No. 96-325 INTHESUPREMECOURTOFTHESTATEOFMONTANA 1997

CLYDESCHRECKENDGUST, JR.,

Plaintiff andAppellant,
v. FLORENCEBAPTIST CHURCH,INC.,

Defendant andRespondent.

APPEALFROM: District Court of the Twenty-First Judicial District,

In andfor the County of Ravalli, TheHonorable Jeffrey H. Langton, Judge presiding.

COUNSELOFRECORD:

For Appellant: Dirk A. Williams; Church, Harris, Johnson & Williams, Missoula, Montana For Respondent: David Rodli; David Rodli LawOffices, Missoula, Montana

Submitted onBriefs: January 16, 1997 Decided: January 30, 1997 Filed:Justice Karla M.Gray delivered the Opinion of the Court.

Pursuant to Section I, Paragraph 3(c), Montana Supreme Court 1995 Internal Operating Rules, the following decision shall not be cited asprecedent andshall bepublished byits filing asapublic document with the Clerk of the Supreme Court andbyareport of its result to State Reporter Publishing Company and West Publishing Company. Clyde Schreckendgust, Jr. (Clyde) appeals from the judgment entered by the Twenty-First Judicial District Court, Ravalli County, onits order granting the motion for summary judgment filed byFlorence Baptist Church, Inc. (Church). Wereverse and remand. Thedispositive issue onappeal is whether the District Court erred in determining that the Church met its initial burden of establishing that nogenuine issue of material fact existed with regard to its compliance with the use restriction in the 1977 warranty deed. FACTUALBACKGROUND In 1975, KenCoxfounded the Church knownthen asthe Florence Bible Church, and held worship services in the basement of his home. In April of that year, Clyde conveyed aone-acre parcel of land (Parcel A) in the Florence Orchard Homessubdivision, Ravalli County, to the Church via aspecial warranty deedwhich limited the
use of Parcel Ato noncommercial church purposes. Oneyear later, Clyde conveyed another one-acre parcel of land (Parcel B) in the
same subdivision to the Church via a warranty deed devoid of
2limitation. The Church opened a school, known as the Florence

Christian Academy, andbegan holding academic classes in 1976. The Church subsequently built a sanctuary and school building on Parcels Aand B. The ownership and use of Parcels Aand Bunder the deeds to those parcels are not at issue in this case. In 1977, the Church offered to purchase thirteen acres of land (the 13-acre parcel) adjacent to Parcels Aand Bfrom Clyde. At that time, the Church wasconducting afive-day per week, Christian school with approximately 140 students from kindergarten through twelfth grade (K-12) on Parcels Aand B. The Church wanted to build alarger church sanctuary and anathletic field onthe 13-
acre parcel and convert its existing church facility into an extension of the school building onParcels AandB. Clyde declined the Church's offer to purchase the land. Later, however, heconveyed the 13-acre parcel to the Church and the Florence Christian Academy via awarranty deed (1977 warranty deed) which described the real property asfollows: Lots Thi.rty (30), Thirty-one (31) andThirty-two (32), Florence Orchard Homes, aplatted subdivision of Ravalli County, Montana, LESSParcel Aand Parcel Blocated in said Lot 30, Certificate of Survey No. 836which were previously conveyed; solong assaid lands are used for school and Christian church pUrpOSeS, that is Fundamental, Bible believing, meeting the adademic [sic] requirements of Christian Education; grades K-12 and beyond, [sic] If this discontinues the property conveyed shall revert back to original owner or assigners [sic]. [Emphasis added.] Asnoted above, Parcels Aand Bhad already been conveyed to the Church. The first portion of the quoted limitation in the 1977

3warranty deed is referred to below as the use restriction; the

second portion asthe reversionary clause. The Church held academic classes at its school located on Parcels AandBthrough the 1985-1986 school year. Enrollment was l:.mited, however, in large part because manyparents could not pay the tuition being charged. During the 1987-1988 and 1988-89 academic years, only kindergarten and first grade students were enrolled at the Church's school on Parcels Aand B. During the 1989-1990 academic year, only kindergarten through third grade students were enrolled at the school. After the 1989-1990 school year, the Church continued to offer
afour-day per week, kindergarten class taught byastate-certified elementary teacher at its school on Parcels Aand B. In 1991, C:.yde met with Gary Randall (Randall), the Church's pastor at the time, to discuss the language of the 1977 warranty deed and the Church's intentions regarding its school. Randall stated in his a:ifidavit that he"expressed the church's continuing intent to have
aschool in operation onthe property." In August of 1991, the Church began the Florence Baptist Bible Institute, apost-secondary education program, which--with the exception of one semester in 1!>94--has been conducting classes since that time. After his 1991meeting with Randall, Clyde apparently did not contact the Church until July 5, 1994, whenheadvised Randall that he would begin "foreclosure" proceedings on the 13-acre parcel unless the Church was operating atraditional on-premises K-12 school bythe endofAugust, 1994. TheChurch did not comply with
4Clyde's demand by the deadline. It did, however, found the

Florence Christian Academy Home School Association (FCABSA), apparently in 1994, andapplied for membership in the Accelerated Christian Education program in late July of 1994; its membership application was approved in January of 1995. The Church administers the FCABSA, supervising families who belong to the FCABSA and who "home school" their children. It also provides those families with access to the school building and numerous resources, materials, curricula, guidance and certification. At the conclusion of each academic quarter, anaward ceremony is held at the school for FCAHSAstudents; graduates of the FCAHSAreceive
a diploma from the Florence Christian Academy. Since its inception, the Church hasheld traditional worship services, Sunday school classes, adult Bible studies andteen group activities. PROCEDURALHISTORY Clyde filed anaction against the Church onNovember 1, 1994, seeking to quiet title to the 13-acre parcel in his name onthe basis that the Church failed to comply with the use restriction contained in the 1977 warranty deed. Healso sought to have the Church ejected from the 13-acre parcel based on its refusal to comply with his demand to vacate. The Church responded that, although it did not "currently regularly conduct on-premises private elementary and secondary school classes during weekdays," it wasin compliance with the use restriction contained in the 1977 warranty deed. In addition, while the Church admitted that it had refused Clyde's demand to 5vacate the 13-acre parcel, it alleged that its refusal wasproper.

Finally, the Church pled the affirmative defenses of accord and satisfaction, estoppel, andthe statute of limitations. The Church subsequently moved for summary judgment on the basis that nogenuine issues of material fact existed regarding its compliance with the clear andunambiguous restriction requiring use for "school andChristian church purposes" which was contained in the 1977 warranty deed. TheChurch also contended that the First Amendment tothe United States Constitution prohibited the District Court from interpreting church doctrine andreligious terminology in order to resolve anyambiguity regarding additional terms in the
use restriction. In addition, the Church argued that the 1977 warranty deed was orally modified in 1991 when Clyde gave the Church five years in which to be operating an on-premises K-12 school. Finally, the Church maintained that Clyde's attempt to quiet title to the 13-acre parcel via exercise of the reversionary clause wasbarred by lathes. Clyde filed across-motion for summary judgment, contending that his quiet title action waspurely acontract action without First Amendment implications. Heasserted entitlement to judgment
asamatter of law onthe basis that the plain language of the use restriction contained in the 1977warranty deedrequired the Church tomaintain anon-premises K-12 academic school andthat nogenuine issue of material fact existed regarding the Church's failure to comply. Alternatively, he maintained that the parties' intent, custom and usage for at least fourteen years wasthat the Church
6must ttoperatel' an on-premises K-12 academic school in order to

comply with the use restriction. The District Court granted the Church's motion for summary judgment and denied Clyde's cross-motion. Among other things, it determined that the Church had established the absence of any genuine issues of material fact regarding its compliance with the
use restriction contained in the 1977warranty deed andthat Clyde failed to raise agenuine issue of material fact in that regard. The District Court subsequently entered judgment in favor of the Church. Thereafter, Clyde filed amotion to alter or amend judgment which was deemed denied byoperation of law. Clyde appealed. DISCUSSION Did the District Court err in determining that the Church met its initial burden of establishing that nogenuine issue of material fact existed with regard to its compliance with the use restriction in the 1977warranty deed? Summary judgment is proper whennogenuine issues of materia fact exist andthe moving party is entitled to judgment asamatter of law. Rule 56(c), M.R.Civ.P. Wereview adistrict court's grant
or denial of amotion for summary judgment denova, applying the
sameRule 56(c), M.R.Civ.P., criteria used bythat court. Carelli
v. Hall (Mont. 1996), 926 P.2d 756, 759, 53 St.Rep. 1116, 1117 (citation omitted). The moving party has the initial burden of establishing the absence of genuine issues of material fact and entitlement to judgment asamatter of law. Carelli, 926 P.2d at 759 (citation omitted). Only where the moving party satisfies itsinitial burden does the burden shift to the party opposing summary

judgment to present evidence raising agenuine issue of material fact. Carelli, 926 P.2d at 759-60 (citation omitted). The arguments made by Clyde and the Church to both the District Court andthis Court refer interchangeably, and often in the aggregate, to Parcels Aand Band the 13-acre parcel, often simply referring to activities on "the property." They also apparently assume that the Church's activities onParcels AandB constitute activities on the 13-acre parcel to which the use restriction and reversionary clause at issue apply and that, if such activities meet the use restriction, those activities would defeat both Clyde's exercise of the reversionary right and his attempt to quiet title to the 13-acre parcel. It is not clear why the parties proceeded in this manner. In any event, however, the District Court joined in this confusion by failing to carefully describe whether certain activities are taking place onParcels A andBor onthe 13-acre parcel; indeed, it appears that the court followed the parties' lead in grouping all the property together andassuming that any church activities anywhere on"the property" related to the 13-acre parcel, the use restriction and the reversionary clause. The problem is that the record before us does not establish any activity at all by the Church onthe 13-acre parcel. Clyde argues in his opening brief on appeal that, regardless of the correct interpretation of the use restriction relating to school purposes, the record does not support anychurch use of the 13-acre
8parcel for any--even tangential--school purpose. The Church

responds that KenCox's July 21, 1995, affidavit establishes that the 13-acre parcel "is used--as it has been since 1977 when the land wasdonated byClyde--as anathletic field." KenCox's affidavit states: 5) Upon the initial two acres [Parcels Aand B] was situated the church andschool. It wasthe desire of the church board to purchase from Mr. Schreckendgust the adjacent 13 acres in order to build a larger church sanctuary andanathletic field, converting the existing church building on the initial two acres into an extension of the already established school. The church board desired nothing more than to expand the ministry already started. 6) Approximately in May, 1977, the church elders of Florence Bible Church, including Affiant, invited Mr. Schreckendgust to the church to show him a threedimensional model ofthe proposed expansion project which would include alarge church sanctuary and an athletic field for the 13 adjacent acres owned by Mr. Schreckendgust. Noother buildings or representations were made on the three-dimensional model. No school buildings were shownonthe model or proposed verbally or otherwise for the 13acres. While the affidavit reflects the Church's desires and intent regarding use of the 13-acre parcel, it clearly does not establish either the existence orthe useof anathletic field onthe 13-acre parcel after Clyde deeded it to the Church. Nor does any other affidavit or exhibit establish that the Church ever madeuse of the 13-acre parcel. Theaffidavit of Mark Davis, the Church's senior pastor from October of 1987 through September of 1989, talks about agentleman using "the bus barn and parsonage" for his ownpersonal use. However, the affidavit does not state onwhich parcel the busbarn andparsonage were located. The Church's brief supporting its summary judgment motion in the
9District Court discusses improvements, such asaseptic system and

drain field, and renovations on "the property." Again, the brief does not establish that the referenced improvements andrenovations
were on the 13-acre parcel. In January of 1987, the Church's attorney wrote a letter to Clyde, exploring the possibility of purchasing the "unconditional conveyance of the lands in Lots 30, 31and32which have previously beenthe subject of the conditional conveyance." He refers, in that letter, to substantial improvements placed onthe land, but does not elaborate. TheChurch contends that Clyde conceded, for summary judgment purposes, that the Church and the full-time, on-premises K-12 school the Church earlier had been conducting were Christian, "Fundamental and Bible believing" and that the school met the academic requirements of Christian education. It also contends that he conceded that the kindergarten and the home school education classes offered bythe Church are Christian, Fundamental, Bible believing andmeet the academic requirements of kindergarten andhome school education, respectively. While that maybetrue, those concessions donot establish that the kindergarten classes, the homeschool administration orthe homeschool awards ceremonies
were conducted onthe 13-acre parcel. Indeed, the record strongly suggests that all of those activities take place in the Church buildings located onParcels AandB. Before the Church can establish the absence of genuine issues of material fact regarding its compliance with the use restriction inthe 1977warranty deed, it must establish--at aminimum--that it
10makes use of the 13-acre parcel for church andschool purposes. It

has not done so. Wehold that the District Court erred in determining otherwise and, for that reason, also erred in granting summary judgment to the Church. The court having erred onthis threshold question, we do not address the legal analysis it applied, or the conclusion it reached, with regard to whether the
use restriction in the 1977 warranty deed is ambiguous; those portions of the District Court's opinion and order on summary judgment are vacated pending further consideration, as may be appropriate, onremand. Reversed andremanded for further proceedings consistent with this opinion.

Weconcur:

Justices /

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