Opinion ID: 883246
Heading Depth: 1
Heading Rank: 6

Heading: Issue I: Montana Real Property

Text: Did the District Court err in finding that real property located in Montana is a partnership asset? Joseph Fiedler contends that the real property located in Montana is and has always been held as tenants in common. He further contends that all real properties owned by the parties  with the exception of the Taylor Ranch  were acquired by various family members prior to 1950, the date James Fiedler has alleged as the time the partnership was created between James and Joseph Fiedler. According to Joseph Fiedler's arguments on appeal, no real property is held in the name of the partnership, no written partnership agreement has ever existed between James and Joseph Fiedler, and the Fiedler brothers never intended to convey real property held as tenants in common to the partnership. Thus, Joseph Fiedler contends that the District Court erred in relying on In the Matter of the Estate of Palmer (1985), 218 Mont. 285, 708 P.2d 242, to determine that James and Joseph Fiedler intended to operate the ranch lands as part of a partnership and in distributing such as partnership property. James Fiedler counters that Joseph Fiedler has maintained since the beginning of this proceeding that all real property owned and operated in Montana for farming and ranching purposes was partnership property and that he is barred by principles of judicial estoppel from now contending otherwise on appeal. We agree. Clearly standing out among the numerous instances in which Joseph Fiedler has previously asserted or maintained that the property is partnership property are the following: 1. Defendant JOSEPH FIEDLER has filed extensive counterclaims against Plaintiff JAMES FIEDLER alleging that JAMES FIEDLER has mismanaged the partnership assets; ... failed to maintain the buildings and lands of the partnership; breached his fiduciary duty by mismanaging partnership lands . .. (From Motion of Defendant and Counter-Plaintiff Joseph Fiedler to add Judith Fiedler as a Defendant to the Counterclaims) 2. The Fiedler Ranch Partnership comprises a number of tracts of land totalling approximately 9254 acres. (From Joseph Fiedler's response to the Preliminary Report of the Special Master) 3. Plaintiff's motion envisions an eventual partition pursuant to MCA Title 70, Ch. 29. That chapter is irrelevant to partnership actions. By its own terms, section 70-29-101 applies only to situations `when several cotenants hold or are in possession of real property as joint tenants or as tenants in common.' Plaintiff's complaint herein did not seek relief in partition. More accurately, it sought dissolution and winding up of a partnership, under MCA Title 35, Ch. 10. Section 35-10-502 makes it clear that partners hold partnership property as `tenants in partnership' , not as tenants in common or as joint tenants, and the statutory system for dissolving and winding up the affairs of a partnership is very different from that of an ordinary partition. (Joseph Fiedler's objection to James Fiedler's Motion for a Title Report, acquiesced in and relied on subsequently by James Fiedler) (Emphasis in original.) James Fiedler also stipulated  pursuant to Joseph Fiedler's argument that the property was held as a tenancy in partnership  to withdraw his claim for partition and for payment for services provided to the partnership. At all times subsequent to James Fiedler's withdrawal of these claims, James Fiedler has taken the position previously argued by Joseph Fiedler that the property was held as a tenancy in partnership. The doctrine of judicial estoppel binds a party to his or her judicial declarations, and precludes a party from taking a position inconsistent with them in a subsequent action or proceeding. Trader's State Bank of Poplar v. Mann (1993), 258 Mont. 226, 242, 852 P.2d 604, 614. This Court has applied the doctrine to estop a party from controverting admissions in the party's pleadings and to estop a party from controverting admissions in an affidavit. Rowland v. Klies (1986), 223 Mont. 360, 368, 726 P.2d 310, 316 (citing Fey v. A.A. Oil Corp. (1955), 129 Mont. 300, 323, 285 P.2d 578, 590). Stated simply, it is a rule which estops a party to play fast-and-loose with the courts. Rowland, 726 P.2d at 315 (citing 31 C.J.S. Estoppel, § 117B (1964)). Just as surely, the doctrine is applicable in this case where a party cannot take the opposing viewpoint when he has induced another to stipulate to his position and drop his arguments for that opposing position. The elements of judicial estoppel are: 1) the estopped party must have knowledge of the facts at the time the original position is taken; 2) the party must have succeeded in maintaining the original position; 3) the position presently taken must be actually inconsistent with the original position; and 4) the original position must have misled the adverse party so that allowing the estopped party to change its position would injuriously affect the adverse party. Mann, 852 P.2d at 614. Throughout the lengthy duration of this litigation and until he presented evidence at trial to argue that the properties were held as tenancies in common, Joseph Fiedler has consistently maintained that the properties involved in this action are partnership properties. There is nothing in the record to indicate that Joseph Fiedler did not have knowledge of all the facts at the time he took his original position and clearly he succeeded in maintaining that position. This position was taken early on in the litigation and James Fiedler stipulated to this position at that time. Clearly, all the elements for judicial estoppel are present and Joseph Fiedler cannot now argue that this should be an action in partition of real property and not a partnership dissolution proceeding. Further, Joseph Fiedler maintained early on in this proceeding that all five Fiedlers operated as a family partnership prior to their deaths. We conclude that Joseph Fiedler is judicially estopped from changing his position concerning this property. Further, he has made no cogent argument for not applying Palmer to the facts of this case to determine that the real property is held by James and Joseph Fiedler as tenancies in partnership. Palmer held that property acquired either before or after formation of a partnership may be considered partnership property despite the appearance of another form of ownership. Palmer, 708 P.2d at 249. We hold the District Court correctly determined that the real property located in Montana is a partnership asset.