Opinion ID: 1314467
Heading Depth: 1
Heading Rank: 3

Heading: Adjudication of Counterclaim

Text: Mrs. Dewsnup contends that the trial court erred in denying her motion to amend her counterclaim. The denial was based on the court's determination that the counterclaim had been implicitly denied by the summary judgment and thus had been wholly disposed of and was no longer subject to amendment. She argues that the counterclaim and the issues raised therein were not before the court at the time the summary judgment was granted, that the counterclaim was unaffected by the judgment, and that the court should have addressed on its merits her motion to amend the counterclaim. Rule 56(a) and (b), Utah Rules of Civil Procedure, states that a party seeking to recover on a claim, counterclaim, or cross-claim or the party against whom a claim, counterclaim, or cross-claim is asserted may move for summary judgment in his favor upon all or any part thereof. We held in Bennion v. Amoss, 28 Utah 2d 216, 500 P.2d 512 (1972), that summary judgment on a complaint is not precluded by the existence of a counterclaim. Also, cases which raise issues of both fact and law may lend themselves to summary judgment only on issues of law. The moving party determines the scope of a motion for summary judgment. That party decides what issues to present to the court for adjudication. He or she may move for summary judgment on all or less than all of the issues raised by the complaint and answer and may also move for determination of issues raised by any counterclaim or cross-claim if he or she deems it appropriate. When the moving party has decided what the scope of the motion for summary judgment shall be, rule 56 contemplates that a written motion shall be served on the opposite party setting forth with clarity the relief sought by the motion so that the opposite party may prepare to defend against it if he or she chooses to do so. Summary judgment procedure is generally considered a drastic remedy, requiring strict compliance with the rule authorizing it. Parmelee v. Chicago Eye Shield Co., 157 F.2d 582, 168 A.L.R. 1130 (8th Cir.1946). In Lazar v. Allen, 347 So.2d 457 (Fla.Dist.Ct.App.1977), the court stressed the importance of scrupulously observing the notice requirements prior to entering summary judgment. The Florida Supreme Court has observed: If the [requirements of the rules] are not fulfilled, both in letter and spirit, the summary judgment procedure may become a vehicle of injustice rather than a salutary medium of reaching a swift but just result on a pure matter of law, as intended by the framers of the rules. Cleveland Trust Co. v. Foster, 93 So.2d 112, 114 (Fla.1957). In accordance with that policy, the Florida District Court of Appeal in Faussner v. Wever, 432 So.2d 100 (Fla.Dist.Ct.App. 1983), held that a summary judgment awarded to a seller in an action brought by a buyer seeking specific performance did not mean that the seller was also necessarily entitled to summary judgment on his counterclaim against the buyer for retention of the earnest money. The court held that in order to recover on the counterclaim, the seller had to make a motion for summary judgment to that effect and give notice as required by the rules of civil procedure. In a later decision of the same court, Redding v. Powell, 452 So.2d 132 (Fla.Dist.Ct.App.1984), at issue was whether a summary judgment for foreclosure of a mortgage disposed of a counterclaim for an accounting and for a satisfaction of the mortgage. The Redding court held that the summary judgment did not dispose of appellant's counterclaim because the record indicates that neither appellee's motion for summary judgment nor the court's order specifically mentioned or referred to the counterclaim. Id. at 135. A review of this court's decisions indicates that we have allowed summary judgments to be granted without strict compliance to the rules only when both parties are present and no prejudice is shown. In Security Title Co. v. Payless Builder's Supply, 17 Utah 2d 179, 407 P.2d 141 (1965), we found no error in a summary judgment granted at the close of a pretrial hearing when both parties were present, although the ten-day notice required by the rules had not been given. See also Crookston v. Fire Ins. Exch., 817 P.2d 789 (Utah 1991); Western States Thrift & Loan Co. v. Blomquist, 29 Utah 2d 58, 504 P.2d 1019 (1972). In contrast, we held in Hein's Turkey Hatcheries, Inc. v. Nephi Processing Plant, Inc., 24 Utah 2d 271, 470 P.2d 257 (1970), that a motion for summary judgment filed on the day of trial was not timely. Turning to the instant case, the lenders contend that although neither the motion for summary judgment, the notice of the hearing on said motion, nor the summary judgment itself made mention or reference to the counterclaim by name, the counterclaim was implicitly denied when summary judgment was granted. This contention requires us to examine what issues were raised by the counterclaim and what issues were resolved by the summary judgment. In their counterclaim, the Dewsnups alleged that their attorneys had failed to fully advise them that the trust deed they executed included property in addition to the 160-acre farm and had failed to advise them that they were also assigning their equity in the Arrow contract as additional security for the $119,000 loan. They further alleged that they did not learn of these facts until two years later, in June of 1980. The relief which they sought in their counterclaim was a decree reforming the trust deed to include only the 160-acre farm and its water rights and vacating the assignment of the Arrow contract. The lenders replied to the counterclaim by denying each and every allegation. Thereafter, the lenders moved for summary judgment against the Dewsnups for the principal sum of $49,966.21, plus accrued interest and attorney fees. As set forth in the affidavit of one of the lenders, the principal sum consisted of the $47,880.50 payment that the lenders had made on the Arrow contract and the $2,085.71 property taxes. The Dewsnups would not have owed these two amounts if they could have proved as alleged in their counterclaim that they did not intend the Arrow contract to be part of the security for the loan. Therefore, we are led to conclude that although the motion for summary judgment, the notice of hearing on the motion, and the summary judgment itself made no reference to the counterclaim by name, the grant of summary judgment implicitly and necessarily constituted an adverse ruling on that part of the counterclaim that sought reformation to exclude the Arrow contract as security in the loan transaction. See Ford Motor Co. v. Transport Indemnity Co., 795 F.2d 538, 543 (6th Cir.1986) (if district court's ruling on one claim necessarily precludes alternative or mutually exclusive claim, final order will arise despite lack of explicit declaration by district court). However, in accordance with the policy that the procedure for summary judgment should be strictly observed, we conclude that nothing else was implicitly adjudicated by the grant of summary judgment. Inasmuch as the lenders, as the moving party, made no express reference to the counterclaim or the issues raised by it in their motion or in their notice of hearing, none of the other issues raised by the counterclaim were implicated by the grant of summary judgment. Those issues remain unaffected in the trial court. One of those issues is whether the parties intended to include the Oak City property in the trust deed. Mrs. Dewsnup also asserts that the trust deed secures only the promissory notes but does not secure payment of the summary judgment, which was for the 1980 annual installment on the Arrow contract and the 1979 property taxes on the Arrow land. We do not reach this question because neither the merits of the summary judgment nor the interpretation of the trust deed is before us for review. At this point, there is no final judgment subject to appellate review.