No. 91-021 

IN THE SUPREME COURT OF THE STATE OF MONTANA 

1991 

JOHN H. MARTIN AND PEGGY MARTIN, 

Plaintiffs and Appellants, 

-vsDORN EQUIPMENT COMPANY, INC., and 

SPERRY-NEW HOLLAND, 

Defendants and Respondents. 

APPEAL FROM: District Court of the Sixth Judicial District, 

In and for the County of Park, 

The Honorable Byron L. Robb, Judge presiding. 

COUNSEL OF RECORD: 

For Appellant: 

J. David Penwell, Bozeman, Montana 

For Respondent: 

Michael W. Tolstedt; Anderson, Brown, Gerbase, 

Cebull, Fulton, Harman & Ross, Billings, Montana 

W. Lee Stokes, Bozeman, Montana 

NOV 14 199% Submitted on Briefs: May 31, 1991 

Cd Smitll Decided: November 14, 1991 

File%~~~~ OF SUPREME COURI 

STATE OF MONTANA 
Justice Karla M. Gray delivered the Opinion of the Court. 

John and Peggy Martin appeal from the October 24, 1990, order 

of the Sixth Judicial District Court, Park County, granting the 

motion of Dorn Equipment Company, Inc. and Sperry-New Holland 

(collectively, the respondents) for summary judgment. We affirm in 

part, and reverse and remand in part. 

The issues raised on appeal are whether the District Court 

erred in granting summary judgment by: 

1. failing to consider the deposition of Richard Jeppson; 

2. concluding as a matter of law that no breach of the peace 

occurred during a repossession; and 

3. finding that no material facts exist to support the 

Martins' claim that the respondents acted fraudulently regarding an 

oral agreement to extend or delay payments. 

John and Peggy Martin (the Martins) owned a 40-acre ranch 

north of Livingston, Montana. They operated a custom haying 

business and raised registered Simmental cattle. 

Dorn Equipment Company, Inc. (Dorn), a Montana corporation, 

sells and repairs new and used agricultural equipment in Bozeman. 

Sperry-New Holland (Sperry) manufactures agricultural equipment and 

is a financier for purchasers of Sperry-New Holland equipment from 

dealers such as Dorn. 

The Martins' business relationship with Dorn spanned from 1975 

until December of 1986. During this period, the Martins purchased 

various items of farm equipment and parts for the equipment from 
Dorn. Dorn also repaired the equipment for the Martins. The 

Martins financed the equipment through Sperry and its affiliated 

credit corporations, First Security Bank of Bozeman, and other 

entities. 

Going into the haying season of 1986, the total amount of 

Martins' debt to the respondents was as follows: 

Creditor Collateral Amount Due Date Due 

Dorn on account $5,009.47 6-6-86 

Sperry swather $5,894.96 8-15-86 

Sperry baler $3,846.53 9-1-86 

Sperry grinder $2,336.66 9-15-86 

Sperry bale wagon $4,500.04 10-15-86 

The Martins failed to make the required payments as they came due 

John Martin met with representatives of Dorn and Sperry on 

October 28, 1986 at Dorn's place of business in Bozeman. The 

parties discussed the overdue payments and attempted to make 

arrangements to resolve the situation. The respondents claim that 

Martin orally agreed to make an immediate $8,000 payment to Sperry 

and to allow Sperry to inspect and inventory the equipment and 

that, in return, Dorn and Sperry would combine all of the Martins' 

contracts and extend them for two more years. The respondents 

maintain that November 3, 1986, was the agreed date for meeting to 

inspect the equipment. However, Peggy Martin stated in her 

deposition that the respondents agreed at the October 28 meeting to 

give the Martins time to put their equipment to work and obtain 

refinancing elsewhere. 
On November 1, 1986, the Martins left Montana for Idaho in 

order to resume work on custom farming operations there. The 

Martins had expanded their custom farming business into Idaho the 

previous year and most of their equipment was located in Idaho at 

that time. On or about November 4, 1986, the respondents 

repossessed the equipment located in Idaho on the basis of the 

Martinsf failure to make the $8,000 payment or the November 3 

meeting. A Notice of Repossession and a Notice of Private Sale 

were sent to the Martins by certified mail on November 10, 1986, 

indicating that the Idaho equipment would be sold at private sale 

on or after fifteen days from November 10. 

On November 11, 1986, Jim Drummond (Drummond) of First 

Security Bank of Bozeman contacted John Dorn of Dorn and informed 

him that he was going to the Martinsf ranch to repossess equipment 

that the Martins pledged as collateral on debts owing to the bank. 

John Dorn sent a driver and pickup truck to accompany Drummond and 

repossess a Sperry-New Holland Grinder/Mixer. 

The gate to the ranch was secured by a chain and padlock. 

Drummond cut the chain with bolt cutters and the parties proceeded 

onto the premises. Richard Jeppson, the Martinsf hired hand, 

confronted Drummond and inquired into the purpose of the partiesf 

presence on the Martin ranch. Drummond informed him that they were 

there to repossess certain equipment. 

On November 24, 1986, the day before the fifteen days referred 

to in the Notice of Sale expired, the Martins filed an Application 
for Preliminary Injunction and Temporary Restraining Order in the 

Eighteenth Judicial District, Gallatin County. A Temporary 

Restraining Order was issued prohibiting the respondents from 

selling any of the repossessed equipment; a show cause hearing was 

held on December 17, 1986. 

During the show cause hearing, the District Court discovered 

that the Martins had filed for bankruptcy in the United States 

Bankruptcy Court for the District of Montana on December 11, 1986. 

The District Court immediately suspended the proceedings until such 

time as the Bankruptcy Court determined whether it would assume 

jurisdiction of the case, 

On February 8, 1988, the Bankruptcy Court issued an Order of 

Abstention from Jurisdiction allowing the Martins to proceed in the 

civil action pending in Gallatin County. The Martins, however, 

dismissed the Gallatin County action and filed this action in the 

Sixth Judicial District Court, Park County. That District Court 

granted the respondents1 motion for summary judgment and the 

Martins appealed. 

The Martins contend, for three different reasons, that the 

District Court erred in granting summary judgment. The first issue 

is whether the District Court erred in not considering the 

deposition of Richard Jeppson. 

The District Court concluded that because the deposition of 

Richard Jeppson, the Martinst hired hand, was taken in the course 

of the earlier action filed in Gallatin County, the deposition 
should not be considered as establishing any facts in the case at 

bar. Based on the record before us, the Jeppson deposition may 

have been properly before the District Court by virtue of either 

Rule 32, M.R.civ.P., or a stipulation of the parties. In any 

event, it is clear that the court did consider it in part and still 

concluded that the respondents' actions did not constitute a breach 

of the peace. Given our holding below on breach of the peace, no 

further discussion of this issue is necessary. 

The second issue is whether the District Court erred in 

concluding as a matter of law that no breach of the peace occurred 

when the respondents repossessed the Martins' equipment. The 

parties agree that the Martins were past due on their various 

accounts. Further, all relevant security agreements gave the 

respondents the right to forego judicial proceedings and retake 

possession of the collateral. 

The Sperry default provisions gave Sperry the right to 

lawfully enter the premises to take possession: 

If the Buyer should fail to make a payment by the 

date herein specified for the payment, TIME BEING OF THE 

ESSENCE OF THIS AGREEMENT, or otherwise breach this 

agreement . . . , the Seller or the Seller's assigns may 

either or both obtain a judgement [sic] for the same or 

lawfully enter any premises where the goods may be and 

take possession thereof, . . . . 

Section 30-9-503, MCA, supplements these contractual default 

provisions with the following Language: 

Unless otherwise agreed a secured party has on default 

the right to take possession of the collateral. In 

takinq ~ossession a secured party may proceed without 

iudicial process if this can be done without breach of 
the peace or may proceed by action. . . . 

(Emphasis added). Therefore, the respondents could only repossess 

the Martins' equipment without resorting to judicial process if 

they could do so lawfully, without breaching the peace. 

Although the District Court did not explicitly state that no 

genuine issues of material fact existed regarding the repossession, 

it held as a matter of law that the respondents' actions were not 

unlawful and did not constitute a breach of the peace. The 

District Court noted that the respondents made no threats, used no 

force or violence, and repossessed the equipment in broad daylight. 

These facts, however, do not support a legal conclusion that a 

breach of the peace did not occur. 

The question of what constitutes a breach of the peace under 

the Uniform Commercial Code is a case of first impression in 

Montana. Section 30-9-503, MCA, does not define breach of the 

peace. However, to avoid breaching the peace, "[tlhe general rule 

is that the creditor cannot utilize force or threats, cannot enter 

the debtor's residence without consent, and cannot seize any 

property over the debtor's objections." J. Sheldon & R. Sable, 

Repossessions, 5 6.3 (1988). 

We find Laurel Coal Co. v. Walter E. Heller & Co., Inc. (W.D. 

Penn. 1982), 539 F.Supp. 1006, persuasive. In Laurel Coal Co., 

defendant repossessed a bulldozer from plaintiff's property. 

Defendant entered onto plaintiff's property after cutting a chain 

used to lock a fence which enclosed the property. The court stated 
that any form of forcible entry constitutes a breach of the peace 

and, as a result, held that the breaking of a lock securing 

property constitutes a breach of the peace. Laurel Coal Co., 539 

F.Supp. at 1007-1008. 

The facts of the instant case clearly indicate that the 

respondents forcibly entered the Martins' property. Drummond and 

the respondentsf representative entered the property without the 

Martins1 consent after cutting the locked chain on the gate with 

bolt cutters. This action in itself constitutes a breach of the 

peace. Self-help repossessions must be conducted in such a manner 

as to avoid forcible breakings and entries, 

The respondents argue that Drummond, a representative of the 

bank and not a party to this action, cut the chain and that their 

representative merely drove onto the property through the open 

gate. We find this argument unpersuasive. Drummond contacted Dorn 

before travelling to the ranch to repossess the equipment. Dorn, 

on behalf of itself and Sperry, sent a driver with the bank 

representatives to repossess certain additional equipment. The 

members of the group were acting in concert and the respondents 

cannot now contend that the bank is solely responsible for the 

unlawful entry onto the Martins1 ranch. 

"This Court has the power to reverse the district court's 

grant of summary judgment and order it to enter summary judgment in 

favor of the other party as a matter of law only when it is clear 

that all the facts bearing on the issues are before this C~urt.'~ 
Canal Ins, Co. v. Bunday (Mont. 1991), 813 P.2d 974, 979, 48 

St.Rep. 597, 600; citing Hereford v. Hereford (1979), 183 Mont. 

104, 110, 598 P.Z~ 600, 603. NO genuine issues of material fact 

exist on the issue of breach of the peace in the instant case. 

Having concluded that the forcible entry onto the Martins' ranch to 

repossess equipment was a breach of the peace, we hold that the 

District Court erred in concludingthat the repossession was lawful 

and did not constitute a breach of the peace. We reverse the grant 

of summary judgment in the respondents' favor and direct the 

District Court to enter partial summary judgment for the Martins on 

this issue. 

The final issue is whether the District Court erred in finding 

that no material facts exist to support the Martins1 claim that the 

respondents acted fraudulently regarding an oral agreement to 

extend or delay payments. Representatives from Dorn and Sperry met 

with John Martin on October 28, 1986 regarding the Martins' past 

due account. Martin claims that the respondents agreed to extend 

his time in which to pay before they would repossess his equipment; 

the respondents contend that Martin had to meet certain conditions 

prior to an extension, which he failed to meet. 

The Martins1 complaint asserts that the respondents acted 

fraudulently by inducing them to believe that they had reached an 

agreement extending the time in which the Martins could make their 

payments. The Martins failed to meet the requirements of Rule 

9(b), M.R.Civ.P.: I1In all averments of fraud or mistake, the 
circumstances constituting fraud or mistake shall be stated with 

particularity. . , . 11 

The purpose of summary judgment underlying Rule 56, 

M. R. Civ. P. , is to encourage j udf cia1 economy through the prompt 

elimination of questions not deserving of resolution by trial. 

Westmont Tractor Co. v. Continental I, Inc. (1986), 224 Mont. 516, 

521, 731 P.2d 327, 330. Summary judgment is proper if no genuine 

issues of material fact exist and the moving party is entitled to 

judgment as a matter of law. Rule 56 (c) , M.R.Civ.P. The party 

moving for summary judgment has the initial burden of proving no 

genuine issues of material fact exist. Westmont Tractor Co., 224 

Mont. at 521, 731 P.2d at 330. Once the moving party meets this 

burden, the burden shifts to the non-moving party to prove that 

material issues of fact are in dispute. Westmont Tractor Co., 224 

Mont. at 521, 731 P.2d at 330. 

The Martins contend they have made out a prima facie case of 

fraud in their complaint and through deposition testimony of Peggy 

Martin. The respondents contend that such has not been 

established. We agree with the respondents. The Martins made 

reference to fraud in their complaint and in their response to the 

respondents' summary judgment motion, but they failed to allege the 

facts and circumstances constituting the fraud with particularity. 

Furthermore, Peggy Martin's deposition was before the court which 

also made reference to a misrepresentation but failed to state 

facts in support of all nine fraud elements which the Martins were 
required to aver and satisfy. 

The Martins failed to allege and satisf] f the rev uired elements 

of fraud. Additionally, the Martins failed to raise genuine issues 

of material fact regarding the elements. Therefore, the District 

Court did not err in granting summary judgment on this issue. 

Affirmed in part, and reversed and remanded in part for 

further proceedings consistent with this 3 opinion. 

We concur: 
November 14, 1991 

CERTIFICATE OF SERVICE 

I hereby certify that the following order was sent by United States mail, prepaid, to the following 

named: 

J. David Penwell 

Attorney at Law 

P.O. Box 1677 

Bozeman, MT 59715 

Michael W. Tolstedt 

Anderson, Brown, Gerbase, Cebull, Fulton, Harman & Ross 

P.O. Drawer 849 

Billings, MT 59103 

W. Lee Stokes 

Berg, Lilly, Stokes, Andriolo, Toilefsen & Schraudner 

910 Technology Blvd., Ste. A 

Bozeman. MT 59715 

ED SMITH 

CLERK OF THE SUPREME COURT 

STATE OF MONTANA