Agstar Financial v. Gordon Paving Co, Inc.

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Gordon Paving Company, Inc., Northwest Sand & Gravel, Inc., Blackrock Land Holdings, LLC (collectively, “Gordon Paving”), Brandon Hansen, an individual, Brian Hansen, an individual, Carol Hansen GPC Nevada Trust, Craig Hansen GPC Nevada Trust, Canyon Equipment and Truck Service, Inc., and Doe Entities owned by Brian, Brandon, and Craig Hansen (collectively “Guarantors”) appealed the district court’s denial of their motion to set aside default in a breach of personal guarantee action brought by AgStar Financial Services, ACA (“AgStar”). Between 2007 and 2008, Gordon Paving borrowed $10 million from AgStar. In addition to real and personal property collateral, the indebtedness was secured by separate guarantee agreements executed by Guarantors. By 2012, Gordon Paving had defaulted and AgStar sued for foreclosure. A year later, the district court entered a Judgment and Decree of Foreclosure against Gordon Paving. AgStar purchased the real property collateral at a foreclosure sale. AgStar moved for entry of a deficiency judgment for the difference between the unpaid judgment as of the time of the sale and its credit bids for the real property. The district court denied AgStar’s motion for a deficiency judgment, finding that the reasonable value of the properties that AgStar purchased by credit bids was nearly two million dollars greater than Gordon Paving’s indebtedness. In an Opinion issued in early 2017, the Idaho Supreme Court held that Gordon Paving’s indebtedness to AgStar had been fully satisfied and discharged. AgStar brought the present action against Guarantors, bringing a number of theories, including breach of personal guarantee. The district court ultimately entered a judgment against Guarantors on the cause of action based on breach of their personal guarantees. AgStar agreed to dismiss the other claims with prejudice because the judgment on the guarantees represented the total remaining amount due on Gordon Paving’s indebtedness. AgStar moved for an award of attorney fees and costs, which was granted. Guarantors timely appealed, but finding no error in defaulting the Guarantors, and in the award of fees and costs, the Supreme Court affirmed. View "Agstar Financial v. Gordon Paving Co, Inc." on Justia Law