Case Title: STATE v MIDLAND MATERIALS CO

Citation: 

Docket Number: 82-375

State: montana

Court: Montana Supreme Court

Date: 1983-05-12T00:00:00Z

Document:
No. 8 2 - 3 7 5 IN THE SUPREME COURT O F THE STATE O F M O N T A N A 1 9 8 3 THE STATE O F MONTANA, a c t i n g b y a n d t h r o u g h i t s D e p a r t m e n t o f H i g h w a y s , P l a i n t i f f a n d R e s p o n d e n t , V S . MIDLAND MATERIALS CO., D e f e n d a n t . a n d R e s p o n d e n t , a n d TIMOTHY E . WOOD, D e f e n d a n t a n d A p p e l l a n t . A p p e a l f r o m : D i s t r i c t C o u r t o f t h e T h i r t e e n t h J u d i c i a l D i s t r i c t , I n a n d f o r t h e C o u n t y o f Y e l l o w s t o n e H o n o r a b l e D i a n e B a r z , J u d g e p r e s i d i n g . C o u n s e l o f R e c o r d : F o r A p p e l l a n t : B r u c e E . L e e , B i l l . i n g s , M o n t a n a F o r R e s p o n d e n t s : C r o w l e y , H a u g h e y , H a n s o n , T o o l e & D i e t r i c h , B i l l i n g s , M o n t a n a J a m e s R. B e c k , H e l e n a , Montana S u b m i t t e d o n b r i e f s : F e b r u a r y 2 4 , 1 9 8 3 D e c i d e d : May 1 2 , 1 9 8 3 F i l e d : -- C l e r k M r . J u s t i c e L . C. Gulbrandson d e l i v e r e d t h e Opinion of t h e Court. T h i s case stems from an i n t e r p l e a d e r a c t i o n brought by t h e Nontana Highway Department to d e t e r m i n e whether r e s p o n d e n t , Midland M a t e r i a l s Co., or a p p e l l a n t , Tim Wood, was t h e " s u c c e s s o r - i n - i n t e r e s t " t o E d i t h I . W a l t e r s , t h e former owner of p r o p e r t y known as t h e " S t a t e P i t , " under s e c t i o n 60-4-204, MCA. The District Court of t h e T h i r t e e n t h J u d i c i a l District , Yellowstone County, denied d e f e n d a n t Wood's motion f o r summary judgment and g r a n t e d t h e summary judgment motion submitted by Midland M a t e r i a l s C o . From t h a t judgment, Tim Wood a p p e a l s . The p a r t i e s s t i p u l a t e d t h e f a c t s to be a s f o l l o w s : " 1 . On December 30, 1954 E d i t h I. Walters conveyed by deed . . . to t h e S t a t e Highway Commission of Montana a t r a c t of land i n Yellowstone County, Montana ( h e r e i n a f t e r ' S t a t e P i t ' ) . "2. I n 1974 E d i t h I . Walters conveyed by w a r r a n t y deed . . . t o M. G . Long p r o p e r t y a d j a c e n t to and n o r t h and s o u t h w e s t of t h e ' S t a t e P i t 1 , e x c e p t i n g t h e ' S t a t e P i t 1 . I n 1975 M . G. Long conveyed t h e 'Midland' pro- p e r t y t o d e f e n d a n t Midland M a t e r i a l s C o . by w a r r a n t y deed . . . " 3 . On February 4, 1981 t h e Montana Department of Highways s e n t a l e t t e r to E d i t h Walters . . . " 4 . On February 6, 1981 t h e Montana Department of Highways s e n t a l e t t e r to Midland Materials Co. . . . "5. Sometime p r i o r t o J u n e 25, 1981 t h e Montana Department of Highways p u b l i s h e d a N o t i c e of S a l e of t h e ' S t a t e P i t 1 p r o p e r t y "6. On J u n e 25, 1981 t h e Montana Department o f Highways, a c t i n g p u r s u a n t t o t h e a u t h o r i t y g r a n t e d by 5 9 60-4-202 and 60-4-204, MCA, con- d u c t e d a p u b l i c a u c t i o n a t B i l l i n g s , Montana o f t h e ' S t a t e P i t 1 p r o p e r t y . The bidding a t s a i d a u c t i o n was opened by M r . J o e l Long of d e f e n d a n t Midland Materials C o . f o r $18,000.00. Defendant Timothy E. Wood t h e n b i d $18,100.00. A f t e r an u n s u c c e s s f u l c a l l f o r h i g h e r b i d s t h e a u c t i o n e e r concluded t h e sale a t t h e $18,100.00 h i g h b i d . M r . Joel Long t h e n a l l e g e d to t h o s e p r e s e n t t h a t they (Midland Materials Co.) were s u c c e s s o r s i n i n t e r e s t t o E d i t h I . Walters and would l i k e to e x e r c i s e t h e i r r i g h t to meet t h e high b i d . M r . Long was informed by a Highway Department r e p r e s e n t a t i v e to send h i s c l a i m t o t h e S t a t e by r e g i s t e r e d mail i n p r e s c r i b e d form. " 7 . On J u n e 2 7 , 1981 d e f e n d a n t Timothy E. Wood o b t a i n e d a q u i t c l a i m deed . . . of t h e ' S t a t e P i t 1 from E d i t h I . Walters whom he had f i r s t m e t and c o n t a c t e d af ter t h e p u b l i c auc- t i o n and a f t e r he had t a l k e d w i t h h i s a t t o r - ney, J e f f Essman, about Midland Materials Co. I s claim t o be t h e s u c c e s s o r i n i n t e r e s t . " 8 . Both d e f e n d a n t Midland M a t e r i a l s Co. and d e f e n d a n t Timothy E. Wood claim t o be t h e suc- c e s s o r i n i n t e r e s t of E d i t h I . Walters f o r t h e purpose of S 60-4-204, MCA, and are both pre- pared to pay t h e high bid p r i c e to t h e S t a t e Highway Commission . . . " 9 . The S t a t e of Montana, p r i o r to t h e f i l i n g of t h i s s u i t , r e j e c t e d t h e claim of Timothy E. Wood by l e t t e r d a t e d J u l y 2, 1981." Subsequent t o t h e s t i p u l a t i o n and a£ t e r judgment was e n t e r e d , Midland M a t e r i a l s submitted a check to t h e S t a t e f o r t h e f u l l p u r c h a s e p r i c e and a deed was mailed to them on August 25, 1982. The deed, a l t h o u g h signed p r i o r to August 25, was n o t mailed u n t i l t h a t d a t e . On August 24, Tim Wood had o b t a i n e d a s t a y of e x e c u t i o n b u t it was n o t s e r v e d on a p p e l l a n t s o r t h e S t a t e p r i o r to t h e i s s u i n g of t h e deed. The deed was sub- s e q u e n t l y r e c o r d e d . The i s s u e p r e s e n t e d is whether t h e District Court e r r e d i n d e t e r m i n i n g Midland Materials Co. to be t h e " s u c c e s s o r - i n - i n t e r e s t " as t h a t term is used i n s e c t i o n 60-4-204, MCA? A s t h i s c a s e is an a p p e a l from a summary judgment, we must f o l l o w t h e r u l e s as set o u t i n Darrah v. Milbank Mutual I n s u r a n c e Company ( 1 9 8 3 ) -- . -- Mont . -- .- , 658 P.2d 374, 40 St.Rep. 117. There w e s t a t e d : " I n cases i n v o l v i n g summary judgment t h e pre- t r i a l r e c o r d s must be looked a t to d e t e r m i n e whether t h e r e a r e any g e n u i n e i s s u e s of material f a c t , 56 ( c ) M.R.Civ.P., Flemmer v. Ming ( 1 9 8 0 ) r 6 2 1 P.2d 1038, 37 St.Rep. 1916, because summary j udgment is o n l y p r o p e r under Rule 5 6 ( c ) M.R.Civ.P., where t h e record d i s c l o s e s no such i s s u e s e x i s t and t h e moving p a r t y is e n t i t l e d t o judgment as a matter of l a w . Reaves v. Reinbold ( 1 9 8 0 ) r 615 P.2d 896, 898, 37 St.Rep. 1500, (and c a s e s c i t e d t h e r e i n ) . A s t h e purpose of t h e proceeding is t o d e t e r m i n e whether t h e r e a r e any material i s s u e s of f a c t i n v o l v e d , it should be remem- bered t h a t t h e formal i s s u e s p r e s e n t e d by t h e p l e a d i n g s a r e n o t c o n t r o l l i n g . Byrd v. B e n n e t t ( 1 9 8 1 ) , 6 3 1 P.2d 695, 38 St.Rep. 1083. "The moving p a r t y i n a summary judgment a c t i o n h a s t h e burden of showing t h e complete absence of material i s s u e s of f a c t . Byrd v. B e n n e t t ( 1 9 8 1 ) , 6 3 1 P.2d a t 696; Cereck v. A l b e r t s o n l s I n c . ( 1 9 8 1 ) , 637 P.2d 509, 511, 38 St.Rep. 1986, (and cases c i t e d t h e r e i n ) ; Rumph v. Dale Edwards, I n c . ( 1 9 7 9 ) , 600 P.2d 163, 36 St.Rep. 1022." 658 P.2d a t 375. I n t h i s case, t h e absence of such i s s u e s h a s been shown, d e s p i t e t h e r e being no p r i o r i n t e r p r e t a t i o n of t h e term " s u c c e s s o r - i n - i n t e r e s t , " c o n t a i n e d i n s e c t i o n 60-4-204, MCA, by t h i s Court or t h e l e g i s l a t u r e , o r any i n d i c a t i o n as to t h e l e g i s l a t i v e i n t e n t from t h e s t a t u t e as a whole. Guidance i n c o n s t r u i n g t h i s term is provided by t h e i n t e r p r e t a t i o n of t h e Montana Highway Department, t h e agency charged w i t h a d m i n i s t e r i n g t h e s t a t u t e . Montana Power Company v. C r e m e r (1979) 182 Mont. S e c t i o n 60-1-102, MCA, t h e l e g i s l a t i v e p o l i c y and i n t e n t sec- t i o n of t h e Highway Code, placed a g r e a t d e a l of t r u s t and a u t h o r i t y i n t h e hands of highway o f f i c i a l s . The p e r t i n e n t p a r t o f t h a t s e c t i o n states: " C o n s i s t e n t w i t h t h e f o r e g o i n g d e t e r m i n a t i o n and d e c l a r a t i o n s , t h e l e g i s l a t u r e i n t e n d s : " (1) to p l a c e a high d e g r e e of t r u s t i n t h e hands of t h o s e o f f i c i a l s whose d u t y it is, w i t h i n t h e l i m i t s of a v a i l a b l e f u n d s , t o p l a n , d e v e l o p , o p e r a t e , m a i n t a i n , and p r o t e c t t h e highway f a c i l i t i e s of t h i s s t a t e f o r p r e s e n t as w e l l as f o r f u t u r e use; " ( 4 ) to p r o v i d e s u f f i c i e n t l y broad a u t h o r i t y t o e n a b l e t h e highway o f f i c i a l s a t a l l l e v e l s o f government t o f u n c t i o n a d e q u a t e l y and e f f i - c i e n t l y i n a l l areas of t h e i r r e s p e c t i v e r e s p o n s i b i l i t i e s , s u b j e c t to t h e l i m i t a t i o n s o f t h e c o n s t i t u t i o n and t h e l e g i s l a t i v e man- d a t e h e r e i n a f t e r imposed ." S e c t i o n 60-1-102, MCA. Under t h i s a u t h o r i t y t h e Highway Department i n t h e p a s t h a s i n t e r p r e t e d t h e terms " s u c c e s s o r - i n - i n t e r e s t " t o mean t h e a d j a - c e n t landowner whose c h a i n of t i t l e can be t r a c e d to t h e o r i g i n a l owner of t h e e n t i r e tract. The District Court s o found i n its c o n c l u s i o n of law N o . 7. A f t e r c i t i n g s e c t i o n 60-1-102, MCA, t h e l e g i s l a t i v e p o l i c y and i n t e n t s e c t i o n of t h e Highway Code, t h e case of Castles v. S t a t e ex rel. Montana Department of Highways ( 1 9 8 0 ) ; -- - - Mont . 609 P,2d 1223, 37 St.Rep. 234, and t h e s t i p u l a t i o n e n t e r e d i n t o by a l l t h e p a r t i e s , it s t a t e d : " A l l of t h e s e f a c t o r s i n d i c a t e d t h a t t h e agency i n t e r p r e t a t i o n of 60-4-204, MCA, by t h e Montana Department of Highways s u p p o r t s t h e c o n c l u s i o n t h a t Midland M a t e r i a l s Co. is t h e ' s u c c e s s o r i n i n t e r e s t . ' " Under t h e case law, it is c l e a r t h a t , when faced w i t h problems of s t a t u t o r y c o n s t r u c t i o n , t h e c o u r t must show d e f e r e n c e and r e s p e c t t o t h e i n t e r p r e t a t i o n s g i v e n t h e s t a t u t e by t h e o f f i - c e r s and a g e n c i e s charged w i t h a d m i n i s t r a t i o n . Montana Power Co. v . Environmental P r o t e c t i o n Agency ( 9 t h C i r . 1 9 7 9 ) , 608 F.2d 334, 344, Department of Revenue v. Puget Sound Power and L i g h t ( 1 9 7 8 ) , 179 Mont. 255, 587 P.2d 1282, Northern Cheyenne T r i b e v. H a l l o w b r e a s t ( 1 9 7 6 ) , '425 U.S. 649, 48 L.Ed.2d 274, 96 S.Ct. 1793. "The p e r s u a s i v e n e s s of an a d m i n i s t r a t i v e i n t e r p r e t a t i o n of a s t a t u t e depends upon t h e thoroughness e v i d e n t i n its con- s i d e r a t i o n , t h e v a l i d i t y of its r e a s o n i n g and its c o n s i s t e n c y w i t h e a r l i e r and l a t e r pronouncements of t h e same agency. [ c i t a t i o n o m i t t e d ] " B l a c k f e e t T r i b e of I n d i a n s v. S t a t e of Montana (D.Mont. 1 9 8 1 ) , 507 F,Supp. 446, 451 ( s e e a l s o , Montana Power Company v. Environmental P r o t e c t i o n Agency, s u p r a ) . I n t h e c a s e a t b a r , t h e r e is no s u b s t a n t i a l e v i d e n c e t o show t h a t t h e i n t e r p r e t a t i o n of " s u c c e s s o r - i n - i n t e r e s t " made by t h e Highway Department h a s n o t been c o n s i s t e n t l y a p p l i e d over t h e y e a r s . I t s h o u l d a l s o be noted t h a t t h e D i s t r i c t Court found t h a t t h e i n t e r p r e t a t i o n advanced by t h e a p p e l l a n t would l e a d t o an a b s u r d r e s u l t i f adopted. I n c o n c l u s i o n of law No. 1 0 it s t a t e d : " I n t h i s c a s e ' s u c c e s s o r - i n - i n t e r e s t ' c a n o n l y r e a s o n a b l y r e f e r t o t h e p r e s e n t owner of t h e a d j a c e n t p r o p e r t y from which o r i g i n a l t r a c t of l a n d t h e Montana Department of Highways a c q u i r e d its p o r t i o n o r s t r i p . Any o t h e r i n t e r p r e t a t i o n would be u n r e a s o n a b l e as it would- l e a d t o p a r t i e s w i t h o u t an i n t e r e s t i n t h e a d j a c e n t l a n d being allowed t h e advantage o f being a b l e t o match t h e h i g h b i d a t p u b l i c a u c t i o n by o b t a i n i n g q u i t c l a i m d e e d s from o r i g i n a l owners who no l o n g e r had any owner- s h i p i n t e r e s t . " T h i s Court h a s p r e v i o u s l y h e l d t h a t when c o n s t r u i n g s t a t u t e s , t h e i n t e r p r e t a t i o n should be r e a s o n a b l e t o avoid such absurd r e s u l t s . Montana Power C o . v. Cremer, supra (and c a s e s c i t e d t h e r e i n ) . For t h e foregoing r e a s o n s , w e b e l i e v e t h e District Court was c o r r e c t i n g r a n t i n g summary judgment. / A £ f irmed . J u s t i c e W e concur: = 2 A d $ &*&a Chief J u s t i c e J u s t i c e s Mr. Justice John C. Sheehy, dissenting: I dissent from the foregoing opinion. I would hold (1) the term "successor in interest" does not include a successor in title; (2) the appeal here is not moot by virtue of the delivery of a quitclaim deed by the Highway Department to Midla.nd Materials Co. ; (3) Timothy E. Wood, by virtue of the quitclaim deed which he received from the original grantor, Edith Walters, is merely a transferee, a successor in title, and not a "successor in interest"; and (4) the quitclaim deed to Midland Materials should be held null and void, set aside, and the Highway Department ordered to follow the proper statutory procedures if it intends to sell the land in question. The majority errs in this case because it misinterprets the term "successor in interest" both on the facts here and the applicable law. First let us determine what a "successor i . n interest" is. It certainly is not a successor in title. The two terms are not synomous. "In order to be a 'successor in interest, ' a party must continue to retain the same rights as the original owner without - a change in ownership. There must be a change in form only and not in substance. --- It does not include - a transfer from one -- party to another . . . "The City endeavors to apply the terms 'successor in interest,' and 'successor in title' as having the same meaning, but cites no law to support this claim . . . I ' City of New York v. Turnpike Development Corporation (S.Ct. Kings Co. 1962) , 36 Misc.2d 704, 233 N.Y.S.2d 887. A successor in interest an owner of real property may be one who is substituted for the owner by operation of law, such as an heir, a personal representative, a trustee in bankruptcy, a purchaser at foreclosure, or any other change which is in form only and not in substance. It cannot include a transferee by deed or assignment from the owner because such a transferee or assignee is a successor in title, and not a successor in interest. Moreover, on the facts of this case, there can be no "successor in interest," because the original owner, Edith Walters, is at the time of these proceedings in existence and very much so. The Sta-te recognized that she was in existence by serving upon her a request for a waiver of her right as the original owner. The statute which applies says "The owner from whom the interest is originally acquired - - or his successor in interest shall have the o~tion to purchase theinterest by offering therecore an amount of money equal to <he highest bid received for the interest at the sale . . ." It can be discerned from the terms of the statute that an owner, and the owner's successor in interest, cannot coexist at the same time. If the owner exists, the successor does not. The successor in interest exists only if he is substituted in the place and stead of the original owner. In this case the deed from Edith Walters to Malcolm Long specifically excepted the property known as the State Pit. Malcolm Long acquired no right, title or interest in the State Pit by virtue of his deed from Edith Walters and neither did Malcolm Long ' s transferee, Midland Ma-terials Co. The majority relies on the interpretation of the term "successor in interest" by the Highway Department. Where that interpretation, a matter of law, is manifestly wrong, we should not follow such interpretation when the effect is to muddle what otherwise should be clear law. The same logic applies to the argument of Timothy Wood. He claims to be a successor in interest by virtue of a quitclaim deed obtained from Edith Walters after the purported. sale of the property had taken place. He did not thereby become a successor in interest, rather he became a successor in title. As a transferee, he is not a successor in interest. He can claim no right to meet the highest bid under section 60-4-204, MCA, as a mere transferee anymore than can Midland Materials Co. as a mere transferee. Midland Materials Co. also contends in this case that the appeal of Timothy E. Wood is moot because a quitclaim deed has been delivered by the Highway Department to Midland. Under the facts of this case, however, the judgment is not moot. On August 24, 1982, the District Court, acting ex parte, as it may under Rule 7, M.R.App.Civ.P., issued a stay order with respect to its judgment. The judgment was to the effect that Midland, upon payment of the proper money to the Highway Department would obtain a deed to the State Pit. However the deed was not delivered by the Highwa-y Department until after the date on which the District Court entered its supersedeas order. In that circumstance, the judgment is stayed and the issue is not moot for the purposes of Woods appeal. A deed takes effect only upon legal delivery. 23 Am.Jur.2d Deeds S 78. Here the delivery by the Highway Department, on August 25, 1982, was too late to avoid the effect of the supersedeas order of the District Court. The situation before us therefore should be clear: Midland Materials Co. is not a successor in interest to Edith Walters. Timothy Wood is not a successor in interest to Edith Walters. Edith Walters is no longer an owner because she has quitclaimed any interest she had in the State Pit. to Timothy Wood. It should be the object of the Highway Department in selling land which it does not need to obtain the greatest sum of money that the highest bidder would agree to pay at a pub]-ic auction. The actions of the Highway Department in this case have side-stepped that beneficial purpose. We should therefore order that the deed issued by the Highway Department in this case to Midland Materials Co. be declared null and void, and set aside, and the judgment reversed. If the Highway Department wishes in the future to sell the lands which would then have reverted to it, it must follow the statutory procedures, and be guided by our opinion in conducting the public auction.