No. 86-246 

### IN THE SUPREME COURT OF THE STATE OF MONTANA 1986

WESTMONT TRACTOR COMPANY, PlaintiffandAppellant,

CONTINENTAL I, INC., an Idaho Corp., and CHARLESA. WHITE, 

### an individual, Defendantsand Respondents.

APPEAL FF.OM: District Court of the Fourth JudicialDistrict, In and for theCounty of Missoula, The Honorable Jack L. Green,Judgepresiding.

COUNSELOF RECORD:
ForAppellant: Datsopoulos,MacDonald & Lind;FichardA. Reep, Missoula,Montana

For Respondent: Boone, Karlberg & Haddon;Wil1ia.mL. Crowley, Missoula,Montana

Submitted on Briefs: Oct. 23, 1986 Decided: 

### December 31, 1986

Filed: 

## DEC3 

## 1986

-.

~ ClerkMr. Justice John 

### C. Sheehy delivered the Opinion of the Court.

Plaintiff Westrnont Tractor Company appeals from a summary judgment granted to defendant Charles White in the District Court, Fourth Judicial District, Missoula County. We affirm theDistrictCourt" judgment. The dispute in this case arises over a series of unpaid debts between the plaintiff Westmont Tractor Company and the defendants Continental I, Inc. and Charles White, former president ofContinental. In its complaint,Westmont alleged five counts of unpaid indebtedness, plus one count for attorney fees incurred in its collection efforts. 

### A default judgment was entered against Continental 

### I on February 5, 1985. A hearingwas held April 25, 

### 1985 on defendantWhite's alternative motion for sumary judgment, and proceedings continued until November 27, 1985 when the District Court entered its findingsof fact and conclusions of law,ordering summary judgment in favor of defendant White 

### on all counts. The court also set a hearinq for award of attorney fees. Judgment 

### was entered January 28, 1q86 awarding White $9,207.00 in attorney fees. The issues presented for our revieware: 

### 1. Whether theDistrict Court erred 

### in sranting summary judgment? 2. Whether the 

### District Court erred in awardjng attorney feesto thedefendant? In order to determine whether summary judgment was proper, we review the pleadings, affidavits, answers to interrogatories and admissions on file to establish whether any genuine issues ofmaterjal fact are presented. Tf thereis no genuine issue as to anymaterial fact,then themoving party is entitled to summary judgment as a matter of lar. Reaganv. Union Oil of California (Mont. 1984), 675 P.2d 953, 956, 41 St.Rep. 131, 134. Westmont first argues it was error for the District Court to make findings of fact, rather than to conclude factual issues remained tobe determined. Under Rule 52(a), M.R.Civ.P., findings of fact are unnecessary on summary judgment motions. Lewis v. State, Dept. of Revenue (Mont. 1984), 675 P.2d 107, 114, 41 St.Rep. 9, 17. However, an analysis of the findings is useful in determining the correctness of the summary judgment involved. UpperMissouri 

### G & 

### T Electric Co-op., Inc. v. McCone Electric Co-op., Xnc.

(1971), 157Mont. 239, 244, 484 P.2d 741, 744. Thus, wewill examine the District Court's fin?.ings for evidence of the existence or non-existence of genuine and material factual issues. F7e first note the specific claims made in Westmont's complaint. Count 

### Iwas a request for a deficiency judgment
on an instal-lment sales contract for heavy equipment. A security interest in the contract was perfected. April 22, 1974. Collateral for the security interest consisted of the heavy eauipment purchased by Continental. Charles Whit-e signed the security agreement as an individual guarantor for Continental. When Continental defaulted on its payments under the contract, F7estmont repossessed the heavy equipment pursuant to a voluntary repossession agreement executed between itself and Continental. This agreement was signed February 27, 1376 by Robert Street, who had replaced Charles White aspresident of Continental.Count I1ofWestmont's complaintalleged defendants were in default on payments for the lease 

### of a Euclid TS-14 scraper. Westmont and Continental entered into a lease agreement March 24, 1972. Charles White signed this agreement as an individual guarantor. 

### A U.C.C. financing statement was also filed on this lease March 27, 1972. The lease agreementprovided for rental payments of $2,500.00 the first month, $2,000.00 for the next twelve months, and $1,650.00 for each month thereafter. Paragraph 12 of the stipulationsand conditions of the lease stated that title to the leased equipment remained vested in the owner, and the lessee had no option to purchase the equipment. However, when Continental defaulted on its lease payments, Westmont

"purchased" the scraper and credited $13,000.00 to Continental's delinquent account. Count's 111 and V of Westmont's complaint are requests for paynents on delinquent open accounts. Continental kept open accounts for parts and services (Count 111) and for rentals (CountV)

# . Continental owed $39,887.85 on its parts and services open account for theperiod fromApril, 

### 1974,to January, 1978. It owed $4,052.39 on its rental account for the period fromAugust, 1974,to February, 1976. In response to defendant White's request for admissions, Westmont admitted that the debts incurred on these open accounts were corporate liabilities, rather than liabilities personally incurredby CharlesWhite. Count IV alleges breach of payment on a promissory note signed by Continental and co-signed by White "as an individual." This note appare~tly was the security for the refinancing of charges made on the above open accountsprior to February 38, 1974. Westmont filed a security agreementon

### this note April 10, 1.974, listing as collateral the Euclid TS-14 scraper (the same scraper listed as collateral in the lease agreement) and a Euclid waterwagon. A 

### payment of $30,486.39 plus interest at 10% was due on the note on December 10, 1974,andwasneverpaid. Count VI is a 

### request for attorney fees incurred in the attempted collectionof thedebts. After reviewing theparties' pl.eadings,interrogatories, request for admissions, requests for production, and affidavits, the District Court made findings of fact and conclusionsof lawas follows: FINDINGSOF 

### FACT

There is no' genuine issue as to anymaterial fact.

Plaintiff and DefendantCorporation entered into a security agreement by t~hichDefendant Corporation granted Plaintiff a security interest 

### in certain corporate property. Defendant White signed the security agreementas individualguarantor.

Plaintiff was granted the security agreement to secure corporate obligations set forth in Counts I, I1 

### andV [sic]of the Compl-aint.
Plaintiff repossessed and disposed of the secured property.

Plaintiff did not give Defendant White reasonable notice of the time and place of any public sale or reasonable notice of the time after which any private sale or other intended disposition [of] collateral was to be made as required by 

### S30-9-504(3)

## ,MCA.

Defendant White did not, after default, sign a 

### written statement renouncing or modifying his right to notification.Defendant Corporation maintained an open account with Plaintiffas alleged 

### in Count 111. VIIL Defendant White was not a party to the agreement alleged in Count I11 either indivi.dually or as guarantor.
Defendant Corporation and Plaintiff entered into an agreement whereby Plaintiff extended Defendant Corporation a line of credit on a rental accountas alleged in CountV.

Defendant White was not a party to the agreement alleged in Count V either individual-lyor as a guarantor. From the foregoing Findings

### of Fact,the Court now makes the following: CONCLUSIONSOF LAW

Defendant White is not legally obligated for the obligationsalleged in Counts TI1andV.

Since Plaintiff failed to comply with 530-9-504(3), MCA with respect to Defendant White, Plaintiff is barred from recovering any deficiency judgment from DefendantWhite. The court then directed a summary judgment in defendant White

### 's favor

# . The purpose of summary judgment is to encourage judicial economy through the prompt elimination of questions not deserving of resolution by trial. Harland v. Anderson

(1976)

## , 169 Mont. 447, 450, 548 P.2d 613, 615. While the initial burden 

### is on themoving party to establish there are
no genuine issues ofmaterial fact,the burden shifts to the opposing party once the showing has been made that no issues of material fact exists. 

### Id. at 451, 548 P.2d at 615. The -

### party opposing the motion must present material facts in dispute, not ones which are fa.ncifu1, frivolous, gauzy or merely suspicions. Silloway v. Jorgenson (1965)

## , 146 Mont. 307, 310, 406 P.2d 167,169. Findings of 

### Fact VII 

### through X 

### are essentially uncontroverted. In Counts 111 

### and V 

### of the complaint, Westmont seeks to recover the unpaid sums on two open accounts. However,Westmont has admitted in its answers to White's request for admissions and set of interrogatories that the debts incurred on the accounts were expenses incurred by 

### Continental as a corporation, rather than by White as an individual. Westmont claims itwill demonstrate at trial that it relied on oral assurances of payment guaranteed by White personally. However, the courtwas not required to anticipate further proof at trial. Dooling v. Perry (1979), 183 Mont. 451, 457, 600 P.2d 799, 802. We therefore find summary judgment proper as to Counts 111

### andV 

### ofplaintiff's complaint. We now examine the facts underlying Findings of Fact 11 

### through VI. 

### Westmont and Continental entered into three secured transactions. The firstwas on an installment sales contract for heavy equipment. Continentalagreed topurchase
a

### number ofpieces of logging equipment,andWhite signed the agreement as 

### an individual guarantor. Westmont filed a financing statement perfecting its interest in April, 1974, and listed the heavy equipmentas collateral. The second secured transaction was a lease agreement entered into 

### for the "lease" of a 

### scraper. White also signed this agreement as an individual guarantor. Westmont filed a 

### financing statement on the lease agreement, listing the scraper as 

### collateral. Westmont arques the Pistrict Court

### erred in concluding the lease agreementwas a lease purchase agreement, rather than leave for trial the issue of whether the lease was or was not a "true lease." We find ample evidence to support the District Court's finding that the lease was in fact a sale. First,Westmont itself refers to the agreement as a "leasepurchase agreement" in its answers to F7hite

### 's interrogatories. Second, Mestmont's vice-president of finance, Walter Kero, in a statement attached to White's attorney's affidavit refers to the agreement as a "lease purchase contract." Finally, F7estmont1 s own treatment of the collateral strongly implies the transactionwas actually a sale. Upon default, Westmont "purchased" the scraper, credited Continental's account for the "purchase price" of $13,000.00 and then resold the scraper to a third partv. In light of these facts,we find
no genuine issue of fact existed as to the status of the lease purchase agreement. The third secured transaction was the execution of a promissory note signed by Continental and Charles White "as
an individual." The note stated, "Each and every party signing or endorsing this note hereby waives presentment, demand, protest and notice of nonpayment thereof, and declares himself bound thereon 

### - as 

### - a principal and not as a 

### ---- surety." (Emphasis added.) From the face of the note, it appears White signed expresslyas a co-maker rather than as a guarantor. The note was secured by the same TS-14 scraper which secured the lease purchase agreement, and also by a Euclidwaterwagon. Thenote apparentlywasused to refinance earlierdebtson the open accountsnoted above. InFebruary, 1976,

### Westmont and 

### Continental entered into
a voluntary repossession agreement. The agreement stated

### that whereas Continental was i.n d.efault on its i.nstallment sales contract, lease agreement, promissory note and open accounts, and whereas Continental had already voluntarily returned all the equipment listed as collateral for the various debts, Continental and Westmont agreed to have Westmont sell the equipment and apply the proceeds to t-he 

### debts. Continental waived the requirement that the equipment be sold at public auction and authorized Westmont to dispose of the equipment through private sales. Continental.also agreed topay any deficiencyarising from the sales. The agreement was signed by Robert Street, then president of Continental. A copy of the agreementwas never sent to White, and in fact he never saw the agreement until the period of discovery in this action. Westmont does not dispute the fact notice of this agreementwas never sent to White. It argues rather a theory of constructive notice, that White should haveheen aware of thisagreement since the final,mutual release between White and Continental was not signeduntil October, 1975. White has sworn inhis affidavit that he took no part in Continental's business after December, 1974. Westmont has not produced evidence sufficientto rebut this statement. We therefore conclude no material issue of fact exists to dispute the contention that White never received notice of the repossession and sale of the collateral which secured the installment sales contract, the lease purchase agreement or thepromissory note. In Montana, failureof a secured party toprovide notice of sale of collateral.as required under S 

### 30-9-504(3), MCA, bars the secured party from obtaining a deficiency judgment from the debtor. Bank of Sheridan 

### v. Devers (Mont. 1985), 702 P.2d 

### 1388, 1390, 42 St.Rep. 1107, 1110-11; FJippert v.Blackfeet Tribe (Mont. 1985), 695 P.2d 461, 465, 42 St.Rep. 200, 204. 1 White, as an individual guarantor on the installment sales contract and lease agreement, and as a co-maker of the promissorynote,was entitled to noticeprior to Westmont's repossession and sale of the collateral. Failure to give notice precludes Westmont from recoverina a deficiency judgmenton the three secured transactions. Westmont's final assignment 

### of error to the District Court is i.ts award of attorney fees to White. Under the provisions of the three contracts, Westmont was entitled to attorney fees in its prosecution of action against the debtor. Under S 28-3-704, IICA, the contractual right to attorney fees is reciprocal. Northwestern National Bank of Great Falls v. Weaver-Maxwell, Inc. (Mont., No. 85-419, Decided November 13, 1-9861,43 St.Rep. 1995, 2003. We find
no abuse of discret.i.on in the District Court's award of attorney fees toWhite. Judgmentof theDistrictCourt is affirmed.

We Concur:



### d 1 We distinguish here First National Park Bank v. Johnson (9th Cir. 1977), 553 F.2d 599, 602. In that case, the court found that a guarantor was not a debtor for the purpose of waiving the notice requirement of §§ 30-9-501(3) and -504(3), 

### MCA. 

### A debtor is given the opportunityto waivenotificationof sale afterdefault, but may not waive notice of repossession and saleprior to default. In this case, White was not at any time given an opportunity towaive notification.i I,'