### No. 82-25 

### IN THE SUPREME COURT 

### OF THE STATE OF 

### MONTANA 1982

SUN DIAL LAND COMPANY, INC., Plaintiff and Respondent,

VS. 

### GOLD CREEK RANCHES, INC., RONALD A. JEROME a/k/a R. 

### A. JEROME, and ROY A. 

### JEROME, Defendants and Appellants.

Appeal from: DistrictCourt of the Thirteenth Judicial District, In and for the County of Carbon Honorable Jack Shanstrom,Judgepresiding. Counsel of Record: ForAppellants: Radovich and Johnson,Billings,Montana For Respondent: 

### Towe, Ball, Enright and Mackey, Billings,Montana

Submitted: March 25, 

### 1982 Decided: May 17, 1982 Filed: 

## MAY

# 17

## 198g

ClerkMr. Chief Justice Frank I. Haswell delivered the Opinion of the Court. Defendants appeal from the judgment of the District Court which gave possession of certainproperty 

### to plaintiff. We affirm and 

### assess damages of $500 againstdefendantsfor a frivolous appeal. Rule 32, M.R.App.Civ. P. On December 3, 1974, defendants Roy A. 

### Jerome and Ronald A. Jerome (Roy's son) executed a pencil agreement with plaintiff signed by Edward Towe (president)which provided that plaintiff Sun DialLand Company would obtain financing for the purchase of Grove Creek Ranches, Inc. near Belfry, Montana. In return the 

### Jeromes 

### were to pay plaintiff 30%of all net earnings from the 

### sale or operation of the ranch. On December 17, 1974, Sun Dialpurchased the ranch. On August 4, 1976, a formal contract 

### was executed between Sun Dial and defendant Gold Creek Ranches, Inc., a corporation set up by the Jeromes. About 9,000 acres 

### were to be divided up into 20-acre parcels for sales as homesites

# . Defendants' planned salesdid not materialize, and plaintiff sentdefendants two defaultnotices, one on February 6, 1978, and another on December 31, 1978. On December 6, 1979, defendants filed 

### a claim against Sun Dial alleging usury and fraud and seeking to set aside the formal contract of August 4, 1976, and reinstate the prior pencil agreement of December 3, 1974. On February 4, 1980, Sun Dial filed suitagainst the defendants, alleging the defendants' default and seeking judgment against defendants for unlawful detainer and restoration of the land to Sun Dial. Thereafter

an involved series of procedural maneuvering between the parties followed which need not be recounted herein, except 

### to note that the cases 

### were consolidated. On September 17, 1980, the District Court set a trial date of October 6, 1980, and, at the October 6 hearing, the parties signed a settlement agreement inopen court, the thrust of which

### was that defendants 

### were to pay to the plaintiff $1,320,424.33 with interest, plus over $150,000 in contract payments and taxes by October 6, 1981 (exactlyone year after the agreement 

### was signed). If the payment 

### was not forthcoming on thatdate, defendants agreed to entryof judgment against them for immediate possession of the property by plaintiff and a quitclaimdeed, wherein defendants relinquished allinterestinthe property, was placed in 

### escrow to be filed if the payment 

### was not made. The settlement agreement concluded with the statement that 

### " 

# .

# . .no further hearing shallbe required for the entryof the judgment

# .

. .I1 and recited that the settlement agreement 

### was to be the final resolution of alldisputes between the parties in the two 

### law suits

# . As the payment deadline approached, therewas 

### some communication between the parties regarding an extensionbut no papers 

### were ever signed. On October 6, 1981, the day the payment

wasdue, defendant deposited $50,000 inTowe's account which was rejected. Because defendants did not make the required payments, on October 20, 1981 (pursuantto the settlement agreement), the court ordered that the judgment for Sun Dial's immediate possession of the property and the quitclaim deed be released 

### to Sun Dial. The District Court signed the judgment against defendants on October 26 (which 

### was filed on October 29) and the next day (October 27) defendants filed a lispendens and a "cross-petition" allegingmalicious interference by plaintiff in the negotiation of the 

### sale of the land, and seeking to 

### set aside the settlement agreement. Sun Dial answered the "cross-petition" and moved to strikethe lispendens on November 4, 1981, and a hearing on the motion 

### was set forNovember 12. The parties stipulated that the "cross-petition" would be treated 

### as combined motions for 

### a new 

### trial, to alter 

### or amend judgment and to set aside the judgment.Hearings 

### were held on November 12 (Thursday) and November 15 (Sunday), 1981. On November 23, the District Court entered findingsof fact and conclusions of law which denied all of defendantst motions and ordered that Sun Dial be entitled 

### to possession of the property and struckdefendants' lispendens. The next day defendants filed their notice of appeal from the judgment and 

### were granted a staypending appeal, upon the filingof $150,000 bond. Defendants posted the bond. PlaintiffIsissues on appeal can be stated as follows: 1. Whether the Montana policy against forfeitureprevents plaintiff from recovering the property; 2. Whether the doctrine of waiver operates against plaintiff; 3. Whether the doctrine of estoppel operates against plaintiff; 4. Whether the District Court erred in adopting plaintiffIsfindings of fact and conclusions of law (of November

With regard 

### to the first issue, appellants argue that the Montana statute for relief from forfeiture has been satisfied. Section 28-1-104, MCA, provides: "Relief from forfeiture. Whenever by the 

### terms of an obliqation a party thereto incurs a forfeiture or-a 

### loss in the nature of a forfeiture by reason of his failure 

### to comply with its provisions, he may be relieved therefrom upon making fullcompensation 

### to the otherparty, except in 

### case of a grossly negligent, willful, 

### or fraudulentbreach of duty." Appellants also argue that Montana 

### case 

### law regarding forfeiture supports the nullificationof the settlement agreement and a remand for a full trial, citing several cases including Montana WilliamsDouble Diamond vs. Royal Village, Inc

# . (1980)

## , Mont

# .

,607 P.2d 1120, 37 St.Rep. 421; Parrott v. Heller (1976), 171 Mont. 212, 557 P.2d 819; and S-wAas- Homes Company v. North 

### Si~-burbq~ (1914), 50 Mont. 108, 145P. 2.This contention is utterlydevoid of merit. How can defendants forfeit something they never had? It 

### is undisputed in thiscase that Sun Dial bought the property and thus obtained equitable 

### title. In every

### case relied on by appellants, the forfeiture discussion centered around the buyer's lossof payments. Here Sun Dial, not defendants, was the buyer and defendants' reliance on the Montana 

### cases is misplaced. See - The Default Clause -- inthe InstallmentLand Contract (1981), 42 M0nt.L.R. 110, 117-25, and Forfeiture - of Payments Under Land Purchase Contract - inMontana (1957), 19M0nt.L.R. 50. Appellants fare no betterby relying on section 28-1-104, MCA, which requires, as a conditionprecedent 

### to relief, that defendants tender fullcompensation 

### to Sun Dial. It is undisputed here thatunder the 

### terms of the settlement agreement, defendants 

### were 

### to pay to Sun Dial within the year, a sum in

excess of $1,300,000. Defendants'deposit of $501000 inTowe's account is a far cry from that. See Gamble-Skogmo, Inc. v. McNair Realty Co. (D.C. Mont. 1951), 98 F.Supp. 440 (fullcompensation 

### is required for relief from forfeiture). Moreover, a forfeiture 

### is an affirmative defense which



### wasnot affirmativelypleaded indefendants' answer. It does not even appear in the llcross-petitionll. Accordingly, 

### we need not consider this issue raised for the firsttimeon appeal, Marcus Daly Memorial Hospital Corp. v. Borkoski (1981 )

## , Mont. 

## , 624 P.2d 997, 38 St.Rep. 322. Appellantsnext contend thatTowe's actions constituted a waiver of hisrights under the settlement agreement because Towe led Roy Jerome tobelieve an extensionhad been granted. Appellantsthen suggest thatwe require Sun Dial to send an additional notice of default before allowing Sun Dial 

### to proceed with the action, citing Surburban Homes and Montana Williams, supra. Atno 

### time during these lengthy proceedings have Gold

-5-Creek or the 

### Jeromes been under anymisapprehension as to how much 

### was due and owing on October 6, 1981. Indeed, Sun DialIs February 6, 1978, 

### letter to them spellsout indetail the obligations of the parties and in the December 31, 1978, notice, the February 6 letter

### was enclosed. We refuse to require such a pointless act. Appellants next apparently argue that Sun Dial should not be allowed 

### to enforce the settlement agreement because of

an estoppel created by Towe's actions. Appellants cite section 26-1-601 (3)

## ,MCA, which provides: "Complete 

### -- list of conclusivepresumptions. The following presumptions and no others 

### are deemed conclusive:

"(3)whenever 

### a party has, by hisown declaration, act, 

### or omission, intentionally and deliberately led another to believe a particular thing true and 

### to act upon such belief, he cannot in any litigationarising out of such declaration, 

### act, oromission be permitted 

### to falsifyit.

# .

# ."

We have recently stated with regard to estoppel: "Six essential elements have been held necessary 

### to constitute an equitable estoppel: "'(1) there must be conduct, 

### acts, language, 

### or silence amounting 

### to a representationora concealment of material facts; (2)these factsmust be known to the party estopped 

### at the 

### timeof hisconduct, 

### or at least the circumstancesmust be such thatknowledge of them 

### is necessarily imputed to him; (3)the truth concerning these factsmust be unknown to the other party claiming the benefit of the estoppel at the time it 

### was acted upon by him; (4)the conduct must be done with the intention, 

### or at least with the expectation, that it willbe acted upon by the other party, orunder the circumstances that it isboth natural and probable that it willbe 

### so acted upon; (5)the conduct must be relied upon by the other party, and, thus relying, he must be led to act upon it, and (6)he must in fact act upon it in such a manner as 

### to change his position for the 

### worse.

### "' Sweet v. Colburn School Supply (1982), Mont

# . , 639 P.2d 521, 524, 39 St.Rep. 168,172-73. Firstof all, estoppel is an affirmative defense that must be pleaded. Rule 8(c), M.R.Civ.P. We

### willnot consider the issue raised for the first

### time on appeal. Borkoski, supra.However, thisdefense 

### is mentioned indefendants' 

### "crosspetition". The trial court found that there

### was no evidence supporting a claimof estoppel. We agree. Towe did not represent 

### to defendants that the simple forwarding of $50,000 to his account 

### was sufficient

### to extend the agreement and he did not intend 

### or expect that the defendantswould act on thispurported representation. Instead he insisted that a writing be executed regarding the extension and this

### was never done. Appellants finallycontend that the District Court erred inadopting the findings of factand conclusions of 

### law prepared by Sun Dial's attorney. While it 

### is true that

### we disapnve of thispractice, Tomaskie v. Tomaskie (1981), Mont. 

## , 625 P.2d 536, 38 St. Rep. 416, they willbe upheld if they are sufficientlycomprehensive and supported by the evidence presented, Jensen v. Jensen (1981), Mon

### t

# . -- 

## ,631P.2d 700, 38 St.Rep. 1109. Here the court's findings and conclusions meet the above test. Sun Dialraises other issues inresponse to appellants1 brief but si,nce, in our view, appellants1contentions 

### are 

### meritless, 

### we willnot consider the additional issues raised by Sun Dial. 

### We note thatGold Creek and the 

### Jeromes have succeeded in accomplishing what they 

### set out to do, 

### i.e. forestalling the effectof the judgment 

### to give them more 

### time to find 

### a buyer of the property 

### or seek another settlement with plaintiff. Defendants have pursued thisaction through the appeal process and by the filingof the lispendens and the "cross-petition" the day af

### ter the judgment was signed. Obviouslywith the 

### -- lispendens of record Sun Dialcould not remedy the situationby conveying or selling the real estate. Allthese defendants1actions



### were done in the face of the language of the settlement agreement, repeated several 

### times therein, that if the paymentdeadline

### was not 

### met defendants would relinquish possession of the land immediately. This agreement 

### was 

### to be the final resolution between the parties. We cannot condone such action and abuse of the appeal process. Our court dockets 

### are overcrowded 

### as it is. Therefore

on the day thiscase is decided, plaintiff shall have judgment against defendantsin the amount of $500 damages for a frivolous appeal pursuant to Rule 32, M.R.App.Civ.P. Affirmed

# .

Chief Justice