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No. 00-206 IN THE SUPREME COURT OF THE STATE OF MONTANA
2000 MT 304
302 Mont. 391

15 P.3d 864 CHRISTOPHER K. DISLER, Plaintiff and Respondent,

vs. FORD MOTOR CREDIT COMPANY, Defendant and Appellant. APPEAL FROM: District Court of the Fifth Judicial District, In and for the County of Madison, The Honorable Frank M. Davis, Judge presiding.
COUNSEL OF RECORD: For Appellant: Kyle Larsen, Great Falls, Montana For Respondent: Loren Tucker, Virginia City, Montana

Submitted on Briefs: July 20, 2000 Decided: December 5, 2000
Filed:

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__________________________________________ Clerk Justice James C. Nelson delivered the Opinion of the Court. ¶1 This is an appeal by Ford Motor Credit Company (Ford) from the District Court's March 22, 2000 Findings and Order granting summary judgment to Christopher K. Disler (Christopher) in his quiet title action. We affirm the court's grant of summary judgment and remand for further proceedings consistent with this opinion as to sanctions under Rule 32, M.R.App.P. Procedural and Factual Background ¶2 Christopher filed his complaint on October 20, 1999, to quiet title to land in Madison County, Montana, legally described as: A tract of land situated in the NW1⁄4 of Section 14, Township 9 South, Range 3 West, P.M.M., more particularly shown and described as Tract A on Certificate of Survey filed in Book 7 of Surveys, page 453, records of Madison County, Montana. Ford answered, claiming a judgment lien on the property. In due course, Christopher moved for summary judgment and filed a supporting affidavit, brief, and Ford's answers to Christopher's requests for admission and interrogatories. Ford opposed summary judgment and supported its objection with a brief. Attached to Ford's brief, but without the benefit of any supporting affidavit, were various documents apparently generated in connection with Wilma Hudson's (Hudson) financing of an automobile purchase through Ford in the summer of 1990 and in connection with Ford's attempt to collect Hudson's default on the resulting loan. The District Court heard oral argument on Christopher's motion and, as noted, subsequently granted summary judgment. Ford timely appealed. ¶3 The summary judgment record reveals the following undisputed--and dispositive-- material facts. Hudson entered into a contract for deed covering the subject real property with Christopher's predecessor in interest, Kevin R. Disler, in July 1981. This transaction was escrowed at the Ruby Valley National Bank. The contract for deed was paid off in May 1988, and on June 8, 1988, the escrow agent sent to "Kevin R. Disler" at his address in Hunertown, Indiana, the title insurance, warranty deed and certificate of survey.

file:///C|/Documents%20and%20Settings/cu1046/Desktop/opinions/00-206%20Opinion.htm (2 of 9)3/30/2007 2:48:06 PMfile:///C|/Documents%20and%20Settings/cu1046/Desktop/opinions/00-206%20Opinion.htm Christopher signed for these documents on June 13, 1988. The Hudson to Kevin Disler deed, dated and signed July 22, 1981, was recorded on April 14, 1997, in Book 407, page 449, records of Madison County. A deed of distribution from the Kevin Disler estate to Christopher was recorded later in Book 427, page 992. On May 3, 1994, Ford obtained a default judgment against Hudson as a result of her failure to pay her automobile loan. ¶4 On this record, we consider two issues: ¶5 1. Did the District Court err in granting summary judgment to Christopher? ¶6 2. Is Christopher entitled to sanctions against Ford for a frivolous appeal? Discussion Issue 1--Summary Judgment ¶7 "Summary judgment is proper when no genuine issues of material fact exist and the moving party is entitled to judgment as a matter of law." Ash Grove Cement Co. v. Jefferson County(1997), 283 Mont. 486, 491, 943 P.2d 85, 88; Rule 56(c), M.R.Civ.P. We review a district court's grant of summary judgment de novo , applying the same Rule 56(c), M.R.Civ.P. criteria as the district court. Ash Grove Cement Co ., 283 Mont. at 491, 943 P.2d at 88 (citation omitted). ¶8 Ford contends that there exist material issues of fact concerning proper delivery of the Hudson to Kevin Disler deed and the nature of Kevin Disler's possession of the subject property. Ford questions why the deed was not recorded until 1997, and it raises various equitable concerns with respect to Hudson's statements on her 1990 loan application and which she made, subsequently, to Ford's collector--statements which Ford claims led it to believe that Hudson owned the property. Ford maintains that it was Christopher's obligation on summary judgment to offer evidence addressing and resolving the various questions and concerns. We disagree. ¶9 While all reasonable inferences are to be drawn from the offered evidence in favor of the party opposing summary judgment, where the record--here, the record made on summary judgment by Christopher--discloses no genuine issue of material fact, the burden then shifts to the party opposing summary judgment to present substantial evidence of a genuine issue of material fact. This burden is not met by merely making conclusory or

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¶14 We must next determine whether Christopher was also entitled to judgment as a matter of law on these facts. Rule 56(c), M.R.Civ.P. We agree with the District Court that he was. Our decision in Hannah v. Martinson (1988), 232 Mont. 469, 758 P.2d 276, is dispositive. ¶15 Hannah is more complicated factually than the case at bar but the principle of law is the same. Hannah transacted a land sale to Pride under a contract for deed. Pride resold the property under another contract to Martinson. Pride defaulted but Hannah honored his contract with Martinson who continued to pay Hannah. Martinson then delivered a quit claim deed and a warranty deed, both executed January 15, 1981, to Nichols. The quit claim deed was recorded October 22, 1982; the warranty deed was recorded June 14, 1983. Nichols continued to make payments to Hannah until he defaulted on April 13, 1983. Hannah then repossessed the property and sued to quiet title. Hannah, 232 Mont. at 470, 758 P.2d at 277. ¶16 The only defendant to dispute Hannah's title was Klatt. Klatt had obtained a judgment against Martinson on September 24, 1981, after Martinson had delivered his two deeds to Nichols, but before the deeds were recorded. The District Court determined that Klatt's judgment lien did not attach to the real property. Hannah, 232 Mont. at 471, 758 P.2d at 277-78. We affirmed in an opinion wherein we thoroughly discussed the issue of whether a judgment lien attaches to real property which has been transferred to another party by means of an unrecorded deed prior to the docketing of the judgment. Hannah , 232 Mont. at 470, 758 P.2d at 277. ¶17 We stated the principle of law upon which we relied to resolve this issue in the following language: A judgment lien can only attach to the actual interest of the judgment debtor. It can not attach to an interest which does not exist, nor can a judgment lien claim superiority as against a valid prior transfer. A judgment lien can only bind an interest in real property when the debtor himself, during the existence of the judgment lien, could voluntarily transfer or alienate the interest. Hannah , 232 Mont. at 472, 758 P.2d at 278-79 (internal citations omitted).

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¶18 In the case sub judice , some thirteen years prior to Ford obtaining its judgment against her, Hudson entered into a contract for deed with Kevin Disler to sell the subject real property. Some six years before entry of Ford's judgment, Hudson actually conveyed the subject property to Kevin Disler by warranty deed when the contract was paid off. Plainly, at the time Ford's judgment was entered on May 3, 1994, Hudson owned neither an equitable interest nor a legal interest in the subject property. In fact, she had no interest at all. ¶19 Under the rule set out in Hannah , as of May 3, 1994, Hudson had no actual interest in the real property at issue; Ford's judgment lien could not attach to an interest of Hudson which did not exist; nor could Ford's judgment lien claim superiority against Hudson's valid prior transfer to Kevin Disler. Ford's judgment lien could only bind an interest of Hudson in the subject real property if, on or after May 3, 1994, she, herself, could have voluntarily transferred or alienated her interest. Obviously, having already sold and conveyed away all of her equitable and legal title and interest in and to the subject property years before Ford obtained its judgment against her, Hudson could not have voluntarily transferred or alienated her interest in the property on or after May 3, 1994. Hannah, 232 Mont. at 472, 758 P.2d at 278-79. ¶20 The fact that the Hudson to Kevin Disler deed was not recorded until April 1997, does not change this result. "An unrecorded instrument is valid as between the parties and those who have notice thereof." Section 70-21-102, MCA. See also Blakely v. Kelstrup (1985), 218 Mont. 304, 306, 708 P.2d 253, 254 (record title and legal title are not synonymous; a property owner can have a valid legal title without recordation; recordation is a device to establish priority but has nothing to do with conveying title; its purpose is to give notice to subsequent purchasers and encumbrancers). ¶21 In summary, on the actual undisputed facts established in the record, Christopher was entitled to judgment as a matter of law. The District Court's order granting summary judgment is, therefore, affirmed. Issue 2--Sanctions ¶22 On appeal Christopher argues that Ford's appeal was without substantial or reasonable grounds. He maintains that Hannah was clearly on point and dispositive under the facts he proved. Accordingly, Christopher requests that we award sanctions under Rule 32, M.R. App.P. This rule provides:

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¶26 The problem is, as we have already observed, that short of counsel's statements, theories, and questions raised in Ford's brief and three loan documents attached to the brief, Ford submitted nothing to meet its burden to demonstrate an issue of material fact. Moreover, and notwithstanding Ford's attempts to distinguish Hannah , the case was and is clearly on point. Finally, Ford's appeal tracks its approach in the trial court. ¶27 While Ford's conduct was and is not as egregious as was John Deere's in Federated , nevertheless, having thoroughly reviewed the summary judgment record and having carefully considered the briefs on appeal, we are hard-pressed to find any real merit in Ford's defense of Christopher's summary judgment motion or in its case on appeal. We conclude that on the record and briefing before us, Ford's appeal was taken "without substantial or reasonable grounds" and, therefore, under Rule 32, M.R.App.P., Christopher is entitled to his costs and attorney's fees in prosecuting this appeal. ¶28 We affirm the trial court's grant of summary judgment to Christopher. We remand, however, for further proceedings to determine and to award judgment to Christopher for his costs and reasonable attorney's fees on appeal. ¶29 Affirmed and remanded for further proceedings consistent with this opinion. /S/ JAMES C. NELSON We Concur: /S/ KARLA M. GRAY /S/ WILLIAM E. HUNT, SR. /S/ JIM REGNIER /S/ W. WILLIAM LEAPHART 1. Rule 56(f), M.R.Civ.P., provides: Should it appear from the affidavits of a party opposing the motion [for summary judgment] that the party cannot for reasons stated present by affidavit facts essential to justify the party's opposition, the court may refuse the application for judgment or may order a continuance to permit affidavits to be obtained or depositions to be taken or

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