No. 92-106 

IN THE SUPREME COURT OF THE STATE OF MONTANA 

TRADERS STATE BANK OF POPLAR, 

Plaintiff and Respondent, 

-vsI,:?- ., 3 i993 ,I>, , : I 

JOHN J. MANN and MANN FARMS, INC. 'I 

Defendants, Third-Party Plaintiffs ., 'RP 

and Appellants, 

NORTHEAST MONTANA BANK SHARES, INC.; 

JOHN WITTE; RICHARD LOEGERING; GERALD KREIG; 

BRUCE A. FREDRICKSON; CHARLES R. CASHMORE; 

MALCOLM H. GOODRICH: CROWLEY, HAUGHEY, HANSON, 

TOOLE & DIETRICH, 

Third-Party Defendants and Respondents. 

APPEAL FROM: District Court of the Fifteenth ~udicial District, 

In and for the County of Roosevelt, 

The Honorable Roy C. Rodeghiero, Judge presiding. 

COUNSEL OF RECORD: 

For Appellants: 

John J. Mann, Pro Se, Wolf Point, Montana 

Terry Wallace, Attorney at Law, Missoula, Montana 

For Respondent: 

Bruce A. Fredrickson, Ronald R. Lodders; Crowley, 

Haughey, Hanson, Toole & Dietrich, Billings, 

Montana 

Filed: 

Submitted on Briefs: December 10, 1992 

Decided: ., May 13, 1993 
Justice Karla M. Gray delivered the Opinion of the Court. 

John J. Mann and Mann Farms, Inc. appeal from orders of the 

Fifteenth Judicial District Court, Roosevelt County, granting 

summary judgment and dismissing third-party claims. They also 

appeal an order of the District Court denying a motion to dissolve 

an injunction. John Mann appeals the contempt order entered 

against him for refusing to comply with the injunction. We affirm 

in part, reverse in part and remand. 

We phrase the issues on appeal as follows: 

1) Does the failure of John Mann and Mann Farms, Inc. to post 

a supersedeas bond on appeal or otherwise stay the proceedings 

below render this appeal moot? 

2) Did the District Court err in concluding that the claims 

the Mann Family asserted against the third-party defendants did not 

constitute sufficient grounds for relief from the Mann I judgment 

under Rule 60(b), M.R.Civ.P.? 

3) Did the District Court err in granting summary judgment for 

the Bank on its foreclosure complaint? 

4) Can the District Court's grant of summary judgment on 

foreclosure be upheld as to Mann Farms under the doctrines of 

judicial estoppel, equitable estoppel or quasi-estoppel? 

5) Did the District Court err in refusing to dissolve an 

injunction and in finding John Mann in contempt for failing to 

abide by the injunction? 

The details surrounding this appeal constitute a morass of 
factual and procedural intricacies. In 1976, Wilbur, Edna, John 

and Frances Mann formed Mann Farms, Inc. (Mann Farms) . (Mann Farms 

and the individual Mann family members are referred to collectively 

herein as the Mann Defendants.) They began banking with Traders 

State Bank of Poplar (the Bank) and operated for several years on 

an unsecured basis. Mann Farms' debt load increased, however, and 

in 1983, the Bank required security for Mann Farms' line of credit. 

The parties began negotiations in late April of 1985 in attempts to 

reduce the loan balance. 

On April 29, 1985, the Mann Defendants executed two promissory 

notes to the Bank. The first note renewed a previous note of 

$215,000, and the second renewed a previous note of $85,000. On 

that date, the Mann Defendants also signed a mortgage pledging real 

property to secure the $300,000 of existing debt (the $215,000 and 

the $85,000 debts evidenced by the renewal notes) and $150,000 of 

contemplated future advances. In addition, they executed four 

security agreements, which were: 

.A security agreement covering crops, livestock and farm 

equipment and vehicles signed on April 29, 1985 by John 

Mann, Frances Mann, Wilbur Mann, and Edna Mann, 

individually and as officers of Mann Farms as security 

for notes totalling $300,000; 

-A security agreement covering a 1962 1 1/2 ton truck 

signed on May 15, 1985, by Wilbur Mann as security for 

the $215,000 note; 

.A security agreement covering various farm vehicles 

signed on May 15, 1985 by John Mann as president of Mann 

Farms as security for the $215,000 note; and 

-A security agreement covering livestock signed on May 

13, 1985, by Patricia Mann Mingus as security for notes 

totalling $300,000 (Patricia Mingus is not a party to 

this appeal but had ownership interest in the cattle). 
On May 1, 1985, the Bank advanced the Mann Defendants $7,500, 

which was evidenced by a promissory note and designated by the Bank 

as operating money for 1985. Around this time, the Bank approved 

two additional conditional loans of $25,000 each. Due to 

disagreements over the collateral for the conditional loans, the 

funds were not advanced 

On May 15, 1987, Mann Farms filed for bankruptcy under Chapter 

12 of the United States Bankruptcy Code. On March 28, 1988, the 

Mann Defendants filed a tort claim against the Bank alleging, among 

other things, breach of the covenant of good faith and fair dealing 

and breach of fiduciary duty. 

As required by the Bankruptcy Act, Mann Farms then filed its 

plan of reorganization and characterized the debt with the Bank as 

disputed. The reorganization plan specified that the Bank's lien 

status would be determined in conjunction with the bad faith action 

in state court. The Bank immediately contested the plan, arguing 

that Mann Farms could not seek to cancel the notes in state court 

and simultaneously seek to restructure the notes in the bankruptcy 

action. Mann Farms amended its plan of reorganization, and 

included the following clause: 

The Debtor will not contest the validity of notes, 

mortgages, or security interests of the Bank in state 

court or by adversary proceedings in this court. Debtor 

does intend to pursue the state court action previously 

commenced by the debtor, insofar as prosecution of the 

debtor's tort claims are concerned. 

On June 22, 1988, the United States Bankruptcy Court for the 

District of Montana approved the amended plan of reorganization, 

and the Bank appealed to the United States District Court. That 
court also affirmed the amended plan, and the Bank appealed to the 

United States Court of Appeals for the Ninth circuit, arguing that 

the state court tort action would restructure de facto its status 

in the bankruptcy plan. The Ninth Circuit concluded that the tort 

claims were independent of the contractual rights of the parties 

and, therefore, that the Mann Defendants' action for tort damages 

in state court could not affect the approved plan of 

reorganization, In re Mann Farms, Inc. (9th Cir. 19901, 917 F.2d 

1210, 1213. 

~eanwhile, in state court, the District Court granted summary 

judgment in favor of the Bank on the tort claims. We affirmed in 

Mann Farms, Inc. v. Traders State Bank (19901, 245 Mont. 234, 801 

P.2d 73 (Mann I). 

On April 19, 1991, the United States Bankruptcy Court 

dismissed Mann Farms1 bankruptcy proceeding; final decree closing 

the case was filed May 28, 1991. Two months later, the Bank filed 

a complaint against the Mann Defendants, seeking judgment on the 

promissory notes signed ~pril 29 and May 1, 1985, which totalled 

$307,500, and foreclosure of the security agreements and mortgage 

described above. The complaint alleged that on May 15, 1987, the 

Mann Defendants had defaulted on the notes and that, at the time of 

the complaint, they owed the Bank $575,709.85, The Bank also 

sought to foreclose on a March 23, 1984, security agreement 

covering crops, cattle, and farm equipment signed by John Mann as 

president of Mann Farms as security for notes totalling $305,100. 

John, Frances, Wilbur and Edna Mann (the Mann Family), 
appearing pro se, answered the foreclosure complaint by generally 

denying its allegations. They also asserted third-party claims 

against Northeast Montana Bank Shares (the holding company for 

Traders State Bank of Poplar) and two bank employees, John Witte 

and Richard Loegering (the Bank Defendants), alleging that the Bank 

Defendants had committed fraud upon the court in the earlier bad 

faith action. Additionally, they asserted third-party claims 

against Bruce Fredrickson, Charles Cashmore, Malcolm Goodrich, and 

the law firm of Crowley, IIaughey, Hanson, Toole & Dietrich (the 

Lawyer Defendants), claiming that the Lawyer Defendants had 

assisted in perpetrating this alleged fraud. They also asserted 

third-party claims against district court judge James Sorte, for 

abandoning his judicial function in the bad faith action, and 

against First Citizens Bank of Wolf Point, for conspiring with the 

Bank to subvert the judicial process. 

On August 12, 1991, John Mann, acting in his capacity as 

president of Mann Farms, transferred all assets held by Mann Farms 

into the Mann Family Trust. The Bank then sought an injunction 

requiring the Mann Defendants to provide an accounting of all 

proceeds received from any sale of the Bank's collateral and to 

execute certain financing statements: the Bank also asked the court 

to enjoin the Mann Defendants from disposing of any of the Bank's 

collateral and from retaining any proceeds that may have been 

obtained from the collateral. 

Upon motion of the Bank, on September 3, 1991, the District 

Court entered a default judgment on the foreclosure claim against 
Mann Farms for failing to respond to the foreclosure complaint. 

Judge Sorte and First Citizens Bank of Wolf Point moved to 

dismiss the third-party claims. The Bank Defendants and the Lawyer 

Defendants moved for summary judgment on the third-party claims 

asserted against them. After a hearing on the motions on October 

3, 1991, the District Court dismissedthe Mann Family's third-party 

claims against Judge Sorte and First Citizens Bank of Wolf Point. 

The court also granted the Lawyer Defendants and the Bank 

Defendants' motions for summary judgment and issued the injunction 

requested by the Bank. 

On November 4, 1991, counsel appeared on behalf on Mann Farms. 

On November 15, Mann Farms moved to set aside the default judgment 

entered against it. The District Court set aside the default 

judgment and allowed Mann Farms to file an answer. Mann Farms' 

answer generally denied the foreclosure allegations and asserted 

various affirmative defenses. John Mann and the other family 

members continued to represent themselves pro se. 

The Bank also moved for summary judgment on its foreclosure 

complaint. In response, Mann Farms moved for summary judgment on 

that issue; the Mann Family contended that summary judgment was 

improper because genuine issues of material fact existed regarding 

the foreclosure complaint. The Bank requested the District Court 

to hold the Mann Defendants in contempt for their continued failure 

to comply with the requirements of the October preliminary 

injunction. 

On December 20, 1991, a hearing was held on the remaining 
motions. Mann Farms orally moved to dissolve the injunction; the 

court denied the motion. After testimony and oral argument, the 

District Court granted summary judgment for the Bank on the issue 

of foreclosure. In a separate order, the District Court also found 

each Mann family member to be in contempt of court for failing to 

comply with its earlier injunction. This appeal follows. 

During the lower court proceedings, John, Frances, Edna and 

Wilbur Mann signed the pleadings individually and represented 

themselves pro se. On appeal, we note that only John Mann and Mann 

Farms have filed a notices of appeal. In Montana, a non-lawyer may 

represent himself or herself, but only attorneys may practice law 

and represent others. Weaver v. Law Firm of Graybill, et al. 

(1990), 246 Mont. 175, 178, 803 P.2d 1089, 1091; $3 37-61-210, MCA. 

John Mann may not appeal on behalf of Frances, Wilbur and Edna 

Mann. Therefore, John Mann and Mann Farms are the only appellants 

properly before this Court. 

Does the failure of John Mann and Mann Farms, Inc. to post a 

supersedeas bond on appeal or otherwise stay the proceedings below 

render this appeal moot? 

As a threshold issue, the Bank argues that because it has 

foreclosed upon the security for the debt, and neither John Mann 

nor Mann Farms posted a supersedeas bond or stayed the lower 

proceedings, this appeal is moot. It cites First Sec. Bank of 

Kalispell v. Income Properties, Inc. (1984), 208 Mont. 121, 126, 

675 P.2d 982, 985, which held that a defendant is considered to 

have acquiesced in a judgment if a bond is not posted or a stay of 
proceedings obtained, citing Gallatin Trust & Sav. Bank v. Henke 

(1969), 154 Mont. 170, 461 P.2d 448. 

Since First Sec. Bank was decided, we have held that where 

payment or performance of a judgment by an appellant is 

involuntary, the appellant does not acquiesce to the judgment and 

the right to appeal is not affected. LeClair v. Reiter (1988), 233 

Mont. 332, 335, 760 P.2d 740, 742 (emphasis added). In LeClair, 

the respondents foreclosed on a contract for deed and filed the 

quitclaim deeds prior to our review. Like the Bank in this case, 

the respondents argued that because they repossessed the property 

and the appellant had not filed a supersedeas bond or otherwise 

stayed execution, the appeal was moot. LeClair, 760 P.2d at 742. 

We expressly overruled Henke and, in effect First Sec. Bank, and 

held that the appeal was not moot because the defendant had not 

voluntarily surrendered the property. LeClair, 760 P.2d at 742; 

First Nat'l Bank in Eureka v. Giles (Mont. 1986), 43 St.Rep. 1326, 

1328. 

As in LeClair, Mann Farms and John Mann did not voluntarily 

relinquish their real estate and personal property to the Bank; the 

Bank foreclosed. We conclude that the failure to post a 

supersedeas bond or otherwise stay the proceedings below does not 

render Mann Farms and John Mann's appeal moot. 

Did the District Court err in concluding that the claims the 

Mann Family asserted against the third-party defendants did not 

constitute sufficient grounds for relief from the Mann I judgment 

pursuant to Rule 60(b), M.R.Civ.P.? 

In response to the Bank's foreclosure complaint, the Mann 
Family set forth a variety of third-party claims. John Mann 

appeals only the dismissal of the third-party claims against the 

Bank Defendants and the Lawyer Defendants. The substance of those 

claims, as paraphrased by this Court, are: 

*that the Bank Defendants conspired with the Lawyer Defendants 

to deceive the court and subvert justice in Mann I; 

*that Bank Defendant Loegering and Lawyer Defendant 

Fredrickson perjured themselves during testimony and argu:ment 

in Mann I; 

that the Lawyer Defendants used I1f orceful argument1' and 

"artful pleading1I to develop a fictitious theory of the case 

that misled the district court in Mann I; and 

-that the Lawyer Defendants misrepresented facts to the 

district court in Mann I. 

We note initially that although these allegations originally 

were pled as third-party claims, John Mann testified at the October 

3, 1991, hearing on the third-party claims that the claims were 

filed under Rule 6O(b), M.R.Civ.P., and had no standing outside of 

that rule. The District Court concluded that, even if all the 

allegations against the Lawyer Defendants and the Bank Defendants 

were true, the claims did not constitute sufficient grounds for 

maintaining an independent equitable action to set aside the 

judgment under Rule 60(b), M.R.c~v.P. The District Court also set 

forth alternative bases for granting summary judgment in favor of 

both the Lawyer Defendants and the Bank Defendants. Because we 

find Rule 60(b), M.R.Civ.P., dispositive, we need not address the 

alternative theories. 

We have stated that a party seeking relief from a judgment 

through an independent equitable action under Rule 60(b) has three 
avenues of relief: extrinsic fraud, lack of personal notification, 

and fraud upon the court. Salway v. Arkava (1985), 215 Mont. 135, 

140, 695 P.2d 1302, 1305; Brown v. Small (1992), 251 Mont. 414, 

420, 825 P.2d 1209, 1213. Lack of personal notification is 

inapplicable to the present case; accordingly, we examine the 

third-party claims to determine whether extrinsic fraud or fraud 

upon the court provide sufficient grounds for the Rule 60(b) 

action. 

Extrinsic fraud is defined as fraud that has prevented the 

unsuccessful party from presenting his or her case. Extrinsic 

fraud is collateral to the matters tried by the court and is not 

fraud in the matters on which the judgment was rendered. Brown v. 

Jensen (1988), 231 Mont. 340, 346, 753 P.2d 870, 874. We have held 

repeatedly that neither perjured testimony nor false or fraudulent 

allegations used in obtaining a judgment constitute extrinsic 

fraud. Jensen, 753 P.2d at 875; Salwav, 695 P.2d at 1307. 

It is apparent that none of the Mann family's allegations, 

even if taken as true, constitute extrinsic fraud. None of the 

allegations regarding the Lawyer Defendants or the Bank Defendants 

are collateral to the action in Mann I; all focus on alleged fraud 

during the proceedings in Mann I. Accordingly, we conclude that 

the Mann family's allegations are insufficient for relief fromthe 

judgment for extrinsic fraud pursuant to Rule 60(b), M.R.Civ.P. 

Rule 6O(b), M.R.Civ.P. also allows relief from a judgment for 

"fraud upon the court." We have characterized fraud upon the court 

as that species of fraud which subverts or attempts to subvert the 
integrity of the court itself. Sal-way, 695 P.2d at 1306; Small, 

825 P.2d at 1213. Fraud which attempts to defile the court has 

been construed to include only the most egregious conduct, such as 

bribery of a judge or member of the jury or the fabrication of 

evidence in which an attorney has been implicated. Salway, 695 

P.2d at 1306. 

In this case, the record does not support any of the Mann 

family's allegations, nor do such allegations, even if supported by 

the record, constitute fraud upon the court. Fraud between the 

parties, without more, does not rise to the level of fraud upon the 

court. Small, 825 P.2d at 1213. John Mann can point to no outside 

influence on the judicial proceedings in Mann I; the claims, even 

if true, would constitute fraud between the parties. Additionally, 

"forceful argument" and "artful pleading" do not rise to the 

egregious conduct contemplated by this rule, but more closely 

relate to the Lawyer Defendants' exercise of their duty to 

zealously represent their client. 

Because John Mann can demonstrate neither extrinsic fraud nor 

fraud upon the court, we hold that the District Court did not err 

in concluding that the third-party Claims Mann asserted against the 

Bank Defendants and Lawyer Defendants did not constitute sufficient 

grounds for maintaining an independent equitable action for relief 

from the Mann I judgment under Rule 60(b), M.R.Civ.P. 

Did the District Court err in granting summary judgment for 

the Bank on its foreclosure complaint? 

The District Court granted the Bank's summary judgment motion 

12 
on its foreclosure complaint and issued findings of fact, 

conclusions of law and a decree of foreclosure. It concluded that 

the Bank had established a prima facie case of foreclosure and that 

all of the Mann Defendants' defenses to foreclosure were barred 

under the doctrine of res judicata. Specifically, the court opined 

that the gravamen of the defenses was that the Bank committed some 

form of fraud in its lending relationship, and that those matters 

were raised or could have been raised in Mann I. The court also 

set forth additional legal doctrines supporting its decision. 

Our standard in reviewing a grant of summary judgment is the 

same as that initially utilized by the trial court. McCracken v. 

City of Chinook (1990), 242 Mont. 21, 24, 788 P.2d 892, 894. 

Summary judgment is appropriate when the pleadings, depositions, 

and other documents on file demonstrate that no genuine issue of 

material fact exists and that the moving party is entitled to 

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

standard in mind, we review the District Court's decision. 

The District Court's grant of summary judgment turned on its 

conclusion that res judicata barred all of the Mann Defendants' 

defenses. Having essentially removed the defenses from 

consideration, the District Court then concluded that no genuine 

issue of material fact remained and the Bank was entitled to 

judgment as a matter of law. Therefore, we initially review 

whether the District Court correctly concluded that res judicata 

barred the defenses asserted by the Mann Defendants; our review of 

legal conclusions is plenary. See Steer, Inc. v. Dep't of Revenue 
(1990), 245 Mont. 470, 475, 803 P.2d 601, 603. 

The principle underlying the doctrine of res judicata is that 

a party is prohibited from relitigating a matter that the party has 

already had an opportunity to litigate. Whirry v. Swanson (1992), 

254 Mont. 248, 250, 836 P.2d 1227, 1228. The four criteria for res 

judicata are: 

1) the parties or their privies must be the same; 

2) the subject matter of the action must be the same; 

3) the issues must be the same and relate to the same 

subject matter; and 

4) the capacities of the persons must be the same in 

reference to the subject matter and to the issues. 

Whirry, 836 P.2d at 1228. Furthermore, once there has been full 

opportunity to present an issue for judicial decision in a given 

proceeding, the determination of the court in that proceeding must 

be accorded finality as to all issues raised or which fairly could 

have been raised. Filler v. Richland County (1991), 247 Mont. 285, 

291, 806 P.2d 537, 541. 

In this case, the parties are the same in both actions; the 

Mann Defendants sued the Bank in Mann I, and the Bank's foreclosure 

complaint named all Mann Defendants as defendants in the present 

action. The subject matter is also generally the same; both suits 

revolve around the banking relationship between the Bank and the 

Mann Defendants. 

As in Whirrv, the third element--whether the issues are the 

same--is the key element here. In order to determine that the 

issues are the same, the fundamental or essential question involved 

in the second case must have been raised and determined in the 

first case. Whirrv, 836 P.2d at 1229, citing Baertsch v. County of 

14 
Lewis and Clark (l986), 223 Mont. 206, 727 P.2d 504. Thus, 

scrutiny of the precise questions involved in Mann I and those 

involved in the present case is necessary. 

In Mann I, the complaint against the Bank alleged tort claims, 

including breach of the covenant of good faith and fair dealing, 

negligent misrepresentation, and breach of fiduciary duty. As 

paraphrased by the District Court, the facts supporting the Mann 

Defendantsi tort claims in Mann I were: 

1. The Bank's decision to withdraw $25,000 of 

conditional operating credit in 1985. 

2. The Bank's discussions with Citizens First National 

Bank of Wolf Point regarding Mann Farmsf financial 

situation. 

3. The Bank's refusal to loan operating funds to Mann 

Farms during the spring of 1986. 

4. The SBAts refusal to loan disaster relief funds 

unless certain conditions were met. 

Here, the Bank's complaint alleged its prima facie case of 

foreclosure. The Mann Family generally denied the foreclosure 

allegations in their answer and, in response to the Bank's motion 

for summary judgment, set forth in detail a multiplicity of 

defenses to foreclosure. Mann Farms' answer also included 

defenses. The majority of the Mann Defendants' defenses to 

foreclosure sounded in contract; however, a few asserted defenses 

were tort-related. We address first whether res judicata bars the 

Mann Defendantst contract-related defenses. 

Although the events surrounding both suits occurred in the 

same time frame, the issues presented in the tort action are 

distinct from those inherent in the contract defenses raised to the 

foreclosure complaint. The issues in the first case were the Mann 
Defendants' allegations of tortious conduct by the Bank over an 

extended period of time and their resulting entitlement to damages. 

The fundamental question raised and determined in Mann I was 

whether the Bank's conduct in dealing with the Mann Defendants 

violated a standard of due care. The fundamental question here is 

whether the mortgage, security interests and notes are valid and 

enforceable contracts. We conclude that the issues involved in 

Mann I were different from those raised by the contract defenses to 

foreclosure in this case. 

We find support for this conclusion in Bras v. First Bank & 

Trust Co. (Okla. l985), 735 P.2d 329, a closely analogous case. In 

Bras, the bank foreclosed upon notes executed by the debtor, and 

the debtor raised the defense of illegality of the notes due to 

self-dealing by the bank. The bank was granted summary judgment on 

the notes. Bras, 735 P.2d at 330. The debtor then sued the bank 

in tort, alleging conspiracyto commit fraud based on circumstances 

surrounding the original loan. The Oklahoma Supreme Court 

concluded that his second suit was not barred by the first, 

stating: 

The [initial] summary judgment . . . necessarily 

determined that the petitioner was primarily liable on 

the note and that such note was not illegal because of 

any "self-dealing." Unlike the former action, the 

present one contains allegations of conspiracy to commit 

fraud. We find no common elements between the fraud 

action, a tort claim involving misrepresentation, and the 

contract action in which illegal self-dealing was raised 

as a defense to the validity of the note. 

Bras, 735 P. 2d at 333. Although the Mann cases occurred in reverse 

order, the same is true here. The tort issues involved in Mann I 
and the contract issues raised by the Mann Defendants' contractrelated defenses to foreclosure are not the same; therefore, res 

judicata does not bar the defenses to foreclosure. 

The Bank argues that although the validity of the notes was 

not raised and determined in the first case, that issue fairly 

should have been raised in Mann I. The Bank is correct that res 

judicata prohibits both claims that were raised and claims that 

should have been raised from being relitigated. Higham v. City of 

Red Lodge (1991), 247 Mont. 400, 403, 807 P.2d 195, 197. We 

disagree, however, that the Mann Defendants' defenses contesting 

the validity of the notes should have been raised in Mann I. 

Mann Farms filed for bankruptcy on May 15, 1987, and the 

bankruptcy proceedings were eventually dismissed and closed in May 

of 1991. The Mann Defendants commenced their tort action in Mann 

- I in March of 1988, and this Court affirmed the District Court's 

grant of summary judgment on November 8, 1990. The entirety of the 

tort action took place during the period Mann Farms was in 

bankruptcy. During the pendency of Mann Farms' bankruptcy 

proceeding, and pursuant to its plan of reorganization, the debtor 

could not challenge the validity of the notes and security 

interests. The plan also specifically allowed Mann Farms to 

proceed with the tort claims in state court. The Bankruptcy Court, 

the United States District Court and the Ninth Circuit Court of 

Appeals all approved Mann Farms' amended plan of reorganization. 

See In re Mann Farms, Inc., 917 F.2d at 1215. 

The Ninth Circuit opinion also makes clear that Mann Farms' 
agreement not to contest the validity of the notes was contingent 

on the implementation of the bankruptcy plan of reorganization, by 

noting "the debtor's agreement not to relitigate the matters 

concluded by the approved plan . . . . " In re Mann Farms, Inc., 

917 F.2d at 1213 (emphasis added). Here, however, the bankrupcty 

action ultimately was dismissed, and the reorganization plan was 

not implemented; thus, issues surrounding the validity of the debt 

to the Bank were never concluded pursuant to the approved plan. 

Under such circumstances, Mann Farms' agreement not to "relitigate" 

those matters was extinguished when the bankruptcy action was 

dismissed. 

The bankruptcy action was formally closed on May 28, 1991, 

some months after our decision in Mann I. Only then could the Bank 

foreclose on the notes, and only then could Mann Farms assert any 

claims it had regarding the validity of the loan documents. Had 

Mann Farms1 bankruptcy been pursued to a final conclusion and the 

debts discharged or restructured, Mann Farms could not have 

contested the validity of those documents; nor would such a 

challenge have been necessary. 

We conclude that the District Court's determination that the 

Mann Defendants could have raised their contract-related defenses 

to the notes in the earlier action is incorrect. Therefore, we 

hold that the District Court erred in granting summary judgment to 

the Bank on the basis that res judicata barred the Mann Defendants' 

contract-related defenses. 

For similar reasons, the District Court did not err in 
concluding that the Mann Defendants' tort-related defenses were 

precluded by res judicata. For example, the Mann Family raised 

questions regarding whether the Bank owed the Manns a "general duty 

of care" and whether the Bank was "negligent" in its dealings with 

the Manns in their response to the Bank's motion for summary 

judgment. Mann Farmsr answer included the affirmative defense of 

"contributory negligence." Pursuant to our analysis and discussion 

above, we conclude that tort-based allegations or defenses raised 

by the Mann Defendants which do not directly concern the 

contractual defenses to the notes, mortgage, and security interests 

at issue are barred by res judicata because they could have been 

raised in the earlier tort action. 

Having determined that the Mann Defendants' contract-related 

defenses are not barred by res judicata the issue is whether 

genuine issues of disputed fact remain and whether the moving party 

is entitled to judgment as a matter of law on those defenses. To 

prevail on summary judgment, the initial burden on the Bank, as the 

moving party, is to establish that the evidence raises no genuine 

issue of material fact. Mayer Bros. v. Daniel Richard Jewelers 

(l986), 223 Mont. 397, 399, 726 P.2d 815, 816. As noted above, the 

District Court found that the Mann Defendants had executed the 

promissory notes, security agreements and mortgage at issue and 

that the Mann Defendants were in default on those instruments. It 

concluded that the Bank had established a prima facie case for 

foreclosure and, therefore, had met its initial burden on summary 

judgment. We agree. 
When the movant has met this initial burden, the burden shifts 

to the party opposing summary judgment to show by present facts of 

a substantial nature that a material fact issue does exist. Maver, 

726 P.2d at 816. The party opposing summary judgment may not rest 

upon the mere allegations of the pleadings, but has an affirmative 

duty to respond by affidavits or sworn testimony with specific 

facts that show a genuine issue of fact remains for trial. See 

Maver, 726 P.2d at 816-7. Conclusory or speculative statements or 

allegations in pleadings, arguments in briefs, and arguments made 

by counsel do not constitute sufficient factual evidence to carry 

the non-moving party's burden. See Sprunk v. First Bank System 

(1992), 252 Mont. 463, 466-7, 830 P.2d 103, 104-5; Maver, 726 P.2d 

at 817; Eitel v. Ryan (l988), 231 Mont. 174, 178, 751 P.2d 682, 

684. 

Because of its conclusion that res judicata barred the Mann 

Defendants' defenses to foreclosure, the District Court did not 

reach the question of whether the Mann Defendants had met their 

burden in opposing summary judgment on the matter of foreclosure. 

We have determined that the District Court erred in concluding that 

res judicata barred the Mann Defendants' contract-related defenses. 

Thus, the question of whether the Mann Defendants have presented 

sufficient factual evidence to demonstrate a genuine issue of fact 

on the contract-related defenses remains to be determined by the 

District Court on the basis of the record before it. 

Can the District Court's grant of summary judgment on 

foreclosure be upheld as to Mann Farms under the doctrines of 

2 0 
judicial estoppel, equitable estoppel or quasi-estoppel? 

As an alternative basis for summary judgment, the District 

Court concluded that judicial estoppel, equitable estoppel and 

quasi-estoppel barred Mann Farms from disputing the validity of the 

debt instruments in the foreclosure action. The District Court did 

not apply the estoppel doctrines to the Mann Family. Although the 

parties do not argue these doctrines on appeal, this Court will 

examine the record to determine whether separate support exists for 

the District Court's result. Wolfe v. Webb (1992), 251 Mont. 

217, 234, 824 P.2d 240, 250. We conclude that the aforementioned 

doctrines do not bar Mann Farms from contesting the documents in 

this case. 

Judicial estoppel binds a party to his or her judicial 

declarations, and precludes a party from contradicting those 

declarations in a subsequent action or proceeding. DeMers v. 

Roncor, Inc. (1991), 249 Mont. 176, 180, 814 P.2d 999, 1001. The 

District Court concluded that the following clause in Mann Farms' 

reorganization plan for bankruptcy triggered the doctrine: 

The Debtor will not contest the validity of notes, 

mortgages, or security interests of the Bank in state 

court or by adversary proceedings in this court. 

The court concluded that because Mann Farms had asserted this 

proposition in bankruptcy proceedings, it could not challenge the 

documents in defense of foreclosure. 

The elements of judicial estoppel are: 

1) the party being estopped must have knowledge of the 

facts at the time the original position is taken; 

2) the party must have succeeded in maintaining the 

original position; 
3) the position presently taken must be actually 

inconsistent with the original position; and 

4) the original position must have misled the adverse 

party so that allowing the estopped party to change its 

position would injuriously affect the adverse party. 

DeMers, 814 P.2d at 1001-2. Applying those factors to the present 

case, it is clear that neither element two nor element four is 

satisfied here. 

Mann Farms' bankruptcy proceeding was dismissed in May of 

1991. Mann Farms did not "succeed" in its bankruptcy proceeding; 

its debts were not discharged nor its reorganization plan fully 

implemented. We stated in DeMers that acquiring a judgment in its 

favor is not always necessary to satisfy this element, but the 

party must have been at least successful in arguing its original 

position against the party asserting the estoppel. DeMers, 814 

P.2d at 1002. The record contains no evidence that would allow us 

to conclude that Mann Farms successfully maintained the 

reorganization plan and the pertinent clause against the Bank. 

Furthermore, the record is devoid of evidence that the Bank 

was misled by Mann Farms' original position or that allowing Mann 

Farms to change its position adversely affects the Bank. On the 

contrary, under the reorganization plan, the Bank was to receive a 

$263,467.03 "cram down" debt in periodic payments. After 

foreclosure, the Bank had at its disposal a foreclosure sale and 

the possibility of a deficiency judgment against the individual 

Mann family members--for the full amount of its debt. We conclude 

that the clause in Mann Farms' reorganization plan, a plan that was 

ultimately dismissed, does not trigger judicial estoppel and Mann 
Farms is not barred from challenging the validity of the security 

agreements in foreclosure proceedings. 

For similar reasons, the doctrines of equitable estoppel and 

quasi-estoppel are inapplicable to the present case. Equitable 

estoppel requires reliance by the party asserting the estoppel on 

an act or representation, and this reliance must induce the party 

asserting estoppel to change its position for the worse. Wassberg 

v. Anaconda Copper Co. (1985), 215 Mont. 309, 316, 697 P.2d 909, 

914. Although this Court has not defined "quasi-estoppel, 'I the 

phrase is used interchangeably with equitable estoppel. See 28 

Am. Jur. 2d Esto~~el and Waiver 5 29 (1966) . As discussed above, the 

record contains no evidence that would support the application of 

the estoppel doctrines. 

Did the District Court err in refusing to dissolve an 

injunction and in finding John Mann in contempt for failing to 

abide by the injunction? 

On September 19, 1991, the Bank applied for a preliminary 

injunction under 5 27-19-201, MCA, against the Mann Defendants. On 

October 3, 1991, following the evidentiary show cause hearing, the 

District Court issued the requested injunction. The Mann 

Defendants refused to comply with the terms, and the District Court 

issued an order requiring the Mann Defendants to appear and show 

cause why they should not be held in contempt for failing to comply 

with the October injunction. At the show cause hearing in 

December, Mann Farms orally moved to dissolve the injunction; the 

District Court denied the motion and found the Mann Defendants in 
contempt. 

Mann Fams argues that the District Court erred in denying its 

motion to dissolve the injunction; in essence, this argument goes 

to the propriety of the District Court's decision to issue the 

injunction itself. Mann Farms contends that the District Court 

issued the injunction without any legal authority, and that the 

injunction improperly resolved a contested issue regarding alleged 

lapsed security interests. The Bank, on the other hand, argues 

that the injunction was properly issued pursuant to 5 27-19-201, 

MCA . 

The injunction in question contained six integral provisions. 

Mann Farms challenges only the following provision of the 

injunction: 

It is further ordered that the Mann Defendants complete 

the following affirmative acts: 

To execute the appropriate security documents, 

including security agreements and Uniform 

Commercial Code Financing Statements, which 

documents are necessary to maintain the Bank's 

security and priority positions in its collateral 

pending appropriate resolution of the above 

captioned litigation, and in order to bring the 

Bank's security documents into conformity with the 

Food Security Act of 1985. 

Section 27-19-201, MCA, lists the specific circumstances under 

which a District Court may issue a preliminary injunction. The 

District Court did not include supporting findings of fact and 

conclusions of law when it issued this injunction in October of 

1991. We have specifically required that findings of fact and 

conclusions of law must accompany preliminary injunctions. Ensley 

v. Murphy (19831, 202 Mont. 406, 408, 658 P.2d 418, 419. Rule 
52(a), M.R.Civ.P., expressly provides that: 

[I]n granting or refusing interlocutory injunctions the 

court shall similarly set forth the findings of fact and 

conclusions of law which constitute the grounds of its 

action. 

An important purpose of findings of fact and conclusions of law is 

to aid the appellate court in its review of the decision. See 

Continental Realty, Inc. v. Gerry (1991), 251 Mont. 150, 153, 822 

As in Ensley, we have no basis for determining whether the 

disputed portion of the October injunction was properly included. 

We cannot ascertain the facts on which the District Court relied or 

the legal basis on which it issued the injunction or the order 

denying Mann Farms' motion to dissolve it. Consequently, we cannot 

properly determine whether the District Court erred. Therefore, we 

vacate the preliminary injunction and remand for reconsideration 

and entry of findings and conclusions. See Enslev, 658 P.2d at 

Finally, John Mann also filed a notice of appeal of the order 

finding him in contempt for failing to abide by the injunction. 

Contempt orders generally are not appealable in Montana. Section 

3-1-523, MCA, states in relevant part: 

Judgment and orders in contempt cases final. The 

judgment and orders of the court or judge made in cases 

of contempt are final and conclusive. There is no 

appeal, but the action of a district court or judge can 

be reviewed on a writ of certiorari by the supreme court 

John Mann has not filed the appropriate writ as directed by 

the statute. This issue, therefore, is not properly before this 
Court. 

As a final matter we note that, by order dated October 14, 

1992, this Court denied a motion by the Bank to strike John Mann's 

briefs and for sanctions; we stated therein that we would address 

the issue of sanctions against John Mann in our decision on appeal. 

In light of our determinations herein, we conclude that further 

consideration of the issue of sanctions is inappropriate at this 

time . 

Affirmed in part, reversed in part and remanded for further 

proceedings consistent with this opinion. 

We concur: 
May 13, 1993 

CERTIFICATE OF SERVICE 

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

following named: 

JOHN J. MANN 

P.O. Box 2219 

Wolf Point, MT 59201 

TERRY WALLACE 

Attorney at Law 

P.O. Box 4763 

Missoula, MT 59806 

Charles R. Cashmore 

Bruce A. Fredrickson 

Malcolm H. Goodrich 

CROWLEY, HAUGHEY, HANSON, TOOLE & DJETRICH 

P.O. Box 2529 

Billings, MT 59103-2529 

ED SMITH 

CLERK OF THE SUPREME COURT 

STATE OF MONTANA