Gregory v. Spannagel

2002 MT 297N

• Court: Montana Supreme Court
• Decided: December 12, 2002
• Docket: 02-172
• Status: Published

Opinion

No. 02-172

[N Ti-ltr: SLJPKEME COGKT OF THE STATE OF R.lONT.ANA

2002 I T 297N

and

ROE GREGORY, SR.. . .. k c 2 ,, ,q Petitioner and Appellant, .tiiiJ

V.

ELI SPAYNAGEL, JR., and JE.4N K. SPANNAGEL, his wife.

Respondents and Respondents

APPEAL FROM: District Court of the Sixteenth .ludicial District, In and for the County of Rosebud, The Honoral~le L. Hegel, Judge presiding. Joe

COUNSEL OF RECORD:

For Appellant:

Ron Gregory, Sr. (pro se), Forsylh. TLZontana

For Respondents:

Geoffrey R. Kcller, Matovich Kc Keller, P.C., Billings, Montana

Sub~nitted Briefs: Juire 6, 2002 on

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fees and iniposcd Rule I 1 sanctions against Ron Gregory, Sr.'?

FACTIJAL A N D PROC:EDI,!RAL BACKGROI!UD

*6 On July 28, 1907, Ron Gregory, Jr., prrrchased approximately 5,828 acres ofproperty

on adjacent parcels from XIent Land Corporation. Apparently Grcgory. Jr., and Grcgory, Sr.,

purchased this property as part of a joint venture to develop the property for ranching and

residential purposes.

7 Shortly after moving onto the property, a dispute arose between the Gregorys and

Spannagels regarding road access to the Gregory property. There were two main routes for

access to thc Gregory land. The first, a gravel road that lvinds through the Gregory parcel,

exits at the north end of the Gregory parcel and continues for two niilcs no12h where it passes

under Interstate Elighway 94. The height of vehicles which can pass under 1-94 is limited.

The second, "Reservation Creek Road," is a county road that runs north to 1-94 and lies

itnmcdiately to thc \vest of the parties' property on "Section 13." To access the Gregory

parcel by way of the second road-known as the "well roadw--vehicles must cross over the

western half of Section 13, which the Spannagels own, to reach the eastern half of Section

13, which forms part of the Gregory property.

"8 i The Gregorys began developing their parcel, and traversed the "well road" on scveral

occasions to deliver materials to the Gregory parcel. M'hile some ofthc use was permittedl

eventually, the Spannagels objected to the use and delivered a Criminal Trespass Yotice to

the Gregorys on October 10, 1907, warning them of civil and criminal sanctions for fi~l-ther use of tlic "well road" on the westem half of Section 13. Gregorys filed a pclilion for

tietiaratory relief and sought a TRO arrd isijuilcrion against tile Spannagels on Xoveinbcr 20,

1907. The District Cou~?initially granted the TRO. However, after Spannagels filed a

motion to dissolve the TRO on Xovember 24, 1097. the court held a heariug on Uovember

25, 1997, modified the TRO temporarily after the hearing, and later quashed the TRO on

December 9, 1097. Gregorys requested reconsideration on I>ecember 2") 1097, and

Spa~lnagels filed a timely response. The District Court eventually denied reconsideratio11

over one year later on January 1 1, 19%').

19 Spannagels then filed a motion for attorney fees on January 15, 1999, pursi~artt to

5 27-19-306, MCA. Shortly thereafter, Gregorys amended their petitiorl for declaratory

judgment, and alleged, as an altenrate theory, a right to prescriptive use of tlte "Quist

homestead road." In its November 29, 1990, Memora~~dum Order, the District Court and

concluded that Ciregorys failed to timely respond to Spannagels motion for fees and

otherwise concluded that the Spannagels deserved fees on the merits of their successful

defense against the 'TKO.

711 0 On January 20, 2000, Gregorys n~oved dismiss their amended petition without to

prejudice, On Jasiuary 31, 2000, one of Ciregorys' attorneys moved to withdraw from

representation at Gregory, Sr.'s, request and Gregory, Sr., appeared without counsel at a

hearing and presented and filed a motion to the court on behalf ofhis son and himself to sct

aside the District Cot~rt's Nove~nher 190") or-dcr granting attorney fees to the Spannagels. 29,

C;regory, Sr., claimed thzit pursuant to Rule (jO(b), M.R.C'iv.P., there were sufficient grounds to set tile order aside, including "newly-discovered e .idence" oi'rhe "Quist homestead road" ~

cascnler.it a~rdscvcral alicgations that Spar~nagelscomn~ittcdfraud and made fi-audtiicnr

representations before the court during the TRO hearings and during settlement negotiatiosis.

Spannagels opposed the motion, contended that Gregory, Sr.. was not pel-tnitted to represent

Ciregot-y, Jr., that rhc Quist easement was irrelevant to the TRO issue, that the motion was

untimely, and that no settlement agreement had ever been reached.

71 1 Spannagels requested an opportunity to take the deposition of Gregory?.lr., who was

absent from these proceedings, and Gregory, Sr., filed an objection on his son's behalf, noting

that his son was in Hong Kong and unavailable for the deposition. Gregory, Jr., st~bmitted

a letter to the court indicating his wisl-,tllat Grcgory, Sr., represent him as "spokesman" for

the family arrd pursuant to his power of attorney.

711 2 On February 9,2000, Gregorys' remaining counsel withdrew from representation. On

February 11, 2000, Grcgory, Sr., filed a reply to the Spannagels' response to the Grcgorys'

motion to set aside attorney fees. On February 14, 2000, (iuegory, Sr., tiled a motion to

prohibit taking Gregory. Jr.'s, deposition the next day, and neithcr Gregory, Jr., or Gregory,

ST.,appeared at the deposition. 1 February 0 1 29, 2000, the Spa~lnagels moved to prohibit

Gregory, Sr.. from the unauthorired practice of law.

7113 The District Court considered the pending motions and on Deccmber 3,2001. issued

a blemorandunr and Ordcr Regarding Attorney Fees, Motion to f>isrniss and Other Pendi1,g

affirmed its earlier atvard of attorney fees, concluded there was Motions. The District C'o~rrt

1 0settletnent 1 agreement and that none of Gregory, Sr.'s, contentions were meritorious. It found that his motion to set the award aside was ti-ivoious, and warded attorney fees for

dei'cnding against that motion. The court dcterrnincd that Gregory. Sr., cngagcci in the

unlawful practicc of law by representing Gregory, Jr. The court ordered that Gregorys be

jointly and severally liable for S3565.54 of attorney fees for defending against the TRO, that

Gregory, Sr.. represent only his own interests, and also awarded attorney fees in the amount

of $2328.80 for having to defend against the motion to set aside.

STANDARD OF REVIEW

114 When reviewing a district court's order granting or denying injunctive relief, v-e

determine whether the court abused its discretion. S~veet (;riiss Farn2.s v. Ho(lrd ufCo~int;l..

2200 f)MT 147, 7 20, 300 Mont. 66, "1 22, 2 P.3d 825, 1' 20. We review a district Conllrss.

court's findings of fact to determine whether the court's findings are clearly erroneous.

G~ttJzrie Hurdj,, 2201 .MT 122, i ! 24, 305 Mont. 367,1! 24, 28 P.3d 467,Tj 24. We review 1,.

a district court's conclusions of law for correctness. Curbor1 Counv 1). C'nion Reserve Coed

Cb., (1995)? 271 Mont. 450, 46") 898 P.2d 680, 680. When a district court concludes Irzc.

a violation of Rlrle 11 M.ti.Civ.P., occurred, we will reverse only where there is a n~anifest

abuse of discretion. t;jelsratl v. State. Tllro2rgiz Dept. of Hig111vcly.s(1994), 267 Mont. 21 1,

226, 883 P.2d 106, 1 15,

DISC~SSIOS

ISStlE I

ql5 Did the District Cotrrt err when it detcrmincd that Ron Gregory, Sr., unlawfullq~

practiced law'? ft 10 'ihe District Court concluded that i t was appropriate to strike motions and picadings

filed by C;rcgov9 Sr., on bchaif ofiiregory, Jr., sincc Gregory. Sr., is not a iicerrscd altornq-

in 'Llnntena. Grcgcqv, Sr., contends that he represents a "cornmon carrse" and acts for tile

"benefit of the entire Gregory Family," and requests that we distinguish H'eczvcr v. Lniv Fin11

~fGr(zyhill, et 01. (1990), 246 Mont. 175, 803 P.2d 1089.

117 Section 37-61-210: MCA, provides that one who practices law in court without a

license is guilty of contempt of court. We concluded in Weaver that a husband could not

appear in court on behalf of his wife to prescnt her claims as a plaintiff. PVeirr~cr, Mont. 246

at 178, 803 P.2d at 1091. tlere, Gregory, Sr., appeared at the District Court and filed

pleadings on behalf of his son Gregory, Jr. Gregory-, Sr., admits that he has no license to

practice la\v. We find that the District Court did not e n when it prohibited Gregory, Sr., from

representing Gregory. Jr. We also limit this appeal to Gregory, Sr.'s, interests since Gregory,

Jr., did not appeal any decision or judgment of thc District Court.

ISSbE 2

1 18 1 Did the District Court abuse its discretion when it affirmed the award of attorney fees

and imposed Rule 1 I sanctions against Ron Gregory, Sr.?

7 I9 The District Court concluded that there was no basis for setting aside the previously-

awarded attorney fees. It found that the partics had not reacllecl an agreement to waive those

fees and that Gregory, Sr.'s, allegation regarding the Quist easement was irrelevant to the

prior defense against the TKO. 'The court further concluded that the Quist casement was

irrelevant since Gregorys had preb-iouslymoved to dismiss its stmended petition claiming the

7 Qriist easement. The District i:ourt concluded that the motion was frivoious and without

merit, violated liulc !1, M.R.Cit-.P.; and a\\ardcd attorney fees to Spanitageis pursuailt to

that mle.

720 On appeal, Gregory, Sr., contends that the motion to set aside was not frivolous

because of the Quist easement evidence and that the District Court erred when it declined to

constder the alleged fraud perpetrated by the Spannagels during atid subsequent to the TKO

hearing. Finally, Gregory, Sr., contends that the Dtstrrct Court erred u hen rt found that the

Spannagels did not breach a settlement agreement with the Gregotys, which included a

provision that the Spannagels would waive their claim for attorney fees incurred in defense

of the TRO.

7121 Spa~inagels note that Gregory, Sr., does not challenge the reasonableness of the Sees

and ask that thts Court affirm the amount of the attonley fees if r e affirm the avard of

attorney fees. Spannagels also contend that the award of attorney fees \vas authorized

pursuant to 3 27-19-306, MCA, and our decision in iblartu v. Sinirll (1981j, 191 Mont. 179,

622 P.2d 1011. Spannagels Surther contend that the District Court's conclusions regarding

the Quist easetilent claims Lvere correct since that info~mationwas available at the time of

the TRO, was never presented at the 1 R O hearing despite the availability of that in forination,

and is irrele~ant bccaitse the amard of attorney fees relates to the successful defense agalnst

the TRO and u a s not based on the ultrtnate malts of the case. Spannagels also contend that

no settlement agt cert-icntu as reached and that even t ftherc had been at1 agreemerrr,

of ihc a& (rreernent.

722 We have recognized that "attorney fees andcosts are recoverable under section 27- 19-

306. MCA, as elements of the damages sustained by reason of the injunction . . . ." ~tt'urta~

191 Mont. at 187,622 P.2d at 1015-16. Our decision in Marta to permit recovery of attorney

with the purpose of 8 27-10-306, fees incurred to defend against an injunction is consiste~it

MCA, to compensate for "costs and damages that may be incurred or suffered by any party

who is found to have been wrongfi~lly enjoined or restrained." Section 27-19-306(1j, MCA.

it is without dispute that Spannagels successfully had the TRO set aside and are entitled to

attorney fees, notwithstandiltg Gregory, Sr.'s, remaining contentions.

1123 We first conclude that Gregory, Sr.'s; "newly-discovered" cvidence claim is without

merit and irrelevant to the issue of attorney fees. The "Quist easement" does not even pertain

to the same road for which the TRO was sought and, in any event, Gregory, Sr., has moved

to dismiss his Quist casement claim and is precluded from further proof of that claim.

':24 Nor are we persuaded by Gregory; Sr.'s, contention that Spannagcls committed fraud

when they sought to set aside the 'TRO. Gregory Sr.'s, fraud allegations are based on a

scrivener's error in the original criminal trespass notice sent by the Spannagcls, testimony

about the exact dimensions of the access under 1-04, and the question of whether or not

Charles Quist was a "ltomesteader." These alleged frat~dulerir statements were all i~nunaterial

to the Llistrict Court's decision to quash the 'T'RO, and were or could have been clarified upon

propcr cross-examination and presentation of contrary testimony by Gregorys. "25 We further co~iciude rhe District Court did riot err when i~ ibund that there "was tliat

ncve1.a settlenient agrcemcnt." Gregory? ST., not provided a scttlernent agrcelnent signed Iias

bc both partlcs, but contends that Spannagels agreed to walvc the attorney fees tn a Icttel

dated April 27. 199") axid that Gregory, Sr.. accepted the offer in his June 25, 1999. letter.

'The ,,%priI27, 1999. letter states, in part:

We previo~rsly offered to waive our costs and attorney fees incurred to date i f this matter is dismissed and trll easeinent clait~zs ),our clierrt are waived. b?. That offer is extended so long as no furflier legal c.xperz.ses arzcl costs are i c r . If-,ou [sic] clieizrs insist oil plirsziiizg this ~ ~ ~ a t tit is: l~if/ldr~'it.ll. ef [Emphasis added.:]

Spannagels also sent an additional letter on June 28, 1990, stating that "the Spannagels will

waive their Petition for Attorney Fees if the Gregorys will acknowledge that they have no

intcrest in the Spannagel property, and will waive any rights that they may have." Gregory.

Sr., alleges that hls attorney sent an acceptance letter on June 28, 1999. stattng:

Let this letter serve as the Grcgorys' notice of their intention to withdraw their Petition for Declaratory Relief. Accordingly, per your letter of April 27.1999, and our telephone conversations, you will similarly dismiss your pending Motion for Attorney Fees. Per our telephone conversation on Friday, in your absence, I will be working with Carey to cIraji a .settlc~?zentagrcci?zerlt mmencrble /o botlz parties. [Emphasis added.]

This letter later included information regarding several otlier issues whiclt were to be

these letters demonstrate a willingness to resolved by the final settlement agreen~ent.Wh~le

settle, Gregory, Sr., has not demonstrated that he has eo~npllednrth the Spannagels'

requirement that he "ackno\vledge . . . no interest in the Spannagel property" and that he

w a n e all easement claims agatnst the Spannagel property. Gregorq, Sr.'s, testtmonq 111 the January 31, 21)00, hearing ciearly shows tl~at was still pursuing or reserving the right to he

pursue a d a i m for acccss across Spannagcls' property. Me conclude tiili~ District Court : illc

did not e n whet1 it found that there was no settlement agreement to waive attorney fccs.

,4ccordingly, we affirm the District Court's order denying Gregorys' ~ilotion set aside the to

auard of attorney fees. We also affirm the amount of fees anarded since Gregory, Sr., does

not raise tlte reaso~~ableness the fees as an issue on appeal. of

'126 Finally, because none of Gregory, Sr.'s, Il~strict Court arguments had legal or factual

nierit, we conclude that the District Court did not abuse its discretion when it concluded that

"the motion to set aside order to be frivolous and completely without legal or factual support

in violation of Rule I 1 of the Montana Rules of Civil Procedure" and awarded attorney fees

for defending against that motion. We hcld that sanctions are permissible where "a pleading

is frivolous, i.e., not 'well grounded in fact' or '\varranted by existing law . . . ."' v.

(l991), 248 Vlont. 32, 38, 808 P.2d 494, 498 (quoting Rule 11, h4.K.Civ.P.). The SPb~ni~

Distr~ctCourt has "vv~dcJat~tudcto determme whether the factual c~rcumstaneesof a

particular case amount to frivolous or abusive litigation tactics . . . ." lI)Ygosrit~o Swnrzsor~ 1).

(19')0), 240 Mont. 435,440. 784 P.2t1919, 926. We affinn the District C'o~~rt's conclusion

that a Rule 1 1 \~olationoccurred and its avvard of attorney fees.

2 7 For the same reasons, \be conclude that t h ~ appeal I S fri\olous and vvithout nierit, and s

award attorney fees to Spannagels for having to defend against this appeal.

728 For thesc reasons we affirm the orders of the District Court and remand for

determination of reasonable attorney fees incurred by Spannagels oil appeal. We Concur: Justice Jim Rice concurring in part and dissenting in part.

4129 i concur cornpieiely with the COUII'S iirraJysii and holdings uniicr issues i anci 2. i

\+-iih~ut and that the District C'ourr did nor e x in agree that Grcgoi-y's argiitnents 12~ci.i: merit

siivarding attorney fees and sanctions to ihc Spannagels. i \\-otilddecline, ho5vcvcr* irnposc to

payment of Spannagels' attorney fees for this appeal upon Grcgory. Follo~vingthe

withdrawal of his attorneys, Gregory sought to litigate this rnatter regarding his propertypo

se. .4lthough his legal arguments were incorrect, i find it plausible that ti nonia\\;yer could

have believed the exchange of letters betwecn the parties here constituted a resolution of ;he

matter, and that, following an adverse ruling by the District Court, it was not unreasonable

for Gregory to seek appellate review based upon that plausible belief.