Case Title: SIMKINS v JAFFE

Citation: 

Docket Number: 

State: montana

Court: Montana Supreme Court

Date: 1974-11-13T00:00:00Z

Document:
No. 12641 I N T H E S U P R E M E C O U R T O F THE STATE O F M O N T A N A 1974 R O B E R T G. SIMKINS and T H O M A S G. H A G G E R T Y , P l a i n t i f f s and Appellants, -vs - MORRIS JAFFE, WILLIAM H. SIPPEL e t a l . , Defendants and Respondents. Appeal from: D i s t r i c t Court of the Eighteenth Judicial D i s t r i c t , Honorable Frank E. Blair, Judge presiding. Counsel of Record: For Appellants : Berg, ~ ' C o n n e l l , Angel and Andriolo, Bozeman, Montana Ben E. Berg argued, Bozeman, Montana For Respondents: Brown and Gilbert, Bozeman, Montana Gene I. Brown argued, Bozeman, Montana Corette, Smith-and Dean, Butte, Montana Kendrick Smith argued, Butte, Montana Submitted: September 9, 1974 Decided: 1 3 3974 R ~ V 7974 Filed : M r . Chief J u s t i c e James T. Harrison delivered t h e Opinion of t h e Court. This is an appeal by p l a i n t i f f s from a summary judgment entered i n favor of defendants i n a slander of t i t l e a c t i o n entered by t h e d i s t r i c t court of G a l l a t i n County. The controversy giving r i s e t o t h i s lawsuit s t a r t e d i n January of 1971. A t t h a t time p l a i n t i f f s Simkins and Haggerty were d i r e c t o r s of Bridger Bowl, a non-profit corooration created f o r t h e purpose of operating skiing f a c i l i t i e s i n Bridger Canyon near Bozeman, Montana. The defendants--stockholders of the cor- poration--learned t h a t P l a i n t i f f s were negotiating t o sell 170 acres of land a t t h e base of t h e ski h i l l . This land had been acquired by p l a i n t i f f s i n 1966 f o r $34,000 while both were d i r e c - t o r s of t h e corporation and was now being offered f o r s a l e t o land developers f o r $450,000. This i s how matters stood on Janu- a r y 14, 1971, when t h e following l e t t e r was s e n t t o p l a i n t i f f s by defendants' attorney, Gene I. Brown: January 14, 1971 "Mr. Thomas Haggerty 1209 South 5th Bozeman, Montana and "Mr. Robert Simkins 1419 South 3rd Bozeman, Montana 59715 "Gentlemen : his firm has been retained by a number of share- holders of t h e Bozeman S t a t e Park Recreational Asso- c i a t i o n , Inc., of Bozeman, Montana. It has been widely rumored t h a t you intend t o sell o r dispose of a l l o r a l a r g e portion of t h e land a t the base of t h e Bridger Bowl Ski H i l l acquired from John F.Neuffer. It was t h e understanding of these stockholders t h a t the Neuf f e r land was acquired by the corporation o r t h a t it was acquired by you individually on behalf of t h e corpora- tion. (Emphasis added) ItThe f a c t t h a t t h i s land was acquired by you a t a time when you were both d i r e c t o r s of the corporation and handling negotiations f o r t h e corporation t o pur- chase t h e land, lends strong support t o t h e conclu- sions of these stockholders. (Emphasis added) "As you know, a d i r e c t o r of a corporation has c e r - t a i n well defined d u t i e s and obligations t o t h e cor- poration and stockholders he serves. Stated q u i t e simply, a d i r e c t o r cannot use h i s p o s i t i o n t o b e n e f i t himself t o t h e detriment of the corporation. A d i r - e c t o r occupies a fiduciary r e l a t i o n s h i p t o t h e cor- poration and i t s stockholders and h i s a c t s must be f o r the b e n e f i t of t h e corporation and not h i s own. (Emphasis added) "Under t h e law, stockholders have a r i g h t t o bring l e g a l a c t i o n a g a i n s t o f f i c e r s and d i r e c t o r s of a cor- poration i n t h e r i g h t of t h a t corporation based upon t h e o f f i c e r s o r d i r e c t o r s breach of l e g a l duty t o t h e corporation. 11 The stockholders who have contacted m e a r e your f r i e n d s and neighbors who have worked with you over t h e years t o develop Bridger Bowl Ski Area a s a com- munity project. Your contribution i n developing t h i s a r e a i s widely acknowledged ard it is d i f f i c u t f o r these men t o believe you would use your p o s i t i o n i n t h e corporation f o r your own b e n e f i t . For t h i s rea- son, these people a r e anxious t o have t h e a i r cleared and t h e rumors stopped. This can be done by a t r a n s f e r of t h e land t o t h e corporation. "It is t h e f e a r of these stockholders t h a t i f t h i s land were t o be t r a n s f e r r e d t o an e n t i r e l y commercially oriented party, t h a t t h e character of the s k i h i l l would be g r e a t l y a l t e r e d o r a t l e a s t the community would l o s e c o n t r o l of i t s f u t u r e development. 11 I n order t o avoid any misunderstanding, I wish t o point out t h a t i f an agreeable arrangement is not reached immediately, we have been i n s t r u c t e d t o commence a lawsuit i n t h e D i s t r i c t Court t o have the land t r a n s - f e r r e d t o t h e corporation. "A copy of t h i s l e t t e r i s being s e n t t o t h e Corpora- t i o n a t i t s p r i n c i p a l o f f i c e , and copies t o each of t h e members of t h e Board of Directors, and i s t o be considered a demand upon them t o take a l l s t e p s neces- sary t o i n s u r e recovery of t h e r e a l property and t h e r e t u r n thereof t o Bozernan S t a t e Park Recreational Associ- a t i o n , Inc. W e f u r t h e r wish by t h i s l e t t e r t o put a l l prospective purchasers of t h e land on n o t i c e t h a t t i t l e t o t h e land is disputed. (Emphasis added) "We w i l l be available t o discuss t h i s matter with your Attorney a t any t i m e . Since time is of t h e es- sence, w e would appreciate hearing somethilgon t h i s matter within f i v e days i n order t o avoid l i t i g a t i o n . I I Yours very t r u l y , GILBERT "BY: /s/ GENE I. BROWN I I Gene I. Brown I I cc : Bozeman S t a t e Park Recreational Association, Inc. Bozeman, Montana 59715 To a l l members of t h e Board of Directors of t h e Bozeman S t a t e Park Recreational Association, Inc. Bozeman, Montana 59715 United Agencies 1602 West Main Bozeman, Montana 59715 This l e t t e r was followed up by another l e t t e r , dated February 3 , 1971, directed t o Robert E. Heath, attorney f o r Bridger Bowl : February 3, 1971 " ~ r . Robert E. Heath, Attorney a t Law Holter & Heath 16 N. Tracy Avenue Bozeman, Montana 59715 "Dear M r . Heath : 11 I a m writing i n reply t o your correspondence dated January 28, 1971. I would l i k e t o furnish you with t h e names of our c l i e n t s . They a r e a s follows: 1) Dick Francis, 2) Volney Steele, 3 ) Morris J a f f e , 4) D r . Sippel, 5) D r . Lensink, 6) D r . Prunty, 7) Dave Vaughn, and 8) B i l l Merrick. "These above s t a t e d stockholders a r e concerned with the preservation and f u r t h e r development of the family type s k i area a t Bridger Bowl. The Bozeman S t a t e Park Recreational Associational, Inc., conceived, financed, and promoted Bridger Bowl on t h e premise. It appears now t h a t unless some immediate changes a r e made, t h e atmosphere a t Bridger Bowl may change from a family type recreation area t o one t h a t i s primarily commer- c i a l i n character. The t r a c t of land, l e s s t h e S a i n t Bernard, presently owned by Simkins and Haggerty, should be acquired by t h e Bozeman S t a t e Park Recrea- t i o n a l Association. The value f o r t h e b a s i s of t h i s a c q u i s i t i o n should be based on t h e o r i g i n a l purchase p r i c e of $34,000.00 plus i n t e r e s t subsequent t o t h e September, 1966, purchase d a t e . I n t h e event t h a t t h e a s s o c i a t i o n is not now i n a position t o assume t h i s f i - nancial r e s p o n s i b i l i t y , t h e above named stockholders can arrange f o r t h e financing. It can be substantiated by those knowledgeable of t h e land purchased by Simkins and Haggerty from M r . Neuffer t h a t t h e land was t o have been purchased f o r t h e association, and not f o r them a s individuals. (Emphasis added) "There is t o our knowledge no evidence t h a t t h e A s - s o c i a t i o n ever suggested t h a t Haggerty and Simkins a c - q u i r e t h i s land i n t h e i r own names. The terms of t h i s purchase i n September, 1966, by Simkins and Haggerty from Neuffer, were approximately $9,000 down and $5,100 annually f o r 5 years. It would not have been d i f f i c u l t t o have t h i s money pledged by i n t e r e s t e d members of t h e Association, had an attempt been made t o do so. "It i s most d e s i r a b l e t h a t t h e land i n question be- long t o t h e Association. Ultimately, much of t h i s land w i l l be u t i l i z e d f o r parking, c h a l e t and l i f t expansion. The balance w i l l serve a s an excellent b u f f e r zone f o r commercial development on adjacent p r i v a t e l y owned lands. The appreciation i n t h e value of t h i s t r a c t o f land can be a t t r i b u t e d almost e n t i r e l y t o t h e s k i l i f t f a c i l i t i e s located thereon. The a s s o c i a t i o n b u i l t the s k i l i f t s , s o it would seem only l o g i c a l t h a t t h e Association own t h e land t h a t i s t h e current hub of t h i s development. "It is t h e above named p a r t i e s s i n c e r e hope t h a t Simkins and Haggerty w i l l agree t o s e l l t h i s land t o t h e Association on t h e terms set f o r t h above. A simple peaceful s o l u t i o n i s preferred t o more d r a s t i c a c t i o n , which t h e above named a r e prepared t o take i f necessary. "YOU have inquired f o r an explanation of how t h e d i r e c t o r s have breached t h e i r d u t i e s t o t h e corporation. It should be pointed out t h a t it i s not our p o s i t i o n t h a t t h a t a l l of the d i r e c t o r s have breached a duty t o t h e Corporation. W e a r e only concerned with the a c t i o n s of W e r t y and Simkins i n acquiring t h i s property which i s so v i t a l t o t h e f u t u r e of t h e corporation.(Emphasis added) -5- "It has become obvious t h a t our exchange of l e t t e r s has only caused confusion and suspicion, f o r t h i s rea- son, I wish t o make t h e suggestion t h a t the seven neu- t r a l board members meet with our group a t t h e e a r l i e s t possible date. This w i l l give us an opportunity t o present our p o s i t i o n and t h e f a c t s a s we know them and t o answer any questions t h e d i r e c t o r s may have. Since everyone has i n mind t h e b e s t i n t e r s t s of t h e s k i h i l l , it seems appropriate t h a t an e f f o r t be made t o resolve t h i s problem i n some reasonable manner. "I suggest t h a t we meet t h i s Thursday o r Friday, o r i f t h i s i s not f e a s i b l e , then next Tuesday, a t t h e meet- ing room of the Chamber of Commerce a t 8:00 P.M. A copy of t h i s l e t t e r is being s e n t t o each member of t h e Board. "It is d i f f i c u l t t o arrange a meeting with t h i s number of people, s o i f t h i s meeting is not agreeable, please l e t m e know. Please contact me a s soon a s possible t o arrange f o r a time f o r t h i s meeting. I t Yours very t r u l y , "BROWN & GILBERT "BY : /s / GENE I. BROWN I 1 Gene I. Brown I'GIB : s h 11 cc : Board members" Thereafter on June 2 , 1971, a t t h e annual meeting of t h e stockholders of Bridger Bowl, a resolution was passed which i n essence authorized t h e board of d i r e c t o r s t o take whatever s t e p s necessary t o gain t i t l e t o the disputed land. O n June 4, 1971, p l a i n t i f f s made a proposal i n an attempt t o s a t i s f y t h e d i s s i d e n t stockholders and on June 11, 1971, entered i n t o a contract with Bridger Bowl whereby they conveyed t o Bridger Bowl approximately 70 acres of t h e disputed land a t i t s 1966 purchase p r i c e , plus i n t e r e s t and taxes. O n September 6, 1971, p l a i n t i f f s brought t h i s slander of t i t l e a c t i o n . O n January 14, 1972, Bridger Bowl brought -6- s u i t a g a i n s t Simkins and Haggerty a l l e g i n g a breach of fidu- c i a r y duty and seeking recovery of t h e balance of t h e disputed land. A s a r e s u l t of t h e l a t t e r s u i t , Bridger Bowl acquired an a d d i t i o n a l 20 a c r e s of land, thus increasing i t s t o t a l holdings i n the disputed land t o 90 a c r e s . O n August 3, 1973, t h e d i s t r i c t court entered i t s Order and Judgment with respect t o the slander of t i t l e action. This Order declared, i n t e r a l i a , t h a t t h e contents of t h e l e t t e r s of January 14, and February 3 , 1971, were t r u e , not f a l s e , and t h a t a s a r e s u l t of those l e t t e r s and t h e stockholders' resolution of June 2, 1971, p l a i n t i f f s t r a n s f e r r e d 70 a c r e s of the disputed land t o Bridger Bowl pur- suant t o t h e June 11, 1971, argeement. The Order, on the theory of r e s judicata, a l s o adopted c e r t a i n amended findings of f a c t and conclusions o f law of t h e d i s t r i c t court i n the Bridger Bowl case a g a i n s t Simkins and Haggerty; namely, t h a t t h e agreement of June 11, 1971, was a good and s u f f i c i e n t accord and s a t i s f a c t i o n of t h e land and t i t l e dispute between t h e p a r t i e s , and t h a t Bridger Bowl was due an a d d i t i o n a l 20 acres of land. Summary judgment was thereupon entered f o r defendants. The elements of a cause of a c t i o n f o r slander of t i t l e a r e s e t f o r t h i n 50 Am.Jr.2d, Libel and Slander, § 541, p. 1060: "One who maliciously publishes f a l s e matter which brings i n question o r disparages t h e t i t l e t o property, thereby causing s p e c i a l damages t o t h e owner, may be held l i a b l e i n a c i v i l a c t i o n for damages. The e s s e n t i a l elements o f t h e cause of a c t i o n , which a r e subsequently discussed, a r e t h e u t t e r i n g and publication of t h e slanderous words t h e defendant, t h e f a l s i t y of t h e words, malice, and s p e c i a l damages. The a c t i o n is not f o r the words spoken, but f o r s p e c i a l damages f o r t h e l o s s sustained by reason of t h e speaking and publication of t h e slander." The c r u c i a l element i n t h i s case is the f a l s i t y of t h e words. Defendants chose t o stand on the finding of the d i s - t r i c t court t h a t the l e t t e r s were true. P l a i n t i f f s take the position t h a t entry of summary judgment i n favor of the defen- dants was improper, since the d i s t r i c t court i n the Bridger Bowl case against p l a i n t i f f s found no breach of fiduciary duty on t h e i r p a r t , and therefore a material question of f a c t has not been resolved. We. think p l a i n t i f f s ' position on t h i s point i s unsound. For one thing, the Bridger Bowl case against them in- volved d i f f e r e n t f a c t s and d i f f e r e n t l e g a l principles than the i n s t a n t case; a finding of one court could very well d i f f e r from a finding of the other court. For another, there i s substantial credible evidence i n the record t o support the finding t h a t the l e t t e r s were true. Approximately s i x months a f t e r the l e t t e r s were written, and following passage of the resolution by the Bridger Bowl stockholders, 70 acres of the disputed land was deeded t o Bridger Bowl by p l a i n t i f f s . The Bridger Bowl case against p l a i n t i f f s resulted i n Bridger Bowl receiving another 20 acres of t h i s land. A very plausible explanation f o r these events is t h a t p l a i n t i f f s had obligations toward Bridger Bowl and were compelled t o recognize i t s claims. Since we have concluded t h a t p l a i n t i f f s have f a i l e d t o sustain t h e i r case with respect t o the element of f a l s i t y , it is unnecessary t o consider the other elements of a slander of t i t l e action. The judgment i s affirmed. - - - - - e m - - - - - - - - - - - - - - - - - - - - - - - - - - - - Chief Justice We concur: