No. 8 8 - 2 3 1
IN THE SUPREME COURT OF THE STATE OF MONTANA
JOHN A. STARK and NADINE A. STARK,
husband and wife,
Plaintiffs and Respondents,
MAYNARD BORNER and OPAL BORNER,
husband and wife,
Defendants and Appellants.
APPEAL FROM: District Court of the Tenth Judicial District,
In and for the County of Fergus,
The Honorable Peter 1. Rapkoch, Judge presiding.
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COUNSEL OF RECORD:
For Appellant:
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CT Richard J. Carstensen, Billings, Montana
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F e Respondent:
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!. Rodd A. Hamman, Calton, Hamman, Calton & Wolfe,
LC! i .' Billings, Montana
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Submitted on Briefs: August 26, 1988
Decided: October 12, 1988
Filed:
Clerk
Mr. Justice R. C. McDonough delivered the Opinion of the
Court.
Defendants Maynard and Opal Borner (Borners) appeal from
the order of the District Court of the Tenth Judicial
District, Fergus County. The District Court, after
considering the case on remand from this Court, determined
that its original findings were correct and granted summary
judgment in favor of plaintiffs John and Nadine Stark
(Starks). We affirm, but remand to the District Court for an
evidentiary hearing on attorney's fees.
The Borners frame three issues on appeal:
1. Whether this Court's directions on remand were
followed by the District Court.
2. Whether the Starks' acquisition of good title after
the summary judgment hearing could be considered by the
District Court.
3. Whether the award of attorney's fees was proper.
This suit is based on a contract for deed. The Starks
entered into the contract to buy a ranch from a couple who
are not parties to this suit. The Starks later entered into
a second contract to sell the ranch to the Borners.
The contract between the Starks and the Rorners provided
payments from the Borners would be made to an escrow agent,
who would apply the money toward the Starks' payments under
the first contract for deed. The remainder would be paid to
the Starks. The Starks1 obligation under the first contract
would be paid before the Borners completely paid their
obligation under their contract with the Starks. Once the
Rorners' obligation was paid, the Starks would then convery
title to the ranch.
The second contract also provided if the Borners failed
to make a scheduled payment, they would receive a notice
giving them 60 days to cure their default. If the default
remained uncured after 60 days, the contract provided the
Starks could then send a notice of acceleration. The
acceleration notice would give the Borners 60 days to pay the
entire amount due on the contract or the contract could be
terminated. The contract further provided if either party
were forced to undertake legal action to enforce contract
terms, the party at fault would be responsible for paying any
reasonable attorney's fees incurred by the prevailing party.
Three years into the contract, the Borners missed a
scheduled payment. They failed to cure their default and
failed to respond to the Starks' notice of acceleration. The
Starks sued, electing termination of the contract and
forfeiture of all amounts paid by the Borners toward the
purchase, and seeking an injunction directing the Borners to
surrender possession of the land in question pending the
outcome of the suit. We addressed certain other issues j n
this case in Stark v. Borner (Mont. 1987), 735 P.2d 314, 44
St.Rep. 717, in which the Borners appealed from the District
Court's order granting the preliminary injunction.
In our prior opinion, we remanded this case to the
District Court for consideration of one particular issue.
Under the rule most recently ennunciated in Sharbono v.
Darden (Mont. 1986), 715 P.2d 433, 43 St.Rep. 400, a seller
of real estate cannot enforce forfeiture provision in a
contract for deed if unable to convey good title at that
time. Both parties agree when the Borners defaulted, the
Starks still owed money on the land in question under the
first contract for deed.
The District Court held a hearing at which it considered
the preliminary injunction on remand from this Court, and
heard argument on the Starks' motion for summary judgment.
The court held Sharbono di-d not apply to the facts of this
case and granted summary judgment in favor of the Starks.
This appeal followed.
The Borners' first argument on appeal is that the
District Court failed to follow the direction of this Court
on remand. According to the Borners, we required the court
to find that Sharbono applied to this case, and the
injunction was therefore improper. We disagree.
Our direction to the court on remand did not require a
particular result:
This Court is concerned, however, about the - -of
lack
any findings regarding the sellers' ability to
convey title after they accelerated payment.
...
Therefore, this Court sustains the District Court's
issuance of the preliminary injunction pending the
District Court's determination on remand - - as to
whether its findings were proper in light of the
above cited cases.
Stark, 735 P.2d at 3 1 8 (emphasis supplied). Our opinion
directed the court to make its - determination as to the
own
propriety of its ruling in light of Sharbono. The court's
order of January 29, 1 9 8 8 did that. The court held that
Sharbono and its predecessors did not apply to this case.
In Sharbono, the buyers had performed the contract
except the final balloon payment. They refused to make the
final payment because the seller had not satisfied a previous
mortgage on the property, and therefore could not perform her
part of the contract. The buyers had contracted to receive
good title upon making the balloon payment. The seller had
breached, and full performance by the buyers would not have
gained what they had bargained for. We held the buyers'
non-payment was therefore excused.
In this case, it was the Borners--the buyers--who
breached, and caused the Starks' alleged inability to convey
good title. The contract specifically provided payments from
the Borners would go first to satisfy the Starkst existing
liability on the property. Continued performance S y the
Borners thus would have gained what they bargained for: clear
title to the land. We recently held that termination and
forfeiture in this situation is proper. Burgess v. Shiplet
(Mont. 1988), 750 P.2d 460, 45 St.Rep. 293. The District
Court followed the direction from this Court on remand, and
we affirm on this issue.
11.
The Borners next assert the District Court, in ruling on
the Starkst motion for summary judgment, improperly
considered facts that occurred after hearing was had on the
motion. The hearing was held on August 11, 1987, and the
court's order was issued in January of 1988. In October of
1987, the Stark's arranged to pay off the balance due on the
land, and obtained clear title. The Rorners argue because
the Starks could not have prevailed on the motion without
having the ability to convey clear title, the court must have
considered the October, 1987, transaction in arriving at its
ruling.
This argument fails for the same reasons given above.
The Borners' position is that the Starks could not seek
termination and forclosure unless they could convey good
title pursuant to the rule in Sharbono. Sharbono, however,
does not apply.
When reviewing a summary judgment order, we apply the
same standard as the trial court. If the moving party shows
there is no genuine issue as to facts that are material in
light of the substantive principles entitling that party t-o
judgment as a matter of law, we will affirm the ruling.
Frigon v. Morrison-Maierle, Inc. (Mont. 1988), - P.2d - I
45 St.Rep. 1344, and cases cited therein. The Rorners admit
they have breached the contract. There is no issue of
material fact regarding the Stark's entitlement to the
remedies provided for in the contract. We affirm the
District Court's ruling on this issue.
The Borners' final argument on appeal is that the
District Court was incorrect in awarding attorney's fees to
the Starks. The Borners cite our decision in Crncevich v.
Georgetown Recreation Corp. (1975), 168 Mont. 113, 541 P.2d
56, for the proposition that attorney's fees cannot be
awarded absent proof.
After the court granted summary judgment in favor of the
Starks, counsel for the Starks filed an Affidavit of
Attorney's Fees with the court and served it on counsel for
the Rorners. The Borners did not object or otherwise respond
to the affidavit, and the court awarded the fees requested as
part of its final judgment. While the contract provided f o r
the award of reasonable attorney's fees, we have held it
improper to award attorney's fees solely on the affidavit of
counsel without holding an evidentiary hearing on the matter.
Keller v. Llewellyn (1977), 175 Mont. 164, 573 P.2d 166.
We affirm the decision of the District Court, set aside
its award of attorney's fees, and remand the case with
instructions to hold an evidentiary hearing on attorney's
fees.
We Concur: