Algee v. Hren , 384 Mont. 93 ( 2016 )

07/12/2016
DA 15-0688
Case Number: DA 15-0688
IN THE SUPREME COURT OF THE STATE OF MONTANA
2016 MT 166
CARL E. ALGEE,
Plaintiff and Appellant,
v.
STEVEN HREN, JANET HREN and JOHN DOES 1-10,
Defendants and Appellees.
APPEAL FROM: District Court of the Eighth Judicial District,
In and For the County of Cascade, Cause No. DDV 13-658
Honorable Michael B. Hayworth, Presiding Judge
COUNSEL OF RECORD:
For Appellant:
Neal P. DuBois, Christopher A. Hoffman, Sutton, DuBois & Mills, PLLC,
Great Falls, Montana
For Appellees:
Patrick R. Watt, Mark T. Wilson, Jardine, Stephenson, Blewett & Weaver,
P.C., Great Falls, Montana
Submitted on Briefs: May 4, 2016
Decided: July 12, 2016
Filed:
__________________________________________
Clerk
Justice James Jeremiah Shea delivered the Opinion of the Court.
¶1 Carl Algee appeals an order of the Eighth Judicial District Court, Cascade County,
granting partial summary judgment to Steven and Janet Hren. The summary judgment
order dismissed all of Algee’s claims, while leaving some of the Hrens’ claims for further
adjudication. The District Court certified the order as final pursuant to M. R. Civ. P.
54(b) to determine whether it correctly invoked the doctrine of laches to dismiss most of
Algee’s claims. We address the following issue on appeal:
Whether the District Court properly applied the doctrine of laches to bar all of
Algee’s claims not already barred by statutes of limitation.
¶2 We affirm.
PROCEDURAL AND FACTUAL BACKGROUND
¶3 Algee and the Hrens own adjoining properties. The Hrens’ property holds an
easement that runs through Algee’s land, including along a creek embankment. In
August of 2010, the Hrens began to build a road on their easement to access their
property. On August 30, 2010, Algee filed a complaint with the Cascade Conservation
District (CCD) regarding the Hrens’ easement road project. The CCD issued a Stop
Work Order. The Hrens ceased construction, altered their plans, and submitted them to
the CCD. The CCD further modified the plans before issuing the necessary permit (310
Permit) to continue road construction. On September 21, 2010, Algee received a letter
informing him of the approved plan and the issued 310 Permit. The Hrens completed the
road along their easement in October 2010, at a cost of approximately $40,000.
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¶4 On August 21, 2013, Algee sued the Hrens over the easement. Algee’s Complaint
alleged, in part, that the Hrens destroyed an access trail when constructing the easement
road in 2010. On the same date, Algee also filed a Notice of Lis Pendens. The Lis
Pendens prevented the Hrens from closing on the sale of their property, which was
scheduled for August 26, 2013. On October 11, 2013, the Hrens filed their Answer,
Counterclaim, and a Request for a Permanent Injunction. On April 9, 2015, the Hrens
filed Defendants’ Motion for Partial Summary Judgment on Plaintiff’s Claims. On April
20, 2015, the Hrens filed an Amended Answer and Counterclaim through an unopposed
M. R. Civ. P. 15(a)(2) motion. The Amended Answer included a Doctrine of Laches
affirmative defense.1
¶5 On July 28, 2015, the District Court entered its Order Regarding Defendants’
Motion for Summary Judgment and Plaintiff’s Cross-Motion for Partial Summary
Judgment on Attorney’s Fees Issue. The District Court held that Algee’s Trespass and
Negligence claims were barred by the statutes of limitation, and Algee’s remaining
claims were barred by laches. Algee does not appeal from the District Court’s order
applying the statutes of limitation, but does challenge the Court’s ruling with respect to
laches. Algee appeals.
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As an initial matter, we will not address Algee’s M. R. Civ. P. 8(c) argument that the Hrens
untimely pleaded their laches affirmative defense because Algee raises this argument for the first
time on appeal. We “will not put a district court in error for a ruling or procedure in which the
appellant acquiesced, participated, or to which the appellant made no objection.” In re Marriage
of Deist, 2003 MT 263, ¶ 31, 317 Mont. 427, 77 P.3d 525 (citation omitted). Algee did not
object to the Hrens pleading laches as an affirmative defense in their Amended Answer and we
will therefore not review the argument.
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STANDARD OF REVIEW
¶6 The parties dispute the applicable standard of review. Algee argues that the
District Court’s order should be reviewed de novo because the appeal is taken from a
grant of summary judgment. The Hrens argue that the standard is whether the District
Court abused its discretion, relying on Williard v. Campbell Oil Co., 77 Mont. 30, 248 P.
219, 224 (1926). Regarding the appropriate standard of review to apply in this case,
Williard is inapposite because it dealt with an appeal from a bench trial. Williard,
77 Mont. at 33, 248 P. at 220. We have consistently held that an order on summary
judgment is reviewed de novo, applying the same criteria as the district court. Denturist
Ass’n of Mont. v. State, 2016 MT 119, ¶ 7, 383 Mont. 391, __ P.3d __ (citing Lorang v.
Fortis Ins. Co., 2008 MT 252, ¶ 36, 345 Mont. 12, 192 P.3d 186). Under M. R. Civ. P.
56(c), summary judgment is appropriate where there is a complete absence of genuine
issues of material fact, and the moving party is entitled to judgment as a matter of law.
Lorang, ¶ 37.
DISCUSSION
¶7 Whether the District Court properly applied the doctrine of laches to bar all of
Algee’s claims not already barred by statutes of limitation.
¶8 The doctrine of laches is an equitable remedy—asserted as an affirmative defense
under M. R. Civ. P. 8(c)(1)—“by which a court denies relief to a claimant who has
unreasonably delayed or been negligent in asserting a claim, when the delay or
negligence has prejudiced the party against whom relief is sought.” Anderson v. Stokes,
2007 MT 166, ¶ 19, 338 Mont. 118, 163 P.3d 1273 (citing Montanans for Justice v. State
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ex rel. McGrath, 2006 MT 277, ¶ 23, 334 Mont. 237, 146 P.3d 759, and Cole v. State ex
rel. Brown, 2002 MT 32, ¶ 24, 308 Mont. 265, 42 P.3d 760). To determine whether
laches applies, a court must find: (1) the party against whom the defense is asserted
lacked diligence in asserting a claim; and (2) that lack of diligence resulted in prejudice
to the party asserting the defense. Wicklund v. Sundheim, 2016 MT 62, ¶ 40,
383 Mont. 1, 367 P.3d 403 (citations omitted). The doctrine of laches’ purpose is to
“discourage stale demands by the court refusing to interfere where there has been gross
laches in prosecuting rights, or where long acquiescence in assertion of adverse rights has
occurred.” Montanans for Justice, ¶ 25 (quoting Castillo v. Franks, 213 Mont. 232, 241,
690 P.2d 425, 429 (1984)). Although time is a factor when determining laches’ elements,
“[l]aches is not a mere matter of elapsed time, but rather, it is principally a question of the
inequity of permitting a claim to be enforced.” Cole, ¶ 25 (citations omitted).
¶9 One way by which a lack of diligence may be demonstrated is when a claimant
contemporaneously believes another is violating his or her right, yet the claimant allows
the alleged unlawful act to finalize before objecting to such action. See Cole, ¶¶ 27-30;
Wagner v. Woodward, 2012 MT 19, ¶¶ 29, 33, 363 Mont. 403, 270 P.3d 21. In Cole, we
held that laches barred plaintiffs from challenging the process by which voters approved
an initiative that imposed term limits on ten state and federal offices. Cole, ¶¶ 1, 42. The
plaintiffs filed suit more than nine years after the challenged election. Cole, ¶ 17. We
found that the plaintiffs contemporaneously knew of the election’s alleged deficiencies
and rejected the argument that the plaintiffs’ injury was only realized nine years later
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when the public officials who were subject to the term limits could not stand for
reelection. Cole, ¶¶ 27-30.
¶10 In Wagner, we held that laches applied when the plaintiffs failed to raise their
claim before or during the defendant’s construction of a deck and fences on a lot adjacent
to the plaintiffs’ land because the plaintiffs knew, or should have known, during
construction that the defendant was violating the lot’s restrictive covenants. Wagner,
¶¶ 29, 33. After the defendant completed construction, the plaintiffs sued for a
declaratory judgment and injunctive relief because the defendant’s eaves—which were
constructed ten years earlier—deck, and fences allegedly violated the lot’s covenants.
Wagner, ¶ 8. Although the plaintiffs brought suit only three months after the deck’s
construction, the plaintiffs failed to claim the eaves violated the covenants for ten years.
Wagner, ¶ 8. More importantly, the plaintiffs knew the construction would not conform
to the covenants while the construction was taking place. Wagner, ¶ 28. We found:
[N]othing in the record . . . indicate[s] that [the plaintiffs] were not aware of
[the defendant’s] construction projects. The deck extension occurred in
June, the west fence in July and the east fence in August. Nothing in the
record indicates that [the plaintiffs] notified [the defendant] that they
believed his projects violated the covenants; rather, they waited until the
projects were completed before bringing this action.
Wagner, ¶ 29. Although the plaintiffs waited 10 years to bring their claim regarding the
eaves, our analysis focused on their silence during the construction project that they knew
violated the covenants.
¶11 In this case, Algee knew or should have known the Hrens were allegedly
destroying his access trail while constructing the road easement. He knew where the trail
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was located because the trail was a selling point when he purchased the property in 2008,
and he admitted in his summary judgment brief that the trail’s alleged destruction was
“primarily why [he] filed suit.” Algee knew the Hrens were constructing a road along
their easement because Algee was the one who informed the CCD of the construction.
Algee then received notice from the CCD that it approved the Hrens’ updated plans and
allowed them to continue construction. Algee did not notify the Hrens, the CCD, or a
district court of his access trail before or during the road easement construction. Algee
then waited almost three years before bringing his claim alleging the Hrens destroyed his
access trail. As in Cole and Wagner, Algee lacked diligence in bringing his claim by
remaining silent while knowingly allowing the Hrens to allegedly destroy his access trail
through road construction. The District Court correctly concluded that Algee’s delay in
bringing his claim constituted an unexplainable delay of such character as to render
enforcement of his asserted right inequitable because Algee allowed the Hrens to
complete their road construction and put their property on the market before pointing out
the alleged access trail destruction. We therefore next consider whether Algee’s lack of
diligence prejudiced the Hrens.
¶12 In some instances, the prejudice element can be satisfied if permitting a claim to
be enforced would cause inequity. See Cole, ¶ 32. In Cole, we held that the plaintiffs’
unreasonable delay in bringing their claims would prejudice others if successful because
“[a]t least some of the executive officers and a large number of state legislators left office
in 2000 based upon [the initiative’s] presumptive validity.” Cole, ¶ 32. We stated:
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“laches is not a mere matter of elapsed time, but rather, it is principally a question of the
inequity of permitting a claim to be enforced.” Cole, ¶ 32 (citation omitted).
¶13 By contrast, in Anderson, we upheld a district court’s rejection of a laches defense
because the party asserting the defense only used conclusory statements to support the
laches prejudice element. Anderson, ¶¶ 20-21. In Anderson, the defendant asserting
laches claimed he would be prejudiced if the plaintiff’s claim was enforced because it
would “destroy his radio station.” Anderson, ¶ 20. The defendant presented no evidence
explaining how enforcing the claim would destroy his radio station, and we therefore
affirmed the District Court’s rejection of the defendant’s laches defense. Anderson, ¶ 21.
¶14 The record in this case evinces the following undisputed facts relevant to the
Hrens’ claims of prejudice: (1) Algee knew of his alleged access trail before the Hrens
began the easement road construction; (2) Algee did not inform the Hrens of the access
trail before or during the process in which the Hrens applied for and received the
necessary 310 Permit to build the easement road; (3) the Hrens spent approximately
$40,000 to complete the easement road; (4) Algee waited almost three years to sue the
Hrens regarding the easement road, which was the first time Algee informed the Hrens
about the access trail; (5) several days before Algee filed the lawsuit and the Lis Pendens,
the Hrens moved their furniture to a new home in anticipation of closing on a buy/sell
agreement; (6) Algee’s suit encumbered the Hrens’ property five days before the buy/sell
agreement’s closing date; and (7) the Hrens’ property sale did not close. Although Algee
labels the facts regarding the Hrens’ property sale as “self-serving,” he did not dispute
them below; he only asserted that he lacked knowledge of the buy/sell agreement when
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filing the Lis Pendens. Algee may not dispute these facts for the first time on appeal. See
Eitel v. Ryan, 231 Mont. 174, 178, 751 P.2d 682, 684 (1988) (holding that this Court will
not fault a district court’s consideration of affidavits not objected to below).
¶15 The undisputed facts demonstrate that Algee’s lack of diligence in bringing his
claim prejudiced the Hrens. His lack of diligence will also prejudice the Hrens if the
claim is enforced because they will have to redo a portion of the easement road or
compensate Algee for the access trail, even though the issue could have been avoided or
addressed before the road’s completion had Algee acted timely. Therefore, the Hrens
have satisfied the second element.
¶16 Algee contends that the District Court resolved disputed material facts, therefore
going beyond summary judgment’s scope. Algee argues the District Court incorrectly
relied on three assertions of past prejudice the Hrens suffered: (1) having to apply for a
310 permit; (2) spending approximately $40,000 completing the easement road; and (3)
losing the ability to sell their home free of the Lis Pendens filed days before closing on
their buy/sell agreement. We disagree.
¶17 The District Court did not resolve disputed facts, as Algee contends; it merely
evaluated the undisputed facts in its laches analysis and determined that enforcing
Algee’s claim would prejudice the Hrens because it would force them to redo a
completed road due to Algee’s failure to timely notify them of the alleged access trail.
¶18 Regarding the undisputed fact that the Hrens’ buy/sell agreement fell through
because of Algee’s suit, Algee contends he lacked knowledge of the buy/sell agreement
and therefore should not suffer from the agreement falling through days after he brought
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suit. Algee’s knowledge of the buy/sell agreement is beside the point. Algee
undisputedly knew of his access trail and its location, knew the easement road would
interfere with the trail, kept silent during the 310 Permit acquisition, and kept silent
during the easement road construction.
¶19 Algee next contends that the District Court’s conclusions of law pertaining to
prejudice are inconsistent with this Court’s lengthy timeframe for finding a delay that
may warrant a laches application. We disagree. When analyzing laches, we focus on a
claimant’s lack of diligence in bringing a claim, and the prejudicial effect that has on the
party asserting laches. Although the length of time is a consideration, it is not a
dispositive one. See Wagner, ¶¶ 27-31.
¶20 Finally, Algee argues that a court may not apply laches when a claim’s applicable
statute of limitations has not run. This argument has no merit. Laches is an equitable
defense focusing on a case’s individual circumstances and “the period of time necessary
to invoke laches is not measured by [a] statute of limitations.” Shimsky v. Valley Credit
Union, 208 Mont. 186, 192, 676 P.2d 1308, 1311 (1984) (holding that laches barred a
claim brought within the applicable statute of limitations because the defendant paid a
creditor twenty-seven payments after receiving notice of an increased interest rate which
he disputed two years after he should have learned of the increase); Montgomery v. First
Nat’l Bank of Dillon, 114 Mont. 395, 136 P.2d 760 (1943).
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CONCLUSION
¶21 For the foregoing reasons, we hold the District Court did not err by granting
summary judgment in favor of the Hrens on all of Algee’s claims not already barred by
statutes of limitation.
¶22 Affirmed.
/S/ JAMES JEREMIAH SHEA
We Concur:
/S/ MIKE McGRATH
/S/ PATRICIA COTTER
/S/ BETH BAKER
/S/ LAURIE McKINNON
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