No. 13722
IN THE SUPREME COURT OF THE STATE OF MONTANA
1977
ROBERT GRAVELEY,
Plaintiff and Respondent,
-vs-
JOHN M. MacLEOD et al.,
Defendants and Appellants.
Appeal from: District Court of the First Judicial District,
Honorable Nat Allen, Judge presiding.
Counsel of Record:
For Appellants:
Kline and Niklas, Helena, Montana
David N. Niklas argued, Helena, Montana
Hughes, Bennett and Cain, Helena, Montana
Alan F. Cain argued, Helena, Montana
For Respondent:
Charles Graveley argued, Helena, Montana
Submitted: September 22, 1977
Decided : $i\i $ ?i%d
Filed:
M r . J u s t i c e Daniel J . Shea d e l i v e r e d t h e Opinion of t h e Court.
Defendants John M. MacLeod and Veva A . MacLeod appeal from
a judgment of t h e D i s t r i c t Court, Broadwater County, ordering
s p e c i f i c performance of an option c o n t r a c t f o r t h e purchase of
r e a l property i n favor of p l a i n t i f f Robert Graveley.
Graveley and t h e MacLeods entered i n t o a w r i t t e n agreement
on A p r i l 2, 1973, which included provisions f o r t h e s a l e of t h e
MacLeods' c a t t l e and t h e l e a s e of t h e i r p a s t u r e t o Graveley and
a c l a u s e g i v i n g him t h e option t o purchase t h e MacLeods' r e a l
property. The r e a l property involved c o n s i s t s of approximately
1,560 a c r e s of farm and ranch land located 18 m i l e s n o r t h e a s t
of Townsend, Montana.
O February 11, 1976, p l a i n t i f f o r a l l y informed the MacLeods
n
t h a t he intended t o e x e r c i s e h i s purchase option. O February 23,
n
1976, t h e MacLeods s e n t p l a i n t i f f n o t i c e t h a t he was i n d e f a u l t
of t h e l e a s e agreement and gave him u n t i l A p r i l 15, 1976, t o
c o r r e c t t h e a l l e g e d items of d e f a u l t . The MacLeods a l l e g e d i n
t h i s n o t i c e t h a t Graveley had n o t complied with t h e agreement
i n t h r e e r e s p e c t s : 1 ) f a i l u r e t o e r e c t a new fence; 2) f a i l u r e
t o remove rocks from t h e t i l l a b l e property; and 3) f a i l u r e t o
o p e r a t e t h e leased property i n a good farmerlike manner.
P l a i n t i f f gave t h e MacLeods w r i t t e n n o t i c e of h i s i n t e n t
t o e x e r c i s e h i s option on March 5, 1976. On A p r i l 5 , 1976, he
presented t o them a check f o r $20,000, t h e down payment s p e c i f i e d
i n t h e agreement. The MacLeods refused t h i s check. On t h e
same day p l a i n t i f f brought t h e present a c t i o n , seeking s p e c i f i c
performance of t h e purchase option o r , i n t h e a l t e r n a t i v e ,
damages, a s w e l l a s i n j u n c t i v e r e l i e f r e s t r a i n i n g t h e MacLeods
and t h e defendant Schendel from removing t i n b e r and r e s t r a i n i n g
t h e MacLeods
/from e v i c t i n g p l a i n t i f f from t h e property involved.
The D i s t r i c t Court issued an o r d e r temporarily r e s t r a i n i n g
defendants from removing timber and e v i c t i n g p l a i n t i f f from t h e
property. The MacLeods then moved t o d i s s o l v e t h e r e s t r a i n i n g
o r d e r s and t o dismiss p l a i n t i f f ' s s u i t f o r f a i l u r e t o s t a t e a
claim. The motion t o dismiss was grounded on t h r e e a l l e g a t i o n s :
1 ) p l a i n t i f f exercised t h e option prematurely, because n o t i c e
of h i s i n t e n t t o e x e r c i s e was given p r i o r t o A p r i l 1, 1976,
t h e beginning d a t e s p e c i f i e d i n t h e agreement f o r such e x e r c i s e ;
2) p l a i n t i f f was i n d e f a u l t of t h e l e a s e agreement because he
had not e r e c t e d a fence a s required by t h e agreement, because
he had n o t removed rocks from t i l l a b l e ground a s r e q u i r e d , and
because he had not prepared t h e ground i n a good farmerlike
manner; and 3) t h e option was not supported by c o n s i d e r a t i o n .
Following a hearing on t h e s e motions, t h e D i s t r i c t Court
overruled t h e motion t o dismiss, continued t h e r e s t r a i n i n g o r d e r s
f o r t h e pendency of t h e s u i t , and ordered defendants t o answer
t h e complaint. A memo i n support of t h e o r d e r was f i l e d by
t h e d i s t r i c t judge a t t h e same time, on J u l y 1, 1976. In this
memo t h e d i s t r i c t judge s t a t e d t h a t (1) p l a i n t i f f had exercised
t h e purchase option within t h e time provided i n t h e agreement,
(2) p l a i n t i f f had s u b s t a n t i a l l y complied with t h e terms of t h e
l e a s e agreement, and (3) t h e c o n t r a c t a s a whole, including t h e
option c l a u s e , was supported by c o n s i d e r a t i o n .
On J u l y 19, 1976, t h e MacLeods f i l e d an answer and a
counterclaim, including i n t h e answer a d e n i a l t h a t p l a i n t i f f ' s
e x e r c i s e of t h e option had been timely and defenses a s s e r t i n g l a c k
of c o n s i d e r a t i o n f o r t h e o p t i o n and p l a i n t i f f ' s d e f a u l t of t h e
agreement. The d i s t r i c t judge who had presided over t h e c a s e ,
Hon. Gordon Bennett, was d i s q u a l i f i e d by t h e MacLeods; t h e Hon.
Nat Allen then assumed j u r i s d i c t i o n .
On November 4 , 1976, p l a i n t i f f moved f o r summary judgment.
Following argument of counsel and submission of b r i e f s , t h e
D i s t r i c t Court granted t h e motion. The MacLeods then requested
t h a t t h e o r d e r be c l a r i f i e d a s g r a n t i n g p a r t i a l summary judgment
on t h e i s s u e of s p e c i f i c performance only, and t h e D i s t r i c t Court
issued a c l a r i f y i n g o r d e r t o t h a t e f f e c t .
On January 3 , 1977, t h e D i s t r i c t Court entered judgment on
i t s order. This judgment ordered s p e c i f i c performance of t h e
purchase option with t h e p a r t i e s t o e n t e r i n t o a "standard c o n t r a c t
f o r deed" w i t h i n 30 days of n o t i c e of e n t r y of t h e judgment.
It a l s o ordered a hearing on t h e i s s u e of p l a i n t i f f ' s damages.
The MacLeods moved f o r a new t r i a l o r t o a l t e r o r amend t h e
judgment. This motion was deemed denied a s i t was n o t n o t i c e d
f o r hearing w i t h i n 10 days a s required by Rule 59(d), M.R.Civ.P.
This appeal followed.
MacLeods r a i s e s e v e r a l i s s u e s f o r review b u t only two a r e
necessary f o r determination of t h i s appeal.
1) Whether t h e judgment was f i n a l o r i n t e r l o c u t o r y .
2) Whether p l a i n t i f f was e n t i t l e d t o summary judgment.
The f i r s t i s s u e i s whether t h e judgment i s appealable a t
t h i s s t a g e of t h e proceedings. In the D i s t r i c t Court's c l a r i f i -
c a t i o n of i t s order g r a n t i n g summary judgment, i t s t a t e d :
"* * * t h a t t h e Order i n t h i s matter dated December
23, 1976, be and i s hereby c l a r i f i e d a s g r a n t i n g a
p a r t i a l summary judgment deciding only t h e i s s u e of
s p e c i f i c performance, and t h e r e f o r e i n t e r l o c u t o r y i n
c h a r a c t e r , a s contemplated by Rule 56(c) of t h e
Montana Rules of C i v i l Procedure."
I n r e l e v a n t p a r t , Rule 56(c), M.R.Civ.P., provides:
"* **A summary judgment, i n t e r l o c u t o r y i n c h a r a c t e r ,
may be rendered on t h e i s s u e of l i a b i l i t y alone although
t h e r e i s a genuine i s s u e a s t o t h e amount of damages. I t
I n Schultz v. Adams, (1973), 161 Mont. 463, 465, 507 P.2d
530, t h i s Court held t h a t an o r d e r g r a n t i n g p a r t i a l summary judg-
ment on t h e i s s u e of l i a b i l i t y i n a personal i n j u r y a c t i o n i s
n o t a f i n a l a d j u d i c a t i o n of t h e whole controversy and t h e r e f o r e
i s n o t appealable, absent a provision i n Rule 1, M.R.App.Civ.P.,
making it so.
A s c l a r i f i e d , t h e o r d e r i n t h e i n s t a n t case i s by i t s own
terms i n t e r l o c u t o r y and t h e r e f o r e n o t appealable u n t i l f i n a l
judgment on t h e whole controversy. However, t h e D i s t r i c t Court
i n i t s judgment g r a n t i n g s p e c i f i c performance went beyond merely
determining t h e MacLeodsl l i a b i l i t y under t h e agreement. It a l s o
ordered :
"2. That w i t h i n t h i r t y (30) days a f t e r t h e
n o t i c e of t h e e n t r y of t h i s decree t h e p a r t i e s s h a l l
make and execute a standard c o n t r a c t f o r deed i n
conformity with t h e Agreement dated A p r i l 2 , 1973;
t h a t upon execution of s a i d c o n t r a c t by s e l l e r s
(defendants), buyer ( p l a i n t i f f ) s h a l l pay Twenty
thousand Dollars ($20,000.00) a s down payment on
t h e property described i n s a i d c o n t r a c t ; t h a t no
r e s e r v a t i o n s o t h e r than those s t a t e d i n t h e A p r i l 2,
1973 Agreement be w r i t t e n i n t o t h e c o n t r a c t f o r deed
except by mutual consent of t h e p a r t i e s and t h a t t h e
terms of t h e c o n t r a c t f o r deed s h a l l be a s described
i n t h e A p r i l 2, 1973 c o n t r a c t .
" 3 . That on defendants' f a i l u r e t o execute t h e
c o n t r a c t f o r deed a s ordered h e r e i n , f i n a l judgment
s h a l l be entered a g a i n s t them, and such a d d i t i o n a l
r e l i e f granted a s may be necessary t o execute t h e
judgment ** *.I1
Defendants contend t h a t while t h e g r a n t of s p e c i f i c per-
formance was i n t e r l o c u t o r y p r i o r t o e n t r y of t h i s judgment,
t h e r e a f t e r i t was f i n a l and appealable.
W agree t h a t i t i s appealable.
e Rule 1, M.R.App.Civ.P.,
I
provides i n p a r t :
"A p a r t y aggrieved may appeal from a judgment
o r o r d e r , except when expressly made f i n a l by law,
i n t h e following cases:
"(b) *** from an o r d e r d i r e c t i n g t h e d e l i v e r y ,
t r a n s f e r , o r surrender of property ** *.I1
The judgment i n t h e i n s t a n t case d i r e c t e d defendants t o t r a n s f e r
t h e property covered by t h e purchase option t o p l a i n t i f f by
means of a c o n t r a c t f o r deed. Although denominated i n t e r l o c u t o r y ,
t h e judgment t h e r e f o r e was appealable. I n t h i s regard we n o t e
h e r e t h a t i t was c l e a r t h e D i s t r i c t Court d e s i r e d only t o e n t e r
an i n t e r l o c u t o r y o r d e r . I f h i s o r d e r compelling t h e t r a n s f e r of
property and i t s p o s s i b l e e f f e c t had been brought t o h i s a t t e n t i o n
most probably t h e o r d e r would have been modified. Had t h i s been
done t h e l i t i g a t i o n would very l i k e l y have ended a t t h e D i s t r i c t
Court l e v e l . The f a i l u r e t o use a v a i l a b l e D i s t r i c t Court pro-
cedures has r e s u l t e d i n a l o s s of valuable time and needless
expense t o both p a r t i e s .
The second i s s u e i s whether summary judgment was properly
granted. Under Rule 56 ( c ) , M.R. Civ .P. , summary judgment i s
proper:
"* ** i f t h e pleadings, d e p o s i t i o n s , answers t o
i n t e r r o g a t o r i e s , and admissions on f i l e , t o g e t h e r
with t h e a f f i d a v i t s , i f any, show t h a t t h e r e i s no
genuine i s s u e a s t o any m a t e r i a l f a c t and t h a t t h e
moving p a r t y i s e n t i t l e d t o a judgment a s a matter
of law. ** *1I
N evidence was presented a t t h e hearing on p l a i n t i f f ' s
o
motion f o r summary judgment. Neither p a r t y had undertaken
discovery. The only m a t e r i a l before t h e D i s t r i c t Court when
i t granted summary judgment was t h e o r d e r and memo i n support
thereof o v e r r u l i n g defendants' motion t o dismiss t h e complaint
f o r f a i l u r e t o s t a t e a claim. A t t h e hearing on t h e motion t o
dismiss testimony was given by Mrs. MacLeod, p l a i n t i f f , and two
neighboring farmers. A copy of t h e agreement, t h e ~ a c ~ e o d s '
l e t t e r t o p l a i n t i f f informing him of h i s a l l e g e d d e f a u l t and
p l a i n t i f f ' s l e t t e r t o t h e MacLeods g i v i n g n o t i c e of h i s i n t e n t i o n
t o e x e r c i s e t h e option were a l s o received a t t h i s hearing. It
does n o t appear t h a t t h e D i s t r i c t Court had a t r a n s c r i p t of
t h e hearing on t h e motion t o dismiss when i t decided t h e motion
f o r summary judgment.
Defendants contend t h e r e a r e genuine i s s u e s of m a t e r i a l
f a c t concerning, i n t e r a l i a , t h e question of p l a i n t i f f ' s d e f a u l t
of t h e agreement and summary judment t h e r e f o r e was n o t proper.
This Court has repeatedly held t h a t t h e p a r t y moving f o r
summary judgment has t h e burden of showing t h e absence of any
factual issue. Rickard v. P a r a d i s , (1975), 167 Mont. 450, 452,
539 P.2d 718; Harland v. Anderson, (1976), Mont . 3
548 P.2d 613, 33 St.Rep. 363. Here, t h e record d i s c l o s e s
p l a i n t i f f r e l i e d upon t h e J u l y 1, 1976 o r d e r o v e r r u l i n g t h e
MacLeods' motion t o dismiss t o show t h e r e was no genuine i s s u e
of m a t e r i a l f a c t . P l a i n t i f f a s s e r t e d t h i s order conclusively
resolved a l l f a c t u a l i s s u e s i n h i s f a v o r , and t h e D i s t r i c t
Court was bound by i t .
While t h e r e were no reasons given by t h e D i s t r i c t Court
f o r i t s o r d e r of December 1 7 , 1976 g r a n t i n g p l a i n t i f f summary
judgment, t h i s r u l i n g was based on i t s e a r l i e r order and memo
i n support of t h e order overruling t h e Mac~eods' motion t o dismiss.
The MacLeods contend t h e D i s t r i c t Court could n o t have properly
determined t h e r e were no f a c t u a l i s s u e s i n t h i s manner, and
argue they were denied t h e opportunity t o e f f e c t i v e l y r e s i s t
t h e summary judgment motion.
I n S t a t e ex r e l . Dept. of Health & Environmental Sciences
v. C i t y of Livingston, (1976), - .
Mont -
3 548 P. 2d 155,
33 St.Rep. 348, 351, t h i s Court held i t was e r r o r t o g r a n t a
summary judgment on a motion t o dismiss when t h e p a r t y a g a i n s t
whom t h e judgment was entered had n o t been given a "reasonable
opportunity t o present a l l m a t e r i a l made p e r t i n e n t t o such motion
by Rule 56" a s required by Rule 1 2 ( b ) , M.R.Civ.P. Also, t h e motion
t o dismiss was t r e a t e d a s a motion f o r summary judgment when
i t was heard. Here, t h e Mac~eods' motion t o dismiss was n o t
so t r e a t e d a t t h e time i t was heard and r u l e d upon. In effect,
however, t h e hearing on t h e motion t o dismiss i n the i n s t a n t
c a s e became a summary judgment hearing. Since t h e MacLeods were
given no n o t i c e t h a t t h i s hearing would determine whether t h e r e
were i s s u e s of m a t e r i a l f a c t , i t was e r r o r f o r t h e D i s t r i c t Court
t o g r a n t summary judgment.
The judgment g r a n t i n g s p e c i f i c performance and d i r e c t i n g t h e
p a r t i e s t o e n t e r i n t o a c o n t r a c t f o r deed covering t h e property
described i n t h e A p r i l 2 , 1973 agreement i s vacated. The cause
i s remanded f o r f u r t h e r proceedings c o n s i s t e n t with t h i s opinion.
-
W Concur:
e