No. 87-493 

IN THE SUPREME COURT OF THE STATE OF MONTANA 

1988 

TERRY PIPINICH, 

Plaintiff and Appellant, 

-vsTOM BATTERSHELL, 

Defendant and Respondent. 

APPEAL FROM: District Court of the First Judicial District, 

In and for the County of Lewis & Clark, 

The Honorable Gordon Bennett, Judge presiding. 

COUNSEL OF RECORD: 

For Appellant: 

John C. Doubek argued; Small, Hatch, Doubek & Pyfer, 

Helena, Montana 

For Respondent: 

Ronald F. Waterman argued; Gough, Shanahan, Johnson 

& Waterman, Helena, Montana 

Submitted: June 15, 1988 

Decided: July 14, 1988 

Clerk 
Mr. Justice L. C. Gulbrandson delivered the Opinion of the 

Court. 

This is an appeal from a judgment of the First Judicial 

District Court, Lewis and Clark County, granting 

defendant/respondent Tom Battershell's (Battershell) summary 

judgment motion against plaintiff/appellant, Terry Pipinich 

(Pipinich) on a complaint and counterclaim and dismissing the 

action initially filed by Pipinich based on allegations of 

fraud. The counterclaim is not at issue in this case. 

Pipinich's appeal is based on the summary judgment ruling 

dismissing the complaint. We affirm. 

The rephrased issue presented to this Court is: 

Whether the District Court erred in granting summary 

judgment to Battershell. 

The case centralizes around a claim by Pipinich that 

Battershell misrepresented the worth of the two individual's 

construction company, Sunrise Construction Company, Inc. 

(Sunrise), when Pipinich sold his share to Battershell. 

Sunrise was originally formed in 1979 by Pipinich and 

Gary Duval (Duval) , after the two had previously worked 

together at Reber Construction Company. Duval sold his 

interest to Battershell and Battershell and Pipinich each 

held a 50% share of the business. Pipinich was in charge of 

the field construction projects and Battershell handled the 

books, mail and bank accounts for the business. Battershell 

also was involved on a Sunrise project in Butte. 

The Butte project, which actually involved Sunrise as a 

subcontractor of A.D. McKee Construction on a series of three 

construction contracts, is central to this case. The first 

contract had been awarded prior to the time Pipinich sold his 

share in Sunrise to Battershell and construction work had 

commenced on the project. Pipinich had actually been 
involved in the bid proposal on this project. The record 

indicates that the other two projects had not been let for 

hid at the time Pipinich sold out. 

Sometime in April of 1981, Battershell and Pipinich 

concluded they could no longer work together and one party 

would have to buy the other's interest. Pipinich claims the 

breakup occurred because he went through the mail to obtain 

two subcontractor bids to compile a bid package on a project. 

He claims this gave Battershell an excuse to force him out of 

the company. 

At any rate, a severing of the relationship occurred. 

Pipinich agreed to sell his interest for approximately 

$250,000 in cash and assets along with relief from debt 

Pipinich owed Sunrise. Battershell allegedly told Pipinich 

that his share was worth no more than $200,000. There is 

also evidence that Pipinich originally wanted $300,000. 

Pipinich consulted with Sunrise's accountant, William 

Holmlund, but did not attempt to ascertain the company's 

actual worth other than relying on what Battershell told him. 

The Sunrise tax return balance sheet for fiscal year 

1981 was not completed at the time of the buy out. The 

balance sheet was later completed and shows the fiscal year 

for the company ended on March 31, 1981. At that time 

Sunrise showed total assets of $1,144,905. This same balance 

sheet showed liabilities in the amount of $925,323. 

In November of 1985 Pipinich alleges he was told by an 

attorney from Butte working on another case which involved 

Battershell that the company was allegedly worth in excess of 

$1 million when Pipinich sold out. Based on this information 

Pipinich consulted counsel in this case who did further 

"investigation". Pipinich filed a complaint on July 11, 

1986. 
Pipinich claims Battershell allegedly misrepresented 

the value of the company so as to capitalize on the 

transaction. The complaint alleged Pipinich was directly and 

proximately damaged by the false, fraudulent, reckless, 

deceitful, willful and unlawful acts and omissions of 

Battershell. Battershell filed an answer and counterclaim on 

September 4, 1986 requesting Pipinich be found liable on 

promissory note debt obligations totalling $38,500.30 plus 

interest. 

On July 6, 1987, Battershell filed motions for summary 

judgment on the complaint and counterclaim. On September 30, 

1987, the court orally granted Battershell's motions for 

summary judgment. A memorandum and order, along with a 

judgment, granting Battershell summary judgment and 

dismissing the complaint was filed October 19, 1987. This 

same order awarded Battershell $51,330.58 on the counterclaim 

after Pipinich admitted owing on the promissory notes. 

Pipinich does not appeal this aspect of the order. In 

granting summary judgment, the District Court adopted 

Battershell's proposed order verbatim. 

Pipinich claims the District Court's order ignored the 

common law tort theory of actual fraud and the verbatim 

adoption was erroneous. Citing, Sawyer-Adecor International, 

Inc v. Anglin, et al. (1982), 198 Mont. 440, 646 P.2d 1194. 

This Court stated that it "disapprove[sl, heartily and 

stoutly, the verbatim adoption of proposed findings and 

conclusions.~ Sawyer-Adecor, 646 P.2d at 1198. However, 

Montana law allows verbatim adoption of findings and 

conclusions where they are comprehensive and detailed, 

supported by the evidence before the court, and are not 

clearly erroneous. Olsen v. McQueary (Mont. 19841, 687 P.2d 

712, 715, 41 St.Rep. 1669; R.L.S. v. Barkhoff (1983), 207 

Mont. 199, 674 P.2d 1082, 1085. Upon review of the record in 
this case and the findings and conclusions, we hold that the 

District Court did not err in adopting Battershell's proposed 

order where the court had previously orally granted his 

motions for summary judgment. 

Immediately prior to the hearing on the motion for 

summary judgment, Pipinich filed a "supplemental legal 

memorandum" in which he raised issues of breach of a 

fiduciary duty of a partner and bad faith on the part of 

Battershell. These two theories are also advanced by 

Pipinich on this appeal. 

We note initially that the business entity involved in 

this case was not a partnership but a corporation. 

Therefore, Pipinich's reliance on a partner's breach of a 

fiduciary relationship creating a claim for bad faith is 

misplaced. A partnership and corporation are two separate 

legal entities under the law. Sections 35-1-101 et seq. and 

35-10-101 et seq., MCA. 

We note additionally that Pipinich failed to allege 

fraud with particularity pursuant to Rule 9(b), M.R.Civ.P. 

An action for actual fraud requires that a number of elements 

must be averred and satisfied to establish a prima facie 

case. These elements are: (1) a representation; (2) its 

falsity; (3) its materiality; (4) the speaker's knowledge of 

its falsity or ignorance of its truth; (5) the speaker's 

intent that it should be relied on; (6) the hearer's 

ignorance of falsity of the representation; (7) the hearer 

must rely on the representation; (8) the hearer's right to 

rely on the representation; and (9) consequent and proximate 

injury caused by reliance on the representation. First 

National Bank in Havre v. Nelson (Mont. 1987), 741 P.2d 420, 

421, 44 St.Rep. 1411; Krone v. McCann (1982), 197 Mont. 380, 

387, 642 P.2d 584, 587-588. 
Further, in answers to interrogatories specifically 

requesting facts supporting his allegations of fraud, 

Pipinich referred Battershell back to the allegations of the 

complaint. Rule 33, M.R.Civ.P., allowing interrogatories as 

a discovery tool, has the purpose of promoting the 

ascertainment of truth and ultimate disposition of lawsuits 

by assuring mutual knowledge of all relevant facts gathered 

by both parties. Massaro v. Dunham (1979), 184 Mont. 400, 

603 P.2d 249. As argued by Battershell, interrogatories 

allow for the just, speedy and inexpensive determination of 

actions and assure judgment is rendered on the facts as they 

actually exist. Wolfe v. Northern Pacific Railway Co. 

(1966), 147 Mont. 29, 409 P.2d 528. Mere reference back to 

complaint allegations is insufficient to answer an 

interrogatory. Unresponsive, incomplete and evasive answers, 

such as those presented by Pipinich in this case, should be 

dealt with in an expeditious manner by the District Court 

even if it requires dismissal of a suit. 

The standard of review on summary judgment has been 

made clear by this Court: 

On review, we will uphold the summary 

judgment if there is no genuine issue of 

material fact and the evidence shows the 

moving party is entitled to judgment as a 

matter of law. Sevalstad v. Glaus (Mont. 

1987), 737 P.2d 1147, 1148, 44 St.Rep. 

930, 932 . . . 

When the movant has met this initial 

burden, the party opposing the motion 

must supply evidence supporting the 

existence of a genuine issue of fact. 

[Citation omitted. I Rule 56 (c) , M.R.Civ.P. 

Vogele v. Estate of Schock (Mont. 19871, 745 P.2d 1138, 1141, 

44 St.Rep. 1950, 1953. 
Pipinich contends that "unless the moving party 

initially presents admissible evidence that a material 

question of fact does not exist, the non-movant has no duty 

to come forward with counter-proof." Citing, Mathews v. 

Glacier General Assurance Company (1979) , 184 Mont. 368, 603 

P.2d 232. Here, Battershell came forward with admissible 

evidence that no material question of fact exists. Pipinich 

has not met his counter-proof burden. 

Rule 56 (c) , M.R.Civ.P., states the judgment should be 

rendered "if the pleadings, depositions, answers to 

interrogatories, and admissions on file, together with the 

affidavits, if any, show that there is no genuine issue as to 

any material fact and that the moving party is entitled to a 

judgment as a matter of law." Here, depositions were taken 

of both Battershell and Pipinich. An affidavit of Holmlund 

was also presented. Interrogatories, although not initially 

complied with on the part of Pipinich, were tendered and. 

answered by the parties. Despite no specific date for 

closure of discovery, pursuant to Rule 16(b), M.R.Civ.P., 

sufficient evidence was present for the court to rule on the 

summary judgment motion. 

Battershell's brief in support of the motion for 

summary judgment, filed on July 6, 1987, is compelling in 

this case. In the brief, Battershell cites to Pipinich's 

deposition: 

Q. [Dl id you have any documents at the 

time that you filed that Complaint? 

A. Not in my possession. 

Q. In whose possession were those 

documents? 

A. [Plaintiff's counsel] showed me a 

document. It was in a insurance -- I 
don't know what it was, but it was an 

insurance questionnaire. 

Pipinich asserts the insurance questionnaire, signed by 

Battershell, is significant because it lists the value of 

Sunrise at $6,000,000. A copy of the questionnaire is 

attached to Pipinichls brief in opposition to the motion for 

summary judgment. It does indeed list the approximate value 

of the business at $6,000,000 but the date of the application 

is March 29, 1982, nearly a year after the transaction 

between Pipinich and Battershell. A document filled out a 

year after the transaction, without more, clearly does not 

create a material issue of fact. Upon further questioning at 

the deposition, Pipinich was asked if he had any other 

documents supporting his claim and he replied unequivocally: 

"no" . 

Pipinich was also questioned concerning his 

conversations with the Butte attorney who allegedly informed 

Pipinich that Sunrise was worth in excess of $1,000,000. 

Testimony was presented as follows: 

Q. Did he show you any documents to 

support his contention that at the time 

you sold out, the company was worth in 

excess of $1 million? 

A. No. 

Q. Since then have you seen any 

documents that support that lawyer's 

contention that when you sold out, the 

company was worth in excess of $1 

million? 

A. None, other than the one I mentioned 

earlier. 

Q. Which one was that? 

A. The insurance. 
Q. The insurance questionnaire? 

A. Right. 

Further questioning of Pipinich showed no additional 

investigation, other than contacting his own attorney, was 

undertaken to ascertain the facts upon which the attorney 

from Butte based his statement. Upon further investigation 

by Pipinich's attorney, no documents were found to support 

the allegations of fraud. 

Finally, Pipinich was questioned as to the facts he 

possessed which supported the complaint: 

Q. At the time the Complaint was filed, 

could you tell me what facts you believed 

existed to support your contention that 

Mr. Battershell defrauded you? 

A. I never had any facts. 

Q. At the time the complaint was filed, 

you had absolutely no facts. 

A. No. 

Q. Since the Complaint has been filed 

until the date of your deposition today, 

have you gathered any other facts or been 

shown any other facts that support your 

contention that Mr. Battershell defrauded 

you? 

A. Not facts. 

Q. No facts. By that, I take that there 

has been something told to you other than 

facts at the present time? 

A. I can't say that they weren't facts. 

Evidently I believe they were. 

Nothing of substance to support Pipinich's claim was stated 

at this deposition. Attached to Pipinich's brief in 

opposition to Battershell's motion for summary judgment was 
the balance sheet attached to tax returns for Sunrise for 

fiscal year 1981. It is suggested by Battershell, and highly 

probable, that the Butte attorney who informed Pipinich that 

the value of the company in 1981 was over $1 million was 

referring to the fact that Sunrise listed assets in excess of 

$1 million. However, if the liabilities of the company are 

subtracted from this amount, the offer made by Battershell 

actually exceeded the value of Pipinich's equity. 

Upon the above depositional testimony and a 

consideration of the tax return balance sheet, the District 

Court could adduce that no facts existed to satisfy the first 

requisite of a fraud claim -- that there was a material 

misrepresentation. 

The failure of Pipinich to show a misrepresentation on 

the part of Rattershell also bars any claim of constructive 

fraud in this case. No failure of a duty to disclose has 

been shown by the facts presented and there was no fiduciary 

relationship between Battershell and Pipinich in this case. 

~ipinich cites to Alexander v. Texaco, Inc. (D.C. Mont. 

1981), 530 F.Supp. 864 and Purcell v. ~utomatic Gas 

~istributors, Inc. (1983), 207 Mont. 223, 673 P.2d 1246, to 

support his constructive fraud argument but both cases are 

inapplicable. In Alexander, supra, the federal district 

court found Texaco liable for failing to disclose its 

intention to leave Montana. In Purcell, supra, a gas 

distributor breached a fiduciary duty. 

Here, from the above stated evidence, Battershell's 

burden of showing no genuine issue of material fact was met. 

In order to prevent summary judgment, ~ipinich must produce 

evidence sufficient to raise a genuine issue of fact. 

Spadaro v. Midland Claims Service, Inc. (Mont. 1987), 740 

P.2d 1105, 1108, 44 St.Rep. 1221; Kaiser v. Town of Whitehall 

(Mont. 1986), 718 P.2d 1341, 1342, 43 St.Rep. 846. ~ipinich 
failed to meet his burden of showing a genuine issue of 

material fact. 

We have held that claimants cannot rest on the mere 

allegations of the complaint in satisfying the burden 

required to resist a motion for summary judgment once the 

moving party has met its burden. See generally, Conboy v. 

State (Mont. 1985), 693 P.2d 547, 42 St.Rep. 120. In Conboy, 

supra, we stated: 

Failure of the party opposing the motion 

to either raise or demonstrate the 

existence of a genuine issue of material 

fact, or to demonstrate that the legal 

issue should not be determined in favor 

of the movant, is evidence that the 

party's burden was not carried. Summary 

judgment is then proper, the court being 

under no duty to anticipate proof to 

establish a material and substantial 

issue of fact. 

Conboy, 693 P.2d at 551. 

The District Court properly determined that no genuine 

issue of material fact was presented by the plaintiff. We 

affirm. 

I 

We concur: d 
L7 / Justices