Case Title: DOWNS v SMYK

Citation: 

Docket Number: 

State: montana

Court: Montana Supreme Court

Date: 1979-12-21T00:00:00Z

Document:
N o . 14772 I N T H E SUPREME C O U R T O F T H E STATE O F M O N T A N A 1979 ROBERT F. D O W N S , P l a i n t i f f and Respondent, -vs- B E R N A R D SMYK, a/k/a B E R N A R D L. SMYK, and LOIS SMYK, Defendants and Appellants. Appeal from: D i s t r i c t Court 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 , Honorable Charles Luedke, Judge p r e s i d i n g . Counsel o f Record: For Appellant: Bernard and Lois Smyk, B i l l i n g s , Montana For Respondent : Calvin A. Calton, B i l l i n g s , Montana Submitted on B r i e f s : October 1 8 , 1 9 7 9 Decided : GEC 2 1 1 m F i l e d : Mr. Justice John Conway Harrison delivered the Opinion of the Court. This is an action to quiet title to certain real prop- erty located in Yellowstone County in the District Court of the Thirteenth Judicial District, the Honorable Charles Luedke presiding. Defendant-appellant, Bernard L. Smyk, leased approxi- mately seven and one-half acres of certain commercially desirable land in Billings, Montana, in 1976. Appellant was given the option to purchase such land by a letter received from his lessor on March 2, 1976. According to the terms of the letter, the option to purchase called for a total pur- chase price of $300,000 and a down payment of $60,000 and was to be exercised by appellant within 120 days. Unable to make the down payment, appellant contacted plaintiff-respon- dent, Robert F. Downs, for financial assistance. Respondent agreed to furnish appellant with the $60,000 down payment, and an agreement was executed to that effect in June 1976. That agreement recited that "Robert F. Downs will advance the down payment of $60,000.00 and in consideration therefor will acquire a 50% interest in the property." The agreement also stated: "When the proposed contract for deed will permit, the parties hereto agree to execute whatever may be required to establish their respective in- terests in the real estate of record with the Clerk and Recorder, Yellowstone County, Montana." Under the agreement, respondent controlled all contrac- tual arrangements concerning the property until appellant contributed, by means of monthly installments, an amount equal to that of the down payment. At that time, both appellant and respondent would share profits and liabilities equally. ~ a v i n g obtained t h e down payment, a p p e l l a n t e n t e r e d i n t o a c o n t r a c t f o r deed t o purchase t h e property i n J u l y 1976. ~ p p e l l a n t t h e r e a f t e r occupied t h e property a s h i s place of business u n t i l a d i s p u t e a r o s e between t h e p a r t i e s over t h e import of t h e agreement i n connection with a pos- s i b l e sale of t h e land. The d i s p u t e concerned whether respondent had merely loaned a p p e l l a n t t h e money f o r t h e purchase of t h e land o r had entered i n t o an agreement whereby he was conveyed an undivided one-half i n t e r e s t i n t h e land. A s a r e s u l t of t h e d i s p u t e , respondent f i l e d an a c t i o n i n D i s t r i c t Court on February 27, 1978, seeking s p e c i f i c performance of t h e agreement, a p a r t i t i o n i n g of t h e prop- e r t y , and an accounting and payment of r e n t a l s . A n amended complaint w a s f i l e d i n August 1978, asking t h e c o u r t t o q u i e t t i t l e t o an undivided one-half i n t e r e s t i n t h e prop- e r t y , p a r t i t i o n t h e property, order an accounting, and i s s u e d e c l a r a t o r y judgment a s t o t h e r i g h t of c o n t r o l f o r t h e sale of t h e property. O n August 2 3 , 1978, respondent f i l e d a motion f o r summary judgment pursuant t o Rule 56, M.R.Civ.P. Both p a r t i e s submitted b r i e f s on t h e motion and, on February 13, 1979, t h e c o u r t granted summary judgment as t o respon- d e n t ' s claim t o q u i e t t i t l e and h i s r e q u e s t f o r an account- i n g and payment of income due. Judgment was then entered by t h e c o u r t on February 23, 1979, and f i n a l judgment was entered on October 1, 1979. W e consider t h e following t h r e e i s s u e s on appeal: (1) Whether t h e D i s t r i c t Court e r r e d i n e n t e r i n g sum- mary judgment because it d i d n o t make f i n d i n g s of f a c t and conclusions of law. (2) Whether t h e D i s t r i c t Court e r r e d i n granting sum- mary judgment because t h e r e w e r e genuine i s s u e s of material f a c t before t h e court. (3) whether a p p e l l a n t may introduce, and whether t h i s Court may properly review, evidence which i s extraneous t o t h e record on appeal. A s h i s f i r s t i s s u e , a p p e l l a n t contends it was e r r o r f o r t h e D i s t r i c t Court t o g r a n t summary judgment and n o t e n t e r f i n d i n g s of f a c t and conclusions of law. Appellant main- t a i n s t h a t such f i n d i n g s w e r e necessary because they inform t h e p a r t i e s and a reviewing c o u r t of t h e b a s i s f o r t h e decision. Because no f i n d i n g s were included i n t h e i n s t a n t case, a p p e l l a n t contends t h a t t h e D i s t r i c t Court e r r e d . W e disagree. Rule 5 2 ( a ) , M.R.Civ.P., provides t h a t f i n d i n g s of f a c t and conclusions a r e n o t required t o be entered upon motions f i l e d pursuant t o Rule 56, M.R.Civ.P., f o r summary judgment, except when t h e r e i s a f a i l u r e by a p l a i n t i f f t o prosecute o r comply with t h e r u l e s of t h e c o u r t under Rule 4 1 (b) , M.R.Civ.P. Rule 52 ( a ) states i n p e r t i n e n t p a r t t h a t " f i n d i n g s . . . a r e unnecessary on d e c i s i o n s of motions under Rules 12 o r 56 o r any o t h e r motion except a s provided i n Rule 4 1 ( b ) . " Appellant attempts t o r e l y upon t h e case of Upper Missouri G&T Elec. Coop. v. McCone Elec. Co-op (1971), 157 Mont. 239, 484 P.2d 741, f o r t h e proposition t h a t such f i n d i n g s a r e necessary. Upper Missouri was a case i n which a D i s t r i c t Court of i t s own v o l i t i o n made f i n d i n g s of f a c t i n g r a n t i n g a motion f o r summary judgment. The judgment was reversed because t h e f i n d i n g s were unsupported by t h e evi- dence. I n t h a t opinion, t h i s Court noted t h a t f i n d i n g s w e r e n o t required i n d e c i s i o n s on motions f o r summary judgment, b u t t h a t , i f f i n d i n g s were entered and w e r e unsupported by t h e evidence, t h e judgment would be reversed: "While, under Rule 5 2 ( a ) , M.R.Civ.P., f i n d i n g s of f a c t and conclusions of l a w are unnecessary i n d e c i s i o n s on summary judgment, w e f i n d here t h a t an a n a l y s i s of t h e findings determines t h e c o r r e c t n e s s of t h e summary judgment involved. A s w e remarked before, our a n a l y s i s w i l l o f t e n show no evidence--that i s t h e negative." Upper Missouri, 157 Mont. a t 244, 484 P.2d a t 744. The motion f o r summary judgment i n t h i s case does n o t relate t o t h e f a i l u r e of p l a i n t i f f t o prosecute o r comply with t h e o r d e r of t h e D i s t r i c t Court. Therefore, t h e D i s - t r i c t Court d i d n o t err i n granting summary judgment because it d i d n o t e n t e r f i n d i n g s of f a c t and conclusions of l a w . Appellant n e x t argues t h a t t h e D i s t r i c t Court e r r e d i n g r a n t i n g summary judgment because an i s s u e of m a t e r i a l f a c t w a s before t h e court. By s t a t u t e it i s c l e a r t h a t summary judgment i s only properly granted " i f t h e pleadings, deposi- t i o n s , answers t o i n t e r r o g a t o r i e s , and admissions on f i l e s , together with t h e a f f i d a v i t s , i f any, show t h a t t h e r e i s no genuine i s s u e a s t o any m a t e r i a l f a c t and t h a t the moving p a r t y i s e n t i t l e d t o judgment a s a matter of law." Rule 56 ( c ) , M.R.Civ.P. I n a motion f o r summary judgment, t h e moving p a r t y has t h e burden of showing t h a t no genuine i s s u e of f a c t i s before t h e t r i a l court. Where t h e record c l e a r l y shows no i s s u e , t h e burden s h i f t s , and t h e opposing p a r t y must come forward with s u b s t a n t i a l evidence r a i s i n g t h e i s s u e . Har- land v. Anderson (1976), 169 Mont. 447, 450-451, 548 P.2d "The Court has c o n s i s t e n t l y held t h a t t h e p a r t y moving f o r summary judgment has t h e burden of showing t h e complete absence of any genuine is- sue as t o a l l f a c t s which a r e deemed m a t e r i a l i n l i g h t of those s u b s t a n t i v e p r i n c i p l e s which e n t i t l e him t o a judgment as a matter of law "The primary p o l i c y and general purpose under- l y i n g Rule 56, M.R.Civ.P., i s t o encourage judi- c i a 1 economy through t h e prompt elimination of questions n o t deserving of r e s o l u t i o n by t r i a l . [ C i t a t i o n omitted.] Thus while t h e i n i t i a l bur- den of proof must a t t a c h t o t h e movant, t h a t burden s h i f t s where t h e record d i s c l o s e s no genuine i s s u e of m a t e r i a l f a c t . Under t h e s e circumstances, t h e p a r t y opposing t h e motion must come forward with s u b s t a n t i a l evidence r a i s i n g t h e i s s u e . [ C i t a t i o n s omitted.]" H e r e , respondent f i l e d a motion f o r summary judgment and thus had t h e burden of e s t a b l i s h i n g t h e absence of any m a t e r i a l i s s u e of f a c t . Respondent attempted t o c a r r y t h i s burden by arguing i n h i s b r i e f t o t h e t r i a l c o u r t t h a t t h e record w a s c l e a r and devoid of any genuine i s s u e of material f a c t . Appellant argued, however, t h a t t h e record was ambigu- ous and t h a t a m a t e r i a l i s s u e of f a c t was before t h e c o u r t . That i s s u e was whether respondent, under t h e terms of t h e agreement between a p p e l l a n t and respondent, obtained any i n t e r e s t i n t h e property by advancing money and, i f so, when he obtained such i n t e r e s t . O n t h e one hand, a p p e l l a n t argued t h a t respondent d i d n o t o b t a i n any i n t e r e s t i n t h e property because t h e money w a s advanced a s a loan. O n t h e o t h e r hand, a p p e l l a n t argued t h a t respondent, by t h e terms of t h e agreement, obtained only a f u t u r e i n t e r e s t i n t h e land. The t r i a l c o u r t was faced with, as w e are, looking t o t h e record t o determine t h e existence of any genuine i s s u e of m a t e r i a l f a c t . Appellant relies heavily on t h e t e r m s of t h e c o n t r a c t f o r one of h i s arguments. Appellant emphasizes t h a t , ac- cording t o t h e t e r m s of t h e c o n t r a c t , respondent obtained h i s i n t e r e s t i n t h e property only "when t h e proposed con- tract f o r deed w i l l permit . . ." Therefore, a p p e l l a n t contends t h a t respondent acquired only a f u t u r e i n t e r e s t i n t h e land. According t o t h e r u l e s of construction, a c o n t r a c t i s t o be i n t e r p r e t e d s o a s t o give e f f e c t t o t h e mutual i n t e n - t i o n of t h e p a r t i e s . Section 28-3-301, MCA. Where t h e language of a c o n t r a c t i s c l e a r and e x p l i c i t and does not involve an absurdity, t h e i n t e r p r e t a t i o n of a c o n t r a c t i s governed by such language. Section 28-3-401, MCA. The whole of t h e c o n t r a c t i s t o be taken together so a s t o give e f f e c t t o every p a r t i f reasonably p r a c t i c a b l e , each c l a u s e helping t o i n t e r p r e t t h e o t h e r . Section 28-3-202, MCA. " I t is well e s t a b l i s h e d t h a t a c o u r t , i n i n t e r - p r e t i n g a w r i t t e n instrument, w i l l n o t i s o l a t e c e r t a i n phrases of t h a t instrument i n order t o garner t h e i n t e n t of t h e p a r t i e s , b u t w i l l grasp t h e instrument by i t s four corners and i n l i g h t of t h e e n t i r e instrument, a s c e r t a i n t h e paramount and guiding i n t e n t i o n of t h e p a r t i e s . Mere i s o - l a t e d t r a c t s , c l a u s e s and words w i l l n o t be a l - lowed t o p r e v a i l over t h e general language u t i l i z e d i n t h e instrument." Steen v. Rustad (1957), 132 Mont. 96, 102, 313 P.2d 1014, 1018. Appellant's argument i s predicated on an i s o l a t e d phrase of t h e c o n t r a c t , which is taken o u t of context and omits t h e remaining p a r t of t h e sentence. The sentence i n i t s e n t i r e t y is: "When t h e proposed c o n t r a c t f o r deed w i l l permit, t h e p a r t i e s h e r e t o agree t o execute whatever may be required t o e s t a b l i s h t h e i r r e s p e c t i v e i n t e r - ests i n t h e real e s t a t e of record with t h e Clerk and Recorder, Yellowstone County, Montana." Viewed i n i t s e n t i r e t y , t h e provision takes on new meaning. The c l a u s e , by i t s very t e r m s , i n d i c a t e s t h a t respondent received a p r e s e n t i n t e r e s t i n t h e land which was t o be recorded a t a f u t u r e d a t e . That t h i s i s c l e a r l y t h e i n t e n t i o n of t h e p a r t i e s i s f u r t h e r evidenced by o t h e r provisions of t h e agreement: "Robert F. Downs w i l l advance t h e down payment of $60,000.00 and i n consideration t h e r e f o r w i l l acquire a 50% i n t e r e s t i n t h e property. "Downs w i l l c o n t r o l any c o n t r a c t u a l arrange- ments u n t i l Smyk has contributed, by payment of monthly i n s t a l l m e n t s , t h e sum of $60,000.00. A t t h a t time, Downs and Smyk s h a l l e q u a l l y share a l l l i a b i l i t i e s and p r o f i t s , i f any." Appellant again relies heavily on an i s o l a t e d phrase f o r t h e argument t h a t respondent obtained no i n t e r e s t i n t h e land because t h e money advanced by respondent was merely a loan. That phrase i s found i n respondent's deposition i n which respondent states t h a t he "lend[ed] t h e money t o him [ a p p e l l a n t ] . " I n evaluating a p p e l l a n t ' s argument, it is f i r s t important t o note t h a t the answer was given by respon- d e n t only a f t e r h i s counsel voiced two o b j e c t i o n s as t o form. Secondly, it i s a l s o important t o examine o t h e r p o r t i o n s of t h e deposition. There, it i s e s t a b l i s h e d t h a t t h e answer i s taken o u t of context and t h a t respondent never considered t h e t r a n s a c t i o n a loan: "Q. NOW, I n o t i c e i n Paragraph 3 of t h e agree- ment t h a t it states, 'Robert F. Downs w i l l ad- vance t h e down payment of $60,000.00 and i n consideration t h e r e f o r w i l l acquire a 50% in- terest i n t h e property.' Now, when w e r e you supposed t o acquire t h e 50% i n t e r e s t i n the property? A. W e l l , I had 50% when I give t h e $60,000 down. "Q. A r e you t h e owner of t h i s property? A. I ' m h a l f owner. "Q. Where does M r . Carlson f i t i n t o t h i s ? A. I ' m half buyer. I ' l l c o r r e c t m y statement." W e need n o t look t o t h e deposition, however, t o d e t e r - mine whether t h e money was advanced by respondent f o r a down payment o r a s a loan. The agreement i t s e l f r e v e a l s t h e answer. The c o n t r a c t d e s c r i b e s t h e money as a down payment, n o t as a loan. Nowhere i n t h e c o n t r a c t i s t h e r e made men- t i o n of a loan, o r a provision f o r repayment of a loan, o r a provision regarding i n t e r e s t on t h e $60,000. Rather, t h e c o n t r a c t s t a t e s t h a t i n consideration f o r t h e down payment, - respondent w i l l acquire a 50% i n t e r e s t i n t h e property. Further, t h e r e is a provision which i n d i c a t e s t h a t t h e p a r t i e s w i l l equally share p r o f i t s and l i a b i l i t i e s when a p p e l l a n t has contributed an amount equal t o t h e down pay- ment. Without question, t h e r e i s a c l e a r and d e f i n i t e i n t e n t of t h e p a r t i e s t o share 50-50 i n t h e ownership, l i a b i l i t i e s , and income of t h e p r o p e r t i e s . W e f i n d , t h e r e f o r e , t h a t t h e D i s t r i c t Court d i d n o t err i n g r a n t i n g summary judgment t o respondent. There was no genuine i s s u e of m a t e r i a l f a c t i n t h e record before t h e c o u r t . It i s c l e a r from t h e f a c e of t h e c o n t r a c t t h a t respondent obtained a one-half i n t e r e s t i n t h e property upon furnishing t h e down payment, such i n t e r e s t t o be recorded when t h e c o n t r a c t f o r deed permitted. Appellant f a i l e d t o come forward with s u b s t a n t i a l evidence of t h e e x i s t e n c e of a genuine i s s u e of m a t e r i a l f a c t . A s t h i s Court s t a t e d i n Yecny v. Day (1977), - Mont. , 571 P.2d 386, 388, 34 St.Rep. 1323, 1325: s e n t w i l l . t h e p a r t y opposing t h e motion must pre- f a c t s i n proper form--conclusions of law n o t s u f f i c e ; and t h e opposing p a r t y ' s f a c t s must be m a t e r i a l and of a s u b s t a n t i a l nature, n o t f a n c i f u l , f r i v o l o u s , gauzy, nor merely sus- picious. " ( C i t a t i o n s omitted. ) The f i n a l i s s u e concerns whether a p p e l l a n t may i n t r o - duce, and whether t h i s Court may properly consider, evidence which i s extraneous t o t h e record on appeal. Appellant begs t h i s Court, i n considering t h e p r o p r i e t y of t h e summary judgment, t o examine a deposition given by respondent i n a d i s s o l u t i o n and property settlement proceeding previously decided by t h i s Court. That deposition, however, was n e i t h e r introduced i n t o evidence nor considered by t h e t r i a l c o u r t i n t h i s matter. I t i s a w e l l - s e t t l e d p r i n c i p l e t h a t t h i s Court i s confined i n equity c a s e s t o a consideration of evidence presented i n the record. Section 3-2-204(5), MCA, s t a t e s i n p e r t i n e n t p a r t : " I n e q u i t y cases and i n m a t t e r s and proceedings of an e q u i t a b l e n a t u r e , t h e supreme c o u r t s h a l l review a l l questions of f a c t a r i s i n g upon t h e evidence presented -- i n t h e record . . ." (Empha- sis added.) W e have previously refused t o consider attempts by l i t i g a n t s t o introduce testimony extraneous t o t h e record. I n Montgomery v. F i r s t National Bank (1943), 1 1 4 Mont. 395, 4 1 2 , 136 P.2d 760, 768, w e s t a t e d : "Reference has been made t o c e r t a i n testimony given a t t h e t r i a l i n Montgomery v. G i l b e r t . Section 9745, Revised Codes, provides what con- s t i t u t e s t h e record on appeal from an order i n probate. The testimony -- i n t h e p r i o r l i t i g a t i o n i s n o t p a r t of t h e p r e s e n t record. Although w e ----- do n o t see wherein it has any bearing on t h e i s s u e s presented by respondents' p e t i t i o n t o sell and a p p e l l a n t s ' o b j e c t i o n s t h e r e t o , nevertheless, i f i t - h a s , w e m x ---- n o t look t o t h a t testimony for t h e p u r p o s e o f supplying -- f a c t s n o t presented in t h e record f o r review -- i n t h e p r e s e n t proceeding." ( C i t a t i o n s omitted.) (Emphasis added.) I n Farmers S t a t e Bank of Conrad v. Iverson (1973), 162 Mont. 130, 133-134, 509 P.2d 839, 841, w e a l s o s t a t e d : " I n a d d i t i o n w e must comment on t h e 'back door' attempt by p e t i t i o n e r s and a p p e l l a n t s t o i n t r o - duce extraneous evidence i n t h e s e proceedings by a t t a c h i n g Appendix ' A ' , ' B ' , and ' C ' t o t h e i r b r i e f on appeal. Said appendices being a f f i d a - v i t s of Ralph Bouma, t o which are attached p h o t o s t a t i c copies of c e r t a i n c i t a t i o n s and o r d e r s i n causes 8073 and 8221, Pondera County, r e f e r r e d t o previously. "We s t r o n g l y condemn t h i s p r a c t i c e Q counsel f o r a p p e l l a n t s and use t h i s occasion to warn o t h e r p a r t i e s t o f u t u r e appeals -- t h a t t h i s prac- tice w i l l n o t t o l e r a t e d . " - - We find, therefore, that we may not consider evidence which is extraneous to the record on this appeal. Accordingly, the judgment of the District Court is affirmed. We concur: ~ A A J p4&&@ Chief Justice Justices Mr. Justice John C. Sheehy, deeming himself disqualified, did not participate in this case.