State Ex Rel. Department of Highways v. Midland Materials Co.

No. 82-375

I N THE SUPREME COURT O F THE STATE O F M O N T A N A

1983

THE STATE O F MONTANA, a c t i n g b y a n d
t h r o u g h i t s Department of Highways,

Plaintiff and Respondent,

VS.

MIDLAND MATERIALS C O . ,

Defendant. and R e s p o n d e n t ,

and

TIMOTHY E . WOOD,

Defendant and A p p e l l a n t .

Appeal from: D i s t r i c t Court of the Thirteenth J u d i c i a l D i s t r i c t ,
I n and f o r t h e County of Yellowstone
Honorable Diane Barz, Judge p r e s i d i n g .

Counsel of Record:

For Appellant:

Bruce E. Lee, Bill.ings, Montana

For Respondents:

Crowley, Haughey, Hanson, Toole & Dietrich, Billings,
Montana
J a m e s R. B e c k , H e l e n a , M o n t a n a

Submitted on b r i e f s : February 24, 1983

Decided: May 1 2 , 1 9 8 3
Filed:

--
Clerk
Mr. J u s t i c e L . C . G u l b r a n d s o n d e l i v e r e d t h e O p i n i o n of t h e C o u r t .

T h i s case stems from a n i n t e r p l e a d e r a c t i o n brought by the

Nontana Highway Department to determine whether respondent,

Midland Materials Co., or appellant, Tim Wood, was the

"successor-in-interest" t o Edith I . Walters , t h e f o r m e r owner of

p r o p e r t y known as t h e "State Pit," u n d e r s e c t i o n 60-4-204, MCA.

The District Court of the Thirteenth Judicial District ,
Yellowstone County, denied d e f e n d a n t Wood's motion for summary

judgment and granted the summary judgment motion submitted by

Midland Materials Co. From that judgment, Tim Wood appeals.

The p a r t i e s s t i p u l a t e d t h e f a c t s to be a s f o l l o w s :

"1. On December 3 0 , 1 9 5 4 E d i t h I . Walters
conveyed by deed . ..
t o t h e S t a t e Highway
Commission o f Montana a t r a c t o f l a n d i n
Yellowstone County, Montana (hereinafter
'State Pit' ) .
"2. In 1 9 7 4 E d i t h I . Walters c o n v e y e d b y
warranty deed . . . t o M . G . Long p r o p e r t y
adjacent t o and n o r t h and s o u t h w e s t of t h e
'State P i t 1 , excepting the ' S t a t e P i t 1 . In
1975 M. G . Long c o n v e y e d t h e ' M i d l a n d ' p r o -
perty to d e f e n d a n t Midland M a t e r i a l s C o . by
warranty deed ...
" 3 . On February 4, 1981 the Montana
D e p a r t m e n t o f Highways s e n t a l e t t e r to E d i t h
Walters . ..
" 4 . On February 6, 1981 the Montana
Department of Highways sent a l e t t e r to
Midland Materials Co. ...
"5. Sometime p r i o r t o J u n e 2 5 , 1981 t h e
Montana D e p a r t m e n t o f Highways p u b l i s h e d a
N o t i c e of S a l e of t h e ' S t a t e P i t 1 p r o p e r t y

"6. On J u n e 2 5 , 1 9 8 1 t h e Montana D e p a r t m e n t
o f Highways, a c t i n g p u r s u a n t t o t h e a u t h o r i t y
g r a n t e d b y 5 9 60-4-202 and 60-4-204, MCA, con-
d u c t e d a p u b l i c a u c t i o n a t B i l l i n g s , Montana
of the ' S t a t e P i t 1 property. The b i d d i n g a t
s a i d a u c t i o n was opened b y M r . J o e l Long o f
defendant
$18,000.00.
Midland Materials Co .
D e f e n d a n t Timothy E. Wood t h e n
for

b i d $18,100.00. A f t e r an unsuccessful call
f o r h i g h e r b i d s t h e a u c t i o n e e r concluded t h e
sale a t t h e $18,100.00 h i g h b i d . M r . Joel
Long t h e n a l l e g e d t o t h o s e p r e s e n t t h a t t h e y
( M i d l a n d Materials Co.) were s u c c e s s o r s i n
i n t e r e s t t o E d i t h I . W a l t e r s and would l i k e t o
e x e r c i s e t h e i r r i g h t to meet t h e h i g h b i d .
M r . Long was i n f o r m e d by a Highway D e p a r t m e n t
r e p r e s e n t a t i v e to send h i s c l a i m t o t h e S t a t e
b y r e g i s t e r e d mail i n p r e s c r i b e d f o r m .
 "7. On J u n e 2 7 , 1 9 8 1 d e f e n d a n t Timothy E .
Wood o b t a i n e d a q u i t c l a i m d e e d
' S t a t e P i t 1 f r o m E d i t h I . Walters whom he had
. . .
of t h e

f i r s t m e t and c o n t a c t e d a f t e r t h e p u b l i c a u c -
t i o n and a f t e r he had t a l k e d w i t h h i s a t t o r -
ney, Jeff Essman, a b o u t Midland Materials
Co. I s claim t o be t h e s u c c e s s o r i n i n t e r e s t .

"8. Both d e f e n d a n t Midland M a t e r i a l s Co. and
d e f e n d a n t T i m o t h y E. Wood claim t o be t h e s u c -
c e s s o r i n i n t e r e s t o f E d i t h I . Walters f o r t h e
p u r p o s e o f S 60-4-204, MCA, and a r e b o t h p r e -
p a r e d t o p a y t h e h i g h b i d p r i c e to t h e S t a t e
Highway Commission .. .
" 9 . The S t a t e o f Montana, p r i o r t o t h e f i l i n g
of t h i s s u i t , r e j e c t e d t h e claim o f Timothy E.
Wood by l e t t e r d a t e d J u l y 2 , 1 9 8 1 . "

S u b s e q u e n t t o t h e s t i p u l a t i o n and a £ t e r j u d g m e n t was e n t e r e d ,

Midland Materials submitted a check to the State for the

f u l l p u r c h a s e p r i c e and a d e e d was m a i l e d t o them o n A u g u s t 2 5 ,

1982. The deed, although signed prior to A u g u s t 2 5 , was n o t
mailed u n t i l t h a t d a t e . On A u g u s t 2 4 , Tim Wood had o b t a i n e d a

s t a y of execution but it was not served on a p p e l l a n t s o r the

State prior to the issuing of the deed. The deed was sub-

sequently recorded.

The issue presented is w h e t h e r t h e D i s t r i c t C o u r t e r r e d in

determining Midland Materials Co. to be the "successor-in-

interest" as that term is used in section 60-4-204, MCA?

As t h i s case is a n a p p e a l from a summary j u d g m e n t , we must
f o l l o w t h e r u l e s as s e t o u t i n D a r r a h v . M i l b a n k Mutual I n s u r a n c e

Company ( 1 9 8 3 ) -- . -- Mont . -- .- , 6 5 8 P.2d 3 7 4 , 40 S t . R e p . 117.

There we s t a t e d :

" I n cases i n v o l v i n g summary j u d g m e n t t h e p r e -
t r i a l r e c o r d s m u s t be l o o k e d a t t o d e t e r m i n e
whether t h e r e a r e any genuine i s s u e s of
m a t e r i a l f a c t , 56 ( c ) M.R.Civ.P., Flemmer v .
Ming ( 1 9 8 0 ) r 6 2 1 P.2d 1 0 3 8 , 37 S t . R e p . 1 9 1 6 ,
b e c a u s e summary j udgment i s o n l y p r o p e r u n d e r
Rule 56(c) M.R.Civ.P., where the record
d i s c l o s e s no s u c h i s s u e s e x i s t and t h e moving
p a r t y is e n t i t l e d t o judgment as a matter of
law. R e a v e s v . R e i n b o l d ( 1 9 8 0 ) r 6 1 5 P.2d 8 9 6 ,
898, 37 St.Rep. 1500, (and cases cited
t h e r e i n ) . A s t h e p u r p o s e of t h e p r o c e e d i n g is
t o d e t e r m i n e whether t h e r e a r e any material
i s s u e s o f f a c t i n v o l v e d , it s h o u l d be r e m e m -
b e r e d t h a t t h e f o r m a l i s s u e s p r e s e n t e d by t h e
pleadings a r e not controlling. Byrd v.
B e n n e t t ( 1 9 8 1 ) , 6 3 1 P.2d 6 9 5 , 38 S t . R e p . 1 0 8 3 .

"The moving p a r t y i n a summary j u d g m e n t a c t i o n
h a s t h e b u r d e n o f showing t h e c o m p l e t e a b s e n c e
 o f material i s s u e s o f f a c t . Byrd v . B e n n e t t
( 1 9 8 1 ) , 6 3 1 P.2d a t 696; C e r e c k v . A l b e r t s o n l s
I n c . ( 1 9 8 1 ) , 637 P.2d 5 0 9 , 5 1 1 , 38 S t . R e p .
1 9 8 6 , ( a n d cases c i t e d t h e r e i n ) ; Rumph v. Dale
E d w a r d s , I n c . ( 1 9 7 9 ) , 6 0 0 P.2d 1 6 3 , 3 6 S t . R e p .
1 0 2 2 . " 658 P.2d a t 375.
In this case, the a b s e n c e of such issues has been shown,

despite there being no prior interpretation of the term
"successor-in-interest," contained i n s e c t i o n 60-4-204, MCA, by
this Court or the legislature, or any indication as to the

legislative intent from the s t a t u t e as a w h o l e . Guidance in
construing this term is p r o v i d e d by t h e i n t e r p r e t a t i o n of the
Montana Highway D e p a r t m e n t , t h e a g e n c y c h a r g e d w i t h a d m i n i s t e r i n g

the statute. Montana Power Company v . Cremer (1979) 1 8 2 Mont.

S e c t i o n 60-1-102, MCA, t h e l e g i s l a t i v e p o l i c y and i n t e n t sec-

tion of the Highway Code, placed a great deal of trust and
a u t h o r i t y i n t h e h a n d s o f highway o f f i c i a l s . The p e r t i n e n t p a r t
of t h a t s e c t i o n states:
"Consistent with the foregoing determination
and d e c l a r a t i o n s , t h e l e g i s l a t u r e i n t e n d s :

" (1) t o p l a c e a h i g h d e g r e e of t r u s t i n t h e
h a n d s o f t h o s e o f f i c i a l s whose d u t y i t is,
w i t h i n t h e l i m i t s of a v a i l a b l e f u n d s , t o p l a n ,
d e v e l o p , o p e r a t e , m a i n t a i n , and p r o t e c t t h e
highway f a c i l i t i e s of t h i s s t a t e f o r p r e s e n t
a s w e l l as f o r f u t u r e u s e ;

" ( 4 ) to p r o v i d e s u f f i c i e n t l y broad a u t h o r i t y
t o e n a b l e t h e highway o f f i c i a l s a t a l l l e v e l s
o f g o v e r n m e n t t o f u n c t i o n a d e q u a t e l y and e f f i -
c i e n t l y i n a l l areas of t h e i r r e s p e c t i v e
r e s p o n s i b i l i t i e s , s u b j e c t to t h e l i m i t a t i o n s
o f t h e c o n s t i t u t i o n and t h e l e g i s l a t i v e man-
d a t e h e r e i n a f t e r imposed
MCA.
." S e c t i o n 60-1-102,

Under this authority the Highway Department in the past has
interpreted the terms "successor-in-interest" t o mean t h e a d j a -
c e n t l a n d o w n e r whose c h a i n o f t i t l e c a n be t r a c e d t o t h e o r i g i n a l

owner of the e n t i r e tract. The D i s t r i c t C o u r t s o f o u n d i n i t s

c o n c l u s i o n of law N o . 7 . A f t e r c i t i n g s e c t i o n 60-1-102, MCA, the
l e g i s l a t i v e p o l i c y and i n t e n t s e c t i o n of t h e Highway Code, the

case o f C a s t l e s v . S t a t e ex r e l . Montana D e p a r t m e n t of Highways
 ( 1 9 8 0 ) ; -- - - Mont . 609 P , 2 d 1 2 2 3 , 37 S t . R e p . 2 3 4 , and t h e
s t i p u l a t i o n e n t e r e d i n t o by a l l t h e p a r t i e s , it s t a t e d :

" A l l of t h e s e f a c t o r s i n d i c a t e d t h a t the
a g e n c y i n t e r p r e t a t i o n of 60-4-204, MCA, b y the
Montana D e p a r t m e n t of Highways s u p p o r t s the
c o n c l u s i o n t h a t Midland M a t e r i a l s Co. i s the
'successor i n i n t e r e s t . ' "
Under the case law, it is clear that, when faced with

p r o b l e m s o f s t a t u t o r y c o n s t r u c t i o n , t h e c o u r t m u s t show d e f e r e n c e
a n d r e s p e c t t o t h e i n t e r p r e t a t i o n s g i v e n t h e s t a t u t e by t h e o f f i -

c e r s and a g e n c i e s c h a r g e d w i t h a d m i n i s t r a t i o n . Montana Power Co.

v. Environmental P r o t e c t i o n Agency (9th Cir. 1 9 7 9 ) , 6 0 8 F.2d
334, 344, Department of Revenue v. P u g e t Sound Power and L i g h t
( 1 9 7 8 ) , 1 7 9 Mont. 2 5 5 , 5 8 7 P.2d 1 2 8 2 , N o r t h e r n Cheyenne T r i b e v.

H a l l o w b r e a s t ( 1 9 7 6 ) , ' 4 2 5 U.S. 6 4 9 , 48 L.Ed.2d 274, 96 S . C t . 1793.
"The p e r s u a s i v e n e s s of a n a d m i n i s t r a t i v e i n t e r p r e t a t i o n of a
statute depends upon the thoroughness evident in its con-

sideration, the validity of its reasoning and its consistency
with earlier and later pronouncements of the same agency.
[citation omitted]" Blackfeet Tribe of Indians v. State of

Montana (D.Mont. 1 9 8 1 ) , 507 F,Supp. 446, 4 5 1 ( s e e a l s o , Montana
Power Company v . E n v i r o n m e n t a l P r o t e c t i o n Agency, s u p r a ) . In the

case a t bar, t h e r e i s no s u b s t a n t i a l e v i d e n c e t o show t h a t t h e

interpretation of "successor-in-interest" made by the Highway
Department has not been consistently applied over the years.
I t s h o u l d a l s o be noted t h a t t h e D i s t r i c t Court found t h a t

the interpretation advanced by t h e a p p e l l a n t would lead to an
absurd r e s u l t i f adopted. I n c o n c l u s i o n of law No. 1 0 i t s t a t e d :
" I n t h i s case 'successor-in-interest' can only
r e a s o n a b l y r e f e r t o t h e p r e s e n t owner of t h e
a d j a c e n t p r o p e r t y from w h i c h o r i g i n a l t r a c t of
land the Montana D e p a r t m e n t of Highways
acquired its portion or s t r i p . Any o t h e r
i n t e r p r e t a t i o n would be u n r e a s o n a b l e as i t
would- l e a d t o p a r t i e s w i t h o u t a n i n t e r e s t i n
t h e a d j a c e n t land being allowed t h e advantage
o f being a b l e t o match t h e h i g h b i d a t p u b l i c
a u c t i o n by o b t a i n i n g q u i t c l a i m d e e d s f r o m
o r i g i n a l o w n e r s who no l o n g e r had a n y owner-
ship interest. "

T h i s C o u r t h a s p r e v i o u s l y h e l d t h a t when c o n s t r u i n g s t a t u t e s , t h e

i n t e r p r e t a t i o n s h o u l d be r e a s o n a b l e t o a v o i d s u c h a b s u r d r e s u l t s .
Montana Power Co. v. Cremer, supra (and c a s e s cited therein).

F o r t h e f o r e g o i n g r e a s o n s , w e b e l i e v e t h e D i s t r i c t C o u r t was

c o r r e c t i n g r a n t i n g summary j u d g m e n t .
/
A £ f irmed .
Justice

W e concur:

= 2 A d $ &*&a
Chief J u s t i c e

Justices
Mr. Justice John C. Sheehy, dissenting:

I dissent from the foregoing opinion.
I would hold (1) the term "successor in interest" does

not include a successor in title; (2) the appeal here is not
moot by virtue of the delivery of a quitclaim deed by the
Highway Department to Midla.nd Materials Co. ; (3) Timothy E.
Wood, by virtue of the quitclaim deed which he received from
the original grantor, Edith Walters, is merely a transferee,
a successor in title, and not a "successor in interest"; and
(4) the quitclaim deed to Midland Materials should be held
null and void, set aside, and the Highway Department ordered
to follow the proper statutory procedures if it intends to
sell the land in question.
The majority errs in this case because it misinterprets
the term "successor in interest" both on the facts here and
the applicable law.
First let us determine what a "successor i n interest"
.
is. It certainly is not a successor in title. The two terms
are not synomous.
"In order to be a 'successor in interest,' a party
must continue to retain the same rights as the
original owner without - change in ownership.
a
There must be a change in form only and not in
substance. - - - not include - transfer --
It does a from one
party to another ...
"The City endeavors to apply the terms 'successor
in interest,' and 'successor in title' as having
the same meaning, but cites no law to support this
claim . . .'
I City of New York v. Turnpike
Development Corporation (S.Ct. Kings Co. 1962) , 36
Misc.2d 704, 233 N.Y.S.2d 887.
A successor in interest an owner of real property may be
one who is substituted for the owner by operation of law,
such as an heir, a personal representative, a trustee in
bankruptcy, a purchaser at foreclosure, or any other change
which is in form only and not in substance. It cannot
include a transferee by deed or assignment from the owner
because such a transferee or assignee is a successor in
title, and not a successor in interest.
Moreover, on the facts of this case, there can be no
"successor in interest," because the original owner, Edith
Walters, is at the time of these proceedings in existence and
very much so. The Sta-terecognized that she was in existence
by serving upon her a request for a waiver of her right as
the original owner. The statute which applies says
"The owner from whom the interest is originally
acquired - - successor in interest shall have
or his
the o ~ t i o n to purchase theinterest by offering
therecore an amount of money equal to