P R Systems v. Teamsters Security F

IN THE SUPREME COURT OF THE STATE OF MONTANA
P R SYSTEMS, WILLIAM ALLEN PARRY,
Trustee,
Defendant and Appellant,
v.
TRUSTEES OF THE TEAMSTERS SECURITY FUND
FOR SOUTHERN NEVADA; UNITED STATES OF AMERIC
acting through the INTERNAL REVENUE SERVICE,
Defendants and Respondents.
APPEAL FROM: District Court of the Sixteenth Judicial District,
In and for the County of Powder River,
The Honorable Kenneth R. Wilson, Judge presiding.
COUNSEL OF RECORD:
For Appellant:
William A. Parry, Trustee; P R Systems
Irrevocable Trust; Las Vegas, Nevada
For Respondent:
George W. Huss; Brown and Huss;
Miles City, Montana
(for Respondent Teamsters Security Fund)
William W. Mercer; Assistant U.S. Attorney;
Billings, Montana
(for Respondent United States of America)
Submitted on Briefs: October 17, 1996
~ ~ ~ i dDecember 10, 1996
~ d :
Filed:
Justice Charles E. Erdmann delivered the opinion of the Court.
Pursuant to Section I, Paragraph 3(c), Montana Supreme Court
1995 Internal Operating Rules, the following decision shall not be
cited as precedent and shall be published by its filing as a public
document with the Clerk of the Supreme Court and by a report of its
result to State Reporter Publishing Company and West Publishing
Company.
P R Systems, William Allen Parry, Trustee, appeals from the
order by the Sixteenth Judicial District Court, Powder River
County, granting the proceeds from the sheriff's sale to the
Teamsters Security Fund and the United States. We affirm.
The issues on appeal are as follows:
1. Did the District Court lack jurisdiction to consider and
rule on the question of which party is entitled to the proceeds
from the sheriff's sale of the real property foreclosed on by
AgAmerica?
2. Did the District Court abuse its discretion and act in a
biased and prejudicial manner against P R Systems during the course
of the litigation?
3. Did the District Court abuse its discretion when it
refused to grant P R Systems' motion for continuance?
FACTS
Leonard and Dorothy Saye owed $140,415.82 to the Internal
Revenue Service for unpaid federal income taxes for the tax years
1978-1980 and 1983. On May 22, 1985, the Sayes granted a mortgage
to AgAmerica on real property in Powder River County to secure a
promissory note in the amount of $110,000. The Sayes did not
respond to the IRS's demand for payment on the back taxes owed, and
therefore the United States filed a tax lien against the Sayes'
real property in 1992.
In August 1994, AgAmerica Corporation filed a complaint to
foreclose the real estate mortgage securing the promissory note
between AgAmerica and the Sayes. The Sayes, who were in default on
the loan payments, were named as defendants along with five other
parties, including P R Systems, the Trustees of the Teamsters
Security Fund for Southern Nevada (Teamsters), and the United
States.
In January 1995, the District Court issued a judgment, decree
of foreclosure, and order of sale. Although the ownership of the
mortgaged real property was not contested in the foreclosure, and
P R Systems had not filed a pleading in response to the complaint,
the District Court determined that P R Systems was the owner of the
real property. The real property mortgaged by the Sayes was then
sold at a sheriff's sale for $220,000 to BIL Ranch. After payments
of amounts due and owing AgAmerica and the costs of the foreclosure
sale, a surplus of $89,939.15 was deposited with the Clerk of the
District Court. The court then instituted proceedings to determine
the rights of junior lienholders to the surplusage.
The United States, P R Systems, and Teamsters all filed
pleadings asserting a priority in the proceeds. On February 17,
1996, William Parry, the trustee of P R Systems, sent Judge Wilson
a common law praecipe captioned "People v. Kenneth Wilson" and a
comptroller warrant for $492,800 issued by Leroy Schweitzer and
Daniel Peterson. The writ of praecipe issued by Parry as a
"Justice pro tempore, Constitution of Nevada," directed Judge
Wilson to pay $220,000 to BIL Ranch and to "provide a full,
complete, free and clear redemption to P R Systems," and
"[ilmmediately after making the above stated payments send the
remainder of said funds to P R Systems." Parry also stated that
funds were sent to the IRS in an amount to satisfy all alleged
assessments, penalties, and interest against the Sayes.
The District Court issued an order on February 20, 1996, for
Parry and P R Systems to appear and show cause why they should not
be held in contempt for serving a common law praecipe and
comptroller's warrant to intimidate the court. Copies of this
order were transmitted by facsimile to Thomas E. Towe, counsel for
P R Systems, and to counsel for the United States. On February 21,
1996, in a letter forwarded to Parry, Towe noted that "you will
have to seek additional counsel to defend yourself in connection
with the Show Cause Order."
The hearing set for March 1, 1996, was cancelled due to
inclement weather, and on the same day the court issued an order
rescheduling the hearing for March 11, 1996. On March 7, 1996,
Parry sent a motion for continuance to Judge Wilson. This motion
was received on March 11, the date of the hearing. Neither Parry
nor another representative of P R Systems attended the hearing. At
the hearing, the court denied P R Systems' motion for continuance,
granted the United States' motion to withdraw disclaimer of
interest, and sua sponte ordered all pleadings and supporting
argument advanced by P R Systems throughout the litigation
stricken, and allowed Towe to withdraw as counsel of record of P R
Systems. On March 28, 1996, the court issued an order directing
the Clerk of the District Court to distribute the surplus proceeds
to the United States and the Teamsters, based upon their
stipulation. The Clerk of the District Court issued two checks,
one to the Teamsters in the amount of $6,299.83, and one to the
United States for the balance of the foreclosure proceeds in the
amount of $86,951.29. P R Systems appeals the District Court's
order of March 7, 1996.
ISSUE ONE
Did the District Court lack jurisdiction to consider and rule
on the question of which party is entitled to the proceeds from the
sheriff's sale of the real property foreclosed on by AgAmerica?
P R Systems argues that the case should be dismissed because
the District Court did not have jurisdiction. P R Systems asserts
that to have jurisdiction, "THEY MUST PROVIDE PROOF THEIR AUTHORITY
EXCEEDS THAT OF THE CONSTITUTION OF THE UNITED STATES. Anything
less, their case must be dismissed."
Contrary to P R Systems' assertion, the District Court did
have both personal and subject matter jurisdiction. P R Systems
styled itself as a trust and is clearly a "person" within the
definition of Rule 4A, M.R.Civ.P., which provides: "As used in this
rule, the word 'person' . . . includes . . . a business trust;
. . . a trust; . . . or any other legal or commercial entity."
Rule 4B, M.R.Civ.P., sets forth those persons who are subject to
jurisdiction of Montana courts:
[A]ny person is subject to the jurisdiction of the courts
of this state as to any claim for relief arising from the
doing personally, through an employee, or through an
agent, of any of the following acts:
. . . .
(c) the ownership, use or possession of any
property, or of any interest therein, situated within
this state;
. . . .
(2) Acquisition of jurisdiction. Jurisdiction may
be acquired by our courts over any person through service
of process as herein provided; or by the voluntary
appearance in an action by any person either personally,
or through an attorney, or through any other authorized
officer, agent or employee.
The District Court had personal jurisdiction over P R Systems on
two bases. First, the action was for judicial foreclosure of a
mortgage upon real property situated in Powder River County,
Montana, in which P R Systems claimed an ownership interest.
Second, personal jurisdiction was acquired by the District Court
through the voluntary appearance by P R Systems through its
counsel
Section 3-5-302, MCA, provides original subject matter
jurisdiction of the district courts for "all cases at law and in
equity." The foreclosure of a mortgage is an equitable action over
which the district court has subject matter jurisdiction. We
therefore determine that the District Court had both personal and
subject matter jurisdiction.
ISSUE TWO
Did the District Court abuse its discretion and act in a
biased and prejudicial manner against P R Systems during the course
of the litigation?
P R Systems cites several passages from the record alleging
that these passages indicate the District Court acted in an
inappropriate and biased manner. P R Systems alleges that the
District Court appeared to have a "nonchalant preconceived mind
set,I' a "bias, prejudice and combative mind set," and that his
"feud with the 'Freeman' has warped his ability to function in an
impartial, non-biased, non-prejudice and without malice in the
capacity as a judge."
A review of the record, including the transcripts, does not
reveal that the District Court acted with prejudice, bias, or
malice. The portions of the record cited by P R Systems, when
reviewed in context, do not demonstrate the District Court abused
its discretion. The few instances where the court interrupted
counsel were not prejudicial to P R Systems, as their counsel was
allowed to complete his statement of his legal position.
P R Systems also alleged that the District Court allowed an
excessive delay in the proceedings; however, P R Systems made no
objection to the timing of the schedule of proceedings. This Court
will not address an issue raised for the first time on appeal.
Rasmussen v. Lee (Mont. 1996), 916 P.2d 98, 100, 53 St. Rep. 263,
265; Fandrich v. Capital Ford ~incolnMercury (1995), 272 Mont .
425, 431, 901 P.2d 112, 115-16. Thus, in a thorough review of the
record, this Court does not detect any evidence of malice, bias,
prejudice or an abuse of discretion by the District Court.
ISSUE THREE
Did the District Court abuse its discretion when it refused to
grant P R Systems' motion for continuance?
The standard of review of discretionary trial court rulings,
such as a motion for continuance, is abuse of discretion. In re
Inquiry into M.M. (1995), 274 Mont. 166, 172, 906 P.2d 675, 678.
We have previously held that simply seeking a continuance due to
lack of representation does not ensure the grant of the
continuance. Matter of Wong (1992), 252 Mont. 111, 827 P.2d 90.
In Wonq, we stated:
In making its decision on a requested continuance due to
lack of counsel, a court or agency must assess whether
the party petitioning for continuance has acted
diligently in seeking counsel. If the party has not
acted diligently in procuring representation, a tribunal
does not abuse its discretion in denying the continuance.
Wonq, 827 P.2d at 94 (citations omitted) .
On February 20, 1996, the District Court directed P R Systems
and Parry to appear before the court on March 1, 1996, to show
cause why they should not be held in contempt following their
tender of the "comptrollers warrant" to the court. The next day,
P R Systems ' counsel, Towe, moved to withdraw due to the actions of
P R Systems before the court. Towe also wrote to Parry on
February 21, 1996, informing him that he would have to seek
additional counsel in connection with the show cause order. On
February 29, 1996, one day prior to the scheduled show cause
hearing, P R Systems faxed to the court a request for a continuance
based upon the grounds that Parry was "on a jury trial." The
court, on its own motion, vacated the hearing on March 1 due to
inclement weather and reset the hearing for March 11, 1996.
On March 7, 1996, P R Systems mailed a motion for continuance
from Las Vegas, Nevada, to the District Court. The court received
the motion on March 11, 1996, the date of the show cause hearing.
As a basis for the motion, Parry argued that (1) the "contempt
charges appear to be criminal by definition" thereby entitling
P R Systems to counsel; (2) P R Systems' attorney "will have
nothing further to do with this case"; (3) it "may take some time"
to find new counsel and additional time for the new counsel to
become familiar with the case; and ( 4 ) no counsel will be present
to represent P R Systems at the March 11 hearing.
In Marks v. First Judicial District Court (1989), 239 Mont.
428, 781 P.2d 249, we addressed a similar situation. In that case,
the district court had issued an order for Marks to appear in court
ten days later and show cause why he should not be held in
contempt. Four days prior to the hearing, Marksr attorney advised
the court that he would be unable to attend the hearing. Counsel
was advised of the denial of his motion the day before the hearing.
As in the present case, Marks asserted that the contempt charge was
criminal in nature and that he was entitled to counsel. This Court
noted that a contempt proceeding may be quasi-criminal in nature
but that the right to counsel in this context "has generally been
held to mean that one charged with contempt of court is entitled to
a 'reasonable opportunity to employ counsel in contempt
proceedings. ' ' I Marks, 7 8 1 P.2d at 252. We determined that the
more than one week Marks had to secure counsel was a reasonable
period of time to seek and employ counsel.
On February 21, 1996, counsel for P R Systems informed
P R Systems and Parry that it would need to have new counsel to
represent it at the show cause hearing. This provided P R Systems
with a reasonable amount of time to seek counsel for the show cause
hearing held on March 11, 1996. Moreover, P R Systems did not
indicate in its motion that it had made any diligent effort to
locate new counsel. By not appearing to argue its motion for
continuance, P R Systems proceeded at its own jeopardy, as the
filing of its motion did not ensure that it would be granted.
m, 827 P.2d 90. We therefore conclude that the District Court
did not abuse its discretion when it refused to grant P R Systems'
motion for continuance.
Af firmed.
a82-P'
Justice
We concur: