Case Title: STENERSON v CITY OF KALISPELL

Citation: 

Docket Number: 

State: montana

Court: Montana Supreme Court

Date: 1982-09-02T00:00:00Z

Document:
No. 82-126 IN THE SUPREME COURT OF THE STATE OF MONTANA 1982 CHARLES STENERSON and F. W . SCHMIDT, joint venturers the name of STENERSON & SCHMIDT, Co-Partners, Plaintiffs and Respondents, THE CITY OF KALISPELL, Defendant and Respondent, GLACIER NATIONAL BANK, Claimant and Respondent, COLONIAL TERRACE ASSOCIATES, Claimant and Appellant Appeal from: District Court of the Eleventh Judicial District, In and for the County of Flathead Honorable J. M. Salansky, Judge presiding. Counsel of Record: For Plaintiffs: James A. Cumrning, Columbia Falls, Montana For Defendant: Merritt N. Warden, Kalispell, Montana For Claimant: Chris G. McEwan, Columbia Falls, Montana For Appellant: Worden, Thane & Haines; Ronald A, Bender, Missoula, Montana - - - Submitted on briefs: July 15, 1982 Decided: September 2, 1982 C' - p - 2 1982 Filed: d k . . I / # Y - " Clerk M r . J u s t i c e John C. H a r r i s o n d e l i v e r e d t h e following Opinion of t h e C o u r t . T h i s a p p e a l i n v o l v e s two competing c r e d i t o r s to F.W. S c h m i d t ' s p o r t i o n of a judgment o b t a i n e d from t h e C i t y of K a l i s p e l l . The D i s t r i c t Court of t h e E l e v e n t h J u d i c i a l D i s t r i c t i n F l a t h e a d County o r d e r e d t h e a l l o c a t i o n of t h e judgment be paid f i r s t t o G l a c i e r N a t i o n a l Bank t o s a t i s f y its claim and t h e b a l a n c e p a i d t o C o l o n i a l T e r r a c e Associates. A p p e l l a n t , C o l o n i a l T e r r a c e A s s o c i a t e s , a p p e a l s t h e d e t e r m i n a t i o n of p r i o r i t y . T h i s a c t i o n , as w i l l be noted f u r t h e r i n t h i s o p i n i o n , is one of two a c t i o n s now b e f o r e t h i s Court i n v o l v i n g judgments of two District C o u r t s concerning c o n s t r u c t i o n work done by t h e a p p e l l a n t . I n t h e o t h e r c a s e , Schmidt e t a l . v . C o l o n i a l T e r r a c e , now on a p p e a l from t h e F i r s t J u d i c i a l D i s t r i c t of t h e S t a t e of Montana, t h e a p p e l l a n t s a r e a p p e a l i n g a judgment of $128 , 278 , p l u s i n t e r e s t , costs and a t t o r n e y f e e s . A s u p e r s e d e a s bond h a s been f i l e d f o r t h i s amount i n t h e District Court. I n a d d i t i o n , t h i s Court is c a l l e d upon t o d e c i d e t h e i s s u e r a i s e d w i t h o n l y t h e b r i e f s of a p p e l l a n t . The r e s p o n d e n t s waived f i l i n g of b r i e f s i n t h e case. I n A p r i l of 1975, S t e n e r s o n and Schmidt c o n t r a c t e d w i t h t h e C i t y of K a l i s p e l l to do work a t t h e B u f f a l o H i l l s Golf Course. When t h e c i t y r e f u s e d to pay f o r work which had been completed b u t n o t computed i n t o t h e b i d p r i c e , S t e n e r s o n and Schmidt f i l e d s u i t i n F l a t h e a d County. Following judgment and a p p e a l , on J u n e 3 0 , 1981, t h i s Court remanded t h e case to F l a t h e a d County w i t h o r d e r s t o e n t e r judgment i n f a v o r of S t e n e r s o n and Schmidt i n t h e amount of $28,359.21 p l u s i n t e r e s t ( t h e K a l i s p e l l j udgment ) . J u s t p r i o r to t h e K a l i s p e l l judgment, on J u n e 22, 1982, C o l o n i a l T e r r a c e Associates o b t a i n e d a judgment ( t h e Helena judgment) , a g a i n s t F.W. Schmidt, Leonard Knutson and R o b e r t a Knutson i n t h e amount of $128 ,278, p l u s i n t e r e s t , c o s t s and a t t o r n e y ' s f e e s i n t h e District Court of t h e F i r s t J u d i c i a l District of t h e S t a t e of Montana, i n and f o r t h e County of L e w i s and C l a r k . A t r a n s c r i p t of t h e Helena judgment was f i l e d i n Missoula County on J u n e 23, 1981, and i n Flathead County on J u n e 24, 1981. On J u l y 2, 1981, C o l o n i a l f i l e d a w r i t of e x e c u t i o n i n F l a t h e a d County. On t h e same day, J u l y 2, 1981, F.W. Schmidt i n d i v i d u a l l y executed a n o t e i n t h e amount of $10,532.79 t o Glacier N a t i o n a l Bank due December 29, 1981. Glacier and Schmidt s i g n e d a s e c u r i t y agreement which d e s c r i b e s t h e collateral a s assignment of f u n d s from t h e C i t y of K a l i s p e l l . On J u l y 1 0 , 1981, t h e C i t y of K a l i s p e l l d e l i v e r e d to t h e c l e r k of c o u r t of F l a t h e a d County t h e sum of $37,788.76 i n exchange f o r a s a t i s f a c t i o n of judgment i n t h e K a l i s p e l l judgment. The funds were d e p o s i t e d w i t h t h e c l e r k of c o u r t w i t h i n s t r u c t i o n s t o hold s u b j e c t t o f u r t h e r i n s t r u c t i o n s . On J u l y 22, 1981, C o l o n i a l ' s w r i t of e x e c u t i o n was r e t u r n e d i n d i c a t i n g t h a t a l l monies due F.W. Schmidt had been paid t o t h e District Court of F l a t h e a d County. On J u l y 23, 1981, C o l o n i a l f i l e d a p e t i t i o n f o r a c h a r g i n g o r d e r i n Missoula County which is t h e p r i n c i p a l p l a c e of b u s i n e s s of t h e S t e n e r s o n and Schmidt p a r t n e r s h i p and where t h e p a r t n e r s r e s i d e . On t h a t same day, Judge Green of t h e Fourth J u d i c i a l D i s t r i c t i n Missoula County i s s u e d t h e c h a r g i n g o r d e r p u r s u a n t t o s e c t i o n 35-10-505, MCA. The o r d e r c h a r g e s t h e i n t e r e s t of F.W. Schmidt i n t h e p a r t n e r s h i p of S t e n e r s o n and Schmidt and o r d e r e d any proceeds t h a t Schmidt might r e c e i v e from t h e K a l i s p e l l judgment be used to t h e Helena judgment i n f a v o r of C o l o n i a l . The F l a t h e a d District Court o r d e r e d t h a t t h e a l l o c a t i o n of t h e K a l i s p e l l judgment to F.W. Schmidt be r e t a i n e d by t h e c l e r k of c o u r t i n F l a t h e a d County and t h a t Glacier and C o l o n i a l f i l e claims and proof of p r i o r i t y . Glacier f i l e d its claim on September 3, 1981, and C o l o n i a l f i l e d its claim on September 4 , 1981. On September 3, 1981, Schmidt, e t a l . , f i l e d a n o t i c e of a p p e a l i n t h e Helena judgment and asked f o r a s t a y of e x e c u t i o n p u r s u a n t t o Rule 7 , M.R.App.Civ.P. On October 6 , 1981, Schmidt f i l e d a s u p e r s e d e a s bond e q u a l t o t h e amount of t h e Helena judgment. On November 3 , 1981, Judge Meloy of t h e D i s t r i c t Court of t h e F i r s t J u d i c i a l D i s t r i c t i n Helena d i s s o l v e d t h e s t a y of e x e c u t i o n . Upon a p p l i c a t i o n t o t h i s Court it was a g a i n s t a y e d and o r d e r e d s t a y e d u n t i l f u r t h e r o r d e r of t h i s C o u r t . On December 11, 1981, t h e D i s t r i c t Court i n Flathead County o r d e r e d S c h m i d t ' s a l l o c a t i o n of t h e K a l i s p e l l judgment be paid to Glacier N a t i o n a l Bank, w i t h t h e b a l a n c e p a i d , i f any, t o C o l o n i a l T e r r a c e Associates. C o l o n i a l T e r r a c e A s s o c i a t e s a p p e a l s . A p p e l l a n t r a i s e s seven i s s u e s f o r review. The s u b s t a n c e of t h o s e i s s u e s is whether t h e District C o u r t ' s o r d e r of p r i o r i t y w a s e r r o n e o u s . P u r s u a n t to Rule 7 ( a ) , M.R.App.Civ.P., an a p p e l l a n t may be g r a n t e d a s t a y of e x e c u t i o n of judgment on appeal i f t h e D i s t r i c t C o u r t approves of a p p e l l a n t ' s s u p e r s e d e a s bond. Rule 6 ( a ) M.R.App.Civ.P., r e q u i r e s t h e bond be executed by a t least t w o s e c u r i t i e s . Here, Schmidt d i d p r e s e n t t h e D i s t r i c t Court w i t h a s u p e r s e d e a s bond which m e t t h e r e q u i r e m e n t s of Rule 6 ( a ) , M.R.App.Civ.P., on October 6 , 1981. Although t h e District Court o r d e r e d t h e s t a y of e x e c u t i o n d i s s o l v e d on November 3 , 1981, t h i s C o u r t g r a n t e d a s t a y on November 12, 1981, and o r d e r e d t h e s t a y t o remain i n e f f e c t u n t i l f u r t h e r o r d e r . A p p e l l a n t , C o l o n i a l T e r r a c e A s s o c i a t e s , c l a i m s t h e Flathead District Court e r r e d i n awarding S c h m i d t ' s a l l o c a t i o n of t h e K a l i s p e l l judgment be a p p l i e d f i r s t t o Glacier N a t i o n a l Bank. W e d i s a g r e e . C o l o n i a l was s t a y e d from t a k i n g any a c t i o n t o e x e c u t e on t h e i r judgment pending a f i n a l d e t e r m i n a t i o n of t h e Helena judgment. T h e r e f o r e , t h e charging o r d e r i s s u e d by Judge Green i n Missoula County was vacated upon o u r g r a n t i n g of t h e s t a y of exe- c u t i o n pending a p p e a l . S c h m i d t ' s s u p e r s e d e a s bond is e q u a l to t h e f u l l amount of t h e Helena judgment. I f t h a t judgment is a f f i r m e d , C o l o n i a l may e x e c u t e upon t h e bond t o r e c o v e r t h e amount of t h e judgment. Thus, C o l o n i a l is a s s u r e d of s a t i s f y i n g t h e i r judgment s h o u l d t h e a p p e a l on t h e Helena judgment be af firmed. W e remand to t h e District Court w i t h i n s t r u c t i o n s to release S c h m i d t ' s a l l o c a t i o n of t h e K a l i s p e l l judgment and o r d e r t h a t t h e c h a r g i n g o r d e r from Missoula County be vacated . W e concur: Chief ~ u s t i c e