06/21/2022
DA 21-0491 Case Number: DA 21-0491
IN THE SUPREME COURT OF THE STATE OF MONTANA 2022 MT 119
LILY M. SMITH and VERNON T. LINDEMULDER,
Petitioners and Appellees,
v.
SAMUEL B. LINDEMULDER, individually and as Trustee of the Alice M. Lindemulder Trust,
Respondent and Appellant,
and
DANIEL G. LINDEMULDER, individually and as Trustee of the Alice M. Lindemulder Trust,
Respondent and Appellee.
APPEAL FROM: District Court of the Twenty-Second Judicial District, In and For the County of Stillwater, Cause No. DV 19-545 Honorable Matthew J. Wald, Presiding Judge
COUNSEL OF RECORD:
For Appellant:
Jim B. Lippert, Jim Lippert, Attorney at Law, P.C., Big Timber, Montana
For Appellees:
Mark D. Parker, Parker, Heitz, Cosgrove, Billings, Montana (for Lily M. Smith and Vernon T. Lindemulder)
David J. Dietrich, Jeffrey E. Janca, Dietrich & Associates, P.C., Billings, Montana (for Lily M. Smith and Vernon T. Lindemulder)
Daniel L. Snedigar, Bruce O. Bekkedahl, Patten, Peterman, Bekkedahl & Green, PLLC, Billings, Montana (for Daniel G. Lindemulder) Ariel Overstreet-Adkins, Bluebird Law, Billings, Montana (for Trustee)
Submitted on Briefs: April 20, 2022
Decided: June 21, 2022
Filed:
oe,,6tA- -if __________________________________________ Clerk
2 Justice Jim Rice delivered the Opinion of the Court.
¶1 Samuel Lindemulder (Sam) appeals the Twenty-Second Judicial District Court’s
Order Granting Motion to Approve Settlement Agreement (Order), in which the court
approved a settlement agreement reached in mediation (Agreement) involving Sam, his
brother Dan Lindemulder (Dan), and their siblings Lily Smith and Vernon Lindemulder
(Petitioners). The Agreement resolved claims involving the Alice M. Lindemulder Trust
(Trust), established by the parties’ mother, which held approximately 2,151 acres of land
in Stillwater County. Sam contends he is the rightful owner of three sections of land held
by the Trust. Sam raises four issues, which we reformulate as follows:
1. Did the District Court err by determining Sam had consented to the Agreement?
2. Did the District Court err by determining Sam’s Contract for Deed was unenforceable?
¶2 We affirm, and remand for the limited purpose of determining attorney fees incurred
on appeal.
FACTUAL AND PROCEDURAL BACKGROUND
¶3 In February 1990, Sam contracted (“Contract for Deed” or “Contract”) to purchase
from his parents three sections of land, Sections 8, 9, and 20 of Township 1 North, Range
20 East, totaling about 1,660 acres, for $50,000. A Notice of Purchaser’s Interest was
signed and recorded. As scheduled under the Contract, the final payment would have been
due February 2005. In 1997, Sam’s mother created the Trust, designating her children as
primary beneficiaries, and transferred land into the Trust, including the three sections
3 subject to Sam’s Contract for Deed.1 These sections were transferred “subject to the
purchase interest of Sam under that certain Contract for Deed dated February 7, 1990.”
Sam continued to run cattle and otherwise personally use the three sections under contract
at all times relevant to this matter. In 2014 Sam’s mother passed away, and Sam and Dan
became co-trustees of the Trust. In September 2019, Petitioners filed the instant action,
alleging they had not received any distributions from the Trust or been provided an
explanation from Sam or Dan, as trustees, regarding the failure to make distributions.
¶4 Sam and Dan were jointly represented by counsel, and the matter was litigated for
over a year. A mediation was scheduled for December 1, 2020, and due to the COVID-19
pandemic, was conducted remotely. The mediation resulted in the parties reaching a
settlement, and the Agreement was executed by all parties about 30 days later. Pursuant to
the Agreement, Sam was permitted to run cattle on the property until June 15, 2021, and
would be reimbursed $1,773 for property taxes he had paid. The Agreement provided that
Sam and Dan would step down as trustees and an independent successor trustee would be
appointed to market and sell the Trust property, including the sections subject to the
Contract, with the proceeds to be distributed to the beneficiaries.
¶5 Petitioners filed a motion to approve the Agreement, and a hearing was held on
April 15, 2021. However, Sam contested the Agreement; Dan, his co-trustee, did not. Sam
argued the Agreement was not enforceable because he lacked capacity to enter it and had
1 The additional property was Section 17 of Township 1 North, Range 20 East, and Lots 1 and 4 of the Far View Subdivision, the dispositions of which are not at issue here.
4 been subjected to undue influence. Also, for the first time, Sam contended he owned or
otherwise held interest in the three sections covered by the 1990 Contract for Deed.
¶6 Sam testified at length during the hearing. He stated that, a few days prior to the
mediation, he went to the hospital due to experiencing COVID-19 symptoms. He was
discharged the same day, with his treating doctor instructing him to rest as much as
possible. Sam stated he attended the mediation from bed on his cell phone with only audio
capability, and a poor connection made it difficult for him to understand what was
happening. Because he was ill with COVID-19, he was fatigued and drifted in and out of
sleep during the mediation, which caused his incapacity. Regarding undue influence, Sam
claimed that Dan and their joint counsel pressured him into signing the Agreement by
saying he would be “sued” if he did not sign it. He stated he signed the Agreement only
“under protest” because of his disagreement with it and because of the undue influence of
his brother and their mutual attorneys. Sam also explained that, after signing the
Agreement but prior to the hearing, he discovered, in a box his mother had left for him, the
warranty deed to the three sections of land he had contracted to purchase. Sam recorded
the deed in February 2021.2
¶7 Cross-examination of Sam established that he was represented by counsel at the
mediation and, despite any fatigue he may have been suffering, he had contributed to the
mediation, including requesting reimbursement of the property taxes he had paid.
2 The precise date Sam signed the Agreement is not provided, but all parties agree this occurred in January 2021. In any event, the Agreement was clearly made effective the date of the mediation, December 1, 2020.
5 Moreover, Sam’s testimony established that, while he did not necessarily agree the three
sections he claimed to own should have been included in the settlement, he nonetheless
understood at the time that their disposition was, in fact, included in the negotiations and
the ultimate settlement reached. Regarding undue influence, Sam was unable to articulate
how the statements by Dan and their mutual counsel regarding future litigation that would
occur if he did not sign the Agreement—effectively a continuation of the litigation he was
already a party to—had exerted “undue” influence on him, offering only that he did not
like to be sued. Finally, cross-examination established that, despite his claim to have
acquired Sections 8, 9, and 20 of the Trust property as of 2005, Sam had entered into, as a
co-trustee, a 2017 contract with a wind energy company to install wind turbines on the
Trust land, a transaction in which he represented that those sections were owned by the
Trust.
¶8 The District Court found Sam had been represented by competent counsel
throughout the proceedings, and that, despite suffering from COVID-19 during the
mediation, “showed a clear understanding of what property was involved in the Trust and
what was going to be done with it.” The District Court noted that Sam signed the
Agreement a month after the mediation, when his COVID-19 symptoms had dissipated.
As to undue influence, the District Court found “the threat of a lawsuit to a person in the
middle of litigation is simply not so coercive that Sam can be considered to have been
forced to agree to and then sign” the Agreement (emphasis in original), and noted the
6 Agreement resolved the potential litigation Sam expressed concerned about.3 The court
accordingly rejected Sam’s competency and undue influence contentions.
¶9 The District Court also rejected Sam’s position that the Contract for Deed should be
enforced. It first concluded that, pursuant to § 27-2-202, MCA, any applicable statute of
limitations for an action to enforce the Contract had expired. The District Court found that,
although there was evidence Sam made some payments on the Contract, there was no
evidence the seller considered the contract satisfied, and that “despite his testimony that he
owns the land, Sam’s actions indicate that he did not consider the [C]ontract fulfilled
either.” Although Sam was both a beneficiary and trustee of the Trust, and clearly knew
the contested sections of land had been placed in the Trust, he nonetheless took no action
to claim ownership of the property. The District Court found that, well after the Contract
would have been fulfilled, Sam treated the land as Trust property when he contracted with
the wind energy company, and later, when signing the Agreement, which did not recognize
his claimed interest. The District Court reasoned Sam had acted inconsistently with any
interest he may have had, and concluded Sam had waived any right in the property by his
course of conduct. For many of the same reasons, the court also concluded the doctrine of
laches barred Sam’s contentions regarding the Contract, reasoning that “Sam’s
unexplained delay in asserting his right would make enforcement of the asserted right
3 While the District Court did not explicitly mention it, this is presumably a reference to the Agreement’s provision mutually releasing Sam, the Trust, and the other parties from any suit related to the Trust or its property.
7 inequitable under the circumstances” and that “the law does not allow Sam to wait until—
literally—the last moment to assert his property rights under the [C]ontract for [D]eed.”
¶10 Sam appeals.
STANDARDS OF REVIEW
¶11 “Settlement agreements are contracts, and are subject to the provisions of contract
law.” Murphy v. Home Depot, 2012 MT 23, ¶ 8, 364 Mont. 27, 270 P.3d 72 (citing
Dambrowski v. Champion International Corp., 2003 MT 233, ¶ 9, 317 Mont. 218, 76 P.3d
1080). “An agreement is binding if made by an unconditional offer, and accepted
unconditionally.” Murphy, ¶ 8 (citing Hetherington v. Ford Motor Co., 257 Mont. 395,
399, 849 P.2d 1039, 1042 (1993)). In equitable matters, such as this one, we will uphold
a district court’s findings of fact unless they are clearly erroneous. See Pense v. Lindsey,
2003 MT 182, ¶ 12, 316 Mont. 429, 73 P.3d 168 (citing In re Estate of Bradshaw, 2001
MT 92, ¶ 11, 305 Mont. 178, 24 P.3d 211). We view the evidence in the light most
favorable to the prevailing party and assign witnesses the same credibility as did the district
court. In re Estate of Harms, 2006 MT 320, ¶ 12, 335 Mont. 66, 149 P.3d 557 (citing
Bradshaw, ¶ 11). A district court’s conclusions of law are reviewed to determine whether
they are correct. Harms, ¶ 12 (citing Guthrie v. Hardy, 2001 MT 122, ¶ 24, 305 Mont.
367, 28 P.3d 467).
DISCUSSION
¶12 1. Did the District Court err by determining Sam had consented to the Agreement?
¶13 Sam argues the District Court erred by holding he consented to the Agreement, free
from undue influence. “Undue influence negates the free consent necessary for the proper
8 formation of a contract” and permits the contract’s recission by the party influenced by it.
Adams v. Allen, 209 Mont. 149, 153, 679 P.2d 1232, 1235 (1984) (citations omitted);
§ 28-2-1711, MCA. Undue influence is defined as:
(1) the use by one in whom a confidence is reposed by another person or who holds a real or apparent authority over the other person of the confidence or authority for the purpose of obtaining an unfair advantage over the other person;
(2) taking an unfair advantage of another person’s weakness of mind; or
(3) taking a grossly oppressive and unfair advantage of another person’s necessities or distress.
Section 28-2-407, MCA. The party claiming undue influence bears the burden of proof.
Adams, 209 Mont. at 153, 679 P.2d at 1235.
¶14 Sam does not specifically contest any of the District Court’s factual findings, but
argues he was unduly influenced in several ways. He argues the conditions under which
he attended the mediation—remotely and ill with COVID-19—prevented him from
understanding the mediation’s terms and properly participating, and therefore any consent
he gave was the result of “the parties and his counsel taking an unfair advantage of [his]
‘weakness of mind.’” He also argues that Petitioners’ counsel, his brother Dan, and their
joint counsel threatened him with legal action if he did not agree to the mediation’s terms.
Further, Sam contends that this undue influence “continued after the mediation” up to his
signing of the Agreement, because his attorneys continued to “pressure[]” him by referring
to future litigation. However, these arguments do not justify a conclusion the District Court
erred in determining Sam validly consented to the Agreement.
9 ¶15 The District Court’s findings regarding the mediation are backed by ample evidence
and support the conclusion that Sam was competent throughout the process, despite the
quality of the phone connection and Sam’s physical condition with COVID-19. Sam’s
2017 dealings with the wind energy company clearly establish that he knew the Trust’s
corpus—the disposition of which was the subject of the mediation—included Sections 8,
9, and 20, which he then represented were owned by the Trust. Despite filing an affidavit
asserting he did not know the disposition of Sections 8, 9, and 20 was included in the
mediation, Sam later testified at the hearing that he did, in fact, know the mediation
involved Sections 8, 9, and 20, but that he simply “didn’t agree” they should have been a
part of the settlement.
¶16 While severe illness could be a factor contributing to a “weakness of mind” making
one vulnerable to undue influence, Sam has not met his burden of establishing his condition
had deteriorated to that point. See In re Marriage of Gorton, 2008 MT 123, ¶¶ 39-42, 342
Mont. 537, 182 P.3d 746. Although ill with COVID-19, Sam was able to—and did—
actively participate in the mediation, both personally and through counsel. There is no
expert testimony in the record regarding the severity of Sam’s medical condition, but it is
undisputed that he was examined by a doctor several days before the mediation and advised
to rest. While Sam and his wife testified he was fatigued and dozed off at times during
mediation, his testimony also established that he understood the mediation’s key terms,
despite not necessarily liking them. As noted by the District Court, an important fact is
that Sam signed the Agreement about a month after the mediation, leaving him ample
opportunity to consider and raise any objections he had to its terms or scope.
10 ¶17 Finally, Sam’s argument concerning the threat of future litigation is not persuasive.
Clearly, Petitioners would likely have continued to prosecute their action if settlement
negotiations had failed. Sam has not presented evidence sufficient to warrant a finding that
his own counsel’s advice regarding the ramifications of failing to sign the Agreement—an
ordinary concern—constituted a threat or coercion. While the possibility of litigation
carries a certain amount of pressure, we agree with the District Court that “the threat of a
lawsuit to a person in the middle of litigation is simply not so coercive” that it can be said
to overcome one’s capacity to enter into a settlement agreement. Under such thinking,
most settlement agreements would be rendered unenforceable.
¶18 The District Court’s findings of fact regarding Sam’s capacity to enter the
Agreement are not clearly erroneous, and Sam has not met his burden to establish that he
was unduly influenced when executing the Agreement. Pense, ¶ 12; Adams, 209 Mont. at
153, 679 P.2d at 1235. We affirm the District Court’s conclusion that Sam validly
consented to the Agreement. Harms, ¶ 12.
¶19 2. Did the District Court err by determining Sam’s Contract for Deed was unenforceable?
¶20 The District Court concluded Sam’s Contract for Deed was not enforceable because
the applicable statute of limitations had expired and that, even if not, enforcement was
proscribed by Sam’s implied waiver through his course of conduct, as well as the doctrine
of laches. Sam provides appellate arguments challenging each of these bases for the
District Court’s conclusion. However, we resolve the issue by applying the doctrine of
laches, and do not address Sam’s arguments regarding waiver or the statute of limitations.
11 ¶21 “The doctrine of laches is an equitable remedy . . . ‘by which a court denies relief
to a claimant who has unreasonably delayed or been negligent in asserting a claim, when
the delay or negligence has prejudiced the party against whom relief is sought.’” Algee v.
Hren, 2016 MT 166, ¶ 8, 384 Mont. 93, 375 P.3d 386 (quoting Anderson v. Stokes, 2007
MT 166, ¶ 19, 338 Mont. 118, 163 P.3d 1273). “The doctrine of laches applies when a
party has been negligent in asserting a right, and where there has been an unexplained delay
of such duration as to render enforcement of the asserted right inequitable.” Peterson v.
Hopkins, 210 Mont. 429, 439, 684 P.2d 1061, 1066 (1984) (citations omitted). The
elements of laches are: “(1) the party against whom the defense is asserted lacked diligence
in asserting a claim; and (2) that lack of diligence resulted in prejudice to the party asserting
the defense.” Algee, ¶ 8 (citing Wicklund v. Sundheim, 2016 MT 62, ¶ 40, 383 Mont. 1,
367 P.3d 403). The doctrine’s purpose is to “discourage stale demands by the court
refusing to interfere where there has been gross laches in prosecuting rights, or where long
acquiescence in assertion of adverse rights has occurred.” Algee, ¶ 8 (quoting Montanans
for Justice v. State ex rel. McGrath, 2006 MT 277, ¶ 25, 334 Mont. 237, 146 P.3d 759).
Although elapsed time is relevant in considering laches’ elements, the principal
consideration is the inequity of permitting a claim to be enforced. Cole v. State ex rel.
Brown, 2002 MT 32, ¶ 25, 308 Mont. 265, 42 P.3d 760.
¶22 The District Court found the Trust was created in 1997, and that Sections 8, 9, and
20 were then transferred into the Trust, subject to Sam’s Contract for Deed. The final
payment under the Contract was scheduled for February 2005. The District Court found,
and Sam does not contest, that he was a beneficiary of the Trust, and since his mother’s
12 2014 passing, a co-trustee. If, by 2005, Sam had fulfilled his obligations under the
Contract—for which there was no evidence from the Trust and which the District Court
noted was “by no means a certainty”—he obviously would have known that the Trust
continued to hold ownership of the property and that some action was necessary to
effectuate transfer of the property interest to himself personally. Instead, Sam not only
failed to raise the issue or otherwise act, he affirmatively represented that Sections 8, 9,
and 20 were owned by the Trust when, on behalf of the Trust, he negotiated a contract with
the wind energy company years later in 2017. The facts here distinguish the holdings in
Peterson v. Hopkins and Carter v. Badrock Rural Fire Dist., 2021 MT 280, 406 Mont. 174,
___ P.3d ___, on which Sam relies for his argument that he had no legal duty to seek a
judicial determination of the section’s ownership until his ownership was challenged. Any
claim that he owned the property was indeed “challenged” by the Trust’s continued
ownership claim and use of the property long after the Contract was supposed to have been
satisfied, by his own representations concerning the Trust’s ownership of it long after 2005,
and, as established above, his knowing settlement of the disposition of the property in the
mediation herein. All of these were directly hostile to his claimed interest. See generally
Carter, ¶ 24.
¶23 It was only after his alleged satisfaction of the Contract in 2005, after his mother’s
passing in 2014, after the Trust’s post-2005 use of the property, after his contrary
representations, after Petitioners’ requests for disbursements from the Trust, after litigation
had been conducted, after mediation, and after execution of a settlement agreement
disposing of the property, that Sam asserted any claim of ownership of Sections 8, 9, and
13 20. Petitioners initially waited for Sam to act as a co-trustee, then litigated and settled this
matter on the understanding those sections were trust property. Allowing Sam to now
contest the Trust’s ownership of a substantial part of the corpus would effectively destroy
the Agreement and severely prejudice the Petitioners and other Trust beneficiaries, an
inequity that would result solely from Sam’s actions. Cole, ¶ 25. The elements of laches
are clearly established. Algee, ¶ 8. The District Court’s findings in that regard are not
clearly erroneous, and its conclusions of law are correct. Pense, ¶ 12; Harms, ¶ 12.
¶24 We recognize Sam has economic and sentimental ties to the contested property, and
it is regrettable that steps were not taken long ago to quiet title to the property, if such were
warranted. However, under the circumstances as they transpired, it is now too late. We
affirm the District Court’s Order holding the Agreement is valid and enforceable. Because
the Agreement provides, should litigation become necessary to enforce its provisions, that
the prevailing party is entitled to attorney fees, we also remand the matter for the limited
purpose of determining a reasonable appellate fee award for Petitioners.
¶25 Affirmed and remanded.
/S/ JIM RICE
We concur: /S/ MIKE McGRATH /S/ BETH BAKER /S/ LAURIE McKINNON /S/ JAMES JEREMIAH SHEA