No. 91-410
IN THE SUPREME COURT OF THE STATE OF MONTANA
1992
MARIE JOHNSTON,
Plaintiff and Appellant,
-vs-
AMERICAN RELIABLE INSURANCE COMPANY,
ROBERT FRANCHUK, DONNA FRANCHUK, and
JANEVA GALAYDA,
Defendants and Respondents.
APPEAL FROM: District Court of the Fourth Judicial District,
In and for the County of Missoula,
The Honorable Jack L. Green, Judge presiding.
COUNSEL OF RECORD:
For Appellant:
Terry G. Sehestedt, Missoula, Montana
For Respondents:
Kim L. Ritter; Milodragovich, Dale & Dye, Missoula,
Montana
Darla J. Keck; Datsopoulos, MacDonald & Lind,
Missoula, Montana
Submitted on Briefs: December 30, 1991
Decided: June 4, 1992
1 Clerk , .
Justice John Conway Harrison delivered the Opinion of the Court.
This action began on April 18, 1989, when appellant, Marie
Johnston (Johnston), filed a complaint in the Fourth Judicial
District Court, Missoula County, alleging conversion and breach of
contract. The District Court granted summary judgment in favor of
the respondents, American Reliable Insurance (Reliable) and Janeva
Galayda (Galayda). Johnston appealed and we remanded the case to
the District Court with instructions to enter grounds for granting
summary judgment in favor of the respondents. Johnston v. American
Reliable Ins. Co. (1991), 248 Mont. 227, 810 P.2d 1189 (Johnston
I).
On remand, the District Court stated its reasons for granting
the respondents' summary judgment. The District Court found that
the Franchuks, the individuals who sold Johnston the mobile home,
lawfully repossessed Johnston's mobile home after proper notice of
default, and that repossession of the mobile home was not covered
under the terms of the homeowner's insurance policy issued by
Reliable. At the time of the lawsuit, the Franchuks had declared
bankruptcy and were protected defendants.
Additionally, the court found that Johnston failed to
establish that Galayda, the owner of the property on which
Johnston's mobile home was located, took possession of the mobile
home converting it to her own use without lawful authority. The
court found that the uncontested facts demonstrated Galayda did not
take or maintain possession of the home, thereby precluding a
wrongful conversion claim. Further, the court found that if
Galayda had chosen to remove the mobile home from her premises, she
possessed the lawful authority to do so based on a July 11, 1988,
Justice Court default judgment. Johnston again appeals. We
reverse and remand.
The factual background leading up to this case has been
previously set forth in Johnston I. Therefore, we will only
address the facts necessary to dispose of this case.
The issue presented for our review is whether the District
Court erred in granting summary judgment in favor of the
respondents and in denying Johnston's motion for partial summary
judgment .
Summary judgment is proper if no genuine issues of material
fact exist and the moving party is entitled to judgment as a matter
of law. Rule 5 6 ( c ) , M.R.Civ.P. The moving party possesses the
initial burden of proving no genuine issues of material fact exist.
Martin v. Dorn Equip. Co. (Mont. lggl), 821 P.2d 1025, 1029, 48 St.
Rep. 978, 980; citing Westmont Tractor Co. v. Continental I, Inc.
(1986), 224 Mont. 516, 521, 731 P.2d 327, 330.
In the case at bar, Reliable, Johnston, and Galayda all moved
the court for summary judgment. Each party argued that no genuine
issues of material fact exist and that it was entitled to judgment
as a matter of law. Finding no genuine issues of material fact,
the District Court held that Reliable and Galayda were entitled to
judgment as a matter of law. Johnston contends that this was
error. We agree.
Essentially, the only issue Johnston raises on appeal is
whether the ~istrictCourt erred in concluding as a matter of law
that Johnston's mobile home was repossessed by someone with lawful
authority to do so. We conclude that the District Court erred in
granting respondents' summary judgment. The undisputed facts of
this case do not support such a legal conclusion.
Conversion requires property ownership, the owner's right of
possession, and the unauthorized control over the property by
another resulting in damages. Lane v. Dunkle (1988), 231 Mont.
365, 368, 753 P.2d 321, 323. Any unauthorized act depriving the
owner of his or her property permanently or for an indefinite time
is conversion. Harri v. Isaac (1940), 111 Mont. 152, 158, 107 P.2d
137, 140. In the case at bar, the record indicates that Johnston
owned the mobile home, entitling her to its possession, and that
Galayda unlawfully converted her home by taking possession of it
without lawful authority to do so.
Galayda argues that since she did not physically remove the
mobile home and never actually had the mobile home in her
possession, she cannot be held liable for conversion. We find this
argument unpersuasive. Galayda caused the removal of the mobile
home by contracting with the Franchuks for its removal. Although
the Franchuks participated in moving the home from Galayda's
premises, they did not repossess the mobile home. They merely
removed the mobile home from Galayda's premises pursuant to the
following written agreement:
It is mutually agreed as of August 17, 1988 that Robert
and Donna Franchuk and, Janeva Galayda will cooperate
with one another in the removal of the mobile home
located at 1 8 0 5 Eaton, Missoula, Montana. Robert and
Donna Franchuk will remove the skirting from the mobile
home prior to the move. Janeva Galayda will pay for the
removal of the mobile home from 1805 Eaton to Old Farm
Road, Lolo, Montana. Said charges for the removal of the
mobile home will be reimbursed to Janeva Galayda by the
Franchuk's [sic] when copies of the moving charges are
submitted to the Franchuk's [sic].
It is undisputed that the Franchuks had no right to repossess the
home as of the date of its removal. Mr. Franchuk acknowledged this
in his deposition; he testified that he acted on Galayda's behalf
when he removed the mobile home because he thought that she
possessed the legal authority to remove it. Additionally, Galayda
testified that she contracted with the Franchuks to remove the
mobile home.
Galayda contends that by virtue of the various notices to quit
the premises and the default judgment she obtained against Johnston
she had the legal authority to physically evict Johnston and her
mobile home from the premises. Although Galayda attempted to
follow correct procedure to lawfully evict Johnston, the procedure
she followed was flawed.
First, Galayda notified Johnston, pursuant to the rental
agreement and 5 70-24-422, MCA, that the rental agreement would be
terminated and Johnston would have to leave the premises if she did
not remove her dogs. Johnston failed to remove the dogs, but she
remained on the premises. Accordingly, the rental agreement was
terminated and Galayda's cause of action against Johnston for
possession of the premises ripened pursuant to 5 70-24-427, MCA.
Galayda did not initiate this action.
Instead, Galayda filed a complaint against Johnston in Justice
Court on June 16, 1988, for back rent from July 1, 1988, and
possession of the premises. As Chief Justice Turnage noted in his
special concurrence in Johnston I, it is difficult for this Court
to understand how back rent could be owed from July 1, 1988, when
the complaint was filed in the middle of June. Regardless of this
apparent mistake, Galayda indicated in her deposition that even
though she received $220 from Johnston, postmarked July 4, 1988,
for June and July rent, she obtained a default judgment on July 11,
1988. This default judgment was based on Galayda's incorrect sworn
affidavit that Johnston still owed approximately $198.1
Although the default judgment awarded money damages only, the
Justice Court issued a Writ of Assistance directing the Missoula
County Sheriff to physically remove Johnston's mobile home from
Galayda's premises. The Sheriff served this writ on Johnston, but
at Galayda's direction, failed to physically remove the mobile
home.
A number of procedural errors occurred during the above
procedure rendering Galayda's subsequent actions in removing the
mobile home unauthorized. First, § 70-24-422, MCA, requires the
landlord to give the tenant notice to pay rent prior to filing a
complaint for non-payment of rent and possession of the premises.
Section 70-24-422, MCA, states:
'~ala~dadetermined that Johnston owed $165 rent for June and
half of July, a contractually imposed late payment fee of $10,
$3.12 in interest, plus $20 in filing and service fees totalling
$198.12.
(2)(a) [I]f rent is unpaid when due and the tenant fails
to pay rent within 3 days after written notice by the
landlord of nonpayment and his intention to terminate the
rental agreement if the rent is not paid within that
period, the landlord may terminate the rental agreement.
(b) For a rental agreement involving a tenant who rents
space to park a mobile home but who does not rent the
mobile home, the notice period referred to in subsection
(2)(a) is 15 days.
Galayda failed to provide Johnston with the requisite fifteen days
notice before filing her complaint. Accordingly, Galayda's
complaint was premature and unfounded in fact.
Second, Galayda obtained the default judgment under somewhat
spurious circumstances by submitting a sworn affidavit stating
Johnston still owed her rent. In fact, Johnston paid Galayda.
Third, the Justice Court issued a Writ of Assistance directing
the Sheriff to remove Johnston's mobile home from Galayda's
premises. Although the Sheriff served the writ, the Sheriff did
not participate in the actual removal of the mobile home. Instead,
Galayda and the Franchuks contracted to remove the mobile home
themselves. Since sheriffs and constables have the only authority
to act under such writs pursuant to 5 25-13-301, MCA, Galayda's
removal of the home by someone other than a sheriff or constable
was unauthorized.
Finally, Galayda served a Notice of Abandonment dated August
17, 1988, on Johnston giving her another fifteen days to remove the
mobile home. Subsequently, the Franchuks moved the mobile home to
their property on Galayda's behalf when Johnston failed to move the
mobile home within fifteen days.
If Johnston abandoned the premises, Galayda was entitled to
7
remove the mobile home from her premises. Section 70-24-430(1),
MCA, states:
If a tenancy terminates in any manner except by court
order and the landlord reasonably believes the tenant has
abandoned all personal property which the tenant has left
on the premises, and a period of time of at least 5 days
has elapsed since the occurrence of events upon which the
landlord formed that belief, the landlord may remove the
property from the premises.
Abandonment is the absolute relinquishment of the premises
consisting of the tenant's act or omission and intent to abandon.
LIC, Inc. v. Baltrusch (1985), 215 Mont. 44, 46-47, 692 P.2d 1264,
1266. Galayda testified during her deposition that she based her
perception of abandonment on a phone call she received from Mrs.
Franchuk. Otherwise, Galayda took no steps to investigate the
situation to determine if, in fact, Johnston had abandoned the
premises. Absent sufficient facts showing absolute relinquishment,
Galayda was without legal authority to remove the mobile home.
Galayda was required to follow g 70-24-430, MCA, when
disposing of the allegedly abandoned property. At minimum, 5 70-
24-430, MCA, requires the landlord to inventory and store the
tenant's personal property in a safe place and reasonably attempt
to notify the tenant in writing that the property must be removed
from the place of safekeeping.
The lower court record is devoid of any references to the
foregoing procedure. It appears from the record before this Court
that Galayda failed to inform Johnston of the location of her
property and failed to notify Johnston of the steps necessary to
reclaim her property. This failure is evidence of Galayda's
unauthorized acts depriving Johnston of her property. Accordingly,
the District Court erred as a matter of law when it granted
Galayda's motion for summary judgment since the undisputed facts
show Galayda wrongfully possessed Johnston's property, constituting
conversion.
Next, it is necessary for this Court to determine whether the
District Court erred in granting summary judgment in Reliable's
favor. Reliable based its motion for summary judgment on the fact
that Johnston's mobile home was lawfully repossessed, precluding
coverage pursuant to the unambiguous language of the insurance
policy. However, in accordance with our above analysis, Johnston's
mobile home was not lawfully repossessed but was converted.
Therefore, Reliable's argument fails.
For Johnston to recover under the comprehensive coverage in
her policy, she was required to prove that Galayda and the
Franchuks had no right to remove and withhold the mobile home.
Pursuant to our above analysis, Johnston met this burden.
Galayda's removal and withholding of Johnston's mobile home was
unauthorized and impermissible, constituting conversion. Johnston
suffered a compensable loss and Reliable is liable under its
policy.
This Court has the power to reverse the district court's grant
of summary judgment and order it to enter summary judgment in favor
of the other party as a matter of law when all facts bearing on the
issue are before this Court. Here, there were no genuine issues of
fact as to whether the acts of the respondents were a conversion of
the mobile home and covered under the policy. Martin, 821 P.2d at
1028, 48 St.Rep. at 980 (citing cases). We hold that the District
Court erred in granting summary judgment in the respondents1 favor.
We reverse and remand to the District Court with directions to
enter partial summary judgment in Johnston's favor and for further
proceedings on the issue of Johnstonlsdamages.
REVERSED.
We concur: i I
Justices
Justice Fred J. Weber dissents as follows:
I understand the desire of the majority to terminate extended
litigation of the type involved in this case. However, I suggest
that improper factual findings and conclusions have been made in
the majority opinion.
As pointed out in the majority opinion, Galayda served a
Notice of Abandonment dated August 17, 1988, on Johnston. That
notice gave her 15 days to remove the mobile home. After Johnston
failed to remove the mobile home within that 15 day period, Galayda
had the mobile home moved by Franchuks. Under the express
provisions of § 70-24-430(1), MCA, such facts establish a statutory
right on the part of Galayda to remove the mobile home. Under the
uncontradicted facts, we must therefore conclude that the moving of
the mobile home from the Galayda trailer court was authorized by
statute. Such an authorized removal does not constitute an
unauthorized act depriving Johnston of her property and therefore
could not constitute a conversion.
The majority points out that under 5 70-24-430, MCA, Galayda
was required to inventory and store the personal property in a safe
place and reasonably attempt to notify the tenant that the property
must be removed. While this was not an issue addressed in the
record, even if we assume a failure to notify Johnston, the
statutes do not warrant a conclusion that such failure to give
notice constitutes a conversion.
The findings of fact and judgment on the part of the District
Court demonstrate that there are material facts in dispute. The
11
District Court concluded that as a result of the justice court
action, Galayda had demonstrated a right to the lawful possession
of the property. In addition, the District Court found the
uncontradicted facts to show that it was the Franchuks who took
possession and not Galayda. Clearly there exist issues of material
fact which prohibit the type of summary judgment reached in the
majority opinion.