NO. 93-326 

IN THE SUPREME COURT OF THE STATE OF MONTANA 

RONALD J. STEVENSON and VICKI R. 

STEVENSON, husband and wife, 

Plaintiffs and Respondents, 

EDWARD ECKLUND and MARY ECKLUND, 

husband and wife; JOHN C. WOOD and 

CAROL A. WOOD, husband and wife; and 

THE STATE OF MONTANA, 

Defendants and Appellants. 

APPEAL FROM: District Court of the Eighth Judicial District, 

In and for the County of Cascade, 

The Honorable Mark P. Sullivan, Judge presiding. 

COUNSEL OF RECORD: 

For Appellants: 

Donald L. Ostrem, Graybill, Ostrem & Crotty, Great 

Falls, Montana (Woods) 

For Respondents: 

Patrick F. Flaherty, Great Falls, Montana 

(Stevensons) 

Filed: 

Submitted on Briefs: November 23, 1993 

Decided: December 22, 1993 
Justice Karla M. Gray delivered the Opinion of the Court. 

The sole issue before this Court is whether the Eighth 

Judicial District Court, Cascade County, erred in concluding that 

a breach of the covenant of warranty contained in a warranty deed 

occurred. Because no party other than the covenantee lawfully 

asserted ownership over the property conveyed by the deed, we 

conclude that the covenant of warranty was not breached. We 

therefore reverse the court's denial of the Woods' motion for 

summary judgment and grant of summary judgment in favor of the 

Stevensons on that issue. 

This case stems from a boundary dispute involving Lots 7 

through 9 and 10 through 12, in Block 1 of the J.L. Largent 

Addition to the town of Ulm, Montana. The dispute arose from an 

error in the original plat recorded in 1910. According to the 1910 

plat, Block 1, containing twelve lots, was 600 feet long. In fact, 

its length was 700 feet. 

The School District in Ulm acquired Lots 1 through 3 and Lot 

4 in 1904 and 1916, respectively. The School District became aware 

of the discrepancy in the 1910 plat as early as 1954. After 

purchasing Lots 5 and 6 in 1966, the School District had Lots 1 

through 6 restaked to correct the error. The surveyor used a rule 

of survey known as the doctrine of apportionment to correct the 

discrepancy in the 1910 plat. Under that doctrine, when a tract 

contains more or less area than that assigned to it in a recorded 

plat, the excess or deficiency is distributed among all the lots 

comprising the tract in proportion to their respective areas. 

2 
Because the lots in Block 1 were of equal size, the surveyor 

increased the width of Lots 1 through 6 from 50 to 58.33 feet. 

The record does not indicate when John and Carol Woods (the 

Woods) acquired Lots 7 through 12. In January of 1975, however, 

they conveyed their interest in Lots 10 through 12 to Edward and 

Mary Ecklund (the Ecklunds) by quitclaim deed. The Woods showed 

the Ecklunds lot lines reflecting a 58.33 foot width. This width 

was subsequently confirmed when the Ecklunds had Lots 10 through 12 

resurveyed. Survey pins were placed on their property accordingly. 

In October of 1977, the Woods conveyed Lots 7 through 9 to Ronald 

and Vicki Stevenson (the Stevensons) by warranty deed after showing 

them lot lines also reflecting a 58.33 foot width. Lots 9 and 10, 

owned respectively by the Stevensons and the Ecklunds by 1977, 

shared a common boundary. 

In 1985, Edward Ecklund began to exert acts of ownership over 

part of Lot 8 and all of Lot 9. He mowed the lawn, started to 

build a fence, and demanded that the Stevensons vacate the 

property. In October of that year, the Stevensons filed a 

complaint against the Ecklunds seeking to quiet title to Lots 7 

through 9. 

In their answer, the Ecklunds asserted that the disputed 

property was actually part of Lots 10 through 12. They also 

alleged via a counterclaim that the Stevensons had erected a 

structure on their Lots 10 and 11 and requested the court to order 

the Stevensons to either purchase the property or remove the 

structure. Through the course of litigation, they maintained that 
the doctrine of apportionment was improperly applied to increase 

the width of each of the lots in Block 1. 

The Stevensons filed an amended complaint in August of 1990, 

adding the Woods as defendants. The Stevensons alleged that the 

covenant of warranty contained in their deed from the Woods had 

been breached by the Ecklundsl assertion of ownership. 

The Woods and the Stevensons concurred on the issue of the 

doctrine of apportionment and requested the District Court, in 

separate motions for summary judgment, to determine that the 

doctrine had been properly applied to correct the 1910 plat. The 

court denied the motions, determining that a factual dispute 

existed concerning the dimensions of the lots. The Stevensons 

subsequently moved for summary judgment on the covenant of warranty 

issue, arguing that the covenant had been breached as a matter of 

law. The court denied the motion, again stating that a factual 

dispute existed. 

The Woods filed another motion for summary judgment in January 

of 1993, asserting that the Ecklunds could not establish a lllawful 

claimH to any of the Stevensonsl property because the doctrine of 

apportionment had been properly applied. On that basis, the Woods 

argued that no breach of the covenant of warranty contained in 

their deed to the Stevensons occurred. 

On March 31, 1993, the District Court granted partial summary 

judgment in favor of the Woods. The court concluded that the 

doctrine of apportionment applied to the 100-foot discrepancy in 

the 1910 plat, reversing its prior refusal to grant summary 
judgment on that issue, Thus, the boundary dispute between the 

Stevensons and the Ecklunds was resolved in favor of the 

Stevensons. As a result, the court dismissed the Ecklundsl 

counterclaim against the Stevensons. 

The court denied the Woods' motion for summary judgment, 

however, insofar as it related to the breach of the covenant of 

warranty. The court determined that a breach had occurred, 

concluding that the Ecklundsl assertion of ownership was '!not 

unlawful.Ir It reversed its previous denial of the Stevensons' 

motion for summary judgment on that issue, effectively granting 

summary judgment in their favor. The court ruled that the 

Stevensons were entitled to damages as a matter of law, and 

scheduled a hearing to determine the amount of attorney's fees that 

they incurred in defending their title to the property. Upon 

stipulation of the parties, however, the court entered a final 

judgment in accordance with its resolution of the summary judgment 

motions and awarded $7,000 to the Stevensons. The court stayed the 

judgment pending appeal. 

The Woods appeal only from the court's denial of their motion 

for summary judgment and simultaneous grant of summary judgment in 

favor of the Stevensons relating to the breach of the covenant of 

warranty. We conclude that no breach of the covenant of warranty 

occurred and, therefore, reverse the District Court on that issue. 

Our standard in reviewing summary judgment is the same as that 

used by the district courts. Emery v. Federated Foods [Mont. 

19931, - P.2d -, I 50 St-Rep. 1454, 1456. Summary judgment 
is appropriate when the pleadings, depositions, and other documents 

on file demonstrate that no genuine issues of fact exist and the 

moving party is entitled to judgment as a matter of law. Rule 

56 (c) , M.R. Civ. P. Here, the District Court's summary judgment 

rulings turned on its legal conclusion that the Ecklunds' assertion 

of ownership over property in Lot 9 was "not unlawful." Our review 

of legal conclusions is plenary. Steer, Inc. v. Dept. of Revenue 

(1990), 245 Mont. 470, 474-75, 803 P.2d 601, 603. 

The Woods assert that because the doctrine of apportionment 

was properly applied to correct the 100-foot discrepancy in the 

1910 plat, the Ecklunds had no legal basis to support their 

assertion of ownership over part of Lot 9. Absent a lawful 

assertion of ownership, the Woods contend that no breach of the 

covenant of warranty occurred, relying on 5 30-11-110, MCA, and 

Green v. Baker (1923), 66 Mont. 568, 214 P. 88. We agree. 

A covenant of warranty indemnifies the covenantee against a 

loss or injury resulting from a defect in the covenantor's title. 

Capital Hill Shopping Center v. Miles (1977), 174 Mont. 222, 230, 

570 P.2d 295, 298. It must conform, as did the covenant of 

warranty contained in the Stevensons' deed, with 5 30-11-110, MCA. 

That statute requires a covenant of warranty to provide, in 

substance, that a covenantee is protected from persons "lawfully 

claimingN the conveyed property. Section 30-11-110, MCA, reflects 

the common law requirement that a covenantee prove the assertion of 

a paramount title that resulted in the covenantee's actual or 

constructive eviction in order to support a breach of the covenant 
of warranty. Green, 214 P. at 91. 

Thus, we focus on whether the Stevensons proved an assertion 

of paramount title by the Ecklunds over the property in Lot 9 that 

resulted in eviction. Only in the presence of such proof would the 

Ecklunds' assertion of ownership be a "lawful claimu resulting in 

a breach of the covenant of warranty in the Stevensons' deed. 

Throughout the litigation, the Stevensons maintained that the 

Ecklunds had no lawful claim to any of their property. They argued 

that the discrepancy in the 1910 plat regarding the size of Block 

1 was properly resolved by applying the doctrine of apportionment. 

At no time did they allege actual or constructive eviction from the 

property in dispute. In accordance with the Stevensons' position, 

the District Court ruled that the doctrine of apportionment had 

been properly applied. No party has asserted error in this ruling. 

The Stevensons' position and the District Court's resolution 

of the boundary dispute in their favor precludes the conclusion 

that a breach of the covenant of warranty occurred. Absent proof 

that the Ecklunds asserted paramount title resulting in the actual 

or constructive eviction of the Stevensons, the Ecklunds' assertion 

of ownership over property in Lot 9 does not constitute a "lawful 

claim" that can serve as a basis for a breach of the covenant of 

warranty. In other words, unless the Ecklunds prevailed in their 

assertion of ownership over property of the Stevensons, no breach 

of the covenant of warranty could occur. 

The Stevensons argue, without citing authority, that the 

Ecklunds' belief that their assertion of ownership had a legal 
basis is sufficient to establish a breach. This position is 

inconsistent with Green, which requires that paramount title be 

proved and that the covenantee be actually or constructively 

evicted. Green, 214 P. at 91. A warrantor is not bound to defend 

against an unlawful claim of title, but only against claims that 

are, in fact, superior. Chaney v. Haeder (0r.App. 1988), 752 P.2d 

854, 856-57; Roper v. Elkhorn at Sun Valley (Idaho 1980) , 605 P. 2d 

968, 972-73; 20 Am.Jur.2d Covenants, Conditions, and Restrictions 

5 56 (1965). 

The Stevensons also assert that they were unable to obtain 

title insurance or refinance the underlying loan on the property 

during the pendency of the litigation. On that basis, they argue 

that the property was "encumbered," resulting in a breach of the 

covenant of warranty. We disagree. 

The mere showing of a cloud on the title is not sufficient to 

establish a breach. Roper, 605 P.2d at 972; 20 Am.Jur.2d 

Covenants, Conditions, and Restrictions 5 56 (1965). Thus, even if 

the Ecklunds' assertion of ownership clouded the Stevensons' title 

in the eyes of the title insurance company or the lending 

institution, the claim was not paramount to the Stevensons' title 

as required by Green. 

The Stevensons also argue that the covenant of warranty was 

breached under Wagner v. Cutler (1988), 232 Mont. 332, 757 P.2d 

779. They quote at length from Waaner, but neither develop an 

argument nor apply that case to the facts before us. In Waaner, we 

addressed the scope of a covenant of warranty contained in a 
C*i 

special warranty deed. Waqner is not relevant in determining 

whether a breach of the covenant of warranty occurred here. 

Finally, the Stevensons contend that S 27-1-316(1) (c) , MCA, 

supports the court's award of attorney's fees as a measure for 

damages resulting from the breach of the covenant of warranty. It 

is true that 27-1-316(1) (c) , MCA, provides that expenses incurred 

by the covenantee in defending his possession are part of the 

detriment caused by a breach of the covenant of warranty. However, 

the statute does not serve as a basis for an award of attorney's 

fees where, as here, no breach is established. 

Because the Stevensons did not establish that the Ecklunds had 

asserted a lawful claim of ownership on the disputed property under 

Montana law, we hold that the District Court erred in concluding 

that a breach of the covenant of warranty occurred. We reverse the 

District Court's denial of the Woods1 motion for summary judgment, 

and simultaneous grant of summary judgment in the Stevensons' 

favor, relating to the covenant of warranty 

its judgment consistent with this opinion. 

Reversed. 

We Concur: 

Chief Justice 

h 

and direct it to modify 

?