing in the form of a deed of conveyance is executed and
        delivered as security for a debt, such instrument becomes a mortgage, and not a
        deed, notwithstanding the form of the instrument.” Bergen v. Johnson, 21 Idaho
        619, 123 P. 484 (1912). This court is aware that the burden is on the plaintiff to
        establish by clear and convincing evidence that a mortgage, and not a sale, was
        intended. Credit Bureau of Preston v. Sleight, 92 Idaho 210, 216, 440 P.2d 143,
        [149] (1968). . . . The criteria to consider when determining if a deed was
        intended to be a mortgage includes,
                (a) existence of debt to be secured; (b) satisfaction or survival of
                the debt; (c) previous negotiations of parties; (d) inadequacy of
                price; (e) financial condition of grantor; and (f) intention of
                parties. While all these factors are to be considered, the controlling
                test to be applied is whether the grantor sustains the relation of
                debtor to the grantee after the execution of the instrument. A



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               mortgage is an incident of the debt, and without a debt there can be
               no mortgage. Id.
       Based on these substantive legal standards, the district court found that “the deeds
executed by [Steuerer] conveying the subject property to [Richards] were intended by the parties
to be a mortgage to secure loans and payment of real property taxes made by [Richards] to or on
behalf of [Steuerer].”
       Richards argues that the district court failed to recognize the presumption that “a fee-
simple title is presumed to pass by a grant of real property, and, independent of proof, the
presumption arises that an instrument is what it purports on its face to be, an absolute
conveyance of land.” In support of this argument Richards relies on both Idaho Code § 55-606,
which provides “[e]very grant or conveyance of an estate in real property is conclusive against
the grantor,” and Gray v. Fraser, wherein the Court stated:
       A fee-simple title is presumed to pass by a grant of real property, and,
       independent of proof, the presumption arises that the instrument is what it
       purports on its face to be—an absolute conveyance of the land. To justify a trial
       court in determining that a deed which purports to convey land absolutely in fee
       simple was intended to be something different, as a mortgage, the authorities are
       uniform to the point that the evidence must be clear, satisfactory, and convincing,
       and that it must appear to the court beyond reasonable controversy that it was the
       intention of the parties that the deed should be a mortgage.
63 Idaho 552, 559, 123 P.2d 711, 713 (1942).
       However, the district court did consider the presumption that fee simple title passes with
the conveyance of real property and required the plaintiff, Steuerer, to show by clear and
convincing evidence that a mortgage and not an absolute conveyance was intended. Based on its
findings, the district court concluded it to be “clear that, at the time of the execution of the two
deeds, Steuerer was not intending to sell and Richards was not intending to purchase the subject
property.” After considering the facts, the district court properly determined there was clear and
convincing evidence that the parties intended for the deeds to be mortgages, rather than absolute
conveyances.
       Richards argues that the district court erred by failing to address this Court’s statement in
Jaussaud, that “a mortgagor subsequent to executing the mortgage may sell his equity of
redemption to the mortgagee; that is, a mortgagee may legally take a deed transferring the
mortgaged property in satisfaction of the debt and legally give an option to purchase back.” 58
Idaho at 202, 71 P.2d at 431. Richards contends that the “right to repurchase” is a competing


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principle of substantive law and is the legally presumed state of affairs when a deed secures a
debt.
         This case, however, does not invoke the substantive law addressing a mortgagor’s “right
to repurchase.” No facts in the record indicated that Richards took the deeds in satisfaction of the
debt owed by Steuerer. Rather, the district court expressly found the opposite, stating “[b]oth
parties were of the expectation and agreement that the amounts paid to Steuerer by Richards
would be repaid by Steuerer and, upon repayment, Richards would re-convey her interest in the
subject property to Steuerer.” Because Richards did not take the deeds executed by Steuerer in
satisfaction of his indebtedness, the substantive law regarding the “right to repurchase” is not at
issue in this case.
         Richards argues that the district court failed to recognize the most critical factor in
determining whether a deed, absolute on its face, is a mortgage―whether the debt survived the
transfer. Richards cites the six factors set out in Sleight, contending the district court failed to
properly consider whether Steuerer remained indebted to Richards following the execution of the
deeds.
         Richards’ contention is puzzling given that the district court cited to Sleight, the very case
Richards relies upon, for the proposition that “the controlling test to be applied is whether the
grantor sustains the relation of debtor to the grantee after the execution of the instrument.” The
district court concluded that Steuerer owed money to Richards “before and after the deeds were
executed and/or recorded; therefore, the debt existed at the time of the deed transfer and survived
after the transfer.” Thus, the district court did recognize survival of the debt as the controlling
factor and the district court unequivocally found that the debt owed by Steuerer to Richards prior
to execution of the deeds survived the transfer of both deeds.
         Lastly, Richards argues that the district court failed to consider or even acknowledge the
requirement in Clontz v. Fortner, 88 Idaho 355, 399 P.2d 949 (1965), that both parties must
concurrently intend to convert a deed into a mortgage. To “convert a deed absolute in its terms
into a mortgage, it is necessary that the understanding and intention of both parties, grantee as
well as grantor, to that effect should be concurrent and the same.” Id. at 362, 399 P.2d at 952.
         However, the district court acknowledged the Clontz requirement by reciting from Parks
v. Mulledy, 49 Idaho 546, 551, 290 P. 205, 207 (1930), that “[t]he intention of the parties at the
time an agreement to execute a deed is consummated is determinative of whether the title is



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irrevocably transferred, or the conveyance is merely as security for the payment of a debt or
performance of an obligation.” The district court then specifically found that both parties
testified “in one form or another, that the subject property, at the time of the loan, was intended
as collateral.” Thus, the district court did consider the testimony of both Richards and Steuerer to
determine their concurrent intentions at the time the deeds were executed.
       B.      The district court adequately addressed Richards’ equitable arguments.
       Richards devotes two pages of her opening brief to a mélange of arguments sounding in
equity. She contends that Steuerer does not have standing “to have the courts declare the
transaction of the parties an equitable mortgage” because he failed to tender payment of the
indebtedness, does not have clean hands, and is barred by estoppel and laches. Richards moves
from one theory to the other without particularly developing any cohesive argument.
       Richards’ initial contention is that Steuerer did not have standing to seek to have the
deeds declared to be mortgages because he had not offered to pay the amount of the
indebtedness. She points out that in Shaner, this Court stated that where a party attempts “to have
a deed declared a mortgage, . . . equity requires the party so asking to tender an offer to pay the
amount of the debt and interest before he is entitled to any standing in a court of equity.” 29
Idaho at 586, 161 P. at 93. However, in Dickens v. Heston, we noted that the plaintiff in Shaner
was required by the terms of the contract to repurchase to pay the purchase price within one year
and failed to do so. 53 Idaho 91, 105, 21 P.2d 905, 910 (1933). In discussing a tender of payment
as a standing requirement, the Dickens Court explained:
       Nor is it true that the debtor who has given a deed absolute in form, as security for
       the payment of his debt, must, under all circumstances, tender payment before he
       can litigate the character of the instrument; as, for example, where the debt is not
       due, and the grantee asserts an absolute title, or is attempting to sell and convey to
       a stranger. A court of equity will not tie its hands by an unbending rule, which
       would require it to impose inequitable terms, or do any injustice in a given case
       falling within a general class, though having peculiar or distinguishing features.

Id. at 105–06, 21 P.2d at 910 (quoting Bradbury v. Davenport, 46 P. 1062, 1065 (Cal. 1896)).
Thus, a plaintiff’s failure to tender payment will not affect his standing where the debt is not due.
       In this case, the district court found that “[t]he parties did not agree as to a definite time
for repayment, other than to agree that Steuerer would repay the monies as soon as possible or
when he could.” Furthermore, the district court found that “Richards, prior to the filing of this
law suit, has never made a demand for repayment” and “[t]here was no agreement as to any


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interest to be paid and it was not a topic of discussion in the original agreement.” Richards
testified that she did not make a demand for payment because she does not “believe in pressing
people for money.” Because the parties’ agreement provided no express time for repayment and
Richards made no demand for payment, the debt was not due. Thus, Steuerer’s failure to tender
payment did not impact his standing before the district court.
       Richards also argues that under Clontz, laches and equitable estoppel bar Steuerer’s claim
because Steuerer sat silent while Richards paid property taxes on the property she believed she
owned until Steuerer learned that the Property had some commercial value. In Clontz, the
plaintiffs agreed to sell the defendants a piece of property, and the defendants agreed to sell the
plaintiffs an option to buy the property back within sixty days. 88 Idaho at 359, 399 P.2d at 950.
By the end of the sixty-day period, plaintiffs had failed to exercise their option and surrendered
possession of the property to the defendants. Id. The defendants then possessed the property for
five years before selling it to a third party. Id. Shortly after the sale, “plaintiffs brought [an]
action, seeking to have the . . . deed declared a mortgage, and seeking the right to redeem the
property therefrom by paying the amount due defendants thereon.” Id. The defendants moved for
summary judgment on various grounds, including the defenses of laches and equitable estoppel.
Id. The district court granted summary judgment, and this Court affirmed because the plaintiffs
completely relinquished the property to the defendants, and the plaintiffs’ testimony showed that
they treated the conveyance to the defendants as absolute, failed to assert any right contrary to
the deed, and remained silent while defendants asserted ownership rights over the property. Id. at
363, 399 P.2d at 953. Thus, the plaintiffs were estopped to change their position or to assert that
the deed was intended as a mortgage. Id.
       Here, unlike the plaintiffs in Clontz, Steuerer never relinquished possession of the
Property. The district court found that “[a]t all times relevant, between 1997 and 2010, Steuerer
continued to occupy the subject property and was not paying any rent to Richards; nor had
Richards demanded the payment of rent.” Furthermore, unlike the plaintiffs’ testimony in Clontz,
the testimony of both Steuerer and Richards indicated that the conveyances were not intended to
be absolute. As Richard stated in her deposition, the purpose of both deeds was “to assure me
that he was going to pay me back.” The district court did not squarely address or rule upon
Richards’ perfunctory arguments on laches and estoppel, possibly because the underlying
predicate for the argument―that Steuerer had relinquished possession of the Property and had



                                                8
treated the deeds as absolute conveyances―had not been established. The district court’s
findings that the indebtedness continued to exist, that there was no definite time for repayment,
and that Richards had made no demand for payment, certainly had an indirect bearing on these
theories.
        After the parties had filed their briefs on appeal, the Court issued a decision in which we
concluded “that the statute of limitations does not bar a claimant who has purchased real
property and is in possession of that property from asserting a claim for specific performance. A
claim for specific performance does not begin to run against a claimant in possession until the
claimant’s possession is interrupted.” Peterson v. Gentillon, 154 Idaho 184, 190, 296 P.3d 390,
396 (2013). In that case we favorably quoted from Richards v. Richards, 76 S.E.2d 492, 497 (Ga.
1953) that “[i]t is well settled that neither laches nor the statute of limitations will run against one
in peaceable possession of property under a claim of ownership for delay in resorting to a court
of equity to establish his rights.” 154 Idaho at 189−90, 296 P.3d at 395−96. Here, Richards
concedes that Steuerer was in possession of the Property and was never asked to vacate. Thus,
Steuerer was in peaceable possession of the Property, and under Peterson v. Gentillon, laches
does not apply.
        C.      Steuerer is entitled to an award of attorney fees.
        Steuerer seeks attorney fees under Idaho Code § 12-121. “In any civil action, the judge
may award reasonable attorney’s fees to the prevailing party.” I.C. § 12-121. “An award of
attorney fees under Idaho Code § 12-121 is not a matter of right to the prevailing party, but is
appropriate only when the court, in its discretion, is left with the abiding belief that the case was
brought, pursued, or defended frivolously, unreasonably, or without foundation.” Michalk v.
Michalk, 148 Idaho 224, 235, 220 P.3d 580, 591 (2009). The Court, “[w]hen deciding whether
attorney fees should be awarded under I.C. § 12-121,” must take into account the “entire course
of the litigation . . . and if there is at least one legitimate issue presented, attorney fees may not
be awarded even though the losing party has asserted other factual or legal claims that are
frivolous, unreasonable, or without foundation.” Id.
        Here, Richards did not present a single legitimate issue on appeal. Not only were all of
her claims without merit, but at times her contentions of error were directly and clearly rebutted
by the district court’s findings. She accepted the district court’s factual findings but then
appeared to question some of them in her argument. Thus, Richards brought this case



                                                   9
frivolously, unreasonably, or without foundation and Steuerer is therefore entitled to attorney
fees on appeal under I.C. § 12-121.
                                           V.
                                       CONCLUSION
        The judgment of the district court is affirmed and Steuerer is awarded his costs and
attorney fees.

       Chief Justice BURDICK, and Justices EISMANN, W. JONES, and HORTON
CONCUR.




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