No. 95-152 IN THESUPREME

COURTOFTHESTATEOFMONTANA 1996

TRAVELERSINSURANCECOMPANY, AConnecticut Corporation,

Plaintiff andRespondent,

HOL,IDAYVILLAGESHOPPINGCENTERLIMITED ': ;~ ,,, ,'-.:-" PARTNERSHIP,aMontana limited partnership; SIX SIXTYSEVEN.INC.: HILL COUNTY.MONTANA: i!i; !!,J,s:,: ROBERTL. BR F. BOHN; O.B.S. PARTN

--DOWN;ROBERTW.RECTOR;RICHARD JACKOLIVER; CLARKESTREEPER;and

_ ,~' ; ',' ERSHIP, ~', ::~ ;.: c;;,':,;,:: ,.~, ;,,,: . ;~: w: ""::~) ;':‘::-:'~i':;".'.~:"l, Defendants andAppellants.

APPEALFROM: District Court of the Twelfth Judicial District,

In andfor the County of Hill, TheHonorable Ted0. Lympus, Judge presiding. COUNSELOFRECORD:

For Appellants: JamesH.Goetz (argued),~Robert K.Baldwin (argued); Goetz, Madden&Dunn, Bozeman, Montana Frank Altman, Daniel A. Boucher; Altman &Boucher, Havre, Montana David G. Rice, Hill County Attorney, Havre, Montana For Respondent: William A. Squires (argued), Randall C. Lester; Matteucci, Falcon, Squires &Lester, Great Falls, Montana

Filed: Argued: April 2, 1996 Submitted: June 27, 1996 Decided: December 16, 1996

ClerKJustice W.William Leaphart delivered the Opinion of the Court.

Appellants (collectively HVSC), appeal from the Amended Findings of Fact, Conclusions of Law, Judgment, and Decree of Foreclosure entered by the Twelfth Judicial District Court, Hill county, foreclosing their interest in the subject property and ordering asheriff's sale. Wereverse and remand. Werestate the issues raised by HVSCasfollows: 1. Did the District Court err in determining that HVSC's interest in the subject property wassubject to Travelers' liens? 2. Did the District Court err in determining that the subordination agreements executed by HVSCgranted Travelers a security interest in the fee to the subject property? 3. Did the District Court err indetermining that the leases were terminated andthat Travelers would beentitled to relief from forfeiture? 4. Did the District Court err in not requiring the delinquent real property taxes to bepaid out of the foreclosure sale proceeds and in ordering that the costs andattorneys' fees would beassessed at alater date? Factual Summary This case arises out of acomplicated dispute relating to the financing of the Holiday Village Shopping Center located in Havre, Montana. Thefollowing facts are taken from the parties' statement of stipulated facts. Beginning in 1975, Hill County, Montana, and several adjoining landowners, Brown, Rector, Bohn, Oliver, and Streeper, entered into lease agreements with M&MEnterprises (M &M)covering the land uponwhich Holiday Village wasconstructed. The lease agreements had been modified several times since they

were executed. In the spring of 1978, Hill County and the adjoininglandowners executed and delivered subordination agreements to

Travelers. These agreements were executed on M&M's behalf so that Travelers would advance the funds necessary to construct the shopping mall. In Mayof 1978, M&Mexecuted and delivered a promissory note to Travelers. Tosecure payment of the promissory note, M&Mexecuted anddelivered amortgage to Travelers. In October of 1980, M&Mexecuted anassignment of lease in favor of Northwestern Union Trust Company(NWU);the sameday, NWUassigned the lease to LIC, Inc. (LIC). At the sametime, M&Mexecuted a special warranty deedto NWUconveying its interest in the subject property andNWUsubsequently conveyed its interest to LIC. M&M also executed anassignment of ground lease giving NWUall of its interest in the leasehold estates. Again, the ground leases were subsequently assigned to LIC. In 1986, LIC assigned its interest in the leasehold agreements to LAACO,Ltd. OnMay30andJune 1, 1990, LAACOand Holiday Village entered into an assignment agreement andconveyance andTravelers andHoliday Village entered into anassumption agreement andconsent. HVSCfailed to makethe required payments dueunder the lease agreement to Hill County and to the adjoining landowners; therefore, HVSCwasin default. In the spring of 1993, Hill County andthe adjoining landowners issued notices of default for failure to makethe required payments due under the terms of the leases. Areceiver was appointed to manageHVSCin March of 1993 and has mademonthly reports to the District Court regarding the financial condition of HVSCsince his appointment.

3In 1992, Travelers filed its complaint seeking ajudgment on

the monetary obligation andforeclosure of its security interest in both the real andpersonal property. In April of 1993, HVSCand its general partner, Six Sixty Seven, Inc., consented to the entry of judgment in favor of Travelers andforeclosure of its interest. Thus, HVSCis no longer litigating the instant appeal. In 1994, all of the remaining parties, Travelers, Hill County, and the adjoining landowners moved for summary judgment. The District Court ordered that Travelers recover ajudgment against HVSCand Six Sixty Seven, Inc. pursuant to the stipulation that Hill County and Brown did not act as sureties anddid not properly terminate the ground leases, and that Hill County and the adjoining landowners recover the monthly rent payments dueunder the terms of their leases to the date of the judgment. Finally, the District Court ordered that the subject property be sold at a sheriff's sale. Subsequently, Hill County andthe adjoining landowners filed the instant appeal. Standard of review In reviewing adistrict court's grant of summaryjudgment we
use the samecriteria as that used by the district court; weare guided by Rule 56, M.R.Civ.P. Chilberg v. Rose (1995), 273Mont. 414, 416, 903P.2d 1377, 1378-79 (citing Minnie v. City of Roundup (1993), 257Mont. 429, 431, 849P.2d 212, 214). Thus, wedetermine whether agenuine issue of material fact exists andwhether the moving party is entitled tojudgment asamatter of law. Chilberq, 903 P.2d at 1379. Here, the parties submitted a statement of

4stipulated facts and the court entered its findings of fact,

conclusions of law, and decree based onthe stipulated facts and oral argument. Nogenuine issue of material fact exists. In the instant case, the District Court determined that "[t]o the extent resolution of this matter turns onthe construction and interpretation of written instruments, such adetermination is a matter of law." In reviewing adistrict court's conclusions of law, wedetermine whether the court's interpretation of the law is correct. Stratemeyer v. Lincoln County (Mont. 1996), 915P.2d 175, 177, 53 St.Rep. 245, 246 (citing Carbon County v. Union Reserve Coal Co., Inc. (1995), 271 Mont. 459, 469, 898 P.2d 680, 686); Steer, Inc. v. Department of Revenue (1990), 245Mont. 470, 474-75, 803 P.2d 601, 603-04 Discussion Resolution of the appeal hinges uponaninterpretation of the subordination agreements executed in 1978by Hill County and the adjoining landowners in favor of Travelers. The subordination agreement with Hill County1 provides in relevant part that: SUBORDINATION AGREEMENT WHEREAS,the undersigned, Hill County, Montana, a political subdivision of the State of Montana, having an address of Havre, Montana, is the owner in fee simple absolute of the real property situated in Hill County, Montana, more particularly described on Exhibit A attached hereto andbythis reference madeapart hereof, and WHEREAS,the undersigned byalease dated August 29,

1Thesubordination agreement with the adjoining landowners is substantially identical to the agreement with Hill County. 51975, as supplemented by Supplemental Agreement dated

November 1, 1976, andexecuted bythe parties August 29, 1975hasleased the hereinbefore described real property to M&MEnterprises, aMontana Partnership; and WHEREAS,M & M Enterprises has applied to the Travelers Insurance Company, aConnecticut corporation, hereinafter referred to asTravelers for aloan in the amount of FIVEMILLION EIGHTHUNDREDFIFTYTHOUSANDand No/100 DOLLARS($5,850,000.00) with interest, evidenced by anote dated February 8, 1978 andsecured by a mortgage on the Lessee's interest in the hereinbefore described real property of even date with said note and recorded onthe 14th davof June, 1978, in Book140of Mortgaqes onPage348, Document Records of the Clerk andRecorder of Hill County, Montana, and WHEREAS,

Travelers is unwilling to makesaid loan or advance funds thereon unless it is assured that the above describedmortyaye shall bealien uponthe undersigned's fee simple title in the hereinbefore described real property andunless the undersigned gives Travelers the assurances hereinafter set forth, and WHEREAS,the undersigned is willing to subordinate its fee simple title to said real property to said mortgage and is willing to give such assurance, NOW,THEREFORE,in consideration of the making of said loan to M&MENTERPRISES,andto induce Travelers to advance funds thereon, the undersigned hereby subordinates all of its right, title andinterest in and to said real property to the lien of said mortgage and agrees that said mortgage shall continue to be afirst lien upon said property prior and superior in right to any right, title and interest of the undersigned in and to said real property. Theundersigned, however, shall not beliable for the payment of anyindebtedness secured by said mortgage or the performance of any of the covenants or obligations of the mortgagor thereunder. Theundersigned further assures Travelers that the undersigned will not terminate the abovedescribed lease without the prior written consent of Travelers except in the case of adefault thereunder by M&MENTERPRISESin which case the undersigned agrees to give Travelers written notice thereof, specifying the default and Travelers shall have ninety (PO)days after receipt of said notice within which to cure said default, andif the default is cured within said period, or if the default is onewhich cannot becured within said period, but steps are taken ingoodfaith during said period anddiligently 6pursued, the lease shall not beterminated[.l [Emphasis

added.] Hill County andthe adjoining landowners assert that they are sureties for M&Mandthat the subordination agreements which they executed are not mortgages. Further, Hill County andthe adjoining landowners assert that they wereexonerated whenTravelers released M&Mfrom all liability without consent of Hill County and the adjoining landowners. Travelers argues that the subordination agreements subjected Hill County's and the adjoining landowners' fee interests to Travelers' lien and that the subordination agreements are, in fact, mortgages. Further, Travelers contends that the subordination agreements waive any statutory right of exoneration. In resolving the parties' contentions, the District Court concluded that the above-quoted subordination agreement creates a contractual right of foreclosure aswell as astatutory mortgage and an equitable mortgage under Montana law because it was "executed with all the formalities required for agrant of real property and the execution of a mortgage.” However, the subordination agreements contain nowords purporting to mortgage an interest in property. Section 71-l-204, MCA. This Court hasstated that "[aIs ageneral rule, construction and interpretation of written agreements, including contracts, is

aquestion of law for the court to decide." Klawitter v. Dettmann (1994)I 268 Mont. 275, 281, 886P.2d 416, 420 (citing First Sec. Bankof Anaconda v. Vander Pas (1991), 250Mont. 148, 152-53, 818 P.2d 384, 387). Similarly, it is a question of law whether 7ambiguity exists in awritten instrument. Klawitter, 886 P.2d at

420 (citing Audit Sews. Inc. v. Systad (1992), 252Mont. 62, 65, 826P.2d 549, 551); Johnson v. Nyhart (1995), 269Mont. 379, 387, 889P.2d 1170, 1174. Hill County and the adjoining landowners argue that "[t]he subordination agreements do not, on their face, purport to be mortgages [and that] [ilt was error for the district court to conclude that they are mortgages without resort to extrinsic evidence." Weagree. The District Court concluded that the "Subordination Agreements are unambiguous, andtherefore the Court need not look to extrinsic evidence for interpretation of the same." Wehold that the District Court erred in concluding that the subordination agreements were not ambiguous. Thedocuments are titled "Subordination Agreement" rather than mortgages. Section 71-l-204, MCA,sets forth the form of amortgage. Theoperative verb in the §204mortgage form is to "mortgage." Although the text of the documents states that the fee interest is "subordinated," it does not contain language purporting to "mortgagelt property to a mortgagee as security. Asubordination agreement only dictates the priorities between existing interests, for example lien holders--it does not mortgage

an interest in the property. Amortgage "is acontract bywhich specific property is hypothecated for the performance of anact, without the necessity of achange of possession." Section 71-l101, MCA. Theagreement at issue here hascharacteristics of both

asubordination agreement and amortgage. The confusion lies in

8the fact that the agreement mixes the concepts of "subordinate" and

"mortgage" by providing that Hill County and the adjoining landowners subordinate their fee simple interests to Travelers' mortgage. Subordinate means"[pIlaced in alower order, class, or rank and having a lower position in a recognized scale; secondary, minor." BLACK'S LAWDICTIONARY 1426 (6th ed. 1990). Since, by definition, a fee simple interest is absolute and without condition or limitation, anagreement purporting to "subordinate"

a fee simple interest presents a paradox; can a fee simple interest, which is absolute andwithout limitation, beplaced in a lower or secondary position bya"subordination agreement?" Thus, the language of the agreements is inherently and internally inconsistent. The District Court was incorrect in holding that the agreements are unambiguous and that resort to extrinsic evidence

was unnecessary. The language of the agreements is ambiguous. Further, Hill County andthe adjoining landowners assert that had the extrinsic evidence beenconsidered it would showthat Travelers itself did not consider the subordination agreements to be mortgages. Toresolve this ambiguity, the court must consider the intent of the parties at the time of the execution of the instrument. As this Court has recognized, "to establish this intention [to create a mortgage] the courts will examine the surrounding circumstances." Boysunv. Boysun (1962), 140Mont. 85, 88, 368 P.2d 439, 440. The dissenters correctly point out that § 28-3-206, MCA,

9provides that in cases of uncertainty, the language of the contract

should be interpreted most strongly against the party whocaused the uncertainty to exist. It should benoted, however, that this is not a peremptory rule. It does not require that the nondrafting party prevail in all cases. Rather, it is a rule of interpretation that requires that the court interpret the contract "most strongly" against the drafting party. For example, in Landon

v. Labor Standards Division (1982), 200 Mont. 153, 158, 649 P.2d 1341, 1343-44, even after the court applied §28-3-206, MCA,and interpreted the contract most strongly against the employer asthe party who caused the uncertainty to exist, it still reached the conclusion that the employer was correct. In the present case, although § 28-3-206, MCA, mandates that the District Court interpret the agreement most strongly against Travelers in deciding whether the agreement constitutes asubordination agreement or a mortgage, that statute does not necessarily dictate the outcome of the court's deliberation after consideration of the extrinsic evidence. Were the ground leases properly terminated? Travelers filed its complaint in this matter onNovember 13, 1992, months before Hill County and Brown, et al. issued their February andMarch, 1993notices of default onthe ground leases. OnJune 18, 1993, Travelers sought the District Court's permission to deposit the lease payments into court pending resolution of the effect of the subordination agreements. The court denied the request.

10Thesubordination agreements provide:

If the default is onewhich cannot becured within said period, but steps are taken in good faith during said period and diligently pursued, the lease shall not be terminatedI. The District Court concluded that, in light of Travelers' timely pursuit of the litigation andrequest to deposit funds with the District Court: Travelers so acted in good faith, and was not grossly negligent or willful in its refusal to cure the defaults alleged by the Lessors. Therefore, the leases were not properly terminatedL.1

. . TheDistrict Court's conclusion that the ground leases were not properly terminated is correct and it is therefore affirmed. Accordingly, wealso affirm the holding that Hill County andBrown, et al. are entitled to receive the monthly lease payments as specified in the judgment. Summary Weaffirm the judgment against Holiday Village Shopping Center Limited Partnership and Six Sixty Seven, Inc. in the amounts specified in paragraph l(a) through l(h) of the Judgment andDecree of Foreclosure with interest at the rate of 12%per annum as provided in the Promissory Note. In its Conclusion of Law#16, the District Court stated: 16. Hill County and Brown, et al. did not act as sureties asdefinedby Section 28-11-401, Mont. CodeAnn. (1993). The subject Subordination Agreements were executed for the benefit of Hill County andBrown, et al. as part of their contractual obligations under the subject ground leases to induce the execution of the same by the Mitchells [co-partners of M&Ml, thus securing a benefit unto Hill County andBrown, et al. Accordingly, the subject Subordination Agreements were not extinguished or exonerated bythe release from liability 11

### of M & M Enterprises and the Mitchells from the

Promissory Note andMortgage. TheDistrict Court's conclusion that Hill County andBrown, et al. were not, under the specific terms of the ground leases andthe subordination agreements, acting as sureties is correct and is therefore affirmed. Accordingly, Hill County and Brown, et al.

were not exonerated by the release of M&MEnterprises and the Mitchells from the Promissory Note andMortgage. Wereverse the judgment of the District Court insofar as it holds that the subordination agreements create acontractual right of foreclosure, astatutory mortgage or anequitable mortgage with regard to appellants' fee interest in the real property. In that the court's award of costs and attorneys' fees is dependent upon its holding that the agreements constitute mortgages, that award is also reversed. Accordingly, wereverse andremand to the District Court for consideration of the extrinsic evidence which, although presented,

was not considered in determining whether Hill County and the adjoining landowners' fee interests are subject to foreclosure. Reversed and remanded.

12Weconcur:

Chief Justice

Justices

Judge of the District Court, sitting for Justice William E. Hunt, Sr.

13Chief Justice J. A. Turnage specially concurring:

I concur with the result reached by the majority, remanding this case to allow the District Court to consider extrinsic evidence concerning the parties' intent in entering the "Subordination Agreement." I amconfident, from the evidence in the record thus far concerning the circumstances surrounding execution of the "Subordination Agreement," that the parties intended to create a lien under the terms of the mortgage on the fee title to the property onwhich,the shopping center is located.

14Justice Terry N. Trieweiler dissenting.

I dissent from the majority's conclusion that the subordination agreement is ambiguous and that its interpretation requires extrinsic evidence. I conclude that the plain terms of the agreement did nothing more than subordinate Hill County's fee

interest to Travelers' right to foreclose onthe lessee's leasehold interest. Furthermore, in the event of anambiguity in the subordination agreement, Montana's statutory and case law require that uncertainties be resolved against the drafter of the document, which in this case was Travelers Insurance Company. For these reasons, I would reverse the judgment of the District Court and enter summary judgment for Hill County. The subordination agreement which was executed by Hill County in favor of Travelers Insurance Company acknowledged that Hill County owned the subject property in fee simple absolute, but had leased it on August 29, 1975, to M&M Enterprises, a Montana partnership. The agreement then acknowledged that M&M had mortgaged its lessee's interest in that property as security for a loan given by Travelers. Therefore, in the event that M&M defaulted from its obligation to repay that loan, Travelers had a right to foreclose on M&M's leasehold interest. M&M's leasehold interest gave it the right to occupy land owned by Hill County in fee simple for aperiod of fifty years from October 1, 1975, and build ashopping center onthat land. It also obligated M&Mto pay rent to Hill County in the amount of $20,360annually after completion of the shopping center. There were

various other terms and conditions set forth in the written lease agreement. However, the leasehold interest was limited to the rights provided for in that agreement and did not include a fee simple interest in the property owned by Hill County As the lessor and owner of the real estate on which the shopping center was to be built, Hill County also had rights pursuant to the lease agreement. It had the right to receive rent, and it had the right to retake possession of the property in the event that the rent was not paid Bythe written subordination agreement, Hill County agreed, in consideration of Travelers' loan to M&M, to [subordinate] all of its right, title and interest in and to said real property to the lien of said mortgage and agrees that said mortgage shall continue to be afirst lien upon said property prior and superior in right to any right, title and interest of the undersigned in and to said real property. 1n other words, Hill County simply agreed to defer the enforcement of its rights in the property to Travelers' enforcement of its right to foreclose on the leasehold interest. A subordination agreement is "an agreement bywhich aparty having asuperior right of some sort agrees with someone having an inferior right that, as between the two of them, the inferior right shall be treated as if it were superior."

. . By executing a lien subordination agreement, the subordinating party agrees to demote the priority of its lien to that of another secured creditor, thereby delaying its recourse to the identified collateral until the other party's secured claim has been satisfied.

16InreLantanaMotel (Bankr. S.D. Ohio 1990), 124 B.R. 252, 255, 256

(citation omitted). However, while the subordination agreement required that Hill County defer its interest in the property during the term of the leasehold, it could not have, by its plain terms, given Travelers any greater interest in the property than it had pursuant to its mortgage agreement with M&M. That conclusion is compelled by the fact that Travelers only had an interest in the leasehold and Hill County only agreed to defer to Travelers' leasehold interest. Travelers had no interest in the fee simple estate, and none was created by the subordination agreement. A similar issue was presented to the United States District Court for the District of Idaho in Old Stone Capital Corp. v.John Hoene ImplementCorp. (D. Idaho 1986), 641 F. Supp. 916. In that case, John Hoene Implement Corporation (JHI) leased property from Davis. JHI then gave alending institution adeed of trust on its leasehold interest to secure an operating loan. Davis, as an inducement for the loan, agreed to subordinate her interest in the property to the lending institution's security interest in the leasehold. JHI defaulted and the lending institution sought to foreclose on Davis's fee simple interest in the property. The Federal District Court for the District of Idaho first concluded that the subordination agreement could not create

a mortgage interest in Davis's fee simple estate. OldStone, 647 F. Supp. at 919. However, in language relevant to the issue in

17this case, it also concluded that since the lender never had an

interest in the fee title to Davis's property, it could not acquire that kind of interest simply by virtue of the fact that Davis subordinated her fee interest, and whatever rights were attendant to it, to the lender's mortgage interest in the leasehold. The court held as follows:

In summary, the nature of a subordination is such that the beneficiary of the subordination must have a competing interest which, after the subordination, becomes senior to that which, before the subordination, was the senior interest. In this case, Old Stone [the lending institution] never had an interest in the fee of Davis's property, but only pursuant to the leasehold mortgage ajunior interest in the leasehold. After the subordination, Old Stone's interest in the leasehold became superior to Davis's interest in the leasehold. By its very nature, the vehicle of subordination could not be used to grant Old Stone an interest in the fee. In order to have an interest in Davis's fee estate, a mortgage or deed of trust must have been executed. No such instrument wasexecuted. Further, the subordination agreement cannot be elevated to the position of a mortgage or deed of trust since it lacks the formalities of such required under Idaho law. The subordination agreement could not, as a matter of law, grant any interest in the fee, upon which foreclosure could behad, to Old Stone. Foreclosure is only possible on the deed of trust affecting the leasehold. OldSmne, 647 F. Supp. at 919. Likewise in this case, Travelers had no interest in Hill County's fee title based on its mortgage agreement with Hill County's lessee. Therefore, when Hill County agreed to defer to Travelers' mortgage interest, it agreed to do nothing more than waive its rights as lessor during the period of the lease agreement

sothat Travelers could freely enforce its security interest in the leasehold without competition from Hill County based on its

18superior interest. These facts are clear from the plain terms of

the subordination agreement and require reversal of the District Court and entry of summary judgment for Hill County. However, even if, as the majority concludes, "[tlhe language of the agreements is ambiguous," the result must be the same. Travelers prepared the documents, and if it intended to create a mortgage interest in Hill County's property, it was capable of doing so by clear language. The fact that it was aware of how to create amortgage interest is evident from the mortgage document that it drafted and had executed by M&Mto create a mortgage interest in M&M's leasehold estate. Section 28-3-206, MCA, provides: III cases of uncertainty not removed by parts 1through 5 of this chapter, the language of a contract should be interpreted most strongly against the party who caused the uncertainty to exist. The promisor is presumed to be such party, except that in the case of acontract between apublic officer or body, as such, and aprivate party, it is presumed that all uncertainty was caused by the private party. Wehave also repeatedly held that ambiguous contracts should be resolved against that party that drafted the contract. See.e.g., Topco,Inc.v. State (1996), 275 Mont. 352, 360, 912 P.2d 805, 810; Mueske

v.Piper,JaJfray&Hopwood, Inc. (1993), 260 Mont. 207, 216, 859 P.2d 444, 449-50; St.PaulFire&MarineIns. Co.v.Cumiskey (1983), 204 Mont. 350, 363,

665 P.2d 223, 229. The majority opinion does not address the standard rule regarding ambiguous contracts. However, when that rule is applied, it clearly requires construing the subordination agreement in favor
19of Hill County and against Travelers' implausible suggestion that

the subordination agreement Was not merely a subordination agreement, but was in fact a mortgage agreement, even though it makes no mention of a mortgage nor includes any language of conveyance. For these reasons, I dissent from the majority opinion. I would reverse the judgment of the District Court and enter summary judgment in favor of Hill County onthe issue of whether Travelers has amortgage interest in Hill County's property.



# / Jus ide

Justice James C. Nelson joins in the foregoing disse ing opinion.

20IN THESUPREME COURTOFTHESTATEOFMONTANA No. 95-152

TRAVELERSINSURANCECOMPANY,a Connecticut corporation, i

Plaintiff andRespondent, v. ; ORDER HOLIDAYVILLAGESHOPPINGCENTER i LIMITED PARTNERSHIP,aMontana limited partnership; SIX SIXTY i SEVEN,ZINC.; HILL COUNTY,MONTANA; ROBERTL. BROWN;ROBERTW.RECTOR; ; 

### JAW301999 RICHARDF. BOHN;JACKOLIVER; CLARKE ) STREEPERandOBSPARTNERSHIP, 22 S&?L CLERK

Od SUPREME COURT STATE OF MONTANA Defendants andAppellants.

OnJanuary 3, 1997, appellants Hill County, Brown, Rector, Oliver, Bohn, Streeper andOBSfiled with this Court apetition for rehearing in the above-entitled matter; respondent, Travelers Insurance Companyfiled its objections onJanuary 13, 1997. Having considered the petition andobjections, IT IS ORDERED: 1. The following stricken language is hereby deleted from this Court's December 16, 1996, Opinion (slip op. at page 3, second line from the top): Travelers. These agreements were executed v b&a++ sothat Travelers would advance the funds

. . . . In all other respects, the Opinion shall remain the same.
2. Thepetition for rehearing is DENIED.
3. The Clerk is directed to mail a true copy hereof to

1counsel of record for the respective parties, to State Reporter

Publishing Publishing Company. DATEDthis 'stayof January, 1997.

Chief Justice

Justices

TheHonorable Douglas G. Harkin, District Court Judge, sitting for Justice William E. Hunt, Sr;, would also deny the Petition for Rehearing.