Federal Savings & Loan Insurance v. Hamilton

No. 89-348
IN THE SUPREME COURT OF THE STATE OF MONTANA
1990

FEDERAL SAVINGS AND LOAN INSURANCE
CORPORATION, as Receiver for the Montana
Federal Savings Bank, f/k/a Montana Savings
and Loan Association,
Plaintiff and Respondent,
-vs-
DARWIN HAMILTON, MARY HAMILTON, et al.,
Defendants and Appellants.

APPEAL FROM: District Court of the Eleventh Judicial District,
In and for the County of Flathead,
The Honorable Michael Keedy, Judge presiding.
COUNSEL OF RECORD:
For Appellant:
Patrick M. Springer, Kalispell, Montana
For Respondent :
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t? c-:
-:> Debra D. Parker; Murphy, Robinson, Heckathorn & Phillips,
c3 .. C-- Kalispell, Montana
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Submitted on Briefs: Dec. 14, 1989
Decided: February 15, 1990
~ustice Fred J. Weber delivered the Opinion of the Court.

This appeal arises from an order by the District Court,
Eleventh Judicial District, Flathead County, Montana, grant-
ing summary judgment in favor of plaintiff. Defendant ap-
peals. We affirm.
The issues presented for our review are:
1. Did the Hamiltons present a timely appeal of the
amended summary judgment?
2. Whether this case should be remanded for a determi-
nation of the adequacy of the sales price of land sold at a
sheriff's sale.
Mr. and Mrs. Darwin Hamilton purchased property near
Kalispell, Montana, in 1982, for development as a mobile home
subdivision. The Hamiltons entered an agreement with the
owners of the land, Mr. and Mrs. Long, to purchase the prop-
erty for $250,000. The Longs took a mortgage on the land at
this time.
That same year Mr. Hamilton borrowed $175,000 from
Montana Savings and Loan Association for development costs.
To secure this loan he executed a promissory note on March
16, 1982, and the Association also took a mortgage on the
land. This promissory note stated that the note would come
due on May 16, 1985. A year later, Mr. Hamilton borrowed an
additional $44,000 from Montana Savings and Loan Association,
which was used to purchase an additional seven acres adjoin-
ing the original property. He executed a promissory note for
this amount, due May 16, 1985. At the same time he executed
a deed of trust to the Association, naming it as beneficiary.
On July 29, 1983, Mr. Hamilton executed a mortgage modifica-
tion agreement and a promissory note for the additional
amount of $144,000. Under this agreement, all three obliga-
tions were consolidated into an indebtedness in the amount of
$359,000, secured by the mortgage. This agreement stated a
due date of August 1, 1984, with a possible twelve month
extension under certain conditions. The Hamiltons gave
personal guarantees of each promissory note. The mortgage
modification also contained an agreement whereby the Longs
subordinated their interest in the property to the
Association.
Mr. Hamilton began subdividing the property into mobile
home lots, calling the subdivision "Green Tree Meadows."
Seventeen of these lots were sold to individual parties;
however, the development of the subdivision was not completed
by the end of 1985, and the Hamiltons had not satisfied their
obligations with the Bank.
Montana Savings and Loan Association became Montana
Federal Savings Bank. On August 14, 1985, the Federal Sav-
ings and Loan Insurance Corporation (FSLIC) was appointed
receiver for Montana Federal Savings Bank. On August 16,
1985, t h e r e c e i v e r c l o s e d t h e S a v i n g s Bank and began l i q u i -

dating the assets. O August 28,
n 1986 FSLIC f i l e d a com-

plaint to foreclose against Darwin and Mary Hamilton,

a l l e g i n g t h a t t h e y were i n d e f a u l t under t h e t e r m s of the

t h r e e promissory n o t e s , t h e Mortgage, t h e Deed o f T r u s t , and

t h e Mortgage M o d i f i c a t i o n Agreement. The c o m p l a i n t s t a t e d a

t o t a l amount owing, i n c l u d i n g p r i n c i p a l and i n t e r e s t t h r o u g h

June 3 0 , 1986, o f $429,557. The Hamiltons d i d n o t d i s p u t e

t h a t t h e y were i n d e f a u l t under t h e t e r m s o f t h e n o t e s .

FSLIC moved for summary j.udgment on t h e i s s u e of de-

fault, and moved f o r a d e f i c i e n c y judgment. On March 2 1 ,

1989, in an amended order granting summary judgment, the

c o u r t awarded FSLIC a d e c r e e o f f o r e c l o s u r e , and a judgment

a g a i n s t Darwin and Mary Hamilton, j o i n t l y and s e v e r a l l y , i n

t h e amount of $564,600 (which sum i n c l u d e d i n t e r e s t t h r o u g h

February 15, 1989). The o r d e r a l s o s t a t e d :

I n t h e e v e n t t h e p r o c e e d s of t h e s a l e a r e
i n s u f f i c i e n t t o pay t h e amounts due t h e P l a i n t i f f ,
t o g e t h e r w i t h i n t e r e s t , c o s t s and a t t o r n e y s ' f e e s ,
t h e P l a i n t i f f s h a l l have a d e f i c i e n c y judgment
a g a i n s t t h e Defendants Darwin Hamilton and Mary
Hamilton, j o i n t l y and s e v e r a l l y , and s h a l l have
execution thereon.

On A p r i l 2 4 , 1989, t h e s h e r i f f o f F l a t h e a d County h e l d a

p u b l i c s a l e of t h e property. FSLIC, t h e o n l y b i d d e r a t t h e

s a l e , purchased t h e p r o p e r t y f o r $475,000. On May 1 6 , 1989,

a deficiency judgment was granted to FSLIC against the
Hamiltons in the amount of $99,306. Notice of entry of
deficiency judgment was filed on May 19, 1989. The Hamiltons
filed this appeal on June 16, 1989.

Did the Hamiltons present a timely appeal of the amended
summary judgment?
This case involves two final orders. The amended summa-
ry judgment was a final order, notice of which was entered
March 24, 1989. This order granted FSLIC a deficiency judg-

ment. The entry of a deficiency judgment in the amount of
$99,306, was also a final order, notice of which was entered
May 19, 1989.
On appeal, Hamiltons contest both the propriety of the
deficiency judgment and the amount of the deficiency judg-
ment. The amount of the judgment will be discussed in Issue

In contesting the propriety of the deficiency judgment,
the Hamiltons are appealing the validity of the amended
summary judgment. Pursuant to Rule 5, M.R.App.P., the Hamil-
tons had thirty days from the date of entry of judgment,

which was March 24, 1989, in which to appeal this order.
This appeal was filed June 16, 1989. We hold that the appeal
of this issue was not timely and will not be discussed.
 Whether this case should be remanded for a determination
of the adequacy of the sales price of land sold at a sher-
iff's sale.
After the sheriff's sale, FSLIC filed a "Notice of
Partial Satisfaction and Motion for Entry of Deficiency
Judgment," requesting that the court grant FSLIC a deficiency
judgment against defendants in the amount of $99,306.
On May 16, 1989 the court granted this motion, stating:

On motion of the Plaintiff, deficiency judg-
ment is hereby granted against the defendants,
Darwin Hamilton and Mary Hamilton jointly and
severally in the amount of $99,306.00.
In this issue we discuss only the above-mentioned order,
which entered the amount of the deficiency judgment. The
Hamiltons object to the amount of this judgment, by urging
that the sale price of $475,000, obtained at the sheriff's
sale, was grossly inadequate. They urge that the fair market
value of this property upon the completion and sale of each
lot, is approximately $1 million. They base this on the fact
that 17 of 81 lots have been sold at prices ranging from
$11,000 to $13,000. The Hamiltons urge that the present case
be remanded to District Court for a determination of the fair
market value of the property at the time of sale, relying on
the recent case of Trustees of Wash.-Idaho-Mont. Carpenters
Employers Retirement Trust Fund v. Galleria Partnership
(Mont. 1989), 780 P.2d 608, 46 St.Rep. 1661. In
Galleria Partnership a piece of real property was bid in at
the sheriff's sale for approximately 30% of its original
appraised value. Although the issue of the adequacy of the
sale price had not been raised in the lower court, we remand-
ed to District Court for a determination of fair market
value. We remanded "in the exercise of our equity jurisdic-
tion." Galleria Partnership, 780 P.2d at 617.
In the present case, however, the Hamiltons' request
must fail. First, as FSLIC correctly notes, the Hamiltons
did not petition the District Court in regard to the adequacy
of the sales price. We acknowledge that an issue not pre--
sented to the District Court will not be addressed on appeal.
Wyman v. DuBray Land Realty (Mont. 1988), 752 P.2d 196, 200,
45 St.Rep. 621, 625. In view of Galleria Partnership we will
consider this matter in order that litigation will be
terminated.
Although several states have statutes requiring that the
amount realized at a sheriff's sale must reflect the fair
market value of the property, Montana statutes have no such
requirement. See Galleria Partnership, 780 P.2d at 616-17.
Further, in the present case defendants failed to submit any
relevant evidence of fair market value on the date of sale.
There is a total absence of facts demonstrating that $475,000
was not a fair price. We note that the face amount of the
original obligation was $ 3 5 9 , 0 0 0 . The purchase price bid by
the receiver in the amount of $ 4 7 5 , 0 0 0 substantially exceeded
that of the original obligation, even though it was less than
the total judgment of $ 5 6 4 , 0 0 0 . We conclude that the Hamil-
tons have failed to present any evidence requiring an exer-
cise of our equity jurisdiction.
We conclude that Galleria Partnership is distinguishable
from the present case. We affirm the District Court's grant-
ing of the deficiency judgment.
Affirmed.

We Cmcur: /