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%d 
Mr. Justice Daniel J. Shea delivered the Opinion of the Court. 

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

a judgment 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 the MacLeods entered into a written agreement 

on April 2, 1973, which included provisions for the sale of the 

MacLeods' cattle and the lease of their pasture to Graveley and 

a clause giving him the option to purchase the MacLeods' real 

property. The real property involved consists of approximately 

1,560 acres of farm and ranch land located 18 miles northeast 

of Townsend, Montana. 

On February 11, 1976, plaintiff orally informed the MacLeods 

that he intended to exercise his purchase option. On February 23, 

1976, the MacLeods sent plaintiff notice that he was in default 

of the lease agreement and gave him until April 15, 1976, to 

correct the alleged items of default. The MacLeods alleged in 

this notice that Graveley had not complied with the agreement 

in three respects: 1) failure to erect a new fence; 2) failure 

to remove rocks from the tillable property; and 3) failure to 

operate the leased property in a good farmerlike manner. 

Plaintiff gave the MacLeods written notice of his intent 

to exercise his option on March 5, 1976. On April 5, 1976, he 

presented to them a check for $20,000, the down payment specified 

in the 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, as well as injunctive relief restraining the MacLeods 

and the defendant Schendel from removing tinber and restraining 
the MacLeods 

/from evicting plaintiff 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 state a 

claim. The motion to dismiss was grounded on three allegations: 

1) plaintiff exercised the option prematurely, because notice 

of his intent to exercise was given prior to April 1, 1976, 

the beginning date specified in the agreement for such exercise; 

2) plaintiff was in default 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 in a 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 filed by 

the district judge at the same time, on July 1, 1976. In this 

memo the district judge stated that (1) plaintiff had exercised 

the purchase option within the time provided in the agreement, 

(2) plaintiff had substantially complied 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 district judge who had presided over the case, 
Hon. Gordon Bennett, was disqualified by the MacLeods; 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 order be clarified as granting partial summary judgment 

on the issue of specific performance only, and the District Court 

issued a clarifying order to that effect. 

On January 3, 1977, the District Court entered judgment on 

its order. This judgment ordered specific performance of the 

purchase option with the parties to enter into a "standard contract 

for deed" within 30 days of notice of entry of the judgment. 

It also ordered a hearing on the issue of plaintiff's damages. 

The MacLeods moved for a new trial or to alter or amend the 

judgment. This motion was deemed denied as it was not noticed 

for hearing within 10 days 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 the judgment was final or interlocutory. 

2) Whether plaintiff was entitled to summary judgment. 

The first issue is whether the judgment 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 in this matter dated December 

23, 1976, be and is hereby clarified as granting a 

partial summary judgment deciding only the issue of 

specific performance, and therefore interlocutory in 

character, as contemplated by Rule 56(c) of the 

Montana Rules of Civil Procedure." 

In relevant part, Rule 56(c), M.R.Civ.P., provides: 
"* * * A summary judgment, interlocutory in character, 

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), 161 Mont. 463, 465, 507 P.2d 

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

not a final adjudication of the whole controversy and therefore 

is not appealable, absent a provision in Rule 1, M.R.App.Civ.P., 

making it so. 

As clarified, the order in the instant case is by its own 

terms interlocutory and therefore not appealable until final 

judgment on the whole controversy. However, the District Court 

in its judgment granting specific performance went beyond merely 

determining the MacLeodsl liability under 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 the Agreement dated April 2, 1973; 

that upon execution of said contract by sellers 

(defendants), buyer (plaintiff) shall pay Twenty 

thousand Dollars ($20,000.00) as down payment on 

the property described in said contract; that no 

reservations other than those stated in the April 2, 

1973 Agreement be written into the contract for deed 

except by mutual consent of the parties and that the 

terms of the contract for deed shall be as described 

in the April 2, 1973 contract. 

"3. That on defendants' failure to execute the 

contract for deed as ordered herein, final judgment 

shall be entered against them, and such additional 

relief granted as may be necessary to execute the 

judgment * * *.I1 

Defendants contend that while the grant of specific performance was interlocutory prior to entry of this judgment, 

thereafter it was final and appealable. 

We agree that it is appealable. Rule 1, M.R.App.Civ.P., 

I 

provides in part: 
"A party aggrieved may appeal from a judgment 

or order, except when expressly made final by law, 

in the following cases: 

"(b) * * * from an order directing the delivery, 

transfer, or surrender of property * * *.I1 

The judgment in the instant case directed defendants to transfer 

the property covered by the purchase option to plaintiff by 

means of a contract for deed. Although denominated interlocutory, 

the judgment therefore was appealable. In this regard we note 

here that it was clear the District Court desired only to enter 

an interlocutory order. If his order compelling the transfer of 

property and its possible effect had been brought to his attention 

most probably the order would have been modified. Had this been 

done the litigation would very likely have ended at the District 

Court level. The failure to use available District Court procedures has resulted in a loss of valuable time and needless 

expense to both parties. 

The second issue is whether 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 is no 

genuine issue as to any material fact and that the 

moving party is entitled to a judgment as a matter 

of law. * * *I1 

No evidence was presented at the hearing on plaintiff's 

motion for summary judgment. 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 state a claim. At the hearing on the motion to 

dismiss testimony was given by Mrs. MacLeod, plaintiff, and two 
neighboring farmers. A copy of the agreement, the ~ac~eods' 

letter to plaintiff informing him of his alleged default and 

plaintiff's letter to the MacLeods giving notice of his intention 

to exercise the option were also received at this 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 summary judgment. 

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), 167 Mont. 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 all factual issues in his 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 the Mac~eods' motion to dismiss. 

The MacLeods contend the District Court could not have properly 

determined there were no factual issues in this manner, and 

argue they were denied the opportunity to effectively resist 

the summary judgment motion. 
In State ex 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 to grant a 

summary judgment on a motion to dismiss when the party against 

whom the judgment was entered had not been given a "reasonable 

opportunity to present all material made pertinent to such motion 

by Rule 56" as required 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 at the time it was heard and ruled upon. In effect, 

however, the hearing on the motion to dismiss in the instant 

case became a summary judgment hearing. Since the MacLeods were 

given no notice that this hearing would determine whether there 

were issues of material fact, it was error for the District Court 

to grant summary judgment. 

The judgment granting specific performance and directing the 

parties to enter into a contract for deed covering the property 

described in the April 2, 1973 agreement is vacated. The cause 

is remanded for further proceedings consistent with this opinion. 

We Concur: 

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