No. 12989
I N T E SUPREME C U T O T E STATE O MONTANA
H OR F H F
JOHN E. FULTON, H R L C ,
AOD
S H A T and DELOIT R. WOLFE,
C W RZ
P l a i n t i f f s and Respondents,
SPENCE C A K and JAMES A , COLLIER,
LR
Defendants and A p p e l l a n t s .
Appeal from: D i s t r i c t Court of t h e Fourth J u d i c i a l D i s t r i c t ,
Honorable E. Gardner Brownlee, Judge p r e s i d i n g .
Counsel of Record:
For Appellants :
Tipp and Hoven, Missoula, Montana
Vernon Hoven appeared, Missoula , Montana
F r e d e r i c k S , P r i n c e , Jr. argued, S a l t Lake C i t y , Utah
For Respondents:
G a r l i n g t o n , Lohn & Robinson, Missoula, Montana
Lawrence F. Daly argued, and Sherman V. Lohn,
appeared, Missoula, Montana
- - - --- - -- -
Submitted: June 23, 1975
F i l e d :6i,,! G 6
M r . J u s t i c e Frank I. Haswell d e l i v e r e d t h e Opinion of t h e Court.
Defendant General P a r t n e r s a p p e a l from a summary judgment
g r a n t e d p l a i n t i f f Limited P a r t n e r s i n an a c t i o n f o r d e c l a r a t o r y
judgment. The d i s t r i c t c o u r t of Missoula County h e l d t h a t t h e
General P a r t n e r s a r e n o t e n t i t l e d a s a m a t t e r of law t o a $60,000
f e e f o r s e r v i c e s rendered i n r e n o v a t i n g and improving t h e Holiday
V i l l a g e Shopping Center. The d i s t r i c t c o u r t g r a n t e d a p e r s o n a l
judgment i n f a v o r of t h e Limited P a r t n e r s a g a i n s t one of t h e
General P a r t n e r s , Spence Clark.
P l a i n t i f f s John F. F u l t o n , Harold C. Schwartz and D e l o i t
R. Wolfe e n t e r e d i n t o a l i m i t e d p a r t n e r s h i p agreement on A p r i l
1, 1968, w i t h General P a r t n e r s Spence C l a r k and James A . C o l l i e r ,
doing b u s i n e s s a s F i n a n c i a l Management S e r v i c e , c o v e r i n g opera-
t i o n of t h e Holiday V i l l a g e Shopping Center i n Missoula, Montana.
The b r i e f s i n d i c a t e t h a t Spence C l a r k h a s s i n c e succeeded t o t h e
i n t e r e s t of James A . C o l l i e r .
Under t h e terms of t h e l i m i t e d p a r t n e r s h i p agreement,
t h e General P a r t n e r s were r e s p o n s i b l e f o r t h e management of t h e
shopping c e n t e r ; t h e Limited P a r t n e r s had no r i g h t t o p a r t i c i p a t e
i n t h e management of t h e b u s i n e s s .
The General P a r t n e r s r e c e i v e d a 5% c a p i t a l i n t e r e s t a s
c o n s i d e r a t i o n f o r t h e assumption of t h e r e s p o n s i b i l i t i e s of
managing and o p e r a t i n g t h e p a r t n e r s h i p p r o p e r t i e s and t h e l i a -
b i l i t y assumed. A l l l o s s e s i n e x c e s s of t h e c a p i t a l a c c o u n t s of
t h e l i m i t e d p a r t n e r s h i p were t h e s o l e l i a b i l i t y of t h e General
Partners. I n a d d i t i o n , Paragraph l l ( a ) of t h e l i m i t e d p a r t n e r s h i p
agreement p r o v i d e s :
"* * * The General P a r t n e r s s h a l l r e c e i v e a
r e a s o n a b l e management f e e f o r s e r v i c e s a c t u a l l y
rendered by them * * *."
During t h e l i f e of t h e p a r t n e r s h i p C l a r k p a i d himself an
a n n u a l management f e e e q u a l i n g 5% of t h e g r o s s proceeds of t h e
partnership properties. These payments a r e n o t i n d i s p u t e .
I n 1971, Clark determined t h e g r o s s and n e t r e n t a l s of
t h e b u s i n e s s could be s u b s t a n t i a l l y i n c r e a s e d by b u i l d i n g a
new s t o r e i n t h e shopping c e n t e r f o r A l b e r t s o n ' s grocery and
l e a s i n g t h e o l d A l b e r t s o n ' s space t o Skagg's Drug Center. From
1971 through 1973, Clark worked a t p u t t i n g t h i s plan i n t o e f f e c t .
He n e g o t i a t e d new l e a s e s w i t h A l b e r t s o n ' s and Skagg's; super-
v i s e d and coordinated t h e design and c o n s t r u c t i o n of t h e new
f a c i l i t i e s ; r e f i n a n c e d t h e e x i s t i n g f i r s t mortgage; and, ob-
t a i n e d f i n a n c i n g f o r t h e new c o n s t r u c t i o n p r o j e c t . lark' s
e f f o r t s r e s u l t e d i n i n c r e a s i n g t h e g r o s s r e n t a l s from $1,685,000
t o $2,700,000.
As compensation f o r t h e s e s e r v i c e s performed from 1971
through 1973, Clark p a i d himself a management f e e of $60,000.
T h i s f e e was i n a d d i t i o n t o t h e f e e of 5% of t h e p a r t n e r s h i p ' s
g r o s s proceeds which he charged a n n u a l l y f o r normal management
duties.
P l a i n t i f f s o b j e c t e d t o t h e $60,000 f e e and f i l e d a complaint
f o r d e c l a r a t o r y judgment a s k i n g t h e d i s t r i c t c o u r t t o c o n s t r u e t h e
terms of t h e l i m i t e d p a r t n e r s h i p agreement and t o o r d e r Clark t o
r e t u r n t h e $60,000. P l a i n t i f f s claimed t h e d e f e n d a n t ' s c o u r s e
of conduct s i n c e 1968 of charging o n l y a 5% management f e e
l i m i t e d t h e f e e t h a t could be charged t o 5% of t h e g r o s s r e n t a l s .
Defendant answered by claiming t h a t a l l f e e s r e c e i v e d
were reasonable f o r s e r v i c e s a c t u a l l y rendered and t h a t t h e r e
was no agreement o r a l o r w r i t t e n , e x p r e s s o r implied, l i m i t i n g
t h e management f e e s t o 5% of t h e g r o s s r e n t a l s .
O December 3 0 , 1974, t h e d i s t r i c t c o u r t g r a n t e d p l a i n t i f f s
n
summary judgment, f i n d i n g t h a t Clark was n o t e n t i t l e d t o a f e e
f o r s e r v i c e s rendered r e l a t i n g t o long t e r m renovation and i m -
provement of t h e Holiday V i l l a g e Shopping Center. The judgment
i s a p e r s o n a l judgment i n favor of p l a i n t i f f s a g a i n s t Clark.
The c o n t r o l l i n g i s s u e on a p p e a l i s whether o r n o t summary
judgment f o r p l a i n t i f f s was e r r o r . W hold i t was, v a c a t e t h e
e
judgment, and remand t o t h e d i s t r i c t c o u r t f o r t r i a l .
Rule 5 6 ( c ) , M.R.Civ.P., s t a t e s t h a t summary judgment
s h a l l b e rendered only i f :
"* * * t h e p l e a d i n g s , d e p o s i t i o n s , answers t o
interrogatorie~~and admissions on f i l e show t h a t
t h e r e i s no genuine i s s u e a s t o any m a t e r i a l f a c t
and t h a t t h e moving p a r t y i s e n t i t l e d t o a judgment
a s a m a t t e r of law. 11
The q u e s t i o n t o be decided on a motion f o r summary judgment
i s whether t h e r e i s a genuine i s s u e of m a t e r i a l f a c t and n o t how
t h a t i s s u e should be determined; t h e h e a r i n g on t h e motion i s
not a t r i a l . ~ a t t e u c c i ' sSuper Save v. Hustad Corp., 158 Mont.
The p a r t y moving f o r summary judgment has t h e burden of
e s t a b l i s h i n g t h e absence of any i s s u e of m a t e r i a l f a c t . Beierle
v. Taylor, 164 Mont. 436, 524 P.2d 783, 31 S t . Rep. 554.
I n Kober & Kyriss v. Stewart, 148 Mont. 1 1 7 , 121, 417
P.2d 476, t h i s Court c i t e d 6 ~ o o r e ' sF e d e r a l P r a c t i c e , Para.
he c o u r t s hold t h e movant t o a s t r i c t s t a n d a r d .
To s a t i s f y h i s burden t h e movant must make a showing
t h a t i s q u i t e c l e a r what t h e t r u t h i s , and t h a t ex-
c l u d e s any r e a l doubt a s t o t h e e x i s t e n c e of any
genuine i s s u e of m a t e r i a l f a c t .
"'Since i t i s n o t t h e f u n c t i o n of t h e t r i a l c o u r t t o
a d j u d i c a t e genuine f a c t u a l i s s u e s a t t h e h e a r i n g on
t h e motion f o r summary judgment, i n r u l i n g on t h e motion
a l l i n f e r e n c e s of f a c t from t h e p r o o f s p r o f f e r e d a t
t h e h e a r i n g must be drawn a g a i n s t t h e movant and i n
f a v o r of t h e p a r t y opposing t h e motion. And t h e papers
s u p p o r t i n g movantfs p o s i t i o n a r e c l o s e l y s c r u t i n i z e d ,
w h i l e t h e opposing papers a r e i n d u l g e n t l y t r e a t e d , i n
determining whether t h e movant has s a t i s f i e d h i s burden. I I 1
I f t h e r e i s any doubt a s t o t h e p r o p r i e t y o f a motion
f o r summary judgment, i t should be denied. Kober & Kyriss v.
Stewart, supra.
The only way t h e d i s t r i c t c o u r t could p r o p e r l y g r a n t
summary judgment t o t h e p l a i n t i f f s h e r e i s by determining t h a t
t h e agreement on i t s f a c e p r o h i b i t s t h e $60,000 f e e a s a m a t t e r
of law. Any o t h e r b a s i s o u t s i d e t h e f o u r c o r n e r s of t h e agree-
ment document, i n v o l v e s d i s p u t e d q u e s t i o n s of f a c t p r e c l u d i n g
summary judgment.
The i n t e n t of t h e p a r t i e s t o p r o h i b i t such payment must
be determined from t h e w r i t t e n agreement a l o n e , i f p o s s i b l e .
S e c t i o n 13-705, R.C.M. 1947. I f t h e language of t h e agreement
i s c l e a r and e x p l i c i t t h e language must govern i t s i n t e r p r e t a t i o n .
S e c t i o n 13-704, R.C.M. 1947. A p l a i n r e a d i n g r e v e a l s t h e agree-
ment g i v e s t h e General P a r t n e r s a 5% c a p i t a l i n t e r e s t a s con-
s i d e r a t i o n f o r assuming t h e r e s p o n s i b i l i t i e s of managing and
o p e r a t i n g t h e b u s i n e s s and assuming l i a b i l i t y beyond t h a t of
t h e Limited P a r t n e r s . I n a d d i t i o n t o t h i s 5% c a p i t a l i n t e r e s t
Paragraph l l ( a ) of t h e agreement provides:
I1
The General P a r t n e r s s h a l l r e c e i v e a r e a s o n a b l e
management f e e f o r s e r v i d e s a c t u a l l y rendered by
them JC 9: ik."
I n d i s t r i c t c o u r t p l a i n t i f f s claimed (1) an executed o r a l
agreement and (2) t h e d e f e n d a n t ' s c o u r s e of conduct s i n c e 1968
of charging only a 5% management f e e modified t h e agreement and
p r o h i b i t e d t h e $60,000 f e e .
O appeal p l a i n t i f f k argue
n t h a t t h e r e a s o n a b l e management
f e e s e t f o r t h i n Paragraph l l ( a ) of t h e l i m i t e d p a r t n e r s h i p
agreement i s l i m i t e d t o r o u t i n e management s e r v i c e s and does
n o t a p p l y t o long term developmental s e r v i c e s .
There i s no d i s t i n c t i o n i n t h e terms of t h e agreement
between s e r v i c e s f o r long range r e n o v a t i o n and improvement and
day t o day r o u t i n e management s e r v i c e s . To determine i f t h e
agreement precludes management f e e s f o r long range s e r v i c e s ,
t h e d i s t r i c t c o u r t must i n q u i r e a s t o t h e conduct of t h e p a r t i e s
and a s t o t h e e x i s t e n c e and substance of t h e a l l e g e d o r a l agree-
ment. Whether t h e r e was an executed o r a l agreement, a s w e l l a s
whether t h e conduct o f t h e p a r t i e s modified t h e w r i t t e n agreement,
a r e m a t e r i a l q u e s t i o n s of f a c t b e a r i n g on t h e i n t e n t of t h e
parties. The c o u r t w h i l e c o n s i d e r i n g t h e motion f o r summary
judgment cannot go o u t s i d e t h e agreement t o determine t h e i n t e n t
of t h e c o n t r a c t i n g p a r t i e s a s t h i s i n v o l v e s d i s p u t e d q u e s t i o n s of
material fact. Summary judgment is usually inappropriate where
the intent of the contracting parties is an important considera-
tion. Kober h Kyriss v. Stewart, supra; 6 ~oore'sFederal
Practice, Para. 56.17[41.-11.
Plaintiffs have not met their burden of establishing the
absence of any issue of material fact. Their arguments clearly
show that genuine factual issues do exist.
We do not here decide where the merits of this controversy
lie, nor which parties should ultimately prevail. We simply
hold that a trial is necessary to resolve disputed issues of
fact.
The summary judgment is vacated and set aside. The cause
is remanded to the district court for trial.
Justice
Ye Concur:
. .,
Chief Justice