Case Title: GRAVELEY V MACLEOD

Citation: 

Docket Number: 

State: montana

Court: Montana Supreme Court

Date: 1978-01-18T00:00:00Z

Document:
No. 13722 IN THE SUPREME COURT OF THE STATE OF MONTANA 1977 ROBERT GRAVELEY, Plaintiff and Respondent, -vs- JOHN M. MacLEOD et al., Defendants and Appellants. Appeal from: District Court of the First Judicial District, Honorable Nat Allen, Judge presiding. Counsel of Record: For Appellants: Kline and Niklas, Helena, Montana David N . Niklas argued, Helena, Montana Hughes, Bennett and Cain, Helena, Montana Alan F. Cain argued, Helena, Montana For Respondent: Charles Graveley argued, Helena, Montana Filed: Submitted: September 22, 1977 Decided : $i\i $ ?i%d M r . Justice Daniel J. Shea delivered the Opinion of the Court. Defendants John M. MacLeod and Veva A . MacLeod appeal from a judgment of the District Court, Broadwater County, ordering specific performance of an option contract for the purchase of r e a l property i n favor of plaintiff Robert Graveley. Graveley and the MacLeods entered into a written agreement on April 2, 1973, which included provisions for the sale of the MacLeods' c a t t l e and the lease of t h e i r pasture to Graveley and a clause giving him the option t o purchase the MacLeods' r e a l property. The real property involved consists of approximately 1,560 acres of farm and ranch land located 18 miles northeast of Townsend, Montana. O n February 11, 1976, plaintiff orally informed the MacLeods that he intended t o exercise h i s purchase option. O n February 23, 1976, the MacLeods sent p l a i n t i f f notice that he was i n default of the lease agreement and gave him u n t i l April 15, 1976, t o correct the alleged items of default. The MacLeods alleged i n t h i s notice that Graveley had not complied with the agreement i n three respects: 1) failure t o erect a new fence; 2) failure t o remove rocks from the t i l l a b l e property; and 3) failure t o operate the leased property i n a good farmerlike manner. Plaintiff gave the MacLeods written notice of h i s intent t o exercise h i s option on March 5, 1976. O n April 5, 1976, he presented t o them a check for $20,000, the down payment specified i n the agreement. The MacLeods refused t h i s check. O n the same day plaintiff brought the present action, seeking specific performance of the purchase option o r , in the alternative, damages, a s well as injunctive relief restraining the MacLeods and the defendant Schendel from removing tinber and restraining the MacLeods /from evicting plaintiff from the property involved. The District Court issued an order temporarily restraining defendants from removing timber and evicting plaintiff from the property. The MacLeods then moved to dissolve the restraining orders and t o dismiss p l a i n t i f f ' s s u i t for failure t o s t a t e a claim. The motion t o dismiss was grounded on three allegations: 1) p l a i n t i f f exercised the option prematurely, because notice of h i s intent t o exercise was given prior t o April 1, 1976, the beginning date specified i n the agreement for such exercise; 2) p l a i n t i f f was i n default of the lease agreement because he had not erected a fence a s required by the agreement, because he had not removed rocks from t i l l a b l e ground as required, and because he had not prepared the ground i n a good farmerlike manner; and 3) the option was not supported by consideration. Following a hearing on these motions, the District Court overruled the motion to dismiss, continued the restraining orders for the pendency of the s u i t , and ordered defendants to answer the complaint. A m e m o i n support of the order was f i l e d by the d i s t r i c t judge a t the same time, on July 1, 1976. In t h i s m e m o the d i s t r i c t judge stated that (1) plaintiff had exercised the purchase option within the time provided i n the agreement, (2) p l a i n t i f f had substantially complied with the terms of the lease agreement, and (3) the contract as a whole, including the option clause, was supported by consideration. On July 19, 1976, the MacLeods f i l e d an answer and a counterclaim, including i n the answer a denial that p l a i n t i f f ' s exercise of the option had been timely and defenses asserting lack of consideration for the option and p l a i n t i f f ' s default of the agreement. The d i s t r i c t judge who had presided over the case, Hon. Gordon Bennett, was disqualified by the MacLeods; the Hon. Nat Allen then assumed jurisdiction. O n November 4, 1976, plaintiff moved for summary judgment. Following argument of counsel and submission of briefs, the District Court granted the motion. The MacLeods then requested that the order be clarified as granting p a r t i a l summary judgment on the issue of specific performance only, and the District Court issued a clarifying order t o that effect. O n January 3, 1977, the District Court entered judgment on i t s order. This judgment ordered specific performance of the purchase option with the parties t o enter into a "standard contract for deed" within 30 days of notice of entry of the judgment. It also ordered a hearing on the issue of p l a i n t i f f ' s damages. The MacLeods moved for a new t r i a l or t o a l t e r o r amend the judgment. This motion was deemed denied as it was not noticed for hearing within 10 days a s required by Rule 59(d), M.R.Civ.P. This appeal followed. MacLeods raise several issues for review but only two a r e necessary for determination of t h i s appeal. 1) Whether the judgment was f i n a l or interlocutory. 2) Whether plaintiff was entitled t o summary judgment. The f i r s t issue i s whether the judgment is appealable a t t h i s stage of the proceedings. In the District Court's c l a r i f i - cation of i t s order granting summary judgment, it stated: "* * * that the Order i n t h i s matter dated December 23, 1976, be and i s hereby clarified a s granting a p a r t i a l summary judgment deciding only the issue of specific performance, and therefore interlocutory i n character, as contemplated by Rule 56(c) of the Montana Rules of Civil Procedure." I n relevant part, Rule 56(c), M.R.Civ.P., provides: "* * * A summary judgment, interlocutory i n character, may be rendered on the issue of l i a b i l i t y alone although there is a genuine issue a s t o the amount of damages. I t I n Schultz v. Adams, (1973), 161 Mont. 463, 465, 507 P.2d 530, t h i s Court held that an order granting p a r t i a l summary judg- ment on the issue of l i a b i l i t y i n a personal injury action is not a f i n a l adjudication of the whole controversy and therefore is not appealable, absent a provision i n Rule 1, M.R.App.Civ.P., making it so. A s c l a r i f i e d , the order i n the instant case is by i t s own terms interlocutory and therefore not appealable u n t i l f i n a l judgment on the whole controversy. However, the District Court i n its judgment granting specific performance went beyond merely determining the MacLeodsl l i a b i l i t y under the agreement. It also ordered : "2. That within t h i r t y (30) days a f t e r the notice of the entry of t h i s decree the parties s h a l l make and execute a standard contract for deed i n conformity with the Agreement dated April 2, 1973; that upon execution of said contract by s e l l e r s (defendants), buyer (plaintiff) s h a l l pay Twenty thousand Dollars ($20,000.00) as down payment on the property described i n said contract; that no reservations other than those stated i n the April 2, 1973 Agreement be written into the contract for deed except by mutual consent of the parties and that the terms of the contract for deed s h a l l be as described i n the April 2, 1973 contract. "3. That on defendants' failure t o execute the contract for deed a s ordered herein, f i n a l judgment s h a l l be entered against them, and such additional r e l i e f granted a s may be necessary t o execute the judgment * * *.I1 Defendants contend that while the grant of specific per- formance was interlocutory prior t o entry of t h i s judgment, thereafter it was f i n a l and appealable. W e agree that it is appealable. Rule 1, M.R.App.Civ.P., I provides i n part: "A party aggrieved may appeal from a judgment o r order, except when expressly made f i n a l by law, i n the following cases: "(b) * * * from an order directing the delivery, transfer, or surrender of property * * * . I 1 The judgment i n the instant case directed defendants t o transfer the property covered by the purchase option t o plaintiff by means of a contract for deed. Although denominated interlocutory, the judgment therefore was appealable. I n t h i s regard we note here that it was clear the District Court desired only t o enter an interlocutory order. I f h i s order compelling the transfer of property and its possible effect had been brought t o h i s attention most probably the order would have been modified. Had t h i s been done the l i t i g a t i o n would very likely have ended a t the District Court level. The failure t o use available District Court pro- cedures has resulted i n a loss of valuable time and needless expense t o both parties. The second issue is whether summary judgment was properly granted. Under Rule 56 (c) , M.R. Civ .P. , summary judgment i s proper: "* * * i f the pleadings, depositions, answers t o interrogatories, and admissions on f i l e , together with the affidavits, i f any, show that there i s no genuine issue as to any material fact and that the moving party i s entitled t o a judgment a s a matter of law. * * * I 1 N o evidence was presented a t the hearing on p l a i n t i f f ' s motion for summary judgment. Neither party had undertaken discovery. The only material before the District Court when it granted summary judgment was the order and m e m o i n support thereof overruling defendants' motion t o dismiss the complaint for failure t o s t a t e a claim. A t the hearing on the motion t o dismiss testimony was given by Mrs. MacLeod, p l a i n t i f f , and two neighboring farmers. A copy of the agreement, the ~ a c ~ e o d s ' l e t t e r t o plaintiff informing him of h i s alleged default and p l a i n t i f f ' s l e t t e r t o the MacLeods giving notice of h i s intention t o exercise the option were also received a t t h i s hearing. It does not appear that the District Court had a transcript of the hearing on the motion to dismiss when it decided the motion for summary judgment. Defendants contend there are genuine issues of material fact concerning, i n t e r a l i a , the question of p l a i n t i f f ' s default of the agreement and summary judment therefore was not proper. This Court has repeatedly held that the party moving for summary judgment has the burden of showing the absence of any factual issue. Rickard v. Paradis, (1975), 167 Mont. 450, 452, 539 P.2d 718; Harland v. Anderson, (1976), Mont . 3 548 P.2d 613, 33 St.Rep. 363. Here, the record discloses p l a i n t i f f relied upon the July 1, 1976 order overruling the MacLeods' motion t o dismiss t o show there was no genuine issue of material fact. Plaintiff asserted t h i s order conclusively resolved a l l factual issues i n h i s favor, and the District Court was bound by it. While there were no reasons given by the District Court for i t s order of December 1 7 , 1976 granting p l a i n t i f f summary judgment, t h i s ruling was based on its e a r l i e r order and m e m o i n support of the order overruling the Mac~eods' motion t o dismiss. The MacLeods contend the District Court could not have properly determined there were no factual issues i n t h i s manner, and argue they were denied the opportunity t o effectively r e s i s t the summary judgment motion. In State ex r e l . Dept. of Health & Environmental Sciences v. City of Livingston, (1976), - Mont . - 3 548 P. 2d 155, 33 St.Rep. 348, 351, t h i s Court held it was error t o grant a summary judgment on a motion to dismiss when the party against whom the judgment was entered had not been given a "reasonable opportunity to present a l l material made pertinent t o such motion by Rule 56" a s required by Rule 12(b), M.R.Civ.P. Also, the motion t o dismiss was treated as a motion for summary judgment when it was heard. Here, the Mac~eods' motion t o dismiss was not so treated a t the time it was heard and ruled upon. I n e f f e c t , however, the hearing on the motion t o dismiss i n the instant case became a summary judgment hearing. Since the MacLeods were given no notice that t h i s hearing would determine whether there were issues of material f a c t , it was error for the District Court t o grant summary judgment. The judgment granting specific performance and directing the parties t o enter into a contract for deed covering the property described i n the April 2 , 1973 agreement i s vacated. The cause is remanded for further proceedings consistent with t h i s opinion. W e Concur: -