No. 01-274
IN THE SUPREME COURT OF THE STATE OF MONTANA
2002 MT 98
RICHARD S. SHEPHERD, d/b/a WEBER CO.,
Plaintiff/Appellant/Cross-Respondent,
v.
CARBON COUNTY BOARD OF COMMISSIONERS
and DOES A-Z,
Defendant/Respondent/Cross-Appellant.
APPEAL FROM: District Court of the Twenty-Second Judicial District,
In and for the County of Carbon,
The Honorable Blair Jones, Judge presiding.
COUNSEL OF RECORD:
For Appellant:
Jacqueline T. Lenmark, Keller, Reynolds, Drake, Johnson & Gillespie, P.C.,
Helena, Montana
For Respondent:
Steven R. Milch, Crowley, Haughey, Hanson, Toole & Dietrich, Billings,
Montana
Submitted on Briefs: November 2, 2001
Decided: May 9, 2002
Filed:
__________________________________________
Clerk
Justice Terry N. Trieweiler delivered the Opinion of the Court.
¶1 The Appellant, Richard S. Shepherd, brought an action in the
District Court for the Twenty Second Judicial District in Carbon
County in which he alleged that the Respondents, the Carbon County
Board of Commissioners and Does A-Z, violated his civil rights and
were negligent when the County Treasurer redeemed real property for
which Weber Co. held an assignment of the tax sale certificate
without collecting the full sum statutorily required for
redemption. The District Court dismissed the civil rights claim,
denied Respondents' motion for attorney fees and costs, and granted
summary judgment to Respondents on the issue of negligence.
Shepherd appeals the order of the District Court which dismissed
his civil rights claim and from the District Court order which
granted summary judgment to Respondents. The Respondents cross-
appeal the District Court's order which denied their motion for
attorney fees. We affirm in part, reverse in part, and remand to
the District Court for further proceedings.
¶2 The following issues are presented on appeal:
¶3 1. Did the District Court err when it concluded that
Shepherd's § 1983 claim failed to state a claim upon which relief
can be granted?
¶4 2. Did the District Court err when it granted summary
judgment to Carbon County on the issue of negligence?
¶5 3. Did the District Court err when it denied Carbon County's
motion for attorney fees and costs of suit?
FACTUAL BACKGROUND
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¶6 On November 17, 1998, the Carbon County Treasurer issued an
assignment of tax sale certificate for the Roman Theater in Red
Lodge, Montana, to the Appellant, Richard S. Shepherd. The
redemption period for the property was to expire on February 13,
1999. However, on February 8, 1999, the record owner, Tom Averill,
redeemed the property by paying $4,407.28. The Carbon County
Treasurer unintentionally overlooked an additional $56.30 for the
interest which had accrued between the December 15, 1998, date of
Notice That a Tax Deed May Be Issued and the date of redemption.
¶7 On October 28, 1999, Shepherd filed a complaint in the
District Court for the Twenty Second Judicial District in Carbon
County in which he alleged that the County's failure to collect the
statutorily required amount for redemption deprived him of a
property interest without due process of law. Shepherd requested
general damages in an amount later determined to be $250,000.00,
punitive damages, and attorney fees and costs pursuant to 42 U.S.C.
§ 1983. On November 22, 1999, $56.30 plus interest was tendered by
the County to Shepherd, but that amount was rejected. Shepherd
added a negligence claim in an Amended Complaint filed on March 21,
2000.
¶8 On August 4, 2000, following a hearing, the District Court
dismissed the § 1983 claim but denied the County's motion for
attorney fees as the prevailing party. On January 17, 2001, the
District Court awarded summary judgment to the County on the
negligence claim, subject to payment of the $60.73 of accumulated
interest then owed to Shepherd. Shepherd now appeals from the
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District Court's order which dismissed his § 1983 claim and from
the order which granted summary judgment to the County on the issue
of negligence. The County cross-appeals that portion of the
District Court's order which denied its motion for attorney fees as
the prevailing party to a § 1983 suit. We affirm in part, reverse
in part, and remand to the District Court for further proceedings
consistent with this opinion.
DISCUSSION
ISSUE 1
¶9 Did the District Court err when it concluded that Shepherd's §
1983 claim failed to state a claim upon which relief can be
granted?
¶10 Whether a complaint fails to state a claim upon which relief
can be granted is a conclusion of law subject to this Court's
determination of whether a district court's interpretation of the
law is correct. Boreen v. Christensen (1994), 267 Mont. 405, 408,
884 P.2d 761, 762.
¶11 Shepherd argues that he has properly stated a claim pursuant
to 42 U.S.C. § 1983 because a tax lien is a substantive property
right that may not be taken without due process and compensation.
He cites our holding in James Talcott Const., Inc. v. P&D Land
Enter. (1993), 261 Mont. 260, 862 P.2d 395, for the notion that a
tax lien is a constitutionally protected property right and, based
on that premise, contends that the County's failure to collect the
full amount required for redemption violated his civil rights and
entitled him to damages and attorney fees pursuant to § 1983.
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¶12 The County contends that before § 1983 can be implicated,
Shepherd has to demonstrate that he lost a property right and that,
in this case, he had none to lose. The County asserts that as a
matter of law the assignee of a tax sale certificate has a mere
inchoate right which can ripen into title under circumstances that
did not occur in this case because the property was redeemed.
¶13 Without discussing whether Shepherd had a property right, we
conclude that his claim fails as a matter of law for other obvious
reasons. To prevail on a § 1983 claim, "the plaintiff must
establish: (1) a violation of rights protected by the United
States Constitution or created by federal statute, (2) proximately
caused (3) by conduct of a "person" (4) acting under color of state
law." Orozco v. Day (1997), 281 Mont. 341, 347, 934 P.2d 1009,
1012.
¶14 The right Shepherd alleges was violated was his right to due
process guaranteed by the Fourteenth Amendment to the United States
Constitution. However, the process he was due is set forth at §§
15-18-111 to -114, MCA, pertaining to redemption of tax liens and,
except for the inadvertent miscalculation of the interest due, that
process was followed.
¶15 The miscalculation was, at most, a ministerial error. It
resulted in an underpayment of $56.30 which was later tendered with
interest but rejected by Shepherd. To equate this miscalculation
with a denial of due process would trivialize the Constitution and
the important remedial purpose that § 1983 serves. Because there
was no denial of due process, there was no § 1983 claim.
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Therefore, we hold that the District Court did not err when it
concluded that Shepherd's § 1983 claim should be dismissed pursuant
to Rule 12(b)(6), M.R.Civ.P. Accordingly, that portion of the
District Court's August 4, 2000, order is affirmed.
ISSUE 2
¶16 Did the District Court err when it granted summary judgment to
Carbon County on the issue of negligence?
¶17 The District Court granted summary judgment to the County
based on its conclusion that § 15-18-114, MCA, provides that when a
tax lien is redeemed, a prospective tax deed purchaser is owed the
money paid plus interest. Therefore, the District Court reasoned
that § 15-18-114, MCA, provides the remedy for the lienholder and
limits the amount of recovery. The District Court noted that
$56.30 of interest was owed, and that that amount, plus interest,
was offered prior to litigation.
¶18 Shepherd contends that the District Court erred when it
dismissed the negligence claim by summary judgment. First,
Shepherd contends that the procedure for redeeming tax liens is set
forth at §§ 15-18-112, -113, MCA, and that because the County did
not comply with that procedure, the Treasurer was negligent for
which he is entitled to compensatory damages. Second, Shepherd
contends that § 15-18-114, MCA, merely outlines the redemption
procedure when the property is properly redeemed. According to
Shepherd, it does not apply to a situation such as this where a
negligence action is brought for improperly extinguishing a lien.
Shepherd contends that the applicable statute is § 27-1-317, MCA,
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which provides that for breach of an obligation not arising from a
contract, the measure of damages is the amount which compensates
for all detriment caused.
¶19 Regardless of the statute relied on, Shepherd was tendered all
the damage caused by the Treasurer's omission when he was offered
$56.30 plus interest on November 22, 1999. Had the Treasurer not
been mistaken, that is the full additional amount he would have
received. Once tendered, it was no longer owed. Without damages,
there is no claim for negligence. Accordingly, the District
Court's order which granted summary judgment to the County on the
issue of negligence is affirmed.
ISSUE 3
¶20 Did the District Court err when it denied Carbon County's
motion for attorney fees and costs of suit?
¶21 On cross-appeal, the County contends that the District Court
erred when it declined to award the County attorney fees as the
prevailing party on a § 1983 claim. The District Court found that
Shepherd's action was not unreasonable or vexatious, and on that
basis declined to award attorney fees to the County. We review a
district court's findings of fact to determine whether they are
clearly erroneous. Daines v. Knight (1995), 269 Mont. 320, 324,
888 P.2d 904.
¶22 A district court may award attorney fees to a prevailing
defendant upon finding that the plaintiff's action was frivolous,
unreasonable, or without foundation. Hughes v. Rowe (1980), 449
U.S. 5, 14, 101 S.Ct. 173, 178, 66 L.Ed.2d 163. Furthermore, an
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award of attorney fees to the prevailing defendant in a § 1983 case
is warranted if a plaintiff continued to litigate after it became
apparent that his action lacked factual or legal substance. See,
e.g., Hughes, 449 U.S. at 15, 101 S.Ct. at 178.
¶23 Despite Shepherd's contentions at the hearing that the amount
the Treasurer failed to charge for redemption is irrelevant, we
conclude that bringing a civil rights claim resulting from a
clerical error that amounted to $56.30 of damages is unnecessary,
vexatious, and without basis in Montana law. It is disingenuous at
best to contend that by virtue of a ministerial mistake, Shepherd
has suffered denial of due process for which he is entitled to
damages over and above the amount to which he would have recovered
pursuant to § 15-18-114, MCA, had no clerical error ever occurred.
¶24 Therefore, we conclude that Shepherd's § 1983 claim was
groundless, meritless, and vexatious and that the District Court's
contrary finding was clearly erroneous. We note that even after
Shepherd was tendered the full amount he was owed, he proceeded
cavalierly to engage in litigation which required the County to
defend his meritless claim. Given these circumstances, the County
is entitled to its attorney fees and costs associated with its
motion to dismiss the § 1983 claim. Accordingly, we remand to the
District Court for a determination of that amount.
¶25 For these reasons, we affirm in part, reverse in part, and
remand to the District Court for further proceedings consistent
with this opinion.
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/S/ TERRY N. TRIEWEILER
We Concur:
/S/ JAMES C. NELSON
/S/ PATRICIA COTTER
/S/ JIM REGNIER
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Chief Justice Karla M. Gray, concurring in part and dissenting in
part.
¶26 I join in the Court's opinion on issues one and two. I
respectfully dissent from that opinion on issue three, however, wherein
the Court reverses the District Court's denial of the County's motion for attorney fees.
¶27 The Court correctly cites to Hughes for the test to be applied
by a trial court in determining whether to award attorney fees to a
defendant prevailing on an asserted §1983 claim. Rephrased only
slightly from the Court's opinion, the test is that, upon a finding
that the plaintiff's action was frivolous, unreasonable or without
foundation, a district court may award attorney fees to a
prevailing defendant. In other words, first there must be an
affirmative finding and, thereafter, the matter is within the
court's discretion.
¶28 In the present case, the District Court did not make the
predicate "frivolous, unreasonable or without foundation" finding.
Indeed, the District Court determined "[a]fter carefully
considering the arguments at hearing on this matter that, while
Shepherd's view . . . [was] erroneous, it was advanced in a good
faith argument." Absent the predicate finding, the District Court
could not exercise its discretion in favor of the County on the
matter of attorney fees.
¶29 This Court concludes that Shepherd's §1983 claim was
groundless, meritless and vexatious, and that the District Court's
finding to the contrary was clearly erroneous. It does not say
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which prong of the clearly erroneous test it applies in reaching
that conclusion.
¶30 In my view, this Court has merely substituted its judgment for
that of the District Court, the court most intimately acquainted
with the particulars of the case. It has done so even in the face
of the District Court's statement that it carefully considered the
arguments before it.
¶31 It is not this Court's job to decide whether we would have
made a different finding than the District Court. It is our job to
accord the finding actually made the deference it is due--and
accept it--unless the finding meets one of the oft-stated and well
established prongs of our clearly erroneous test for findings
entered by Montana's district courts.
¶32 Here, it is my view that the District Court's finding does not
meet any prong of the clearly erroneous test and, therefore, the
finding is not clearly erroneous. I would affirm the District
Court's denial of the County's motion for attorney fees, and I
dissent from the Court's failure to do so.
/S/ KARLA M. GRAY
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