Title: MAJERS v THE SHINING MOUNTAINS
Citation: N/A
Docket Number: 85-100
State: Montana
Issuer: Montana Supreme Court
Date: January 7, 1986

No. 85-100 IN THE SUPREME COURT OF THE STATE OF MONTANA 1985 FRED W. MAJERS, CECILA MAJERS, et al. Plaintiffs and Respondents, THE SHINING MOUNTAINS, a California limited partnership, Defendant and Appellant. APPEAL FROM: District Court of the Fifth Judicial District, In and for the County of Madison, The Honorable Frank Davis, Judge presiding. COUNSEL OF RECORD: For Appellant: Randy Dix argued, Helena, Montana Jones & Hoffman; Chester Lloyd Jones argued, Virginia City, Montana Landoe, Brown, Planalp, Kommers & Johnstone, Bozeman, Montana For Respondent: Poore, Roth & Robinson; Urban L. Roth and Charles R. Anderson argued, Butte, Montana Submitted: September 18, 1985 Decided: January 7, 1986 Mr. Justice L. C. Gulbrandson delivered the Opinion of the Court. Appellant, Shining Pl'lountains, appeals an order of the District Court of the Fifth Judicial District, Madison County, granting plaintiffs' motion for partial summary judgment. The District Court held that Shining Mountains had an implied covenant to construct improvements indicated on a recorded plat. The order also stated the covenant could be enforced through specific performance. We reverse and remand for further proceedings. Shining Mountains acquired and subdivided a 7,000 acre ranch in Madison County between January and July, 1972. In order to sell the lots, they prepared and recorded subdivision plat maps which assigned a number to each lot and designa-ted common areas and roadways. These plats were filed prior to the effective date of the Montana Subdivision and Platting Act in §§ 76-3-501 et. seq., MCA, and thus were not subject to its provisions. When Shining Mountains prepared the purchase and sale contracts, they specifically referred to the recorded plats. The purchase and sale contracts and protective covenants, also recorded by Shining Mountains, provided that Shining Mountains would form a non-profit corporation or similar entity to administer such things as the "overseeing and maintenance of all common areas." The agreements contained no statements on who would construct roads or comon areas. Plaintiffs and respondents are the purchasers and owners of some of the residential lots within this subdivision. They purchased lots from Shining Mountains between 1974 and 1978. They stated in affidavits that Shining Mountains personnel told them roads would be constructed and maintained by the sellers. They also stated that Shining Mountains personnel told them a dam would be constructed across the creek on the property to form a lake 2 suitable for fishing and other recreation. Respondents apparently asked Shining Mountains to open and construct the designated roadways. Shining Mountains was unwilling to construct the roadways. Respondents filed their complaint on February 17, 1984 alleging: (1) the existence of a common-law implied covenant to open and build roadways in Shining Mountains; and ( 2 ) Shining Mountains was estopped from denying this obligation because of representations made about the road construction. The complaint asked for a decree of specific performance or, alternatively, money damages. On April 2, 1984, Shining Mountains submitted a motion to dismiss contending that the first count failed to state a claim upon which relief could be granted. They argued that, as a matter of law, roa-dway easements reserved in subdivision plats do not create any implied obligation on the part of a subdivider to open and construct roads at its expense. Respondents conceded that this was a case of first impression in Montana. The District Court denied the motion to dismiss on May 4, 1984. In its answer, Shining Mountains repeated contentions from the motion to dismiss and raised several affirmative defenses including impossibility of performance for lack of an ascertainable standard and the statute of limitations. Respondents submitted a motion for partial summary judgment on their implied covenant theory of recovery on July 2, 1984. At about the same time, Shining Mountains filed a motion to stay this proceeding on the grounds that related lawsuits brought four years earlier by other lot owners could afford full relief to all claimants. After briefs and oral argument by both parties, the District Court granted respondents1 motion for partial summary judgment and denied Shining Mountains1 motion to stay this action. On motion by Shining Mountains and after argument by both parties, the District Court certified its judgment as final pursuant to Rules 54(b) and 58 M.R.Civ.P. on November 7, 1984. Shining Mountains raises three issues on appeal: (1) Whether the District Court erred by granting partial summary judgment and ruling that reservation of easements for roadways in subdivision plats creates an implied common-law covenant by the lot seller to open and construct roadways at his expense. (2) Whether the claims for relief are barred by applicable statutes of limitations. (3) Whether the remedy of specific performance is available in this case. Summary judgment is proper if "there is no genuine issue as to any material fact and . . . the moving party is entitled to a judgment as a matter of Rule 56 (c) , P4.R.Civ.P. This Court has consistently held that the moving party has the burden of showing a complete absence of any genuine fact issue material to the substantive principles which entitles him to judgment as a matter of law. This rule imposes a strict standard on the movant. Farmer's Ins. Exchange v. Janzer (Mont. 1985), 697 P.2d 460, 461-462, 42 St.Rep. 337, 339. Once this burden is met, the burden shifts to the party opposing the motion, who must come forward with substantial evidence raising a factual issue. Farmer's Ins. Exchange, 697 P.2d at 462. When reviewing the summary judgment on appeal, this Court views the evidence in a light most favorable to the party opposing summary judgment and affords that party the benefit of reasonable inferences from the offered proof. Mally v. Asanovich (1967) , 149 Mont. 99, 423 P.2d 294. Shining Mountains contends, in the first issue, no legal authority exists to hold that reservations of roadway easements in plats create an implied covenant in the seller to open and construct the roadways. The District Court 4 r e l i e d on t h e reasoning i n Beechler v. Winkel (Ohio 1978), 392 N.E.2d 889, and noted t h a t 5 76-3-304, MCA, which came i n t o e f f e c t a f t e r t h e p l a t s were f i l e d , recognized t h e general p r i n c i p l e s involved. I n Beechler, 392 N.E.2d 889, t h e defendant subdivided farmland. When he submitted t h e p l a t f o r recording, t h e defendant signed an owner's c e r t i f i c a t e , required by t h e county, s t a t i n g t h a t roads would be constructed according t o county s p e c i f i c a t i o n s . Defendant t e s t i f i e d he believed t h a t t h e c e r t i f i c a t e o b l i g a t e d him t o b u i l d roads t o those s p e c i f i c a t i o n s only i f he wanted them t o be public. H e then b u i l t roads and sold l o t s . Testimony showed t h a t t h e c o s t of building roads t o t h e s p e c i f i c a t i o n s would exceed t h e s a l e p r i c e o f t h e l o t i n some cases. The evidence c o n f l i c t e d a s t o what o r a l r e p r e s e n t a t i o n s t h e s e l l e r made t o purchasers. N o purchaser t e s t i f i e d t h a t he looked a t t h e p l a t p r i o r t o buying t h e property. Beechler, 392 N.E.2d a t 894, held t h a t f i l i n g a p l a t which shows s t r e e t s and s e l l i n g l o t s with reference t o t h e p l a t " c r e a t e s ea-sements and r i g h t s i n t h e p r i v a t e owners." Beechler i s d i s t i n g u i s h a b l e from t h e case a t b a r i n t h a t t h e defendant i n Beechler agreed i n w r i t i n g t o c o n s t r u c t t h e roads and t h e w r i t i n g was p a r t of t h e recorded p l a t . Here, no w r i t i n g e x i s t s t o show such an agreement and t h e county d i d not r e q u i r e such a promise. Other a u t h o r i t i e s , c i t e d by respondents, support contentions t h a t s e l l i n g l o t s with reference t o a map i n d i c a t i n g s t r e e t s c r e a t e s p r i v a t e enforceable easements i n t h e purchasers f o r use of those s t r e e t s ; purchasers may enforce a dedication of such s t r e e t s ; and s e l l i n g l o t s shown t o be on a s t r e e t i n a p l a t c r e a t e s an implied covenant t h a t t h e s t r e e t e x i s t s . Respondents acknowledge t h a t t h e s e a u t h o r i t i e s a r e not d i r e c t l y applicable. Section 76-3-304, MCA, provides t h a t t h e recording of a p l a t e s t a b l i s h e s t h e i d e n t i t y of t h e land shown and t h a t t h e 5 p l a t i s incorporated i n t o t h e instrument o f conveyance when t h e l a n d i s conveyed w i t h r e f e r e n c e t o t h e p l a t . The p l a t s h e r e show roadway easements. This s t a t u t e does n o t c o n v e r t t h e i n d i c a t i o n of an ea.sement i n a p l a t t o a promise t o b u i l d t h e road. The p l a t merely e s t a b l i s h e s t h e l o c a t i o n o f t h e easements. Respondents a l s o contend t h a t S S 76-3-501 and -507, MCA, may be a c o d i f i c a t i o n o f an e x i s t i n g common law duty and t h u s a p p l i c a b l e . W e d i s a g r e e . These s e c t i o n s g i v e l o c a l government a u t h o r i t y over subd.ivision r e g u l a t i o n s and a l l o w t h e l o c a l government t o r e q u i r e t h e p o s t i n g o f a bond o r o t h e r s e c u r i t y i n l i e u o f c o n s t r u c t i n g p u b l i c improvements. These s e c t i o n s w e r e s p e c i f i c a l l y made p r o s p e c t i v e i n a p p l i c a t i o n a f t e r t h e p l a t s i n t h i s c a s e w e r e recorded. They w e r e a l e g i s l a t i v e response t o problems w i t h developers, n o t a c o d i f i c a t i o n of common law. Montana had no c a s e law on t h i s i s s u e . F u r t h e r , c a s e law from o t h e r j u r i s d i c t i o n s i n d i c a t e s a d i f f e r e n t common law r u l e . I n Buckley v. Maxson (Conn. 1935), 181 A . 922, p l a i n t i f f requested an i n j u n c t i o n t o r e s t r a i n defendants from i n t e r f e r i n g w i t h h e r use o f a s t r i p o f l a n d t o a c c e s s h e r p r o p e r t y . Defendants w e r e successors i n i n t e r e s t t o t h e people who s o l d h e r t h e property. Defendants w e r e aware t h a t p l a i n t i f f had acquired h e r land r e l y i n g on land r e c o r d s which showed a proposed e x t e n s i o n o f a street t o h e r p r o p e r t y . That c o u r t c i t e d c a s e s from s e v e r a l j u r i s d i c t i o n s on t h e common law r u l e t h a t where a conveyance d e s c r i b e s land a s bounded by a proposed street, defendants cannot "d.eny t h e e x i s t e n c e o f a street a t l e a s t s u f f i c i e n t t o e n t i t l e t h e p l a i n t i f f t o a r i g h t o f way over t h e l a n d s o r e f e r r e d t o . " Buckley, 181 A. a t 925. The c o u r t t h e n s t a t e d : . . . N o covenant i s implied, however, t h a t t h e street w i l l be made and maintained f i t f o r t r a v e l . Hennessey v. Old Colony & Newport R. Co., 101 Mass 540, 100 Am.Dec. 3.27 . . . A l l t h a t t h e p l a i n t i f f i s h e l d e n t i t l e d t o i s a r i g h t t o u s e t h e l o c u s . . . without obstruction or unreasonable interferences by the defendants. Buckley, 181 A. at 925. - More recent case law also supports the proposition that instruments such as those in the case at bar do not comprise a promise, express or implied, to construct roads. In Ute Park Summer Homes Ass'n v. Maxwell Land Gr. Co. (N.M. 1 9 6 7 ) , 427 P.2d 249, the New Mexico Supreme Court reversed a summary judgment entered for the seller and developer and discussed legal principles applicable to the case at bar. The plat, in that case, showed lot lines and numbers, existing and proposed roads, an open area labelled "golf course" with a "clubhouse" located at one end, and an area labelled "tennis courts" nearby. Although the plat was not recorded, it was distributed and used in the sale of these lots. The developer then sold lots in the "clubhouse" and "golf course" area without use restrictions. The purchasers and owners filed a complaint seeking to enjoin any transfers of land without use restrictions, to obtain an order directing the development of the lands, and for a declaratory judgment as to the parties' rights. Reversing a summary judgment entered for the developers on the injunction issue, the court held that "where land is sold with reference to a map or plat showing a park or like open area, the purchaser acquires a private right, generally referred to as an easement, that such area shall be used in the manner designated." Ute Park, 427 P.2d at 253. The rationale for this rule is relevant for this case. "It is the use made of the plat in inducing the purchasers [sic], which gives rise to the legally enforceable right in the individual purchasers, and such is not dependent upon a dedication to public use, or upon the filing or recording of the plat." Ute Park, 427 P.2d at 253. Similarly here, the purchasers acquired an easement for the designated use. Whether there is any legally enforceable right to have the roads constructed depends not on the designation in the plats but on the use of those plats in inducing purchases. The instruments alone do not give rise to a promise to open or construct the roads. Factual issues remain on the use made of the plats and what representations were made in the sale of lots. We therefore reverse the order granting partial summary judgment for respondents and remand for further proceedings. In the second issue, Shining Mountains argues that the claims are barred by the statute of limitations in either § 27-2-207 (1) or -202 (3) , MCA. Section 27-2-207 (1) , MCA, prescribes a two year limit on actions for "injury to or waste or trespass on real or personal property." This case does not concern injury, waste or trespass to property. Section 27-2-202(3), MCA, limits the period for commencing an action based on "an obligation or liability, other than a contract, account, or promise, not founded upon an instrument in writing" to within three years. The issue here concerns an implied covenant arising from the use of written documents. "Whatever is implied. in a contract is as effectual as what is expressed." Berthelote v. Loy Oil Co. (1933), 95 Mont. 434, 445, 28 P.2d 187, 190, cited in U.V. Industries Inc. v. Danielson (1979), 184 Mont. 203, 228, 602 P.2d 571, 586. "The appropria.te statute of limitations is therefore eight years, the limitation for actions based on a written contract. Section 27-2-202 (1) , MCA. " U.V. Industries,Inc, supra. Accordingly, we hold that the purchasers1 cla.ims are not barred by the statute of limitations in § 27-2-207 (1) or -202 (3), MCA. The District Court held that specific performance is a remedy available to respondents for breach of the implied covenant. Shining Mountains argues in its third issue that this remedy is not available. The District Court, on remand, may find no such covenant exists. In addition, the record on 8 appeal does not contain the evidence necessary for a determination on this issue. Therefore, we leave this issue for any further consideration found necessary by the District Court. Reversed and remanded. ,/ Justice ; ! We concur: /7