No. 01-094 

IN THE SUPREME COURT OF THE STATE OF MONTANA 

 

2003 MT 9N 

RALPH ANDERSON and CAPITAL FORD SALES, INC., 

Plaintiffs and Respondents, 

v. 

DUGAN ANDERSON, TERRY LEA LANE, CAPITAL 

IMPORTS, INC., and WILD WEST MOTORS, INC., 

d/b/a BIG MOUNTAIN TOYOTA, 

Defendants and Appellants. 

* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * 

DUGAN ANDERSON, TERRY LEA LANE, CAPITAL 

IMPORTS, INC., and WILD WEST MOTORS, INC., 

d/b/a BIG MOUNTAIN TOYOTA, 

Counterclaimants, 

v. 

RALPH ANDERSON and CAPITAL FORD SALES, INC., 

Counterdefendants. 

APPEAL FROM: District Court of the First Judicial District, 

In and for the County of Lewis and Clark, 

Honorable James E. Purcell and Honorable Ed McLean, Presiding 

COUNSEL OF RECORD: 

For Appellants: 

Douglas J. Wold and Leslie Ann Budewitz, Wold Law Firm, PC., 

Polson, Montana 

For Respondents: 

Ross W. Cannon, Cannon & Sheehy, Helena, Montana 

Submitted on Briefs: August 23, 2001 

 Decided: January 23, 2003 

Filed: 

__________________________________________ 

Clerk 

Justice Jim Rice delivered the Opinion of the Court. 
2 

¶1 Pursuant to Section I, Paragraph 3(c) Montana Supreme Court 

1996 Internal Operating Rules, the following decision shall not be 

cited as precedent but shall be filed as a public document with the 

Clerk of the Supreme Court and shall be reported by case title, 

Supreme Court cause number and result to the State Reporter 

Publishing Company and to West Group in the quarterly table of 

noncitable cases issued by this Court. 

¶2 Ralph Anderson and Capital Ford Sales, Inc. (collectively 

“Ralph”), sued to collect on loans extended to his son Dugan 

Anderson, daughter-in-law Terry Lea Lane and his son’s business 

enterprises (collectively “Dugan”). On summary judgment, the First 

Judicial District Court, Lewis and Clark County, ordered Dugan to 

pay loan balances with interest and Ralph’s court costs and 

attorney fees. We affirm in part, reverse in part, and remand for 

further proceedings consistent with this opinion. 

FACTUAL AND PROCEDURAL BACKGROUND

¶3 Ralph Anderson purchased the Ford dealership in Helena, 

Montana, from his father and for nearly 40 years owned and managed 

Capital Ford Sales, Inc. (“Capital Ford”). Dugan Anderson worked 

with his father from 1977 until 1982 when he acquired Wild West 

Motors, Inc. (“Wild West Motors”), which conducted business as Big 

Mountain Toyota in Kalispell, Montana. To obtain financing for the 

purchase of the Kalispell dealership, Dugan’s father, mother and 

grandmother co-signed Dugan’s bank loans. In 1984, Dugan and Ralph 

jointly purchased the Nissan and Mazda dealerships in Helena, 

renamed as Capital Imports, Inc. (“Capital Imports”), and held 51 
3 

percent and 49 percent interests, respectively. Again, Ralph cosigned the loans from Norwest Bank of Helena for the purchase of 

the dealership. 

¶4 By 1987, financial difficulties at Wild West Motors required 

Dugan to seek Ralph’s support in refinancing the dealership’s 

loans, which then were held by Norwest Bank of Kalispell. Capital 

Imports and Capital Ford were also in financial distress at this 

time. Dugan, Ralph and other family shareholders in the three 

dealerships entered into a Settlement, Forbearance and Liquidation 

Agreement with Norwest Bank on December 8, 1987, which allowed time 

for the parties to obtain new financing. By the end of the month, 

Ralph arranged for a loan of $1,327,000 to Capital Ford from Ford 

Motor Credit Corporation (“Ford Credit”), a portion of which was 

disbursed to Dugan and his business enterprises in three separate 

loans totaling $506,574.42. In his capacity as the president of 

Wild West Motors and Capital Imports, Dugan signed promissory notes 

to Capital Ford for two business loans in the amounts of 

$141,861.14 and $288,812.30. Ralph also claims that he loaned 

$75,900.98 from the Capital Ford account to Dugan personally. 

Dugan, and his wife, Terry Lea Lane, executed personal guarantees 

for each note, although no promissory note or guaranty evidenced 

the personal loan. 

¶5 After the acquisition of Capital Imports by Ralph and Dugan in 

1984, Dugan frequently traveled between the Kalispell Toyota and 

Helena Nissan/Mazda dealerships. Dugan also worked on a consulting 

basis with Capital Ford, which was managed at that time by his 
4 

brother, David Anderson. In April 1989, Capital Ford purchased the 

assets of Capital Imports and merged inventory and sales at one 

location. Dugan continued to divide his time between Helena and 

Kalispell until early 1991 when he relocated to Helena to assume 

full-time management of the combined Nissan/Mazda and Ford 

dealerships. 

¶6 In January 1994, Ralph and Dugan signed a Memorandum of 

Understanding (MOU) that outlined the process by which Dugan could 

purchase the Helena dealerships and take full control of all 

operations. In his deposition testimony, Dugan characterized his 

working relationship with Ralph as “difficult.” In March 1995, 

Dugan left Helena and resumed full-time management of Big Mountain 

Toyota in Kalispell. Ralph stepped in to manage Capital Ford on a 

full-time basis and began negotiations to sell the dealership to a 

third party. 

¶7 The action subject to this appeal was initiated on December 

22, 1995, when Ralph filed a Complaint alleging that Dugan 

defaulted on three 1987 loans from Capital Ford and failed to 

transfer to Ralph a promised share of Wild West Motor stock. Ralph 

sought payment of the loan balances with interest from the dates of 

default, plus attorney fees and court costs, as provided in the 

loan agreements. After numerous district court judges recused 

themselves, the court appointed Honorable James E. Purcell to 

preside over the matter. 

¶8 An Amended Complaint, filed on April 16, 1996, enumerated 

four Counts, which we summarize as follows: 
5 

Count I: $141,861.14 loan to Wild West Motors, Inc., 

dated December 23, 1987, used to pay debts at Norwest 

Bank of Kalispell and to provide the dealership with 

working capital. Loan in default as of June 1, 1995, 

with an unpaid balance of $60,614.21 plus interest. 

Count II: $288,812.30 loan to Capital Imports, Inc., 

dated December 23, 1987, used to pay the debts at Norwest 

Bank of Helena and to provide the dealership with working 

capital. Loan in default as of February 28, 1989, with 

an unpaid balance of $181,963.00 plus interest. 

Count III: Demand for the transfer of 39 percent of Wild 

West Motors stock from Dugan to Ralph in exchange for 

financial support extended by Ralph and Capital Ford in 

accordance with an oral agreement. 

Count IV: $75,900.98 loan to Dugan, personally, on 

December 23, 1987, used to pay Norwest Bank of Kalispell 

the balance due on the Wild West Motors stock purchase 

and to reduce the mortgage on Dugan’s home. No payments 

ever received, with full amount due plus interest. 

¶9 Dugan admitted in his Amended Answer that he had not paid the 

loan obligations in full, but raised various defenses and 

counterclaims. Admitting an unpaid balance of $57,863.62 on the 

Count I loan to Wild West Motors, Dugan argued that this debt was 

forgiven by Ralph as consideration for Dugan’s release of all 

claims against Ralph for the sale of the combined Capital 

Ford/Capital Imports dealership to a third party in February 1997 

without regard for the 1994 MOU for Dugan’s purchase of the 

business. Regarding the Count II loan to Capital Imports, Dugan 

asserted that any outstanding obligation had been assumed by 

Capital Ford when the two entities merged in 1989. Dugan denied he 

promised to transfer any Wild West Motor stock to Ralph, as claimed 

by Count III. Dugan answered that the Count IV loan was used to 
6 

purchase Capital Imports stock rather than Wild West Motors stock. 

 He asserted that Capital Ford assumed liability for the 

outstanding balance of that portion of the Count IV loan that went 

to the stock purchase when Capital Ford bought the assets and 

assumed the liabilities of Capital Imports. Dugan counterclaimed 

for loss of business opportunities, constructive discharge and 

other damages resulting from Ralph’s alleged breach of the 1994 

MOU. 

¶10 Ralph was deposed by opposing counsel in April 1997. The 

parties entered settlement negotiations and filed one stipulation 

with the District Court on May 27, 1997. The stipulation stated 

that the pretrial order would include the affirmative defenses of 

statute of limitations and laches against Ralph’s Count III claim. 

 In July 1997, Ralph’s attorneys advised the court by letter that 

the parties had agreed to eliminate three counts from the Amended 

Complaint. Later that month, Dugan’s attorneys affirmed in another 

letter to the judge that only one count and the counterclaims 

remained for trial. In August 1997, Ralph dismissed his attorneys 

and the court vacated the trial date to allow Ralph time to obtain 

new counsel. With new counsel representing Ralph, the parties 

proceeded with discovery and Dugan’s deposition was taken in July 

1998. 

¶11 In June 1999, Ralph moved for partial summary judgment on 

Counts I, II and IV and dismissal of Dugan’s counterclaims. Dugan 

objected and moved for partial summary judgment on Counts II, III 

and IV. The parties presented oral arguments in August 1999. The 
7 

court directed the parties to arrange for a formal settlement 

conference, which was held in February 2000 and followed by a 

telephone conference. Both attempts proved unsuccessful. The 

parties then filed proposed findings of fact and conclusions of 

law. 

¶12 By summary judgment on November 20, 2000, the District ruled 

in favor of Ralph on Counts I, II, and IV, and dismissed Count III 

for violation of the statute of limitation. The court dismissed 

Dugan’s cross-motion for partial summary judgment and each of his 

counterclaims. The Order directed Ralph to file affidavits 

calculating accrued interest and supporting his request for 

attorney fees on Counts I and II. On the same day, the Honorable 

James E. Purcell recused himself from the case in anticipation of 

stepping down from the bench. On November 29, 2000, Ralph filed a 

motion for entry of judgment with affidavits documenting interest 

accrual, court costs and attorney fees. Judge Purcell signed the 

judgment nunc pro tunc on December 1, 2000, and assessed Dugan 

$100,897.62 in fees for Ralph’s attorneys. Dugan immediately filed 

for relief from judgment, arguing that the court afforded him 

insufficient time to file a brief in response to Ralph’s motion for 

entry of judgment and that the amount of attorney fees was 

unreasonable. The Honorable Edward P. McLean assumed jurisdiction 

on December 11, 2000. Judge McLean denied Dugan’s motion for 

relief and assessed an additional $1,231.90 in fees. 

¶13 We restate the issues raised by Dugan on appeal as follows: 
8 

¶14 Issue 1. Did the District Court err by granting summary 

judgment to Ralph and dismissing Dugan’s counterclaims? 

¶15 Issue 2. Did the District Court err by declining to enforce a 

settlement agreement? 

¶16 Issue 3. Did the District Court err by relying on 

inadmissible evidence? 

¶17 Issue 4. Did the District Court err by entering judgment 

before Dugan responded to the motion for entry of judgment? 

¶18 Issue 5. Did the District Court abuse its discretion by 

awarding unreasonable attorney fees?

STANDARD OF REVIEW

¶19 Our standard of review for a district court’s order granting 

summary judgment is de novo, using the same Rule 56, M.R.Civ.P., 

criteria applied by the district court. Abraham v. Nelson, 2002 

MT 94, ¶ 9, 309 Mont. 366, ¶ 9, 46 P.3d 628, ¶ 9. We look to the 

pleadings, depositions, answers to interrogatories, admissions on 

file, and affidavits to determine the existence or nonexistence of 

genuine issues of material fact. Erker v. Kester, 1999 MT 231, ¶ 

17, 296 Mont. 123, ¶ 17, 988 P.2d 1221, ¶ 17. 

¶20 Summary judgment is an extreme remedy which should be granted 

only when there is no genuine issue as to any material fact and the 

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

USAA Casualty Insurance Co., 2001 MT 59, ¶ 25, 304 Mont. 356, ¶ 25, 

22 P.3d 631, ¶ 25. The party seeking summary judgment, therefore, 

has the burden of demonstrating a complete absence of any genuine 

factual issues. Lee, ¶ 25. The party seeking summary judgment 
9 

also must overcome the burden that all reasonable inferences that 

might be drawn from the offered evidence will be drawn in favor of 

the party opposing summary judgment. Lee, ¶ 25. 

¶21 Where the moving party is able to demonstrate that no genuine 

issue as to any material fact remains in dispute, the burden shifts 

to the party opposing the motion. Lee, ¶ 26. This burden shift 

requires that the opposing party present material and substantial 

evidence, rather than merely conclusory or speculative statements, 

to raise a genuine issue of material fact. Lee, ¶ 26. 

¶22 This Court has routinely stated that the purpose of summary 

judgment is to eliminate unnecessary trials, but that summary 

adjudication should “never be substituted for a trial if a material 

factual controversy exists.” Boyes v. Eddie, 1998 MT 311, ¶ 16, 

292 Mont. 152, ¶ 16, 970 P.2d 91, ¶ 16 (citation omitted). 

Because the practical result of applying the summary judgment 

remedy is to deprive the party against whom judgment is granted of 

a trial in the usual course, the remedy should be used only in 

those cases in which the justice of its application is clear. 

Issue 1. 

¶23 Did the District Court err by granting summary judgment to 

Ralph and dismissing Dugan’s counterclaims?

¶24 Dugan first claims that the District Court committed 

reversible error by adopting the findings of fact and conclusions 

of law prepared by Ralph. This assertion is not supported by the 

law. 

¶25 Rule 52(a), M.R.Civ.P., states, in pertinent part: 
10 

The court may require any party to submit proposed 

findings of fact and conclusions of law for the court’s 

consideration and the court may adopt any such proposed 

findings and conclusions so long as they are supported by 

the evidence and law of the case. 

¶26 We have held that a court’s adoption of the findings and 

conclusions presented by the prevailing party is not grounds for 

reversal. In re Marriage of Nikolaisen (1993), 257 Mont. 1, 5, 

847 P.2d 287, 289. Instead, we examine whether the findings are 

sufficiently comprehensive, pertinent and supported by substantial 

evidence to provide a basis for the decision. Nikolaisen, 257 

Mont. at 5, 847 P.2d at 289 (citing In re Marriage of Hurley

(1986), 222 Mont. 287, 296, 721 P.2d 1279, 1285). 

¶27 The District Court resolved this case by adopting, virtually 

verbatim, the findings of fact and conclusions of law prepared by 

Ralph. While the court’s findings are sufficiently comprehensive 

and pertinent, the court employed an incorrect legal standard for 

summary judgment. Rather than ascertaining whether genuine issues 

of material fact remained, the court’s Findings of Fact, 

Conclusions of Law and Order reveal that the court weighed the 

evidence to reach conclusions supported by substantial, but 

nonetheless disputed, evidence. 

¶28 The claims asserted in this action arise from a complicated 

series of financial transactions spanning many years and 

encompassing the purchase and operation of three car dealerships 

and the merger and sale of two. While the District Court’s 

wholesale adoption of the plaintiffs’ proposed findings and 

conclusions does not, in and of itself, constitute reversible 
11 

error, the importation of an incorrect legal standard resulted in 

an incorrect analysis. Using the de novo standard of review 

outlined above, we have examined the record on appeal to determine 

whether the moving party was entitled to summary judgment as a 

matter of law. 

Count I

¶29 Ralph presented an executed promissory note from Capital Ford 

to Wild West Motors and a signed guaranty to document the 1987 loan 

to Dugan in the amount of $141,861.14. Ralph alleged in his 

Amended Complaint that the loan was in default as of June 1995. 

Dugan admitted an unpaid balance of $57,683.62. Consequently, 

Ralph met his initial burden of demonstrating the undisputed 

existence of a $57,683.62 debt. 

¶30 The burden then shifted to Dugan to demonstrate by more than 

mere denial, speculation or conclusory statement that a genuine 

issue of material fact existed to preclude summary judgment. Dugan 

raised the affirmative defense of accord and satisfaction, claiming 

that Ralph had promised to forgive the debt in exchange for Dugan’s 

forbearance in exercising his interest in purchasing Capital Ford 

under the terms of the MOU. When Dugan learned in 1995 that Ralph 

was engaged in negotiations for the sale of the Helena dealership 

to a third party, Dugan stated that he twice wrote to Ralph’s 

attorney and presented two forbearance offers. The attorney 

forwarded Dugan’s letters to Ralph, but the record contains no 

evidence that Ralph responded to Dugan’s offers. Dugan presented 

no evidence that the Count I obligation was released by Ralph or in 
12 

any way connected to the MOU. Because Dugan failed to offer 

factual support for his defense of accord and satisfaction, his 

admission that the unpaid balance on the Count I loan was 

$57,863.62 stands as uncontroverted fact. 

¶31 Dugan also asserts on appeal that the Count I debt should be 

set off against the damages resulting from Ralph’s alleged breach 

of the MOU. However, Dugan’s counterclaim for breach of contract 

must be established before set off may be considered. We affirm 

the District Court’s grant of summary judgment in Ralph’s favor on 

Count I. 

Count II

¶32 Ralph and Dugan both moved for summary judgment on Count II, 

and the District Court ruled in Ralph’s favor. To meet his initial 

burden, Ralph presented a promissory note documenting the 1987 loan 

by Capital Ford to Capital Imports in the amount of $288,812.30, 

together with a signed guaranty. Ralph asserted that the loan was 

in default as of February 1989, with an unpaid balance of 

$181,963.00. He stated that he received no payments on the loan 

after the sale of Capital Imports and that he never forgave the 

debt. 

¶33 Dugan countered in his Amended Answer that “the obligation of 

Capital Imports was satisfied at such time as the business of 

Capital Imports was merged with Capital Ford, and in consideration 

of that transaction.” He argued that Capital Ford assumed 

liability for the Count II loan as part of its acquisition of 

Capital Imports in 1989 and, when Capital Ford paid off Ford Credit 
13 

in full after the asset sale, Dugan’s liability as a guarantor was 

extinguished. To substantiate his argument, Dugan cited his 

affidavit, where he stated: 

Capital Ford purchased Capital Imports in 1989, assuming 

all liabilities, including the debts alleged in Counts II 

and IV. Capital Imports is no longer a going concern. 

After the purchase, Capital Imports made no further 

payments or distributions. 

Dugan also cited the following excerpt from his deposition 

testimony: 

MR. CANNON [attorney for Ralph]: This $288,812.30 is 

still owing to Capital Ford Sales? You haven’t paid it? 

A. [DUGAN]: Well, I think if you get the document that 

was prepared–the sale document between Capital Ford and 

Capital Imports–you will find that the note was assumed 

by Capital Ford. 

Q. That’s this contract of sale that you’re speaking of, 

I assume? 

THE DEPONENT: You know, I think we have covered this 

territory previously, but I don’t know–I don’t know where 

to look for it. 

MR. WOLD [attorney for Dugan]: I think your answer is 

just fine. 

THE DEPONENT: Okay. 

MR. CANNON: Are you saying that there should be an 

instrument somewhere that in–in which it specifically 

says that Capital Ford Sales forgives indebtedness? 

A. I believe this instrument (indicating)– 

Q. Says that somewhere? 

A. No. There is no forgiveness. They took it–They took 

it over. 

Q. And therefore it’s no longer a debt owing from you to 

Capital Ford Sales; is that your position? 

A. I believe that’s how it’s handled, yes. 
14 

¶34 The First Amended Contract for Sale of Assets of Capital 

Imports to Capital Ford (“Contract for Sale”) states that the 

transfer was to be “free of all debts and encumbrances except those 

expressly assumed.” The Contract purchase price was $857,107.05, 

which equaled the listed value of the assets sold. Capital Ford 

also expressly assumed $973,207.00 in liabilities from Capital 

Imports as part of the acquisition. The list of existing creditors 

attached to the Contract for Sale included a $66,655.23 debt to 

Capital Ford and two debts to Ford Credit in the amounts of 

$572,900.05 and $290,502.00. 

¶35 In 1987, Ford Credit provided the financing that permitted 

Capital Ford and Ralph to make the loan to Capital Imports that is 

the subject of Count II. While the Contract for Sale did not 

specifically enumerate the outstanding balance on the Count II loan 

as a liability on the list of existing creditors when the 

dealerships merged, Dugan contends that this debt was subsumed 

within the obligations to Ford Credit and Capital Ford that Capital 

Ford expressly assumed. 

¶36 We first examine whether either party successfully 

demonstrated a complete absence of issues of material fact. While 

Ralph’s sworn testimony that he did nothing to forgive Dugan’s 

Capital Imports debt remained undisputed, Dugan raised the defense 

of debt assumption, which Ralph denied. Dugan’s sworn assertion 

that Capital Ford assumed the liability for the Count II debt by 

executing the 1989 Contract for Sale conflicts with Ralph’s 

contention that Capital Imports had no legal basis for ceasing to 
15 

make payments on the obligation when this merger with Capital Ford 

occurred. The Contract for Sale’s inclusion of the debts that 

existed between the two dealerships and with Ford Credit is subject 

to interpretation and cannot be resolved given the conflict in the 

parties’ sworn testimony. Therefore, we conclude that neither 

party demonstrated an absence of genuine issues of material fact. 

¶37 The District Court in its findings and conclusions 

consistently mischaracterized Dugan’s position as an assertion that 

the Count II obligation had been forgiven by Ralph. Debt 

forgiveness and debt assumption are wholly different defenses 

requiring different proofs. Whereas an obligation of a debtor is 

released by a creditor only upon the acceptance of new 

consideration or in writing, see § 28-1-1601, MCA, an obligation 

may be transferred with the consent of the party entitled to its 

benefits, see § 28-1-1002, MCA. Dugan maintained that Ralph’s 

consent to the transferred liability for Capital Imports’ debt was 

manifested by the Contract for Sale. However, the court overlooked 

the legal theory propounded by Dugan, revealing its 

misunderstanding of the dispute between the parties. As a result, 

the court failed to hold Ralph to the requirement that he 

demonstrate that all facts material to the substantive law raised 

by Dugan’s defense were undisputed. We reverse the grant of 

summary judgment in Ralph’s favor and remand Count II for trial. 

Count IV

¶38 Both Ralph and Dugan also moved for summary judgment on Count 

IV. Ralph alleged that Dugan defaulted on the entire $75,900.98 
16 

loan extended to Dugan personally from Capital Ford as part of the 

disbursement of the Ford Credit recapitalization loan in 1987. 

Ralph asserted that the personal loan to Dugan was used to pay-off 

a $55,900.98 balance that remained on the note with Norwest Bank of 

Kalispell that Ralph had co-signed in 1982 for the purchase of Big 

Mountain Toyota. The remaining $20,000 of the personal loan was 

used to reduce the mortgage on Dugan’s home. Because the Count IV 

loan was not evidenced by a promissory note, Ralph attached various 

financial records prepared by Capital Ford’s accountant to his 

opening and reply briefs in support of his motion for summary 

judgment. Dugan challenged each of these exhibits as 

unauthenticated and inadmissible for lack of proper foundation. 

¶39 In his Amended Answer Dugan acknowledged that he received the 

Count IV personal loan in 1987 as part of the refinancing provided 

by Ford Credit. However, he denied that he used the loan to payoff Norwest Bank of Kalispell for his Wild West Motors stock 

purchase and instead asserted that he had used the money to pay-off 

Norwest Bank of Helena for his 1984 Capital Imports stock purchase. 

 In his Amended Answer to the Count IV allegations, Dugan 

explained: 

In approximately 1984, Ralph Anderson and Dugan Anderson 

jointly borrowed $75,000.00 from Norwest Bank for the 

purpose of buying stock in Capital Imports, 51% of which 

was for the benefit of Dugan Anderson, and 49% of which 

was for the benefit of Ralph Anderson. This debt 

obligation was assumed by Capital Ford at such time as 
17 

the business of Capital Imports was merged with Capital 

Ford, and in consideration of that transaction. 

By affidavit, Dugan declared: 

I had borrowed money from Norwest for part of my purchase 

of Capital Imports stock; the balance at the time of the 

refinance was $55,900.98. I had also borrowed from 

Norwest for part of the purchase of my home; the balance 

at the time of the refinance was $20,000. As part of the 

refinance, my note related to Capital Imports was 

forgiven. I then paid off the home loan. All other 

indebtedness by Ralph, my brother David, me, my wife, 

Capital Imports, and Wild West to Norwest Bank was 

released, with the exception of two smaller loans not at 

issue here. 

Dugan further asserted that the portion of the Count IV obligation 

he used to purchase Capital Imports stock had been assumed by 

Capital Ford as part of the 1989 acquisition and merger. 

¶40 While Ralph failed to establish the purpose, disposition or 

lack of payment on the alleged $75,900.98 obligation with 

uncontroverted evidence, Dugan also failed to demonstrate an 

absence of a genuine issue of material fact under his theories of 

debt assumption, payment or forgiveness. For example, Dugan’s 

sworn assertion that he paid the $20,000.00 home mortgage loan in 

full does not trump Ralph’s sworn statement that Dugan never repaid 

the obligation, when no other evidence supports either claim. On 

cross-motions for summary judgment, both parties enjoy the benefit 
18 

of all reasonable inferences drawn from the evidence presented. We 

conclude that neither party met their initial burden and that 

genuine issues of material fact exist. We reverse the entry of 

summary judgment in Ralph’s favor on the Count IV loan and remand 

for trial. 
19 

Counterclaims

¶41 In his Amended Answer, Dugan counterclaimed for deprivation of 

business opportunity and profit and deprivation of the right to 

purchase Capital Ford under the terms of the MOU, which resulted 

from Ralph’s breach of contract, misrepresentation and constructive 

discharge of Dugan as general manager of Capital Ford. Dugan 

contended that the sale of the Helena dealership to a third party 

without a release from the terms of the MOU that obligated Ralph to 

sell the business to Dugan entitles Dugan to reliance and 

expectancy damages. Ralph moved for dismissal of all 

counterclaims, which the District Court granted on summary 

judgment. 

¶42 The District Court excerpted Dugan’s deposition testimony at 

length in its findings and conclusions. Dugan stated in his 

deposition that he could not think of any actual business 

opportunities that he had foregone as a result of his employment 

with Capital Ford. Later, he neither supplemented nor contradicted 

this testimony by affidavit or in his briefs. The court also 

referenced Dugan’s deposition testimony regarding the circumstances 

of his departure from the Helena dealership in March 1995. 

Although Dugan declared that working with Ralph was untenable and 

resulted in Dugan’s constructive discharge, Dugan also stated that 

he could not think of any examples of acts or omissions by Ralph 

that created an intolerable employment situation. 

¶43 The District Court noted that the MOU for the purchase of 

Capital Ford demanded that Dugan take affirmative action to carry 
20 

out the intent of the agreement. Before the MOU would compel Ralph 

to surrender his operational authority and resign as an officer and 

director, the agreement required Dugan to arrange for the transfer 

of Capital Ford’s dealership sales and service agreements from 

Ralph to Dugan, to obtain life insurance coverage for himself, and 

to execute a stock redemption agreement with Ralph for the purchase 

of Ralph’s interest. Dugan acknowledged in his deposition that he 

did not apply for the transfer of the franchise agreements with 

Ford Motor Company. He also stated that he and Ralph had discussed 

the Capital Ford buy-out arrangements over the years, but had 

reached no agreement. 

¶44 Consequently, we conclude that the uncontroverted evidence 

shows that Ralph met his burden of demonstrating the counterclaims 

lack any basis in fact. Dugan presented no evidence in rebuttal 

that supported his counterclaims or established a genuine issue of 

material fact. Therefore, we affirm the District Court’s dismissal 

of Dugan’s counterclaims by summary judgment. 

Issue 2. 

¶45 Did the District Court err by declining to enforce a 

settlement agreement?

¶46 Dugan grounded his cross-motion for summary judgment on Counts 

II and IV on an alternative theory that Ralph was “bound by [his] 

counsel’s agreement to dismiss those counts.” The District Court 

concluded that Counts II and IV were not effectively dismissed by 

agreement. On appeal, this Court will affirm the court’s ruling 

if the court reached the correct result, even if it did so for the 

wrong reasons. Eschenbacher v. Anderson, 2001 MT 206, ¶ 40, 306 
21 

Mont. 321, ¶ 40, 34 P.3d 87, ¶ 40. See State v. Parker, 1998 MT 

6, ¶ 20, 287 Mont. 151, ¶ 20, 953 P.2d 692, ¶ 20 (citation 

omitted). In order for Dugan to prevail on his cross-motion for 

partial summary judgment, he must demonstrate that no genuine issue 

as to any material fact regarding the existence of a binding 

agreement to settle the Count II and IV claims remains in dispute 

and that he is entitled to judgment as a matter of law. 

¶47 Dugan claims that Ralph’s counsel, Patrick Hooks, offered to 

dismiss Counts II and IV without condition in April 1997, and 

counsel for Dugan unconditionally accepted the offer. Ralph 

counters that he never consented to a final settlement agreement, 

regardless of his attorneys’ representations. Citing § 37-61-

401(1), MCA, as authority, Ralph argues that any agreement reached 

by his attorney is not binding because no agreement was filed with 

the clerk of the court or entered into the minutes of the court. 

 

¶48 Section 37-61-401(1), MCA, states, in pertinent part: 

An attorney and counselor has authority to: (a) bind his 

client in any steps of an action or proceeding by his 

agreement filed with the clerk or entered upon the 

minutes of the court and not otherwise. . . 

Years ago, this Court observed that “a literal construction [of the 

above statute] would greatly retard the business of the court and 

lead to absurd consequences. Every admission, consent or agreement 

made in the course of the trial would either have to be reduced to 

writing or filed with the clerk or by the clerk entered in his 

minutes. It was never intended that the section should receive 

such a construction.” State v. Turlok (1926), 76 Mont. 549, 563, 
22 

248 P. 169, 175 (citation omitted). In practice, § 37-61-401(1), 

MCA, is applied solely to agreements between attorneys. State v. 

Nelson (1991), 251 Mont. 139, 141, 822 P.2d 1086, 1087 (citing St. 

Paul Fire & Marine Ins. Co. v. Freeman (1927), 80 Mont. 266, 

274-75, 260 P. 124, 127; Bush v. Baker (1913), 46 Mont. 535, 

544-46, 129 P. 550, 553-54). The purpose of the statute is to 

relieve the presiding judge of the burden of determining disputes 

between attorneys concerning their unexecuted agreements. Nelson, 

251 Mont. at 141, 822 P.2d at 1087 (citing Bush, 46 Mont. at 540, 

129 P. at 553). 

¶49 An agreement to settle is binding if made by an unconditional 

offer and accepted unconditionally. Hetherington v. Ford Motor Co. 

(1993), 257 Mont. 395, 399, 849 P.2d 1039, 1042. The parties must 

consent to all terms before a settlement agreement becomes binding. 

 In re Estate of Goick (1996), 275 Mont. 13, 23, 909 P.2d 1165, 

1171. See also §§ 28-2-501 and -504, MCA. Because a settlement 

agreement reached by the respective attorneys becomes binding on 

the parties only when the parties consent to all terms, the 

agreement is not one that exists solely between the attorneys and 

need not be “filed with the clerk or entered upon the minutes of 

the court” to be valid, as contemplated by § 37-61-401(1), MCA. In 

this case, the existence of a binding agreement between Ralph and 

Dugan to settle the Count II and IV claims may be demonstrated by 

evidence of the unconditional acceptance of an unconditional offer 

by the parties. 
23 

¶50 Dugan argues that Ralph’s acquiescence to the settlement 

agreement is demonstrated by his deposition testimony, taken on 

April 11, 1997, during which Ralph failed to protest his attorney’s 

statement that Count II would be dismissed. The testimony reads: 

Q. [MR. WOLD, attorney for Dugan]: Let’s move on to the 

second claim, which is one for $288,812.30, which is, 

according to the Complaint, the subject of a promissory 

note attached to the Complaint as Exhibit C. For the 

purposes of the record, I’ll ask whether you are going to 

maintain that claim after this point? Either of you can 

answer that. 

MR. HOOKS [attorney for Ralph]: I’ll answer. The claim 

will be dismissed. 

Q. [By MR. WOLD]: So, as a result of that representation, 

which I accept, I’m not going to ask any questions about 

that claim. We’ve just saved ourselves quite a bit of 

time. 

A. [By RALPH]: And I’ve lost $282,000 [sic]. 

Q. [By MR. WOLD]: Well, let’s move on . . . 

¶51 As further proof of settlement, Dugan stated that Hooks 

confirmed the agreement to dismiss Counts II, III and IV in a 

letter dated May 14, 1997. Although Dugan referenced a copy of 

this May 14 letter as an attachment to his brief on cross-motion 

for summary judgment, the letter is not included in the record on 

appeal. By affidavit, Douglas J. Wold, Dugan’s attorney, stated 

that Hooks offered to dismiss Counts II and IV without condition 

and that Wold confirmed his clients’ acceptance of the offer on May 

15, 1997. The affidavit continues, “Mr. Hooks and I agreed that no 

written dismissal or release was necessary, and that instead, the 

two counts would be omitted when the pretrial order was prepared.” 

 
24 

¶52 Another letter to Dugan’s attorney from Hooks, dated May 28, 

1997, states that Ralph was willing to dismiss Counts II, III and 

IV on the condition that Dugan disclaim any interest in Ford 

Country, Inc., the real estate holding entity associated with 

Capital Ford. No response to this offer is included in the record 

and Dugan never asserted that he accepted this settlement proposal 

unconditionally. Although no other settlement offer or evidence of 

acceptance is in evidence, attorneys representing both parties 

informed the District Court judge by mail in July 1997 that three 

of the four counts had been eliminated from the litigation. These 

letters do not indicate which counts were to be dropped and which 

remained for trial. 

¶53 Although the record includes various expressions of intent to 

settle by both parties, evidence concerning the agreement and the 

terms thereof are not consistent. By way of examples, the letters 

between counsel and from counsel to the judge demonstrate that the 

attorneys concurred that a settlement had been reached, which is 

supported by the Wold affidavit, but a meeting of the minds on the 

terms of the settlement is not demonstrated. The Wold affidavit 

states that the parties’ settlement agreement was affirmed by May 

15, 1997, yet Ralph sent Dugan another conditional offer to settle 

two weeks later on May 28, 1997. The May 28 letter raises a 

genuine issue of fact regarding Dugan’s claim that the parties had 

reached an unconditional agreement prior to that date. We note 

that Dugan did not file a motion to compel settlement following 

Ralph’s dismissal of counsel in August 1997, but proceeded with 
25 

discovery. And, finally, the parties filed no pretrial order, 

stipulation, motion for dismissal or amended pleading that 

expressed an intention to delete Counts II or IV from the 

litigation. 

¶54 Therefore, we conclude that Dugan did not meet his burden by 

demonstrating that an unconditional offer to settle was 

unconditionally accepted. The factual dispute precludes summary 

judgment as a matter of law, and the District Court was correct to 

refuse to dismiss Ralph’s Count II and IV claims on the basis that 

the parties had already settled the claims. We affirm the court’s 

denial of Dugan’s cross-motion. Because we are reversing the entry 

of summary judgment in Ralph’s favor on Counts II and IV, the issue 

of a settlement agreement may be raised again upon remand. 
26 

CONCLUSION

¶55 In conclusion, we reiterate that a court’s role on summary 

judgment is not to weigh the evidence, which occurred here, but to 

save all parties involved the expense and time of taking a case to 

trial when no material issues of fact remain in dispute. 

Uncontroverted evidence sustains the District Court’s grant of 

summary judgment in favor of Ralph on Count I and dismissal of all 

counterclaims. However, the record raises genuine issues of 

material fact regarding Counts II and IV as well as the purported 

agreement to settle these two claims. Additional proceedings are 

required to resolve these matters. 

¶56 We remand to the District Court without discussing the merits 

of the final three issues. We reached our decision to reverse on 

Counts II and IV without reference to the evidence challenged by 

Dugan. Therefore, it is not necessary for us to decide whether the 

District Court improperly considered unauthenticated exhibits that 

were submitted without proper foundation. However, our holding 

necessitates reversal of the District Court’s award of attorney 

fees to Ralph, as the award was premised upon multiple claims that 

Ralph had prevailed upon, two of which are now reversed and 

remanded. Thus, the issue of attorney fees will need to be 

resolved by further proceedings in the District Court. 

¶57 Affirmed in part, reversed in part, and remanded for further 

proceedings consistent with this opinion. 

/S/ JIM RICE 
27 

We concur: 

/S/ KARLA M. GRAY 

/S/ JAMES C. NELSON 

/S/ JIM REGNIER 

/S/ TERRY N. TRIEWEILER