No
No. 99-176
IN THE SUPREME COURT OF THE STATE OF MONTANA
1999 MT 178
295 Mont. 268
983 P.2d 390
ENVIRONMENTAL CONTRACTORS, LLC,
Plaintiff and Respondent,
v.
WINFIELD MOON, SR.,
Defendant and Appellant.
file:///C|/Documents%20and%20Settings/cu1046/Desktop/opinions/99-176_(07-27-99)_Opinion.htm (1 of 11)4/9/2007 10:10:51 AM
No
APPEAL FROM: District Court of the Thirteenth Judicial District,
In and for the County of Yellowstone,
Honorable Diane G. Barz, Judge Presiding.
COUNSEL OF RECORD:
For Appellant:
M. Dayle Jeffs and Rodney W. Rivers, Jeffs & Jeffs, Provo, Utah
Kenneth D. Peterson, Peterson & Schofield, Billings, Montana
For Respondent:
Gerald B. Murphy and Christopher J. Flann, Moulton, Bellingham,
Longo and Mather, Billings, Montana
Submitted on Briefs: July 1, 1999
Decided: July 27, 1999
file:///C|/Documents%20and%20Settings/cu1046/Desktop/opinions/99-176_(07-27-99)_Opinion.htm (2 of 11)4/9/2007 10:10:51 AM
No
Filed:
__________________________________________
Clerk
Chief Justice J. A. Turnage delivered the Opinion of the Court.
¶1. Winfield Moon, Sr. (Moon), appeals from the entry of summary judgment by the
Thirteenth Judicial District Court, Yellowstone County, in favor of Environmental
Contractors, LLC (Environmental), in an action to recover amounts due under two
promissory notes. We affirm.
ISSUES
¶2. 1. Is this appeal subject to dismissal for Moon's failure to comply with the
mandatory mediation requirements of Rule 54(a), M.R.App.P.?
¶3. 2. Did the District Court err when it ruled on the motion for summary judgment
without allowing Moon the opportunity to conduct further discovery?
¶4. 3. Did the District Court err in granting summary judgment in favor of
Environmental?
¶5. 4. Did the District Court err in denying Moon's motion to consolidate this matter
with a separate action filed by Environmental for breach of contract?
file:///C|/Documents%20and%20Settings/cu1046/Desktop/opinions/99-176_(07-27-99)_Opinion.htm (3 of 11)4/9/2007 10:10:51 AM
No
BACKGROUND
¶6. On September 5, 1996, Moon entered into a contract with Environmental for the
dismantling and salvage of the F.W. Bird Power Plant in Billings, Montana. As part
of the agreement between the parties, Moon executed two promissory notes in favor
of Environmental. The first note was made in the principal amount of $100,000,
payable by an initial installment of $50,000 on or before January 1, 1997, and a final
installment of $50,000 on or before June 1, 1997. Moon failed to pay either
installment, and on March 11, 1997, the parties agreed to extend the payment date on
the entire note to May 17, 1997.
¶7. The second note was made in the principal amount of $55,000, payable by
cashier's check on or before May 13, 1997, and accruing interest at the rate of 10
percent per annum from September 5, 1996, until payment of the note. The note
recites that the instrument was executed by Moon in exchange for Environmental's
promise to forego immediate collection action on a dishonored check on which Moon
had wrongfully stopped payment. Moon had issued the check to Environmental for
the purpose of obtaining additional bonding on the salvage project.
¶8. Environmental filed the present action to collect the amounts due under the two
promissory notes, along with a separate action alleging breach of contract on the
salvage project. Moon acknowledged in his pleadings before the District Court that
he executed the promissory notes, but asserted, among other things, that the amounts
due on the notes had been paid from other sources, or in the alternative, that the
notes were not enforceable for lack of consideration. Moon also filed a motion before
the District Court requesting that this action be consolidated with Environmental's
breach of contract claim. The District Court denied Moon's motion to consolidate.
¶9. Environmental filed a motion for summary judgment for the amounts of the
promissory notes, along with supporting affidavits stating that both notes were in
default. The District Court initially scheduled a hearing on the summary judgment
motion for October 14, 1998, but subsequently moved the hearing back by one week
due to a conflict in attorney schedules.
¶10. Moon filed a motion pursuant to Rule 55(f), M.R.Civ.P., seeking to have the
file:///C|/Documents%20and%20Settings/cu1046/Desktop/opinions/99-176_(07-27-99)_Opinion.htm (4 of 11)4/9/2007 10:10:51 AM
No
summary judgment hearing further continued so that additional discovery could be
performed. The District Court effectively denied this motion when it conducted the
summary judgment hearing and granted summary judgment in favor of
Environmental.
¶11. Moon appeals the denial of his motion to consolidate, the de facto denial of his
motion to continue, and the grant of summary judgment in favor of Environmental.
Environmental raises the additional issue of whether Moon's conduct during the
mandatory mediation process of Rule 54, M.R.App.P., warrants the dismissal of
Moon's appeal.
DISCUSSION
¶12. 1. Is this appeal subject to dismissal for Moon's failure to comply with the
mandatory mediation requirements of Rule 54, M.R.App.P.?
¶13. In its appellate brief, Environmental urges this Court to sanction Moon for his
uncooperative behavior during the appellate mediation process mandated by Rule
54, M.R.App.P., by dismissing this appeal. In particular, Environmental argues that
Rule 54(e)(3), M.R.App.P, requires the mediation conference to be held in person
except where impractical due to time, distance or other considerations, and that
Moon's failure to appear in person at the mediation conference constitutes grounds
for sanctions under the Rule. As support for its request for sanctions, Environmental
relies on a letter by the mediator in which Moon's participation in the mediation is
summarized as follows:
At the appointed time for mediation, namely, 9:00 a.m., May 3, 1999, Mr. Moon did not
appear. Mr. Frank Kolendick, on behalf of Respondent, did appear in person. Mr. Jeffs,
counsel for Mr. Moon, did appear and indicated that Mr. Moon was unable to obtain a
plane from Salt Lake City Sunday afternoon and evening or early Monday morning. He
explained that he was on the waiting list for three planes on Sunday and one Monday
morning but that he was not able to get on any of the airplanes. At my suggestion, we
made phone contact with Mr. Moon and asked him to explain further. At that time, and in
front of the other persons at the mediation, he indicated that he did not obtain a reservation
in advance and made no effort to do so.
file:///C|/Documents%20and%20Settings/cu1046/Desktop/opinions/99-176_(07-27-99)_Opinion.htm (5 of 11)4/9/2007 10:10:51 AM
No
Notwithstanding his absence, at my request we made some effort to determine the position
of the parties and to engage in some meaningful mediation with Mr. Moon participating
by phone. The mediation was not successful.
¶14. Moon responds that his failure to personally attend the mediation conference
did not violate Rule 54, because the Rule expressly provides that a party may
participate in a mediation conference via a representative, provided that
representative has full authority to engage in settlement negotiations. Although
Moon was unable to attend the conference, his counsel, Mr. Jeffs, was in attendance
and had full authority to negotiate on Moon's behalf. Moreover, Moon argues, Rule
54 makes no provision for the imposition of sanctions against a party who declines to
participate in mediation.
¶15. Although Environmental is correct that under Rule 54(e)(3), M.R.App.P., in-
person meetings are the preferred medium of communication for mediation
conferences, this Rule addresses only the means by which the conference may be
conducted, not who is required to attend. That requirement is addressed in Rule 54(e)
(8), M.R.App.P., which expressly provides that "[e]ach party, or a representative of
each party with authority to participate in settlement negotiations and effect a
complete compromise of the case, shall be required to participate in the mediation
conference." Based on the record before us, we hold that Moon's participation in the
mediation process was within the bounds permitted by Rule 54, M.R.App.P.,
notwithstanding his failure to appear in person at the mediation conference.
¶16. Because we hold that Moon's conduct during the settlement negotiations did not
violate the parameters of Rule 54, M.R.App.P., we decline at this time to address
whether a party may be sanctioned under Rule 54 for failure to participate in
mandatory alternative dispute resolution on appeal.
¶17. 2. Did the District Court err when it ruled on the motion for summary judgment
without allowing Moon the opportunity to conduct further discovery?
¶18. Moon contends that Environmental's motion for summary judgment was
premature because of an inadequate opportunity to depose various persons or obtain
documents which might demonstrate whether payment on the notes was made, and if
so, in what manner.
file:///C|/Documents%20and%20Settings/cu1046/Desktop/opinions/99-176_(07-27-99)_Opinion.htm (6 of 11)4/9/2007 10:10:51 AM
No
¶19. Rule 56(f), M.R.Civ.P., provides that:
Should it appear from the affidavits of a party opposing the motion that the party cannot
for reasons stated present by affidavit facts essential to justify the party's opposition, the
court may refuse the application for judgment or may order a continuance to permit
affidavits to be obtained or depositions to be taken or discovery to be had or may make
such other order as is just.
District courts have inherent discretionary power to control discovery. J.L. v.
Kienenberger (1993), 257 Mont. 113, 119, 848 P.2d 472, 476. This discretionary power
extends to deciding whether to deny or to continue a motion for summary judgment
pursuant to Rule 56(f), M.R.Civ.P. Howell v. Glacier General Assur. Co. (1989), 240
Mont. 383, 386, 785 P.2d 1018, 1019. A district court does not abuse its discretion in
denying a Rule 56(f), M.R.Civ.P., motion where the party opposing a motion for summary
judgment does not establish how the proposed discovery could preclude summary
judgment. Howell, 240 Mont. at 386, 785 P.2d at 1020.
¶20. In his Memorandum of Points and Authorities In Support of Defendant's
Motion for Rule 56(f) Continuance, Moon listed the names of a number of persons
whom he wished to depose prior to the summary judgment hearing. These
depositions were necessary, Moon asserted, because "[e]ach of these parties have
knowledge or information which are relevant to the allegations set forth by the
Plaintiffs in the Complaint as well as the defenses and allegations set forth by the
Defendant in his Answer and Counterclaim." Moon also submitted the affidavit of
his counsel, in which counsel again states that the deposition of these persons is
necessary in order for Moon to properly respond to Environmental's motion for
summary judgment because these parties "have knowledge of the facts and
circumstances of the case, including allegations made by the Plaintiff."
¶21. Neither Moon's briefs nor the supporting affidavit of counsel establish how the
proposed discovery could preclude summary judgment. It was Moon's burden to
explain what new facts could have been obtained through further discovery which
could defeat Environmental's motion, and this he failed to do. We hold therefore that
the District Court did not abuse its discretion in conducting the summary judgment
hearing and ruling on Environmental's motion without allowing Moon the
file:///C|/Documents%20and%20Settings/cu1046/Desktop/opinions/99-176_(07-27-99)_Opinion.htm (7 of 11)4/9/2007 10:10:51 AM
No
opportunity to conduct further discovery.
¶22. 3. Did the District Court err in granting summary judgment in favor of
Environmental?
¶23. Our standard of review of the grant of summary judgment by the district court
is the same as that used by the district court under Rule 56(c), M.R.Civ.P. Matter of
Estate of Lien (1995), 270 Mont. 295, 298, 892 P.2d 530, 532. Summary judgment may
be granted where there are no genuine issues of material fact and the moving party is
entitled to judgment as a matter of law. Rule 56(c), M.R.Civ.P. In a motion for
summary judgment the moving party has the initial burden of showing an absence of
material fact, upon which the burden shifts to the opponent to affirmatively
demonstrate that an issue of material fact exists. Owen v. Ostrum (1993), 259 Mont.
249, 255-56, 855 P.2d 1015, 1019. Mere denial or speculations will not suffice; the
nonmovant must show facts sufficient to raise a genuine issue. Taylor v. Koslosky
(1991), 249 Mont. 215, 217, 814 P.2d 985, 986.
¶24. In its Order and Memorandum granting Environmental's motion for summary
judgment, the District Court concluded that no genuine issues of material fact existed
with regard to whether the notes had been paid. The District Court based this
conclusion on the fact that
the only actual evidence the Court has concerning payment is that payment, according to
the terms of the notes, has not been made. Defendant could have easily rebutted this
assertion by submitting an Affidavit of his own stating that he has paid the notes.
Defendant has not done this, however, and the Court is left with only one conclusion; that
the notes have not been paid according to their terms.
¶25. In his appellate brief, Moon argues that his failure to submit an affidavit stating
that payment on the notes had been made was due in part to the District Court's
denial of his motion for continuance and his resulting inability to perform proper
discovery in this case. "It is unjust and unreasonable," Moon argues, "for the
District Court to criticize the Plaintiff's [sic] failure to submit evidence, when the
Court itself improperly restricted Defendant's access to said evidence."
¶26. As discussed above, the District Court's denial of Moon's motion for
continuance of the summary judgment hearing so that additional discovery could be
file:///C|/Documents%20and%20Settings/cu1046/Desktop/opinions/99-176_(07-27-99)_Opinion.htm (8 of 11)4/9/2007 10:10:51 AM
No
performed was a proper exercise of that court's discretion based upon Moon's failure
to provide the District Court with an adequate explanation of what additional
discovery was likely to produce. We therefore reject Moon's argument that the
District Court erred in granting summary judgment based on the evidence before it
at the time of the hearing.
¶27. Moon also argues that the District Court erred in granting summary judgment
on the promissory notes because there was a genuine issue of material fact regarding
whether the notes were unenforceable for lack of consideration. The District Court
found that this fact was not in dispute because "the notes clearly state that the
consideration Defendant received was the Plaintiff's forbearance on collecting the
underlying debts for the dishonored check and the failure to pay the original note."
¶28. Section 26-1-602(21), MCA, creates a rebuttable presumption arising from the
fact of the note itself that the note was given for sufficient consideration. Rule 301(b)
(2), M.R.Evid., states that a disputable presumption may be overcome by a
preponderance of the evidence contrary to the presumption; otherwise, the trier of
fact is bound to find the assumed fact in accordance with the presumption.
¶29. The introduction of the notes into evidence before the District Court created a
rebuttable presumption that proper consideration was given in exchange for the
notes. It was Moon's burden to show that an issue of material fact existed regarding
whether such consideration in fact existed. Although Moon asserted in his pleadings
that, if deposed, Lee Alt, the architectural engineer hired by Moon to oversee the
dismantling of the power plant and arrange payment to Environmental, would likely
testify that the notes were not supported by any consideration, this assertion was
contradicted by Alt's own affidavit, filed in support of Environmental's motion for
summary judgment, in which Alt testified that both notes were supported by
adequate consideration at the time of their execution.
¶30. Moon's other conclusory and speculative statements in his pleadings, briefs, and
the affidavit of counsel submitted with his motion to continue do not constitute
sufficient factual evidence to carry Moon's burden of demonstrating that a genuine
issue of material fact existed contrary to the presumption of valid consideration
accorded to these notes under the law. We therefore affirm the District Court's
conclusion that the notes were not unenforceable for lack of consideration and its
award of summary judgment in favor of Environmental.
file:///C|/Documents%20and%20Settings/cu1046/Desktop/opinions/99-176_(07-27-99)_Opinion.htm (9 of 11)4/9/2007 10:10:51 AM
No
¶31. 4. Did the District Court err in denying Moon's motion to consolidate this
matter with a separate action filed by Environmental for breach of contract?
¶32. Rule 42(a), M.R.Civ.P., states:
When actions involving a common question of law or fact are pending before the court, it
may order a joint hearing or trial of any or all the matters in issue in the actions; it may
order all the actions consolidated; and it may make such orders concerning proceedings
therein as may tend to avoid unnecessary costs or delay.
We review a district court's denial of a motion to consolidate for an abuse of discretion.
Tribby v. Northwestern Bank of Great Falls (1985), 217 Mont. 196, 208, 704 P.2d 409,
416.
¶33. Moon argues that the District Court abused its discretion in denying its motion
to consolidate this action with Environmental's breach of contract claim because
both actions involved common questions of law and fact; it would have been more
cost efficient for the parties to have the actions consolidated; and the court's refusal
to consolidate the actions creates the possibility of conflicting and duplicative
judgments against Moon. Environmental responds that the two actions do not
involve common issues of fact and law because the contract on the salvage project
was entirely independent and apart from Moon's obligations on the promissory
notes, and the fact that the two actions involve the same parties is not sufficient
grounds to justify consolidation.
¶34. After reviewing the promissory notes at issue and the complaints filed in both
actions, the District Court determined that the salvage contract and the promissory
notes constituted separate and independent obligations, neither referencing or
incorporating the terms of the other. Additionally, the District Court determined
that the amounts in controversy in each action were different and independent of one
another. Finally, the District Court determined that while the action on the salvage
contract involved issues of law regarding contract interpretation, the primary issues
in this action were simply questions of fact.
¶35. Our review of the record supports the District Court's denial of Moon's motion
to consolidate the actions between these parties based on the reasons given by the
court. We find no abuse of discretion in the District Court's ruling and therefore
file:///C|/Documents%20and%20Settings/cu1046/Desktop/opinions/99-176_(07-27-99)_Opinion.htm (10 of 11)4/9/2007 10:10:51 AM
No
affirm that ruling.
¶36. Affirmed.
/S/ J. A. TURNAGE
We concur:
/S/ KARLA M. GRAY
/S/ JAMES C. NELSON
/S/ W. WILLIAM LEAPHART
/S/ TERRY N. TRIEWEILER
file:///C|/Documents%20and%20Settings/cu1046/Desktop/opinions/99-176_(07-27-99)_Opinion.htm (11 of 11)4/9/2007 10:10:51 AM