No. 86-246 

IN THE SUPREME COURT OF THE STATE OF MONTANA 

1986 

WESTMONT TRACTOR COMPANY, 

Plaintiff and Appellant, 

CONTINENTAL I, INC., an Idaho 

Corp., and CHARLES A. WHITE, 

an individual, 

Defendants and Respondents. 

APPEAL FF.OM: District Court of the Fourth Judicial District, 

In and for the County of Missoula, 

The Honorable Jack L. Green, Judge presiding. 

COUNSEL OF RECORD: 

For Appellant: 

Datsopoulos, MacDonald & Lind; Fichard A. Reep, 

Missoula, Montana 

For Respondent: 

Boone, Karlberg & Haddon; Wil1ia.m L. Crowley, 

Missoula, Montana 

Submitted on Briefs: Oct. 23, 1986 

Decided: December 31, 1986 

Filed: DEC 3 1986 

-. ~ 

Clerk 
Mr. 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 the District Court" 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 of Continental. 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 hearing was held April 25, 1985 on defendant White's 

alternative motion for sumary judgment, and proceedings 

continued until November 27, 1985 when the District Court 

entered its findings of 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 review are: 

1. Whether the District Court erred in sranting summary 

judgment? 

2. Whether the District Court erred in awardjng 

attorney fees to the defendant? 

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 of materjal fact are presented. Tf there 
is no genuine issue as to any material fact, then the moving 

party is entitled to summary judgment as a matter of lar. 

Reagan v. 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 to be 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. Upper Missouri 

G & T Electric Co-op., Inc. v. McCone Electric Co-op., Xnc. 

(1971), 157 Mont. 239, 244, 484 P.2d 741, 744. Thus, we will 

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 I was 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 as president of Continental. 
Count I1 of Westmont's complaint alleged 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 agreement provided 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 

stipulations and 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 (Count V) . Continental owed $39,887.85 on its parts 

and services open account for the period from April, 1974, to 

January, 1978. It owed $4,052.39 on its rental account for 

the period from August, 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 l iabilities, rather than liabilities personal ly 

incurred by Charles White. 

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 accounts prior 

to February 38, 1974. Westmont filed a security agreement on 
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, and was never paid. 

Count VI is a request for attorney fees incurred in the 

attempted collection of the debts. 

After reviewing the parties' pl.eadings, interrogatories, 

request for admissions, requests for production, and 

affidavits, the District Court made findings of fact and 

conclusions of law as follows: 

FINDINGS OF FACT 

There is no' genuine issue as to any material fact. 

Plaintiff and Defendant Corporation entered into a 

security agreement by t~hich Defendant Corporation 

granted Plaintiff a security interest in certain 

corporate property. Defendant White signed the 

security agreement as individual guarantor. 

Plaintiff was granted the security agreement to 

secure corporate obligations set forth in Counts I, 

I1 and V [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 Plaintiff as 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 account as 

alleged in Count V. 

Defendant White was not a party to the agreement 

alleged in Count V either individual-ly or as a 

guarantor. 

From the foregoing Findings of Fact, the Court 

now makes the following: 

CONCLUSIONS OF LAW 

Defendant White is not legally obligated for the 

obligations alleged in Counts TI1 and V. 

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 

Defendant White. 

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 the moving party to establish there are 

no genuine issues of material 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 it will demonstrate 

at trial that it relied on oral assurances of payment 

guaranteed by White personally. However, the court was 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 and V 

of plaintiff's complaint. 

We now examine the facts underlying Findings of Fact 11 

through VI. Westmont and Continental entered into three 

secured transactions. The first was on an installment sales 

contract for heavy equipment. Continental agreed to purchase 

a number of pieces of logging equipment, and White signed the 

agreement as an individual guarantor. Westmont filed a 

financing statement perfecting its interest in April, 1974, 

and listed the heavy equipment as 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 agreement was 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 "lease purchase agreement" in its answers 

to F7hi te ' 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 transaction was 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 expressly as 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 

Euclid waterwagon. The note apparently was used to refinance 

earlier debts on the open accounts noted above. 

In February, 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 to pay any deficiency arising from the sales. 

The agreement was signed by Robert Street, then 

president of Continental. A copy of the agreement was 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 agreement was never sent to 

White. It argues rather a theory of constructive notice, 

that White should have heen aware of this agreement since the 

final, mutual release between White and Continental was not 

signed until October, 1975. White has sworn in his affidavit 

that he took no part in Continental's business after 

December, 1974. Westmont has not produced evidence 

sufficient to 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 the promissory note. 

In Montana, failure of a secured party to provide 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 promissory note, was entitled to notice prior 

to Westmont's repossession and sale of the collateral. 

Failure to give notice precludes Westmont from recoverina a 

deficiency judgment on 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 to White. 

Judgment of the District Court 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 

opportunity to waive notification of sale after default, 

but may not waive notice of repossession and sale prior 

to default. In this case, White was not at any time 

given an opportunity to waive notification. 
i I,'