No. 90-167 

IN THE SUPREME COURT OF THE STATE OF MONTANA 

1991 

JACK M. AND CAROLYN M. SCANLON, 

GARY L. AND BEVERLY J. BECK, WILLIAM 

INKRET, JR., M.D., P.C., PROFIT SHARING 

TRUST, RICHARD AND MARY GRANBERG AND 

RICHARD AND ROBERTA URWILLER, 

Plaintiffs and Appellants, 

-vsCABLE MOUNTAIN MINE, INC., a ~evada Gorp-t 

and MAGELLAN RESOURCES COW. , a Montana corps 

Defendants and Respondents. 

APPEAL FROM: District Court of the Third Judicial District, 

In and for the County of Deer Lodge, 

The Honorable Ted L. ~izner, Judge presiding. 

COUNSEL OF RECORD: 

For Appellant: 

Donald A. Garrity, Helena, Montana 

For Respondent: 

William M. Kebe, Jr.; Johnson, Skakles & Kebe, 

Butte, Montana 

Gary L. Walton; Poore, Roth & Robinson, Butte, 

Montana 

Filed: 

Submitted on Briefs: August 29, 1991 

Decided: December 10, 1991 

Clerk 
Justice R. C. McDonough delivered the Opinion of the Court. 

Plaintiffs appeal from various orders of the District Court of 

the Third Judicial District, Deer Lodge County, in favor of 

defendants Cable Mountain Mine, Inc., and Magellan Resources, Corp. 

We affirm. 

The issues on appeal are: 

1. Whether the District Court erred in failing to impose 

sanctions against Cable Mountain Mine Inc., and Magellan Resources 

Corp., pursuant to Rule 11, M.R.Civ.P. 

2. Whether The District Court erred in determining that no 

joint venture existed between Cable Mountain Mine, Inc., and 

Magellan Resources Corp. 

3. Whether the District Court erred in granting a directed 

verdict dismissing the claims of William Inkret, Jr., M.D. Profit 

Sharing Trust. 

4. Whether the District Court erred in instructing the jury 

on laches at the request of the defendants. 

5. Whether the District Court erred in refusing to instruct 

the jury on the language of 5 82-2-221, MCA. 

Cable Mountain Mine, Inc. (Cable), is a Nevada corporation 

qualified to transact business in Montana since June 22, 1987. 

Cable operates a gold recovery operation at a placer mine near 

Cable Creek under a State permit. Magellan Resources Corp. 

(Magellan), is a Montana corporation which owns patented and 

unpatented mining claims in the Southern Cross and Cable Mountain 

Mining Districts located in Deer Lodge County, Montana. At times 

pertinent to this lawsuit, Magellan conducted various methods of 
exploration, including an active drilling program under an 

exploration permit from the State. 

Jack M. and Carolyn M. Scanlon, William Inkret, Jr., M.D. P.C. 

Profit Sharing Trust, Richard and Mary Greenberg, and Richard and 

Roberta Urwiller are property owners in the Southern Cross area. 

Plaintiffs purchased their properties between 1972 and 1974. 

Plaintiffs1 complaint alleged inverse condemnation, trespass, and 

nuisance. 

A trial commenced on December 4, 1989. At the close of 

plaintiffs' case in chief the District Court granted a directed 

verdict in favor of Cable and Magellan on the joint venture issue, 

and dismissed the claims of William Inkret, Jr., M.D., P.C. Profit 

Sharing Trust. Subsequently, the jury rendered a verdict in favor 

of the defendants on the remaining issues. This appeal followed. 

I 

Whether the District Court erred in failing to impose 

sanctions against Cable and Magellan pursuant to Rule 11, 

M.R.Civ.P. 

The standard of review in regard to findings of fact in Rule 

11 cases is clearly erroneous. The District Court, having the feel 

of the case, will not be overturned unless its final judgment 

constitutes an abuse of discretion. DIAgostino v. Swanson (1990), 

240 Mont. 435, 446, 784 P.2d 919, 926. 

Plaintiffs maintain that Cable filed false answers to 

interrogatories regarding the alleged joint venture between Cable 

and Magellan. Further, plaintiffs allege that Cable answered 

falsely that the company was incorporated in 1984 when in fact it 
was 1987. Plaintiffs also maintain that Cable refused to answer 

interrogatories regarding construction and maintenance of a road in 

the Southern Cross area. 

In support of their position, plaintiffs produced a document 

at trial titled ItMemorandum of Agreementtf. The document was 

executed by North Lily Mining Company and Joseph Aidlin personally 

and as president of Cable Mountain Mine, Inc. The document 

provided that North Lily reserved the right to transfer its rights 

and obligations to Magellan. No evidence was presented that this 

transfer ever took place, or that a joint venture between Cable and 

Magellan ever came into fruition. 

At trial Joseph Aidlin testified that he did not incorporate 

Cable Mountain Mine, Inc. until March of 1987. Gary Walton, 

attorney for Cable, explained to the District Court that he did not 

know the March 1987 date until the night prior to Aidlinfs 

testimony. Walton also argued that Cable did not refuse to answer 

the interrogatory but exercised its right to object. Plaintiffs 

subsequently filed a motion to compel which was denied. We 

conclude the District Court did not abuse its discretion when it 

declined to impose Rule 11 sanctions against Cable. 

Plaintiffs maintain that Magellan also made false and 

misleading representations in their answers to interrogatories. 

Magellan alleged it had no discussions with Cable regarding a joint 

venture between the two companies. Plaintiffs produced an 

unexecuted flMemorandum Agreementtt between North Lily Mining Company 

and Magellan. The document allowed Magellan to acquire 100% of 

North Lily s interest in the Aidlin/North Lily ttMemorandum of 
Agreement. l1 Further, the document provided that a joint venture 

would be executed lgas soon as practicablegg. The memorandum was 

never executed. 

We conclude that the District Court was not clearly erroneous 

in its findings and did not abuse its discretion in declining to 

impose Rule 11 sanctions against Magellan. 

I1 

Whether the District Court erred in determining that no joint 

venture existed between Cable Mountain Mine, Inc., and Magellan 

Resources Corp. 

As stated above, plaintiffs failed to produce evidence that a 

joint venture existed between Cable and Magellan. The standard of 

review for a directed verdict is whether a reasonable person could 

draw different conclusions from the evidence. If only one 

conclusion is reasonably proper, then the directed verdict is 

proper. Davis v. Sheriff (1988), 234 Mont. 126, 130, 762 P.2d 221, 

223. The party opposing the motion must present substantial 

credible evidence to avoid a directed verdict. Davis at 129, 130, 

762 P.2d at 224. The plaintiffs failed to provide evidence that a 

joint venture existed. Therefore, the District Court did not err 

in determining no joint venture existed between Cable and Magellan. 

I11 

Whether the District Court erred in granting a directed 

verdict dismissing the claims of William Inkret, Jr., M.D. Profit 

Sharing Trust. 

The District Court found that the deeds presented at trial 

showed that William Inkret, Jr., M.D., P.C. Profit Sharing Trust 
did not have an ownership interest in the property in question at 

the time of the alleged taking. 

Plaintiffs allege defendants violated Rule 9(a) M.R.Civ.P., by 

not raising this defense in their answer. Plaintiffs did not make 

this argument in opposing the motion at trial. We conclude the 

District Court did not err in granting defendantst directed 

verdicts on the dismissal of Inkretls claims. 

IV 

Whether the District Court erred in instructing the jury on 

laches at the request of the defendants. 

Plaintiffs1 complaint alleged defendants1 use of plaintiffs1 

alleged road constituted a taking of their property. Defendants 

maintained, and the District Court found, the road in question was 

a public road. Testimony presented at trial revealed that mining 

activity was present in the area in question historically, and, 

most recently, over the last ten years. Additional evidence showed 

that Magellan actively explored for minerals in October 1986. 

Cable applied for a mining permit in February of 1988. Plaintiffs 

did not comment on or oppose Cable's application during the comment 

period. The State issued the permit in July of 1988. Plaintiffs 

allege the date of the taking was in January of 1987. As stated 

above, the plaintiffs acquired their properties between 1972 and 

1974. 

These are sufficient facts to conclude the District Court did 

not err in giving defendants1 instruction on laches. 

v 

Whether the District Court erred in refusing to instruct the 
jury on the language of 3 82-2-221, MCA. 

Plaintiffs requested an instruction based on 5 82-2-221, MCA, 

which provides in part that when the right of eminent domain is 

exercised for the purpose of open-pit mining, plaintiffs should 

purchase the property within 300 yards of the surface tract. No 

evidence was presented at trial that either Magellan or Cable was 

engaged in open-pit mining. Therefore, the District Court did not 

err in refusing this instruction. 

Pursuant to Section I, Paragraph 3(c), Montana Supreme Court 

1988 Internal Operating Rules, this decision shall not be cited as 

a precedent and shall be published by its filing as a public 

document with the Clerk of this Court and by report of its result 

to the West Publishing Company. 

For the reasons stated above, we affirm the District Court. 

We Concur: H # ,nwT+ 

Chief Justice