Majers v. Shining Mountains

No. 8 5 - 1 0 0
IN THE SUPREME COURT OF THE STATE OF MONTANA
1985

FRED W. MAJERS, CECILA MAJERS,
et al.
Plaintiffs and Respondents,

THE SHINING MOUNTAINS, a California
limited partnership,
Defendant and Appellant.

APPEAL FROM: District Court of the Fifth Judicial District,
In and for the County of Madison,
The Honorable Frank Davis, Judge presiding.

COUNSEL OF RECORD:

For Appellant:
Randy Dix argued, Helena, Montana
Jones & Hoffman; Chester Lloyd Jones argued, Virginia
City, Montana
Landoe, Brown, Planalp, Kommers & Johnstone, Bozeman,
Montana

For Respondent:
Poore, Roth & Robinson; Urban L. Roth and Charles R.
Anderson argued, Butte, Montana

Submitted: September 18, 1985

Decided: January 7, 1986
Mr. Justice L. C. Gulbrandson delivered the Opinion of the
Court.

Appellant, Shining Pl'lountains, appeals an order of the
District Court of the Fifth Judicial District, Madison
County, granting plaintiffs' motion for partial summary
judgment. The District Court held that Shining Mountains had
an implied covenant to construct improvements indicated on a
recorded plat. The order also stated the covenant could be
enforced through specific performance. We reverse and remand
for further proceedings.
Shining Mountains acquired and subdivided a 7,000 acre
ranch in Madison County between January and July, 1972. In
order to sell the lots, they prepared and recorded
subdivision plat maps which assigned a number to each lot and
designa-ted common areas and roadways. These plats were filed
prior to the effective date of the Montana Subdivision and
Platting Act in §§ 76-3-501 et. seq., MCA, and thus were not
subject to its provisions. When Shining Mountains prepared
the purchase and sale contracts, they specifically referred
to the recorded plats. The purchase and sale contracts and
protective covenants, also recorded by Shining Mountains,
provided that Shining Mountains would form a non-profit
corporation or similar entity to administer such things as
the "overseeing and maintenance of all common areas." The
agreements contained no statements on who would construct
roads or c o m o n areas.
Plaintiffs and respondents are the purchasers and
owners of some of the residential lots within this
subdivision. They purchased lots from Shining Mountains
between 1974 and 1978. They stated in affidavits that
Shining Mountains personnel told them roads would be
constructed and maintained by the sellers. They also stated
that Shining Mountains personnel told them a dam would be
constructed across the creek on the property to form a lake
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suitable for fishing and other recreation. Respondents
apparently asked Shining Mountains to open and construct the
designated roadways. Shining Mountains was unwilling to
construct the roadways.
Respondents filed their complaint on February 17, 1984
alleging: (1) the existence of a common-law implied covenant
to open and build roadways in Shining Mountains; and
(2) Shining Mountains was estopped from denying this
obligation because of representations made about the road
construction. The complaint asked for a decree of specific
performance or, alternatively, money damages. On April 2,
1984, Shining Mountains submitted a motion to dismiss
contending that the first count failed to state a claim upon
which relief could be granted. They argued that, as a matter
of law, roa-dway easements reserved in subdivision plats do
not create any implied obligation on the part of a subdivider
to open and construct roads at its expense. Respondents
conceded that this was a case of first impression in Montana.
The District Court denied the motion to dismiss on May 4,
1984. In its answer, Shining Mountains repeated contentions
from the motion to dismiss and raised several affirmative
defenses including impossibility of performance for lack of
an ascertainable standard and the statute of limitations.
Respondents submitted a motion for partial summary
judgment on their implied covenant theory of recovery on July
2, 1984. At about the same time, Shining Mountains filed a
motion to stay this proceeding on the grounds that related
lawsuits brought four years earlier by other lot owners could
afford full relief to all claimants. After briefs and oral
argument by both parties, the District Court granted
respondents1 motion for partial summary judgment and denied
Shining Mountains1 motion to stay this action. On motion by
Shining Mountains and after argument by both parties, the
District Court certified its judgment as final pursuant to
Rules 54(b) and 58 M.R.Civ.P. on November 7, 1984.
Shining Mountains raises three issues on appeal:
(1) Whether the District Court erred by granting
partial summary judgment and ruling that reservation of
easements for roadways in subdivision plats creates an
implied common-law covenant by the lot seller to open and
construct roadways at his expense.
(2) Whether the claims for relief are barred by
applicable statutes of limitations.
(3) Whether the remedy of specific performance is
available in this case.
Summary judgment is proper if "there is no genuine
issue as to any material fact and . . . the moving party is
entitled to a judgment as a matter of Rule 56 (c),
P4.R.Civ.P. This Court has consistently held that the moving
party has the burden of showing a complete absence of any
genuine fact issue material to the substantive principles
which entitles him to judgment as a matter of law. This rule
imposes a strict standard on the movant. Farmer's Ins.
Exchange v. Janzer (Mont. 1985), 697 P.2d 460, 461-462, 42
St.Rep. 337, 339. Once this burden is met, the burden shifts
to the party opposing the motion, who must come forward with
substantial evidence raising a factual issue. Farmer's Ins.
Exchange, 697 P.2d at 462. When reviewing the summary
judgment on appeal, this Court views the evidence in a light
most favorable to the party opposing summary judgment and
affords that party the benefit of reasonable inferences from
the offered proof. Mally v. Asanovich (1967), 149 Mont. 99,
423 P.2d 294.
Shining Mountains contends, in the first issue, no
legal authority exists to hold that reservations of roadway
easements in plats create an implied covenant in the seller
to open and construct the roadways. The District Court
4
r e l i e d on t h e r e a s o n i n g i n B e e c h l e r v. Winkel (Ohio 1 9 7 8 ) ,

392 N.E.2d 889, and n o t e d t h a t 5 76-3-304, MCA, which came

into effect after the plats were filed, recognized the

general p r i n c i p l e s involved.

I n Beechler, 392 N.E.2d 889, t h e d e f e n d a n t s u b d i v i d e d

farmland. When h e submitted the plat for recording, the

defendant signed an owner's certificate, required by the

c o u n t y , s t a t i n g t h a t r o a d s would be c o n s t r u c t e d a c c o r d i n g t o

county s p e c i f i c a t i o n s . Defendant t e s t i f i e d he b e l i e v e d t h a t

the certificate obligated him to build roads to those

s p e c i f i c a t i o n s o n l y i f he wanted them t o be p u b l i c . H e then

b u i l t r o a d s and s o l d l o t s . Testimony showed t h a t t h e c o s t o f

building r o a d s t o t h e s p e c i f i c a t i o n s would exceed t h e s a l e

p r i c e o f t h e l o t i n some c a s e s . The e v i d e n c e c o n f l i c t e d a s

t o what o r a l r e p r e s e n t a t i o n s t h e s e l l e r made t o p u r c h a s e r s .

No p u r c h a s e r t e s t i f i e d t h a t he looked a t t h e p l a t p r i o r t o

buying t h e property. B e e c h l e r , 392 N.E.2d a t 894, h e l d t h a t

filing a plat which shows streets and selling lots with

reference t o the p l a t " c r e a t e s ea-sements and r i g h t s i n t h e

p r i v a t e owners." B e e c h l e r i s d i s t i n g u i s h a b l e from t h e c a s e

a t b a r i n t h a t t h e defendant i n Beechler agreed i n w r i t i n g t o

c o n s t r u c t t h e r o a d s and t h e w r i t i n g was p a r t o f t h e r e c o r d e d

plat. Here, no w r i t i n g e x i s t s t o show such an agreement and

t h e c o u n t y d i d n o t r e q u i r e such a promise.

Other authorities, cited by respondents, support

contentions that selling lots with reference to a map

i n d i c a t i n g s t r e e t s c r e a t e s p r i v a t e enforceable easements i n

the purchasers for use of those streets; purchasers may

e n f o r c e a d e d i c a t i o n o f such s t r e e t s ; and s e l l i n g l o t s shown

t o be on a s t r e e t i n a p l a t c r e a t e s an i m p l i e d covenant t h a t

the street exists. Respondents acknowledge that these

authorities a r e not directly applicable.

S e c t i o n 76-3-304, MCA, p r o v i d e s t h a t t h e r e c o r d i n g o f a

p l a t e s t a b l i s h e s t h e i d e n t i t y o f t h e l a n d shown and t h a t t h e

5
p l a t i s i n c o r p o r a t e d i n t o t h e i n s t r u m e n t o f c o n v e y a n c e when

t h e l a n d i s conveyed w i t h r e f e r e n c e t o t h e p l a t . The p l a t s

h e r e show roadway e a s e m e n t s . This s t a t u t e does n o t convert

t h e i n d i c a t i o n o f a n ea.sement i n a p l a t t o a p r o m i s e t o b u i l d

t h e road. The p l a t m e r e l y e s t a b l i s h e s t h e l o c a t i o n o f t h e

easements. Respondents also contend that S S 76-3-501 and

-507, MCA, may b e a c o d i f i c a t i o n o f a n e x i s t i n g common law

d u t y and t h u s a p p l i c a b l e . W e disagree. These s e c t i o n s g i v e

l o c a l government a u t h o r i t y o v e r s u b d . i v i s i o n r e g u l a t i o n s and

a l l o w t h e l o c a l government t o r e q u i r e t h e p o s t i n g o f a bond

or other security in lieu of constructing public

improvements. These sections were specifically made

prospective i n application a f t e r t h e p l a t s i n t h i s case w e r e

recorded. They w e r e a l e g i s l a t i v e r e s p o n s e t o p r o b l e m s w i t h

d e v e l o p e r s , n o t a c o d i f i c a t i o n o f common law. Montana had no

case law on this issue. Further, case law from other

jurisdictions indicates a different common law rule. In

Buckley v. Maxson (Conn. 1935), 181 A. 922, plaintiff

requested an injunction to restrain defendants from

i n t e r f e r i n g with her use of a s t r i p of land t o access her
property. Defendants were successors in interest to the

p e o p l e who s o l d h e r t h e p r o p e r t y . D e f e n d a n t s w e r e aware t h a t

p l a i n t i f f had a c q u i r e d h e r l a n d r e l y i n g on l a n d r e c o r d s which

showed a proposed extension of a street t o h e r property.

That court cited cases from several jurisdictions on the

common law r u l e t h a t where a c o n v e y a n c e d e s c r i b e s land a s

bounded by a proposed street, defendants cannot "d.eny t h e

existence of a street at least sufficient t o entitle the

plaintiff t o a r i g h t o f way o v e r t h e l a n d s o r e f e r r e d t o . "

B u c k l e y , 1 8 1 A . a t 925. The c o u r t t h e n s t a t e d :

... N o c o v e n a n t i s i m p l i e d , however,
that the street will be made and
maintained f i t f o r t r a v e l . Hennessey v .
Old Colony & Newport R. Co., 1 0 1 Mass
540, 100 A m . D e c . 3.27 ...
A l l that the
plaintiff is held e n t i t l e d t o is a right
to use the locus ...
without
 obstruction or unreasonable interferences
by the defendants.
Buckley, 181 A. at 925.
-
More recent case law also supports the proposition that
instruments such as those in the case at bar do not comprise
a promise, express or implied, to construct roads. In Ute
Park Summer Homes Ass'n v. Maxwell Land Gr. Co. (N.M. 1 9 6 7 ) ,
427 P.2d 249, the New Mexico Supreme Court reversed a summary
judgment entered for the seller and developer and discussed
legal principles applicable to the case at bar. The plat, in
that case, showed lot lines and numbers, existing and
proposed roads, an open area labelled "golf course" with a
"clubhouse" located at one end, and an area labelled "tennis
courts" nearby. Although the plat was not recorded, it was
distributed and used in the sale of these lots. The
developer then sold lots in the "clubhouse" and "golf course"
area without use restrictions. The purchasers and owners
filed a complaint seeking to enjoin any transfers of land
without use restrictions, to obtain an order directing the
development of the lands, and for a declaratory judgment as
to the parties' rights. Reversing a summary judgment entered
for the developers on the injunction issue, the court held
that "where land is sold with reference to a map or plat
showing a park or like open area, the purchaser acquires a
private right, generally referred to as an easement, that
such area shall be used in the manner designated." Ute Park,
427 P.2d at 253. The rationale for this rule is relevant for
this case. "It is the use made of the plat in inducing the
purchasers [sic], which gives rise to the legally enforceable
right in the individual purchasers, and such is not dependent
upon a dedication to public use, or upon the filing or
recording of the plat." Ute Park, 427 P.2d at 253.
Similarly here, the purchasers acquired an easement for the
designated use. Whether there is any legally enforceable
right to have the roads constructed depends not on the
designation in the plats but on the use of those plats in
inducing purchases. The instruments alone do not give rise
to a promise to open or construct the roads. Factual issues
remain on the use made of the plats and what representations
were made in the sale of lots. We therefore reverse the
order granting partial summary judgment for respondents and
remand for further proceedings.
In the second issue, Shining Mountains argues that the
claims are barred by the statute of limitations in either
§ 27-2-207 (1) or -202 (3), MCA. Section 27-2-207 (1), MCA,
prescribes a two year limit on actions for "injury to or
waste or trespass on real or personal property." This case
does not concern injury, waste or trespass to property.
Section 27-2-202(3), MCA, limits the period for commencing an
action based on "an obligation or liability, other than a
contract, account, or promise, not founded upon an instrument
in writing" to within three years. The issue here concerns
an implied covenant arising from the use of written
documents. "Whatever is implied. in a contract is as
effectual as what is expressed." Berthelote v. Loy Oil Co.
(1933), 95 Mont. 434, 445, 28 P.2d 187, 190, cited in U.V.
Industries Inc. v. Danielson (1979), 184 Mont. 203, 228, 602
P.2d 571, 586. "The appropria.te statute of limitations is
therefore eight years, the limitation for actions based on a
written contract. Section 27-2-202 (1), MCA. " U.V.
Industries,Inc, supra. Accordingly, we hold that the
purchasers1 cla.ims are not barred by the statute of
limitations in § 27-2-207 (1) or -202 (3), MCA.
The District Court held that specific performance is a
remedy available to respondents for breach of the implied
covenant. Shining Mountains argues in its third issue that

this remedy is not available. The District Court, on remand,
may find no such covenant exists. In addition, the record on
8
appeal does not contain the evidence necessary for a

determination on this issue. Therefore, we leave this issue
for any further consideration found necessary by the District
Court.
Reversed and remanded. ,/

Justice ;
!

We concur: /7