February 25 2014
DA 13-0528
IN THE SUPREME COURT OF THE STATE OF MONTANA 2014 MT 51N
GAIL STAFFORD,
Plaintiff and Appellee,
v.
CHARLES FOCKAERT,
Defendant and Appellant.
APPEAL FROM: District Court of the Second Judicial District, In and For the County of Butte-Silver Bow, Cause No. DV-12-302 Honorable Brad Newman, Presiding Judge
COUNSEL OF RECORD:
For Appellant:
Charles Fockaert, (self-represented), Lakeside, Montana
For Appellee:
Quentin M. Rhoades, Alison Garab, Sullivan, Tabaracci & Rhoades, P.C., Missoula, Montana
Submitted on Briefs: February 5, 2014 Decided: February 25, 2014
Filed:
__________________________________________ Clerk Justice Patricia Cotter delivered the Opinion of the Court.
¶1 Pursuant to Section 1, Paragraph 3(d), Montana Supreme Court Internal Operating
Rules, this case is decided by memorandum opinion and shall not be cited and does not
serve as precedent. Its case title, cause number, and disposition shall be included in this
Court’s quarterly list of noncitable cases published in the Pacific Reporter and Montana
Reports.
¶2 Charles Fockaert (Fockaert) appeals from orders of the Second Judicial District
Court, Silver Bow County, granting Gail Stafford’s (Stafford) motion for judgment on the
pleadings, denying Fockaert’s motion for judgment on the pleadings, and denying
Fockaert’s motion for leave to amend his answer. We reverse.
ISSUES
¶3 A restatement of the dispositive issues on appeal is:
¶4 1. Did the District Court abuse its discretion in denying Fockaert’s motion for
leave to amend his answer?
¶5 2. Did the District Court err in granting Stafford’s motion for judgment on the
pleadings?
FACTUAL AND PROCEDURAL BACKGROUND
¶6 This case arises from Stafford’s complaint against Fockaert asserting claims for
unjust enrichment, constructive trust, and fraud. Both parties agreed that Stafford
transferred $100,000 to Fockaert’s account with the Korea Exchange Bank in July 2010,
2 and that Fockaert later refused or failed to repay the $100,000. In his answer, Fockaert
raised several affirmative defenses and argued that “no strings were attached to the
funds” and “there was no time frame involved in the return of the funds.” He also
admitted the allegation set forth in paragraph 13 of the complaint, namely that: “On or
about July 4, 2010, Stafford agreed to loan Fockaert $100,000.00.”
¶7 On April 11, 2013, Stafford filed a motion for judgment on the pleadings. She
alleged that Fockaert’s answer included admissions that: (1) Stafford had agreed to loan
Fockaert $100,000; (2) Stafford had transferred $100,000 to his account; (3) Stafford had
requested that he return the funds in August 2010; and (4) Fockaert had refused or failed
to return the funds. In April and May 2013, Fockaert filed three motions: a motion to
extend the time to respond to Stafford’s motion for judgment on the pleadings, a motion
for leave to file an amended answer, and a cross motion for judgment on the pleadings.
¶8 After additional briefing, the District Court denied Fockaert’s motion to amend his
answer and entered an order granting Stafford’s motion for judgment on the pleadings
and denying Fockaert’s cross motion. The court concluded that “[i]n light of Defendant’s
admissions that Plaintiff loaned him $100,000.00 and subsequently demanded repayment
of such funds, Plaintiff is entitled to judgment as a matter of law that Defendant’s failure
to repay the loan constitutes unjust enrichment or establishes that Defendant held the
funds in constructive trust for Plaintiff.” The court also concluded that Stafford was
entitled to interest at the rate of 10% a year from the date of the loan.
3 ¶9 Fockaert timely appealed. Fockaert, a self-represented litigant, alleges there is a
genuine issue of material fact as to whether the transfer of funds in fact constituted a
loan. He maintains that Stafford herself referred to the extension of funds as an
“investment.” He also argues that even if he inadvertently admitted that it was a loan, it
did not meet the legal definition of a loan. He further argues that the District Court
abused its discretion in denying his motion to extend time to file a brief in opposition to
Stafford’s motion for judgment on the pleadings.
¶10 Stafford counters that there are no material facts in dispute because Fockaert
admitted in his answer that Stafford loaned him $100,000. Stafford maintains she is
entitled to judgment because Fockaert failed to file an answer brief opposing Stafford’s
motion for judgment on the pleadings and Fockaert clearly took advantage of her by
retaining the funds. Stafford argues that the District Court did not abuse its discretion in
denying Fockaert’s motion to amend his answer because he acted in bad faith and
Stafford would have suffered undue prejudice if Fockaert amended his answer.
STANDARDS OF REVIEW
¶11 “We review a district court’s denial of a party’s motion for leave to amend the
pleadings to determine whether the district court abused its discretion.” Stundal v.
Stundal, 2000 MT 21, ¶ 12, 298 Mont. 141, 995 P.2d 420 (citation omitted).
¶12 “Because a motion for judgment on the pleadings is decided as a matter of law, we
apply our standard of review for conclusions of law: whether they are correct.” Paulson
4 v. Flathead Conservation Dist., 2004 MT 136, ¶ 17, 321 Mont. 364, 91 P.3d 569 (citation
omitted).
DISCUSSION
¶13 1. Did the District Court abuse its discretion in denying Fockaert’s motion for
¶14 As an initial matter, we note that Fockaert denied that the advance of money
constituted a loan throughout his answer. He denied the complaint’s allegation that
“[b]eginning some time in 2010, Fockaert began telling Stafford via email that if she
loaned him money, he could put the funds to good use and multiply them.” Further, he
maintained that his admission to the allegations set forth in paragraph 13 was an
inadvertent mistake. He also argued that Stafford never indicated that she expected the
capital to be returned to her upon request and that he “came to believe the wired funds
were an attempt by Stafford, despite Defendant’s repeated warnings to prevent just such
an expectation, to induce Defendant to fulfill expectations known only to Stafford.”
¶15 M. R. Civ. P. 15(a) provides that a party may amend its pleadings by leave of
court and leave shall be freely given when justice so requires. Stundal, ¶ 12 (citations
omitted). “[A]mendments to pleading[s] are not appropriate when the party opposing the
amendment would incur substantial prejudice as a result of the amendment.” Stundal,
¶ 12 (citations omitted). “[W]e have held that a district court is within its discretionary
authority to deny a motion to amend the pleadings if the motion causes undue delay, is
5 made in bad faith, is based upon a dilatory motive on the part of the movant, or is futile.”
Stundal, ¶ 12 (citations omitted).
¶16 The District Court noted that M. R. Civ. P. 15(a) provides for liberal amendments
but denied the motion because it was untimely and had been filed only after Stafford
sought judgment on the basis of the original answer. The court concluded that the motion
was not made in good faith and “appear[ed] to be nothing more than a late attempt to
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February 25 2014
DA 13-0528
IN THE SUPREME COURT OF THE STATE OF MONTANA 2014 MT 51N
GAIL STAFFORD,
Plaintiff and Appellee,
v.
CHARLES FOCKAERT,
Defendant and Appellant.
APPEAL FROM: District Court of the Second Judicial District, In and For the County of Butte-Silver Bow, Cause No. DV-12-302 Honorable Brad Newman, Presiding Judge
COUNSEL OF RECORD:
For Appellant:
Charles Fockaert, (self-represented), Lakeside, Montana
For Appellee:
Quentin M. Rhoades, Alison Garab, Sullivan, Tabaracci & Rhoades, P.C., Missoula, Montana
Submitted on Briefs: February 5, 2014 Decided: February 25, 2014
Filed:
__________________________________________ Clerk Justice Patricia Cotter delivered the Opinion of the Court.
¶1 Pursuant to Section 1, Paragraph 3(d), Montana Supreme Court Internal Operating
Rules, this case is decided by memorandum opinion and shall not be cited and does not
serve as precedent. Its case title, cause number, and disposition shall be included in this
Court’s quarterly list of noncitable cases published in the Pacific Reporter and Montana
Reports.
¶2 Charles Fockaert (Fockaert) appeals from orders of the Second Judicial District
Court, Silver Bow County, granting Gail Stafford’s (Stafford) motion for judgment on the
pleadings, denying Fockaert’s motion for judgment on the pleadings, and denying
Fockaert’s motion for leave to amend his answer. We reverse.
ISSUES
¶3 A restatement of the dispositive issues on appeal is:
¶4 1. Did the District Court abuse its discretion in denying Fockaert’s motion for
leave to amend his answer?
¶5 2. Did the District Court err in granting Stafford’s motion for judgment on the
pleadings?
FACTUAL AND PROCEDURAL BACKGROUND
¶6 This case arises from Stafford’s complaint against Fockaert asserting claims for
unjust enrichment, constructive trust, and fraud. Both parties agreed that Stafford
transferred $100,000 to Fockaert’s account with the Korea Exchange Bank in July 2010,
2 and that Fockaert later refused or failed to repay the $100,000. In his answer, Fockaert
raised several affirmative defenses and argued that “no strings were attached to the
funds” and “there was no time frame involved in the return of the funds.” He also
admitted the allegation set forth in paragraph 13 of the complaint, namely that: “On or
about July 4, 2010, Stafford agreed to loan Fockaert $100,000.00.”
¶7 On April 11, 2013, Stafford filed a motion for judgment on the pleadings. She
alleged that Fockaert’s answer included admissions that: (1) Stafford had agreed to loan
Fockaert $100,000; (2) Stafford had transferred $100,000 to his account; (3) Stafford had
requested that he return the funds in August 2010; and (4) Fockaert had refused or failed
to return the funds. In April and May 2013, Fockaert filed three motions: a motion to
extend the time to respond to Stafford’s motion for judgment on the pleadings, a motion
for leave to file an amended answer, and a cross motion for judgment on the pleadings.
¶8 After additional briefing, the District Court denied Fockaert’s motion to amend his
answer and entered an order granting Stafford’s motion for judgment on the pleadings
and denying Fockaert’s cross motion. The court concluded that “[i]n light of Defendant’s
admissions that Plaintiff loaned him $100,000.00 and subsequently demanded repayment
of such funds, Plaintiff is entitled to judgment as a matter of law that Defendant’s failure
to repay the loan constitutes unjust enrichment or establishes that Defendant held the
funds in constructive trust for Plaintiff.” The court also concluded that Stafford was
entitled to interest at the rate of 10% a year from the date of the loan.
3 ¶9 Fockaert timely appealed. Fockaert, a self-represented litigant, alleges there is a
genuine issue of material fact as to whether the transfer of funds in fact constituted a
loan. He maintains that Stafford herself referred to the extension of funds as an
“investment.” He also argues that even if he inadvertently admitted that it was a loan, it
did not meet the legal definition of a loan. He further argues that the District Court
abused its discretion in denying his motion to extend time to file a brief in opposition to
Stafford’s motion for judgment on the pleadings.
¶10 Stafford counters that there are no material facts in dispute because Fockaert
admitted in his answer that Stafford loaned him $100,000. Stafford maintains she is
entitled to judgment because Fockaert failed to file an answer brief opposing Stafford’s
motion for judgment on the pleadings and Fockaert clearly took advantage of her by
retaining the funds. Stafford argues that the District Court did not abuse its discretion in
denying Fockaert’s motion to amend his answer because he acted in bad faith and
Stafford would have suffered undue prejudice if Fockaert amended his answer.
STANDARDS OF REVIEW
¶11 “We review a district court’s denial of a party’s motion for leave to amend the
pleadings to determine whether the district court abused its discretion.” Stundal v.
Stundal, 2000 MT 21, ¶ 12, 298 Mont. 141, 995 P.2d 420 (citation omitted).
¶12 “Because a motion for judgment on the pleadings is decided as a matter of law, we
apply our standard of review for conclusions of law: whether they are correct.” Paulson
4 v. Flathead Conservation Dist., 2004 MT 136, ¶ 17, 321 Mont. 364, 91 P.3d 569 (citation
omitted).
DISCUSSION
¶13 1. Did the District Court abuse its discretion in denying Fockaert’s motion for
¶14 As an initial matter, we note that Fockaert denied that the advance of money
constituted a loan throughout his answer. He denied the complaint’s allegation that
“[b]eginning some time in 2010, Fockaert began telling Stafford via email that if she
loaned him money, he could put the funds to good use and multiply them.” Further, he
maintained that his admission to the allegations set forth in paragraph 13 was an
inadvertent mistake. He also argued that Stafford never indicated that she expected the
capital to be returned to her upon request and that he “came to believe the wired funds
were an attempt by Stafford, despite Defendant’s repeated warnings to prevent just such
an expectation, to induce Defendant to fulfill expectations known only to Stafford.”
¶15 M. R. Civ. P. 15(a) provides that a party may amend its pleadings by leave of
court and leave shall be freely given when justice so requires. Stundal, ¶ 12 (citations
omitted). “[A]mendments to pleading[s] are not appropriate when the party opposing the
amendment would incur substantial prejudice as a result of the amendment.” Stundal,
¶ 12 (citations omitted). “[W]e have held that a district court is within its discretionary
authority to deny a motion to amend the pleadings if the motion causes undue delay, is
5 made in bad faith, is based upon a dilatory motive on the part of the movant, or is futile.”
Stundal, ¶ 12 (citations omitted).
¶16 The District Court noted that M. R. Civ. P. 15(a) provides for liberal amendments
but denied the motion because it was untimely and had been filed only after Stafford
sought judgment on the basis of the original answer. The court concluded that the motion
was not made in good faith and “appear[ed] to be nothing more than a late attempt to
avoid the consequences of Defendant’s knowing admissions in his original answer.” The
record reflects, however, that Fockaert sought to amend his answer as soon as the
mistaken admission was brought to his attention by Stafford’s motion. See Weaver v.
State, 2013 MT 247, ¶ 26, 371 Mont. 476, 310 P.3d 495 (“[A] judicial admission is ‘not
effective if it was subsequently modified or explained so as to show that the litigant was
mistaken.’”) (citation omitted).
¶17 The court determined Stafford would suffer undue prejudice if the motion were
granted because she had relied on Fockaert’s admission in her motion for judgment on
the pleadings. We respectfully disagree. Under our recent decision in Bates v. Anderson,
2014 MT 7, ___ Mont. ___, ___ P.3d ___, we conclude Stafford would not be unduly
prejudiced if Fockaert amended his answer only months after the original pleadings were
filed. Though Bates dealt specifically with requests for admissions under M. R. Civ. P.
36, the same rationale applies here. Mere inconvenience does not constitute prejudice for
the purposes of M. R. Civ. P. 15, and preparing a motion for judgment on the pleadings in
reliance upon an erroneous admission does not constitute prejudice. See Bates, ¶ 22; but
6 see Peuse v. Malkuch, 275 Mont. 221, 228, 911 P.2d 1153, 1157 (1996) (The district
court was within its discretion in finding prejudice when the nonmoving party had based
his motion on the original pleadings that had remained unchanged for almost two years.).
This issue is one of judicial discretion, and we conclude the District Court abused its
discretion in denying Fockaert’s motion to amend.
¶18 2. Did the District Court err in granting Stafford’s motion for judgment on the
¶19 When granting Stafford’s motion for judgment on the pleadings, the District Court
relied upon Fockaert’s admission regarding paragraph 13. Given our disposition of
Issue 1, we conclude the District Court erred in granting Stafford’s motion for judgment
on the pleadings on the basis of this admission.
¶20 Because Issue 1 is dispositive, it is not necessary for this Court to reach Fockaert’s
arguments that a material issue of fact exists regarding whether he was damaged by
Stafford’s action and inaction, that the District Court erred when it determined that his
pleadings did not contain any allegations regarding the prejudices he has suffered, and
that the District Court erred in determining he did not raise the defense of failure to state
a claim upon which relief can be granted until his motion for judgment on the pleadings.
The District Court can address these arguments on remand.
¶21 We have determined to decide this case pursuant to Section I, Paragraph 3(d) of
our internal Operating Rules, which provides for noncitable memorandum opinions.
7 ¶22 For the forgoing reasons, we reverse the District Court’s decision and remand for
further proceedings.
/S/ PATRICIA COTTER
We concur:
/S/ MIKE McGRATH /S/ BETH BAKER /S/ LAURIE McKINNON /S/ JIM RICE