Engebretson v. Putnam

No. 13679
IN THE SUPREME COURT OF THE STATE OF MONTANA

1977

GERALDINE T. ENGEBRETSON,
Plaintiff and Respondent,

BRYCE C. PUTNAM and BETTE J. PUTNAM,

Defendants, Counter-claimants and
Appellant.

Appeal from: District Court of the Fourth Judicial District,
Honorable E. Gardner Brownlee, Judge presiding.
Counsel of Record:
For Appellant:

Boone, Karlberg and Haddon, Missoula, Montana
Sam E. Haddon argued, Missoula, Montana
For Respondent :
Skelton and Knight, Missoula, Montana
Robert Skelton argued, Missoula, Montana

Submitted: September 29, 1977
Decided: WGV - 4 1977
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Filed:
M r . J u s t i c e Frank I. Haswell delivered the Opinion of t h e Court.

Defendants appeal from a summary judgment granted t o

p l a i n t i f f by t h e D i s t r i c t Court, Missoula County, i n her s u i t

on a promissory note.

P l a i n t i f f Geraldine T. Engebretson was the owner of c e r t a i n

r e a l property located i n Missoula County, Montana. O October
n

29, 1970, she l i s t e d t h i s property f o r s a l e with T r a i l Realty

owned by defendants Bryce C. and Bette J. Putnam. Defendants

prepared a l i s t i n g agreement f o r the property using a standard

form l i s t i n g contract which p l a i n t i f f signed.

Defendants l a t e r decided t o purchase p l a i n t i f f ' s property

f o r themselves. On January 18, 1971, defendant Bryce C , Putnam

executed a promissory note i n p a r t payment, payable t o Geraldine

T. Engebretson f o r $3,000 a t 8 percent i n t e r e s t due i n one year.

P l a i n t i f f signed a warranty deed whereby she did "grant,

bargain, s e l l and convey" her property t o the Putnams. By t h e

same deed Engebretson convenanted t h a t she would:

"* * * forever WARRANT and DEFEND a l l r i g h t , t i t l e
and i n t e r e s t i n and t o the s a i d premises and the
q u i e t and peaceable possession thereof unto the
[Putnams] *** a g a i n s t a l l a c t s and deeds of [Enge-
bretson] and a l l and every person and persons whom-
soever lawfully claiming o r t o claim the same,"
[Bracketed material paraphrased.]

The warranty deed s t a t e d Engebretson's grant was subject t o a

f i r s t mortgage i n favor of t h e Missoula F i r s t Federal Building

& Loan Association, which mortgage the Putnams agreed t o assume

and pay according t o i t s terms.

A t t h e time Engebretson sold her property t o the Putnams,

i t was subject t o the l i e n s of Special Improvement D i s t r i c t No.

296 f o r engineering fees and Special Improvement D i s t r i c t No. 304
f o r sewer. P r i o r t o t h e execution of t h e warranty deed, p l a i n t i f f

had paid a l l matured s p e c i a l improvement d i s t r i c t installsreats,

however $1,244 i n unmatured installments remained t o be paid. The

l i s t i n g agreement which defendants prepared f o r p l a i n t i f f indicated
\

the property was subject t o an annual s p e c i a l improvement d i s t r i c t

payment of $21.50 f o r sewer i n s t a l l a t i o n . The warranty deed made

no provision f o r the assumption of o r proration of t h e unmatured

payments by e i t h e r party. Defendants l a t e r paid the $1,244 t o

r e l e a s e the s p e c i a l improvement d i s t r i c t l i e n s from the property.

A s compensation f o r paying these i n s t a l l m e n t s , Putnams

claimed a s e t o f f against t h e amount owing on the $3,000 promis-

sory note Bryce Putnam signed. Consequently, when t h e note

matured on January 18, 1972, Putnams did not make any payment

toward the amount due. I n M y 1972, they offered t o pay Engebret-
a

son an amount l e s s than the $3,000 plus i n t e r e s t then due. She

refused t o accept the l e s s e r amount.

On June 2, 1972, Engebretson f i l e d a complaint a g a i n s t Bryce

Putnam a l l e g i n g Putnam executed the promissory note; t h a t he

f a i l e d t o pay t h e note upon maturity; and t h a t the note provided

f o r a reasonable attorney f e e i n case of s u i t t o recover it. She

prayed f o r judgment f o r $3,000, i n t e r e s t and a reasonable attorney

fee.

Putnam f i l e d an answer admitting t h e existence of t h e note

and t h a t he had made no payment on i t , but a l l e g i n g , as a

defense, t h a t the amount due on the note was subject t o a s e t o f f

f o r t h e s p e c i a l improvement d i s t r i c t installments he had paid. He

counterclaimed f o r a s e t o f f of $1,244 and f o r a reasonable attorney

fee. He a l s o moved t o join h i s wife a s a defendant and counter-

claimant i n the action.
 P l a i n t i f f f i l e d a reply t o defendants' counterclaim alleging,,

among o t h e r things, t h a t Bryce Putnam was a r e a l e s t a t e broker;

t h a t she had l i s t e d h e r r e a l property with him f o r s a l e ; t h a t

a t t h e time p l a i n t i f f l i s t e d her r e a l property with the defendants

and a t t h e time she sold the property t o them, they knew of the

unnsatured s p e c i a l improvement d i s t r i c t installments previonaiy

assessed on the property.

Each s i d e moved f o r summary judgment. O t h e b a s i s of the
n

pleadings, the e x h i b i t s t h e r e t o , and t h e memoranda of law submitted

by the p a r t i e s , the D i s t r i c t Court granted summary judgment i n

p l a i n t i f f ' s favor and awarded her $1,450 i n attorney fees. De-

f endant s appealed.

Three i s s u e s developed on appeal:

1. Did t h e D i s t r i c t Court e r r i n granting summary judgment?

2. Did t h e D i s t r i c t Court e r r i n denying defendants'

counterclaim?

3. Did the D i s t r i c t Court e r r i n awarding p l a i n t i f f attorney

fees i n the amount of $1,450.

The purpose of t h e summary judgment procedure i s t o encourage

j u d i c i a l economy through the elimination of unnecessary t r i a l ,

delay and expense. Bonawitz v. Bourke, Mont . , 567 P.2d

32, 33, 34 St.Rep. 638, 640 (1977); Guthrie v. Dept. of Social &

R e h a b i l i t a t i v e Services, M nt
o . , 563 P.2d 555,

St.Rep. 255, 257 (1977). Summary judgment i s n o t a s u b s t i t u t e

f o r t r i a l , however, and i s inappropriate when genuine i s s u e s of

material f a c t remain t o be l i t i g a t e d . Rule 56(c), M.R.Civ.P. ;

Duncan v. Rockwell Manufacturing Co., Mont .-, 567 P.2d 936,

938, 34 St.Rep. 821, 823 (1977).

Additionally, whether a court should grant a motion f o r

summary judgment or require a t r i a l r e s t s i n t h e sound d i s c r e t i o n
of the court even though the movant may have made out a case

f o r summary judgment. 6 P t . 2 Moore's Federal P r a c t i c e 156.15[6] ;

John B l a i r & Co. v. Walton, 47 F.R.D. 196 (1969). I f there i s

any doubt a s t o t h e propriety of a motion f o r summary judgment,

the court should deny i t . Fulton v. Clark, 167 Mont. 399, 403,

538 P.2d 1371, 1373 (1975); Kober & Kyriss v. B i l l i n g s Deaconess

Hospital, 148 Mont. 1 1 7 , 122, 123, 417 P.2d 476, 479 (1966).

During o r a l argument on appeal, c e r t a i n f a c t s were brought

t o l i g h t making i t apparent t h a t genuine i s s u e s of material

f a c t remained t o be l i t i g a t e d . Summarizing from the pleadings

and o r a l argument, p l a i n t i f f ' s a l l e g a t i o n s a r e : (a) t h a t

p l a i n t i f f l i s t e d her property with the defendant r e a l t o r s f o r

s a l e , thus c r e a t i n g a principal/agent r e l a t i o n s h i p between plain-

t i f f and defendants a t t h e time of t h e l i s t i n g ; (b) t h a t defendants

prepared both the l i s t i n g agreement and, a f t e r they decided t o

purchase the property themselves, the warranty deed; and (c)

t h a t a t a l l times defendants knew of the unmatured s p e c i a l

improvement d i s t r i c t installments, y e t no mention was made of

them i n the warranty deed. The p r e t r i a l proceedings l e f t undecided

such i s s u e s a s :

1. Did the principaI/agent r e l a t i o n s h i p between p l a i n t i f f

and defendants s t i l l e x i s t a t the time p l a i n t i f f sold her property

t o defendants?

2. What was the i n t e n t of the p a r t i e s regarding payment of

the unmatured s p e c i a l improvement d i s t r i c t installments?

3. Did defendants breach any f i d u c i a r y duty they may have

owed p l a i n t i f f ?

This Court has previously held t h a t summary judgment i s

usually inappropriate where the i n t e n t of the contracting p a r t i e s
is an important consideration. Fulton v. Clark, supra; Kober &
Kyriss v. Billings Deaconess Hospital, supra. Because this
and other questions heretofore mentioned remain at issue, we hold
summary judgment was improperly granted in this case.
Because this case must be remanded, we feel some direction
to the District Court on the remaining two issues is appropriate.
The first issue in essence is whether unmatured installments
of a special improvement district assessment constitute an encum-
brance upon the real property upon which they are assessed from
the date the special improvement district assessment was levied,
or from the date the individual installments of the assessment
mature.
By statute, a special improvement district assessment "shall
constitute a lien upon and against the property upon which such
assessment is made and levied" and the assessment attaches as a
lien to the property assessed "from and after the date of the
passage of the resolution levying such assessment * * * " Section
.
11-2229, R.C.M. 1947. The only way in which the lien created by
the assessment can be extinguished is by payment of the assessment
including all penalties, costs and interest. Section 11-2229,
R.C.M. 1947.
Clark v. Demers, 78 Mont. 287, 254 P. 162 (1927) and State
ex rel. Malott v. Board of Commissioners, 89 Mont. 37, 296 P. 1

(1931), relied on by plaintiff, do not stand for the proposition
that special improvement district assessment installments become
liens upon the property assessed only upon maturity of the install-
ments. Clark and Malott are distinguishable from the instant case
in that they dealt with irrigation district assessments rather
than special improvement district assessments. Both kinds of assess-
ments a r e s t a t u t o r i l y controlled; thus, one must look t o t h e

s t a t u t e s c r e a t i n g them t o determine the time the l i e n of assess-

ment a t t a c h e s .

The s t a t u t o r y provisions regarding s p e c i a l improvement d i s -

t r i c t s a r e s e t out i n sections 11-2201 through 11-2288, R.C.M.

1947. To c r e a t e a s p e c i a l improvement d i s t r i c t , the c i t y council

must f i r s t pass a resolution of i n t e n t and give public n o t i c e

.thereof. After the p r o t e s t time has elapsed, the council must

pass a resolution a c t u a l l y c r e a t i n g the s p e c i a l improvement

district. Section 11-2207, R.C.M. 1947.

The council then determines the e n t i r e c o s t of the proposed

improvements and e s t a b l i s h e s a method by t h i c h i t s h a l l a s s e s s

the c o s t o f - the improvements a g a i n s t t h e property owners who

a r e subject t o the assessment. Section 11-2214, R.C.M. 1947.

B a separate resolution, t h e council l e v i e s and assesses a
y

tax upon a l l taxable property i n the s p e c i a l improvement d i s -

trict. This resolution contains a d e s c r i p t i o n of each l o t and

parcel of land with the name of the owner i f known, the amount

of each payment t o be made, and the d a t e when it becomes delinquent.

The assessment may be paid i n equal annual installments spread

over a term n o t exceeding twenty years. Section 11-2222, R.C.M.

1947.

The s t a t u t e under which i r r i g a t i o n d i s t r i c t assessments i n

Clark were made, provided t h a t the board of d i r e c t o r s of each

i r r i g a t i o n d i s t r i c t should make a y e a r l y determination of t h e

t o t a l amount of money needed f o r t h a t year f o r the administrative

expenses of the d i s t r i c t . The board would then levy a proportionate

amount of t h e yearly c o s t a g a i n s t each landowner i n the d i s t r i c t .

The t a x thus determined would become a l i e n upon the land and

the l i e n would a t t a c h "as of the f i r s t Monday of March of t h a t

year". Laws of Montana 1921, Ch. 153, 522 (repealed 1929).
 The s t a t u t o r y schemes f o r s p e c i a l improvement d i s t r i c t s

and f o r i r r i g a t i o n d i s t r i c t s thus d i f f e r e d i n two important

ways: (1) t h e e n t i r e c o s t of the s p e c i a l improvement d i s t r i c t

i s made i n one determination and assessed accoedingly, whereas

the i r r i g a t i o n d i s t r i c t assessment i s determined yearly and t h e

amount of t h e yearly assessment f l u c t u a t e s according t o t h e

needs of t h e d i s t r i c t ; and (2) the s p e c i f i c s t a t u t o r y times a t

which the ass-nts a t t a c h t o the property a s l i e n s , i . e . , t h e
assessment
date of the resolution levying the s p e c i a l improvement d i s t r i c t /

versus "the f i r s t ~ & d a ~March of [each] year."
of

Section 67-1617, R.C.M. 1947, provides t h a t the term

"encumbrances" includes taxes, assessments, and a l l l i e n s upon

r e a l property, Therefore, a l i e n created by a. s p e c i a l improve-

ment d i s t r i c t assessment i s an encumbrance upon the property

which d a t e s from the passage of the resolution c r e a t i n g the

assessment.

The remaining i s s u e involves what evidence i s s u f f i c i e n t

t o support an award of attorney fees. The promissory note upon

which p l a i n t i f f sued provided f o r recovery of a reasonable

attorney f e e i n case s u i t was brought t o recover on t h e note,

The only e d d e n c e p l a i n t i f f presented t o e s t a b l i s h a reasonable

attorney f e e was a copy of her r e t a i n e r agreement with her

attorney. This was a contingent f e e agreement authorizing her

attorney t o r e t a i n one-third of any monies received a s compensa-

t i o n f o r h i s services. On the b a s i s of t h i s agreement alone,

the court awarded p l a i n t i f f $1,450 a s a reasonable attorney fee.

W disapprove of an award of attorney f e e s based on t h i s
e

type of documentation. W have previously approved guidelines
e

f o r such an award. Crncevich v. Georgetown Recreation Corp.,

168 Mont. 113, 541 P.2d 56 (1975). Those zguidelines, which
enumerated the items to be considered in making an award, include:
"*** the amount and character of the services
rendered, the labor, time, and trouble involved,
the character and importance of the litigation in
which the services were rendered, the amount of
money or the value of property to be affected, the
professional skill and experience called for, the
character and standing in the profession of the
attorneys. * * * The result secured by the services
of the attorneys may be considered as an important
.
element in determining their value . 168 Mont 119,120.
"
The retainer agreement between plaintiff and her attorney
does not conform to the above requirements. The result of the
negotiations between an attorney and his client as to their

fee agreement is not controlling in fixing a reasonable attorney
fee to assess against the opposing party. Such an award must
be determined in accordance with the guidelines enumerated in
Crncevich.
The cause is reversed and remanded with instructions to
proceed in accordance with this Opinion.

Justice