State Bank of Townsend v. Worline , 227 Mont. 315 ( 1987 )

No. 87-38
IN THE SUPREME COURT OF THE STATE OF MONTANA
1987
STATE BANK OF TOWNSEND, a Montana
banking corporation,
Plaintiff and Respondent,
-vs-
MARY JANE WORLINE; NELSON EDWARD
SAYER and ROSE MARY SAYER; TOMMIE
H. THOMPSON and CATHLEEN K. THOMPSON;
GARY R. MARSHALL and ROMAINE L. MARSHALL,
Defendants and Appellants.
GARY R. MARSHALL and ROYAINE L. MARSHALL,
Cross-claimants,
-vs-
MARY JANE WORLINE; NELSON EDWARD SAYER
and ROSE MARY SAYER; TOMMIE H. THOMPSON
and CATHLEEN K. THOMPSON,
Cross-defendants.
APPEAL FROM: District Court of the First Judicial District,
In and for the County of Broadwater,
The Honorable Henry Loble, Judge presiding.
COUNSEL OF RECORD:
For Appellants:
Worden, Thane & Haines; Samuel M. Warren, Missoula,
Montana (Thompson)
McChesney & Grenfell; H.L. McChesney, Missoula, Montana
(Edward & Sayer)
Datsopoulos, MacDonald & Lind; Christopher B. Swartley,
Missoula, Montana (Worline)
For Respondents:
John T. Flynn, Townsend, Montana (~arshall)
Hooks & Budewitz; Patrick F. Hooks, Townsend,
Montana (State Bank)
(Continued, page 2)
Submitted on Briefs: April 3, 1987
Decided: June 30, 1987
Clerk
Mr. Justice William E. Hunt, Sr., delivered the Opinion of
the Court.
This is an appeal from the First Judicial District,
Broadwater County, Montana, by cross-defendants, Tommie H.
Thompson and Cathleen K. Thompson. The Thompsons appeal from
an order denying the motions of all cross-defendants for a
change of venue.
We reverse and remand to the District Court.
The issues raised on appeal are as follows:
1. What is the proper venue for an interpleader
complaint requesting the resolution of conflicting demands
made upon an escrow agent holding documents for a contract
for deed?
2. What is the proper venue for an action seeking to
effect repossession, foreclosure, or forfeiture of an
interest in real property when the escrow documents are held
in a county different from that in which the property is
located?
3. Does an initial appearance by a defendant waive that
defendant's right to demand a change of venue with respect to
a cross-claim which was not before the court at the time of
the initial appearance?
4. Did the District Court err in failing to order a
separation of trial for an interpleader action and a
cross-claim to quiet title?
On April 30, 1986, the State Bank of Townsend (Bank)
filed an interpleader action pursuant to Rule 22 (a),
M.R.Civ.P. against Mary Jane Worline, Nelson E. and Rose
Marie Sayer, Tomrnie and Cathleen Thompson, Gary and Romaine
Marshall and Don Torgenrud in Broadwater County, Montana.
The defendants had made conflicting demands concerning a
contract for deed held in escrow by the Bank. The Bank
requested a determination of the respective rights to the
property in question and that a final judgment be entered
directing the action to be taken by the Bank.
The real estate at issue is located in Missoula County.
In 1976, the Marshalls sold the land to Worline and the
Sayers under a contract for deed which was deposited in
escrow with the State Bank of Townsend, Broadwater County.
The Sayers and Worline secured the contract with two other
contracts for deed on property located in Broadwater County.
Sometime prior to this action the Sayers assigned all
their interest in the Missoula property to Worline, who
subsequently sold the land to Torgenrud. Torgenrud, in turn,
sold the property to the Thompsons.
In response to the Bank's filing of the interpleader
complaint, in May, 1986, Worline, the Thompsons and the
Marshalls filed motions to dismiss. The Sayers filed a
motion to dismiss on June 7, 1986. All motions were
summarily denied by the District Court.
On June 12, 1986, defendants Marshall filed a
cross-claim against all other defendants alleging that the
cross-defendants failed to make an annual payment on the
Missoula property and requesting forfeiture and repossession
of said property.
The Marshalls also counterclaimed against the Bank but
this counterclaim was dismissed with prejudice on August 8,
1986.
In response to the Marshalls' cross-complaint,
cross-defendants Worline, Thompson and Torgenrud filed
motions for a change of venue to Missoula County. They
argued that all cross-defendants reside in Missoula County,
that the property at issue is located there as well, and as
such Missoula County is the proper place for trial of this
action.
The District Court denied all motions for a change of
venue, calling the transaction at issue a contract action,
and applying 5 25-2-121, MCA. Under this statute, Broadwater
County was considered the place where the contract was to be
performed and venue need not be moved to Missoula County.
The court held that defendants Worline, Sayer and Thompson
waived their right to a change of venue when they failed to
move for the change at their initial appearance when filing
motions to dismiss the Bank's interpleader action.
As to defendant Torgenrud, the District Court held that
regardless of his timely filing of a motion to change venue,
his motion was denied. The reasoning given by the court was
that since, as to defendants Marshall, Worline and Sayer, the
action was properly filed in Broadwater County, then pursuant
to § 25-2-117, MCA, all defendants can be tried in Broadwater
County.
In his memorandum in support of a change of venue,
defendant Torgenrud raised the issue of separating the trials
pursuant to Rule 42 (b), M.R.Civ.P. The District Court
refused to decide this issue due to the lack of a properly
filed motion requesting separate trials as required by Rule
7 (b), M.R.Civ.P.
From this order denying the motions for a change of
venue, defendants Thompson appeal.
The first issue which must be resolved when determining
the proper county of trial for this action is whether the
transaction falls under § 25-2-121, MCA, or § 25-2-123, MCA.
In other words, is this a contract transaction or a real
property transaction?
Upon review of the contract for deed and escrow receipt
for the property in question we find that Broadwater County
is not delineated as the county in which the contract was to
be performed. The contract at issue secures a real property
transaction. Section 25-2-123, MCA, unambiguously states
that when real property is at issue, proper venue is the
county in which the property is located. Broadwater County
is merely the county in which the escrow documents were held.
Section 25-2-121, MCA, does not apply to this case and
Broadwater County is not a proper county in which to try an
action based on the interpleader complaint.
The second issue of what is the proper venue for the
cross-claim, supports the finding that Missoula County is the
only proper county in which to try this action.
The Marshalls filed a cross-claim against the other
co-defendants subsequent to the District Court's denial of
the motions to dismiss the Bank's interpleader action. The
cross-claim alleges that cross-defendants failed to pay an
annual payment due on the contract for deed for the Missoula
County real property held in escrow at the State Bank of
Townsend. Further, the Marshalls requested the court to:
(1) declare that the contract for deed on the Missoula
property is forfeited; (2) determine that cross-defendants
have no further right, title or interest in and to the
subject property and to those contracts for deed pledged as
security; (3) order cross-defendants to surrender possession
of the Missoula property and vacate the same; and, ( 4 ) order
the escrow agent to deliver the documents to them.
The Marshalls allege that they have all right, title and
interest in the property in Missoula County and that the
cross-defendants have none. The cross-claim demands further
that cross-defendants vacate and return possession of the
property to the Marshalls. This type of action is precisely
what is described as a real property action in 5 25-2-123(3),
FCA :
The proper place of trial for all actions for the
recovery of the possession of, quieting title to,
or the enforcement of liens upon real property is
the county in which the real property, or any part
thereof, affected by such action or actions is
situated.
Although there are two contracts for deed for property
located in Broadwater County held in escrow along with the
other documents, these contracts are not at issue as to
venue. The Broadwater County property contracts for deed are
being held as security for the sale of the Missoula County
property to Worline and the Sayers from the Marshalls. The
dispute and consequential legal action is concerned solely
with the Missoula County property.
In Beavers v. Rankin (1963), 142 Mont. 570, 572, 385
P.2d 640, 641 this Court stated that "if [a] complaint
contains more than one cause of action, on one of which
defendant is entitled to a change of venue, the motion must
be granted, though the other cause or causes of action may be
properly triable where the action was commenced" citing
Heinecke v. Scott (1933), 95 Mont. 200, 26 P.2d 167.
In the present case the causes of action to recover
possession of and quiet title to the property in Missoula are
properly tried in Missoula County only. The land in question
is located in Missoula County and all cross-defendants reside
in Missoula County.
We hold that Missoula County is the proper venue for
issues raised by the interpleader complaint and for the
cross-claim of defendants Marshall. Therefore, Missoula
County is the proper county for trial of the entire action.
The third issue of whether cross-defendants Worline,
Thompson and Sayer waived their right to demand a change of
venue by failing to make a proper motion upon initial
appearance is rendered moot because defendant Torgenrud did
not waive his right. Torgenrud's initial appearance was to
move for change of venue of the case to Missoula County. "If
an action with two or more defendants is brought in a county
that is not a proper place of trial for any of the
defendants, any defendant may make a motion for change of
place of trial to any county which is a proper place of
trial." Section 25-2-117, MCA.
The final request by cross-defendants for an order
requiring a separation of the cross-claim from the
interpleader complaint for the purpose of trial is also
rendered moot by this decision.
The order of the District Court denying
cross-defendant's motions for a change of venue to Missoula
County is reversed.
/
We Concur: A