Fed National Mortgage v. Taves ( 2016 )

May 10 2016
DA 15-0527
Case Number: DA 15-0527
IN THE SUPREME COURT OF THE STATE OF MONTANA
2016 MT 109N
FEDERAL NATIONAL MORTGAGE ASSOCIATION,
Plaintiff and Appellee,
v.
GEE GEE TAVES,
Defendant and Appellant.
APPEAL FROM: District Court of the Eleventh Judicial District,
In and For the County of Flathead, Cause No. DV 15-091A
Honorable Ted O. Lympus, Presiding Judge
COUNSEL OF RECORD:
For Appellant:
Gee Gee Taves, Self-Represented, Kalispell, Montana
For Appellee:
Danielle A.R. Coffman, Crowley Fleck PLLP, Kalispell, Montana
Cassie R. Dellwo, Mackoff Kellogg Law Firm, Dickinson, North Dakota
Submitted on Briefs: March 30, 2016
Decided: May 10, 2016
Filed:
__________________________________________
Clerk
Justice James Jeremiah Shea 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 Gee Gee Taves (Taves) appeals an order from the Eleventh Judicial District Court,
Flathead County, which granted partial summary judgment in favor of the Federal
National Mortgage Association (Fannie Mae). The Court’s order also dismissed Taves’
counterclaim and related discovery requests. We affirm.
¶3 This matter involves two lawsuits. The first—cause number DV-10-1166A (2010
Lawsuit)—involved Gee Gee Taves and his wife Ilse Taves, who attempted to revoke the
foreclosure and subsequent Trustee’s sale of their Kalispell property. The second lawsuit
involved the property’s current owner—Fannie Mae—suing to evict Taves. Taves is
appealing from the District Court’s order in the second lawsuit.
¶4 In 2010, Taves sued Northwest Trustee Services, Inc. and Wells Fargo Home
Mortgage Company (collectively Wells Fargo) to prevent them from foreclosing on the
property and selling it in a Trustee’s sale. On August 11, 2011, the Court denied Taves’
motion to revoke the Trustee’s sale. The Court denied all of Taves’ claims, which
included: (1) Wells Fargo failed to provide him legal notice of the Trustee’s sale;
(2) Wells Fargo failed to record notice of the sale; (3) Taves was in bankruptcy; and
(4) because Taves filed the 2010 Lawsuit, the foreclosure became contested and therefore
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fell outside the scope of nonjudical foreclosure. The Court entered summary judgment
and final judgment against Taves in July 2013, holding:
A review of the memoranda and documents of record reveals that the June
17, 2011, Trustee’s Sale of [the Taves’] former residence was properly
noticed in conformity with the Montana Small Tract Financing Act,
Sections 71-1-301 MCA, et seq. The Bankruptcy Court granted a discharge
and the automatic stay expired on June 8, 2011, and therefore, did not
preclude the Trustees sale on June 17, 2011. Plaintiff’s filing of this action
did not prevent the Trustee’s Sale. Section 71-1-304(3), MCA, provides
that the decision to foreclose nonjudicially belonged to the beneficiary,
Wells Fargo. Further, the filing of a document requesting a temporary stay
of foreclosure did not prevent the Trustee from proceeding with the sale.
¶5 After Fannie Mae purchased the property at the Trustee’s sale, it rented the
property to tenants. On November 3, 2014, those tenants moved out. After the tenants
moved out, Taves moved back in, triggering the eviction action he is currently appealing.
¶6 On February 2, 2015, Fannie Mae sued Taves to evict him and all other occupants
from the property. Taves counterclaimed that Fannie Mae abandoned the property and
that he had re-gained the property through adverse possession. Taves also argues that
Fannie Mae does not own the property because the Trustee’s sale was void.
¶7 On June 1, 2015, Fannie Mae moved the District Court to grant summary
judgment dismissing Taves’ counterclaim. On June 22, 2015, Taves moved the Court for
an extension of time to oppose summary judgment and an authorization to issue
subpoenas duces tecum. On the same date, Taves also filed a Motion for Discovery. On
July 22, 2015, the District Court: (1) granted Fannie Mae’s Motion for Summary
Judgment on Counterclaim/Request for TRO; and (2) denied Taves’ Motion for
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Extension of Time to Oppose Summary Judgment and Authorization to Issue Subpoena
Duces Tecum. The Court did not rule on Taves’ Motion for Discovery.
¶8 The District Court held: (1) claim preclusion barred Taves’ claim of alleged
defects in the Trustee’s sale; (2) issue preclusion barred relitigation of alleged improper
notice of the Trustee’s sale; and (3) Taves did not satisfy adverse possession’s time or tax
elements. Taves appeals the first two holdings.
¶9 We review a district court’s summary judgment de novo, applying the same M. R.
Civ. P. 56(c) criteria as the district court. Lorang v. Fortis Ins. Co., 2008 MT 252, ¶ 36,
345 Mont. 12, 192 P.3d 186. Summary judgment is appropriate when there is no genuine
issue as to any material fact and the moving party is entitled to judgment as a matter of
law. M. R. Civ. P. 56(c); Estate of Willison v. Addison, 2011 MT 179, ¶ 13,
361 Mont. 269, 258 P.3d 410. A district court’s application of claim preclusion presents
an issue of law that we review de novo for correctness. Brilz v. Metro. Gen. Ins. Co.,
2012 MT 184, ¶ 13, 366 Mont. 78, 285 P.3d 494. We review a district court’s denial of a
M. R. Civ. P. 56(f) motion—requesting to continue a summary judgment motion for
further discovery—for abuse of discretion. Rosenthal v. Cnty. of Madison, 2007 MT 277,
¶ 23, 339 Mont. 419, 170 P.3d 493. “This Court’s review of constitutional questions is
plenary.” Williams v. Bd. of Cnty. Comm’rs, 2013 MT 243, ¶ 23, 371 Mont. 356,
308 P.3d 88 (citing Walters v. Flathead Concrete Prods., 2011 MT 45, ¶ 9, 359 Mont.
346, 249 P.3d 913).
¶10 Taves contends that the District Court erred in several respects. First, Taves
asserts that the Court improperly granted Fannie Mae summary judgment because it
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failed to address the Trustee’s sale’s deficiencies. Second, Taves argues that the Court
failed to issue subpoenas and allow him to conduct discovery relating to his counterclaim.
Finally, Taves claims the Court violated his Fifth and Fourteenth Amendment rights, in
addition to violating his right to a jury by his peers.
¶11 Claim preclusion applies to all issues relating to the alleged deficiencies in the
property’s Trustee’s sale. Claim preclusion bars a party from “relitigating claims that
were or could have been raised” in a previous action in which a final judgment was
reached. Brilz, ¶ 18. The doctrine embodies “a judicial policy that favors a definite end
to litigation.” Baltrusch v. Baltrusch, 2006 MT 51, ¶ 15, 331 Mont. 281, 130 P.3d 1267
(citations omitted). Claim preclusion deters “plaintiffs from splitting a single cause of
action into more than one lawsuit, thereby conserving judicial resources and encouraging
reliance on adjudication by preventing inconsistent judgments.” Baltrusch, ¶ 15
(citations omitted). Claim preclusion applies if the following elements are met:
(1) the parties or their privies are the same in the first and second actions;
(2) the subject matter of the actions is the same; (3) the issues are the same
in both actions, or are ones that could have been raised in the first action,
and they relate to the same subject matter; (4) the capacities of the parties
are the same in reference to the subject matter and the issues between them;
and (5) a valid final judgment has been entered on the merits in the first
action by a court of competent jurisdiction.
Brilz, ¶ 22. Here, it is undisputed that the subject matter is the same, the issues are the
same, the parties’ capacities are the same, and the District Court entered final judgment in
the 2010 Lawsuit, on the merits. Taves contends that the privity element is not met
because the parties from this litigation and the 2010 Lawsuit differ.
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¶12 The first claim preclusion element is met if the parties’ “privies are the same in the
first and second actions.” Brilz, ¶ 22. To determine whether a party to a second action is
in privity with the first action’s party, we focus on “whether a defendant’s legal right or
interest has been represented by the previous litigant to determine whether the two are
privies.” Holtman v. 4-G’s Plumbing & Heating, Inc., 264 Mont. 432, 437,
872 P.2d 318, 321 (1994). In Holtman, we defined privies “as those who are so
connected in . . . law as to be identified with the same interest and, consequently, affected
with each other by litigation.” Holtman, 264 Mont. at 437, 872 P.2d at 321. In this case,
Wells Fargo—which participated in the 2010 Lawsuit—and Fannie Mae are “privies.”
Both parties shared the same interest in advocating for the validity of the property’s
Trustee’s sale through persuading the District Court that they met all the statutory
requirements. All claim preclusion elements are met, and the District Court correctly
applied the doctrine to dismiss Taves’ counterclaim on summary judgment. Any issue
preclusion analysis does not change the outcome of our claim preclusion analysis; we
therefore decline to address the issue preclusion doctrine.
¶13 Taves also asserts that the District Court erred by not issuing subpoenas or
allowing discovery. Taves requested subpoenas in response to Fannie Mae’s Motion for
Summary Judgment on Counterclaim/Request for TRO. Though Taves did not invoke
M. R. Civ. P. 56(f) in making his request, we analyze it in that context because of Taves’
pro se status.
¶14 M. R. Civ. P. 56(f) allows a district court to continue a summary judgment motion
if the opposing party needs further discovery. “A district court does not abuse its
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discretion in denying a M. R. Civ. P. 56(f) motion where the party opposing a motion for
summary judgment does not establish how the proposed discovery could preclude
summary judgment.” Rosenthal, ¶ 38 (citations omitted). In Taves’ response to Fannie
Mae’s motion for summary judgment, he requested to subpoena three individuals with
knowledge of the underlying Trustee’s sale, any “potential witness for [Fannie Mae],”
and “[t]o have [Fannie Mae] furnish a full accounting as to any expenses incurred by
their maintenance, upkeep, protection and security of [the property].” Taves did not
explain why the latter discovery would help defeat the opposed summary judgment, nor
can we discern from the record how his proposed discovery would unearth a disputed
material fact that would create a genuine issue precluding the Court from granting Fannie
Mae summary judgment. The District Court, therefore, did not abuse its discretion when
denying Taves his requested subpoenas because he failed to establish how the proposed
discovery could preclude summary judgment.
¶15 Taves asserts that the Court violated his right to a jury trial by his peers when it
disposed of the matter by summary judgment. Article II, Section 26 of the Montana
Constitution provides a civil litigant the right to a jury trial. This Court has held that “the
right to trial by jury in this state is the same as that guaranteed by the Seventh
Amendment [to the United States Constitution].” Linder v. Smith, 193 Mont. 20, 23,
629 P.2d 1187, 1189 (1981). Summary judgment does not violate the Seventh
Amendment. Parklane Hosiery Co. v. Shore, 439 U.S. 322, 336-37, 99 S. Ct. 645,
654-55 (1979) (citing Fidelity & Deposit Co. v. United States, 187 U.S. 315, 319-21,
23 S. Ct. 120, 121-22 (1902)). Furthermore, the Parklane Court also determined that
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neither claim nor issue preclusion violate the Seventh Amendment. Parklane, 439 U.S.
at 334-35, 23 S. Ct. at 653. The District Court did not deprive Taves of his right to try
that claim before a jury because it properly used summary judgment to dispose of his
counterclaim.
¶16 Taves also contends the Court deprived him of his Fifth and Fourteenth
Amendment due process rights. Taves’ only supporting analysis of the contention is
found in his reply brief to this Court: Taves alleges that the District Court violated his due
process rights by “not giving [him] an opportunity to appear at [the] foreclosure sale . . .
[and] not having a hearing . . . [and] not allowing Motions for discovery . . . .” The
Fourteenth Amendment to the United States Constitution, and Mont. Const. art. II, § 17,
provide that no person shall be deprived of life, liberty, or property without due process
of law. “The guarantee of due process has both a procedural and a substantive
component . . . [and] substantive due process analysis applies when state action is alleged
to unreasonably restrict an individual’s constitutional rights.” Montanans v. State, 2006
MT 277, ¶ 29, 334 Mont. 237, 146 P.3d 759. Procedural due process requires a court to
provide a litigant (1) notice, and (2) an opportunity for a hearing appropriate to the case’s
nature. Montanans, ¶ 30. However, those elements are “flexible” and are applied in
relation to the “procedural protections demanded by the specific situation.” Montanans,
¶ 30 (citations omitted). Here, we have already addressed the foreclosure sale and
discovery issues. The District Court properly disposed of those issues, while allowing
Taves full notice of the arguments, and in turn did not violate his due process rights.
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¶17 The lack of a hearing issue remains. The record does not show any request for a
hearing on the summary judgment motion. The only hearing request came in Taves’
Motion for Discovery when he requested “oral arguments be scheduled in this above
action and that a jury trial be scheduled by the court . . . .”
¶18 “The right to a hearing is waived unless a party requests a hearing within 14 days
after the time for filing a reply brief has expired.” M. R. Civ. P. 56(c)(2)(A); e.g., RN &
DB, LLC v. Stewart, 2015 MT 327, ¶¶ 40-47, 381 Mont. 429, 362 P.3d 61. Furthermore,
“we will not put a district court in error for failing to hold a summary judgment hearing if
the hearing testimony would not raise any issue of material fact.” Stewart, ¶ 44 (citations
omitted). Here, Taves waived his right to a summary judgment hearing because he failed
to request one. Even if Taves’ broad oral argument hearing request is construed as a
summary judgment hearing request, the District Court did not violate his due process
right to a hearing because nothing in the record indicates potential hearing testimony
would have raised an issue of material fact. The District Court did not violate Taves’ due
process rights.
¶19 Taves also argues: the 2010 Lawsuit did not adjudicate the lack of an order
directing Taves off the Property; claim preclusion would constitute double jeopardy; and
the District Court forced his case through to clear its docket before the presiding judge
retired. Taves did not request the District Court to consider any of those arguments.
Generally, this Court will not review an issue raised for the first time on appeal. Stewart
v. Rice, 2013 MT 55, ¶ 16, 369 Mont. 203, 296 P.3d 1174. We decline to review the
arguments Taves omitted below.
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¶20 We have determined to decide this case pursuant to Section I, Paragraph 3(c) of
our Internal Operating Rules, which provides for memorandum opinions. In the opinion
of the Court, the case presents a question controlled by settled law or by the clear
application of applicable standards of review. Having reviewed the briefs and the record
on appeal, we conclude that the Appellant has not met his burden of persuasion relative to
the summary judgment and constitutional issues, nor was the District Court’s ruling
denying subpoenas an abuse of discretion. We affirm.
/S/ JAMES JEREMIAH SHEA
We Concur:
/S/ MICHAEL E WHEAT
/S/ PATRICIA COTTER
/S/ BETH BAKER
/S/ JIM RICE
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