Washington v. Montana Mining Properties, Inc.

795 P.2d 460, 243 Mont. 509, 47 State Rptr. 1366, 1990 Mont. LEXIS 220
CourtMontana Supreme Court
DecidedJuly 13, 1990
Docket89-577
StatusPublished
Cited by11 cases

This text of 795 P.2d 460 (Washington v. Montana Mining Properties, Inc.) 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
Washington v. Montana Mining Properties, Inc., 795 P.2d 460, 243 Mont. 509, 47 State Rptr. 1366, 1990 Mont. LEXIS 220 (Mo. 1990).

Opinions

JUSTICE McDONOUGH

delivered the Opinion of the Court.

Petitioner Montana Mining Properties, Inc., (MMP) has petitioned this Court for a writ of supervisory control disqualifying Judge Mark P. Sullivan from preceding further in this case. In its petition, MMP maintains that Judge Sullivan should be disqualified due to his relationship with the law firm representing the respondent, Dennis R. Washington. The writ is granted and we direct that this action be assigned to another judge.

The sole issue on appeal is:

Whether a writ of supervisory control disqualifying a presiding judge should issue when: (1) his son is employed by counsel of record for the respondent, Dennis R. Washington, (2) he knows and associates with partners of that law firm on a social basis, and (3) the petitioners raise questions concerning his ability to impartially preside over the case.

On June 19, 1987, Dennis Washington (Washington) entered into a contract with MMP for the sale of two mining properties and equipment, which are located in Butte, Montana. The first property, the “Main Butte Property” was sold to MMP for three million dollars in cash. Both parties agree this sum has been paid.

The second parcel of property sold for $500,000 and the equipment located on this property sold for three million dollars. Half of the price [511]*511for the equipment was to be paid in cash. The parties agree that this part of the contract has been performed.

The dispute here arises from the contract which provides that the $500,000 for the second parcel of property, and $1.5 million representing the balance of the price of the equipment may be paid in ‘ ‘unrestricted free trading common stock’ ’ of a public company, called Butte Mining PLC. This company was organized and promoted in London by Clive J. Smith, who was one of four joint venturers who controlled MMP. The joint venture used MMP as a vehicle to acquire mining properties that were then transferred to Butte Mining PLC. Shares in this company were then sold in public stock offerings.

The agreement between Washington and MMP provided that the stock, which represented the $1.5 million balance of the purchase price for the equipment, was to be transferred to Washington no later than September 15, 1987. The stock representing the $500,000 due on the property was transferred on November 27, 1987. The agreement stated that time was of the essence with respect to both payments, and it contained an express termination clause, pursuant to which Washington was entitled to terminate the contract in the event of default. The agreement contained provisions which granted to MMP, a “first right of refusal” to acquire an interest in any mineral property owned by Washington in the Butte Mining District.

The shares of stock were delivered to a firm of accountants, Bryant & Co., in Jersey, Channel Islands. Apparently, the delivery of both stock payments was made on time. In October of 1987, Peter Bryant notified Washington, through a letter, that his firm was holding 312,500 shares of common stock which were made payable “to the order of” Washington. This delivery represented the $500,000 due under the contract for the land. A subsequent letter from Bryant advised Washington that he was releasing to Washington’s order an additional 937,000 shares, which represented the $1.5 million balance due on the equipment.

Washington does not deny receiving these letters. However, he maintains that he never gained possession, dominion or control over the stock. In support of this contention, Washington testified that he was never sent any documents regularly disseminated to Butte Mining PLC shareholders, nor given dominion over the shares. He maintained that when he attempted to sell the shares, he was unable to do so because Smith retained control over the escrow where the stock was held. In light of these circumstances, Washington maintained that he was not paid the monies due him under the contract.

[512]*512Eventually, Washington, deeming MMP in breach of the contract, brought a lawsuit on March 14, 1989. In his complaint, he sought to terminate all of MMP’s rights under the agreement. MMP answered the complaint and denied the allegations of breach of contract. In short, MMP maintained that its deliveries of stock to the holding company constituted valid deliveries and that it had, therefore, met its obligations under the contract.

On April 25, 1989, Washington publicly announced that he had entered into an agreement with ASARCO, Inc. Under this agreement, Washington agreed to sell certain mining properties, located in Butte, to ASARCO. MMP deemed this agreement a violation of its right of first refusal contained in its contract with Washington. It brought a lawsuit seeking a preliminary injunction to prohibit consummation of the arrangement and also sought tort and contractual damages against both Washington and ASARCO.

A hearing was held relative to MMP’s request for an injunction on May 22 and 23, 1989. At this hearing, the primary issue was whether MMP had violated the terms of its contract with Washington. Obviously if MMP was in breach, and Washington was entitled to terminate the contract, MMP was not entitled to enforce its right of first refusal.

At the hearing, both sides presented testimony concerning the stock transfers. The law firm of Datsopoulos, MacDonald and Lind P.C., of Missoula, Montana, represented Washington. As part of his case, Washington called Milton Datsopoulos, one of the named partners of that firm, to testify concerning the various payment arrangements. Dennis Washington, Clive Smith, and Kelvin Myers, an employee of Bryant & Co., also testified.

The trial judge, the Honorable Mark Sullivan, determined that MMP had not validly transferred the stock to Washington. Judge Sullivan found that Washington did not have dominion or control over the stock and therefore MMP had not validly made the payments under the contract. He further found that this was a material breach since it represented a failure of a significant part of the consideration. Judge Sullivan, therefore, denied MMP’s request for an injunction.

Following the injunction hearing, MMP was informed that Judge Sullivan’s son was employed as a legal intern by Datsopoulos, MacDonald and Lind. This fact led counsel for MMP to question a number of rulings made by Sullivan during the injunction hearing. In particular, MMP questioned the judge’s ruling which allowed Milton Datsopoulos to testify when his law firm was actively representing one [513]*513of the defendants to the action. According to MMP, Datsopoulos sat at counsel table during the hearing and actively assisted in Washington’s defense. Judge Sullivan’s decision to allow his testimony, MMP maintains, is in direct contravention of Rule 3.7(a) of the Montana Rules of Professional Conduct which states:

“A lawyer shall not act as an advocate at trial in which the lawyer is likely to be a necessary witness except where:
“(1) the testimony relates to a non-contested issue;
“(2) the testimony relates to the nature and value of legal services rendered in the case; or
“(3) disqualification of the lawyer would be a substantial hardship on the client.”

None of these exceptions apply here.

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Washington v. Montana Mining Properties, Inc.
795 P.2d 460 (Montana Supreme Court, 1990)

Cite This Page — Counsel Stack

Bluebook (online)
795 P.2d 460, 243 Mont. 509, 47 State Rptr. 1366, 1990 Mont. LEXIS 220, Counsel Stack Legal Research, https://law.counselstack.com/opinion/washington-v-montana-mining-properties-inc-mont-1990.