Anderson v. Anderson

No. 01-094

IN THE SUPREME COURT OF THE STATE OF MONTANA

2003 MT 9N

RALPH ANDERSON and CAPITAL FORD SALES, INC.,

Plaintiffs and Respondents,

v.

DUGAN ANDERSON, TERRY LEA LANE, CAPITAL
IMPORTS, INC., and WILD WEST MOTORS, INC.,
d/b/a BIG MOUNTAIN TOYOTA,

Defendants and Appellants.
********************************
DUGAN ANDERSON, TERRY LEA LANE, CAPITAL
IMPORTS, INC., and WILD WEST MOTORS, INC.,
d/b/a BIG MOUNTAIN TOYOTA,

Counterclaimants,

v.

RALPH ANDERSON and CAPITAL FORD SALES, INC.,

Counterdefendants.

APPEAL FROM: District Court of the First Judicial District,
In and for the County of Lewis and Clark,
Honorable James E. Purcell and Honorable Ed McLean, Presiding

COUNSEL OF RECORD:

For Appellants:

Douglas J. Wold and Leslie Ann Budewitz, Wold Law Firm, PC.,
Polson, Montana

For Respondents:

Ross W. Cannon, Cannon & Sheehy, Helena, Montana

Submitted on Briefs: August 23, 2001
Decided: January 23, 2003

Filed:

__________________________________________
Clerk
Justice Jim Rice delivered the Opinion of the Court.
¶1 Pursuant to Section I, Paragraph 3(c) Montana Supreme Court

1996 Internal Operating Rules, the following decision shall not be

cited as precedent but shall be filed as a public document with the

Clerk of the Supreme Court and shall be reported by case title,

Supreme Court cause number and result to the State Reporter

Publishing Company and to West Group in the quarterly table of

noncitable cases issued by this Court.

¶2 Ralph Anderson and Capital Ford Sales, Inc. (collectively

“Ralph”), sued to collect on loans extended to his son Dugan

Anderson, daughter-in-law Terry Lea Lane and his son’s business

enterprises (collectively “Dugan”). On summary judgment, the First

Judicial District Court, Lewis and Clark County, ordered Dugan to

pay loan balances with interest and Ralph’s court costs and

attorney fees. We affirm in part, reverse in part, and remand for

further proceedings consistent with this opinion.
FACTUAL AND PROCEDURAL BACKGROUND

¶3 Ralph Anderson purchased the Ford dealership in Helena,

Montana, from his father and for nearly 40 years owned and managed

Capital Ford Sales, Inc. (“Capital Ford”). Dugan Anderson worked

with his father from 1977 until 1982 when he acquired Wild West

Motors, Inc. (“Wild West Motors”), which conducted business as Big

Mountain Toyota in Kalispell, Montana. To obtain financing for the

purchase of the Kalispell dealership, Dugan’s father, mother and

grandmother co-signed Dugan’s bank loans. In 1984, Dugan and Ralph

jointly purchased the Nissan and Mazda dealerships in Helena,

renamed as Capital Imports, Inc. (“Capital Imports”), and held 51

2
percent and 49 percent interests, respectively. Again, Ralph co-

signed the loans from Norwest Bank of Helena for the purchase of

the dealership.

¶4 By 1987, financial difficulties at Wild West Motors required

Dugan to seek Ralph’s support in refinancing the dealership’s

loans, which then were held by Norwest Bank of Kalispell. Capital

Imports and Capital Ford were also in financial distress at this

time. Dugan, Ralph and other family shareholders in the three

dealerships entered into a Settlement, Forbearance and Liquidation

Agreement with Norwest Bank on December 8, 1987, which allowed time

for the parties to obtain new financing. By the end of the month,

Ralph arranged for a loan of $1,327,000 to Capital Ford from Ford

Motor Credit Corporation (“Ford Credit”), a portion of which was

disbursed to Dugan and his business enterprises in three separate

loans totaling $506,574.42. In his capacity as the president of

Wild West Motors and Capital Imports, Dugan signed promissory notes

to Capital Ford for two business loans in the amounts of

$141,861.14 and $288,812.30. Ralph also claims that he loaned

$75,900.98 from the Capital Ford account to Dugan personally.

Dugan, and his wife, Terry Lea Lane, executed personal guarantees

for each note, although no promissory note or guaranty evidenced

the personal loan.
¶5 After the acquisition of Capital Imports by Ralph and Dugan in

1984, Dugan frequently traveled between the Kalispell Toyota and

Helena Nissan/Mazda dealerships. Dugan also worked on a consulting

basis with Capital Ford, which was managed at that time by his

3
brother, David Anderson. In April 1989, Capital Ford purchased the

assets of Capital Imports and merged inventory and sales at one

location. Dugan continued to divide his time between Helena and

Kalispell until early 1991 when he relocated to Helena to assume

full-time management of the combined Nissan/Mazda and Ford

dealerships.

¶6 In January 1994, Ralph and Dugan signed a Memorandum of

Understanding (MOU) that outlined the process by which Dugan could

purchase the Helena dealerships and take full control of all

operations. In his deposition testimony, Dugan characterized his

working relationship with Ralph as “difficult.” In March 1995,

Dugan left Helena and resumed full-time management of Big Mountain

Toyota in Kalispell. Ralph stepped in to manage Capital Ford on a

full-time basis and began negotiations to sell the dealership to a

third party.
¶7 The action subject to this appeal was initiated on December

22, 1995, when Ralph filed a Complaint alleging that Dugan

defaulted on three 1987 loans from Capital Ford and failed to

transfer to Ralph a promised share of Wild West Motor stock. Ralph

sought payment of the loan balances with interest from the dates of

default, plus attorney fees and court costs, as provided in the

loan agreements. After numerous district court judges recused

themselves, the court appointed Honorable James E. Purcell to

preside over the matter.

¶8 An Amended Complaint, filed on April 16, 1996, enumerated

four Counts, which we summarize as follows:

4
 Count I: $141,861.14 loan to Wild West Motors, Inc.,
dated December 23, 1987, used to pay debts at Norwest
Bank of Kalispell and to provide the dealership with
working capital. Loan in default as of June 1, 1995,
with an unpaid balance of $60,614.21 plus interest.

Count II: $288,812.30 loan to Capital Imports, Inc.,
dated December 23, 1987, used to pay the debts at Norwest
Bank of Helena and to provide the dealership with working
capital. Loan in default as of February 28, 1989, with
an unpaid balance of $181,963.00 plus interest.
Count III: Demand for the transfer of 39 percent of Wild
West Motors stock from Dugan to Ralph in exchange for
financial support extended by Ralph and Capital Ford in
accordance with an oral agreement.

Count IV: $75,900.98 loan to Dugan, personally, on

December 23, 1987, used to pay Norwest Bank of Kalispell

the balance due on the Wild West Motors stock purchase

and to reduce the mortgage on Dugan’s home. No payments

ever received, with full amount due plus interest.
¶9 Dugan admitted in his Amended Answer that he had not paid the

loan obligations in full, but raised various defenses and

counterclaims. Admitting an unpaid balance of $57,863.62 on the

Count I loan to Wild West Motors, Dugan argued that this debt was

forgiven by Ralph as consideration for Dugan’s release of all

claims against Ralph for the sale of the combined Capital

Ford/Capital Imports dealership to a third party in February 1997

without regard for the 1994 MOU for Dugan’s purchase of the

business. Regarding the Count II loan to Capital Imports, Dugan

asserted that any outstanding obligation had been assumed by

Capital Ford when the two entities merged in 1989. Dugan denied he

promised to transfer any Wild West Motor stock to Ralph, as claimed

by Count III. Dugan answered that the Count IV loan was used to

5
purchase Capital Imports stock rather than Wild West Motors stock.

He asserted that Capital Ford assumed liability for the

outstanding balance of that portion of the Count IV loan that went

to the stock purchase when Capital Ford bought the assets and

assumed the liabilities of Capital Imports. Dugan counterclaimed

for loss of business opportunities, constructive discharge and

other damages resulting from Ralph’s alleged breach of the 1994

MOU.

¶10 Ralph was deposed by opposing counsel in April 1997. The

parties entered settlement negotiations and filed one stipulation

with the District Court on May 27, 1997. The stipulation stated

that the pretrial order would include the affirmative defenses of

statute of limitations and laches against Ralph’s Count III claim.

In July 1997, Ralph’s attorneys advised the court by letter that

the parties had agreed to eliminate three counts from the Amended

Complaint. Later that month, Dugan’s attorneys affirmed in another

letter to the judge that only one count and the counterclaims

remained for trial. In August 1997, Ralph dismissed his attorneys

and the court vacated the trial date to allow Ralph time to obtain

new counsel. With new counsel representing Ralph, the parties

proceeded with discovery and Dugan’s deposition was taken in July

1998.
¶11 In June 1999, Ralph moved for partial summary judgment on

Counts I, II and IV and dismissal of Dugan’s counterclaims. Dugan

objected and moved for partial summary judgment on Counts II, III

and IV. The parties presented oral arguments in August 1999. The

6
court directed the parties to arrange for a formal settlement

conference, which was held in February 2000 and followed by a

telephone conference. Both attempts proved unsuccessful. The

parties then filed proposed findings of fact and conclusions of

law.

¶12 By summary judgment on November 20, 2000, the District ruled

in favor of Ralph on Counts I, II, and IV, and dismissed Count III

for violation of the statute of limitation. The court dismissed

Dugan’s cross-motion for partial summary judgment and each of his

counterclaims. The Order directed Ralph to file affidavits

calculating accrued interest and supporting his request for

attorney fees on Counts I and II. On the same day, the Honorable

James E. Purcell recused himself from the case in anticipation of

stepping down from the bench. On November 29, 2000, Ralph filed a

motion for entry of judgment with affidavits documenting interest

accrual, court costs and attorney fees. Judge Purcell signed the

judgment nunc pro tunc on December 1, 2000, and assessed Dugan

$100,897.62 in fees for Ralph’s attorneys. Dugan immediately filed

for relief from judgment, arguing that the court afforded him

insufficient time to file a brief in response to Ralph’s motion for

entry of judgment and that the amount of attorney fees was

unreasonable. The Honorable Edward P. McLean assumed jurisdiction

on December 11, 2000. Judge McLean denied Dugan’s motion for

relief and assessed an additional $1,231.90 in fees.
¶13 We restate the issues raised by Dugan on appeal as follows:

7
¶14 Issue 1. Did the District Court err by granting summary

judgment to Ralph and dismissing Dugan’s counterclaims?

¶15 Issue 2. Did the District Court err by declining to enforce a

settlement agreement?

¶16 Issue 3. Did the District Court err by relying on

inadmissible evidence?

¶17 Issue 4. Did the District Court err by entering judgment

before Dugan responded to the motion for entry of judgment?

¶18 Issue 5. Did the District Court abuse its discretion by

awarding unreasonable attorney fees?
STANDARD OF REVIEW

¶19 Our standard of review for a district court’s order granting

summary judgment is de novo, using the same Rule 56, M.R.Civ.P.,

criteria applied by the district court. Abraham v. Nelson, 2002

MT 94, ¶ 9, 309 Mont. 366, ¶ 9, 46 P.3d 628, ¶ 9. We look to the

pleadings, depositions, answers to interrogatories, admissions on

file, and affidavits to determine the existence or nonexistence of

genuine issues of material fact. Erker v. Kester, 1999 MT 231, ¶

17, 296 Mont. 123, ¶ 17, 988 P.2d 1221, ¶ 17.

¶20 Summary judgment is an extreme remedy which should be granted

only when there is no genuine issue as to any material fact and the

moving party is entitled to judgment as a matter of law. Lee v.

USAA Casualty Insurance Co., 2001 MT 59, ¶ 25, 304 Mont. 356, ¶ 25,

22 P.3d 631, ¶ 25. The party seeking summary judgment, therefore,

has the burden of demonstrating a complete absence of any genuine

factual issues. Lee, ¶ 25. The party seeking summary judgment

8
also must overcome the burden that all reasonable inferences that

might be drawn from the offered evidence will be drawn in favor of

the party opposing summary judgment. Lee, ¶ 25.

¶21 Where the moving party is able to demonstrate that no genuine

issue as to any material fact remains in dispute, the burden shifts

to the party opposing the motion. Lee, ¶ 26. This burden shift

requires that the opposing party present material and substantial

evidence, rather than merely conclusory or speculative statements,

to raise a genuine issue of material fact. Lee, ¶ 26.
¶22 This Court has routinely stated that the purpose of summary

judgment is to eliminate unnecessary trials, but that summary

adjudication should “never be substituted for a trial if a material

factual controversy exists.” Boyes v. Eddie, 1998 MT 311, ¶ 16,

292 Mont. 152, ¶ 16, 970 P.2d 91, ¶ 16 (citation omitted).

Because the practical result of applying the summary judgment

remedy is to deprive the party against whom judgment is granted of

a trial in the usual course, the remedy should be used only in

those cases in which the justice of its application is clear.
Issue 1.

¶23 Did the District Court err by granting summary judgment to
Ralph and dismissing Dugan’s counterclaims?

¶24 Dugan first claims that the District Court committed

reversible error by adopting the findings of fact and conclusions

of law prepared by Ralph. This assertion is not supported by the

law.

¶25 Rule 52(a), M.R.Civ.P., states, in pertinent part:

9
 The court may require any party to submit proposed
findings of fact and conclusions of law for the court’s
consideration and the court may adopt any such proposed
findings and conclusions so long as they are supported by
the evidence and law of the case.

¶26 We have held that a court’s adoption of the findings and

conclusions presented by the prevailing party is not grounds for

reversal. In re Marriage of Nikolaisen (1993), 257 Mont. 1, 5,

847 P.2d 287, 289. Instead, we examine whether the findings are

sufficiently comprehensive, pertinent and supported by substantial

evidence to provide a basis for the decision. Nikolaisen, 257

Mont. at 5, 847 P.2d at 289 (citing In re Marriage of Hurley

(1986), 222 Mont. 287, 296, 721 P.2d 1279, 1285).
¶27 The District Court resolved this case by adopting, virtually

verbatim, the findings of fact and conclusions of law prepared by

Ralph. While the court’s findings are sufficiently comprehensive

and pertinent, the court employed an incorrect legal standard for

summary judgment. Rather than ascertaining whether genuine issues

of material fact remained, the court’s Findings of Fact,

Conclusions of Law and Order reveal that the court weighed the

evidence to reach conclusions supported by substantial, but

nonetheless disputed, evidence.

¶28 The claims asserted in this action arise from a complicated

series of financial transactions spanning many years and

encompassing the purchase and operation of three car dealerships

and the merger and sale of two. While the District Court’s

wholesale adoption of the plaintiffs’ proposed findings and

conclusions does not, in and of itself, constitute reversible

10
error, the importation of an incorrect legal standard resulted in

an incorrect analysis. Using the de novo standard of review

outlined above, we have examined the record on appeal to determine

whether the moving party was entitled to summary judgment as a

matter of law.

Count I

¶29 Ralph presented an executed promissory note from Capital Ford

to Wild West Motors and a signed guaranty to document the 1987 loan

to Dugan in the amount of $141,861.14. Ralph alleged in his

Amended Complaint that the loan was in default as of June 1995.

Dugan admitted an unpaid balance of $57,683.62. Consequently,

Ralph met his initial burden of demonstrating the undisputed

existence of a $57,683.62 debt.
¶30 The burden then shifted to Dugan to demonstrate by more than

mere denial, speculation or conclusory statement that a genuine

issue of material fact existed to preclude summary judgment. Dugan

raised the affirmative defense of accord and satisfaction, claiming

that Ralph had promised to forgive the debt in exchange for Dugan’s

forbearance in exercising his interest in purchasing Capital Ford

under the terms of the MOU. When Dugan learned in 1995 that Ralph

was engaged in negotiations for the sale of the Helena dealership

to a third party, Dugan stated that he twice wrote to Ralph’s

attorney and presented two forbearance offers. The attorney

forwarded Dugan’s letters to Ralph, but the record contains no

evidence that Ralph responded to Dugan’s offers. Dugan presented

no evidence that the Count I obligation was released by Ralph or in

11
any way connected to the MOU. Because Dugan failed to offer

factual support for his defense of accord and satisfaction, his

admission that the unpaid balance on the Count I loan was

$57,863.62 stands as uncontroverted fact.

¶31 Dugan also asserts on appeal that the Count I debt should be

set off against the damages resulting from Ralph’s alleged breach

of the MOU. However, Dugan’s counterclaim for breach of contract

must be established before set off may be considered. We affirm

the District Court’s grant of summary judgment in Ralph’s favor on

Count I.
Count II

¶32 Ralph and Dugan both moved for summary judgment on Count II,

and the District Court ruled in Ralph’s favor. To meet his initial

burden, Ralph presented a promissory note documenting the 1987 loan

by Capital Ford to Capital Imports in the amount of $288,812.30,

together with a signed guaranty. Ralph asserted that the loan was

in default as of February 1989, with an unpaid balance of

$181,963.00. He stated that he received no payments on the loan

after the sale of Capital Imports and that he never forgave the

debt.

¶33 Dugan countered in his Amended Answer that “the obligation of

Capital Imports was satisfied at such time as the business of

Capital Imports was merged with Capital Ford, and in consideration

of that transaction.” He argued that Capital Ford assumed

liability for the Count II loan as part of its acquisition of

Capital Imports in 1989 and, when Capital Ford paid off Ford Credit

12
in full after the asset sale, Dugan’s liability as a guarantor was

extinguished. To substantiate his argument, Dugan cited his

affidavit, where he stated:

Capital Ford purchased Capital Imports in 1989, assuming
all liabilities, including the debts alleged in Counts II
and IV. Capital Imports is no longer a going concern.
After the purchase, Capital Imports made no further
payments or distributions.

Dugan also cited the following excerpt from his deposition

testimony:

MR. CANNON [attorney for Ralph]: This $288,812.30 is
still owing to Capital Ford Sales? You haven’t paid it?
A. [DUGAN]: Well, I think if you get the document that
was prepared–the sale document between Capital Ford and
Capital Imports–you will find that the note was assumed
by Capital Ford.

Q. That’s this contract of sale that you’re speaking of,
I assume?

THE DEPONENT: You know, I think we have covered this
territory previously, but I don’t know–I don’t know where
to look for it.

MR. WOLD [attorney for Dugan]: I think your answer is
just fine.

THE DEPONENT: Okay.

MR. CANNON: Are you saying that there should be an
instrument somewhere that in–in which it specifically
says that Capital Ford Sales forgives indebtedness?

A. I believe this instrument (indicating)–

Q. Says that somewhere?

A. No. There is no forgiveness. They took it–They took
it over.

Q. And therefore it’s no longer a debt owing from you to
Capital Ford Sales; is that your position?

A. I believe that’s how it’s handled, yes.

13
¶34 The First Amended Contract for Sale of Assets of Capital

Imports to Capital Ford (“Contract for Sale”) states that the

transfer was to be “free of all debts and encumbrances except those

expressly assumed.” The Contract purchase price was $857,107.05,

which equaled the listed value of the assets sold. Capital Ford

also expressly assumed $973,207.00 in liabilities from Capital

Imports as part of the acquisition. The list of existing creditors

attached to the Contract for Sale included a $66,655.23 debt to

Capital Ford and two debts to Ford Credit in the amounts of

$572,900.05 and $290,502.00.
¶35 In 1987, Ford Credit provided the financing that permitted

Capital Ford and Ralph to make the loan to Capital Imports that is

the subject of Count II. While the Contract for Sale did not

specifically enumerate the outstanding balance on the Count II loan

as a liability on the list of existing creditors when the

dealerships merged, Dugan contends that this debt was subsumed

within the obligations to Ford Credit and Capital Ford that Capital

Ford expressly assumed.

¶36 We first examine whether either party successfully

demonstrated a complete absence of issues of material fact. While

Ralph’s sworn testimony that he did nothing to forgive Dugan’s

Capital Imports debt remained undisputed, Dugan raised the defense

of debt assumption, which Ralph denied. Dugan’s sworn assertion

that Capital Ford assumed the liability for the Count II debt by

executing the 1989 Contract for Sale conflicts with Ralph’s

contention that Capital Imports had no legal basis for ceasing to

14
make payments on the obligation when this merger with Capital Ford

occurred. The Contract for Sale’s inclusion of the debts that

existed between the two dealerships and with Ford Credit is subject

to interpretation and cannot be resolved given the conflict in the

parties’ sworn testimony. Therefore, we conclude that neither

party demonstrated an absence of genuine issues of material fact.

¶37 The District Court in its findings and conclusions

consistently mischaracterized Dugan’s position as an assertion that

the Count II obligation had been forgiven by Ralph. Debt

forgiveness and debt assumption are wholly different defenses

requiring different proofs. Whereas an obligation of a debtor is

released by a creditor only upon the acceptance of new

consideration or in writing, see § 28-1-1601, MCA, an obligation

may be transferred with the consent of the party entitled to its

benefits, see § 28-1-1002, MCA. Dugan maintained that Ralph’s

consent to the transferred liability for Capital Imports’ debt was

manifested by the Contract for Sale. However, the court overlooked

the legal theory propounded by Dugan, revealing its

misunderstanding of the dispute between the parties. As a result,

the court failed to hold Ralph to the requirement that he

demonstrate that all facts material to the substantive law raised

by Dugan’s defense were undisputed. We reverse the grant of

summary judgment in Ralph’s favor and remand Count II for trial.
Count IV

¶38 Both Ralph and Dugan also moved for summary judgment on Count

IV. Ralph alleged that Dugan defaulted on the entire $75,900.98

15
loan extended to Dugan personally from Capital Ford as part of the

disbursement of the Ford Credit recapitalization loan in 1987.

Ralph asserted that the personal loan to Dugan was used to pay-off

a $55,900.98 balance that remained on the note with Norwest Bank of

Kalispell that Ralph had co-signed in 1982 for the purchase of Big

Mountain Toyota. The remaining $20,000 of the personal loan was

used to reduce the mortgage on Dugan’s home. Because the Count IV

loan was not evidenced by a promissory note, Ralph attached various

financial records prepared by Capital Ford’s accountant to his

opening and reply briefs in support of his motion for summary

judgment. Dugan challenged each of these exhibits as

unauthenticated and inadmissible for lack of proper foundation.
¶39 In his Amended Answer Dugan acknowledged that he received the

Count IV personal loan in 1987 as part of the refinancing provided

by Ford Credit. However, he denied that he used the loan to pay-

off Norwest Bank of Kalispell for his Wild West Motors stock

purchase and instead asserted that he had used the money to pay-off

Norwest Bank of Helena for his 1984 Capital Imports stock purchase.

In his Amended Answer to the Count IV allegations, Dugan

explained:

In approximately 1984, Ralph Anderson and Dugan Anderson

jointly borrowed $75,000.00 from Norwest Bank for the

purpose of buying stock in Capital Imports, 51% of which

was for the benefit of Dugan Anderson, and 49% of which

was for the benefit of Ralph Anderson. This debt

obligation was assumed by Capital Ford at such time as

16
 the business of Capital Imports was merged with Capital

Ford, and in consideration of that transaction.

By affidavit, Dugan declared:

I had borrowed money from Norwest for part of my purchase

of Capital Imports stock; the balance at the time of the

refinance was $55,900.98. I had also borrowed from

Norwest for part of the purchase of my home; the balance

at the time of the refinance was $20,000. As part of the

refinance, my note related to Capital Imports was

forgiven. I then paid off the home loan. All other

indebtedness by Ralph, my brother David, me, my wife,

Capital Imports, and Wild West to Norwest Bank was

released, with the exception of two smaller loans not at

issue here.
Dugan further asserted that the portion of the Count IV obligation

he used to purchase Capital Imports stock had been assumed by

Capital Ford as part of the 1989 acquisition and merger.

¶40 While Ralph failed to establish the purpose, disposition or

lack of payment on the alleged $75,900.98 obligation with

uncontroverted evidence, Dugan also failed to demonstrate an

absence of a genuine issue of material fact under his theories of

debt assumption, payment or forgiveness. For example, Dugan’s

sworn assertion that he paid the $20,000.00 home mortgage loan in

full does not trump Ralph’s sworn statement that Dugan never repaid

the obligation, when no other evidence supports either claim. On

cross-motions for summary judgment, both parties enjoy the benefit

17
of all reasonable inferences drawn from the evidence presented. We

conclude that neither party met their initial burden and that

genuine issues of material fact exist. We reverse the entry of

summary judgment in Ralph’s favor on the Count IV loan and remand

for trial.

18
 Counterclaims

¶41 In his Amended Answer, Dugan counterclaimed for deprivation of

business opportunity and profit and deprivation of the right to

purchase Capital Ford under the terms of the MOU, which resulted

from Ralph’s breach of contract, misrepresentation and constructive

discharge of Dugan as general manager of Capital Ford. Dugan

contended that the sale of the Helena dealership to a third party

without a release from the terms of the MOU that obligated Ralph to

sell the business to Dugan entitles Dugan to reliance and

expectancy damages. Ralph moved for dismissal of all

counterclaims, which the District Court granted on summary

judgment.
¶42 The District Court excerpted Dugan’s deposition testimony at

length in its findings and conclusions. Dugan stated in his

deposition that he could not think of any actual business

opportunities that he had foregone as a result of his employment

with Capital Ford. Later, he neither supplemented nor contradicted

this testimony by affidavit or in his briefs. The court also

referenced Dugan’s deposition testimony regarding the circumstances

of his departure from the Helena dealership in March 1995.

Although Dugan declared that working with Ralph was untenable and

resulted in Dugan’s constructive discharge, Dugan also stated that

he could not think of any examples of acts or omissions by Ralph

that created an intolerable employment situation.

¶43 The District Court noted that the MOU for the purchase of

Capital Ford demanded that Dugan take affirmative action to carry

19
out the intent of the agreement. Before the MOU would compel Ralph

to surrender his operational authority and resign as an officer and

director, the agreement required Dugan to arrange for the transfer

of Capital Ford’s dealership sales and service agreements from

Ralph to Dugan, to obtain life insurance coverage for himself, and

to execute a stock redemption agreement with Ralph for the purchase

of Ralph’s interest. Dugan acknowledged in his deposition that he

did not apply for the transfer of the franchise agreements with

Ford Motor Company. He also stated that he and Ralph had discussed

the Capital Ford buy-out arrangements over the years, but had

reached no agreement.
¶44 Consequently, we conclude that the uncontroverted evidence

shows that Ralph met his burden of demonstrating the counterclaims

lack any basis in fact. Dugan presented no evidence in rebuttal

that supported his counterclaims or established a genuine issue of

material fact. Therefore, we affirm the District Court’s dismissal

of Dugan’s counterclaims by summary judgment.
Issue 2.

¶45 Did the District Court err by declining to enforce a
settlement agreement?

¶46 Dugan grounded his cross-motion for summary judgment on Counts

II and IV on an alternative theory that Ralph was “bound by [his]

counsel’s agreement to dismiss those counts.” The District Court

concluded that Counts II and IV were not effectively dismissed by

agreement. On appeal, this Court will affirm the court’s ruling

if the court reached the correct result, even if it did so for the

wrong reasons. Eschenbacher v. Anderson, 2001 MT 206, ¶ 40, 306

20
Mont. 321, ¶ 40, 34 P.3d 87, ¶ 40. See State v. Parker, 1998 MT

6, ¶ 20, 287 Mont. 151, ¶ 20, 953 P.2d 692, ¶ 20 (citation

omitted). In order for Dugan to prevail on his cross-motion for

partial summary judgment, he must demonstrate that no genuine issue

as to any material fact regarding the existence of a binding

agreement to settle the Count II and IV claims remains in dispute

and that he is entitled to judgment as a matter of law.

¶47 Dugan claims that Ralph’s counsel, Patrick Hooks, offered to

dismiss Counts II and IV without condition in April 1997, and

counsel for Dugan unconditionally accepted the offer. Ralph

counters that he never consented to a final settlement agreement,

regardless of his attorneys’ representations. Citing § 37-61-

401(1), MCA, as authority, Ralph argues that any agreement reached

by his attorney is not binding because no agreement was filed with

the clerk of the court or entered into the minutes of the court.

¶48 Section 37-61-401(1), MCA, states, in pertinent part:

An attorney and counselor has authority to: (a) bind his
client in any steps of an action or proceeding by his
agreement filed with the clerk or entered upon the
minutes of the court and not otherwise. . .

Years ago, this Court observed that “a literal construction [of the

above statute] would greatly retard the business of the court and

lead to absurd consequences. Every admission, consent or agreement

made in the course of the trial would either have to be reduced to

writing or filed with the clerk or by the clerk entered in his

minutes. It was never intended that the section should receive

such a construction.” State v. Turlok (1926), 76 Mont. 549, 563,

21
248 P. 169, 175 (citation omitted). In practice, § 37-61-401(1),

MCA, is applied solely to agreements between attorneys. State v.

Nelson (1991), 251 Mont. 139, 141, 822 P.2d 1086, 1087 (citing St.

Paul Fire & Marine Ins. Co. v. Freeman (1927), 80 Mont. 266,

274-75, 260 P. 124, 127; Bush v. Baker (1913), 46 Mont. 535,

544-46, 129 P. 550, 553-54). The purpose of the statute is to

relieve the presiding judge of the burden of determining disputes

between attorneys concerning their unexecuted agreements. Nelson,

251 Mont. at 141, 822 P.2d at 1087 (citing Bush, 46 Mont. at 540,

129 P. at 553).
¶49 An agreement to settle is binding if made by an unconditional

offer and accepted unconditionally. Hetherington v. Ford Motor Co.

(1993), 257 Mont. 395, 399, 849 P.2d 1039, 1042. The parties must

consent to all terms before a settlement agreement becomes binding.

In re Estate of Goick (1996), 275 Mont. 13, 23, 909 P.2d 1165,

1171. See also §§ 28-2-501 and -504, MCA. Because a settlement

agreement reached by the respective attorneys becomes binding on

the parties only when the parties consent to all terms, the

agreement is not one that exists solely between the attorneys and

need not be “filed with the clerk or entered upon the minutes of

the court” to be valid, as contemplated by § 37-61-401(1), MCA. In

this case, the existence of a binding agreement between Ralph and

Dugan to settle the Count II and IV claims may be demonstrated by

evidence of the unconditional acceptance of an unconditional offer

by the parties.

22
¶50 Dugan argues that Ralph’s acquiescence to the settlement

agreement is demonstrated by his deposition testimony, taken on

April 11, 1997, during which Ralph failed to protest his attorney’s

statement that Count II would be dismissed. The testimony reads:

Q. [MR. WOLD, attorney for Dugan]: Let’s move on to the
second claim, which is one for $288,812.30, which is,
according to the Complaint, the subject of a promissory
note attached to the Complaint as Exhibit C. For the
purposes of the record, I’ll ask whether you are going to
maintain that claim after this point? Either of you can
answer that.

MR. HOOKS [attorney for Ralph]: I’ll answer. The claim
will be dismissed.
Q. [By MR. WOLD]: So, as a result of that representation,
which I accept, I’m not going to ask any questions about
that claim. We’ve just saved ourselves quite a bit of
time.

A. [By RALPH]: And I’ve lost $282,000 [sic].

Q. [By MR. WOLD]: Well, let’s move on . . .

¶51 As further proof of settlement, Dugan stated that Hooks

confirmed the agreement to dismiss Counts II, III and IV in a

letter dated May 14, 1997. Although Dugan referenced a copy of

this May 14 letter as an attachment to his brief on cross-motion

for summary judgment, the letter is not included in the record on

appeal. By affidavit, Douglas J. Wold, Dugan’s attorney, stated

that Hooks offered to dismiss Counts II and IV without condition

and that Wold confirmed his clients’ acceptance of the offer on May

15, 1997. The affidavit continues, “Mr. Hooks and I agreed that no

written dismissal or release was necessary, and that instead, the

two counts would be omitted when the pretrial order was prepared.”

23
¶52 Another letter to Dugan’s attorney from Hooks, dated May 28,

1997, states that Ralph was willing to dismiss Counts II, III and

IV on the condition that Dugan disclaim any interest in Ford

Country, Inc., the real estate holding entity associated with

Capital Ford. No response to this offer is included in the record

and Dugan never asserted that he accepted this settlement proposal

unconditionally. Although no other settlement offer or evidence of

acceptance is in evidence, attorneys representing both parties

informed the District Court judge by mail in July 1997 that three

of the four counts had been eliminated from the litigation. These

letters do not indicate which counts were to be dropped and which

remained for trial.
¶53 Although the record includes various expressions of intent to

settle by both parties, evidence concerning the agreement and the

terms thereof are not consistent. By way of examples, the letters

between counsel and from counsel to the judge demonstrate that the

attorneys concurred that a settlement had been reached, which is

supported by the Wold affidavit, but a meeting of the minds on the

terms of the settlement is not demonstrated. The Wold affidavit

states that the parties’ settlement agreement was affirmed by May

15, 1997, yet Ralph sent Dugan another conditional offer to settle

two weeks later on May 28, 1997. The May 28 letter raises a

genuine issue of fact regarding Dugan’s claim that the parties had

reached an unconditional agreement prior to that date. We note

that Dugan did not file a motion to compel settlement following

Ralph’s dismissal of counsel in August 1997, but proceeded with

24
discovery. And, finally, the parties filed no pretrial order,

stipulation, motion for dismissal or amended pleading that

expressed an intention to delete Counts II or IV from the

litigation.

¶54 Therefore, we conclude that Dugan did not meet his burden by

demonstrating that an unconditional offer to settle was

unconditionally accepted. The factual dispute precludes summary

judgment as a matter of law, and the District Court was correct to

refuse to dismiss Ralph’s Count II and IV claims on the basis that

the parties had already settled the claims. We affirm the court’s

denial of Dugan’s cross-motion. Because we are reversing the entry

of summary judgment in Ralph’s favor on Counts II and IV, the issue

of a settlement agreement may be raised again upon remand.

25
 CONCLUSION

¶55 In conclusion, we reiterate that a court’s role on summary

judgment is not to weigh the evidence, which occurred here, but to

save all parties involved the expense and time of taking a case to

trial when no material issues of fact remain in dispute.

Uncontroverted evidence sustains the District Court’s grant of

summary judgment in favor of Ralph on Count I and dismissal of all

counterclaims. However, the record raises genuine issues of

material fact regarding Counts II and IV as well as the purported

agreement to settle these two claims. Additional proceedings are

required to resolve these matters.
¶56 We remand to the District Court without discussing the merits

of the final three issues. We reached our decision to reverse on

Counts II and IV without reference to the evidence challenged by

Dugan. Therefore, it is not necessary for us to decide whether the

District Court improperly considered unauthenticated exhibits that

were submitted without proper foundation. However, our holding

necessitates reversal of the District Court’s award of attorney

fees to Ralph, as the award was premised upon multiple claims that

Ralph had prevailed upon, two of which are now reversed and

remanded. Thus, the issue of attorney fees will need to be

resolved by further proceedings in the District Court.

¶57 Affirmed in part, reversed in part, and remanded for further

proceedings consistent with this opinion.

/S/ JIM RICE

26
We concur:

/S/ KARLA M. GRAY
/S/ JAMES C. NELSON
/S/ JIM REGNIER
/S/ TERRY N. TRIEWEILER

27