Tri-City Lumber Inc. v. Anderson ( 1995 )

NO. 94-570
IN THE SUPREME COURT OF THE STATE OF MONTANA
1995
TRY-CITY LUMBER, INC.,
a Montana corporation,
Plaintiff and Respondent,
-VS-
NYLE S. ANDERSON, DARWIN HAI\IILTON,
MARY HAMILTON, MEADOW HILLS HOMEOWNERS
ASSOC., MELANIE VESTRE, DAVID KNOLL,
STANLEY W. PINE, and all other persons,
unknown, claiming, or who might claim,
any right, title, estate, or interest
in or lien or encumbrance upon the real
property described in the complaint adverse
to Plaintiffs' ownership or any cloud upon
Plaintiffs' title thereto, whether such
claim or possible claim be present or contingent,
Defendants and Appellant.
APPEAL FROM: District Court of the Eleventh Judicial District,
In and for the County of Flathead,
The Honorable Ted 0. Lympus, Judge presiding.
COUNSEL OF RECORD:
For Appellants:
Patrick M. Springer, Attorney at Law,
Kalispell, Montana
For Respondent:
Randall S. Ogle; Ogle & Worm, Kalispell,
Montana
Submitted on Briefs: April 6, 1995
Decided: May 11, 1995
Filed:
Justice Karla M. Gray delivered the Opinion of the Court.
Darwin Hamilton appeals from the grant of summary judgment to
Try-City Lumber, Inc. by the Eleventh Judicial District Court,
Flathead County. We affirm and remand.
We address the following issues:
1. Did the District Court err in granting the motion of
Try-City Lumber, Inc. for summary judgment?
2. Is Try-City Lumber, Inc. entitled to Rule 32,
M.R.App.P., damages?
Try-City Lumber, Inc. (Try-City) filed an action to quiet
title to Lot 45 of Meadow Hills, a residential subdivision located
in Flathead County, Montana. Meadow Hills originally was developed
by Darwin Hamilton (Hamilton), appellant herein. Although numerous
defendants were named in the action, the underlying--and largely
undisputed--facts of record primarily involve Try-City, Hamilton
and Dean P. Conaway (Conaway). Taken in the light most favorable
to Hamilton, the party opposing summary judgment, the facts of
record are as follows.
Hamilton was an active real estate developer in Flathead
County. When financial and legal difficulties arose, Hamilton
became associated in business dealings with Conaway. Hamilton had
been the owner of a number of residential lots in Meadow Hills,
including Lot 45; Conaway became the successor owner of Lot 45.
During a construction project on another lot in Meadow Hills,
Conaway failed to pay Try-City, which supplied him with building
materials for the project. Try-City brought an action against
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conaway; conaway was served, but did not respond or contest the
action. Try-City obtained a default judgment against Conaway on
January 24, 1992, in the amount of $13,283.96, plus interest.
Notice of entry of judgment was duly filed thereafter. Pursuant to
§ 25-g-301 (2), MCA, Try-City's judgment attached as a judgment lien
against all real property owned by Conaway. Conaway was the record
owner of Lot 45 on January 24, 1992.
Try-City initiated proceedings in aid of execution of its
judgment on April 13, 1992. A supplemental proceeding for the
purpose of determining assets owned by Conaway occurred on April
21, 1992. Hamilton was aware of Try-City's judgment against
Conaway and attended the proceeding. Attorney Randall S. Ogle
(Ogle) appeared on Try-City's behalf and inquired of Conaway
regarding his assets; Conaway acknowledged both his ownership of
Lot 45 and Try-City's judgment against him. Brent Hall (Hall),
Try-City's general manager, also attended the supplemental
proceeding.
Subsequent to the proceedings in aid of execution and on June
30, 1992, Conaway apparently executed a quitclaim deed to Lot 45 in
Hamilton's favor. Ogle's law office prepared the realty transfer
certificate for the purpose of recording the quitclaim deed from
Conaway to Hamilton; Ogle did not notify Try-City of the existence
of the quitclaim deed to Lot 45. Hamilton did not record the
quitclaim deed until April 7, 1993.
Conaway filed a petition in bankruptcy on July 17, 1992. Try-
City filed a proof of claim ,and its claim was classified as a
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secured claim against Lot 45. The United States Bankruptcy Court
ultimately released Conaway from all dischargeable debts; nothing
of record indicates that any lien or claim against Lot 45 was
released.
After the bankruptcy stay was lifted, Try-City proceeded to
foreclose its judgment lien against Lot 45. The District Court
issued a writ of execution on December 10, 1992, directing the
Flathead County Sheriff to satisfy Try-City's judgment from
Conaway's assets. The sheriff issued a notice of sheriff's sale
for Lot 45 the same day; the sale was scheduled for January 6,
1993. Notice of the sale was provided to Conaway, Hamilton, and
Hamilton's counsel.
The sale occurred as scheduled. Hall appeared for Try-City
and purchased Lot 45 on its behalf for $14,609.58. Neither
Conaway, Hamilton, nor Hamilton's counsel attended the sale.
Conaway's one-year right of redemption regarding Lot 45 ran from
the January 6, 1993, date of sale.
Try-City subsequently received and, on January 15, 1993,
recorded the sheriff's certificate of sale regarding Lot 45. On
April 7, 1993, Hamilton caused the quitclaim deed to Lot 45, which
apparently was executed in his favor by Conaway on June 30, 1992,
to be recorded. Try-City initiated the quiet title action
presently before us on April 21, 1993, to clear the title to Lot
45.
Conaway did not redeem Lot 45 during his one-year redemption
period. No one else redeemed the property. Conaway's right of
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redemption expired on January 6, 1994.
In responding to Try-City's quiet title action, Hamilton
raised a number of defenses and affirmative defenses. Briefly
stated, the defenses were premised primarily on allegations that
Try-City's judgment against Conaway was extinguished in Conaway's
bankruptcy action; that Try-City is not the owner of Lot 45 because
Conaway had no interest therein at the time of the sheriff's sale;
and that Try-City--by and through its legal counsel--had actual or
constructive knowledge at all pertinent times that Conaway had no
right, title or interest in Lot 45. Hamilton also counterclaimed
against Try-City on essentially the same grounds.
Try-City subsequently moved for summary judgment, briefed the
motion and presented extensive materials in support thereof.
Hamilton responded to the motion and offered primarily his
affidavit and the affidavit of his counsel. Those affidavits
revolve around Hamilton's two basic contentions, which are:
1) Even though title to Lot 45 was in Conaway's name at the
time of Try-City's judgment, Hamilton and Conaway never
intended Conaway to be the actual owner of the property; their
intent was to remove ownership of the property from Hamilton's
name while he attempted to weather financial and legal
difficulties; and
2) Ogle's involvement in the quitclaim deed transaction
between Hamilton and Conaway in June of 1992 which, according
to Hamilton, serves as actual and/or constructive knowledge to
Try-City, Ogle's client, that Conaway had no ownership
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interest in Lot 45 at any pertinent time
The District Court granted Try-City's motion for summary
judgment and quieted title to Lot 45 in Try-City against all named
defendants. Hamilton appeals.
Did the District Court err in granting Try-City's motion
for summary judgment?
We review a district court's ruling on a motion for summary
judgment de now. Summary judgment is proper only when no genuine
issue of material fact exists and the moving party is entitled to
judgment as a matter of law. Rule 56(c), M.R.Civ.P.; Spain-Morrow
Ranch, Inc. v. West (1994), 264 Mont. 441, 444, 872 P.2d 330, 331-
32.
Hamilton advances two challenges to the District Court's grant
of summary judgment. In the first, he asserts that the court erred
as a matter of law in concluding that Try-City's judgment lien
remained a valid judgment lien against Lot 45 subsequent to the
conclusion of Conaway's bankruptcy proceeding. Hamilton cites this
Court to 11 U.S.C. § 524(c) (2) (1988), and to In re Mendenhall, 93-
11405-7-JLP, 13 M.B.R. 73, November 25, 1993, on which the District
Court relied. The extent of his argument in this regard is that
"[iIt is respectfully submitted that Section 524, and Mendenhall is
not applicable to the facts of this case." He then provides a copy
of those cited materials.
With regard to this bankruptcy-related argument, we observe
only that it is counsel's function to present and develop legal
arguments on the client's behalf and to apply those legal arguments
and authorities to the facts of record in the case. Counsel has
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totally failed to do so here. We decline to undertake the role of
both advocate and reviewing court.
Hamilton's second assertion of error is that genuine issues of
material fact exist relating to Try-City's actual or constructive
knowledge of Conaway's alleged lack of ownership or interest in Lot
45. Here, he relies on affidavits presented in response to Try-
City's motion for summary judgment, contending that the District
Court ignored his affidavit evidence.
The record in this case leaves no room for doubt that the
District Court properly determined that no genuine issue of
material fact exists in this regard. Hamilton makes much of his
own, and his counsel's, statements that Ogle--and through him, Try-
City--knew of the quitclaim deed transaction between himself and
Conaway in the summer of 1992. While it may be true that a factual
dispute exists regarding the extent of Ogle's knowledge at that
time, such a factual dispute is not "material" in this case.
"Disputed facts are material . . if they involve the
elements of the cause of action or defense at issue to an extent
that necessitates resolution of the issue by a trier of fact."
State Med. Oxygen v. American Med. Oxygen (Mont. 19941, 883 P.2d
1241, 1243, 51 St.Rep. 1063, 1064. Here, the record is clear that
Conaway was the record owner of Lot 45 on January 24, 1992, when
Try-City obtained its judgment against him. Pursuant to § 25-9-
301(2), MCA, that judgment became a judgment lien against all real
property owned by Conaway at that time. Matters relating to the
subsequent quitclaim deed from Conaway to Hamilton, including any
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actual or constructive notice of that transaction by Try-City, have
no bearing whatsoever on and, therefore, are not material to the
validity of Try-City's judgment lien.
We conclude that the District Court did not err in determining
that no genuine issues of material fact exist and that Try-City is
entitled to judgment as a matter of law.
Is Try-City entitled to Rule 32, M.R.App.P., damages?
Try-City requests damages against Hamilton pursuant to Rule
32, M.R.App.P. Rule 32 provides that if this Court is satisfied
from the record and the presentation of the appeal that it was
taken without reasonable or substantial grounds, we may award
appropriate damages.
Sanctions under Rule 32 are seldom requested in Montana, and
even less seldom awarded. Counsel understand that we will not
lightly determine that an appeal is so lacking in merit as to meet
the "frivolous" threshold which must be met before we will impose
the Rule 32 sanction.
Here, no reasonable or substantial basis existed for the
bringing of this appeal. Indeed, the appeal is without merit and
frivolous. No effort at all, much less a serious one, was made to
present colorable legal arguments in support of an appeal. Where
no such arguments can be made, no appeal should be taken.
We conclude that Try-City is entitled to damages against
Hamilton pursuant to Rule 32, M.R.App.P., for the bringing of a
frivolous appeal. We further conclude that those damages properly
are the reasonable amount of Try-City's attorney fees in defending
against this appeal.
We affirm the District Court's grant of summary judgment in
favor of Try-City and remand for proceedings to determine the
amount of Rule 32, M.R.App.P., damages to which Try-City is
entitled in accordance with this opinion.
Pursuant to Section I, Paragraph 3(c), Montana Supreme Court
1988 Internal Operating Rules, this decision shall not be cited as
precedent and shall be published by its filing as a public document
with the Clerk of this Court and by a report of its result to the
West Publishing Company.
We concur:
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May 11, 1995
CERTIFICATE OF SERVICE
I hereby certify that the following certified order was sent by United States mail, prepaid, to the
following namedI:
Patrick M. Spririger
Attorney at Law
P.O. Box 1112
Kalispell, MT 5i9903-1112
Randall S. Ogle
Ogle & Worm
P.O. Box 899
Kalispell, MT 59903-0899
“3 SMITH
EERK OF THE SUPREME COURT
STATE OF MONTANA