NO. 8 8 - 1 3 5
IN THE SUPREME COURT OF THE STATE OF MONTANA
1988
GEORGE ERNEST LeCLAIR and THERESA
JANE LeCLAIR, husband and wife,
Plaintiffs and Respondents,
-vs-
EDWARD L. REITER, CLIFFORD C. HUST and
MARLENE M. HUST, husband and wife,
Defendant and appellants.
APPEAL FROM: District Court of the Thirteenth Judicial District,
In and for the County of Yellowstone,
The Honorable Russell Fillner, Judge presiding.
COUNSEL OF RECORD:
For Appellant:
Edward L. Reiter, pro se, Huntley, Montana
For Respondent:
Jones Law Firm; Blair Jones, Billings, Montana
Submitted on Briefs: June 30, 1 9 8 8
Filed:
Clerk
Mr. Justice Fred J. Weber delivered the Opinion of the Court.
This is an action for termination of a contract for
deed. The District Court for the Thirteenth Judicial Dis-
trict, Yellowstone County, declared the interests of the
defendant purchasers terminated and quieted title in the
plaintiff sellers. Mr. Reiter appeals. We affirm.
We restate the issues as follows:
1. Is this appeal moot because Mr. Reiter failed to
file a supersedeas bond?
2. Was sufficient notice of default served upon Mr.
Reiter?
3. Are the findings supported by the evidence?
4. Were attorney fees properly awarded to plaintiffs?
In May 1978, the plaintiffs, as sellers, entered a
contract for sale of farm equipment and real property in
Yellowstone County, Montana, with defendants Clifford and
Marlene Hust. In January 1980, the Husts made a written
assignment to defendant Mr. Reiter of "all of their right,
title and interest" in the real and personal property de-
scribed in that contract for deed. The provisions of the
contract for deed which are relevant to this appeal are:
7. Buyer and Seller agree that taxes and
assessments shall be pro-rated between them as of
May 14 , 1978. Seller shall pay taxes
and assessments for all prior years in full and
Buyer shall pay taxes and assessments for all
subsequent years in full before the same become
delinquent. Should Buyer fail to pay such taxes
and assessments, Seller may, at their election,
either treat the failure to pay said taxes and
assessments as an event of default hereunder . . .
10. Should any default of Buyer hereunder
remain uncured for more than thirty (30) days after
written notice thereof, Seller may, without further
notice or period of grace:
...
(b) declare the entire unpaid principal bal-
ance with accrued interest thereon immediately
due and payable and upon non-payment thereof
after thirty (30) days' notice to Buyer of
said acceleration, Seller may enforce collec-
tion of the total amount then due and payable
in any appropriate manner by any available
remedy, or terminate this Agreement, retaining
all payments made by Buyer as liquidated
damages for breach of this Agreement.
15. Any notice hereunder may be served person-
ally or by certified mail. If served by mail.,
notice shall be directed to Buyer at Rd 9-Hardin,
Mont., and to Seller at 2917 S.W-337-St. Federal
Wav-Wash-98003, or such other address as Buyer or
seller may designate by notice appropriately heliv-
ered to the other and to the Escrow Agent. Service
by mail shall be complete on deposit in any United
States Post Office.
In June 1986, the plaintiffs sent Mr. Reiter, by certi-
fied mail, a notice of default. The notice alleged that Mr.
Reiter had failed to comply with the provisions of the con-
tract for deed by failing to make the contract payments due
for the months of March and April 1986 and to pay real prop-
erty taxes for the years 1984 and 1985. The notice further
pointed out that the contract required Mr. Reiter to bring
the default current within 30 days from the date of the
notice.
In July, the plaintiffs served upon Mr. Reiter a "Notice
of Default and Election to Accelerate," listing failure to
pay the 1984 and 1985 property taxes, failure to make the
payment due for the month of June 1986, and failure to main-
tain adequate insurance coverage. In that notice, the
plaintiffs elected as allowed under the contract to declare
the entire unpaid balance of the contract due within 30 days.
When Mr. Reiter failed to pay the accelerated balance of
principal plus interest, the plaintiffs filed this suit for
termination of the contract for deed.
The lower court granted judgment to plaintiffs, ordering
that the contract was terminated, that plaintiffs' title to
the property be quieted, and that the real and personal
property described in the contract be returned to plaintiffs'
possession. It also awarded plaintiffs their reasonable
attorney fees as allowed under the contract. Mr. Reiter
appeals, appearing pro se.
Is this appeal moot because Mr. Reiter failed to file a
supersedeas bond?
The plaintiffs have raised this threshold issue, point-
ing out that they have already repossessed the real and
personal property and that quitclaim deeds from Mr. Reiter to
the Husts and from the Husts to plaintiffs have been filed.
They argue that since Mr Reiter did not file a supersedeas
bond or otherwise stay execution of the lower court's judg-
ment, this appeal is moot.
Where payment or performance of a judgment by an appel-
lant is involuntary, the right to appeal is not affected.
State v. Rafn (1956), 130 Mont. 554, 557, 304 P.2d 918,
919-20. That rule was reaffirmed in this Court's opinion and
order in First Nat. Bank in Eureka v. Giles (Mont. 1986), -
,
P.2d - 43 St.Rep. 1326, 1328:
It thus appears that in our decided cases we have
been skirting around the rule that if a judgment is
satisfied by an involuntary payment or performance,
the appeal from the judgment is not thereby ren-
dered moot. We herebv adopt that rule, expressly
overruling anything to the contrary in Henke
[Gallatin Trust and Savings Bank v. Henke (1969),
154 Mont. 170, 461 P.2d 4481 or other cases.
It is clear from the District Court file that Mr. ~ e i t e r
did not voluntarily relinquish either the real or personal
property to the plaintiffs. We therefore go on to the issues
raised by Mr. Reiter.
Was sufficient notice of default served upon Mr. Reiter?
Mr. Reiter asserts that the notice of default was in-
valid because the copy he received was undated. He testified
that his mother signed for the certified letter and that he
threw away the envelope. He cites caselaw requiring return
of process after service of a summons as his authority that
the notice must have been dated.
The contract for deed does not require that the notice
be dated in any certain way, except to specify that service
by mail is complete on deposit in a post office. Under the
contract, the postmarked date is the beginning of the 30-day
period for curing a default. Mr. Reiter acknowledges receiv-
ing the notice by certified mail and there is nothing to
indicate prejudice to him by a failure to date it. Further,
a copy of the notice of default was submitted into evidence.
It contains all information required by the contract and is
dated at the bottom. We hold that the lower court was not in
error in finding that the notice of defau1.t served upon Mr.
Reiter was sufficient.
Are the find.ings supported by the evidence?
Mr. Reiter makes several arguments which we have grouped
under this issue. One depends on his contention in Issue I1
that the notice of default was insufficient. Our resolution
of Issue I1 disposes of that argument.
Another of Mr. Reiter's arguments involves his Chapter
11 (reorganization) bankruptcy proceeding. is bankruptcy
petition was dismissed in April of 1986. Mr. Reiter asserts
that before his petition was dismissed, he and his creditors
reached an agreement that the sole secured creditor would
claim the secured property and that he would pay all other
creditors within three years. He maintains that this oral
agreement binds the plaintiffs.
The District Court found, as to this argument:
13. That the Court finds the allegation by
Defendant Reiter as to the existence of a subse-
quent agreement with Plaintiffs forgiving or allow-
ing Defendant Reiter additional time to pay taxes
to be unfounded and not supported by credible
evidence in the following respects:
a. Defendant Reiter ties his allegation with
regard to the taxes to a Chapter 11 bankruptcy
filing which was dismissed in April, 1986 -
prior to the service of the default notices
and maintenance of this action. No agreement
was reached during the bankruptcy proceedings
which alters the terms of the contracts before
the Court.
Findings of fact will not be set aside unless they are clear-
ly erroneous. Rule 52 (a), M.R.Civ.P. In their testimony at
trial, the plaintiffs denied ever discussing with Mr. Reiter
an agreement such as the one he claims existed. There is no
formal creditor agreement from the bankruptcy proceeding,
because that proceeding was dismissed. We conclude that the
above finding is not clearly erroneous.
Mr. Reiter next argues that after he received the notice
of default, he kept his payments current to the escrow agent,
so that the lower court should have dismissed this case at
the hearing on his motion for summary judgment. However,
under paragraph 7 of the contract, nonpayment of taxes could
be grounds for default. Mr. Reiter does not dispute that he
did not pay the 1984 and 1985 taxes. Whether he did or did
not make up or keep up on his monthly payments, he was in
default based on nonpayment of the taxes.
Finally, Mr. Reiter argues that the bill of sale he
received on the personal property included in his contract
with the Husts never went into escrow, so that he is entitled
to retain that property. The District Court's order extin-
guished Mr. Reiter's interest in the foll.owi.ng personal
property:
John Deere Tractor - ? O Gas
John Deere Tractor - A
John Deere Drill - 8'
1 2 " Post Hole Digger
3-Section Harrow
Wooden Leveler - 6' x 24'
Border Dyker
International Two-Bottom Rollover Plow
John Deere #5 Mowing Machine
Johnson WorkHorse Loader with manure fork
and hay head
Ditcher
Burr Grain Grinder plus belt
The escrow officer testified by deposition that the original
bill of sale for the above property was in the escrow file.
The Husts had no power to convey to Mr. Reiter any greater
interest in the personal property than the interest they
possessed, and their interest was limited by the contract for
deed. Mr. Reiter did not produce an original bill of sale,
nor any other documents showing that the personal property
had been paid off separately from the escrow contract. We
conclude that the lower court's finding that plaintiffs are
entitled to have the personal property returned to them is
supported by the evidence and is not clearly erroneous.
IT7
Were attorney fees properly awarded to plaintiffs?
Under paragraph 14 of the contract for deed, the
prevailing party in an action for enforcement of the contract
"shall be entitled to a reasonable attorney's fee in addition
to costs of suit." Mr. Reiter asks that the award of attor-
ney fees be reversed.
Paragraph 14 of the contract clearly allows attorney
fees to the prevailing party. As discussed above, we affirm
the rulings of the District Court which made plaintiffs the
prevailing party. We conclude that plaintiffs are entitled
to the attorney fees awarded by the District Court and that
they are entitled to reasonable attorney fees on appeal.
This matter is remanded to the District Court for determina-
tion of the reasonable attorney fee on appeal.
Affirmed and remanded.