Tri-City Lumber Inc. v. Anderson

• Court: Montana Supreme Court
• Decided: May 11, 1995
• Docket: 94-570
• Status: Published

Opinion

NO. 94-570 IN THE SUPREME COURT OF THE STATE OF MONTANA 1995

TRY-CITY LUMBER, INC., a Montana corporation, Plaintiff and Respondent, -VS-

NYLE S. ANDERSON, DARWIN HAI\IILTON, MARY HAMILTON, MEADOW HILLS HOMEOWNERS ASSOC., MELANIE VESTRE, DAVID KNOLL, STANLEY W. PINE, and all other persons, unknown, claiming, or who might claim, any right, title, estate, or interest in or lien or encumbrance upon the real property described in the complaint adverse to Plaintiffs' ownership or any cloud upon Plaintiffs' title thereto, whether such claim or possible claim be present or contingent, Defendants and Appellant.

APPEAL FROM: District Court of the Eleventh Judicial District, In and for the County of Flathead, The Honorable Ted 0. Lympus, Judge presiding.

COUNSEL OF RECORD: For Appellants: Patrick M. Springer, Attorney at Law, Kalispell, Montana

For Respondent: Randall S. Ogle; Ogle & Worm, Kalispell, Montana

Submitted on Briefs: April 6, 1995 Decided: May 11, 1995 Filed: Justice Karla M. Gray delivered the Opinion of the Court.

Darwin Hamilton appeals from the grant of summary judgment to

Try-City Lumber, Inc. by the Eleventh Judicial District Court,

Flathead County. We affirm and remand.

We address the following issues:

1. Did the District Court err in granting the motion of Try-City Lumber, Inc. for summary judgment?

2. Is Try-City Lumber, Inc. entitled to Rule 32, M.R.App.P., damages?

Try-City Lumber, Inc. (Try-City) filed an action to quiet

title to Lot 45 of Meadow Hills, a residential subdivision located

in Flathead County, Montana. Meadow Hills originally was developed

by Darwin Hamilton (Hamilton), appellant herein. Although numerous

defendants were named in the action, the underlying--and largely

undisputed--facts of record primarily involve Try-City, Hamilton

and Dean P. Conaway (Conaway). Taken in the light most favorable

to Hamilton, the party opposing summary judgment, the facts of

record are as follows.

Hamilton was an active real estate developer in Flathead

County. When financial and legal difficulties arose, Hamilton

became associated in business dealings with Conaway. Hamilton had

been the owner of a number of residential lots in Meadow Hills,

including Lot 45; Conaway became the successor owner of Lot 45.

During a construction project on another lot in Meadow Hills,

Conaway failed to pay Try-City, which supplied him with building

materials for the project. Try-City brought an action against

2 conaway; conaway was served, but did not respond or contest the

action. Try-City obtained a default judgment against Conaway on January 24, 1992, in the amount of $13,283.96, plus interest.

Notice of entry of judgment was duly filed thereafter. Pursuant to

§ 25-g-301 (2), MCA, Try-City's judgment attached as a judgment lien

against all real property owned by Conaway. Conaway was the record

owner of Lot 45 on January 24, 1992.

Try-City initiated proceedings in aid of execution of its

judgment on April 13, 1992. A supplemental proceeding for the

purpose of determining assets owned by Conaway occurred on April

21, 1992. Hamilton was aware of Try-City's judgment against

Conaway and attended the proceeding. Attorney Randall S. Ogle

(Ogle) appeared on Try-City's behalf and inquired of Conaway

regarding his assets; Conaway acknowledged both his ownership of

Lot 45 and Try-City's judgment against him. Brent Hall (Hall),

Try-City's general manager, also attended the supplemental

proceeding. Subsequent to the proceedings in aid of execution and on June

30, 1992, Conaway apparently executed a quitclaim deed to Lot 45 in

Hamilton's favor. Ogle's law office prepared the realty transfer

certificate for the purpose of recording the quitclaim deed from

Conaway to Hamilton; Ogle did not notify Try-City of the existence

of the quitclaim deed to Lot 45. Hamilton did not record the

quitclaim deed until April 7, 1993. Conaway filed a petition in bankruptcy on July 17, 1992. Try-

City filed a proof of claim ,and its claim was classified as a

3 secured claim against Lot 45. The United States Bankruptcy Court

ultimately released Conaway from all dischargeable debts; nothing of record indicates that any lien or claim against Lot 45 was

released.

After the bankruptcy stay was lifted, Try-City proceeded to

foreclose its judgment lien against Lot 45. The District Court

issued a writ of execution on December 10, 1992, directing the

Flathead County Sheriff to satisfy Try-City's judgment from

Conaway's assets. The sheriff issued a notice of sheriff's sale

for Lot 45 the same day; the sale was scheduled for January 6,

1993. Notice of the sale was provided to Conaway, Hamilton, and

Hamilton's counsel.

The sale occurred as scheduled. Hall appeared for Try-City

and purchased Lot 45 on its behalf for $14,609.58. Neither

Conaway, Hamilton, nor Hamilton's counsel attended the sale.

Conaway's one-year right of redemption regarding Lot 45 ran from

the January 6, 1993, date of sale.

Try-City subsequently received and, on January 15, 1993,

recorded the sheriff's certificate of sale regarding Lot 45. On

April 7, 1993, Hamilton caused the quitclaim deed to Lot 45, which

apparently was executed in his favor by Conaway on June 30, 1992,

to be recorded. Try-City initiated the quiet title action

presently before us on April 21, 1993, to clear the title to Lot

45. Conaway did not redeem Lot 45 during his one-year redemption

period. No one else redeemed the property. Conaway's right of

4 redemption expired on January 6, 1994.

In responding to Try-City's quiet title action, Hamilton raised a number of defenses and affirmative defenses. Briefly

stated, the defenses were premised primarily on allegations that

Try-City's judgment against Conaway was extinguished in Conaway's

bankruptcy action; that Try-City is not the owner of Lot 45 because

Conaway had no interest therein at the time of the sheriff's sale;

and that Try-City--by and through its legal counsel--had actual or

constructive knowledge at all pertinent times that Conaway had no

right, title or interest in Lot 45. Hamilton also counterclaimed

against Try-City on essentially the same grounds.

Try-City subsequently moved for summary judgment, briefed the

motion and presented extensive materials in support thereof.

Hamilton responded to the motion and offered primarily his

affidavit and the affidavit of his counsel. Those affidavits

revolve around Hamilton's two basic contentions, which are:

1) Even though title to Lot 45 was in Conaway's name at the

time of Try-City's judgment, Hamilton and Conaway never

intended Conaway to be the actual owner of the property; their

intent was to remove ownership of the property from Hamilton's

name while he attempted to weather financial and legal

difficulties; and

2) Ogle's involvement in the quitclaim deed transaction

between Hamilton and Conaway in June of 1992 which, according

to Hamilton, serves as actual and/or constructive knowledge to

Try-City, Ogle's client, that Conaway had no ownership

5 interest in Lot 45 at any pertinent time

The District Court granted Try-City's motion for summary judgment and quieted title to Lot 45 in Try-City against all named

defendants. Hamilton appeals.

Did the District Court err in granting Try-City's motion for summary judgment?

We review a district court's ruling on a motion for summary

judgment de now. Summary judgment is proper only when no genuine

issue of material fact exists and the moving party is entitled to

judgment as a matter of law. Rule 56(c), M.R.Civ.P.; Spain-Morrow

Ranch, Inc. v. West (1994), 264 Mont. 441, 444, 872 P.2d 330, 331-

32.

Hamilton advances two challenges to the District Court's grant

of summary judgment. In the first, he asserts that the court erred

as a matter of law in concluding that Try-City's judgment lien

remained a valid judgment lien against Lot 45 subsequent to the

conclusion of Conaway's bankruptcy proceeding. Hamilton cites this

Court to 11 U.S.C. § 524(c) (2) (1988), and to In re Mendenhall, 93-

11405-7-JLP, 13 M.B.R. 73, November 25, 1993, on which the District

Court relied. The extent of his argument in this regard is that

"[iIt is respectfully submitted that Section 524, and Mendenhall is

not applicable to the facts of this case." He then provides a copy

of those cited materials.

With regard to this bankruptcy-related argument, we observe

only that it is counsel's function to present and develop legal

arguments on the client's behalf and to apply those legal arguments

and authorities to the facts of record in the case. Counsel has

6 totally failed to do so here. We decline to undertake the role of both advocate and reviewing court.

Hamilton's second assertion of error is that genuine issues of

material fact exist relating to Try-City's actual or constructive

knowledge of Conaway's alleged lack of ownership or interest in Lot

45. Here, he relies on affidavits presented in response to Try-

City's motion for summary judgment, contending that the District

Court ignored his affidavit evidence.

The record in this case leaves no room for doubt that the

District Court properly determined that no genuine issue of material fact exists in this regard. Hamilton makes much of his

own, and his counsel's, statements that Ogle--and through him, Try-

City--knew of the quitclaim deed transaction between himself and

Conaway in the summer of 1992. While it may be true that a factual

dispute exists regarding the extent of Ogle's knowledge at that

time, such a factual dispute is not "material" in this case.

"Disputed facts are material . . if they involve the elements of the cause of action or defense at issue to an extent

that necessitates resolution of the issue by a trier of fact."

State Med. Oxygen v. American Med. Oxygen (Mont. 19941, 883 P.2d

1241, 1243, 51 St.Rep. 1063, 1064. Here, the record is clear that

Conaway was the record owner of Lot 45 on January 24, 1992, when

Try-City obtained its judgment against him. Pursuant to § 25-9-

301(2), MCA, that judgment became a judgment lien against all real

property owned by Conaway at that time. Matters relating to the

subsequent quitclaim deed from Conaway to Hamilton, including any

7 actual or constructive notice of that transaction by Try-City, have

no bearing whatsoever on and, therefore, are not material to the

validity of Try-City's judgment lien.

We conclude that the District Court did not err in determining

that no genuine issues of material fact exist and that Try-City is

entitled to judgment as a matter of law.

Is Try-City entitled to Rule 32, M.R.App.P., damages?

Try-City requests damages against Hamilton pursuant to Rule

32, M.R.App.P. Rule 32 provides that if this Court is satisfied

from the record and the presentation of the appeal that it was

taken without reasonable or substantial grounds, we may award appropriate damages.

Sanctions under Rule 32 are seldom requested in Montana, and

even less seldom awarded. Counsel understand that we will not

lightly determine that an appeal is so lacking in merit as to meet

the "frivolous" threshold which must be met before we will impose

the Rule 32 sanction.

Here, no reasonable or substantial basis existed for the

bringing of this appeal. Indeed, the appeal is without merit and

frivolous. No effort at all, much less a serious one, was made to

present colorable legal arguments in support of an appeal. Where

no such arguments can be made, no appeal should be taken. We conclude that Try-City is entitled to damages against

Hamilton pursuant to Rule 32, M.R.App.P., for the bringing of a

frivolous appeal. We further conclude that those damages properly

are the reasonable amount of Try-City's attorney fees in defending against this appeal.

We affirm the District Court's grant of summary judgment in

favor of Try-City and remand for proceedings to determine the

amount of Rule 32, M.R.App.P., damages to which Try-City is

entitled in accordance with this opinion.

Pursuant to Section I, Paragraph 3(c), Montana Supreme Court

1988 Internal Operating Rules, this decision shall not be cited as

precedent and shall be published by its filing as a public document

with the Clerk of this Court and by a report of its result to the

West Publishing Company.

We concur:

9 May 11, 1995

CERTIFICATE OF SERVICE

I hereby certify that the following certified order was sent by United States mail, prepaid, to the following namedI:

Patrick M. Spririger Attorney at Law P.O. Box 1112 Kalispell, MT 5i9903-1112

Randall S. Ogle Ogle & Worm P.O. Box 899 Kalispell, MT 59903-0899

“3 SMITH EERK OF THE SUPREME COURT STATE OF MONTANA