No. 94-233

IN THE SUPREME COURT OF THE STATE OF MONTANA

1994

CLUB BUFFET BAR, INC.,

Plaintiff and Respondent,

v.

RAY LILIENTHAL, a/k/a RAY LILENTHAL,

UNITED STATES OF AMERICA (acting by

and through the INTERNAL REVENUE

SERVICE) and STATE OF MONTANA (acting

by and through its DEPARTMENT OF

REVNUE),

Defendants and Appellants.

APPEAL FROM: District Court of the Sixteenth Judicial District,

In and for the County of Rosebud,

The Honorable Kenneth R. Wilson, Judge presiding.

COUNSEL OF RECORD:

For Appellant:

John Houtz, Forsyth, Montana

For Respondent:

Richard W. Josephson, Josephson & Fredricks,

Big Timber, Montana

Filed:

Submitted on Briefs: October 28, 1994

Decided: November 29, 1994
Chief Justice J. A. Turnage delivered the Opinion of the Court.

In this action, Club Buffet Bar, Inc. (Club Buffet Bar), seeks

to repossess real and personal property and a liquor license

financed through a contract for deed. The District Court for the

Sixteenth Judicial District, Rosebud County, granted summary

judgment to Club Buffet Bar. The buyer, Ray Lilienthal, appeals.

We affirm and remand for determination of the amount of attorney

fees to be awarded to Club Buffet Bar.

The issue on appeal is whether material issues of fact bar

summary judgment on Lilienthal's counterclaims.

In 1980, Ray Lilienthal contracted to purchase from Club

Buffet Bar a liquor license and real and personal property located

in Ashland, Montana. The parties' contract required Lilienthal to

make monthly payments, to insure the property and keep it free of

liens, and to pay all taxes on the property. A default clause

provided that if Lilienthal failed to perform any of his obligations and failed to cure default after thirty days' written notice,

Club Buffet Bar could terminate the contract and Lilienthal would

forfeit his interest in the property.

In December 1992, Club Buffet Bar brought this action alleging

numerous defaults by Lilienthal and asking to be restored to

possession of the property. Lilienthal counterclaimed that Club

Buffet Bar unreasonably withheld consent to and interfered with his

negotiations for resale of the property.

Lilienthal testified before the District Court at a January

1993 hearing on Club Buffet Bar's motion for a temporary injunc2
tion. In his testimony, Lilienthal admitted to receiving a notice

of default dated August 6, 1992. He further admitted to the

following uncured defaults:

- being at least five monthly payments behind at the time of

the hearing

- having no fire insurance on the property

- allowing at least four federal tax liens to be filed

against the property

- allowing a Montana Department of Revenue warrant of distraint to be filed against the property

- allowing a lien to be filed on the liquor license

- being delinquent in payment of the real property taxes

At the end of the hearing, the parties reached a tentative

settlement.

Later, when the parties were not able to finalize the

settlement, Club Buffet Bar moved for summary judgment. The

District Court determined that Lilienthal's testimony at the

January 1993 hearing demonstrated there was no basis for his

counterclaims. The court granted summary judgment in favor of Club

Buffet Bar, including reasonable attorney fees and costs as allowed

under the contract.

Do material issues of fact bar summary judgment on Lilienthal's counterclaims?

Summary judgment is proper when the record discloses no

genuine issue as to any material fact and that the moving party is

entitled to judgment as a matter of law. Rule 56(c), M.R.Civ.P.

This Court's standard of review of a ruling on a motion for summary

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judgment is the same as the district court's. Minnie v. City of

Roundup (1993), 257 Mont. 429, 431, 849 P.2d 212, 214.

In his counterclaims, Lilienthal argues he has over $50,000 of

equity in the bar and that returning the real and personal property

and liquor license to Club Buffet Bar amounts to unjust enrichment.

However, a party requesting relief from forfeiture must tender full

compensation to the vendor as a condition precedent to relief.

Section 28-l-104, MCA: Daugherty Cattle v. General Const. (1992),

254 Mont. 479, 485-86, 839 P.2d 562, 565. Because Lilienthal does

not claim to have tendered full compensation to Club Buffet Bar,

his argument fails.

Lilienthal also maintains he has established a prima facie

case that the owners of Club Buffet Bar, the Howards, interfered

with his negotiations to sell the property to Greg Humphreys. He

alleges that the Kowards offered Humphreys a better deal on the

property than he had offered Humphreys. He states that after the

Howards talked to Humphreys, Humphreys signed an affidavit that

Lilienthal had threatened to "strip" the property if Club Buffet

Bar attempted to retake possession of it. (The business has

remained closed since Christmas 1992, under a temporary restraining

order and injunction to prevent Lilienthal from "stripping" it.)

In his testimony before the District Court, Lilienthal stated

his deal with Humphreys did not go through because

he didn't come up with his end of the deal that I wanted

to hear. There was somebody backing him with the money

and that wasn't working out.

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A letter from Humphreys' attorney to Lilienthal indicated Humphreys

backed away from the deal because of the liens Lilienthal had

allowed to be placed upon the property. Additionally, Lilienthal

admitted that Club Buffet Bar would have allowed the contract to be

assumed by a reputable person. He conceded that the Howards "were

very cooperative that way." Lilienthal's testimony thus disproved

his counterclaim of contract interference.

We conclude, based upon Lilienthal's own sworn testimony, that

he has not demonstrated material issues of fact concerning his

counterclaims. Because he has also failed to show any material

issues of fact concerning his default, we hold that the District

Court did not err in entering summary judgment for Club Buffet Bar.

The contract for deed provides that "the prevailing party

shall be entitled to recover from the other party a reasonable

attorney fee to be fixed in amount by the court" in litigation

between the parties arising from the contract. The District Court

awarded attorney fees to Club Buffet Bar. We remand this case to

the District Court for determination of the amount of attorney fees

to be added to the judgment as a result of this appeal.

Affirmed.

Chief Justice

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We concur: