No. 87-398 

IN THE SUPREME COURT OF THE STATE OF MONTANA 

1988 

JOHN J. D'AGOSTINO and JOANN M. 

D'AGOSTINO, husband and wife, 

Third-Party Plaintiffs and 

Appellants, 

ROBERT I,. SCHAAP and VIVIAN J. 

SCHAAP, husband and wife, 

Third-Party Defendants and 

Respondents. 

APPEAL FROM: District Court of the Eighteenth Judicial District, 

In and for the County of Gallatin, 

The Honorable Byron Robb, Judge presiding. 

COUNSEL OF RECORD: 

For Appellant: 

Morrow, Sedivy & Bennett; Edmund P. Sedivy, Jr., 

Bozeman, Montana 

For Respondent: 

Moore, Rice, O'Connell & Refling; Perry J. Moore, 

Bozeman, Montana 

Submitted on Briefs: Oct. 29, 1987 

Decided: January 7, 1988 

Filed: 14N - 7, iq@8 
Mr. Justice Fred J. Weber delivered the Opinion of the Court. 

This is a claim for breach of a contract for sale of 

real property. The District Court for the Eighteenth Judicial District, Gallatin County, denied the motion of the 

DIAgostinos for summary judgment and granted summary judgment 

to the Schaaps. We affirm in part and reverse in part. 

The issue is whether the trial court erred in failing to 

grant the DIAgostinosl motion for summary judgment and in 

granting the Schaaps' motion for summary judgment. 

In 1977, the Schaaps sold the DIAgostinos property in 

West Yellowstone, Montana, consisting of Lots 3, 4, 5, and 6 

in Block 26 of the original townsite of West Yellowstone. 

The Westwood Motel occupied most of the property. Prior to 

the sale, the Schaaps had moved some cabins which were part 

of the motel. The Schaaps originally believed they had moved 

the cabins to a spot entirely on Lot 4 but surveyors have 

later determined that the cabins are partially on Lot 3 and 

partially on Lot 4. There is a dispute as to whether the 

DIAgostinos knew of this when they bought the property, but 

the Schaap-DIAgostino contract contemplated the separate sale 

by the DIAgostinos of Lot 3. The D'Agostinos later sold Lot 

3 as a vacant lot to Mr. Swanson and Lots 4, 5, and 6, including the motel, to the Markovs. Some time later, Mr. 

Swanson demanded that the cabins which were partially on his 

property be moved. The Markovs brought an action for fraud 

and misrepresentation against the DIAgostinos, who filed a 

third-party complaint against the Schaaps. They claim that 

the Schaaps breached the warranty that Lot 3 was free and 

clear of all encumbrances in the contract for sale of the 

property. The matter was bifurcated for purposes of trial, 

and a $53,050 judgment has been rendered against the 

DIAgostinos in the original action. That amount represents 
the cost of moving the cabins so that they no longer encroach 

upon Lot 3. 

Both parties moved for summary judgment as to the 

DIAgostinos complaint against the Schaaps. The District 

Court granted the Schaaps' motion for summary iudgment, 

explaining, 

I am convinced DIAgostinos had knowledge of the 

cabin encroachment for considerably more time than 

is necessary for the statute of limitation to be 

invoked. . . . This involved litigation and endless 

chain of additional parties being joined who were 

former owners of the realty must cease, and 

DIAgostinos should settle up on the reasonable and 

fair jury verdict. against them and cease trying to 

pass the buck to someone else. 

The court certified its order for consideration by this 

Court. 

Did the trial court err in failing to grant the 

DIAgostinosl motion for summary judgment and in granting the 

Schaaps' motion for summary judgment? 

Rule 56 (c) , M. R. Civ. P. , provides that summary iudgment 

shall be granted 

if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the 

affidavits, if any, show that there is no genuine 

issue as to any material fact and that the moving 

party is entitled to a judgment as a matter of law. 

The party moving for summary judgment has the burden of 

showing the complete absence of any genuine issue of material 

fact. Once that is done, the burden shifts to the party 

opposing the motion to come forward with substantial evidence 

raising a factual issue. Rumph v. Dale Edwards Inc. (19?9), 

183 Mont. 359, 365-66, 600 P.2d 163, 167. 
The D'Agostinos moved for summary judgment on the basis 

that the Schaaps had breached the warranty that Lot 3 was 

free and clear of all encumbrances, in that the encroachment 

of the cabins onto Lot 3 is an encumbrance. In support of 

their motion, the D'Agostinos submitted an affidavit, copies 

of documents, and a portion of the transcript of the 

Markov-D'Agostino trial. In opposing this motion for summary 

judgment, the Schaaps submitted the affidavit of another 

former owner of the property, who stated that she told Mr. 

D'Agostino in 1979 that the cabins encroached onto Lot 3. 

The Schaaps argue that this knowledge on the part of Mr. 

D'Agostino constitutes a waiver of the warranty against 

encumbrances. We conclude that the District Court correctly 

denied the D'Agostinos' motion for summary judgment because 

of this material issue of fact. We affirm the denial of the 

D'Agostinos' motion for summary judgment. 

On the day of the hearing on the D'Agostinos' motion, 

the Schaaps moved for summary judgment. The court considered 

both motions at the hearing. Although they filed no affidavits or other documents with their motion, the Schaaps referred to the pleadings and to the facts which the 

D'Agostinos had marshalled in support of their motion for 

summary judgment. In their brief before this Court, the 

Schaaps argue that as a matter of law the encroachment of the 

cabins does not constitute an encumbrance so tha-t, as a 

matter of law, no breach of contract has been alleged. 

The District Court stated in granting summary judgment 

to the Schaaps that it was convinced the D'Agostinos knew of 

the encroachment of the cabins onto Lot 3 "for considerably 

more time than is necessary for the statute of limitation to 

be invoked." It appears that the court's statement is based 

on the evidence heard at the Markov-DIAgostino trial. Neither party argues or presents authority on whether evidence 
from that bifurcated trial may properlv be considered in 

deciding these motions for summary judgment, and we are 

doubtful that such evidence may properly be considered here. 

An encumbrance is "any right in a third party which 

diminishes the value or limits the use of the land granted." 

3 American Law of Property S 12.128 (A. J. Casner ed. 1952) . An encroachment may or may not be an encumbrance. 

[I] f the encroachment is of an improvement located 

on adjoining land which extends across the line 

onto the land conveyed, there may be a breach of 

either the covenant of seizin or of the covenant 

against encumbrances, depending upon whether title 

to that part of the land purchased has been lost by 

adverse possession, or has become encumbered by an 

easement. 

Casner, at 12.128. We hold that the above rule of law 

governs in this case. 

Neither party has submitted proof as to whether the 

cabins have a legal right to encroach upon Lot 3. Under the 

above rule of law, this fact question is material to the 

outcome. We therefore conclude that summary judgment is not 

appropriate, and reverse the lower court's grant of summary 

judgment to the Schaaps. 

Affirmed in part and reversed in p 

We Concur: