Silver Hill v. Mosser , 2009 MT 406N ( 2009 )

November 25 2009
DA 09-0144
IN THE SUPREME COURT OF THE STATE OF MONTANA
2009 MT 406N
SILVER HILL FINANCIAL BAYVIEW
LOAN SERVICING, LLC, BAYVEIW
FINANCIAL MANAGEMENT CORP.,
BAYVIEW FINANCIAL, LP, BAYVIEW
LENDING GROUP, LLC, and
AZTECH MORTGAGE CORP.,
Plaintiffs and Appellees,
v.
THOMAS M. MOSSER,
Defendant and Appellant.
APPEAL FROM: District Court of the Eighteenth Judicial District,
In and For the County of Gallatin, Cause No. DV 07-184C
Honorable John C. Brown, Presiding Judge
COUNSEL OF RECORD:
For Appellant:
Thomas M. Mosser, (self-represented litigant); Bozeman, Montana
For Appellees:
David L. Charles, Kevin P. Heaney, Kenneth K. Lay; Crowley Fleck,
PLLP; Helena, Montana
Submitted on Briefs: November 4, 2009
Decided: November 25, 2009
Filed:
__________________________________________
Clerk
Justice W. William Leaphart delivered the Opinion of the Court.
¶1 Pursuant to Section I, Paragraph 3(d)(v), Montana Supreme Court 1996 Internal
Operating Rules, as amended in 2006, the following memorandum decision shall not be
cited as precedent. It shall be filed as a public document with the Clerk of the Supreme
Court and its case title, Supreme Court cause number and disposition shall be included in
this Court’s quarterly list of noncitable cases published in the Pacific Reporter and
Montana Reports.
¶2 Appellant Thomas M. Mosser (Mosser) appeals from the order of the Eighteenth
Judicial District Court, Gallatin County, denying his motion for partial summary
judgment and granting summary judgment in favor of Silver Hill Financial, Bayview
Loan Servicing, Bayview Financial, Bayview Financial Management and Bayview
Lending Group (collectively Bayview-Silver Hill).
¶3 The issue on appeal is as follows:
¶4 1. Did the District Court properly enter summary judgment for Bayview-Silver
Hill.
¶5 On or about August 14, 2006, Mosser, through Aztech Mortgage Corp., applied to
Bayview-Silver Hill for a $1,000,000 refinancing loan on the Downtown Imperial Inn,
which he owned through his company, Downtown Realty Investors (DRI). On
August 18, 2006, Bayview-Silver Hill sent Mosser a “Conditional Pre-Approval Letter”
indicating that he had been conditionally pre-approved for a $1,000,000 loan. Bayview-
Silver Hill included a more personalized letter that also indicated their “intent to fund
70% or $1 million . . . .” Ultimately, however, Bayview-Silver Hill did not lend Mosser
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one million dollars and on October 31, 2006, DRI, with Mosser personally guaranteeing
DRI’s indebtedness, executed an Adjustable Rate Promissory Note (Note) in favor of
Silver Hill Financial, LLC in the total principle amount of only $852,000. As security for
this indebtedness, DRI executed and delivered a Deed of Trust, encumbering the
Downtown Imperial Inn, for the benefit of Silver Hill Financial, LLC. The Note, Deed of
Trust and Guaranty were all assigned to Bayview Loan Servicing, LLC on October 31,
2006.
¶6 Ultimately, DRI and Mosser failed to make a single payment and did not meet
their financial obligations under the Note. As a result, on March 21, 2007, Bayview Loan
Servicing, LLC initiated this action and filed a Motion for Summary Judgment to
foreclose the Deed of Trust and Security Agreement encumbering the Downtown
Imperial Inn. In response, Mosser and DRI filed a Third-Party Complaint against Silver
Hill, LLC, Bayview Financial, LP, Bayview Financial Management Corp., Bayview
Lending Group, LLC and Aztech Mortgage Corp. premised on theories of fraud,
negligent misrepresentation, rescission and negligence. On February 6, 2009, Mosser
dissolved DRI and transferred the Downtown Imperial Inn and property back to himself.
On February 17, 2009, the District Court entered summary judgment on Bayview Loan
Servicing, LLC’s Verified Complaint for Foreclosure. On March 2, 2009, the District
Court entered its Order, Final Judgment and Decree of Foreclosure and granted summary
judgment for Silver Hill and the remaining Bayview Third-Party Defendants. Additional
facts are discussed below as relevant.
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¶7 On appeal, Mosser argues that the District Court erred in granting summary
judgment in favor of Bayview-Silver Hill. Mosser maintains that Bayview-Silver Hill
fraudulently misrepresented to him that they would loan him one million dollars, but then
funded a loan of only $852,000. He maintains that the District Court improperly
excluded evidence of this alleged fraud and negligent misrepresentation including such
relevant documents as the “Conditional Pre-Approval” letters indicating Bayview-Silver
Hill’s intent to finance one million dollars. Mosser asserts that under the fraud exception
to the Parol Evidence Rule, the District Court should have allowed him to present
extrinsic evidence to establish that Bayview-Silver Hill committed fraud. In short,
Mosser argues that, in excluding the relevant evidence of fraud, the District Court
misapplied the Parol Evidence Rule and Merger Doctrine and therefore, improperly
granted summary judgment.
¶8 Bayview-Silver Hill counters that the fraud exception to the Parol Evidence Rule
does not apply because the alleged fraud directly contradicts the written loan documents.
Basing their argument on this Court’s holding in Sherrod, Inc. v. Morrison-Knudsen Co.,
249 Mont. 282, 815 P.2d 1135 (1991), Bayview-Silver Hill contends that the fraud
exception that would allow Mosser to enter extrinsic evidence “only applies when the
alleged fraud does not relate directly to the subject of the contract.” Under Sherrod,
Bayview-Silver Hill maintains that evidence of an agreement for a one million dollar
loan, such as the “Conditional Pre-Approval” letters, are inadmissible because they
directly contradict the actual loan documents for an $852,000 loan. Without that
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evidence, Bayview-Silver Hill argues that there is no genuine issue of material fact in
dispute and that the District Court properly granted summary judgment in their favor.
¶9 We review a district court’s ruling on a motion for summary judgment de novo,
applying the same criteria applied by the district court. Spinler v. Allen, 1999 MT 160,
¶ 14, 295 Mont. 139, 983 P.2d 348. Under this analysis, summary judgment is only
appropriate if there are no genuine issues of material fact and the moving party is entitled
to judgment as a matter of law. Natl. Cas. Co. v. Am. Bankers Ins. Co. of Fla., 2001 MT
28, ¶ 13, 304 Mont. 163, 19 P.3d 223.
¶10 In relevant part § 28-2-905, MCA, provides that “whenever the terms of an
agreement have been reduced to writing by the parties, it is to be considered as containing
all those terms” and as a result, “there can be . . . no evidence of the terms of the
agreement other than the contents of the writing . . . except . . . to establish illegality or
fraud.” Here, the parties vigorously dispute the applicability of the fraud exception that
would allow Mosser to present evidence of Bayview-Silver Hill’s alleged fraud and
misrepresentation. While the District Court granted summary judgment on the basis that
the fraud exception does not apply, we determine that such a conclusion is not required in
order to affirm the District Court’s disposition of this case.
¶11 Even assuming arguendo, that Mosser could, under the fraud exception, present
evidence of alleged misrepresentations Bayview-Silver Hill made with respect to a one
million dollar loan, that evidence would be insufficient to avoid summary judgment.
“Actual fraud consists of ‘acts committed by a party to the contract . . . with intent to
deceive another party thereto or to induce him to enter into the contract.’” Richards v.
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JTL Group, Inc., 2009 MT 173, ¶ 40, 350 Mont. 516, 212 P.3d 264 (citing § 28-2-405,
MCA). Here, even with the evidence Mosser argues should be considered under the
fraud exception, there is no evidence of deceit. The evidence Mosser points to in support
of his fraud argument, such as the “Conditional Pre-Approval” letters, make it clear that
the one million dollar figure “[did] not constitute a loan approval.” The correspondences
addressing a one million dollar loan, clearly explained that “Conditional Pre-Approval
does not constitute a loan approval and is instead a preliminary assessment of your
current creditworthiness.” Rather than supporting an argument for fraud, the evidence
Mosser wishes to present here shows that Bayview-Silver Hill made it clear from the start
that the financing of a one million dollar loan was conditional and depended on final
approval. As such, even if the District Court should have considered this evidence under
the fraud exception, Mosser cannot succeed on his allegations of fraud. Consequently,
we conclude that the District Court properly granted summary judgment in favor of
Bayview-Silver Hill.
¶12 Having reviewed the record, the District Court’s decision and the parties’
arguments on appeal, we have determined to decide this case pursuant to Section I,
Paragraph 3(d) of our 1996 Internal Operating Rules, as amended in 2006, which
provides for memorandum opinions. It is manifest on the face of the briefs and the
record before us that the appeal is without merit because the findings of fact are
supported by substantial evidence, the legal issues are clearly controlled by settled
Montana law which the District Court correctly interpreted, and the record supports the
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District Court’s denial of Mosser’s motion for partial summary judgment and granting of
summary judgment in favor of Bayview-Silver Hill.
¶13 Affirmed.
/S/ W. WILLIAM LEAPHART
We concur:
/S/ MIKE McGRATH
/S/ PATRICIA O. COTTER
/S/ BRIAN MORRIS
/S/ JIM RICE
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