Towe Farms v. Corbett ( 2017 )

05/30/2017
DA 16-0601
Case Number: DA 16-0601
IN THE SUPREME COURT OF THE STATE OF MONTANA
2017 MT 131N
TOWE FARMS, INC., and MIDSTATE
LAND CORPORATION,
Plaintiffs and Appellants,
v.
LINDA CORBETT, Clerk and Recorder
of Custer County, Montana,
Defendant and Appellee.
APPEAL FROM: District Court of the Sixteenth Judicial District,
In and For the County of Custer, Cause No. DV 06-62
Honorable Michael B. Hayworth, Presiding Judge
COUNSEL OF RECORD:
For Appellants:
Thomas E. Towe, Towe, Ball, Mackey, Sommerfeld, Turner, PLLP,
Billings, Montana
For Appellee:
Tara Depuy, Attorney at Law, PLLC, Livingston, Montana
Susan B. Swimley, Attorney and Counselor at Law, Bozeman, Montana
Submitted on Briefs: March 29, 2017
Decided: May 30, 2017
Filed:
__________________________________________
Clerk
Justice Laurie McKinnon delivered the Opinion of the Court.
¶1 Pursuant to Section I, Paragraph 3(c), Montana Supreme Court Internal Operating
Rules, this case is decided by memorandum opinion and shall not be cited and does not
serve as precedent. Its case title, 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 Towe Farms, Inc. (Towe) appeals the Sixteenth Judicial District Court’s grant of
summary judgment in favor of Custer County’s Clerk and Recorder Linda Corbett
(Corbett) on two issues:
1. Whether the existence of unrecorded aerial photographs, taken in 1974 and
marked to show 40-acre parcels, sufficed to create a “grandfathered” subdivision
prior to the enactment of the Montana Subdivision and Platting Act (MSPA) in 1973,
and the act’s subsequent amendment in 1974.
2. Whether an agreement for the sale of a large tract of land (the Bloch Agreement),
which described the tract in terms of smaller parcels and contemplated the future
sale of the smaller parcels, constituted a division of land that created segregated
parcels sufficient to create a grandfathered subdivision under the MSPA.
¶3 We affirm the District Court’s ruling.
¶4 We review de novo a district court’s grant of summary judgment, to determine
whether the movant established both the absence of any genuine issues of material fact and
entitlement to judgment as a matter of law. The district court’s findings of fact are
reviewed for clear error and its conclusions of law for correctness. LaMere v. Farmers Ins.
Exch., 2011 MT 272, ¶ 13, 362 Mont. 379, 265 P.3d 617. Here, neither party presents any
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genuine issue of material fact. We thus review the District Court’s legal conclusions to
determine whether they are correct.
¶5 The MSPA regulates the creation of subdivisions in order to “promote the public
health, safety, and general welfare. . . .” Section 11-3860, RCM (1973). Corbett refused
to record certain deeds of sale because the transactions, which were sales of 40-acre parcels,
failed to comply with the provisions of the MSPA. Towe argues that the deeds should be
recorded because the tract from which the sales are derived is exempt from MSPA
regulations as a “grandfathered” subdivision. The basis for Towe’s argument is that the
40-acre parcels were larger than what the MSPA regulations covered, either in 1973 when
the MSPA regulated 10-acre or less parcels, or after 1974, but prior to 1993, when the
MSPA regulated 20-acre parcels. Not until 1993 did the MSPA expand to regulate all
parcels less than 160 acres. Since Corbett’s contention that the deeds should not be
recorded is premised on the fact that they arise from sales of 40-acre parcels, and are thus
subject to the MSPA’s current regulation of parcels less than 160 acres, Towe’s compliance
with or exemption from earlier iterations of the law would potentially “grandfather” in the
sales for recording, without the need to engage in the MSPA’s subdivision review process.
Towe’s arguments are misplaced, however, as the transactions on which it relies to
circumvent the current MSPA provisions are still deficient under prior versions of the
statute.
¶6 Towe first asserts that in 1974, a surveyor by the name of Compton created aerial
photographs of Sun Dial Ranch and drew lines on them denoting 40-acre tracts. Towe
argues that we should now consider these marked photographs to be a subdivision of land
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already in existence prior to the passage of the MSPA, and thus “grandfathered” in and
exempt from its provisions. Like the District Court, we will not examine the sufficiency
of these photographs to determine whether they constitute a division of land because it is
undisputed that neither these photographs nor a concordant certificate of survey were ever
recorded. The MSPA, adopted nearly one year prior to these aerial photographs, provided
that, “all division of real property made after June 30, 1973 . . . the boundaries or area of
which cannot be determined without a survey or trigonometric calculation, must be
surveyed by or under the supervision of a registered surveyor; and a certificate of survey .
. . must be completed by the surveyor and filed by him in the office of the county clerk and
recorder of the county in which the real property lies.” Section 11-3862(1), RCM (1973).
Under the plain language of § 11-3862(1), RCM (1973), we will not give legal effect to the
surveying of a parcel absent evidence of a certificate of survey having been recorded.
¶7 Towe then argues that if the Compton survey does not exempt the tract from the
MSPA and validate the deeds for recording, the Bloch Agreement will. We disagree,
concluding as the District Court did that the Bloch Agreement suffers from similar statutory
shortcomings. Although the agreement was signed and properly recorded on December 7,
1984, prior to the MSPA being amended in 1993 to cover the transfer of parcels less than
160 acres, the agreement is nonetheless not a contract for the sale of land that created a
division of land with segregated parcels sufficient to meet the definition of “subdivision”
under the MSPA. Under the relevant portions of the MSPA in effect in 1984, § 76-3-
103(3), MCA (1983), a “[d]ivision of land” means “the segregation of one or more parcels
of land from a larger tract held in single or undivided ownership by transferring or
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contracting to transfer title to a portion of the tract[;]” and a “subdivision” is defined as “a
division of land or land so divided which creates one or more parcels containing less than
20 acres[.]” Section 76-3-103(15), MCA (1983). By Towe’s admission, the Bloch
Agreement did not create parcels containing less than 20 acres, so the issue on appeal is
whether the language of the agreement amounted to a division of land segregating one or
more parcels from the larger tract, and thus creating a valid subdivision in existence prior
to the statute’s amendment in 1993.
¶8 When interpreting the language of a deed, we apply rules of contract interpretation.
Construction and interpretation of a contract are decided as a matter of law. Wicklund v.
Sundheim, 2016 MT 62, ¶ 16, 383 Mont. 1, 367 P.3d 403. “[T]he language of a contract
governs its interpretation if the language is clear and unambiguous.” Wicklund, ¶ 19 (citing
§ 28-3-401, MCA). The relevant portions of the Bloch Agreement provided that the
parties, Towe (Seller) and A. Howard Bloch (Purchaser), agree to a sale of “the property
described herein: 260 Forty Acre tracts of platted land on the Sun Dial Ranch in Custer
County, Montana[;]” that the “total aggregate price of the Land . . . shall be $2,080,000[;]”
and that the transaction “shall be consummated in the following manner: Seller agrees to
convey to Purchaser, land demised hereunder on an acreage or individual site basis upon
receipt of $8,000 per 40 acres, site in cash, plus interest from the date of each contract to
third party . . . .” Although Towe urges us to examine extrinsic evidence to bolster its
argument that the Bloch Agreement constitutes a division of land, we look to extrinsic
evidence to interpret a contract only where an ambiguity exists. Habets v. Swanson, 2000
MT 367, ¶ 13, 303 Mont. 410, 16 P.3d 1035. We find the Bloch Agreement language
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sufficiently clear and unambiguous to interpret the terms as they were written. In doing
so, we agree with the District Court that the agreement did not create segregated parcels,
but was instead a sale of a large tract of land described in terms of smaller parcels, with the
purchaser permitted to make incremental payments toward the whole of the purchase price
as he was able to secure third-party subcontracts. A structured payment arrangement does
not amount to the creation of a subdivision; the Bloch Agreement does not therefore
exempt the sales at issue from the provisions of the MPSA and validate the deeds for
recording.
¶9 Lastly, Towe argues that Corbett should be equitably estopped from refusing to file
the deeds because some prior sales had been recorded, and because the clerk’s office
previously had made assurances that the Sun Dial properties would be grandfathered in
when changes to the MPSA took effect in 1993. We agree with the District Court that the
doctrine of equitable estoppel does not apply here because there was no misrepresentation
or concealment of material facts, but instead a misrepresentation of law. Equitable estoppel
requires clear and convincing evidence of a misrepresentation or concealment of a material
fact and does not apply where “the conduct complained of consists solely of legal
representations.” Elk Park Ranch v. Park Cnty., 282 Mont. 154, 166, 935 P.2d 1131, 1138
(1997). In Elk Park, landowners sought relief in equitable estoppel when Park County
officials represented that the landowners’ one-party deeds, which sought to circumvent
certain provisions of the MSPA, were valid. The County allowed the landowners to record
the deeds and pursue third-party sales in reliance on the deeds’ validity. We denied the
landowners relief under the equitable estoppel doctrine, reasoning that the County’s actions
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amounted to inadvertent misrepresentations of the law, not misrepresentations of fact. Elk
Park, 282 Mont. at 166, 935 P.2d at 1138. Like in Elk Park, Corbett’s misrepresentations
and inadvertent recordings here amount to misrepresentations of the law, not fact. Towe
thus cannot prove an element of the equitable estoppel doctrine. The District Court’s
conclusions are therefore correct and its ruling is affirmed.
¶10 We have determined to decide this case pursuant to Section I, Paragraph 3(c) of our
Internal Operating Rules, which provides for unpublished opinions. This appeal presents
no constitutional issues, no issues of first impression, and does not establish new precedent
or modify existing precedent.
/S/ LAURIE McKINNON
We Concur:
/S/ MIKE McGRATH
/S/ JAMES JEREMIAH SHEA
/S/ DIRK M. SANDEFUR
/S/ JIM RICE
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