No. 90-078
IN THE SUPREME COURT OF THE STATE OF MONTANA
1 99 0
FIRST SECURITY BANK OF BOZEMAN,
Plaintiff and Respondent,
MILTON E. JONES and HELEN
C. JONES; and AMERICAN LAND
TITLE COMPANY,
Defendants and Appellants.
APPEAL FROM: District Court of the Eighteenth Judicial District,
In and for the County of Gallatin,
The Honorable Larry W. Moran, Judge presiding.
COUNSEL OF RECORD:
For Appellant:
Thomas E. Smith, Scot Schermerhorn, Moulton,
Bellingham, Longo & Mather, P.C., Billings, Montana
For Respondent:
Calvin L. Braaksma, Landoe, Brown, Planalp &
Kommers, P.C., Bozeman, MT 5 9 7 1 5
Submitted on Briefs: May 16, 1990
Decided: June 26, 1990
Filed:
Justice John Conway Harrison delivered the Opinion of the Court.
District Judge Larry Moran of the Eighteenth Judicial
District, Gallatin County, granted summary judgment to plaintiff
First Security Bank of Bozeman in its effort to foreclose on five
deeds of trust delivered by defendants Milton E. and Helen C. Jones
for a promissory note. We affirm the summary judgment.
The issue which we will review is whether the District Court
erred in ruling that First Security Bank could judicially foreclose
upon five deeds of trust in two counties, by filing separate
actions in each of the counties, wherein the Bank sought a single
judgment and a single, integrated foreclosure proceeding?
The facts relevant to this appeal are simple and undisputed.
On May 24, 1988, Milton and Helen Jones (Joneses), husband and
wife, executed a promissory note to First Security Bank (Bank) in
the amount of $132,026.26. As collateral for the obligation the
Joneses pledged five deeds of trust covering five parcels of real
property, four parcels located in Gallatin County and one in
Flathead County.
The Joneses subsequently defaulted on the promissory note.
The Bank proceeded to foreclose upon the deeds of trust as
mortgages, filing actions in both Gallatin and Flathead counties.
The complaint filed in Gallatin County sought collection of the
promissory note and foreclosure of the four deeds of trust covering
the four Gallatin properties. Likewise, the complaint filed in
Flathead County sought collection on the same promissory note and
foreclosure of the deed of trust covering the Flathead real
property. The two complaints reference to and incorporate each
other and allege default of the same promissory note, but clearly
set forth that the Bank seeks a single recovery with integrated and
coordinated foreclosures and, thereafter, a single deficiency
judgment .
The Joneses answered, specifically setting forth as
affirmative defenses that (1) the Bank violated § 71-1-222, MCA,
which requires but one action for recovery of a debt or enforcement
of a right secured by a real estate mortgage; and (2) the Bank was
barred from collecting upon the debt or obtaining a deficiency
judgment, or both, by virtue of the doctrines of the one-action
rule, waiver and estoppel.
The Bank filed a motion for summary judgment in the Gallatin
County action. The Joneses then moved the court to deny the Bank's
motion for summary judgment and to enter summary judgment on their
behalf prohibiting the Bank from obtaining any deficiency judgment
against them.
The District Court subsequently issued its Memorandum and
Judgment which granted the Bank's motion for summary judgment. The
Joneses now appeal from the summary judgment.
Summary judgment is appropriately granted where 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. The party
seeking summary judgment has the burden of demonstrating absence
of genuine factual issues. OIBagy v. First Interstate Bank (Mont.
1990), 785 P.2d 190, 191, 47 St.Rep. 69, 71. The burden then
shifts to the non-moving party who must show the existence of a
genuine issue in order to prevail. a. To meet this burden, the
non-moving party must proffer substantial evidence, not mere
speculation and conclusory statements. Hando v. PPG Industries,
Inc. (1989), 236 Mont. 493, 500, 771 P.2d 956, 959; Benson v. Pyfer
(Mont. 1989), 783 P.2d 923, 925, 46 St.Rep. 2033, 2035.
In the case at bar it has been shown that no genuine issue of
material fact exists. The agreed upon facts establish that the
Joneses executed the promissory note and deeds of trust which are
the subject of this action, delivered them to the Bank, and then
failed to make payment as required in the note.
Appellants argue that the Bank violated 9 71-1-222, MCA,
Montana's none action rule,I1by filing simultaneous actions in the
two counties where the real property pledged as security on the
note is located. In pertinent part, the statute reads:
(1) There is but one action for the recovery
of debt or the enforcement of any right
secured by mortgage upon real estate, which
action must be in accordance with the
provisions of this part. ..
Section 71-1-222(1), MCA.
The purpose of the one-action rule I1[i]s to compel one who has
taken a special lien to secure his debt to exhaust his security
before having recourse to the general assets of the debtor.'' Barth
v. Ely (1929), 85 Mont. 310, 320, 278 P. 1002, 1006 (quoting Merced
Bank v. Casaccia (Cal. 1894), 37 P. 648). Also, the rule is
intended to shield a mortgagor from multiple lawsuits where two
separate actions, while theoretically distinct, are so closely
connected that the two can and should be decided in one suit.
Stallings v. Erwin (1966);148 Mont. 227, 233, 419 P.2d 480, 483.
See also Dietrich, The Montana Judicial and Non-Judicial
Foreclosure Sale: Analysis and Suqqestions for Reform, 49 M0nt.L.
Rev. 285, 298 (1988).
The Bank did not intend to defeat the purpose of the one-
action rule by filing complaints in both Gallatin and Flathead
counties. The Bank filed simultaneous foreclosure proceedings in
an attempt to comply with 5 25-2-123, MCA, which states that:
(1) The proper place of trial for the
following actions is the county in which the
subject of the action or some part thereof is
situated :
(d) for the foreclosure of all liens and
mortgages on real property.
Section 25-2-123(1), MCA.
Each complaint references and incorporates the other. The two
complaints seek a single recovery, a single, integrated,
coordinated foreclosure, and a single deficiency judgment
thereafter. In no way did the Bank endeavor to circumvent the one-
action rule.
We affirm the judgment of the District Court and concur with
its Memorandum wherein it noted:
The [Gallatin and Flathead] actions are
not sequential actions, and it is sequential
actions that are.usually at issue when the one
action rule is raised. Nor is there any
effort to keep one or the other Court in the
dark regarding the simultaneous action for
foreclosure and deficiency judgment.
The Court concludes that Plaintiff's
Complaints, though filed in two counties are,
because of the language of the Complaints, one
action, and Plaintiff is acting entirely
within the stated purpose of the one action
rule. The remedy being pursued is a
foreclosure action and includes a deficiency
claim in the same proceeding. The mortgagor
is, essentially, being protected against a
multiplicity of actions.
This case is a proper one for summary
judgment, there being no genuine dispute over
material fact.
The District Court is affirmed.