Idaho Independent Bank v. Marty D. Frantz

Summary

The Idaho Supreme Court affirmed a judgment against Marty and Cindy Frantz on their commercial guaranties of construction loans made to Eagle Ridge on Twin Lakes, Inc. The court held that the Frantzes could not assert defenses based on an alleged oral agreement between the bank and Eagle Ridge because they lacked privity, and alternatively that the guaranties waived those defenses and the right to require further lending. The court awarded the bank costs and attorney fees on appeal.

Holdings

1. The Frantzes could not rely on the alleged oral agreement as a basis for their affirmative defenses because the agreement was between the Bank and Eagle Ridge, and the Frantzes did not establish that they were parties to it or otherwise in privity with the Bank concerning that agreement.
2. The judgment was properly affirmed on the alternative ground that the guaranties barred the Frantzes' asserted defenses. The guaranties unconditionally guaranteed Eagle Ridge's indebtedness, waived any right to require the Bank to continue lending or extend credit, waived defenses available to guarantors other than actual payment and performance, and incorporated the guaranties' entire-understanding provision.
3. The Bank, as the prevailing party, was entitled to attorney fees and costs on appeal under Idaho Code section 12-120(3) and the attorney-fee provisions in the guaranties.

Questions Presented

1. Whether the district court properly rejected the Frantzes' affirmative defenses based on an alleged oral agreement between the Bank and Eagle Ridge because the Frantzes were not parties to that agreement and lacked privity.
2. Whether the judgment could alternatively be affirmed because the guaranties waived the Frantzes' asserted defenses and any right to require the Bank to continue lending or extend credit.
3. Whether the Bank was entitled to attorney fees and costs on appeal.

Disposition

affirmed