No. 92-187 

IN THE SUPREME COURT OF THE STATE OF MONTANA 

APPEAL FROM: District Court of the ~ineteenth Judicial District, 

In and for the County of Lincoln, 

The Honorable Robert S. Keller, Judge presiding. 

COUNSEL OF RECORD: 

For Appellant: 

John A. Lence, Attorney at Law, Kalispell, Montana 

For Respondent: 

Steven E. ~ummings, Murphy, Robinson, Heckathorn & 

Phillips, ~alispell, Montana 

Filed: 

Submitted on Briefs: August 13, 1992 

Decided: September 29, 1992 
Justice Karla M. Gray delivered the Opinion of the Court. 

John A. Lence appeals from the Judgment and Decree of 

Foreclosure entered following a grant of summary judgment in favor 

of First Western Federal Savings Bank by the Nineteenth Judicial 

District Court, Lincoln County. We affirm. 

We address the following issues: 

1. Did the District Court err in designating its Judgment and 

Decree of Foreclosure a final judgment? 

2. Did the District Court err in concluding that a deficiency 

judgment is available following judicial foreclosure of a deed of 

trust securing a condominium not utilized as a primary residence? 

3. Did the District Court err in refusing to delay a 

sheriff's sale and determination of fair market value of the 

property in question pending the outcome of separate litigation? 

The basic facts of this case are not in dispute. On January 

31, 1984, appellant John A. Lence (Lence) signed and delivered to 

Montana Savings and Loan Association an adjustable rate promissory 

note (note). Payment of the obligation evidenced by the note was 

secured by a deed of trust signed by Lence, with Montana Savings 

and Loan Association as beneficiary. The deed of trust describes 

the property as "Unit No. 21 of Crystal Lakes Condominiums Club 

House Units1! (the condominium). Respondent First Western Federal 

Savings Bank (First Western) is the successor in interest to 

Montana Savings and Loan Association and is the present owner and 

holder of the note and deed of trust. 
Lence purchased the condominium as a secondary residence: his 

primary residence was in Whitefish, Montana. He lived at the 

condominium during the summers from 1977 until approximately 1985. 

Lence sold the property on February 1, 1986, and repossessed it on 

December 22, 1989. Since the repossession, he has rented the 

property on an intermittent basis. The property is the subject of 

federal district court litigation by Lence and other Crystal Lakes 

property owners for the right to use facilities at Crystal Lakes 

Resort. 

Lence defaulted on the note by failing to pay the monthly 

installments due on December 1, 1989, and on the first day of each 

month thereafter. The outstanding amount owed as of December 10, 

1990, is $55,971.38, plus interest at a variable rate on the 

principal balance. 

First Western brought suit against Lence to foreclose the note 

and deed of trust relating to the condominium and subsequently 

moved for summary judgment. The District Court found the 

undisputed facts to be essentially those stated above and granted 

summary judgment, concluding that First Western was entitled to 

judgment for the amounts owing and to have its deed of trust 

foreclosed judicially as provided by law. In addition, the court 

concluded that a deficiency judgment would be available to First 

Western in the event the sheriff's sale did not net sufficient 

funds to satisfy the debt. The deficiency judgment would be the 

difference between the fair market value of the property at the 

time of sale and the amount of the debt; a hearing would be held 
for the purpose of determining the fair market value at that time. 

Lence appeals from the final judgment and decree of foreclosure 

entered March 3, 1992. 

1. Did the District Court err in designating its Judgment and 

Decree of Foreclosure a final judgment? 

The District Court entered its Judgment and Decree of 

Foreclosure on March 3, 1992; the Judgment included an order of 

sale at public auction and the right of First Western to a 

deficiency judgment if sale proceeds were insufficient. Lence 

argues that the Judgment and Decree of Foreclosure is not a final, 

appealable order. 

In Federal Savings and Loan Ins. v. Hamilton (1989) , 241 Mont. 

367, 786 P.2d 1190, the mortgagors attempted a consolidated appeal 

from an amended order granting summary judgment, decree of 

foreclosure, and deficiency judgment to the mortgagee, and from a 

subsequent notice of entry of deficiency judgment in the amount of 

$99,306. In other words, they tried to appeal both the propriety 

and the amount of the deficiency judgment. We concluded that the 

amended summary judgment, decree of foreclosure and deficiency 

judgment was a final order under Rule 1, M.R.App.P. Therefore, we 

held that the appeal of the propriety of the deficiency judgment 

entered with the summary judgment and decree of foreclosure was not 

timely. 

As we noted in Hamilton, foreclosure cases can involve two 

final orders: first, the judgment/decree of foreclosure, which may 
contain the right to a deficiency judgment: and second, the actual 

entry of the deficiency judgment. Hamilton, 241 Mont. at 369. 

Here, the Judgment and Decree of Foreclosure is, indeed, a final 

judgment under Hamilton. The District Court did not err in so 

designating it. 

2. Did the District Court err in concluding that a deficiency 

judgment is available following judicial foreclosure of a deed of 

trust securing a condominium not utilized as a primary residence? 

We first addressed the availability of deficiency judgments 

after judicial foreclosure of trust deeds executed under Montana's 

Small Tract Financing Act (Act) in First State Bank of Forsyth v. 

Chunkapura (1987), 226 Mont. 54, 734 P.2d 1203. We traced the 

history of the legislature's adoption of the Act, considered 

decisions from other states with similar Acts on the question of 

the availability of deficiency judgments, and held that deficiency 

judgments are not allowed when trust indentures executed under the 

Act are foreclosed by judicial proceedings. Chunka~ura, 226 Mont. 

at 56-58, 60-63. On rehearing, we carefully limited the opinion to 

the facts of that case, namely, that the trust deed before us 

"related to an occupied, single family residential property" and 

held that prospective deficiency judgments for like property would 

be invalid and of no effect. Chunkaoura, 226 Mont. at 67. 

We addressed the availability of deficiency judgments under 

the Act again in 1989, under somewhat different facts. In First 

Federal Savings & Loan v. Anderson (1989), 238 Mont. 296, 777 P.Zd 
1281, the lender also sought a deficiency judgment after judicial 

foreclosure of a trust deed under the Act. There, the Andersons 

had occupied the dwelling as a family residence for seven years, 

subsequently renting it for eighteen months while the property was 

for sale in order to continue making the payments to the lender. 

The lender argued that, because the Andersons no longer occupied 

the property themselves and, in fact, rented it to others, they 

were not entitled to the benefit of the Chunkauura holding. We 

disagreed, holding that the property fit the Chunkauura exception 

and that no deficiency judgment was available. Anderson, 238 Mont. 

at 301. 

Again, in Wash.-Ida.-Mont. Retirement v. Galleria (1989), 239 

Mont. 250, 780 P.2d 608, we addressed the availability of a 

deficiency judgment after judicial foreclosure of a trust 

indenture. In Galleria, however, the property at issue was 

commercial property. There, we noted that the Chunkauura 

limitation on the availability of deficiency judgments was limited 

to "trust deeds used as security for the financing of single 

dwelling, occupied homes (the type of financing for which the Small 

Tract Financing Act was argued to the legislature) ." Galleria, 239 

Mont. at 258. We held that the Chunkauura limitation on deficiency 

judgments did not apply to a trust indenture securing a purely 

commercial loan. 

The facts before us in the present case are not qualitatively 

equivalent to those in Chunkauura or Anderson. Here, the trust 

deed secured property utilized as a second residence during the 
summers: Lence concedes that his primary residence remained in 

Whitefish. He argues, however, that the property at issue is a 

single family residential property which, under Chunka~ura, 

precludes the availability of a deficiency judgment. He further 

argues that the fact that he no longer occupies the property at 

all, but has rented it intermittently, brings him within the facts 

of Anderson. Lencefs hypertechnical attempt to make his factual 

situation indistinguishable from Chunka~ura and Anderson misses the 

thrust of those decisions. 

Lence's condominium was never intended to be, or occupied as, 

his actual and primary residence. He purchased it as recreational 

or seasonal property and utilized it as such for several years. 

Under the laws of Montana, a person has one residence; the 

residence is "where one remains when not called elsewhere for labor 

or other special or temporary purpose. . . . Section 1-1-215, 

MCA. Lence cannot have two legal "residences" in Montana--a 

primary residence in Whitefish and one to which he is "called for 

special purpose1* in Lincoln County--and claim the benefits of the 

laws of Montana with regard to both. That is the result he seeks 

in asking this Court to preclude the availability of a deficiency 

judgment to First Western. 

In Chunka~ura and Anderson, we defined the property to which 

the limitation on deficiency judgments applied based on the facts 

before us in those cases. Both involved residential properties 

purchased and utilized as the family's primary residence. We 

conclude that the condominium at issue here, never intended or 
occupied as Lence's primary residence, does not qualify for the 

limitation on deficiency judgments established in Chunkapura and 

Anderson. To accept Lence's argument would pervert the limited 

nature of the Chunkapura exception; it would allow a person to 

avoid the possibility of deficiency judgment on virtually unlimited 

numbers of properties by merely ensuring that each property was a 

residential unit and without regard to whether the property was 

ever intended or used as a personal, primary residence. Indeed, 

under Lence's interpretation of Anderson, it would not be necessary 

that the borrower ever occupy the properties, so long as they were 

occupied by someone. Such results were not contemplated or 

intended by Chunka~ura and Anderson, and do not reflect the purpose 

for which the Small Tract Financing Act was adopted by the Montana 

legislature. 

3. Did the District Court err in refusing to delay a 

sheriff's sale and determination of fair market value of the 

property in question pending the outcome of separate litigation? 

The District Court determined that if the proceeds of the 

ordered sheriff's sale proved insufficient to pay the amounts owing 

to First Western and the expenses of the sale, a hearing would be 

held to determine the amount of the deficiency judgment, if any, to 

which First Western would be entitled. The purpose of the hearing 

would be to determine the fair market value of the property; the 

amount of any deficiency would then be based on the difference 

between the fair market value and the amount owing to First 
Western. While the District Court did not so state, the procedures 

it ordered were those set forth by this Court for determining fair 

market value in Galleria. 

Lence contends that the District Court erred in refusing to 

delay the sheriff's sale until the federal court litigation 

concerning the Crystal Lakes owners' access to resort facilities is 

completed. He cites no authority in support of this contention. 

He simply asserts that "the fair market value of the property can 

not be ascertained in this situation" and quotes a portion of First 

Western's appraisal report to the effect that the value is totally 

dependent on the future outcome of the federal lawsuit. 

We do not disagree that the federal court litigation, if 

unresolved at the time of the sheriff's sale, may have a 

significant impact on the sale and the fair market value 

determination made by the District Court. This lack of 

disagreement does not equate, however, to agreement that the fair 

market value of the property cannot be ascertained. 

All property has a fair market value; such a value is 

influenced by numerous factors and is always dependent, to some 

degree, on the moment in time at which the value is established. 

Indeed, while the appraisal report offered on behalf of First 

Western indicates the significance of the pendency of the federal 

litigation, that report goes on to make a fair market value 

determination under then-current circumstances, including the 

pending litigation. Simply put, it is the appraiser's job to make 

such valuations. We are confident that the District Court, aided 
by the evidence presented by the parties and, presumably, their 

respective appraisers, will be able to determine the fair market 

value of the condominium after the sheriff's sale if the need 

arises. 

Finally, we note that Lence has been in default on his 

obligations to First Western since December 1989. First Western 

cannot complete the judicial foreclosure and deficiency 

determination and collect the amounts to which it is entitled by 

law until such time as the present case reaches final resolution. 

There is no reason in law or in equity to further delay its ability 

to enforce its rights by awaiting the outcome of litigation in 

which it is not involved and over which it has no control. We hold 

that the District Court did not err in refusing to delay a 

sheriff's sale and determination of fair market value of the 

property pending the outcome of separate litigation. 

Affirmed. 
September 29, 1992 

CERTIFICATE OF SERVICE 

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

following named: 

JOHN A. LENCE 

Attorney at Law 

69 North Main Street 

Kalispell, MT 59901 

Steven E. Cummings 

MURPHY, ROBINSON, HECKATHORN & PHELIPS 

P.O. Box 759 

Kalispell, MT 59903 

ED SMITH 

CLERK OF THE SUPREME COURT 

STATE OF MONTANA