Opinion ID: 885260
Heading Depth: 1
Heading Rank: 1

Heading: issues

Text: ¶ 8 Whether the 1991 amendment to § 30-3-122, MCA, which reduced the statute of limitations on demand note actions from eight to six years, applied to First Citizens Bank's collection proceedings in 1997. ¶ 9 Under Montana's current statutory scheme, which Fisher alleges is applicable, the statute of limitations for actions on notes payable at a definite time is different from the statute of limitations for actions on demand notes. A note payable at a fixed time is governed by a six-year statute of limitations from the payment dates set forth on the note, or if the note is accelerated, six years from the date of acceleration. Section 30-3-122(1), MCA. Demand notes are simply payable upon a demand from the bank at which time the entire balance must be paid. In such instances the statute of limitations is six years after the demand is first made, but if no demand is made, an action to enforce the note is barred if neither principal nor interest has been paid for a continuous period of ten years. Section 30-3-122(2), MCA. As a result, it is conceivable that the holder of a demand note could not receive payment for up to ten years, then make demand for payment upon the maker and have six years more to enforce the note. [1] ¶ 10 Contrary to Fisher's characterization of his obligation as a demand note, under § 30-3-109(2), MCA (1999), the note at issue became a note payable at a definitetime on March 1, 1991, the fixed payment date. (2) If an instrument, payable at a fixed date, is also payable upon demand made before the fixed date, the instrument is payable on demand until the fixed date and, if demand for payment is not made before that date, becomes payable at a definite time on the fixed date. Section 30-3-109, MCA (1999). ¶ 11 Here, the note at issue was payable upon demand by the Bank up until March 1, 1991. As the Bank made no such demand, the note became payable in full on that date. As a result, the correct characterization of the note under the current statutory scheme would be as a note payable at a definite time, not a demand note, and a six-year statute of limitations would apply, as Fisher argues. If Fisher were correct in arguing that the 1991 amendments apply, he could prevail on that issue. However, we agree with the District Court that the savings clause in the amendments passed by the legislature in 1991 preserved the eight-year statute of limitations in effect as of the maturity date of the note at issue here. ¶ 12 This Court reviews a district court's summary judgment ruling de novo using the same criteria applied by the district court. In Fisher v. State Farm General Ins. Co., 1999 MT 308 ¶ 8, 297 Mont. 201 ¶ 8, 991 P.2d 452 ¶ 8, we stated: The movant must demonstrate that no genuine issues of material fact exist. Once this has been accomplished, the burden then shifts to the non-moving party to prove, by more than mere denial and speculation, that a genuine issue does exist. Having determined that genuine issues of material fact do not exist, the court must then determine whether the moving party is entitled to judgment as a matter of law. We review the legal determinations made by a district court with regard to whether or not the court erred. Fisher, 297 Mont. at ¶ 8, 991 P.2d at ¶ 8. ¶ 13 Here, the parties do not dispute any issues of material fact. The dispute centers solely around which statute of limitations applies, which is a matter of law. The claims against Ragain and Martinson also center around our determination as to which statute of limitations applies. ¶ 14 Statutes of limitations are generally considered laws of procedure. If the legislature passes a new statute of limitations, all rights of action are to be enforced under the new procedure regardless of when the cause of action accrued unless there is an explicit savings clause set forth in the statute. Haugen v. Blaine Bank of Montana (1996), 279 Mont. 1, 9, 926 P.2d 1364, 1368. The 1991 amendments to § 30-3-122, MCA, provided: Savings clause. [This act] does not affect rights and duties that matured, penalties that were incurred, or proceedings that were begun before [the effective date of this act]. 1991 Mont. Laws 410, Section 232. ¶ 15 By phrasing the savings clause in the disjunctive, the legislature essentially set forth four circumstances that, if in existence at the time of the October 1, 1991 effective date of the amendments, would not be affected by passage of the amendments. These are: (1) rights that had matured; and (2) duties that had matured; or (3) penalties that were incurred; or (4) proceedings that had begun before the effective date. There is no ambiguity regarding the language of the amendments passed by the legislature. Fisher argues that if the Legislature wished to say that the amended statute of limitations would not affect causes of action that accrued before the effective date of the act they certainly could have. That is precisely what the legislature accomplished with the savings clause included in the 1991 legislation. Because the legislature included an explicit savings clause in the amendments we agree with the District Court that the legislature clearly did not intend to foreclose the collection efforts exercised by the Bank in the instant case. ¶ 16 An amendment to the general definitions found in § 30-1-201, MCA, defines relevant terms as: Rights includes remedies. 1991 Mont. Laws 410, Section 2(36). Remedy means any remedial right to which an aggrieved party is entitled with or without resort to a tribunal. 1991 Mont. Laws 410, Section 2(34). ¶ 17 While the term rights encompasses many principles and actions far beyond the term remedies, the Bank's remedies alone certainly include the customary collection efforts of writing to a debtor in default requesting payment. The Bank's attempt to collect the debt owed here is simply a form of remedy without resort to a tribunal, and is therefore protected by the savings clause passed by the legislature. ¶ 18 Furthermore, just as the Bank's rights to collect the funds from Fisher owed under the note and to contact Fisher regarding his delinquent obligation had matured prior to the effective date of the statutory amendment, Fisher's duty to pay had also matured prior to the effective date of the statute in question. Therefore two of four legal circumstances that are explicitly protected by the savings clause enacted by the legislature are present here. Only one is necessary to invoke the savings clause. ¶ 19 When the legislature provides a savings clause in new legislation, it excepts from the new legislation matters that would otherwise be governed by the new law and preserves the existing law for such excluded matters. Haugen, 279 Mont. at 9, 926 P.2d at 1368. The legislature preserved the existing law for precisely the statutorily-defined circumstances present here. ¶ 20 The nature of the rights, duties, penalties and actions that had matured as of the effective date, and the correct legal analysis, are therefore defined by the 1989 Montana Code Annotated, in which they are set forth in different fashion than the current code. The 1989 MCA refers to both notes payable on demand, § 30-3-108, MCA (1989), and notes payable at a definite time, § 30-3-109, MCA (1989). The note at issue here purports to be a note payable on demand, albeit with a fixed maturity date of one year. Such a note is now clearly defined as a demand note until the fixed date of payment under § 30-3-109(2), MCA (1999), at which time its character changes to a note payable at a definite time, but is not so clearly defined under the 1989 Code. Regardless of the lack of clarity of definition, the effects of the applicable statute of limitations on demand notes versus notes payable at a definite time are not nearly as dramatic under the 1989 Code as the differences under the 1999 Code discussed previously. The applicable statute of limitations governing the note at issue here is the same, regardless of the note's characterization, as it is simply the eight-year statute of limitations governing actions based on contract. Section 27-2-202, MCA (1989); Worden Trading Co. v. Trenka (1979), 184 Mont. 256, 602 P.2d 601 (This statute governs notes payable). Here, the District Court was correct in its finding that the note at issue had matured March 1, 1991, and that the loan was in default due to nonpayment March 2, 1991. The effective date of the amendments to Montana's Uniform Commercial Code was October 1, 1991. Therefore, the Bank's right to payment, and Fisher's duty to pay, both matured prior to the effective date of the amendments. The District Court was also correct in its determination that the bank had eight years after the rights and duties had matured, or until March of 1999, to enforce the note. It is clear then that the Bank's collection efforts in 1997 were well within the statutory period for such actions. It is no less clear that Ragain and Martinson were not negligent when as Fisher's counsel they did not advise him to the contrary. The eight-year statute of limitations must apply. The District Court did not err in so determining and we affirm the District Court's ruling. ¶ 21 The court's ruling that the Release signed by Fisher is also sufficient grounds for dismissing this action is correct as well. The Release stated in pertinent part: Fisher, by his execution of the agreement, does hereby release, acquit and forever discharge Bank, its directors, officers, shareholders, employees and agents, including without limitation its attorneys, of and from any and all claims, suits, demands or causes of action arising from or in connection with the promissory note referenced above, the loan evidenced by such note, and/or Bank's claims or demands upon Fisher, his agents, or any other persons for payment or collection of the obligations evidenced by the note. ¶ 22 We have previously reviewed the effect of such releases from liability and future claims in Somersille v. Columbia Falls Aluminum Co. (1992), 255 Mont. 101, 841 P.2d 483. There, we stated that because Somersille had consulted an attorney and was not under duress from his former employer when he signed a release similar to that in the instant case, the release would bind the parties. Here, Fisher had two separate attorneys advising him on this matter. The record shows the Bank's cover letter accompanying the release, addressed to one of Fisher's attorneys, stated, Enclosed please find a proposed Settlement Agreement and Mutual Release for execution by Harry Fisher and First Citizens Bank. If the Agreement is satisfactory, please have Mr. Fisher sign the original and one copy of the Agreement and return it to me.... Such language is hardly coercive or threatening and appeared to invite Fisher to suggest any changes he thought necessary. It admonished Fisher to sign it only if it was satisfactory to him. Because he indeed signed it after consultation with counsel, without requesting any modifications, we can only conclude that in fact it was satisfactory to him as drafted, and that he agreed to abide by its terms. We agree with the District Court that Fisher is bound by the Settlement Agreement and Mutual Release, and that his action against the Bank and Svendsen must be dismissed for this reason as well. ¶ 23 Svendsen moved separately for summary judgment under Rule 56(b), M.R.Civ.P. Rule 56(e), M.R.Civ.P., states: Form of affidavits-further testimony-defense required.... If the adverse party does not so respond, summary judgment, if appropriate, shall be entered against the adverse party. Rule 56(e), M.R.Civ.P. ¶ 24 Here, Fisher did not respond to Svendsen's motion for summary judgment. The court found that summary judgment was appropriate, and dismissed the action against Svendsen on this basis also. The District Court did not err in finding that summary judgment was appropriate and we affirm its ruling for this reason as well.