D A 0 7

- 0 7 5 0

I N T H E S U P R E M E C O U

R T O F T H E S T

A T E O F M O N T

A N A

2 0 0 9 M T 8 6

C Y N T H I A R

. J O H N S O N

,

P l a i n t i f f a n d A p p e l l a n t

,

v

.

D I S T R I C T V I I

, H U

M A N R E S O U

R C E S D E V E L O P M EN T

C O U N C I L a n d F I R S T M O N T A N A T I T L E C O M P A

N Y

O F B I L L I N G S

,

D e f e n d a n t s a n d A p p e l l e e s

.

APP EAL FROM: District Court of the Thirteenth Judicial District

,

I n a n d F o r t h e C o u

n t y o f Y e l l o w s t o n e

, C a

u s e N o

. D V

- 0 6

- 0 1 4 2

H o n o r a b l e G r e g o r

y R

. T o d d

, P r e s i d i

n g J u d g e

C O U N S E L O F R E C O R D :

F o r A p p e l l a n t :

T h o m a s E

. T o w e

, T o w e

, B a l l

, E n r i g h t

, M a c k e y & S o m m e r f e l d

, B i l l i n g s

, M o n t a n a

F o r A p p e l l e e s :

P e t e r T

. S t a n l e y

, A t t o r

n e y a t L a w

, B i l l i

n g s

, M o n t a n a

S u b m i t t e d o n B r i e f

s : J a n u a r y 7

, 2 0 0 9

D e c i d e d : M a r c h 2 0

, 2 0 0 9

F i l e d :

_ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ C l e r k March 20 20092

Justice Brian Morris delivered the Opinion of the Court.

¶ 1 C y n t h i a R

. J o h n s o n ( J o h n s o n ) a p p e a l s f r o m a n o r d e r o f t h e T h i r t e e n t h J u d i c i a l D i s t r i c t

C o u r t

, Y e l l o w s t o n e C o u n t y

, t h a t r e q u i r e d J o h n s o n t o p a y D i s t r i c t V I I

, H u m a n R e s o u r c e s

D e v e l o p m e n t C o u n c i l ( H R D C ) $ 1 6

, 6 1 2

. 0 9 i n l o a n p r i n c i p a l a n d i n t e r e s t

, a t t o r n e y f e e s

, c o s t s

,

and accrued interest. Johnson ’ s a p p e a l r e q u i r e s u s t o r e s o l v e t h e f o l l o w i n g i s s u e s :

¶ 2 W h e t h e r t h e D i s t r i c t C o u r t c o r r e c t l y c o n v e r t e d H R D C ’ s c o u n t e r c l a i m o f m u t u a l

m i s t a k e t o a n a f

f i r m a t i v e d e f

e n s e

.

¶ 3 W h e t h e r t h e D i s t r i c t C o u r t p r o p e r l y d e n i e d J o h n s o n ’ s m o t i o n f

o r p a r t i a l s u m m a r y

j u d g m e n t

.

¶ 4 W h e t h e r t h e D i s t r i c t C o u r t p r

o p e r l y g r a n t e d a f f i r m a t i v e r e l i e f t o H R D C o n i t s

c o u n t e r c l a i m o f m

u t u a l m i s t a k e w h e n t h e c o u r

t d e e m e d t h e c o u n

t e r c l a i m t o b e a n a f

f i r m a t i v e

d e f e n s e

.

PROCEDURAL AND FACTUAL BACKGROUND

¶ 5 J o h n s o n a

p p l i e d f o r a l o a n w i t h H R D C t o p u r c h a s e a n a s s i s t e d l i v i n g f a c i l i t y

. D e n i s e

J o r d a n ( J o r d a n )

, H R D C ’ s l o a n o f f i c e r

, p r o c e s s e d J o h n s o n ’ s l o a n a p p l i c a t i o n a

n d d e t e r m i n e d

t h a t H R D C w o u l d r e q u i r e e x t r a s e c u r i t y o n t h e l o a n

. J o h n s o n a g

r e e d t o a s e c o n d m o r t g

a g e

o n h e r h o m e a n d a l i e n o n h e r b u s i n e s s e q u i p m e n t

.

¶ 6 J o h n s o n r e c e i v

e d a l e t t e r f

r o m J o r d a n o n F e

b r u a r y 2 0

, 1 9 9 8

, n o t i f

y i n g h e r t h a t

H R D C ’ s l o a n r e v i e w b o a r d h a d a p p r o v e d t h e l o a n a

t a 1 3 % f i x e d i n t e r e s t r a t e

. J o r d a n

p r e p a r e d a l l t h e l o a

n d o c u m e n t s i n c l u d i n g t h e l o a n a g r e e m e n t

, p r o m

i s s o r y n o t e ( n o t e )

, a n d

M o n t a n a t r u s t i n d e n t u r e

.3

¶ 7 J o h n s o n a n d H R D C s i g n e d a l o a n a g

r e e m e n t o n F e b r

u a r y 2 6

, 1 9 9 8

. T h e t e r m s o f t h e

a g r e e m e n t i n c l u d e d t h e p r i n c i p a l s u m o f $ 2 1

, 6 6 1

, f

o r a f i v e

- y e a r t e r m w i t h m o n t h l y

p a y m e n t s a t a n i n

t e r e s t r a t e o f 1 3 % p e r a n n

u m

. J o h n s o n a n d H R D C a l s o s i g

n e d t h e n o t e o n

F e b r u a r y 2 6

, 1 9 9 8

. T h e t e r m s o f t h e n o t e i n c l u d e d t h e c o r r e c t p r i n c i p a l s u m o f $ 2 1

, 6 6 1 a n d

m o n t h l y p a y

m e n t s i n t h e a m o u n t o f $ 3 6 2

. 2 3 f o r s i x t y m o n t h s

. T h e n o t e i n c o r r e c t l y l i s t e d a n

i n t e r e s t r a t e o f 0

. 1 3 % p e r a n n u m

. J o h n s o n c o n v

e y e d h e r h o m e b y i s s u i n g a d e e d o f t r u s t o n

F e b r u a r y 2 6

, 1 9 9 8

, t h a

t l i s t e d F i r s t M o n t a n a T i t l e C o m p a n y ( F M T C ) a s t h e t r

u s t e e a n d

H R D C a s t h e l e

n d e r

.

¶ 8 J o h n s o n d i s c o v

e r e d t h e i n t e r e s t r a

t e e r r o r i n M a r c h 2 0 0 1 w

h e n s h e a p p l i e d f

o r a r e a l

e s t a t e l o a n

. J o h n s o n t e s t i f

i e d t h a t s h e c a l l e d H R D C a b o u t t h e d i s c r e p a n c y i n t h e l o a n p a y o f f

a m o u n t

. J o h

n s o n c o n t e n d e d t h a t J o r d a n a s k e d h e r t o s i g

n n e w l o a n p a

p e r s t o r e p a y t

h e

$ 1 6

, 0 0 0 d e f

i c i e n c y a t a n i n e p e r c e n t i n t e r e s t r a t e

. J o h n s o n u n d e r s t o o d h e r b a l a

n c e a t t h a t

t i m e t o b e a p p r o x i m a t e l y $ 8

, 8 0 0

.

¶ 9 J o h n s o n f

u r t h e r t e s t i f i e d t h a t s h e h a

d b e e n w i l l i n g t o p a y h a l f o f t h e $ 1 6

, 0 0 0 o n t h e

g r o u n d s t h a

t t h e m i s t a k e h a d n o t b e e n h e r s a n d t h a t s h e t i m e l y h a d m a d e h e r m o n t h l y

p a y m e n t s

. J o h n s o n c l a i m e d t h a t J o r d a n f a i l e d t o r e t

u r n h e r t e l e p h o n e c a l l s a n d t h a t J o r d a n

e v e n t u a l l y r e f

e r r e d h e r t o H R D C ’ s c o u n s e l

, P e t e r S t a n l e y ( S t a n l e y )

. J o h n s o n t e s t i f i e d t h a t

S t a n l e y i n f

o r m e d h e r t h a t t h e e r r

o r w a s a “ s c r i v e n e r ’ s e r r o r

, ” a m u t u a l m i s t a k e

, a n d t h u s

J o h n s o n o w e d t

h e e n t i r e $ 1 6

, 0 0 0 l o a n b a l a

n c e

.

¶ 1 0 J o r d a n t e s t i f

i e d t h a t s h e h a

d d i s c o v e r e d t h e d i s c r e p a n c y i n i n t e r e s t r a t e s a t

a p p r o x i m a t e l y t h e s a m e t i m e a s h a d J o h n s o n

. S h e i m

m e d i a t e l y c o n

t a c t e d S t a n l e y

. J o r d a

n4

t e s t i f i e d t h a t s h e h a

d m a d e t h e m

i s t a k e i n i n t e r e s t r a t e s a n d m o n t h l y c a l c u l a t i o n s d u e t o h e r

u n f a m i l i a r i t y w i t h H R D C ’ s n e w l y a c q u i r e d l e n d i n g s o f t w a r e

. S h e s i m

p l y h a d i n p u

t t h e

information incorr e c t l y

. J o r d a n d e n i e d J o h n s o n ’ s c l a i m t h a t s h e h a d o f f e r e d J o h n s o n a

c h a n g e i n t h e l o a n ’ s t e r m s

. S h e l a c k e d a u t h o r i t y t o a p p r o v e s u c h a c h a n g

e w i t h o u t a p p r o v

a l

from the loan committee o r H R D C ’ s e x e c u t i v e d i r e c t o r

. J o r d a n a d m

i t t e d

, h o w e v

e r

, t h a t s h e

h a d b e e n w i l l i n g t o c o m

p r o m i s e w i t h J o h

n s o n o n e x t e

n d i n g t h e l e n g

t h o f t h e p a y

m e n t a n d

r e d u c i n g t h e i n t e r e s t r a t e o n f u t u r e p a y m e n t s b a s e d o n t

h e a u t h o r i t y o f t h e e x e c u t i v

e d i r e c t o r

.

¶ 1 1 J o r d a n f

u r t h e r t e s t i f i e d t h a t J o h n s o n m a d e h e r l a s t p a y

m e n t o f $ 3 6 2

. 2 3 o n M a r c h 5

,

2 0 0 3

, l e a v

i n g a n o u t s t a n d i n g l o a n b a l a n c e o f $ 1 1

, 0 6 6

. 4 4

. J o r d a

n c a l c u l a t e d t h e 1 3 % i n t e r e s t

r a t e o n t h a t b a l a n c e f r o m M a r c h 5

, 2 0 0 3

, t h r o u g h J a n u a r y 8

, 2 0 0 7

, t o y i e l d a n a c c r u e d

i n t e r e s t a m o u n t o f $ 5

, 5 4 5

. 6 5

. J o r d a n t h u s c a l c u l a t e d $ 1 6

, 6 1 2

. 0 9 a s t h e t o t a l l o a n a m o u n t

d u e

. J o r d a

n a c k n o w l e d g e d t h a t s h e w a s u n a w a r e o f a n y d e m a n d s b y H R D C u p o n J o h n s o n t o

p a y a n y i n t e r e s t a f

t e r h e r l a s t p a y

m e n t

.

¶ 1 2 J o h n s o n r e q u e s t e d b o t h F T M C a n d H R D C t o r e l e a s e t h e l i e n o n h e r h o m e a b o u t t w o

y e a r s a f t e r h e r f i n a l p a y m e n t

. F T M C r e f

u s e d

. F T M C r e q u i r e d a r e c o n v e y a n c e r e q u e s t f

r o m

H R D C a n d p r o o f t h a t J o h n s o n h a d s a t i s f

i e d t h e l o a n

. H R D C r e f u s e d t o r e q u e s t a

r e c o n v e y a n c e o r r e l e a s e t h e t r

u s t i n d e n t u r e m o r t g

a g e o n J o h n s o n ’ s h o m e u n t i l J o h n s o n

r e p a i d t h e f

u l l a m o u n t o f t h e l o a n

.

¶ 1 3 J o h n s o n f

i l e d a c o m

p l a i n t f o r d a m a g e s o n F e b r

u a r y 1 0

, 2 0 0 6

, b a s e d u

p o n H R D C ’ s

f a i l u r e t o r e c o n v

e y h e r p r o p e r t y a n d o t

h e r a c t u a l d a m a g e s a r i s i n g f

r o m t h e l o s t p o t e

n t i a l t o

p u r c h a s e a n d s e l l a n o t

h e r p i e c e o f p r o p e r t y d

u e t o t h e e n c

u m b r a n c e o n h e r p r

o p e r t y

. H R D C5

d e n i e d J o h

n s o n ’ s e n t i t l e m e n t t o d a m a g e s a n d f i l e d a c o u n t e r c l a i m i n w

h i c h i t a l l e g

e d m u t u a l

m i s t a k e

. H R D C c l a i m e d t h a t J o h n s o n k n e w o f t h e c l e r i c a l e r r o r i n t h e n o t e a n d s o u g

h t

p a y m e n t o f t h e n o t e ’ s f

u l l a m o u n t a n d a l l o w a b l e a

t t o r n e y f e e s a n d c o s t s

.

¶ 1 4 J o h n s o n m o v

e d f o r p a r t i a l s u m m a r y j u d g m e n t o n t h e i s s u e o f H R D C ’ s l i a b i l i t y

.

J o h n s o n a r g

u e d t h a t t h e c o u r t s h o u l d e n f

o r c e t h e n o t e ’ s p l a i n l a n g u a g e

. J o h n s o n f

u r t h e r

asserted that the two

- y e a r s t a t u t e o f l i m

i t a t i o n s h a d r

u n o n H R D C ’ s m

u t u a l m i s t a k e

c o u n t e r c l a i m

. H R D C a s s e r t e d t h a t t h e 0

. 1 3 % i n

t e r e s t w a s a “ s c r i v

e n e r ’ s e r r o r ” a n d t h a t t

h e

c o u r t m a y c o r r e c t a m

u t u a l m i s t a k e m a d e i n t h e p r e

p a r a t i o n o f a l e g

a l d o c u m e n t

. H R D C

a r g u e d t h a t t h e l o n g

e r e i g h t

- y e a r s t a t u t e o f l i m i t a t i o n s f o r a c t i o n o n a w

r i t t e n d o c u m e n t

s h o u l d a p p l y t o i t s c o u n

t e r c l a i m

.

¶ 1 5 T h e D i s t r i c t C o u r t d e n i e d J o h n s o n ’ s m o t i o n f

o r p a r t i a l s u m m a r y j u d g m e n t

. T h e c o u r t

d e t e r m i n e d t h a t H R D C i m

p r o p e r l y h a d d e s i g

n a t e d i t s c l a i m o f “ m

u t u a l m i s t a k e ” a s a

counterclaim. The court determined instead t h a t t h e a l l e g e d “ m u t u a l m i s t a k e ” c o n s

t i t u t e d a n

a f f i r m a t i v e d e f e n s e f o r w h i c h n o s t a

t u t e o f l i m

i t a t i o n s a p p l i e d

.

¶ 1 6 T h e D i s t r i c t C o u r t h e l d a t r i a l o n J a n u a r y 8

, 2 0 0 7

. T h e c o u r t d e t e r m i n e d t h a t J o h n s o n

k n e w b e f o r e a p p l y i n g f

o r t h e l o a n t h a

t H R D C o f

f e r e d a 1 3 % i n t e r e s t r a t e

. T h e c o u r t o p i n e d

t h a t J o h n s o n ’ s c l a i m o f 0

. 1 3 % i n t e r e s t r a t e c o n f l i c t e d w i t h t

h e n a t u r e o f H R D C

- - t o o f

f e r

f u n d s t o h i g

h

- r i s k b o r r o w e r s

. T h e c o u r t f u r t h e r d e t e r m

i n e d t h a t J o h n s o n h a

d s i g n e d t h e l o a

n

a g r e e m e n t a n d t h a

t s h e h a d a c c e p t e d t h e 1 3 % i n t e r e s t r a t e

. A s a r e s u l t

, t h e c o u r

t c o n c l u d e d

t h a t J o h n s o n k n e w

, o r s u s p e c t e d

, t

h a t t h e r a t e o f

f e r e d o n t h e n o t e m

i s t a k e n l y l i s t e d t

h e

i n t e r e s t r a t e a

t 0

. 1 3 %

.6

¶ 1 7 T h e c o u r

t r u l e d t h a t J o h n s o n ’ s l o a n r e m a i n e d d u e a n d o w i n g a n d t h e r e f o r e J o h n s o n

s u f f e r e d n o a c t

u a l d a m a g

e s f r o m H R D C ’ s r e f

u s a l t o r e l e a s e t h e M o n

t a n a t r u s t i n d e n t u r e

f r o m h e r p r o p e r t y

. T h e c o u r t p r o c e e d e d t o r e v

i s e t h e n o t e p u r s u a n

t t o § 2 8

- 2

- 1 6 1 1

, M C A

.

T h i s s t a t u t e a l l o w s a r e v i s i o n w h e n a p a r t y h a s c o m m i t t e d a u n i l a t e r a l m i s t a k e t h a t t h e o t

h e r

p a r t y k n e w

, o r s u s p e c t e d

, a t t h e t i m e o f c o n t r a c t i n g

. T h e c o u r t c o n c l u d e d t h a t 1 3 % p e r

a n n u m o v e r t h e f i v e

- y e a r t e r m o f t h e l o a n c o n s t i t u t e d t h e a p p r o p r i a t e i n t e r e s t r a t e t o b e l i s

t e d

o n a l l d o c u m e n t s i n v

o l v e d i n t h e t r a

n s a c t i o n

. T h e c o u r t h e l d J o h n s o n t o b e l i a b l e f

o r t h e

u n p a i d b a l a n c e o f $ 1 6

, 6 1 2

. 0 9

. T h e c o u r t r e c o g n i z e d t h a t t h e n o t e a l l o w e d H R D C t o c o l l e c t

a t t o r n e y f e e s a n d c o s t s

. T h e c o u r t ’ s j u d g m e n t i n c l u d e d a n a w a r d o f $ 6

, 0 7 5 i n a t t o r n e y f e e s

,

$ 1 1 5 i n c o s t s

, p l u s i n t e r e s t t o H R D C

. J o h n s o n a p p e a l s

.

STANDARD OF REVIEW

¶ 1 8 W e r e v i e w d e n o v

o t h e D i s t r i c t C o u r t ’ s d e c i s i o n t o c o n v e r t H R D C ’ s c o u n t e r c l a i m t o

a n a f f i r m a t i v e d e f

e n s e

. Yellowstone County v. Drew

, 2 0 0 7 M T 1 3 0

, ¶ 1 1

, 3 3 7 M o n t

. 3 4 6

,

160 P.3d 557. We review for correctness the distr ict court ’ s a p p l i c a t i o n o f t h e s t a t u t e o f

l i m i t a t i o n s

. Wing v. State ex rel. Dept. of Transp.

, 2 0 0 7 M T 7 2

, ¶ 9

, 3 3 6 M o n t

. 4 2 3

, 1 5 5

P

. 3 d 1 2 2 4

.

DISCUSSION

¶ 1 9 T h e u n o r

t h o d o x p r o c e d u r a l h i s t o r y i n t h e D i s t r i c t C o u r t c o n t i n u e s o n a p p e a l a s H R D C

failed to file a b r i e f

. W e m u s t d e c i d e t h i s m a t t e r s o l e l y o n J o h n s o n ’ s b r i e f a n d o u r r e v i e w o f

t h e D i s t r i c t C o u r t r e c o r d

. A s a r e s u l t

, t h e C o u r t h a s b e e n f o r c e d t o l o o k t o l e g

a l a u t h o r i t i e s

f a r b e y o n d t

h o s e p r e s e n t e d b y t h e p a r t i e s t o r e a c h t h e c o r r e c t r e s u l t i n t h i s m a t t e r

.7

¶ 2 0 W hether the District Court correctly converted HRDC’s counterclaim of mutual

mistake to an affirmative defense.

¶ 2 1 The District Court relied upon M. R. Civ. P . 8(c) to support its decision to convert

H R D C ’ s m

u t u a l m i s t a k e c o u n t e r c l a i m t o a n a f f i r m a t i v e d e f e n s e

. R u l e 8 ( c ) p e r m

i t s a c o u r t t o

c o n s i d e r a m i s t a k e n l y d e s i g n a t e d c o u n t e r c l a i m t o b e a n a f

f i r m a t i v e d e f

e n s e “ i f j u s t i c e s o

r e q u i r e s

. ” T h e c o u r t d e t e r m i n e d t h a t j u s t i c e r e q u i r e d i t t o t r e a t H R D C ’ s m u t u a l m i s t a k e

c o u n t e r c l a i m a s a n a f

f i r m a t i v e d e f

e n s e t o a v o i d a p p l y i n g t h e t w o

- y e a r s t a t u t e o f l i m i t a t i o n s

set forth in § 27

- 2

- 2 0 3

, M C A

, t o H R D C ’ s m u t u a l m i s t a k e c o u n t e r c l a i m

.

¶ 2 2 S e c t i o n 2 7

- 2

- 2 0 3

, M C A

, p r o v i d e s f o r a t w o

- y e a r p e r i o d f

o r t h e i n i t i a t i o n o f a n a c t i o n

f o r r e l i e f o n t h e g

r o u n d s o f f

r a u d o r m i s t a k e

. T h e c a u s e o f a c t i o n a c c r u e s u p o n d i s c o v

e r y b y

t h e a g g r i e v e d p a r t y o f t h e f

a c t s t h a t c o n s t i t

u t e t h e f r a u d o r m i s t a k e

. S e c t i o n 2 7

- 2

- 2 0 3

, M C A

.

In D ’ A g o s t i n o v

. S

w a n s o n

, 2 4 0 M o n t 4 3 5

, 7 8 4 P

. 2 d 9 1 9 ( 1 9 9 0 )

, t h e p u r c h a s e r s o f r e a l

p r o p e r t y b r o u g h t a n a c t i o n t o r e f

o r m o r r e s c i n d a p r o p e r t y c o n t r a c t b a s e d o n m i s t a k e

. W e

d e t e r m i n e d t h a t m u t u a l m i s t a k e w a s t h e e s s e n c e o f t h e a c t i o n a n d a p p l i e d t h e t w o

- y e a r

s t a t u t e o f l i m

i t a t i o n s p e r t a i n i n g t o a c t i o n s s e e k i n g r e l i e f o n t h e g r o u n d o f m

u t u a l m i s t a k e

.

D ’ A g o s t i n o

, 2 4 0 M o n

t

. a t 4 4 2

, 7 8 4 P

. 2 d a

t 9 2 3

. S i m

i l a r l y

, i n N

a f t c o L e a s i n

g L t d

. v

. F i n a l c o

,

I n c

. , 2 5 4 M o n t

. 8 9

, 9 2

- 9 3

, 8 3 5 P

. 2 d 7 2 8

, 7 3 0

- 3 1 ( 1 9 9 2 )

, t h e p l a i n t i f

f s f i l e d a n a c t i o n t o

r e f o r m l e a s e a g r e e m e n t s b a s e d u p o n a m u t u a l m i s t a k e d i s c o v

e r e d m o r e t h a n f

i v e y e a r s a f

t e r

executing the lease agreements. This Court cited D’Agostino a n d a f f i r m e d t h a t § 2 7

- 2

- 2 0 3

,

M C A

, b a r r e d t

h e p l a i n t i f

f ’ s a c t i o n

.8

¶ 2 3 H R D C i s t h e a g g

r i e v e d p a r t y i n t h i s c a s e

. I

t s c o u n t e r c l a i m a l l e g

e d a m u t u a l m i s t a k e

.

T h e q u e s t i o n a r i s e s

, t h e r e f o r e

, w h e n H R D C l e a r n e d o f t h e m i s t a k e

. T h e p a r t i e s e x e c u t e d t h e

l o a n a g r e e m e n t a n d n o t e o n F e

b r u a r y 2 6

, 1 9 9 8

. T h e l o a

n a g r e e m e n t p r o v i d e d a 1 3 % i n t e r e s t

r a t e

. T h e p r

o m i s s o r y n o t e a

n d a c c o m p a n y i n g p a y m e n t c o u

p o n s p r o v i d e d a 0

. 1 3 % i n t e r e s t

r a t e

. J o h n s o n a n d J o r d a n t e s t i f i e d t h a t t h e y s e p a r a t e l y d i s c o v

e r e d t h e m

i s t a k e i n M a r c h

2 0 0 1

. S t a n l e y a c k n o w l e d g e d t h e m i s t a k e i n w

r i t i n g o n J u l y 2 0

, 2 0 0 1

, a n d i n f

o r m e d J o h n s o n

t h a t a p p r o x i m a t e l y $ 1 6

, 0 0 0 r e m a i n e d d u e

. T h u s

, H R D C d i s c o v

e r e d t h e m

u t u a l m i s t a k e n o

later than July 20, 2001. The two

- y e a r p e r i o d p r e s c r i b e d i n § 2 7

- 2

- 2 0 3

, M C A

, w o u l d h a v e

expired in 2003. D ’

A g o s t i n o

, 2 4 0 M o n t

. a

t 4 4 2

, 7 8 4 P

. 2 d a t 9 2 3

. H R D C w a i t e d u n t i l M a r c h

2 7

, 2 0 0 6

, t o f

i l e i t s c o u n t e r c l a i m b a s e d u p o n m u t u a l m i s t a k e

. T h e t w o

- y e a r l i m i t a t i o n s

period c ontained in § 27

- 2

- 2 0 3

, M C A

, w o u l d h a v e b a r r e d H R D C ’ s c o u n t e r c l a i m

.

D ’ A g o s t i n o

, 2 4 0 M o n t

. a t 4 4 2

, 7 8 4 P

. 2 d a t 9 2 3

.

¶ 2 4 T h e c o u r t d e e m e d a p p l i c a t i o n o f t h i s t w o

- y e a r l i m i t a t i o n p e r i o d t o c o n s t i t u t e a n

u n d e s e r v e d w i n d f a l l t o J o h n s o n i n l i g

h t o f i t s c o n c l u s i o n t h a

t J o h n s o n k

n e w

, o r s h o u l d h a v

e

k n o w n

, t h a t t h e 1 3 % i n t e r e s t r a t e s e t f

o r t h i n t h e l o a

n a g r e e m e n t a p p l i e d

. T h e c o u r t f u r t h e r

p o i n t e d t o t h e f

a c t t h a t H R D C e x i s t s t o p r

o v i d e l o a n s t o h i g h r i s k b o r r o w e r s

. T h e s e h i g h

r i s k s n a t u r a l l y c o r r e s p o n d t o a h i g h e r i n t e r e s t r a t e a s r e f

l e c t e d i n t h e 1 3 % r a t e i n t h e l o a n

a g r e e m e n t

.

¶ 2 5 M. R. Civ. P 8 ( c ) p r o v i d e s t h a t “ [ i ] n p l e a d i n g t o a p r e c e d i n g p l e a d i n g

, a p a r t y s h a l l s e t

forth affirmatively . . . any other matter constituting an avoidance or affirmative defense. ”

Rule 8(c) derives from “ t h e s a m e p r i n c i p l e s o f f a i r n e s s a n d n o t i c e w

h i c h r e q u i r e a p l a

i n t i f f t o9

set forth the basis of the [plaintiff's claim] . . . . ” B r o w n v

. E h l e r t

, 2 5 5 M o n t

. 1 4 0

, 1 4 6

, 8 4 1

P

. 2 d 5 1 0

, 5 1 4 ( 1 9 9 2 )

. R

u l e 8 ( c ) i s n o t a b s o l u t e

, h o w e v e r

, a s t h e c o u r t r e t a i n s d i s c r e t i o n t o

a l l o w a d e f

e n d a n t t o a m e n d p u r s u a n t t o t h e t e r m s o f M

. R

. C i v

. P

. 1 5

, a s d e t e r m i n e d b y o u r

h o l d i n g i n K

e l l e r v

. D o o l i n

g

, 2 4 8 M o n t

. 5 3 5

, 5 4 2

, 8 1 3 P

. 2 d 4 3 7

, 4 4 1 ( 1 9 9 1 )

.

¶ 2 6 M. R. Civ. P . 15(a) provides that “ l e a v e [ t o a m e n d ] s h a l l b e f

r e e l y g i v e n w h e n j u s t i c e

so requires. ” R

u l e 1 5 ( a ) f

a v o r s a l l o w i n g a m e n d m e n t s

, b u t a t r i a l c o u r t m a y j u s t i f

y d e n y i n g a

m o t i o n t o a m e n d o n t

h e g r o u n d s o f “ u

n d u e p r e j u d i c e t o t h e o p p o s i n g p a r t y

. ” Lindey ’ s v

.

P r o f e s s i o n a l C o n s u l t a n t s

, 2 4 4 M o n t

. 2 3 8

, 2 4 2

, 7 9 7 P

. 2 d 9 2 0

, 9 2 3 ( 1 9 9 0 )

. W e a g r e e w i t h t h e

D i s t r i c t C o u r t t

h a t j u s t i c e r e q u i r e d t

h e a m e n d m e n t o f H R D C ’ s t i m e b a r r e d c o u n t e r c l a i m t o

a n a f f i r m a t i v e d e f

e n s e

.

¶ 2 7 J o h n s o n e

n t e r e d t h e l o a n a g

r e e m e n t w i t h t h e u n d e r s t a n d i n g t h a t s h e w

o u l d b e r e q u i r e d

t o r e p a y t h e p r i n c i p a l o v e r a f i v e

- y e a r p e r i o d a t a 1 3 % i n t e r e s t r a t e

. S h e s i g n e d t h e l o a

n

a g r e e m e n t t h a t a c c

u r a t e l y r e f

l e c t e d t h e 1 3 % i n t e r e s t r a t e

. S h e l e a r n e d o f t h e m i s t a k e n

i n t e r e s t r a t e o n t h e p r o m i s s o r y n o t e i n 2 0 0 1

, b e f

o r e s h e h a d c o m

p l e t e d r e p a y

m e n t o f t h e

l o a n

. W e c a n n o t s a y t h a t J o h n s o n w o u l d s u f

f e r u n d u e p r e

j u d i c e u n d e r t

h e s e c i r c u m s t a n c e s

f r o m t h e D i s t r i c t C o u r t ’ s d e c i s i o n t o a m e n d H R D C ’ s c o u n t e r c l a i m t o a n a f f i r m a t i v e d e f

e n s e

.

¶ 2 8 W h e t h e r t h e D i s t

r i c t C o u r t p r o p e r l y d e n i e d J o h n s o n ’ s m o t i o n f

o r p a r t i a l s u m m a r

y

j u d g m e n t

.

¶ 2 9 J o h n s o n p r e m

i s e d h e r m o t i o n f

o r p a r t i a l s u m m a r y j u d g m e n t o n t h e g r o u n d s t h a t t

h e

s t a t u t e o f l i m i t a t i o n s h a d e x p i r e d o n H R D C ’ s m

u t u a l m i s t a k e c o u n t e r c l a i m

. O u r

d e t e r m i n a t i o n t h a

t t h e D i s t r i c t C o u r t c o r r e c t l y a m e n d e d H R D C ’ s c o u n t e r c l a i m t o a n1 0

a f f i r m a t i v e d e f e n s e a l s o c o n f

i r m s t h e c o r r e c t

n e s s o f t h e D i s t r i c t C o u r t ’ s d e c i s i o n t o d e n y

J o h n s o n ’ s m o t i o n f

o r p a r t i a l s u m m a r y j u d g m e n t o n t h e i s s u e o f l i a b i l i t y

.

¶ 3 0 W h e t h e r t h e D i s t r i c t C

o u r t p r o p e r l y g r a n t e d a f f i r m a t i v e r e l i e

f t o H R D C o n i t s

c o u n t e r c l a i m o

f m u t u a l m i s t a k e w h e n t h e c o u r t d e e

m e d t h e c o u n t e r c l a i m t

o b e a n a f f i r m a t i v e

d e f e n s e

.

¶ 3 1 O u r c o n c l u s i o n t

h a t t h e D i s t r i c t C o u r t p r o p e r

l y c o n c l u d e d t h a

t t h e i n t e r e s t s o f

j u s t i c e

r e q u i r e d i t t o c o n v

e r t H R D C ’ s c o u n t e r c l a i m t o a n a f f i r m a t i v e d e f

e n s e r a i s e s t h e q

u e s t i o n o f

w h e t h e r H R D C c o u l d u s e t h i s a f f i r m a t i v e d e f

e n s e a s a v

e h i c l e t o r e c o v

e r d a m a g e s a g a i n s t

J o h n s o n

. H R D C f

i l e d a c o u n t e r c l a i m t o r e f

o r m t h e n o t e t o r e f

l e c t a 1 3 % i n t e r e s t r a t e b a s e d

o n a “ s c r i v

e n e r ’ s e r r o r

. ”

¶ 3 2 O u r g

e n e r a l r u l e r e q u i r e s t h a t a c o u n t e r c l a i m

, c r o s s

- c l a i m

, o r t h i r d

- p a r t y c o m p l a i n t f o r

a f f i r m a t i v e r e l i e f m

u s t c o m p l y w i t h t h e a p p l i c a b l e s t a t u t e o f l i m i t a t i o n s

. S t

a t e e x r e l

.

E g e l a n d v

. C i t y C o u n c i l

, 2 4 5 M o n t

. 4 8 4

, 4 9 0

, 8 0 3 P

. 2 d 6 0 9

, 6 1 3 ( 1 9 9 0 )

. W e e x e m p t f r o m

t h e s t a t u t e o f l i m i t a t i o n s a d e f

e n s i v e c l a i m w

h e r e t h e d e f

e n d a n t a t t e m p t s t o o f f s e t t h e a m o u n t

t h a t a p l a i n t i f

f c a n r e c o v

e r

, s u c h a s b y r e c o u p m e n t

, c o n t r i b u t i o n

, o r i n d e m n i t y

. E g e l a n d

, 2 4 5

M o n t

. a t 4 9 0

, 8 0 3 P

. 2 d a t 6 1 3

. H R D C ’ s “ a f f i r m a t i v e d e f

e n s e ” o f a m

u t u a l m i s t a k e g o e s w e l l

b e y o n d a d e f

e n s i v e c l a i m

.

¶ 3 3 H R D C ’ s m

u t u a l m i s t a k e c o u n t e r c l a i m

, a s a l l e g e d i n i t s a n s w e r

, s o u g

h t a n a w a r d o f

the entire unpaid balance on Johnson’s loan. HRDC’s answer i n c l u d e d a c l a i m f o r “ p a y m e n t

of the balance due on the promissory note plus allowable attorney ’ s f e e s a n d c o s t s

. ” T h u s

H R D C ’ s c o u n t e r c l a i m c o m p o r t e d w i t h t h e g

e n e r a l r u l e t h a t a c o u

n t e r c l a i m p r e s e n t s a c a u s e1 1

o f a c t i o n t

h a t s e e k s a f

f i r m a t i v e r e l i e f

. E s t a t e o f W e b s t e r

, 9 2 0 S

. W

. 2 d 6 0 0

, 6 0 6 ( M o

. A p p

.

W

. D

. 1 9 9 6 ) ; H

a v e n F e d e r a l S a v

. & L o a n v

. K

i r i a n

, 5 7 9 S o

. 2 d 7 3 0

, 7 3 3 ( F l a

. 1 9 9 1 )

.

¶ 3 4 T h i s c o u n t e r c l a i m s u f f e r e d f r o m H R D C ’ s f

a i l u r e t o r a i s e i t w i t h i n t h e t w o

- y e a r p e r i o d

f o r t h e i n i t i a t i o n o f a n a c t i o n f o r r e l i e f o n t h e g

r o u n d s o f f

r a u d o r m i s t a k e

. S e c t i o n 2 7

- 2

-

2 0 3

,

MCA. The District Court correctly con v e r t e d H R D C ’ s c o u n t e r c l a i m t o a n a f f i r m a t i v e

d e f e n s e

. I n d o i n g s o

, h o w e v

e r

, t h e D i s t r i c t C o u r

t c a n n o t c o n v

e r t t h e c o u n

t e r c l a i m t o a

n

a f f i r m a t i v e d e f e n s e t h a t s e e k s a f

f i r m a t i v e r e l i e f w i t h b u m

p i n g a g a i n s t t h e t w o

- y e a r s t a t u t e o f

l i m i t a t i o n s s e t f

o r t h i n § 2 7

- 2

- 2 0 3

, M C A

. E g e l a n d

, 2 4 5 M o n

t

. a t 4 9 0

, 8 0 3 P

. 2 d a t 6 1 3

. A n

affirmative defense properly seeks to defeat or avoid the other party ’ s c a u s e o f a c t i o n

.

W e b s t e r

, 9 2 0 S

. W

. 2 d a

t 6 0 6 ; H a v e n F e d e r a l S a v

. & L o a n

, 5 7 9 S o

. 2 d a t 7 3 3

.

¶ 3 5 T h e D i s t r i c t C o u r t p r e m i s e d i t s a w a r d t o H R D C o f t h e u n p a i d b a l a n c e o f t h e l o a

n o n

t h e “ a f f i r m a t i v e d e f

e n s e ” o f m

u t u a l m i s t a k e

. O u r d e c i s i o n i n Egeland a n d § 2 7

- 2

- 2 0 3

,

M C A

, p r e c l u d e s t h i s o u

t c o m e

. H R D C c a n r e c o v

e r n o t h i n g b e y o n d J o h n s o n ’ s l a s t p a y m e n t

o f M a r c h 5

, 2 0 0 3

, a s § 2 7

- 2

- 2 0 3

, M C A

, b a r s a n y f u r t h e r a t t e m

p t s b y H R D C t o r e c o v

e r

. W e

therefore reverse this portion of the D i s t r i c t C o u r t ’ s r u l i n g

. C o n v

e r s e l y

, J o h n s o n i s e n t i t l e d

t o r e c o n v e y a n c e o f h e r p r

o p e r t y i n l i g

h t o f H R D C ’ s i n a b i l i t y t o c o l l e c t a n y a d d i t i o n a l

p a y m e n t s u n d e r t

h i s l o a n

.

¶ 3 6 W e a l s o m

u s t r e v e r s e t h e D i s t r i c t C o u r t ’ s a w a r d o f a t t o r n e y f e e s a n d c o s t s i n f

a v o r o f

H R D C

. T h e c o u r t a w a r d e d a t t o r n e y f e e s a n d c o s t s t o H R D C a s t h e p r e v a i l i n g p a r t y i n

r e c o v e r i n g t h e u

n p a i d b a l a n c e o f J o h n s o n ’ s l o a n

. T h e D i s t r i c t C o u r t e r r o n e o u s l y a w a r d e d1 2

t h i s u n p a i d b a l a n c e t o H R D C

. T h e a w a r d o f t h e a t t o r n e y f e e s a n d c o s t s a s s o c i a t e d w i t h

r e c o v e r i n g t h i s u n p a i d b a

l a n c e c a n n o t s t a n d

.

¶ 3 7 W e r e m a n d t o t

h e D i s t r i c t C o u r t f

o r e n t r y o f j u d g m e n t i n f a v o r o f H R D C o n

J o h n s o n ’ s c l a i m f

o r d a m a g e s

. W e f u r t h e r r e m a n d f

o r e n t r y o f a n o r d e r b y t h e D i s t r i c t C o u r t

t h a t H R D C i s s u e a d e e d o f r e c o n v e y a n c e o f J o h n s o n ’ s p r o p e r t y t o a l l o w F M T C t o r e l e a s e

t h e d e e d o f t r

u s t

. T h e D i s t r i c t C o u r t f

u r t h e r s h o u l d o r d e r e a c h p a r t y t o b e a r i t s o w n f e e s a n d

c o s t s

.

/ S / B R I A N M O R R I S

W e C o n c u r :

/ S / W

. W I L L I

A M L E A P H A R T

/ S / J O H N W A R N E R

/ S / J I M R I C E

Justice James C. Nelson, concurring in part and dissenting in part.

¶ 3 8 I concur with the result of the Court’s Opinion under Issue 3

— i

. e

. , t h a t H R D C i s

precluded by § 2 7

- 2

- 2 0 3

, M C A

, f r o m r e q u i r i n g J o h n s o n t o p a y a n y t h i n g b e y o n d h e r l a s t

p a y m e n t o f M a r c h 5

, 2 0 0 3

, a n d t h a t H R D C i s b a r r e d f

r o m a n y f u r t h e r c o l l e c t i o n e f

f o r t s

.

Opinion, ¶ 35. I respectfully dissent, however, from the Court’s decision on Issues 1 and 2

—1 3

res p e c t i v e l y

, w h e t h e r t h e D i s t r i c t C o u r t c o r r e c t l y c o n v e r t e d H R D C ’ s c o u n t e r c

l a i m o f m u t u a l

m i s t a k e t o a n a f

f i r m a t i v e d e f e n s e

, a n d w

h e t h e r t h e D i s t r i c t C o u r t p r o p e r l y d e n i e d J o h

n s o n ’ s

m o t i o n f o r p a r t i a l s u m

m a r y j u d g m e n t

.

¶ 3 9 A s a p r e l i m i n a r y m a t t e r

, i t i s n e c e s s a r y t o p o i n t o u t t h a t H R D C d i d n o t b o t h e r t o f i l e a

r e s p o n s e b r i e f i n t h i s a p p e a l

, e v e n d e s p i t e t w o g r a n t e d r e q u e s t s f o r e x t e n s i o n s o f t i m e i n

which to do so. Where an appellee does not appear by brief or argument, this Court will take

t h e a p p e l l a n

t ’ s v e r s i o n s a n d p o s i t i o n s a s b e i n g c o r r e c t i f t h e y a r e s u p p o r t e d b y t h e r e c o r d

.

A l d e n v

. B o a r d o

f Z o n i n g C o m m r s

. , 165 Mont. 364, 365, 528 P.2d 1320, 1320 (1974). Here,

Johnson’s positions are well

- supported by the record and should be taken as correct.

¶ 4 0 First, HR D C w a s a w a r e o f t h e “ s c r i v e n e r ’ s e r r o r ” i n t h e p r o m

i s s o r y n o t e n o l a t e r t

h a n

J u l y 2 0 0 1

, b u

t H R D C d i d n o t f

i l e i t s c l a i m b a s e d o n m

u t u a l m i s t a k e u n t i l M a r c h 2 0 0 6

, w e l l

beyond the two

- year period of limitations prescribed by § 27

- 2

- 203, MCA.

¶ 4 1 Second, HRDC’s “ c o u n t e r c l a i m ” w a s j u s t t h a t : a c o u n t e r c l a i m

. H R D C s e t f o r t h a

c l a i m f o r r e l i e f : p a y m e n t o f t h e b a l a

n c e d u e o n t h e n o t e

. T h i s c o n s t i t u t e s a c o u n t e r c l a i m

,

n o t a n a f f i r m a t i v e d e f

e n s e

. See M. R. Civ. P

. 8 ( a ) ( “ A p l e a d i n g w h i c h s e t s f o r t h a c l a i m f

o r

r e l i e f

, w h e t h e r a n o r i g

i n a l c l a i m

, c o u n t e r c l a i m

, c r o s s

- c l a i m o r t h i r d

- p a r t y c l a i m

, s h a l l c o n t a i n

(1) a short and plain statement of the claim showing that the pleader is entitled to relief, and

(2) a demand for judgment for the relief the pleader seeks.”). Ind eed, the Court so holds:

HRDC’s mutual mistake counterclaim, as alleged in its answer,

sought an award of the entire unpaid balance on Johnson’s loan. HRDC’s

answer included a claim for “payment of the balance due on the promissory

note plus allowable att o r n e y ’ s f e e s a n d c o s t s

. ” T h u s H R D C ’ s c o u n t e r c l a i m

c o m p o r t e d w i t h t h e g

e n e r a l r u l e t h a t a c o u n t e r c l a i m p r e s e n t s a c a u s e o f1 4

action that seeks affirmative relief.

Opinion, ¶ 33.

¶ 4 2 Third, up until the District Court, entirely of its own accord, declared HRDC’s

counterclaim to be something other than it is, both Johnson and HRDC framed their

respective arguments based on their shared understanding that HRDC’s “counterclaim” was,

in fact, a counterclaim. That’s why HRDC presented an argument in its brief opposin g

Johnson’s motion for partial summary judgment that its “claim” for reformation of the note

pursuant to § 28

- 2

- 1611, MCA, was not barred by the statute of limitations

— an argument

that would have been unnecessary had HRDC’s counterclaim actually been, in s ubstance, an

affirmative defense.

¶ 4 3 Fourth, § 27

- 2

- 2 0 3

, M C A

, s t a t e s : “ T h e p e r i o d p r e s c r i b e d f o r t h e c o m

m e n c e m e n t o f

a n a c t i o n f

o r r e l i e f o n t h e g

r o u n d o f

. . . m

i s t a k e i s w i t h i n 2 y e a r s

, t h e c a u s e o f a c t i o n i n s u c h

case not to be deemed to have accrued unti l the discovery by the aggrieved party of the facts

constituting the .

. . m

i s t a k e

. ” A c c o r d i n g

l y

, H R D C ’ s c o u n t e r c l a i m w a s t i m e

- b a r r e d ( s e e

Opinion, ¶¶ 23, 35), and Johnson was entitled to judgment in her favor.

¶ 4 4 To avoid this legally correct (but apparentl y unpalatable) result, the District Court

decided in its September 1, 2006 Memorandum and Order Denying Plaintiff’s Motion for

P a r t i a l S u m m a r y J

u d g m e n t t o t r e a t H R D C ’ s c o u n t e r c l a i m a s a n a f f i r m a t i v e d e f

e n s e

. A s

g r o u n d s f o r t h i s

, t h e c o u r t c i t e d M

. R

. C i v

. P

. 8 ( c )

, w h i c h s t a t e s : “ W

h e n a p a r t y h a s

m i s t a k e n l y d e s i g

n a t e d a d e f

e n s e a s a c o u n t e r c l a i m

. . . , t h e c o u r t o n t e r m s

, i f j u s t i c e s o

r e q u i r e s

, s h a l l t r e a t t

h e p l e a d i n g a s i f t h e r e h a d b e e n a p r o p e r d e s i g

n a t i o n

. ” E v

i d e n t l y

, t h e1 5

court believed that justic e required it to re

- designate HRDC’s counterclaim as an affirmative

d e f e n s e b e c a u s e J o h n s o n o t

h e r w i s e w o u l d r e c e i v

e a n “ u n d e s e r v e d w i n d f

a l l

. ” O p i n i o n

, ¶ 2 4

.

T h i s C o u r t a g

r e e s

, c i t i n g n o t o n l y R

u l e 8 ( c )

, b u t a l s o R

u l e 1 5 ( a )

, w

h i c h s t a t e s t

h a t a p a r t y

may amend its pleading by leave of court and that leave “shall be freely given when justice

so requires.” Opinion, ¶¶ 25

- 26.

¶ 4 5 T h e r e a r e t w o o b v i o u s p r o b l e m s w i t h t h i s a p p r o a c h

. F i r s t

, H R D C

, w h o w a s

r e p r e s e n t e d b y c o u

n s e l t h r o u g h o u t t h e p r o c e e d i n g s i n t h e D i s t r i c t C o u r t

, n e v e r s o u g h t l e a v e

t o a m e n d i t s p l e a d i n g

. N o r d i d H R D C a s k t h e D i s t r i c t C o u r t t o c o n v e r t i t s c o u n t e r c l a i m i n t o

a n a f f i r m a t i v e d e f

e n s e

. S e c o n d

, a n d m o s t i m p o r t a n t l y

, a c o u n

t e r c l a i m m a y n o t b e

r e

- designated or amended to be an affirmative defen se if it is not, in fact, an affirmative

d e f e n s e

. A g a i n

, R

u l e 8 ( c ) s t a t e s w

h e n a p a r t y h a s “ m

i s t a k e n l y d e s i g

n a t e d ” a d e f

e n s e a s a

c o u n t e r c l a i m

, t h e c o u r t s h a

l l t r e a t t h e p l e a d i n g a s i f t h e r e h a

d b e e n a p r o p e r d e s i g

n a t i o n

, i f

justice so requires. Here, HR DC’s counterclaim was not “mistakenly designated.” It was, in

fact, a claim for relief. Thus, there is no basis in law or in fact for treating it as an

a f f i r m a t i v e d e f e n s e u n d e r R

u l e 8 ( c ) o r a m e n d i n g H R D C ’ s p l e a d i n g ( s u a s p o n t e ) t o s t a t e a n

a f f i r m a t i v e d e f e n s e

, r a t h e r t

h a n a c o u n t e r c l a i m

, u n d e r R

u l e 1 5 ( a )

.

¶ 4 6 I t i s d i f f i c u l t t o u n d e r s t a n d t h e C o u r t ’ s h o l d i n g s u n d e r I s s u e s 1 a n d 2

, g i v e n t h a t t h e

C o u r t e s s e n t i a l l y a g

r e e s w i t h a l l o f t h e f

o r e g o i n g p o i n t s

. S p e c i f

i c a l l y

, i n i t s a n a l y s i s u n d e r

Issue 3, the Court s t a t e s t h a t “ t h e D i s t r i c t C o u r t c a n

n o t c o n v e r t t h e c o u n

t e r c l a i m t o a n

a f f i r m a t i v e d e f e n s e t h a t s e e k s a f

f i r m a t i v e r e l i e f w i t h b u m

p i n g a g a i n s t t h e t w o

- y e a r s t a t u t e o f

limitations set forth in § 27

- 2

- 203, MCA.” Opinion, ¶ 3 4

. B u t i f t h e “ c o u n

t e r c l a i m ” w e r e i

n1 6

fact an “affirmative defense,” then the statute of limitations set forth in § 27

- 2

- 203, MCA,

w o u l d n o t a p p l y

. B y i t s t e r m s

, t h i s s t a t u t e a p p l i e s t o a “ c a u s e o f a c t i o n

. ” See § 2 7

- 2

- 2 0 3

,

M C A

. T h u s

, b y a p p l y i n g t h i s s t a t u t e t o t h e c a s e a t h a n d

, t h e C o u r t i s t a c i t l y c o n c e d i n g t h a t

HRDC’s counterclaim is, in fact, a “cause of action,” not an affirmative defense.

¶ 4 7 Ultimately, what the Court does here is (1) call HRDC’s counterclaim an “affirmative

defense” for purposes of ruling against Johnson regarding th e terms of the note and then (2)

t r e a t H R D C ’ s c o u n t e r c l a i m a s a “ c a u s e o f a c t i o n ” f o r p u r p o s e s o f r

u l i n g a g a i n s t H R D C

r e g a r d i n g t h e u n p a i d b a

l a n c e o f t h e n o t e

. W

h i l e t h i s r e s u l t m a y s e e m f a i r o r e q u i t a b l e u n d e r

the circumstances, it is legally untenable.

¶ 4 8 In this case, the trial court decided that “justice” required it

— sua sponte

— t o b a i l o u t

H R D C f r o m i t s o w

n m i s t a k e s

, s l o p p y d o c u m e n t p r e p a r a t i o n

, a n d h a r d

- l i n e b u s i n e s s

p r a c t i c e s

. I s i m

p l y c a n n o t a g

r e e t h a t t h i s i s a p r o p e r f u n c t i o n o f a d i s t r i c t c o u r t

. H RDC

either chose to take no action, or simply neglected to do so, when it became aware that the

promissory note contained a glaring mistake. It was not the District Court’s role to rescue

H R D C b y i n t e r c e d i n g

, s u a s p o n t e

, o n t h a t p a r t y ’ s b e h a

l f d u r i n g t h e c o u r s e o f t h i s l i t i g a t i o n

.

H R D C i s a c o r

p o r a t i o n w h i c h i s i n t

h e b u s i n e s s o f m a k i n g l o a n s

. I t c a u s e d i t s o w

n

p r o b l e m s

. I f H R D C i s a n “ a g g r i e v e d ” p a r t y

, a s t h e C o u r t a s s e r t s i n ¶ 2 3

, i t i s s o b e c a u s e o f

i t s o w n a c t i o n s o r i n a c t i o n

, n o t a n y t h i n g J o h n s o n d i d o r f

a i l e d t o d o

.

¶ 4 9 Given the above, I concur in the result the Court reaches under Issue 3, but I dissent

f r o m t h e C o u r t ’ s h o l d i n g s u n d e r I s s u e s 1 a n d 2

. I w o u l d h o l d t h a t J o h n s o n w a s e n t i t l e d t o

p a r t i a l s u m m a r y j u d g m e n t o n t h e i s s u e o f l i a b i l i t y

. A c c o r d i n g l y

, I w o u l d r e v

e r s e t h e D i s

t r i c t1 7

Court’s Memorandum and Order Denying Plaintiff’s Motion for Partial Summary Judgment

a n d r e m a n d f

o r f u r t h e r p r o c e e d i n g s

. I

n a d d i t i o n

, I w o u l d a w a r d J o h n s o n h e r a t t o r n e y ’ s f e e s

a n d c o s t s a s t h e p r e v

a i l i n g p a r t y a t t r i a l a n d o n a p p e a l

, a n d I w o u l d o r

d e r t h e c o m

p u t a t i o n o f

those on remand.

¶ 5 0 I c o n c u r a n d d i s s e n t

.

/ S / J A M E S C

. N E L S O N

J u s t i c e P a t r i c i a O

. C o t t e r j o i n s t h e c o n c u r r e

n c e a n d d i s s e n t o f J

u s t i c e J a m e s C

. N e l s o n

.

/ S / P A T R I C I A C O T T E R