Title: WILLSON v TAYLOR

State: montana

Issuer: Montana Supreme Court

Document:

IN THE SUPREME COURT OF THE STATE OF MONTANA 1981 GUY M . WILLSON, Plaintiff and Respondent, CHARLES R. TAYLOR, PHYLLIS A. TAYLOR, MICHAEL J. TAYLOR, CHRISTINE J. TAYLOR, MARK R . TAYLOR and TARA A. TAYLOR, Defendants and Appellants. Appeal from: District Court of the Tenth Judicial District, In and for the County of Fergus. Honorable Jack D. Shanstrom., Judge presiding. Counsel of Record: For Appellants: Moses Law Firm, Billings, Montana For Respondent: Robert L. Johnson and Torger S. Oaas, Lewistown, Montana Submitted on briefs: May 15, 1981 Decided: September 28, 1981 Filed: SEP 2 8 198 aLz.w g* Y v Clerk M r . J u s t i c e Fred J. Weber delivered t h e Opinion of t h e Court. Appellants/defendants Charles R. Taylor and P h y l l i s A. Taylor, husband and wife, and Michael, C h r i s t i n e , Mark and Tara Taylor, minor c h i l d r e n , bring t h i s appeal from two o r d e r s entered i n t h e D i s t r i c t Court of t h e Tenth J u d i c i a l D i s t r i c t , Fergus County. The f i r s t order, dated A p r i l 11, 1980, denied t h e defendants' motions t o dismiss each of t h e two counts of t h e complaint, the motions having been made s e p a r a t e l y by defendants Charles and P h y l l i s Taylor and by t h e minor defendants. The second o r d e r , dated December 1 0 , 1980, granted p a r t i a l summary judgment t o t h e respondent/ p l a i n t i f f Guy M. Willson a g a i n s t t h e a d u l t defendants. Willson was granted summary judgment on only t h e f i r s t count of h i s complaint. The case was properly c e r t i f i e d under Rule 54 and t h e r e f o r e , may be brought before t h i s Court f o r review. The defendants p r e s e n t t h e following i s s u e s : 1. Did the D i s t r i c t Court e r r i n denying the defendants' various motions t o dismiss t h e complaint? 2. Did t h e D i s t r i c t Court err i n granting summary judgment on Count I of t h e complaint t o t h e p l a i n t i f f ? W e hold t h a t summary judgment was properly granted and a f f i r m t h e lower c o u r t . The p a r t i e s entered i n t o a l e a s e agreement with an option-to-purchase covering r e a l property located i.n Fergus County. P l a i n t i f f Willson wants t o e x e r c i s e the option and purchase t h e land. The p a r t i e s executed t h e l e a s e on J u l y 2 , 1 9 7 6 , with a term ending January 30, 1982. The l e a s e provides: "OPTION: "Lessee i s hereby given an option t o purchase t h e s u b j e c t property upon the terms contained i n t h i s paragraph. The option s h a l l be e x e r c i s a b l e during t h e month of December of any year during the l i f e of t h i s lease. The option p r i c e s h a l l be Three Hundred Seventy Five Dollars ($375.00) per a c r e i f exercised during t h e years 1976, 1977, 1978 o r 1979. Thereafter t h e option p r i c e s h a l l be Four Hundred Dollars ($400.00) per acre. Lessee s h a l l n o t i f y Lessor of t h e e x e r c i s e of t h e option i n w r i t i n g , on o r before t h e 10th day of December, addressed t o t h e Lessor a t Moore, Montana. The t e r m s of t h e sale s h a l l be twenty-nine percent (29%) of t h e option p r i c e t o be paid i n t h e month of t h e e x e r c i s e of t h e option, with t h e balance of t h e purchase p r i c e t o be paid i n t h e next succeeding month. Lessor agrees t o pay t h e Federal Land Bank Association of Lewistown s u f f i c i e n t funds from t h e purchase p r i c e t o obtain a r e l e a s e of any mortgage on t h e s u b j e c t property. I n a d d i t i o n , Lessor agrees t o provide t i t l e insurance o r a b s t r a c t s showing marketable t i t l e , on o r before t h e d a t e t h a t t h e balance of t h e purchase p r i c e i s paid. . . . "OIL AND MINERAL RIGHTS: "Lessor s h a l l r e t a i n a l l e x i s t i n g o i l and mineral r i g h t s during t h e term of t h i s l e a s e , together with a r i g h t of i n g r e s s and egress t o develop such r i g h t s . I n t h e event t h a t Lessee s h a l l e x e r c i s e h i s option, then Lessee s h a l l r e c e i v e one-half of any o i l and mineral r i g h t s then e x i s t i n g , together with t h e r i g h t and power t o l e a s e such o i l and mineral r i g h t s . " The l e a s e contains provisions regarding land d e s c r i p t i o n , t e r m , payment of crop share, operations, minerals, fences, sub-lease, breach and re-entry and r i g h t of f i r s t r e f u s a l on t h e p a r t of t h e l e s s o r . The p l a i n t i f f f i l e d h i s complaint on December 20, 1979, requesting s p e c i f i c performance of t h e s a l e . The defendants' f i r s t i s s u e concerns t h e motions t o dismiss made by them and t h e i r children. Four s e p a r a t e motions were made: one f o r each count of t h e complaint by t h e p a r e n t s and one f o r each count by t h e minor children. A l l of the motions were denied by order dated April 11, I. A complaint should n o t be dismissed f o r f a i l u r e t o s t a t e a claim unless it appears beyond doubt t h a t t h e p l a i n t i f f can prove no s e t of f a c t s i n support of h i s claim which would e n t i t l e him t o r e l i e f . Conley v. Gibson (1957), 355 U.S. 4 1 , 45-46, 78 S.Ct. 99, 1 0 2 , 2 L.Ed.2d 80, 84; Fraunhofer v. P r i c e (1979), - Mont. - , 594 P.2d 324, 327, 36 St.Rep. 883, 886. A motion t o dismiss under Rule 1 2 ( b ) ( 6 ) , M.R.Civ.P., has t h e e f f e c t of admitting a l l well-pleaded a l l e g a t i o n s i n t h e complaint. I n considering t h e motion, t h e complaint i s construed i n t h e l i g h t most favorable t o t h e p l a i n t i f f , and a l l a l l e g a t i o n s of f a c t contained t h e r e i n a r e taken a s t r u e . Commonwealth Edison Co. v. S t a t e (1980), Mont. , 615 P.2d 847, 849, 37 St.Rep. 1192, 1193, a f f ' d ( J u l y 2 , 1981), U.S. , 1 0 1 S e c t . 2946, 69 L.Ed.2d 884, 49 U.S.L.W. - 4957; Fraunhofer v. P r i c e , supra; Duffy v. Butte Teachers' Union, Number 332, AFL-CIO (1975), 168 Mont. 246, 252-253, 541 P.2d 1199, 1202-1203. W e now proceed t o examine t h e a l l e g a t i o n s contained i n each count of t h e complaint. The f i r s t count a l l e g e s t h a t t h e defendants owned c e r t a i n described r e a l property i n Fergus County; t h a t t h e p l a i n t i f f and defendants entered i n t o a w r i t t e n l e a s e of t h e property, extending t o January 30, 1982, under which t h e p l a i n t i f f i s granted an option t o purchase t h e lands i n question ( a copy of t h e l e a s e is attached t o the complaint and t h e t e r m s thereof incorporated by r e f e r e n c e ) ; and t h a t t h e p l a i n t i f f has been and i s p r e s e n t l y i n possession of t h e leased lands and t h e l e a s e document was placed of record. The f i r s t count then goes on t o s t a t e t h e a l l e g a t i o n s attacked by t h e Taylors: " IV. " I n t h e month of December, 1979, and before t h e 10th day thereof, p l a i n t i f f n o t i f i e d t h e s e defendants i n w r i t i n g addressed t o them i n Moore, Montana of plain- t i f f ' s e x e r c i s e of t h e option set f o r t h i n t h e l e a s e . P l a i n t i f f i s ready, w i l l i n g , and a b l e t o perform h i s o b l i g a t i o n s under t h e option and p l a i n t i f f has tendered t h e required down payment. P l a i n t i f f i s informed and believes, however, t h a t these defendants have pur- ported t o a l i e n a t e t o t h e i r c h i l d r e n a p o r t i o n of t h e lands s u b j e c t t o t h e option, t h a t they have placed a d d i t i o n a l encumbrances upon t h e land, and t h a t they have otherwise endeavored t o f r u s t r a t e p l a i n t i f f ' s purchase of t h e land under t h e option. P l a i n t i f f i s f u r t h e r informed and believes t h a t these defendants intend t o r e f u s e t o perform t h e i r o b l i g a t i o n s under t h e option. P l a i n t i f f herewith o f f e r s t o perform h i s o b l i g a t i o n s f u l l y . " The substance of paragraph I V i s t h a t t h e p l a i n t i f f has n o t i f i e d t h e defendants of t h e e x e r c i s e of t h e option, t h e p l a i n t i f f i s ready t o perform, t h e p l a i n t i f f has tendered t h e downpayment, t h e defendants have a l i e n a t e d a p o r t i o n of t h e land t o t h e i r c h i l d r e n , the defendants have placed a d d i t i o n a l encumbrances upon the land, t h e defendants have otherwise endeavored t o f r u s t r a t e p l a i n t i f f ' s purchase, defendants intend t o r e f u s e t o perform, and p l a i n t i f f o f f e r s t o perform. A l l pleadings must be so construed a s t o do s u b s t a n t i a l j u s t i c e . Rule 8 ( f ) , M.R.Civ.P. The defendants o b j e c t primarily t o t h e "informed and believed" preface t o c e r t a i n a l l e g a t i o n s . W e a r e required t o construe t h e complaint i n t h e l i g h t most favorable t o t h e p l a i n t i f f , Fraunhofer v. P r i c e , supra. W e hold t h e a l l e g a t i o n s a r e s u f f i c i e n t t o s t a t e a claim. This Court does n o t favor d i s m i s s a l s on pleading, and recognizes t h a t the defendant can o b t a i n a d d i t i o n a l information required. A s s t a t e d i n Tobacco River Lbr. Co. v. Yoppe (1978), 176 Mont. 267, 271, 577 P.2d 855, "We note a l s o t h a t should defendants d e s i r e any f u r t h e r degree of s p e c i f i c i t y , they may o b t a i n the same by use of t h e appropriate discovery devices such as depositions, i n t e r r o g a t o r i e s and r e q u e s t s t o admit. This Court does n o t favor the s h o r t c i r c u i t i n g of l i t i g a t i o n a t t h e i n i t i a l pleading s t a g e unless a complaint does n o t s t a t e a cause of a c t i o n under any set of f a c t s . . ." The same a n a l y s i s r e q u i r e s us t o a f f i r m the lower c o u r t ' s order a s t o t h e second count, a l s o . I n t h a t count, t h e p l a i n t i f f incorporates a l l of t h e a l l e g a t i o n s contained i n h i s f i r s t count, and then f u r t h e r a l l e g e s : t h a t i n November of 1979 t h e p l a i n t i f f n o t i f i e d defendant Charles R. Taylor t h a t t h e p l a i n t i f f intended t o and would e x e r c i s e t h e option i n December; t h a t notwithstanding such n o t i c e and t h e t e r m s of the option, t h e a d u l t defendants purported t o convey t o t h e i r c h i l d r e n a l l of t h e minerals under t h e s u b j e c t lands ( a copy of t h e mineral i n t e r e s t conveyance i s attached t o t h e complaint and incorporated by r e f e r e n c e ) ; t h a t t h e conveyance was without consideration and i n c l e a r v i o l a t i o n of t h e t e r m s of t h e option; and, t h a t i f t h e conveyance i s n o t avoided, t h e value of t h e s u b j e c t lands w i l l be diminished i n t h e amount of $51,000 o r more. These a l l e g a t i o n s are s u f f i c i e n t t o s t a t e a claim f o r r e l i e f . The defendants argue t h a t t h e c h i l d r e n should have been dismissed from count one i n any event. W e do not agree. They a r e n o t p a r t i e s t o t h e l e a s e , s o could n o t be a f f e c t e d by any decree granting s p e c i f i c performance. I n a d d i t i o n , t h e f i r s t count i s s p e c i f i c a l l y d i r e c t e d a g a i n s t t h e p a r e n t s , a s was recognized by t h e D i s t r i c t Court when it granted summary judgment on count one a g a i n s t t h e a d u l t defendants only. The D i s t r i c t Court d i d not err i n r e f u s i n g t o dismiss a s t o t h e children; they a r e not p a r t i e s t o t h e f i r s t count, and they a r e proper p a r t i e s t o t h e second count a s t h e grantees named i n t h e mineral conveyance. The defendants assert t h a t t h e lower c o u r t e r r e d i n granting summary judgment t o the p l a i n t i f f and a g a i n s t t h e a d u l t defendants on count one. "When m u l t i p l e claims f o r r e l i e f and m u l t i p l e p a r t i e s a r e involved i n an a c t i o n , t h e c o u r t may d i r e c t the e n t r y of a f i n a l judgment as t o one o r more, b u t fewer than a l l of t h e claims o r p a r t i e s only upon an express d e c l a r a t i o n t h a t t h e r e i s no j u s t reason f o r delay and upon an express d i r e c t i o n f o r t h e e n t r y of judgment." Rule 5 4 ( b ) , M.R.Civ.P. The c o u r t by judgment dated December 1 0 , 1980, pointed o u t t h a t t h e c o u r t had c e r t i f i e d t h a t t h e r e was no j u s t reason f o r delay i n t h e e n t r y of f i n a l judgment on t h a t order. I t was, therefore, ordered,adjudged and decreed t h a t the p l a i n t i f f s have judgment a g a i n s t t h e defendants t h a t t h e option be s p e c i f i c a l l y performed. I t was a l s o ordered t h a t s a i d defendants be required t o s e l l and convey t h e land s u b j e c t t h e r e t o t o p l a i n t i f f and t o execute a good and s u f f i c i e n t conveyance t o him on payment by p l a i n t i f f of the amount of the purchase p r i c e a l l i n accordance with t h e t e r m s and conditions s e t f o r t h i n s a i d option. This m e e t s t h e requirements of Rule 54 (b) and t h e appeal i s properly before t h i s Court. The following r u l e s governed t h e D i s t r i c t Court's consideration of t h i s motion: "A p a r t y seeking t o recover upon a claim . . . may . . . move with o r without supporting a f f i d a v i t s f o r a summary judgment i n h i s favor upon a l l o r any p a r t thereof." Rule 5 6 ( a ) , M.R.Civ.P. "The [summary] judgment sought s h a l l be granted forthwith i f t h e pleadings, depositions, 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 , together with t h e [supporting] 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 t h e moving p a r t y i s e n t i t l e d t o a judgment a s a matter of law . . ." Rule 56 ( c ) , M.R.Civ.P. "When a motion f o r summary judgment i s made and supported a s provided i n t h i s r u l e , an adverse p a r t y may n o t rest upon t h e mere a l l e g a t i o n s o r d e n i a l s of h i s pleading, b u t h i s response, by a f f i d a v i t s o r a s otherwise provided i n t h i s r u l e , must s e t f o r t h s p e c i f i c f a c t s showing t h a t t h e r e i s a genuine i s s u e f o r t r i a l . I f he does n o t so respond, summary judg- ment, i f appropriate, s h a l l be entered a g a i n s t him." Rule 5 6 ( e ) , M.R.Civ.P. The D i s t r i c t Court had before it a s a record on count one t h e complaint and answer, twenty r e q u e s t s f o r admission submitted t o the defendants by t h e p l a i n t i f f and t h e defendants1 answers t h e r e t o , and a n a f f i d a v i t i n support of t h e motion executed by the p l a i n t i f f . The defendants f a i l e d t o conduct any discovery of t h e i r own, and f a i l e d t o f i l e any a f f i d a v i t s i n opposition t o t h e motion f o r summary judgment. Summary judgment i s appropriate when t h e moving p a r t y shows a complete absence of any genuine i s s u e as t o a l l f a c t s which a r e 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; and when t h e defendants f a i l e d t o come forward with evidence of a genuine i s s u e of m a t e r i a l f a c t . The pleadings, r e q u e s t s f o r admissions, and a f f i d a v i t s e s t a b l i s h e d the following f a c t s : The l e a s e was executed (de- fendants' answer t o r e q u e s t no. 1, dated January 18, 1980); defendant Charl-es R. Taylor was served with a n o t i c e of t h e p l a i n t i f f ' s e x e r c i s e of h i s option, such s e r v i c e accomplished a t h i s residence within t h e f i r s t t e n days of December 1979 (answers t o r e q u e s t no. 2 dated January 18, 1980); t h e p l a i n t i f f a l s o n o t i f i e d the defendants of h i s e x e r c i s e of t h e option within t h e f i r s t t e n days of December 1979, by w r i t i n g addressed t o them a t t h e i r address i n Moore, Montana ( a f f i d a v i t of Guy M. Willson dated June 30, 1980); the a d u l t defendants were r e s i d i n g together i n Moore during t h a t time (answer t o r e q u e s t no. 6 ) ; t h e p l a i n t i f f tendered t h e required downpayment w i t h i n t h e time s p e c i f i e d i n t h e option ( a f f i d a v i t of June 30, 1980) ; t h e de- fendants executed a new mortgage on t h e s u b j e c t lands on December 1 0 , 1979, i n favor of t h e United S t a t e s of America, through t h e FHA, t o secure t h e repayment of a loan i n t h e amount of $190,000, which mortgage was unreleased a s of January 30, 1980 (answers t o r e q u e s t s no. 1 4 and no. 15, dated January 30, 1980); t h e defendants executed a n a d d i t i o n a l mortgage on t h e lands i n favor of Northwestern Bank of Lewistown t o secure repayment of a loan i n t h e amount of $126,800 which was unre- leased a s of January 30, 1980 (answers t o requests no. 16 and no. 17, dated January 30, 1980); the defendants conveyed mineral i n t e r e s t s i n t h e land t o t h e i r c h i l d r e n a s a g i f t and without consideration by quitclaim deed dated November 30, 1979 (answers t o r e q u e s t no. 5 of January 18, 1980); t h e p l a i n t i f f paid t h e balance of t h e purchase p r i c e i n the amount of $90,652.80 i n t o c o u r t by order dated A p r i l 11, 1980; and, none of t h e defendants ever advised t h e p l a i n t i f f t h a t h i s tender of t h e downpayment w a s d e f e c t i v e (answer t o r e q u e s t no. 19, dated January 30, 1980). The defendants a s s e r t t h a t t h e i s s u e s whether t h e p l a i n t i f f properly n o t i f i e d them of h i s e x e r c i s e of t h e option and whether t h e tender was s u f f i c i e n t t o r a i s e m a t e r i a l i s s u e s of f a c t . Their answers t o t h e r e q u e s t s f o r admissions state t h a t t h e postmarks on t h e l e t t e r s a r e a l l i l l e g i b l e , so t h a t they a r e n o t s u r e of the d a t e s on which they received n o t i c e ; a l s o , t h a t n o t i c e was served only on Charles R. Taylor and was n o t served on P h y l l i s A. Taylor. However, t h e p l a i n t i f f ' s a f f i d a v i t of June 30, 1980, s t a t e s t h a t he d i d make timely n o t i f i c a t i o n and d i d tender t h e downpayment properly. " ' [Tlhe 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, not f a n c i f u l , f r i v o l o u s , gauzy, nor merely s u s p i c i o u s . ' " Harland v. Anderson, supra. The defendants f a i l e d t o come forward with t h e i r own a f f i d a v i t s i n d i s p u t e of p l a i n t i f f ' s averments. For t h a t reason, summary judgment on count one w a s properly granted. W e af firm t h e judgment of t h e D i s t r i c t Court. W e Concur: % -4 d, psu- Chief J u s t i c e