NO. 91-179
IN THE SUPREME COURT OF THE STATE OF MONTANA
1991
CONTINENTAL REALTY, INC., a Montana corporation,
Plaintiff and Respondent,
-vs-
ARTHUR STANLEY GERRY and wife, HARRIET GERRY,
Defendants and Appellants.
APPEAL FROM: District Court of
In and for the County of Silver Bow,
The Honorable Mark P. Sullivan, Judge presiding.
COUNSEL OF RECORD:
For Appellants:
John F. Lynch, Law Offices of John F. Lynch, Great
Falls, Montana.
For Respondent:
Charles Reed, President of Continental Realty,
Appearing Pro Se, Butte, Montana.
Submitted on Briefs: September 24, 1991
Decided: December 19, 1991
Filed:
Justice Karla M. Gray delivered the Opinion of the Court.
The respondent, Continental Realty, Inc., brought an action
against the appellants, Arthur Stanley Gerry and Harriet Gerry,
seeking to have the appellants vacate the premises at 1530 Phillips
Avenue in Butte, Montana and to recover attorney's fees and costs.
The basis for the action was that the appellants were in default
under a contract for deed between the parties. The appellants
counterclaimed for damages for emotional distress and attorney's
fees on the ground that the respondent breached its fiduciary duty
and wrongfully canceled the contract for deed. The District Court
of the Second Judicial District, Silver Bow County, sitting without
a jury, ruled that the respondent did not sustain its burden of
proof that the appellants were in default and reinstated the
contract for deed between the parties. No ruling was made on the
appellants' counterclaim. The appellants appeal. We remand to the
District Court for entry of appropriate findings of fact and
conclusions of law and judgment on the appellants' counterclaim.
The sole issue we address on appeal is whether the District
Court erred in failing to rule on the appellants' counterclaim.
The respondent and the appellants entered into a contract for
deed on August 4, 1975, whereby the respondent agreed to sell
residential property to the appellants for monthly payments of
$153, together with $ 4 2 per month to be held in reserve for the
payment of taxes and insurance. In addition to being the seller of
the property, the respondent was the escrow holder as designated in
the pre-printed contract for deed form prepared by the respondent.
2
In April 1983, the respondent claimed that the appellants were
in default under the contract for deed in the amount of $2,490.56;
it served a notice of cancellation of the contract upon the
appellants. After thirty days the respondent canceled the
contract. A three-day notice to surrender possession was served on
the appellants on August 10, 1983. The record indicates that the
appellants continued to occupy the premises and tendered monthly
payments to the respondent in the amount of $200 through the time
of trial. The respondent designated these payments as rental
payments instead of payments on the contract for deed.
On November 8, 1983, the respondent filed the present action
against the appellants in which it sought to have the appellants
vacate the premises and to recover attorney's fees and costs on the
ground that the appellants were in default under the contract for
deed. The appellants counterclaimed for emotional distress and
attorney's fees on the ground that the respondent breached its
fiduciary duty and wrongfully canceled the contract for deed. A
nonjury trial on the matter was eventually held in the District
Court on December 4, 1990. On January 16, 1991, the District Court
entered its findings of fact and conclusions of law in which the
court concluded that the respondent did not sustain its burden of
proof that the appellants were in default. The court reinstated
the contract for deed between the parties at a balance owing of
$16,000. No specific findings of fact or conclusions of law were
made on the appellants' counterclaim for damages for emotional
distress and attorney's fees. Judgment was entered on March 11,
3
1991. This appeal followed.
Did the District Court err in failing to rule on the
appellants' counterclaim?
Initially, we note an issue of importance which has not been
raised by the appellants. Although the respondent was represented
at trial by counsel, it appears on appeal solely through Charles
Reed in his capacity as president of the corporation. A
corporation is a separate legal entity and cannot appear on its own
behalf through an agent other than an attorney. Weaver v. Law Firm
of Graybill, et al. (1990), 246 Mont. 175, 803 P.2d 1089;
Annotation, Propriety and Effect of Corporation's Appearance Pro
Se, Through Agent W o Is Not Attorney, 19 A.L.R.3d
h 1073 (1968).
Therefore, Mr. Reed cannot appear on behalf of the respondent
corporation. Accordingly, we have considered only the brief of the
appellants and the record before us for purposes of this appeal.
Rule 52(a), M.R.Civ.P., requires the District Court, in a
nonjury trial, to find the facts specially and state separately its
conclusions of law. The purpose of this requirement is threefold
in nonjury cases: (1) as an aid in the trial judge's process of
adjudication; (2) for purpose of res judicata and estoppel by
judgment; and (3) as an aid to the appellate court on review.
United Methodist Church v. D.A. Davidson, Inc. (1987), 228 Mont.
288, 295, 741 P.2d 794, 799.
At the close of the evidence at trial, the District Court
stated on the record:
You've got a counterclaim, Mr. Lynch, you think is
appropriate under the circumstances, particularly since
4
you were saying because of Mr. Reed wearing two hats and
being the seller as well as the escrow holder, that there
is a breach of some fiduciary relationship. I would like
to see some law, if there is any on that point. You
should, Mr. Richardson, anticipate that and brief the
same point.
After the matter was briefed, the District Court made the
following pertinent findings of fact and conclusions of law on
January 16, 1991:
FINDINGS OF FACT
17. Not only did Plaintiff not sustain its burden
of proof as to default and eviction, these actions of the
Plaintiff all evidenced a breach of Plaintiff's fiduciary
duty to Defendants since it was acting as both the Seller
and the Escrow Agent.
18. That because of Plaintiff's various breaches of
his fiduciary duty owed the Defendants, the Plaintiff was
without authority to find the Defendants in default,
forfeit the contract between the parties, and evict the
Defendants.
CONCLUSIONS OF L A W
3. That Plaintiff violated its fiduciary
relationship to the Defendants because it was acting as
both the Seller and the Escrow Holder.
Thus, the District Court apparently agreed with the
appellants' position that the respondent breached its fiduciary
duty. However, the court made no findings of fact or conclusions
of law as required by Rule 52(a), M.R.Civ.P., regarding the
appellants' counterclaim for damages for emotional distress and
attorney's fees to which the appellants alleged they were entitled
as a result of the respondent's breach of fiduciary duty. In
addition, the District Court's Judgment, entered March 11, 1991,
includes no mention of the appellants' counterclaim for damages and
attorney's fees. Therefore, we remand to the District Court with
5
instructions to make findings of fact and conclusions of law
regarding the appellants' counterclaim, and to enter the
appropriate judgment.
The appellants maintain that this Court should direct entry of
judgment in their favor on the counterclaim since the evidence
concerning damages as a result of the respondent's breach of
fiduciary duty is uncontested. Rule 52(a), M.R.Civ.P., provides
that "[dlue regard shall be given to the opportunity of the trial
court to judge of the credibility of the witnesses." Here,
deference to the trial court's superior position to observe the
witnesses and assess their credibility requires that the trial
court enter appropriate findings. This Court will not review the
record for the purpose of making its own findings.
Remanded to the District Court for entry of appropriate
findings of fact, conclusions of law and judgment on the
appellants' counterclaim.
We concur:
December 19, 1991
CERTIFICATE OF SERVICE
I hereby certify that the following order was sent by United States mail, prepaid, to the
following named:
John F. Lynch
Attorney at Law
P.O. Box 2265
Great Falls, MT 59403
Charles Reed, President
Continental Realty, Inc.
2053 Harrison Avenue
Butte, MT 59701
ED SMITH
CLERK OF THE SUPREME COURT