Scanlon v. Cable Mountain Mine

No. 90-167
IN THE SUPREME COURT OF THE STATE OF MONTANA
1991
JACK M. AND CAROLYN M. SCANLON,
GARY L. AND BEVERLY J. BECK, WILLIAM
INKRET, JR., M.D., P.C., PROFIT SHARING
TRUST, RICHARD AND MARY GRANBERG AND
RICHARD AND ROBERTA URWILLER,
Plaintiffs and Appellants,
-vs-
CABLE MOUNTAIN MINE, INC., a ~ e v a d aGorp-t
and MAGELLAN RESOURCES C O W . , a Montana corps
Defendants and Respondents.
APPEAL FROM: District Court of the Third Judicial District,
In and for the County of Deer Lodge,
The Honorable Ted L. ~izner, Judge presiding.
COUNSEL OF RECORD:
For Appellant:
Donald A. Garrity, Helena, Montana
For Respondent:
William M. Kebe, Jr.; Johnson, Skakles & Kebe,
Butte, Montana
Gary L. Walton; Poore, Roth & Robinson, Butte,
Montana
Submitted on Briefs: August 29, 1991
Decided: December 1 0 , 1991
Filed:
Clerk
Justice R. C. McDonough delivered the Opinion of the Court.
Plaintiffs appeal from various orders of the District Court of
the Third Judicial District, Deer Lodge County, in favor of
defendants Cable Mountain Mine, Inc., and Magellan Resources, Corp.
We affirm.
The issues on appeal are:
1. Whether the District Court erred in failing to impose
sanctions against Cable Mountain Mine Inc., and Magellan Resources
Corp., pursuant to Rule 11, M.R.Civ.P.
2. Whether The District Court erred in determining that no
joint venture existed between Cable Mountain Mine, Inc., and
Magellan Resources Corp.
3. Whether the District Court erred in granting a directed
verdict dismissing the claims of William Inkret, Jr., M.D. Profit
Sharing Trust.
4. Whether the District Court erred in instructing the jury
on laches at the request of the defendants.
5. Whether the District Court erred in refusing to instruct
the jury on the language of 5 82-2-221, MCA.
Cable Mountain Mine, Inc. (Cable), is a Nevada corporation
qualified to transact business in Montana since June 22, 1987.
Cable operates a gold recovery operation at a placer mine near
Cable Creek under a State permit. Magellan Resources Corp.
(Magellan), is a Montana corporation which owns patented and
unpatented mining claims in the Southern Cross and Cable Mountain
Mining Districts located in Deer Lodge County, Montana. At times
pertinent to this lawsuit, Magellan conducted various methods of
exploration, including an active drilling program under an
exploration permit from the State.
Jack M. and Carolyn M. Scanlon, William Inkret, Jr., M.D. P.C.
Profit Sharing Trust, Richard and Mary Greenberg, and Richard and
Roberta Urwiller are property owners in the Southern Cross area.
Plaintiffs purchased their properties between 1972 and 1974.
Plaintiffs1 complaint alleged inverse condemnation, trespass, and
nuisance.
A trial commenced on December 4, 1989. At the close of
plaintiffs' case in chief the District Court granted a directed
verdict in favor of Cable and Magellan on the joint venture issue,
and dismissed the claims of William Inkret, Jr., M.D., P.C. Profit
Sharing Trust. Subsequently, the jury rendered a verdict in favor
of the defendants on the remaining issues. This appeal followed.
I
Whether the District Court erred in failing to impose
sanctions against Cable and Magellan pursuant to Rule 11,
M.R.Civ.P.
The standard of review in regard to findings of fact in Rule
11 cases is clearly erroneous. The District Court, having the feel
of the case, will not be overturned unless its final judgment
constitutes an abuse of discretion. DIAgostinov. Swanson (1990),
240 Mont. 435, 446, 784 P.2d 919, 926.
Plaintiffs maintain that Cable filed false answers to
interrogatories regarding the alleged joint venture between Cable
and Magellan. Further, plaintiffs allege that Cable answered
falsely that the company was incorporated in 1984 when in fact it
was 1987. Plaintiffs also maintain that Cable refused to answer
interrogatories regarding construction and maintenance of a road in
the Southern Cross area.
In support of their position, plaintiffs produced a document
at trial titled ItMemorandum of Agreementtf. The document was
executed by North Lily Mining Company and Joseph Aidlin personally
and as president of Cable Mountain Mine, Inc. The document
provided that North Lily reserved the right to transfer its rights
and obligations to Magellan. No evidence was presented that this
transfer ever took place, or that a joint venture between Cable and
Magellan ever came into fruition.
At trial Joseph Aidlin testified that he did not incorporate
Cable Mountain Mine, Inc. until March of 1987. Gary Walton,
attorney for Cable, explained to the District Court that he did not
know the March 1987 date until the night prior to Aidlinfs
testimony. Walton also argued that Cable did not refuse to answer
the interrogatory but exercised its right to object. Plaintiffs
subsequently filed a motion to compel which was denied. We
conclude the District Court did not abuse its discretion when it
declined to impose Rule 11 sanctions against Cable.
Plaintiffs maintain that Magellan also made false and
misleading representations in their answers to interrogatories.
Magellan alleged it had no discussions with Cable regarding a joint
venture between the two companies. Plaintiffs produced an
unexecuted flMemorandum
Agreementtt
between North Lily Mining Company
and Magellan. The document allowed Magellan to acquire 100% of
North Lily s interest in the Aidlin/North Lily ttMemorandumof
Agreement. l1 Further, the document provided that a joint venture
would be executed lgas soon as practicablegg. The memorandum was
never executed.
We conclude that the District Court was not clearly erroneous
in its findings and did not abuse its discretion in declining to
impose Rule 11 sanctions against Magellan.
I1
Whether the District Court erred in determining that no joint
venture existed between Cable Mountain Mine, Inc., and Magellan
Resources Corp.
As stated above, plaintiffs failed to produce evidence that a
joint venture existed between Cable and Magellan. The standard of
review for a directed verdict is whether a reasonable person could
draw different conclusions from the evidence. If only one
conclusion is reasonably proper, then the directed verdict is
proper. Davis v. Sheriff (1988), 234 Mont. 126, 130, 762 P.2d 221,
223. The party opposing the motion must present substantial
credible evidence to avoid a directed verdict. Davis at 129, 130,
762 P.2d at 224. The plaintiffs failed to provide evidence that a
joint venture existed. Therefore, the District Court did not err
in determining no joint venture existed between Cable and Magellan.
I11
Whether the District Court erred in granting a directed
verdict dismissing the claims of William Inkret, Jr., M.D. Profit
Sharing Trust.
The District Court found that the deeds presented at trial
showed that William Inkret, Jr., M.D., P.C. Profit Sharing Trust
did not have an ownership interest in the property in question at
the time of the alleged taking.
Plaintiffs allege defendants violated Rule 9(a) M.R.Civ.P., by
not raising this defense in their answer. Plaintiffs did not make
this argument in opposing the motion at trial. We conclude the
District Court did not err in granting defendantst directed
verdicts on the dismissal of Inkretls claims.
IV
Whether the District Court erred in instructing the jury on
laches at the request of the defendants.
Plaintiffs1 complaint alleged defendants1 use of plaintiffs1
alleged road constituted a taking of their property. Defendants
maintained, and the District Court found, the road in question was
a public road. Testimony presented at trial revealed that mining
activity was present in the area in question historically, and,
most recently, over the last ten years. Additional evidence showed
that Magellan actively explored for minerals in October 1986.
Cable applied for a mining permit in February of 1988. Plaintiffs
did not comment on or oppose Cable's application during the comment
period. The State issued the permit in July of 1988. Plaintiffs
allege the date of the taking was in January of 1987. As stated
above, the plaintiffs acquired their properties between 1972 and
1974.
These are sufficient facts to conclude the District Court did
not err in giving defendants1 instruction on laches.
v
Whether the District Court erred in refusing to instruct the
jury on the language of 3 82-2-221, MCA.
Plaintiffs requested an instruction based on 5 82-2-221, MCA,
which provides in part that when the right of eminent domain is
exercised for the purpose of open-pit mining, plaintiffs should
purchase the property within 300 yards of the surface tract. No
evidence was presented at trial that either Magellan or Cable was
engaged in open-pit mining. Therefore, the District Court did not
err in refusing this instruction.
Pursuant to Section I, Paragraph 3(c), Montana Supreme Court
1988 Internal Operating Rules, this decision shall not be cited as
a precedent and shall be published by its filing as a public
document with the Clerk of this Court and by report of its result
to the West Publishing Company.
For the reasons stated above, we affirm the District Court.
# ,nwT+
We Concur: H
Chief Justice