No. 88-392 

IN THE SUPREME COURT OF THE STATE OF MONTANA 

1989 

FIRST BANK WESTERN MONTANA MISSOULA, 

Plaintiff and Respondent, 

-vsVERNONT T. GREGOROFF and LUANNE 

GREGOROFF, 

Defendants and Appellants. 

APPEAL FROM: District Court of the Second Judicial District, 

In and for the County of Silver Bow, 

The Honorable Mark P. Sullivan, Judge presiding. 

COUNSEL OF RECORD: 

For Appellant: 

David L. Holland argued, Butte, Montana 

David J. Wing argued, Butte, Montana 

For Respondent: 

Corette, Smith, Pohlman & Allen; Lisa Swan Semansky 

%rgued and R.D. Corette, Jr. argued, Butte, Montana a 3- =3 

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Submitted: January 10, 1989 

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,i Decided: March 2, 1989 

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Clerk 
Mr. Justice John Conway Harrison delivered the Opinion of the 

Court. 

Appellants Vernon and Luanne Gregoroff challenge the 

constitutionality of Montana's Claim and Delivery statutes, 

under which their trailer was seized by the Butte-Silver Bow 

County sheriff. Appellants allege they were denied 

procedural due process when the District Court, upon motion 

of respondent First Bank Western Montana, ordered the seizure 

of the trailer without providing notice of or opportunity for 

an immediate post-seizure hearing. The appellants' motion to 

quash the claim and delivery order was denied, and 

respondent's motion for summary judgment was subsequently 

granted. This appeal arises from the District Court's order 

and judgment entered against the appellants. We affirm, but 

remand for clarification of the judgment. 

In 1983, Gregoroffs purchased a fifth-wheel trailer 

from Rangitsch Brothers in Missoula, Montana. The purchase 

was financed through respondent First Bank Western Montana 

(hereinafter referred to the Bank). Gregoroffs 

simultaneously executed a retail installment contract which 

granted a security interest in the trailer to the Bank. 

Gregoroffs ultimately defaulted on the installment 

contract, and the Bank was unable to locate the trailer for 

several months after the default. After locating the 

Gregoroffs, the Bank unsuccessfully attempted to have the 

note payments brought current. The Gregoroffs were informed 

by Bank employee Donna Duffy that they must either make the 

late note payments under the contract or turn the trailer 

over to the Rank. Mr. Gregoroff informed Duffy that he would 

not surrender the trailer, but would be taking a job in 

Arizona which would enable him to make the note payments. 
Although he informed Duffy that he, Mrs. Gregoroff and their 

young daughter were living in the trailer, he did not 

specifically state that he was taking his family or the 

trailer to Arizona. 

On September 16, 1986, the Bank commenced a Claim an 

Delivery action against the appellants, as provided for und-er 

S 27-17-101 et seq., MCA. Lisa Swan Semansky, counsel for 

the Bank, made an ex parte appearance before District Judge 

Arnold Olsen for Claim and Delivery of the trailer. No 

notice was given to the Gregoroffs that the Bank was seeking 

a court ordered delivery. 

Recause Judge Sullivan was not available, the matter 

was heard by Judge Olsen. At the request of the Judge, the 

Motion was presented in the Clerk of Court's office, not in 

the courtroom, and, therefore, no record. was made of the 

hearing. 

The Bank's motion for Claim and Delivery was supported 

by a bond in an amount double the value of the property, as 

required by 5 27-17-205, MCA. The bond. ensures the defendant 

is protected in the event the seizure is determined to be 

unlawful. Additionally, Semansky attached to the motion the 

Bank's complaint and an affidavit of Donna Duffy. The 

af f ida~rit stated in part: 

10. Rased on information and bel-ief, 

Gregoroffs are using and living in the 

1983 40 Foot Aluma Lite fifth-wheel 

trailer, Serial No. KR381V29DW002152, and 

thereby are decreasing its value. 

11. The ... trailer . . . is 

decreasing in value by virtue of the fact 

that such property decreases in value 

with age. 
14. Based on her conversation with 

Defendant Vernon Gregoroff on September 

15th, 1986, when he refused to relinquish 

possession of the 1983 40 foot Aluma Lite 

fifth-wheel trailer, this affiant 

believes that Gregoroffs will take the 

trailer to Arizona some time within the 

next week. 

Judge Olsen signed the order and the seizure was 

completed the evening of September 17, 1986, by the 

Butte-Silver Bow County sheriff. The trailer, which 

contained most of the Gregoroffs' personal belongings, was 

taken to Rangitsch Brothers' lot in Missoula. 

On October 1, 1986, Gregoroffs filed a motion to quash 

the order. District Judge Mark Sullivan denied this motion, 

nearly fourteen months later, on December 31, 1987. The Bank 

then filed a motion for summary judgment on its complaint 

January 20, 1988. This motion was granted, and judgment was 

entered for the Bank on May 18, 1988. Gregoroffs appeal from 

this judgment. 

Gregoroffs raise four issues for review: 

1. Does S 27-17-203 (2), MCA, violate the due process 

clause of the Fourteenth Amendment of the United States 

Constitution? 

2. Does § 27-17-203 (2), MCA, violate Article 11, 

Section 17 of the Montana Constitution? 

3. Did the District Court err in granting its order to 

seize the property without a hearing in open court as 

required by the statute? 

4. Did the District Court err in granting the order 

based on a fatally defective affidavit? 
Issue Nos. 1 and 2 

Does § 27-17-203 (2), MCA, violate due process 

guarantees of the United States and Montana Constitutions? 

Appellants argue S 27-17-203 (2) , MCA, is unconstitutional because it allows a court ordered seizure of property 

without requiring notice of or opportunity for an immediate 

post-seizure hearing. We disagree. 

Section 27-17-203, MCA, provides: 

The sheriff shall make no seizure unless 

an order from a judge of the court having 

jurisdiction of the cause is attached to 

the affidavit. The judge may sign such 

an order if he is satisfied: 

(1) that the party seeking possession of 

the property has made a prima facie 

showing of his right to possession and 

the necessity for seizure at a show cause 

hearing before him with at least 3 days' 

notice to the person in possession of the 

property; if such person cannot be found 

for personal service, notice posted on 

the property and in three public places 

in the county where the property is 

located is sufficient service for this 

purpose; or 

(2) that the delay caused by notice and 

a hearing would seriously impair the 

remedy sought by the party seeking 

possession. Evidence of such impairment 

must be presented in open court, and the 

court must set forth with specificity the 

reasons why such delay would seriously 

impair the remedy sought by the person 

seeking possession. 

In Mitchell v. W.T. Grant Co. (1974), 41.6 U.S. 600, 94 

S.Ct. 1895, 40 L.Ed.2d 406, the Supreme Court modified its 

earlier position that a hearing must always precede a court 

ordered seizure of property. The Court held that Sniadach v. 
Family Finance Corp. (1969), 395 U.S. 337, 89 S.Ct. 1820, 23 

L.Ed.2d 349, and Fuentes v. Shevin (19721, 407 U.S. 67, 92 

S.Ct. 1983, 32 Ij.Ed.2d 556, did not categorically require a 

pre-seizure hearing in every situation. 

Their import, however, is not so clear as 

petitioner would have it: they merely 

stand for the proposition that a hearing 

must be had before one is finally 

deprived of his property and do not deal 

at all with the need for a 

pre-termination hearing where a full and 

immediate post-termination hearing is 

provided. The usual rule has been 

" [wlhere only property rights are 

involved, mere postponement of the 

judicial enquiry is not a denial of due 

process, if the opportunity given for 

ultimate judicial determination of 

liability is adequate." Phillips v. 

Commissioner, 283 U.S. 589, 596-597 

(1931). 

Mitchell, 416 U.S. at 611. 

Similar to Louisiana's sequestration procedure outlined 

in Mitchell, Montana's Claim and Delivery procedure balances 

and protects the interests of both parties involved in the 

action. Subsection (2) of S 27-17-203, MCA, is an extraordinary remedy, and we in no way countenance abuse of its 

provisions. However, we conclude the statutes do provide the 

constitutional safeguards required by the United States and 

Montana Constitutions. 

A pre-hearing seizure may only be obtained under 

circumstances which indicate the plaintiff's remedy would be 

seriously impaired. The plaintiff must swear to facts which 

support this claim, and must file a bond in an amount double 

the value of the property to protect the defendant. 

Additionally, the delivery order can only be obtained from, 
and under the supervision of, a judge or justice of the 

peace, not a court clerk or adminis1trative officer. 

Moreover, Montana's statutes allow the defendant to file a 

bond to immediately regain possession of the property. 

While S 27-17-203(2), MCA, does not provide for a postseizure hearing, a defendant may immediately apply for a 

motion to quash the order, which the appellants did in this 

action. Additionally, under Rule 1, M.R.App.P., a defendant 

can promptly seek review by this Court of a denial of that 

motion. Furthermore, as mentioned in Mitchell, a final 

judicial determination of liability follows the seizure, at 

which time the defendant can challenge the validity of the 

Claim and Delivery order. 

The appellants knew they had defaulted under the terms 

of the retail installment contract. The terms of the 

contract gave the Bank the right to repossess the trailer 

when the appellants defaulted. Such a property interest 

distinguishes this case from Fuentes, supra. Furthermore, 

the appellants were notified by the Bank in writing, and by 

Duffy in person, that the trailer would be repossessed if a 

resolution could not be reached. No satisfactory effort to 

resolve the delinquency was made and, therefore, it came as 

no surprise to the appellants when the trailer was seized. 

As noted in Mitchell, 416 U.S. at 610, " [t] he 

requirements of due process of law 'are not technical, nor is 

any particular form of procedure necessary."' We conclude 

the substantial rights of the appellants have been protected 

and that the Claim and Delivery statutes are not 

unconstitutional. 
Issue No. 3 

Appellants argue the District Court erred because the 

Bank's attorney met with Judge Olsen, and the order was 

signed, in the Clerk of Court's office, not in "open court" 

as required by the statute. While appellants raise a 

technical argument, the Judge's decision to meet with 

Semansky and hear the evidence in the Clerk of Court's office 

does not constitute reversible error. 

Subsection (2) of S 27-17-203, MCA, onl:? requires the 

evidence be presented in open court. It does not require a 

record of the hearing be made. The "open court" language 

requires the plaintiff or his attorney be present before the 

judge or justice when the ex parte motion for Claim and 

Delivery is made, and prevents the plaintiff from obtaining 

the order merely upon written application. Judge Olsen was 

acting in his official, judicial capacity when he heard the 

evidence and concluded sufficient evidence was present to 

issue the order. 

Issue No. 4 

Finally, appellants argue it was error to issue the 

order based on an affidavit which contained the conclusory 

allegations of employee Duffy. We again disagree. Section 

27-17-201, MCA, requires that an affidavit, by the person 

claiming the property or someone in his behalf, state: 

(1) facts which establish reasonable 

belief that the person claiming the 

property is the owner or is lawfully 

entitled to possession and that the 

seizure is necessary to prevent the 

removal. or destruction of the property; 

(2) that the property is wrongfully 

detained by the defendant; 
(3) that the same has not been taken for 

a tax, assessment, or fine, pursuant to 

statute, or seized under an execution or 

an attachment against the property of the 

person claiming the property or, if so 

seized, that it is by statute exempt from 

seizure; and 

(4) a particular description of the 

property and the actual value of the 

property. 

The affidavit contained these required statements and alleged 

two grounds for a Claim and Delivery order: that the trailer 

was depreciating by the appellants' daily use of the trailer, 

and that Gregoroff's employer had just completed work in 

Butte, Montana and was beginning another job in Arizona 

within the next week. While mere depreciation was not the 

type of serious impairment contemplated by the statute, 

threat of removal of the property from the jurisdiction does 

satisfy that requirement. 

The statutes require the judge be satisfied by the 

evidence that the delay caused by a hearing would seriously 

impair the remedy sought. As disclosed bv the Claim and 

Delivery order, Judge Olsen found that a delay would 

seriously impair the remedy. 

Evidence indicates that Defendant Vernon 

T. Gregoroff is employed by Acme Cement 

and Concrete of Spokane, Washington. The 

job that Acme Cement and Concrete was 

doing in Butte, Montana ended the week of 

September 15th, 1986. Acme Cement and 

Concrete will begin a new job in Arizona. 

Defendant Vernon T. Gregorof f will 

continue to be emploved bv Acme Cement 

and Concrete in Arizona. Since Vernon T. 

Gregorof f and Luanne Gregoroff live in 

the property described in Exhibit "A", 

they will be moving the property 

described. in Exhihit "A" to Arizona. 
Removing the property described in 

Exhibit "A" to Arizona would preclude 

Plaintiff from recovering possession of 

the property described in Exhibit "A". 

Judge Olsen subsequently submitted two affidavits which 

express his understanding of the procedures of this case. 

The first affidavit states he signed the order without any 

hearing. The second affidavit states he signed the order 

because sufficient evidence was presented which satisfied him 

"that any delay caused by notice and a hearing would 

seriously impair repossession of the trailer by 

plaintiff-claimant in this case." We conclude Duffy's 

affidavit, supported by the verified complaint presented 

sufficient evidence to enable the Judge to conclude that 

notice and delay would seriously impair the Bank's remedy of 

repossession. 

Finally, we recognize a problem in the judgment. The 

judgment states the Bank is entitled to recover $16,058.67 

plus legal interest and costs, but it does not account For 

the value of the trailer which has been seized. It is not 

disputed that the Bank is not entitled to both the trailer 

and its value. Section 27-17-401, MCA, entitles a plaintiff 

to judgment for possession of the property (or the value of 

the property if delivery cannot be had) . Since the Bank is 

now in possession of the trailer, it is not also entitled to 

its value. Additionally, while the order and judgment 

mentions attorney's fees in the amount of $10,000.85, it 

apparently only entitles the Bank to the value of the 

trailer, legal interest and costs, but no attorney's fees. 

However, we do not rule on this issue, but point out that, in 

any case, the contract does limit attorney's fees to 15% of 

the amount owed. 
We affirm, but remand this case to the District Court 

to clarify its judgment on these points accordingly. 

We concur: R