Graveyard Creek Ranch, Inc. v. Bell

2005 MT 172, 116 P.3d 779, 327 Mont. 491, 2005 Mont. LEXIS 326
CourtMontana Supreme Court
DecidedJuly 12, 2005
Docket04-085
StatusPublished
Cited by8 cases

This text of 2005 MT 172 (Graveyard Creek Ranch, Inc. v. Bell) is published on Counsel Stack Legal Research, covering Montana Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Graveyard Creek Ranch, Inc. v. Bell, 2005 MT 172, 116 P.3d 779, 327 Mont. 491, 2005 Mont. LEXIS 326 (Mo. 2005).

Opinion

JUSTICE LEAPHART

delivered the Opinion of the Court.

¶1 Defendants William Bell and Bell Cattle Company, Inc., appeal from the judgment of the District Court. Plaintiffs cross-appeal from the judgment. We affirm the issue cross-appealed and dismiss the remaining issues because we determine Bell’s appeal to be moot.

¶2 We address the following issues on appeal:

¶3 1. Whether Bell’s appeal is moot because this Court cannot grant effective relief.

¶4 2. Whether the District Court erred in concluding the Pashas were liable for unlawful detainer and in trebling the jury’s damage award.

FACTUAL AND PROCEDURAL BACKGROUND

¶5 Elvan and Nancy Pasha purchased Graveyard Creek Ranch in 1993. At the outset of this litigation, the couple were still living on the ranch, along with their daughter Amy Adler and son-in-law Brad *493 Adler. In 2000 the Pashas 1 were in default on their real estate loan and in danger of losing the ranch to U.S. Bank. In March 2000 the ranch was appraised and valued at $950,000. After some negotiations with the Pashas over the loan’s actual balance, U.S. Bank called the loan due at $500,000 and filed a foreclosure action.

¶6 Faced with the prospect of losing their ranch, the Pashas came into contact with Bell, an investor from California. With an impending date of foreclosure of September 15,2000, the Pashas agreed to sell the ranch to Bell. Bell agreed to pay-off the loan balance with U.S. Bank through a loan made to him by Zion Bank, pay a $50,000 finders fee to the party who put Bell into contact with the Pashas, and pay $150,000 to the Pashas, including $100,000 through a contract for deed to be paid over thirty years. The Pashas would then reinvest the $150,000 into a new company to be formed by Bell, making them minority owners of that new company and releasing Bell from his payment obligations on the contract for deed. Also purportedly a part of the deal was an oral agreement that the Pashas would continue to live and work on the ranch as employees of Bell. Attorney and Third-Party Defendant Albert Batterman represented the Pashas in these negotiations. Because we determine below that Bell’s appeal is moot, facts relevant to Batterman are irrelevant to this opinion.

¶7 In the actual agreement reached on September 15,2000, and later closed on December 22,2000, a mortgage for $100,000, due in only one year, was substituted for the contract for deed. Bell claims that he did not learn of this substitution until months after the closing, and that he would not have entered into the deal had he known. The Pashas claim that Bell suffered no harm from this substitution because, whether the instrument was a mortgage or a contract for deed, the Pashas were going to reinvest the proceeds into Bell’s company anyway.

¶8 The substitution of a mortgage led to a break-down in relations between the parties. Although Bell created a company to run the ranch, ‘Bell Cattle Company, Inc.,” the mortgage was never transferred into the company. Bell did seek to renegotiate the transfer, but offered terms much less favorable to the Pashas then the prior agreement had called for. Instead of a 21 percent share of the ranch, Bell offered the Pashas the equivalent of a 7.5 percent ownership share. Subsequently, the Pashas sued Bell in September 2001 for fraud *494 and breach of contract. Bell counterclaimed for fraud and unlawful detainer, contending that the Pashas continued to live on the ranch after ownership passed to him and after he had asked them to leave. The matter went to trial with the jury awarding the Pashas $400,000 in compensatory damages, and $100,000 in punitive damages. The jury also found for Bell on his unlawful detainer claim, awarding a total of $14,300, which the court then trebled to $42,900, pursuant to §70-27-205(2), MCA.

¶9 Following the judgment, on January 8,2004, Bell filed a notice of appeal but did not post a supersedeas bond or obtain a stay of execution of the Pashas’ judgment. The Pashas proceeded to execute on the judgment and were in the process of planning a sheriffs sale on the ranch when Bell filed for bankruptcy protection in the United States Bankruptcy Court for the Eastern District of California. Bell sought bankruptcy protection from both the Pashas and Zion Bank. In late December 2004, the bankruptcy court granted the Pashas’ motion to lift the stay on their judgment lien as of February 2, 2005. Therefore, as of that date the Pashas were free to foreclose on the ranch. However, the bankruptcy court also allowed (but did not order) Bell to sell the ranch with the caveat that if the ranch were sold Bell must pay his creditors in full, including the Pashas and Zion Bank. Bell thenceforth sold the ranch and paid Zion Bank and the Pashas in full. Accordingly, the Pashas’ mortgage on the ranch was released.

¶10 After the close of briefing in the appeal to this Court, Pashas moved that Bell’s appeal be dismissed on account of waiver and mootness. We conclude below that Bell’s appeal is moot. Therefore, we do not address the issue of waiver or the issues raised in Bell’s appeal.

DISCUSSION ISSUE ONE

¶11 Whether Bell’s appeal is moot because this Court cannot grant effective relief.

¶12 As we have explained before, “In deciding whether a case is moot, we determine whether this Court can fashion effective relief.” Turner v. Mountain Eng’g & Constr., Inc. (1996), 276 Mont. 55, 61, 915 P.2d 799, 803. Turner involved a party, Turner, who foreclosed on mortgages on a property. The district court held that his mortgages were superior to construction liens that other creditors (the defendants) held on the property. Pursuant to the court’s judgment, the door was open for Turner to foreclose on the property. The lien creditors appealed to this Court, but failed to post a supersedeas bond. *495 Turner then foreclosed on the property at a sheriffs sale and bought the property himself. Turner, 276 Mont. at 58, 915 P.2d at 801.

¶13 In determining mootness we distinguished Turner from Martin Dev. Co. v. Keeney Constr. Co. (1985), 216 Mont. 212, 703 P.2d 143. In Martin, the appellant had not posted a supersedeas bond, and instead had paid the money judgment. On appeal, the respondent argued that the payment rendered the appeal moot. We disagreed, stating that the case involved “a simple money judgment .... No property changed hands pursuant to the judgment nor are there third party interests involved. There is no reason why this Court cannot grant effective relief.” Martin, 216 Mont. at 220, 703 P.2d at 148. These two elements, (1) property changing hands and (2) third-party interests, were not present in Martin, so all that was necessary for effective relief was for the respondent to return the money to the appellant. These two elements were, however, present in Turner. Turner, 276 Mont. at 63, 915 P.2d at 804.

Free access — add to your briefcase to read the full text and ask questions with AI

Related

Taylor v. Taylor
2024 MT 297N (Montana Supreme Court, 2024)
Sudan Drillings Inc. v. Anackers
2014 MT 72 (Montana Supreme Court, 2014)
Progressive Direct Insurance v. Stuivenga
2012 MT 75 (Montana Supreme Court, 2012)
Smith v. Wells Fargo Bank
991 A.2d 20 (District of Columbia Court of Appeals, 2010)
Bell v. GRAVEYARD CREEK RANCH, INC.
175 P.3d 305 (Montana Supreme Court, 2007)
Thorn v. Walker
912 A.2d 1192 (District of Columbia Court of Appeals, 2006)
Marriage of Dahm
2006 MT 230 (Montana Supreme Court, 2006)

Cite This Page — Counsel Stack

Bluebook (online)
2005 MT 172, 116 P.3d 779, 327 Mont. 491, 2005 Mont. LEXIS 326, Counsel Stack Legal Research, https://law.counselstack.com/opinion/graveyard-creek-ranch-inc-v-bell-mont-2005.