October 15 2009
DA 09-0031
IN THE SUPREME COURT OF THE STATE OF MONTANA
2009 MT 335N
LANA VLAHAKIS and BRENDA HYDE,
Plaintiffs and Appellees,
v.
BRENDA BURKHARTSMEIER and
MOUNTAIN MANUFACTURING, INC.,
Defendants and Appellants.
APPEAL FROM: District Court of the Thirteenth Judicial District,
In and For the County of Yellowstone, Cause No. DV 07-623
Honorable Susan P. Watters, Presiding Judge
COUNSEL OF RECORD:
For Appellants:
Malcolm H. Goodrich, Goodrich Law Firm, Billings, Montana
Randall George Nelson, Nelson & Dahle, Billings, Montana
For Appellees:
James A. Patten, Patten, Peterman, Bekkedahl & Green,
Billings, Montana
Submitted on Briefs: September 23, 2009
Decided: October 14, 2009
Filed:
__________________________________________
Clerk
Justice Brian Morris delivered the Opinion of the Court.
¶1 Pursuant to Section I, Paragraph 3(d)(v), Montana Supreme Court 1996 Internal
Operating Rules, as amended in 2003, the following memorandum decision shall not be cited
as precedent. It shall be filed as a public document with the Clerk of the Supreme Court and
its case title, Supreme Court cause number, and disposition shall be included in this Court’s
quarterly list of noncitable cases published in the Pacific Reporter and Montana Reports.
¶2 Brenda Burkhartsmeier (Burkhartsmeier) and Mountain Manufacturing, Inc. (MMI)
appeal from the District Court’s order denying their motion to alter or amend the judgment in
favor Lana Vlahakis and Brenda Hyde (collectively Vlahakis). We affirm.
¶3 Vlahakis obtained a judgment on October 31, 2006, against MMI for $47,630.22.
MMI did not appeal the judgment. Vlahakis proceeded with post-judgment discovery in an
effort to collect on the judgment. One of the assets appearing on MMI’s balance sheet
included a shareholder receivable due to MMI from Burkhartsmeier for approximately
$467,000. Vlahakis purchased the receivable for $1,000 at a properly conducted sheriff’s
sale of MMI’s assets. Burkhartsmeier did not bid at the sheriff’s sale.
¶4 Burkhartsmeier acknowledged the receivable. She claimed she had made some
payment on it. Vlahakis sought to attach the receivable for purposes of execution on the
judgment. At that point, Burkhartsmeier produced a document purporting to have assigned
the receivable from MMI to Burkhartsmeier on October 26, 2006. Burkhartsmeier claimed
that she received the assignment from MMI in consideration of her assumption of certain
specified debts. Burkhartsmeier executed the assignment as both assignor and assignee.
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¶5 Vlahakis discovered that MMI lacked sufficient funds to pay the judgment owing to
her. Vlahakis instituted a second action against MMI and Burkhartsmeier personally for
payment of the receivable and an order to assess the first judgment directly against
Burkhartsmeier. Vlahakis alleged fraudulent transfer and sought to pierce MMI’s corporate
veil. MMI did not appear in the suit and the court entered a default. The case proceeded to
trial with Burkhartsmeier and Vlahakis. The court ruled in favor of Vlahakis. The court
determined that the transfers either were fraudulent or intended to defraud creditors, or, in
the alternative, that MMI did not receive adequate compensation from the transfers from
MMI to Burkhartsmeier. The court found that MMI’s corporate veil should be pierced and
that Burkhartsmeier should be held personally liable. The court entered a judgment of
$508,358.74 in favor of Vlahakis. The court denied Burkhartsmeier’s motion pursuant to
M. R. Civ. P. 59(g) to alter or amend the judgment. Burkhartsmeier appeals.
¶6 Burkhartsmeier argues on appeal that the District Court allowed Vlahakis to bootstrap
the original judgment of $47,630.22 with interest into the larger judgment against
Burkhartsmeier personally. Burkhartsmeier argues that the first judgment constitutes the
sole debt owed to Vlahakis. She contends that the MMI receivable was owed, if it was owed
at all, by Burkhartsmeier, the sole shareholder of MMI, to MMI. Burkhartsmeier further
contends that Vlahakis grossly underpaid for the purchase of the MMI receivables at the
sheriff’s sale. She argues that any recovery by Vlahakis of the new MMI receivable above
the value of the original judgment of $47,630.22 constitutes a clear violation of § 25-13-
402(2), MCA, which directs that excess proceeds should be remitted to a judgment debtor,
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and § 25-13-402(1), MCA, which directs that the purpose of execution is to satisfy the
executed debt.
¶7 Burkhartsmeier presents many arguments here that should have been raised in a
different case. For example, Burkhartsmeier, as the person affected by the sheriff’s sale, or
MMI, of which Burkhartsmeier was the sole shareholder, should have raised the arguments
regarding alleged deficiencies with the sheriff’s sale in an appeal from that judgment and
execution. Burkhartsmeier makes the arguments regarding the sheriff’s sale too late in this
litigation, and, as a result, we will not consider them here.
¶8 The decision to alter or amend a judgment rests within the sound discretion of the
District Court. Lopez v. Josephson, 2001 MT 133, ¶ 16, 305 Mont. 446, 30 P.3d 326. We
review for an abuse of discretion whether a district court erred in refusing to set aside an
execution sale. State ex rel. Daniels v. Dist. Court, 145 Mont. 406, 403 P.2d 634 (1965). A
district court abuses its discretion if it acts arbitrarily without employment of conscientious
judgment or exceeds the bounds of reason in a manner that results in a substantial injustice.
Essex Ins. Co. v. Moose Saloon, Inc., 2007 MT 202, ¶ 19, 338 Mont. 423, 166 P.3d 451. We
have determined to decide this case pursuant to Section I, Paragraph 3(d)(v), of our 1996
Internal Operating Rules, as amended in 2003, that provide for memorandum opinions. It is
manifest on the face of the briefs and record before us that the District Court did not act
arbitrarily without employment of conscientious judgment or exceed the bounds of reason in
determining not to set aside the judgment, and, in turn, to consolidate the first judgment into
a large judgment that included the MMI receivable.
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¶9 We affirm.
/S/ BRIAN MORRIS
We Concur:
/S/ MIKE McGRATH
/S/ W. WILLIAM LEAPHART
/S/ PATRICIA O. COTTER
/S/ JIM RICE
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