Smith v. Idaho State University Federal Credit Union

BAKES, Justice,

concurring in part and dissenting in part:

I concur in Part I of the Court’s opinion. I might also have concurred in Part II if the issue of unconscionability had been raised in the trial court, and that court had made the factual findings regarding unconscionability. However, the appellant did not raise the unconscionability issue either in the trial court or in this Court on appeal. Accordingly, the first time the parties will realize that they have had the issue of unconscionability litigated will be when they receive the Court’s opinion today.

The trial court’s opinion made findings which are adverse to this Court’s finding of unconscionability. The trial court found that the defendant credit union “was not guilty of fraud or breach of fiduciary duty to plaintiff” (R., p. 140), as the majority opinion acknowledges, ante at 683, 760 P.2d 22. That finding of lack of fraud or breach of fiduciary duty is totally inconsistent with the majority’s appellate factfinding of unconscionability.

The trial court did rule against the credit union on its claim for the remainder of its unsecured notes. However, in that conclusion of law the trial court gave absolutely no reason why the credit union was not entitled to a judgment against Mrs. Smith on the balance of its loans. The trial court merely stated that the “defendant is not entitled to judgment against plaintiff or any balance owing on the loans over and above the amounts set off.” (Conclusion of Law Number IX.) No reason was given anywhere in the trial court’s findings or conclusions for the denial of the credit union’s claim for the balance owing on those community debts.

This Court on appeal now affirms that denial by the trial court, creating its own finding of fact and conclusion of law that the credit union was guilty of unconscionable conduct and therefore it is not entitled to recover on the remaining loans. That finding and conclusion is based solely upon this Court’s embracing of Mr. Smith’s testimony to the effect that he told two girls at the credit union that he was gambling with the money and he didn’t want Mrs. Smith to know, and “they said they wouldn’t say a word.” Ante at 685, 760 P.2d 24. The majority opinion then states that this “Court must accept as true the positive, uncontradicted testimony of a credible witness, unless his or her testimony is inherently improbable, or rendered so by facts and circumstances disclosed at trial,” citing Pierstorff v. Gray’s Auto Shop, 58 Idaho 438, 447, 74 P.2d 171, 180 (1937). The majority of this Court then concludes, based on Mr. Smith’s testimony, that “enforcement of the notes would be unconscionable because the acts of collusion between the Credit Union and Mr. Smith prevented Mrs. Smith from learning that the deposited funds were being pledged for Mr. Smith’s used car business and gambling escapades.” Ante at 684, 760 P.2d 23. However, Mr. Smith was hardly a credible witness. The trial court, who observed all of the witnesses and commented on their credibility, concluding (1) that the credit union was not guilty of fraud or breach of fiduciary duty to Mrs. Smith, and (2) that “the chief culprit, however, in the Court’s opinion, is Alfred E. Smith. While Smith professes to be functionally illiterate, he *687proved to be an avaricious, scheming, shrewd faker and a fraud. It is indeed unfortunate that plaintiff became the victim of this devious person’s machinations.” It is the testimony of this “avaricious, scheming, shrewd faker and ... fraud” which this Court now says that it is bound to accept under the Pierstorff case, thus justifying its factual foray into the unconscionability issue, an issue which was never raised either in the trial court or on appeal. However, the Pierstorff case does not require this Court, or any other court, to accept the testimony of an “avaricious, scheming, shrewd faker and [a] fraud.” In any event, this Court should not be second-guessing the trial courts on the credibility of witnesses.

Additionally, our prior cases uniformly state that issues not raised in the trial court will not be considered or reviewed. Baldner v. Bennett’s, Inc., 103 Idaho 458, 460, 649 P.2d 1214, 1216 (1982) (holding that “issues not raised below ... will not be considered or reviewed”); Green v. Young, 102 Idaho 735, 639 P.2d 433 (1981); Silver Syndicate, Inc. v. Sunshine Mining Co., 101 Idaho 226, 611 P.2d 1011 (1979); McNeil v. Gisler, 100 Idaho 693, 696, 604 P.2d 707, 710 (1979) (holding that “this Court has quite consistently adhered to the principle that an issue not raised below will not be considered when raised for the first time on appeal”); Unigard Ins. Group v. Royal Globe Ins. Co., 100 Idaho 123, 127, 594 P.2d 633, 637 (1979); Sines v. Blaser, 100 Idaho 50, 52, 592 P.2d 1367, 1369 (1979); Mitchell v. Siqueiros, 99 Idaho 396, 582 P.2d 1074 (1978); Farmer v. International Harvester Co., 97 Idaho 742, 553 P.2d 1306 (1976); Bair v. Barron, 97 Idaho 26, 539 P.2d 578 (1975); Dunn v. Baugh, 95 Idaho 236, 506 P.2d 463 (1973); Frasier v. Carter, 92 Idaho 79, 437 P.2d 32 (1968).

The trial court never ruled on the unconscionability issue because it wasn’t raised in the trial court. The majority errs when it considers that issue on appeal. In any event, by finding that the credit union committed no fraud or breach of fiduciary relationship to the plaintiff, the trial court effectively nullified any basis for the majority finding unconscionability.

The issue of unconscionability was not only not raised in the trial court it was not raised by the appellant on appeal either. It is raised for the first time in the majority’s opinion, contrary to Idaho Appellate Rule 35(a)(4), and the teaching of a number of our recent cases. State v. Hoisington, 104 Idaho 153, 159, 657 P.2d 17, 23 (1983) (citing Bolen v. Baker, 69 Idaho 93, 99, 203 P.2d 376, 379 (1949), for the proposition that “this Court has consistently followed the rule that it will not review the actions of a district court which have not been specifically assigned as error[,] [especially where there are no authorities cited nor argument contained in the briefs upon the question.”); State v. Dennard, 102 Idaho 824; 825 n. 2, 642 P.2d 61, 62 n. 2 (1982); see also Walker v. Shoshone County, 112 Idaho 991, 998, 739 P.2d 290, 297 (1987) (Bistline, J., specially concurring) (stating that “hopefully, after today there will never be another opinion which sustains another erroneous trial court decision while ruling on another correct theory of law unless that correct theory was, as here, indeed presented to and urged upon the trial court.” (Emphasis in original)).

The Court today seems willing to brush aside all our rules and precedents in order to achieve its “unconscionability” result. However, if unconscionability is now going to be an issue in this case, the defendant is entitled to a trial on that issue before a trial court, not a trial in this Court on appeal based solely on a selected portion of the testimony of one witness, Mr. Smith, which the trial court refused to believe, characterizing him as an “avaricious, scheming, shrewd faker and a fraud.” I dissent from Part II of the Court’s opinion.