No. 01-449 

IN THE SUPREME COURT OF THE STATE OF MONTANA 

 

2002 MT 100 

INDEPENDENCE BANK, f/k/a 

FIRST SECURITY BANK OF HAVRE, 

Plaintiff and Respondent, 

v. 

JAMES J. HALSETH, CAMIA L. HALSETH, 

and STATE OF MONTANA, STATE MUTUAL 

INSURANCE COMPENSATION FUND, 

Defendants and Appellant. 

APPEAL FROM: District Court of the Seventeenth Judicial District, 

In and for the County of Blaine, 

The Honorable John C. McKeon, Judge presiding. 

COUNSEL OF RECORD: 

For Appellant: 

James J. Halseth, Pro Se, Harlem, Montana 

For Respondent: 

Chris R. Young, Attorney at Law, Havre, Montana 

Submitted on Briefs: January 31, 2002 

 Decided: May 10, 2002 

Filed: 

__________________________________________ 

Clerk
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Chief Justice Karla M. Gray delivered the Opinion of the Court. 

¶1 James J. Halseth (Halseth) appeals from the judgment entered 

by the Seventeenth Judicial District Court, Blaine County, on its 

findings of fact, conclusions of law and decree of foreclosure. We 

affirm. 

¶2 The sole issue on appeal is whether the District Court erred 

in determining that Halseth was not entitled to possession of the 

mortgaged property during the statutory redemption period. 

 BACKGROUND 

¶3 In 1993, Halseth executed a promissory note in favor of First 

Security Bank of Havre, now known as Independence Bank (Bank), 

secured by a mortgage on real property he owned in Blaine County. 

In 1994, he executed three more promissory notes along with 

security agreements giving the Bank security interests in his farm 

machinery, equipment and crops. Halseth subsequently defaulted on 

the promissory notes and, in October of 1999, the Bank filed a 

foreclosure action in the District Court. The District Court held 

a bench trial, at which Halseth stipulated that he had defaulted on 

the notes and the Bank was entitled to foreclose. He contended, 

however, that he currently was residing on the Blaine County 

property and, therefore, was entitled to possession of the property 

for the one-year redemption period following the foreclosure sale. 

¶4 The District Court entered findings of fact, conclusions of 

law and a decree of foreclosure, granting the Bank the right to 

take possession of the real and personal property at issue, sell it 
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and apply the proceeds toward the judgment amount. The court 

further determined that Halseth was not entitled to retain 

possession of the property during the following year because he was 

not residing there. The court entered judgment on the decree and 

Halseth appeals. 

STANDARD OF REVIEW 

¶5 Whether a debtor occupies mortgaged property so as to allow 

him or her to retain possession following a foreclosure sale is a 

question of fact to be determined by the trial court. Interstate 

Prod. Credit Ass'n v. DeSaye (1991), 250 Mont. 320, 322, 820 P.2d 

1285, 1287. We will affirm a district court’s findings of fact 

unless they are clearly erroneous. DeSaye, 250 Mont. at 322, 820 

P.2d at 1287. A finding of fact is clearly erroneous if it is not 

supported by substantial evidence of record, if the court has 

misapprehended the effect of the evidence or if a review of the 

record leaves us with the definite and firm conviction that a 

mistake has been committed. DeSaye, 250 Mont. at 323, 820 P.2d at 

1287. Substantial evidence is that which a reasonable mind might 

accept as adequate to support a conclusion and, while consisting of 

more than a scintilla of evidence, may be less than a 

preponderance. Foley v. Arvidson, 2000 MT 388, ¶ 8, 304 Mont. 43, 

¶ 8, 16 P.3d 389, ¶ 8. 

 DISCUSSION 

¶6 Did the District Court err in determining that Halseth was not 

entitled to possession of the mortgaged property during the 

statutory redemption period? 
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¶7 Following a judicial foreclosure of mortgaged real property, 

the judgment debtor has the statutory right to redeem the property 

from the purchaser at the sheriff’s sale any time within one year 

after the sale. See §§ 25-13-802 and 71-1-228, MCA. During this 

one-year redemption period, the purchaser is not entitled to 

possession of the property if the debtor “personally occupies the 

land as a home for himself and his family.” Section 71-1-229, MCA. 

 Halseth contended in the District Court that he resided on the 

Blaine County property which was the subject of the foreclosure 

proceeding and, therefore, was entitled to retain possession of the 

land during the redemption period. 

¶8 In determining whether Halseth occupied the property as 

required by § 71-1-229, MCA, the District Court looked to § 1-1-

215, MCA, which provides as follows: 

Every person has, in law, a residence. In determining 

the place of residence, the following rules are to be 

observed: 

(1) It is the place where a person remains when not 

called elsewhere for labor or other special or temporary 

purpose and to which the person returns in seasons of 

repose. 

(2) There may only be one residence. If a person claims 

a residence within Montana for any purpose, then that 

location is the person’s residence for all purposes 

unless there is a specific statutory exception. 

(3) A residence cannot be lost until another is gained. 

. . . . 

(6) The residence can be changed only by the union of act 

and intent. 

Based on the testimony at trial and the above guidelines, the 

District Court found that Halseth resided in Harlem, Montana, had 
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not shown the requisite union of act and intent to change his 

residence to the Blaine County property and, as a result, did not 

reside on that property. The court then concluded that, because 

Halseth did not reside on the Blaine County property, he did not 

occupy the property as his home as required in § 71-1-229, MCA, 

and, therefore, was not entitled to retain possession during the 

statutory redemption period. 

¶9 Halseth does not challenge the District Court’s application of 

§ 1-1-215, MCA, in reaching its decision and, as a result, we do 

not address the propriety of applying the criteria set forth 

therein to the requirements of § 71-1-229, MCA. Halseth does 

assert, however, that the court’s finding of fact regarding his 

lack of intent--under § 1-1-215, MCA--to make the Blaine County 

property his residence is clearly erroneous. 

¶10 Halseth testified at trial that he moved into a camper trailer 

on the Blaine County property in June of 2000 for the sole purpose 

of establishing his right to retain the property during the 

redemption period following foreclosure. Prior to that time, he 

resided in a house he owns in Harlem, Montana, and for which he 

pays the mortgage, property taxes and insurance. Halseth also 

testified that the Harlem house was being rented by his girlfriend, 

but there was no written rental agreement and no rent receipts; nor 

had she paid any rent in the five months prior to the trial. He 

further testified that he still stays at the Harlem house 

occasionally. Additionally, although the telephone service to the 

Harlem house is in his girlfriend’s name, Halseth gives out--and 
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receives calls at--that telephone number for both business and 

personal purposes, even though he has telephone service at the 

Blaine County property. 

¶11 Halseth does not dispute that, prior to June of 2000, the 

Harlem house was his legal residence. Moreover, as a matter of 

law, Harlem remains Halseth’s legal residence until he 

demonstrates, by the union of act and intent, that he has changed 

his residence. See § 1-1-215, MCA. The above testimony 

establishes that, while he moved to the camper trailer on the 

Blaine County property, Halseth retained ties to his Harlem home 

and did not intend to relinquish his residence in Harlem. 

Consequently, we conclude Halseth’s testimony constitutes 

substantial evidence supporting the District Court’s finding that 

he did not demonstrate the union of act and intent necessary to 

change his residence from Harlem to the Blaine County property. We 

further conclude that the court’s finding is not otherwise clearly 

erroneous. 

¶12 Halseth argues the District Court should have found he did 

intend to make the Blaine County property his permanent residence 

and points to portions of his trial testimony which he asserts 

supports such a finding. However, we review a district court’s 

findings of fact only to determine whether substantial evidence 

supports those findings, not whether the evidence would support 

contrary findings. In re Estate of Bradshaw, 2001 MT 92, ¶ 20, 305 

Mont. 178, ¶ 20, 24 P.3d 211, ¶ 20 (citations omitted). As we 

concluded above, substantial evidence of record supports the 
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District Court’s finding of fact regarding Halseth’s lack of intent 

to make the Blaine County property his residence. 

¶13 Based on its finding that the Blaine County property was not 

Halseth’s legal residence pursuant to § 1-1-215, MCA, the District 

Court determined that Halseth did not occupy the property as 

required in § 71-1-229, MCA, and, therefore, was not entitled to 

retain possession during the statutory redemption period. Having 

concluded the court’s finding of fact was not clearly erroneous, we 

hold that the District Court did not err in determining that 

Halseth was not entitled to possession of the mortgaged property 

during the statutory redemption period. 

¶14 Affirmed. 

/S/ KARLA M. GRAY 

We concur: 

/S/ JAMES C. NELSON 

/S/ PATRICIA COTTER 

/S/ JIM REGNIER 

/S/ W. WILLIAM LEAPHART