No. 13722 IN THE SUPREME COURT OF THE STATE OF MONTANA 1977

ROBERT GRAVELEY, Plaintiff and Respondent,

-vsJOHN M. MacLEOD et al., Defendants and Appellants.

Appeal from: District Court of the First Judicial District, Honorable Nat Allen, Judge presiding. Counsel of Record: For Appellants: Kline and Niklas, Helena, Montana David N. Niklas argued, Helena, Montana Hughes, Bennett and Cain, Helena, Montana Alan F. Cain argued, Helena, Montana For Respondent: Charles Graveley argued, Helena, Montana

Filed: Submitted: September 22, 1977 Decided: $i\i $ 

### ?i%dMr. JusticeDaniel J. Shea delivered the Opinion of the Court.

Defendants John M. MacLeod and Veva A. MacLeod appeal from

ajudgment of the District Court, Broadwater County, ordering specific performance of an option contract for the purchase of real property in favor of plaintiff Robert Graveley. Graveley and theMacLeods entered into a written agreement

on April 2, 1973, which included provisions for the sale of the MacLeods' cattleand the lease of their pasture to Graveley and

a clause givinghim the option topurchase theMacLeods' real property. The real property involved consists of approximately 1,560 acres of farm and ranch land located 18milesnortheast of Townsend, Montana. On February 

### 11, 1976, plaintiff orally informed the MacLeods thathe intended to exercise his purchase option. On February 23, 1976, theMacLeods sentplaintiff notice that he was indefault of the lease agreement and gave him untilApril 15, 1976, to correct the alleged items of default. The MacLeods alleged in this notice that Graveley had not complied with the agreement inthree respects: 1) failure to erect a new fence; 2) failure to remove rocks from the tillableproperty; and 3) failure to operate the leased property ina good farmerlike manner. Plaintiff gave theMacLeods written notice of his intent to exercisehis option on March 

### 5, 1976. On April 

### 5, 1976, he presented to them a check for $20,000, the down payment specified inthe agreement. The MacLeods refused this check. On the

same day plaintiff brought the present action, seeking specific performance of the purchase option or, in the alternative, damages, aswell as injunctive relief restraining the MacLeods and the defendant Schendel from removing tinber and restrainingtheMacLeods /from evictingplaintiff from the property involved. The District Court issued an order temporarily restraining defendants from removing timber and evicting plaintiff from the property. The MacLeods then moved to dissolve the restraining orders and to dismiss plaintiff's suit for failure to statea claim. The motion todismiss was grounded on three allegations: 1) plaintiff exercised the option prematurely, because notice of his intent to exercise was given prior toApril 1, 1976, the beginning date specified in the agreement for such exercise; 2) plaintiff was indefault of the lease agreement because he had not erected a fence as required by the agreement, because he had not removed rocks from tillable ground as required, and because he had not prepared the ground ina good farmerlike manner; and 3) the option was not supported by consideration. Following a hearing on these motions, the District Court overruled the motion to dismiss, continued the restraining orders for the pendency of the suit, and ordered defendants to answer the complaint. A memo in support of the order was filedby the districtjudge atthe same time, on July 1, 1976. In this

memo the districtjudge stated that (1) plaintiff had exercised the purchase option within the time provided in the agreement, 

### (2) plaintiff had substantiallycomplied with the terms of the lease agreement, and (3) the contract as a whole, including the option clause, was supported by consideration. 

### On July 19, 1976, the MacLeods filed an answer and a counterclaim, including in the answer a denial that plaintiff's exercise of the option had been timely and defenses asserting lack of consideration for the option and plaintiff's default of the agreement. The districtjudge who had presided over the case,Hon. Gordon Bennett, was disqualified by theMacLeods; the Hon. Nat Allen then assumed jurisdiction. On November 

### 4, 1976, plaintiff moved for summary judgment. Following argument of counsel and submission of briefs, the District Court granted the motion. The MacLeods then requested that the orderbe clarified as granting partial summary judgment

on the issue of specificperformance only, and the District Court issued a clarifying order to that effect. On January 

### 3, 1977, the District Court enteredjudgment on 

### its order. Thisjudgment ordered specificperformance of the purchase option with the parties toenter into a "standard contract for deed" within 30 days of notice of entry of thejudgment. It also ordered a hearing on the issue of plaintiff's damages. The MacLeods moved for a new trialor to alter or amend the judgment. This motion was deemed denied as it was not noticed forhearing within 10days as required by Rule 59(d), M.R.Civ.P. This appeal followed. MacLeods raise several issues for review but only two are necessary for determination of this appeal. 1) Whether thejudgment was finalor interlocutory. 2) Whether plaintiff was entitled to summary judgment. The first issue 

### iswhether thejudgment 

### is appealable at this stage of the proceedings. In the District Court's clarification of its order granting summary judgment, it stated: 

# "** * that the Order inthismatter dated December 23, 1976, be and 

### ishereby clarified asgranting a partial summary judgment deciding only the issue of specificperformance, and therefore interlocutory in character, as contemplated by Rule 56(c) of the Montana Rules of CivilProcedure." Inrelevant part, Rule 

### 56(c), M.R.Civ.P., provides:

### "*

# **A summary judgment, interlocutory incharacter, may be rendered on the issue of liability alone although there 

### is a genuine issue as to the amount of damages.It In Schultz 

### v. Adams, (1973), 161Mont. 463, 465, 507 P.2d 

### 530, this Court held that an order granting partial summary judgment on the issue of liability ina personal injury action 

### is not a finaladjudication of the whole controversy and therefore 

### isnot appealable, absent a provision inRule 

### 1,M.R.App.Civ.P., making it so. Asclarified, the order inthe instant case 

### isby its own terms interlocutory and therefore not appealable until final judgment on the whole controversy. However, theDistrict Court in

### itsjudgment granting specificperformance went beyond merely determining theMacLeodsl liabilityunder the agreement. It also ordered: "2. That within thirty (30) days after the notice of the entry of this decree the parties shall make and execute a standard contract for deed in conformity with theAgreement datedApril 2, 1973; that upon execution of said contractby sellers (defendants), buyer (plaintiff) shallpay Twenty thousand Dollars ($20,000.00) as down payment on the property described in said contract; that no reservations other than those stated inthe April 2, 1973Agreement be written into the contract for deed except by mutual consent of the parties and that the terms of the contract for deed shallbe as described intheApril 2, 1973contract. 

### "3. That on defendants' failure to execute the contract for deed asordered herein, finaljudgment shallbe entered against them, and such additional relief granted asmay be necessary to execute the judgment 

# ** *.I1 Defendants contend that while the grant of specificperformance was interlocutory prior toentry of thisjudgment, thereafter it was finaland appealable. We agree that it 

### is appealable. Rule 

### 1,M.R.App.Civ.P.,

I provides inpart:"A party aggrieved may appeal from a judgment or order, except when expressly made finalby law, inthe following cases:

"(b)

# ** * from an order directing the delivery, transfer, or surrender of property

# ** *.I1 The judgment inthe instant case directed defendants to transfer the property covered by the purchase option toplaintiff by

means of a contract for deed. Although denominated interlocutory, thejudgment therefore was appealable. In this regard we note here that it was clear the District Court desired only to enter

an interlocutory order. Ifhis order compelling the transfer of property and 

### itspossible effecthad been brought to his attention most probably the order would have been modified. Had thisbeen done the litigationwould very likelyhave ended atthe District Court level. The failure touse availableDistrict Court procedures has resulted in a loss of valuable time and needless expense toboth parties. The second issue iswhether summary judgment was properly granted. Under Rule 

### 56(c)

## ,M.R. Civ.P. 

## , summary judgment 

### is proper: 

### "*

# *

# * if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there isno genuine issue as to any material fact and that the moving party 

### is entitled toajudgment as a matter of law. 

# *

# * *I1 No evidence was presented atthe hearing on plaintiff's motion for summaryjudgment. Neither party had undertaken discovery. The only material before the District Court when it granted summary judgment was the order and memo in support thereof overruling defendants' motion to dismiss the complaint for failure to statea claim. Atthe hearing on the motion to dismiss testimony was givenby Mrs. MacLeod, plaintiff, and twoneighboring farmers. A copy of the agreement, the ~ac~eods' letter toplaintiff informing him of his alleged default and plaintiff's letter to theMacLeods givingnotice of his intention to exercise the option were also received atthis hearing. It does not appear that the District Court had a transcript of the hearing on the motion to dismiss when it decided the motion for summaryjudgment. Defendants contend there are genuine issues of material fact concerning, inter alia, the question of plaintiff's default of the agreement and summary judment therefore was not proper. This Court has repeatedly held that the party moving for summary judgment has the burden of showing the absence of any factual issue. Rickard v. Paradis, (1975), 167Mont. 450, 452, 539 P.2d 718; Harland v. Anderson, (1976), Mont

# . 3 548 P.2d 613, 33 St.Rep. 363. Here, the record discloses plaintiff relied upon the July 1, 1976 order overruling the MacLeods' motion to dismiss to show there was no genuine issue of material fact. Plaintiff asserted this order conclusively resolved allfactual issues inhis favor, and the District Court was bound by it. While there were no reasons given by the District Court for 

### its order of December 

### 17, 1976 granting plaintiff summary judgment, this ruling was based on its earlier order and memo in support of the order overruling theMac~eods'motion to dismiss. The MacLeods contend the District Court could not have properly determined therewere no factual issues inthis manner, and argue they were denied the opportunity toeffectively resist the summary judgment motion.In Stateex rel. Dept. of Health & Environmental Sciences

v. City of Livingston, (1976), 

# - Mont

# . -3 548 P.2d 155, 33 St.Rep. 348, 351, this Court held it was error togrant a summaryjudgment on a motion to dismiss when the party against whom thejudgment was entered had not been given a "reasonable opportunity to present allmaterial made pertinent to such motion by Rule 56" asrequired by Rule 12(b), M.R.Civ.P. Also, the motion to dismiss was treated as a motion for summary judgment when it was heard. Here, the Mac~eods'motion to dismiss was not

so treated atthe time itwas heard and ruled upon. Ineffect, however, thehearing on the motion to dismiss in the instant

casebecame a summaryjudgment hearing. Since theMacLeods were givenno notice that thishearing would determine whether there

were issues of material fact, it was error for the District Court to grant summary judgment. The judgment granting specificperformance and directing the parties to enter into a contract for deed covering the property described inthe April 2, 1973 agreement 

### isvacated. The cause 

### is remanded for furtherproceedings consistentwith this opinion.

We Concur: 

# -