NO. 94-524
IN THE SUPREME COURT OF THE STATE OF MONTANA
1995
MARTA CORPORATION, a Montana
corporation, PAUL R. SMITH and
DONNA C. SMITH, husband and wife;
WALTER J, VERMEDAHL and PATRICIA
L. VERMEDAHL, husband and wife;
and ARLEN WISSEMAN,
Plaintiffs, Counterclaim Defendants
and Appellants,
ROBERT A. THOFT and SUSIE M. THOFT,
husband and wife,
Defendants, Counterclaimants
and Respondents.
APPEAL FROM: District Court of the Twentieth Judicial District,
1n and for the County of Lake,
The Honorable Michael H. Keedy, Judge presiding.
COUNSEL OF RECORD:
For Appellant:
Douglas J. Wold; wold Law Firm, Polson, Montana
For Respondent:
Sam E. Haddon; Boone, Karlberg & Haddon, Missoula
Montana
Submitted on Briefs: February 23, 1995
Decided: May 4, 1995
Filed:
Justice W. William Leaphart delivered the Opinion of the Court
Marta Corporation, Paul and Donna Smith, Walter and Patricia
Vermedahl, and Arlen Wisseman (Appellants) appeal from the
September 23, 1994 order of the Twentieth Judicial District, Lake
County, denying their motion requesting reconsideration of court
orders enforcing a stipulation and relief from an order granting a
show cause hearing to find Appellants in contempt. We affirm.
This case started with a water rights dispute involving
conflicting claims to waters of White Earth Creek and to the Irvine
Flats aquifer in Lake County. Appellants and Robert and Susie
Thoft (Respondents) claim water rights in White Earth Creek, which
flows through the parties' properties. Respondents hold irrigation
water claims from a well which draws its water from the Irvine
Flats aquifer. Additionally, one Appellant party, the Smiths, have
a developed spring which draws its waters from the Irvine Flats
aquifer. Appellants, all neighboring ranchers, sued Respondents
for injunctive relief arising from Respondents' use of surface and
ground water.
This case was originally filed on September 30, 1992. On May
5, 1993, the District Court entered an order appointing a Special
Master to effect an agreement for interim management of the water
rights at issue. The Special Master completed a report and
recommendation on June 30, 1993, but it was set aside by the court
on August 11, 1993 because of "substantial error in the
proceedings."
On May 12, 1994, the morning of the scheduled trial, the court
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initiated settlement discussions, during which the parties agreed
to general settlement terms. The court directed the parties'
attorneys to meet and prepare a stipulation for entry of an order.
The court scheduled a meeting for 6:00 p.m. on May 19, 1994 for
entry of the order. On May 16, 1994, Respondents' counsel sent a
draft stipulation to Appellants' counsel. On May 19, 1994,
Respondents' counsel sent Appellants' counsel the final form of the
stipulation: Appellants' counsel signed and mailed the stipulation
to the court and the parties that same day. He did not have client
approval but anticipated their approval for three reasons: First,
they had an urgent need for water, second, the terms of the
stipulation provided for modification if it became unworkable, and
third, the court imposed the May 19 deadline. The next day, in
accordance with the stipulation, counsel filed a motion to replace
the Special Master.
Appellants received the stipulation on May 23, 1994 and they
concluded that the written stipulation was unacceptable. They were
not able to talk with their counsel until May 24, 1994. Appellants
allege that after they explained to him that it was unacceptable,
he called the court and spoke with the judge's assistant. At that
time the stipulation had not been signed by the judge. Appellants
allege that their counsel told the judge's assistant he wanted to
withdraw the stipulation and she agreed to withdraw it and notify
the judge that further documents would be filed. Appellants allege
that, relying on the judge's assistant's assurances, they believed
that the stipulation had been withdrawn. On May 26, 1994,
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Appellants' counsel signed and mailed a motion to reschedule the
trial date.
On May 29, 1994, the court signed the stipulation and order
that both parties' counsel had signed on May 19, 1994. on May 31,
1994, Respondents filed their motion to enforce the stipulation and
order. On June 6, 1994, the stipulation was filed with the clerk
of court. On June 14, 1994, Respondents wrote to Appellants Smiths
that they (Respondents) intended to enforce the signed stipulation
and that unless the Smiths wrote a letter indicating a willingness
to "honor and carry out" the terms of the stipulation, they would
commence contempt proceedings. on July 7, 1994, Respondents moved
for an order to show cause why the Smiths should not be held in
contempt for their failure to carry out the terms and conditions of
the stipulation. On July 15, 1994, the court granted Respondents'
motion to enforce the stipulation and order (and for attorney's
fees and costs) and denied Appellants' motion to reschedule the
trial date. On September 23, 1994, the District Court denied
Appellants' motion for relief from, and reconsideration of, its
June 6 and July 15 orders, and granted Respondents' request to
prepare and submit an order to show cause regarding Appellants'
contempt. This appeal followed.
Two issues are presented on appeal:
1. Did the District Court err in denying Appellants relief
from the court's orders of June 6 and July 15, 1994?
2. Did the District Court err in granting Respondents'
motion for a show cause hearing to find Appellants in contempt for
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not complying with the June 6, 1994 order?
I
Did the District Court err in denying Appellants relief from
the court's orders of June 6 and July 15, 1994?
In Hetherington v. Ford Motor Company (19931, 257 Mont. 395,
849 P.Zd 1039, after settlement negotiations, it appeared as if the
parties had reached a settlement agreement. The Hetheringtons
agreed to Ford's settlement offer and gave their counsel authority
to accept the offer. Their counsel sent a letter stating that his
clients had decided to accept Ford's offer of settlement. The
letter specified the amount of the settlement offer, the parties'
contributions, and stated that each party would forward certain
paperwork. Hetherington, 849 P.Zd at 1041.
Four days after this letter was sent, the Hetheringtons wrote
a letter to their counsel indicating that they were discharging him
and his firm, that they were not interested in the settlement which
had been offered, and that they did not wish him to negotiate
further on their behalf. The Hetheringtons contended that it was
their understanding that their right to bring their claim would be
preserved until the "written settlement agreement was formally
approved and executed." Hetherington, 849 P.2d at 1041. We held
that "[aIn agreement is binding if made by an unconditional offer,
and accepted unconditionally." Hetherington, 849 P.2d at 1042. In
that case, we held that the attorney's letter, and conference
between the Hetheringtons and their attorney, "disclosed no
conditions or manifestations of conditional intent." Hetherington,
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849 P.2d at 1042.
In the instant case, during the May 12 settlement discussion,
the parties agreed to general terms, and the parties' counsel were
instructed to meet and prepare a stipulation for entry of an order.
Appellants' attorney executed a signed stipulation and submitted it
to the judge for his signature. As in Hetherington, there were no
conditions placed on Appellants' acceptance of the settlement
agreement. Appellants and Respondents were present and represented
at the settlement discussion and therefore were party to the
agreement on general terms. Although Appellants argue strenuously,
after the fact, that the written stipulation did not meet their
wishes and was unacceptable to them, they do not point to any
specific instances wherein the written stipulation is contrary to
what they agreed to at the May 12 settlement conference.
Appellants argue that their attorney was unauthorized to
execute the stipulation and that the court mistakenly entered the
stipulation after it had been withdrawn. Appellants, however, were
participants in the May 12, 1994 settlement discussion, at which
time the terms of the stipulation were formulated. Applying the
rationale of Hetherington to these facts, we hold that Appellants
are bound by the terms of the written stipulation signed by their
counsel pursuant to the Appellants' participation in a settlement
conference. "The intentions of the parties are those disclosed and
agreed to in the course of negotiations. A party's latent
intention not to be bound does not prevent the formation of a
binding contract." Hetherington, 849 P.2d at 1042. The instant
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case is more compelling than Hetherington which involved oral
settlement negotiations followed by a letter of acceptance. Here
we have a signed stipulation filed with the court. That Appellants
no longer wish to be bound by the settlement agreement, as set
forth in the written stipulation, does not excuse them from
complying with the terms of that stipulation.
II
Did the District Court err in granting Respondents' motion for
a show cause hearing to find Appellants in contempt for not
complying with the June 6, 1994 order?
In its September 23, 1994 order and memorandum, the District
Court granted Respondents' request to prepare and submit an order
to show cause regarding Appellants' alleged contempt for not
complying with the signed stipulation. No hearing has been held on
this issue. The Smiths argue that the facts do not support their
contempt and no hearing should be held. We do not rule on the
former contention and we disagree with the latter contention.
Rule 1 of the Rules of Appellate Procedure states in part:
(b) In civil cases a party aggrieved may appeal
from a judgment or order, except when expressly made
final by law, in the following cases:
(1) From a final judgment entered in an action or
special proceeding commenced in a district court, or
brought into a district court from another court or
administrative body.
No contempt hearing was held and no final judgment regarding the
Smiths' contempt was issued. It is premature for us to rule on
this issue.
Affirmed
Justi&&
We concur:
May 4‘, 1995
CERTIFICATE! OF SERVICE
I hereby certify that the following certified orde:r was sent by United States mail, prepaid, to the
following named:
Douglas J. Wold, Esq.
Wold Law Firm
P.O. Box 1212
Polson, MT 59860-1212
Sam E. Haddon, Esq.
Boone, Karlberg & Haddon
P.O. Box 9199
Missoula, MT 59807-9199
ED SMITH
CLERK OF T‘HE SUPREME COURT
STATE OF MONTANA
,BY: *
Deputy