No. DA 06-0136 

IN THE SUPREME COURT OF THE STATE OF MONTANA 

2007 MT 129 

MYKL MEAGHER, 

Plaintiff and Appellant, 

v. 

BUTTE-SILVER BOW CITY-COUNTY, 

A Municipal Corporation and Political 

Subdivision of the State of Montana, 

Defendant and Respondent. 

APPEAL FROM: The District Court of the Second Judicial District, 

In and For the County of Silver Bow, Cause No. DV 2005-193, 

Honorable Kurt Krueger, Presiding Judge 

COUNSEL OF RECORD: 

For Appellant: 

 Kevin E. Vainio, Attorney at Law, Butte, Montana 

For Respondent: 

Eileen Joyce, Butte-Silver Bow Deputy County Attorney, Butte, Montana 

Submitted on Briefs: December 28, 2006 

 Decided: June 5, 2007 

Filed: 

__________________________________________ 

Clerk 
Justice Patricia O. Cotter delivered the Opinion of the Court. 

¶1 Mykl Meagher appeals the Second Judicial District Court’s grant of summary 

judgment in favor of Butte-Silver Bow City-County (BSB or the County). Meagher filed 

a Complaint against BSB alleging that the County breached an oral agreement under 

which the County agreed to sell certain properties to Meagher. BSB filed a motion to 

dismiss pursuant to M. R. Civ. P. 12(b)(6) (Rule 12(b)(6)). The District Court converted 

the Rule 12(b)(6) motion into a motion for summary judgment and entered judgment in 

favor of the County. Meagher appeals. We reverse and remand. 

ISSUES 

¶2 A restatement of the issues on appeal is: 

¶3 Did the District Court erroneously fail to comply with M. R. Civ. P. 56 (Rule 56) 

when it converted the County’s Motion to Dismiss to a motion for summary judgment? 

¶4 Did the District Court err when it denied Meagher’s motion for a continuance? 

FACTUAL AND PROCEDURAL BACKGROUND 

¶5 In October 2003 Butte-Silver Bow City-County acquired several properties 

through tax forfeiture proceedings and posted them for sale at the County Treasurer’s 

Office. In July 2004 Meagher identified five properties he wished to purchase from the 

County. As required by the county treasurer, Meagher submitted five letters to the Chief 

Executive and Council of Commissioners, offering in each to pay BSB’s established bid 

value for the respective parcels. Attached to each letter was a $50.00 check to cover the 

required administrative fee. 

 2 
¶6 In August 2004 the County met with Meagher and orally agreed to sell him the 

two properties located on W. Broadway Street and S. Wyoming Street, contingent upon 

Meagher completing specified restoration and remodeling work on the properties by 

November 1, 2004. It also agreed to place a hold on selling two of the other properties 

Meagher wanted to purchase conditioned on his restoration work on the Broadway and 

Wyoming Street properties. The BSB Council memorialized the oral agreement as it 

pertained to the sale of the Broadway and Wyoming Street properties in a September 15, 

2004, resolution. Meagher undertook the required work, expended approximately 

$30,000.00 in labor and material, and held an open house showing the remodeled 

properties on November 15, 2004. Several commissioners attended the open house. BSB 

subsequently conveyed these two properties to Meagher. 

¶7 Despite repeated requests by Meagher between September 2004 and June 2005, 

the County ultimately denied his requests to purchase the other three properties and 

recommended that the administration fees he had paid for each of these properties be 

returned to him. 

¶8 On July 25, 2005, Meagher filed suit against BSB claiming that he and BSB had 

entered into an oral contract under which the County was obligated to sell him all five 

properties on which he had placed bids and paid administrative fees. He sought specific 

performance under this oral agreement. In August 2005 the County filed a Motion to 

Dismiss under Rule 12(b)(6) on the ground that the Complaint failed to state a claim for 

which relief could be granted. In its Brief in Support of Motion to Dismiss, the County 

 3 
argued that no oral or written agreement existed, and therefore specific performance was 

unavailable. 

¶9 Meagher responded with a brief in opposition to the County’s Motion to Dismiss 

in which he specifically objected to the County’s inclusion of “facts, exhibits and 

arguments” that extended beyond the contents of his Complaint. While objecting to the 

County’s additional “facts,” Meagher explained that he included additional facts in his 

brief in opposition so as “to more clearly answer the [County’s] Brief.” He noted that if 

the District Court considered the additional facts presented by the parties, the court would 

be converting the County’s Motion to Dismiss into a motion for summary judgment. 

Meagher advised the court that if it intended to undertake such a conversion the District 

Court had to provide the parties with notice of its intent and allow him the opportunity to 

produce pertinent and relevant facts to overcome summary judgment. The County filed 

its reply brief in support of its Motion to Dismiss in which it indicated that it “would not 

object to the [c]ourt converting its Motion to Dismiss to a Motion for Summary Judgment 

and allowing [Meagher] to supplement the record.” 

¶10 On September 27, the District Court scheduled a hearing on BSB’s Motion to 

Dismiss for November 1, 2005. On October 11, it rescheduled the hearing for October 

19, 2005. On October 13, it vacated the hearing until further notice, and on October 20, 

re-scheduled it for November 7, 2005. In each notice, the District Court referred to the 

hearing as a hearing on the County’s Motion to Dismiss. On October 28, 2005, Meagher 

filed an affidavit in which he detailed his recollection of the dealings with the County visà-vis the five properties. On Friday, November 4, Meagher’s counsel filed a Motion to 

 4 
Continue Hearing explaining that Meagher had left for Thailand on business, and 

requesting a continuance of the hearing until the second week of March at which time 

Meagher would have returned. The District Court did not receive Meagher’s Motion 

until Monday morning, November 7, just prior to the commencement of the hearing. 

After considering Meagher’s request and the County’s objection to a continuance, the 

court denied Meagher’s motion and held the scheduled hearing. 

¶11 The court heard testimony with respect to facts, exhibits and evidence beyond 

what was included in Meagher’s Complaint. On December 28, 2005, it issued its Order 

Granting Motion for Summary Judgment to BSB. In it the court explained that 

[T]he parties’ subsequent pleadings proposed that the [c]ourt convert such 

Motion [to Dismiss] to a Motion for Summary Judgment. Meagher has 

also supplemented the record through filing an Affidavit in support of his 

position. The [c]ourt reviewed the briefs submitted, the oral arguments, 

and the pleadings in their entirety and considered the same. 

The District Court ruled that no contract existed between the parties and therefore the 

County was not obligated to sell the remaining three properties to Meagher. 

Additionally, it determined that the County had the authority to seek and accept a 

separate purchase proposal from another buyer under a “developer’s packet.” Lastly it 

held that no genuine issues of material fact existed and the County was entitled to 

judgment as a matter of law. 

¶12 Meagher appeals. We reverse and remand the matter to the District Court for 

further proceedings. 

STANDARD OF REVIEW 

 5 
¶13 We review de novo a district court’s ruling on a motion to dismiss pursuant to 

Rule 12(b)(6). A motion to dismiss under Rule 12(b)(6) has the effect of admitting all 

well-pleaded allegations in the complaint. In considering the motion, the complaint is 

construed in the light most favorable to the plaintiff, and all allegations of fact contained 

therein are taken as true. Plouffe v. State, 2003 MT 62, ¶ 8, 314 Mont. 413, ¶ 8, 66 P.3d 

316, ¶ 8 (citations omitted). 

¶14 We also review an order granting summary judgment de novo, relying on the 

provisions of M. R. Civ. P. Rule 56. Hajenga v. Schwein, 2007 MT 80, ¶ 11, 336 Mont. 

507, ¶ 11, 155 P.3d 1241, ¶ 11 (citation omitted). Summary judgment is an extreme 

remedy that should be granted only when there is no genuine issue as to any material fact 

and the moving party is entitled to judgment as a matter of law. Hajenga, ¶ 11. 

DISCUSSION 

¶15 The first issue before us is whether the District Court erred in converting the 

County’s Motion to Dismiss into a motion for summary judgment without giving notice 

to Meagher. A motion to dismiss under Rule 12(b)(6) allows the district court to examine 

only whether “a claim has been adequately stated in the complaint.” Gebhardt v. D.A. 

Davidson & Co., 203 Mont. 384, 389, 661 P.2d 855, 857 (1983). As a result, the court is 

limited to an examination of the contents of the complaint in making its determination of 

adequacy. Additionally, the effect of a Rule 12(b)(6) motion to dismiss is that all the 

well-pleaded allegations in the complaint are admitted as true; therefore, it should not be 

dismissed “unless it appears beyond reasonable doubt that the plaintiff can prove no set 

 6 
of facts which would entitle him to relief.” Gebhardt, 203 Mont. at 389, 661 P.2d at 857-

58 (citation omitted). 

¶16 Rule 12(b) allows the court to convert a motion to dismiss into a motion for 

summary judgment when matters outside the pleadings are presented to the court. Rule 

12(b) states in part: 

If, on a motion asserting the defense numbered (6) to dismiss for failure of 

the pleading to state a claim upon which relief can be granted, matters 

outside the pleading are presented to and not excluded by the court, the 

motion shall be treated as one for summary judgment and disposed of as 

provided in Rule 56, and all parties shall be given reasonable opportunity 

to present all material made pertinent to such motion by Rule 56. 

(Emphasis added.) 

Thus, the court has the discretion to include or exclude matters presented to it that are 

outside of the pleadings when considering a motion to dismiss. If it chooses to include 

matters outside of the pleadings, however, it must treat the motion as a motion for 

summary judgment under Rule 56 and provide notice to the parties of its intention to do 

so. Gebhardt, 203 Mont. at 390, 661 P.2d at 858. See also Hoveland v. Petaja, 252 

Mont. 268, 271, 828 P.2d 392, 393-94 (1992); State ex rel. Dept. of H. & E. S. v. City of 

Livingston, 169 Mont 431, 436, 548 P.2d 155, 157 (1976); Graveley v. MacLeod, 175 

Mont. 338, 344, 573 P.2d 1166, 1169 (1978). The purpose of notice is to allow the 

parties a reasonable opportunity to present all material pertinent to the motion and avoid 

surprise. Plouffe, ¶ 15. This includes an opportunity to produce additional facts by 

affidavit or otherwise which would establish a genuine issue of material fact to preclude 

summary judgment under Rule 56. Plouffe, ¶ 15 (citing Hoveland, 252 Mont. at 271, 828 

P.2d at 394). 

 7 
¶17 As observed above, summary judgment is an extreme remedy. Hajenga, ¶ 11. 

What makes it extreme is that an order of summary judgment is a ruling on the merits 

which terminates a complainant’s district court proceedings with prejudice. On the other 

hand, dismissal of a complaint for failure to state a claim upon which relief may be 

granted is not a “terminal” ruling on the merits; thus, a complainant is free to recast his or 

her complaint and file it anew, as long as this can be done within the period of 

limitations. 

¶18 Meagher argues that the District Court erred by converting the County’s Motion to 

Dismiss to a motion for summary judgment without notice to the parties. He asserts that 

he did not acquiesce to the conversion and that the mere presentation of facts beyond the 

Complaint by both parties did not relieve the court of its obligation to provide notice of 

its intent to convert the proceeding. BSB counters that the District Court correctly 

dismissed Meagher’s Complaint because Meagher failed to establish the existence of a 

valid enforceable contract. It further maintains that because dismissal was correct the 

court’s decision to resolve the matter through summary judgment rather than simple 

dismissal was harmless error. BSB also argues that the parties acquiesced to the 

conversion of the motion. 

¶19 We find no merit in the County’s argument that Meagher acquiesced to the 

conversion of the motion to dismiss to one for summary judgment. In fact, Meagher 

expressly asked the District Court for the statutory notice in the event the court chose to 

convert the motion. While Meagher may have filed an affidavit, he did so not knowing 

whether the affidavit would be considered or that he was in fact facing summary 

 8 
judgment proceedings. We cannot know whether he would have expanded his affidavit 

or requested a full hearing on the summary judgment matter, as he had the right to do 

under Rule 56, had he been provided notice of the conversion. Meagher had a right to 

notice of the conversion as he requested and as our cases require. See Plouffe, ¶ 15, and 

the cases cited at ¶ 16 of this Opinion. Moreover, given that the court referred in each 

notice of hearing to a motion to dismiss and not to a summary judgment hearing, we 

cannot conclude Meagher knew he was facing summary judgment proceedings and 

acquiesced to the conversion.

¶20 As noted above, the distinction between dismissal and summary judgment is more 

than academic. The former allows for the possibility of re-filing a complaint so as to 

withstand dismissal, while the latter is a final adjudication on the merits. Therefore, we 

cannot agree that the conversion was, as argued by BSB, harmless error. Therefore, we 

reverse the court’s order of summary judgment and remand for further proceedings. 

¶21 Finally, in light of the foregoing, we need not address Meagher’s claim that the 

District Court erred in denying his motion to continue the hearing. 

CONCLUSION 

¶22 For the foregoing reasons, we reverse the District Court’s Order granting summary 

judgment and remand this matter for further proceedings consistent with this Opinion. 

/S/ PATRICIA COTTER 

 

 9 
We Concur: 

/S/ BRIAN MORRIS 

/S/ W. WILLIAM LEAPHART 

/S/ JIM RICE 

/S/ JOHN WARNER 

 10