NO. 94-091

IN THE SUPREME COURT OF THE STATE OF MONTANA

1994

JAMES M. TROGLIA, JR.,

Plaintiff and Appellant,

-v- AIJG30 1994 :

E. A. BARTOLETTI, et al.,

Defendants and Respondents. S~~~~ O F MONTANA

APPEAL FROM: District Court of the Fifth Judicial District,

In and for the County of Jefferson,

The Honorable Frank M. Davis, Judge presiding.

COUNSEL OF RECORD:

For Appellant:

Ward A. Shanahan, Gough, Shanahan, Johnson &

Waterman, Helena, Montana

For Respondent:

Edward Beaudette, Anaconda, Montana

Filed:

Submitted on briefs: June 30, 1994

Decided: August 30, 1994
Justice Fred J. Weber delivered the Opinion of the Court.

In a partition action in the District Court of the Fifth

Judicial District, Jefferson County, this is an appeal from a

property valuation and order allocating the sale proceeds from a

public sale of the real property as between the co-tenant parties

to the action. We affirm in part and reverse in part.

The issues on review are:

I . Did the District Court err in awarding defendant E. A.

Bartoletti $24,450 for his interest in the land and improvements?

II. Did the District Court err in awarding defendants damages

for "wrongful exclusion and wrongful deprivation" when the claim

was not properly raised by the parties?

III. Did the District Court err in waiving the formal notice

of entry of judgment pursuant to Rule 77(d), M.R.Civ.P.?

The parties are tenants in common in the ownership of two

patented mining claims, in Jefferson County, Montana, with a total

acreage of 41.179 acres.

The property was first leased by James M. Troglia, Sr. and

Louis Bartoletti, father of defendant E. A. Bartoletti. It

originally included two older structures and also showed evidence

of active mining operations. James M. Troglia, Sr. and Louis

Bartoletti built a cabin on the property and jointly used it for

recreation. In 1958, they purchased the property in equal shares

and thereby became tenants in common. They also purchased another

unpatented mining property nearby on which they built another

dwelling. In 1964, this cabin was destroyed by fire.

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James M. Troglia, Sr. and Louis Bartoletti began having

business problems and defendant E. A. Bartoletti became involved in

the disputes. Several lawsuits followed.

In October of 1970, James Troglia, Sr. deeded his half

interest in the property to his son, plaintiff James Troglia, Jr.

(Troglia) and in December 1971, Louis Bartoletti deeded his half in

equal shares to his son defendant E.A. Bartoletti (Bartoletti) and

his daughter Mrs. Thelma Casey (Casey) of Great Falls. Casey sold

her one-quarter interest in the surface to Troglia for $7,000 in

1990 before the commencement of the present action. Casey retained

her mineral rights. As a result, Troglia owned 75% of the surface

estate and 50% of the minerals and Bartoletti owned 25% of the

surface and 25% of the minerals. Casey owned the remaining 25% of

the minerals.

Troglia and Bartoletti disputed the cause of the destruction

of a cabin. Attempts by Troglia to settle the dispute and get the

cabin rebuilt were unsuccessful. Troglia then notified Bartoletti

that he was going to rebuild the cabin himself and that it would be

his exclusive property. Bartoletti objected to this plan and

stated his right to have the land partitioned.

Troglia proceeded to build a quite sophisticated lodge on a

fenced 14.11 acre portion of the property. Troglia repaired the

existing fence and also made extensive improvements to the other

two older cabins on the combined properties. Troglia also filed a

water right on a spring that runs through the property.

Troglia has paid taxes on all of the improvements since 1978.

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The county assessed Troglia based on a one-acre "homestead tract"

valued as a homesite until the present time. The rest of the

property was assessed as grazing land. Troglia, Bartoletti, and

Casey have paid taxes on their respective interest in the land.

Troglia eventually filed an action claiming 1) an "ouster" and

repudiation of Bartoletti's surface rights in a 14.11-acre portion

of the 41.179 acre property, 2) the need for a partition or sale

of all of the property, and 3) a request for quiet title in himself

against all other persons unknown. Bartoletti filed an answer

containing a general and special denial.

The case was tried on February 26, 1992. In its order the

court appointed a receiver to appraise and sell the property in the

event an agreement between the parties concerning partition could

not be achieved. The court granted Troglia a right of first

refusal on the same terms and conditions of any bona fide offer.

The court amended its order, striking this right of first refusal

and directing the receiver that Troglia be compensated for the

reasonable value of improvements made by him during his exclusive

occupancy of the property. The court also at this time gave

specific directions to the receiver for the appraisal and sale of

the property.

The receiver did not complete the sale arrangements during the

winter of 1992-93. He later requested permission of the court to

try to effect a partition by mutual agreement. In June of 1993, he

reported that he was unable to accomplish this. On July 28, 1993,

the court issued an order directing sale. The property was

4
advertised for sale and bids were accepted. The bids were opened

by the court on October 27, 1993 and Troglia's bid of $201,000 was

the highest bid received.

On November 5, 1993, Troglia moved the court for disposition

of sale proceeds. The court issued an order on January 28, 1994,

finding that Bartoletti owned a 25% interest in both the land and

the improvements and was owed the sum of $24,450. The court

further determined that the reasonable rental value of the property

from which Bartolettihad been "wrongfully excluded" equaled $1,000

per year for a total of $16,000. The court then waived the

provisions of Rule 77(d), M.R.Civ.P., and made its judgment

immediately effective, even though the actual document was not

filed until January 31, 1994, and not received by the parties until

February 1, 1994. Troglia appeals this January 28, 1994 order of

the court. Judgment is stayed pending appeal and the quiet title

action remains pending before the District Court.

I .

Did the District Court err in awarding defendants $24,450 for their

interest in the land and improvements?

Troglia contends that the District Court was statutorily bound

by § 70-29-207, MCA, to separate the value of improvements from the

value of the land; instead, the court simply awarded Bartoletti the

sum of $24,450 for land and improvements. Troglia contends the

court ignored the evidence of valuation and did not base its

decision upon any pertinent evidence. Troglia contends that the

land was appraised by his appraiser at $30,000, and that Bartoletti

5
is due only $13,000 of that sum. Bartoletti contends that the

statute relied upon by Troglia is inapplicable because there was no

partition.

Under Tonack v. Montana Bank of Billings (1993), 258 Mont.

247, 854 P.2d 326, our standard of review of the District Court's

findings of fact is to determine if they are clearly erroneous,

that is if they are supported by substantial evidence, and then to

determine if the trial court has misapprehended the effect of the

evidence and last to determine whether this Court is left with a

firm conviction that a mistake has been made. We evaluate the

legal interpretations of a court as to whether those

interpretations are correct. Doting v. Trunk (1993), 259 Mont.

343, 856 P.2d 536.

Section 70-29-207, MCA, cited by Troglia provides:

Allotment of shares of land--improvements. In all cases

the court shall direct the referees, in makincr oartition

of land, to allot the share of each of the parties owning

an interest in the whole or in any part of the premises

sought to be partitioned and to locate the share of each

cotenant so as to embrace as far as practicable the

improvements made by such cotenantupon the property, and

the value of the improvements made by the tenants in

common must be excluded from the valuation in making

allotments, and the land must be valued without regard to

such improvements, in case the same can be done without

material injury to the rights and interest of the other

tenants in common owning such land. (Emphasis added.)

The wording of the statute makes it applicable to cases in which

the court partitions land. The court did not do that in the

present case, and therefore, the court was not bound by the

statute's directive to evaluate the land separately from the

improvements upon it.

6
In its final order, the District Court issued the following

findings:

2 . The Court finds that the aggregate value of the

property is $201,000. Allocation of the respective

interests of the co-tenants must necessarily be based on

that value. The Receiver's appraisal was of little help

to the Court in view of 24 bids ranging from a low of $7,

000 to the high of $201,000. The Court personally

inspected the property, and from that inspection finds

and agrees with the Plaintiff in his appraisal and his

bid pursuant thereto.

. . .

4 . The Court finds, based on Plaintiff's $201,000

appraisal, that Defendants' 25% interest in the land and

improvements to be the sum of $24,450.

Twenty-four bids for the property were presented to the court.

They showed a broad variation in sums that people were willing to

pay for the property. Because of this great range, the judge

personally inspected the property. And although he has not

provided us with a detailed analysis of how he reached the final

amount, we cannot say that his findings here are clearly erroneous.

Plaintiff's appraiser valued the land at $30,000 and the lodge

at $103,000. Plaintiff's bid for land and improvements was

$201,000. As pointed out by Bartoletti, by valuing Bartoletti's

interest at $24,450, the District Court set a value of $97,800 on

the land and a value on the improvements made by plaintiff Troglia

of $103,200. While it would have been helpful to have a more

precise statement by the District Court, we conclude that the court

had the right to disregard the appraiser's value and to consider

other credible evidence, and we further conclude that he was not

clearly erroneous in valuing the defendant Bartoletti's interest at

$24,450.

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We hold that the court did not err in awarding $24,450 to the

defendant Bartoletti for his interest in the land and improvements.

II.

Did the District Court err in awarding defendants damages for

"wrongful exclusion and wrongful deprivation" when the claim was

not properly raised by the parties?

Troglia argues that the District Court erred in finding a

claim for relief based upon "wrongful exclusion and wrongful

deprivation." Such claims, contends Troglia, were required to be

plead under Rule 13(a) of the M.R.Civ.P. which requires that any

claim against the same parties arising from the same incident and

not requiring the presence of a third party, must be plead in

defendant's answer to the original charges. Troglia asserts that

the first mention of the aforementioned claims came in Defendant's

Memorandum Regarding Disposition of Proceeds filed December 3,

1993. Further, Troglia argues that the court held no hearing, and

no evidence was presented, with respect to the proper amount of

damages arising from these claims.

Bartoletti argues that he did seek equitable relief from the

court and that such a request enables the District Court to award

any and all relief available under the court's equitable

jurisdiction. Bartoletti further argues that § 70-29-209, MCA,

specifically allows for a ruling in equity.

Bartoletti cites the following sentence from the prayer for

relief found in his Answer as asking for an equitable settlement:

2 . That a partition of the Viola and Jettie Pearl

mining claims be made equitably by this Court according

8
to the interests held by the parties.

In this sentence the word "equitably" modifies the word

"partition." Bartoletti asked for a fair partition in this

sentence, he did not request any equitable award that the court can

make--nor do we interpret the sentence as having such a broad

meaning.

Next, Bartoletti argues that 5 70-29-209, MCA, requires that

the court make a decision in equity concerning the property. The

section cited by Bartoletti concerns what the court "may" do if the

court cannot make an "equalU' partition. The facts of this case

present us with a situation in which the court could effect no

partition of any kind. Thus, this statute which defines a

particular set of guidelines to be applied in circumstances when

the court is making a partition is not applicable and is not

precedent for the case before us.

Troglia argues that Bartoletti has not filed a proper

counterclaim concerning "wrongful exclusion and wrongful

deprivation" according to the dictates of Rule 13(a), M.R.Civ.P.

This rule states:

Compulsory counterclaims. A pleading shall state as a

counterclaim any claim which at the time of serving the

pleading the pleader has against any opposing party, if

it arises out of the transaction or occurrence that is

the subject matter of the opposing party's claim and does

not require for its adjudication the presence of third

parties of whom the court cannot acquire jurisdiction. .

. .

A claim for wrongful exclusion or wrongful deprivation is a claim

against the other party to the litigation arising out of the same

incident and not requiring a third party for the adjudication. It

9
is, therefore, a compulsory counterclaim. A close review of the

Answer indicates that no counterclaim was made. If a compulsory

counterclaim is not specifically plead, defendant loses the right

to bring it up later. Julian v. Matson (1985), 219 Mont. 145, 710

P.2d 707.

We conclude that because Bartoletti did not raise this claim

in his answer, he cannot raise it in subsequent documents pursuant

to Rule 13(a), M.R.Civ.P. Therefore, we hold that the District

Court erred in awarding defendant damages for "wrongful exclusion

and wrongful deprivation" when the claims were not properly raised

by the parties. We reverse the court's holding on this issue and

vacate the court's award of $16,000 to Bartoletti for "wrongful

exclusion and wrongful deprivation."

III.

Did the District Court err in waiving the formal notice of

entry of judgment pursuant to Rule 77(d), M.R.Civ.P.?

The District Court's ruling dated January 28, 1994, states:

This order shall constitute a judgment in favor of the

Defendants and against the Plaintiff and shall be

effective this date without formal notice of entry

thereof.

Rule 77(d), M.R.Civ.P., provides:

(d) Notice of Entry of Judgment Served. Within 10 days

after entry of judgment or an order in an action in which

an appearance has been made, notice of such entry,

together with a copy of such judgment or order or general

description of the nature and amount of relief and

damages thereby granted, shall be served by the

prevailing party upon all parties who have made an

appearance, but any other party may in addition serve a

notice of such entry in the manner provided in Rule 5 for

the service of papers.

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The ruling was filed with the clerk on January 31, 1994, and

received by plaintiff on February 1, 1994.

Troglia argues that the court should have followed the rule,

but admits that the court's error was harmless. While we agree

that what happened in this instance was harmless error, we point

out that a party's allotted time in which to file an appeal does

not begin to run until the notice of entry of judgment has been

served. In re Marriage of Robertson (1989), 237 Mont. 406, 773 P.2d

1213. We therefore emphasize that the district courts cannot

eliminate the necessity for the prevailing party's service of

notice of entry of judgment.

While the court's order was incorrect, we hold the action did

not rise to the level of reversible error.

We affirm the award of $24,450 and reverse the award of

$16,000 and remand for entry of appropriate judgment.

We Concur: n