Redinger v. French , 216 Mont. 16 ( 1985 )

No. 84-413
IN THE SUPREME COURT OF THE STATE OF MONTANA
1985
VICTOR T. IPEDINGER, ARLAN D. FRYER,
HELEN J. FRYER, as F & R PROPERTIES,
a co-partnership,
Plaintiffs and Respondents.
GEORGE D. FRENCH, YELLOWSTONE
INVESTMENT AND DEVELOPMENT, INC.,
a Delaware corp; EDWARD L. BOND,
individually, and FIRST BANK BILLINGS,
Defendants and Appellants.
APPEAL FROM: District Court of the Thirteenth Judicial District,
In and for the County of Yellowstone,
The Honorable Diane G. Barz, Judge presiding.
COUNSEL OF RECORD:
For Appellants:
Brad L. Arndorfer, Billings, Montana
For Respondents:
Harris, Morin & Collins; Robert P. Morin, Billings,
Montana
Submitted on Briefs: Jan. 18, 1985
Decided: May 2 , 1985
Filed: : j985
Mr. Justice Fred J. Weber delivered the Opinion of the Court.
In this action in Yellowstone County District Court, the
plaintiffs sought a cancellation of a contract for deed.
Defendants, Edward L. Bond and Yellowstone Investment and
Development, Inc. (herein called Defendants), appeal judgment
of forfeiture by the defendants of all interest in the
payments and the real property and the award of attorney's
fees and costs to the plaintiffs. We a.ffirm.
The issues are:
1. Did the defendants fail to file a notice of appeal
within the required time?
2. Was the contract for deed in this case actually a
mortgage?
3. Was the liquidated damages clause in the contract
for deed actually a penalty clause?
The extended written contract for deed dated May 18,
1977, required that the defendants pay the sum of $26,000
plus 9 percent interest per annum with a down payment of
$1,300, monthly payments of $200 on principal and interest,
plus $30 monthly payments on a separate tax reserve account.
?'he contract further provided that the balance of the
purchase price with interest should be payable on May 15,
1982.
We set forth the findings of fact, as made by the
District Court, from which no appeal has been taken. On May
3, 1982, plaintiffs sent a letter to the attorney for the
defendants advising of the impending balloon payment date of
May 15, 1982, and pointing out that the principal balance of
$23,500.74, interest in the amount of $168.06, and escrow fee
of $29.58, resulting in a total of $23,698.38, would be due.
Defendants failed to pay on the due date. Appropriate
notices of default were served on the defendants in
accordance with the contract for deed. The contract provided
that the plaintiffs take possession of the premises upon
defendants' failure to cure the default within 60 days and
for the redelivery of various papers in the bank escrow.
Defendants Edward L. Bond, individually, and Yellowstone
Investment and Development, Inc., instructed the escrow agent
not to redeliver the papers in escrow. Defendants retained
possession of the property notwithstanding the contract
provisions.
On October 4, 1982, plaintiffs filed a complaint seeking
cancellation of the contract for deed. During the pendency
of the action and the trial, defendants remained in
possession of the property and received and retained the
rental proceeds. The District Court found that the
defendants were not entitled to relief from forfeiture
because they were grossly negligent in failing to perform in
accordance with the terms and provisions of the contract and
the defendants therefore were not entitled to any equitable
relief.
From the findings of fact, the District Court made the
following conclusions of law. The defendants failed to pay
the balloon payment of $23,698.38 on or before May 15, 1982.
The defendants had forfeited any and all payments under the
contract and all right, title and interest in and to the real
property. The plaintiffs were fully reinvested with all
right, title and interest in the premises. The contract for
deed was terminated, and the escrow bank was to deliver to
plaintiffs all papers in escrow. By judgment dated June 1,
1984, the District Court restated its conclusions of law and
awarded attorneys' fees of $7,270.10 and costs and
disbursements of $514.29 to plaintiffs.
Did the defendants fail to file a notice of appeal
within the required time?
Pla.intiff contends that defendants failed to file their
notice of appeal within the time prescribed by Rule 5,
M. R.App.Civ. P., which provides that an appeal must be taken
within 30 days from the service of notice of entry of
judgment.
Following the service by mail of notice of entry of the
June 1, 1984 judgment, new defense counsel was substituted.
On June 12, 1984, defendants filed a motion to amend the
judgment pursuant to Rule 52 (b), M.R.Civ.P. That motion was
timely made. On June 20, 1984, defendants filed a notice of
hearing for June 28, 1984, and completed service by mail on
that date. On June 28, 1984, the District Court heard the
oral arguments and took the matter under advisement. On July
13, 1984, the District Court entered its order denying the
motion to amend. On August 13, 1984, defendants filed their
notice of appeal.
A motion for amendment of judgment under Rule 52(b),
M.R.Civ.P. is controlled by Rule 59. Rule 59 (g), M.R.Civ.P.
provides that the motion shall be served not later than 10
days after the service of the notice of the entry of
judgment. Rule 59 (d), M. R.Civ. P. in pertinent part states:
"Hearing on the motion shall be had within 10 days
after it has been served ...
except that at any
time after the notice of hearing on the motion has
been served the court may issue an order continuing
the hearing for not to exceed 30 days. In case the
hearing is continued by the court, it shall be the
duty of the court to hear the same at the earliest
practicable date thereafter, and the court shall
rule upon and decide the motion within 15 days
after the same is submitted. If the court shall
fail to rule upon the motion within said time, the
motion shall, at the expiration of said period, be
deemed denied."
The defendants did not serve a notice of motion at the
same time as the motion itself. The District Court did not
receive a request to continue the motion, as authorized under
the rule. The hearing date of June 28 was not within the
initial 10-day period. However, the June 28 hearing date was
well within the total of 40 days which the rule allows for
the hearing. A notice of hearing was given within the
initial 10-day period. We find that a technical failure to
obtain a continuance from the District Court is not a
sufficient reason to invalidate the proceedings where the
hearing is held within the period prescribed by the rule.
The denial of the motion on July 13, 1984, was exactly
within the 15-day maximum of the rule. Finally, since 30
days from July 13 was Sunday, August 12, the filing of the
notice of appeal on Monday, August 13, was within the 30-day
maximum permitted by the rule.
We conclude that the notice of appeal was timely filed.
I1
Was the contract for deed in this case actually a
mortgage?
The defendants set forth an extensive contention that
this contract for deed should be considered a mortgage. In
addition, they argue that all contracts for deed should be
declared mortgages. This i s a new theory which was not
.
presented to the District Court at any time prior to the
entry of findings of fact, conclusions of law and judgment.
The first time the theory was presented was in the
defendants' brief supporting the motion to amend the
judgment.
In Mont. Williams Double Diamond v. Royal Village
(1980), 186 Mont. 359, 365-66, 607 P.2d 1120, 1124, a case
involving the cancellation of a written contract for deed,
this Court sta.ted:
"Appellants assert as grounds for their second
issue of review that it is evident from both the
contract of sale and the manner in which appellants
and respondents performed it that the contracts
entered into between appellants and individual
third party purchasers constitute a joint venture
between appellants and respondents making them
iointly bound. This issue was not presented to the
District Court and as such cannot be raised for the
first time on appeal. Northern Plains v. Board of
Natural Resources (1979), Mont., 594 P.2d 297, 309,
36 St.Rep. 666, 680; Spencer v. Robertson (1968),
151 Mont. 507, 511, 445 P.2d 48, 50-51."
See also, Sun Dial Land Co. v. Gold Creek Ranches (1982), 198
Mont. 247, 253, 645 P.2d 936, 940.
Because this issue was not presented to the District
Court, it cannot be raised for the first time on appeal.
Was the liquidated damages clause in the contract for
deed actually a penalty clause?
The District Court found that the defendants were
grossly negligent in failing to perform under the contract
and that they were not entitled to any equitable relief by
virtue of the facts in this case. The balloon payment was
due May 15, 1982, and the judgment was entered almost two
years later on June 1, 1984. The defendants failed to make
any significant efforts to correct the default during that 2
year period. The defendants remained in possession of the
real property which was rented, retained the rents during
that period, and a.lso retained the benefit of taking tax
depreciation on the property. The record does not show any
attempt on defendants' part to refinance or otherwise
complete the actual purchase. The contract for deed provided
that the time of payment was of the essence. The defendants
were informed in advance of the balloon payment date.
Notwithstanding that information and the subsequent delay of
two years until entry of judgment, the defendants took no
action to comply with the requirements of the contract for
deed. The total principal payment made by the defendants on
the $26,000 contract was approximately $2,300.
The record clearly contains substantial evidence to
support the District Court's conclusion. We affirm the
court's conclusion that the defendants are not entitled to
relief from forfeiture.
The judgment is affirmed.
We concur: Y
,