J. JONES, Chief Justice.
McAdams, LLC sought to hold Peter Cintorino and Tim and Kimberly Resler ("the Reslers") liable on their personal guarantees of a promissory note made by Fawnwood, LLC, in favor of JBM, LLC. The district court granted summary judgment in favor of Cintorino and the Reslers holding that McAdams, LLC was prohibited from filing a collection action in Idaho because its assignor, JBM Company, LLC, was prohibited from filing suit in Idaho under either Idaho's Assumed Business Name Act ("IABNA") or Idaho's Uniform Limited Liability Company Act ("IULLCA"). McAdams, LLC timely appealed to this Court.
In March of 2009, the Reslers and Cintorino, members of Fawnwood, LLC ("Fawnwood"), entered into an agreement with Joe McAdams to obtain a $1,200,000 loan to purchase and develop real property in Valley County, Idaho. Fawnwood is an Idaho limited liability company. The funds were advanced by Joe McAdams and his company, JBM Company, LLC ("JBM Company"), a Wyoming limited liability company. Fawnwood executed a Promissory Note Secured
By September 3, 2010, Fawnwood had defaulted on the promissory note. In December 2010, Fawnwood agreed to sign a Deed in Lieu of Foreclosure, transferring the property securing the promissory note to "JBM, LLC." In January 2011, the Reslers and Cintorino, on behalf of Fawnwood, executed a deed transferring ownership of the Valley County property to "JBM, LLC."
On March 3, 2012, Tim Resler recorded a mechanic's lien in the amount of $135,450 against the Valley County property for improvements he allegedly made to it. On May 4, 2012, Tim Resler filed an action against JBM, LLC and McAdams for breach of contract and for foreclosure of the mechanic's lien. On June 20, 2012, McAdams answered and asserted a counterclaim against the Reslers and a third-party complaint against Cintorino on behalf of himself and "JBM, LLC, a d/b/a of JBM Company, LLC." The counterclaim and third-party complaint alleged that the Reslers and Cintorino were personally liable for the default on the promissory note in the amount of $1,200,000.
According to McAdams, it was only after Tim Resler's suit was filed that he realized all of the above documents referred to JBM, LLC, not JBM Company. Additionally, McAdams learned that JBM, LLC, or JBM Company, had to be registered as a limited liability company in Idaho in order to file suit. The names JBM, LLC, and JBM Company, LLC, were not available for registration with the Secretary of State. To get around this issue, McAdams registered McAdams, LLC as an Idaho limited liability company and JBM Company assigned all interest in the promissory note and property at issue to McAdams, LLC. McAdams, LLC then filed suit against the Reslers and Cintorino alleging the same causes of action raised in JBM, LLC and McAdams' counterclaim and third-party complaint. McAdams, LLC's suit was then consolidated with Tim Resler's suit.
The Reslers and Cintorino moved for summary judgment on JBM, LLC and McAdams' counterclaim and third-party complaint and McAdams, LLC's complaint. They alleged that JBM, LLC and McAdams were not real parties in interest and that McAdams, LLC was not entitled to file suit in Idaho. JBM, LLC, McAdams, and McAdams, LLC ("the McAdams group") filed a motion for leave to amend JBM, LLC and McAdams' counterclaim and third-party complaint and McAdams, LLC's complaint to add causes of action for breach of contract and fraud.
On June 27, 2013, the district court heard oral arguments on the Reslers' and Cintorino's motions for summary judgment. On August 7, 2013, the court issued its memorandum decision and order granting the motions. First, the court held that JBM, LLC was not a real party in interest because there was no evidence showing that JBM, LLC was an actual entity. The court then held that McAdams was not a real party in interest because McAdams, as an individual, was not a party to the promissory note and never personally held title in the Valley County property. Lastly, the court considered whether McAdams, LLC was a real party in interest and was entitled to bring suit. For the purpose of considering this issue, the court assumed that JBM Company was the real party in interest with regard to the promissory note and Valley County property.
Based on the foregoing, the district court granted the Reslers' and Cintorino's motions for summary judgment and dismissed JBM, LLC and McAdams' counterclaim and third-party complaint and McAdams, LLC's complaint. Accordingly, the court did not address the McAdams group's motion for leave to amend. Judgment was entered dismissing the McAdams group's claims with prejudice on September 16, 2013. On October 10, 2014, Tim Resler and the McAdams group reached a settlement and the district court entered a final judgment dismissing with prejudice all claims between them. The McAdams group then timely appealed the district court's dismissal of McAdams, LLC's claims against Cintorino.
Appeals from an order of summary judgment are reviewed de novo, and this Court's standard of review is the same as the standard used by the trial court in ruling on a motion for summary judgment. Summary judgment is appropriate if the pleadings, depositions, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law. I.R.C.P. 56(c). Under this standard, disputed facts are construed in favor of the non-moving party, and all reasonable inferences that can be drawn from the record are drawn in favor of the non-moving party. Where the evidence reveals no disputed issues of material fact, then only a question of law remains, over which this Court exercises free review.
Trotter v. Bank of N.Y. Mellon, 152 Idaho 842, 845-46, 275 P.3d 857, 860-61 (2012) (footnotes, case citations, and internal quotation marks omitted).
JBM, LLC, McAdams, and McAdams, LLC collectively appealed the district court's dismissal of the claims against Cintorino. While it is not entirely clear whether the McAdams group intended to appeal the district court's dismissal of JBM, LLC and McAdams' third-party complaint, no argument is provided challenging the district court's conclusion that JBM, LLC, and McAdams were not real parties in interest. This Court "will not consider an issue not `supported by argument and authority in the opening brief.'" Bach v. Bagley, 148 Idaho 784, 790, 229 P.3d 1146, 1152 (2010) (quoting Jorgensen v. Coppedge, 145 Idaho 524, 528, 181 P.3d 450, 454 (2008)). The McAdams group's opening brief focused exclusively on whether the district court erred in concluding
In ruling on Cintorino's motion for summary judgment, the district court assumed that JBM Company was the real party in interest with respect to the promissory note, personal guarantees, and real property at issue. Additionally, it was undisputed that JBM Company had assigned its rights to McAdams, LLC. As the district court correctly noted, in Idaho "choses in action are generally assignable," and "[a]n assignment of the chose in action transfers to the assignee and divests the assignor of all control and right to the cause of action, and the assignee becomes the real party in interest." Purco Fleet Servs., Inc. v. Idaho State Dep't of Fin., 140 Idaho 121, 126, 90 P.3d 346, 351 (2004). Therefore, the district court properly concluded that McAdams, LLC was the real party in interest.
However, the court held that McAdams, LLC was not entitled to file suit in Idaho based on the promissory note and personal guarantees. This holding was based on the court's conclusion that JBM Company could not assign the right to recover on the note and guarantees because JBM Company was prohibited from filing file suit in Idaho. The court concluded that JBM Company was prohibited from filing suit in Idaho under either IABNA, because it was transacting business in Idaho under an unregistered assumed business name (JBM, LLC), or IULLCA, because it was a foreign limited liability company transacting business in Idaho without a certificate of authority.
The district court based its holding that JBM Company did not possess a right to maintain a cause of action in Idaho and could not therefore assign such a right to McAdams, LLC upon our decision in Foley v. Grigg. In that case we stated that "[a]n assignee takes the subject of the assignment with all the rights and remedies possessed by and available to the assignor." 144 Idaho 530, 533, 164 P.3d 810, 813 (2007) (emphasis in original). The district court interpreted Foley to suggest that where an assignor would be prohibited from filing suit in Idaho under IABNA or IULLCA, its assignee would also be prohibited from doing so. This is a constricted view of the effect of an assignment where "all rights" are transferred.
"An `assignment' is a transfer of property or some other right from one person (the `assignor') to another (the `assignee'), which confers a complete and present right in the subject matter to the assignee." 6 Am. Jur. 2d Assignments § 1 (2016) (footnotes omitted).
6 Am. Jur. 2d Assignments § 113 (footnotes omitted). However, "[a]n assignee generally acquires no greater right than was possessed by the assignor, and is subject to all defenses and claims that the debtor had against the assignor. Id. An assignee is not subject to just any claim or defense but, rather, is subject only to claims and defenses that go to the validity or enforceability of the right transferred. See Kroeplin Farms Gen. P'ship v. Heartland Crop Ins., Inc., 430 F.3d 906, 911 (8th Cir.2005) ("[A]n assignee's right is subject to a defense that the contract was voidable or unenforceable before the assignment."); Restatement (Second) of Contracts § 336(1) (1981) ("[I]f the right of the assignor would be voidable by the obligor or unenforceable against him if no assignment had been made, the right of the assignee is subject to the infirmity.").
Under IABNA [I.C. § 53-501, et seq],
Similarly, Part 8 of IULLCA provides that "[a] foreign limited liability company transacting business in this state may not maintain an action or proceeding in this state unless it has a certificate of authority to transact business in this state." I.C. § 30-6-808(1).
JBM Company's alleged violations of IABNA and IULLCA have no effect on its ability to assign the promissory note to McAdams, LLC. Additionally, the alleged violations do not affect the validity or enforceability of the promissory note and personal guarantees. JBM Company's alleged violations of IABNA and IULLCA are not defenses to the validity or the enforceability of the rights assigned to McAdams, LLC. Rather, if JBM Company was in violation of Idaho Code section 30-6-808(1) or 53-509, it would lack capacity to file suit in the state until the violation was cured.
As an assignee, McAdams, LLC obtained all rights attendant to the promissory note and guarantees, including the ability to enforce the same in legal proceedings. It is undisputed that McAdams, LLC was, at the time of the summary judgment proceedings, registered with the Secretary of State as an Idaho limited liability company and there is no indication in the record that McAdams, LLC would have been prohibited from filing suit in the State. Therefore, we reverse the district court's grant of summary judgment and hold that McAdams, LLC was entitled to pursue its claim against Cintorino to enforce the promissory note and his personal guarantee of the same.
The McAdams group asks this Court to rule that the agreements between JBM, LLC and Cintorino should be reformed to change "JBM, LLC" to "JBM Company, LLC." Additionally, Cintorino asks the Court to rule that McAdams, LLC's claims for a deficiency against Cintorino are not ripe. The district court has yet to rule on these issues. "Even though an issue was argued to the court, to preserve an issue for appeal
Cintorino requests attorney fees on appeal pursuant to Idaho Code section 12-120(3). Since Cintorino did not prevail on appeal, there is no basis for such an award. McAdams, LLC seeks attorney fees under the same statutory provision but also cites the following language in the promissory note: "If action be instituted on this note, We/I the undersigned, promise to pay such sum as the Court may fix as attorney's fees." Cintorino personally described himself as an "undersigned" in the personal guarantee which appears on the face of the note. As assignee of the promissory note, McAdams, LLC is entitled to recover its attorney fees on appeal with respect to the complaint it instituted for recovery as against Cintorino.
We reverse the district court's judgment dismissing McAdams, LLC's complaint against Cintorino and remand for further proceedings. Costs and attorney fees on appeal to McAdams, LLC.
Justices EISMANN, BURDICK, HORTON, and Justice Pro Tem KIDWELL concur.
