Court Opinion

ID: 8213251
Source: CourtListenerOpinion
Date Created: 2022-10-11 22:05:42.258891+00
Date Added: 2024-06-11T16:42:21.416409
License: Public Domain

10/11/2022

                                         DA 22-0063
                                                                                   Case Number: DA 22-0063

              IN THE SUPREME COURT OF THE STATE OF MONTANA

                                        2022 MT 198N

MICHAEL A. SANTACROCE,

              Plaintiff and Appellee,

         v.

KENNITH G. FERRON,

              Defendant and Appellant.

APPEAL FROM:          District Court of the Eleventh Judicial District,
                      In and For the County of Flathead, Cause No. DV-19-1029(A)
                      Honorable Amy Eddy, Presiding Judge

COUNSEL OF RECORD:

               For Appellant:

                      Stephanie M. Breck, Breck Law Office, PC, Columbia Falls, Montana

               For Appellee:

                      Richard De Jana, Richard De Jana & Associates, PLLC, Kalispell,
                      Montana

                                                Submitted on Briefs: September 14, 2022

                                                          Decided: October 11, 2022

Filed:

                      __________________________________________
                                       Clerk
Chief Justice Mike McGrath delivered the Opinion of the Court.

¶1        Pursuant to Section I, Paragraph 3(c), Montana Supreme Court Internal Operating

Rules, this case is decided by memorandum opinion and shall not be cited and does not

serve as precedent. Its case title, cause number, and disposition shall be included in this

Court’s quarterly list of noncitable cases published in the Pacific Reporter and Montana

Reports.

¶2        Kennith G. Ferron (Ferron) appeals from the Findings of Fact, Conclusions of Law

and Order, and Judgment With Permanent Injunction entered by the Eleventh Judicial

District Court, Flathead County, granting Michael A. Santacroce (Santacroce) injunctive

relief and awarding Santacroce attorney’s fees. We affirm.

¶3        Ferron owns property located at 3000 MT Hwy. 35 in Kalispell, Montana

(Property). A set of restrictive covenants govern the use of the property, with the stated

purpose to provide “country residential living.” This case directly implicates three of the

covenants: a covenant that forbids any use of the land for any commercial purpose, with

exceptions for personal home office activity and sales activity necessary to promote the

development of the subject property; a covenant that prohibits the use of any road on the

property for an impermissible land use; and a provision for reasonable attorney’s fees to

the prevailing party in a suit brought on the covenants.

¶4        In 2004, Ferron built a gym on the property and created a parking area in front of

the gym.1 Ferron provided paid fitness services at the gym; his then-wife, Diane Ferron

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    Facts taken from the District Court’s Findings of Facts, Conclusions of Law and Order.
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(Diane), provided paid dance training there. In 2010, Ferron and Diane began divorce

proceedings, which finalized in or around 2015. In 2012, Vergena Mahilom (Mahilom)

moved into the property. Mahilom maintains a workspace at the property for personal

home office activity related to her occupation as a masseuse. As of 2015, Ferron and

Mahilom operated a business called Edge Fitness from the gym.

¶5     In or around 2014, Ferron’s financial situation changed which eventually

precipitated an alleged end of commercial operations at the gym. Ferron claims that he

financially sustained himself during this period by relying on savings, selling personal

property, and borrowing money. He has not had to file any taxes since 2015. Ferron

maintained that he had not performed any paid services on the property after 2016. He

claimed that after his divorce, which was finalized well before 2016, he decided that

providing paid fitness services was not worth the marginal income it produced nor the legal

risk it created. However, Diane, now his ex-wife, testified that she still had friends paying

for fitness services at the gym on the property.

¶6     At some point prior to February 2017, Mahilom wrote social media posts that

implied commercial activity was continuing at the gym. One post advertised her location

in Kalispell, her possession of fitness equipment, and a specific offer of 60 minutes of

fitness training for $50. In 2019, Mahilom formed a limited liability company (LLC) called

Advanced Functional Fitness and listed the property as the company’s address. Mahilom

testified that her employer required her to create the LLC and that she had no other address

to provide.

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¶7    In 2009, Santacroce acquired property near Ferron’s property. At some point in

2014, Ferron provided fitness training to Santacroce’s wife for a fee. That year Santacroce

began complaining to Ferron about noises and vibrations from the gym. Santacroce also

documented between eight and ten vehicles per day visiting the property and the immediate

plowing of the parking area in front of the gym upon snowfall. In response to the noise

complaints, Santacroce and Ferron reached an agreement regarding the volume level of

music from the gym.      Though Ferron complied with that volume level, Santacroce

continued to complain. Ferron stopped answering calls from Santacroce.

¶8    On September 3, 2019, Ferron received a letter from Santacroce’s legal counsel

threatening legal action unless Ferron ceased any commercial activity at his gym and

stopped the noises and vibrations emerging from the gym. Ferron did not alter his use of

the property, and, on January 29, 2020, he was served with a summons and complaint.

¶9    On May 6 and 7, 2021, the District Court conducted a bench trial. The court granted

Santacroce injunctive relief and awarded him attorney’s fees. Ferron requested a hearing

on his objection to the awarded fees. He also sought a new trial or relief from judgment.

The court denied both of those motions. Ferron then withdrew his request for a hearing

regarding the attorney’s fees. On January 7, 2022, the court entered a judgment granting a

permanent injunction, and awarded attorney’s fees based on uncontested affidavits.

¶10   We review a district court’s findings of fact to determine whether they are clearly

erroneous. A finding of fact is clearly erroneous if it is not supported by substantial

evidence, if the district court misapprehended the effect of the evidence, or, if after

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reviewing the record, we are left with a firm conviction that a mistake has been made.

Morley v. Morley, 2022 MT 12, ¶ 11, 407 Mont. 241, 502 P.3d 666.

¶11    We review a district court’s grant of injunctive relief for a manifest abuse of

discretion. A manifest abuse of discretion is an obvious, evident, or unmistakable abuse

of discretion. Davis v. Westphal, 2017 MT 276, ¶ 10, 389 Mont. 251, 405 P.3d 73.

¶12    Substantial evidence in the record supports the District Court’s grant of injunctive

relief for Santacroce based on Ferron’s violation of the covenants applicable to the

property.   Neither party contests that for several years Ferron used the gym for a

commercial purpose. Ferron and Mahilom, whether in their individual capacities or jointly,

set up a number of commercial entities associated with fitness and the gym. They both

continued to invite guests to the property for the explicit purpose of using the gym.

Mahilom advertised fitness-related services on social media. Diane testified that her

friends continued to pay for fitness services at the property. Santacroce documented

continued vehicular traffic to the gym. This record supports the findings the District Court

made that Ferron used his property for a commercial purpose.

¶13    The District Court did not abuse its discretion by granting Santacroce injunctive

relief. The covenants explicitly grant parties with any right, title, or interest in any tract of

the burdened territory the right to “prevent or stop violation of any of the covenants by

injunction or other lawful procedure[.]” Santacroce complained for years about noises and

vibrations coming from the property. He documented vehicular traffic to and from the

gym. He observed patterns, such as the timing and prioritization of snow plowing, to

validate his suspicions. The court included these facts and others in a comprehensive

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summary of Ferron’s violation of the covenants. Santacroce presented substantial evidence

to support the injunctive relief granted by the District Court.

¶14    A district court lacks the discretion to deny a request for attorney’s fees where a

contract requires an award of fees. See Gibson v. Paramount Homes, 2011 MT 112, ¶ 10,

360 Mont. 421, 253 P.3d 903. We presume that contractual provisions that provide the

prevailing party with attorney’s fees cover fees arising from appellate costs and fees.

See Boyne USA, Inc. v. Lone Moose Meadows, LLC, 2010 MT 133, ¶ 27, 356 Mont. 408,

235 P.3d 1269. Here, the covenants unambiguously provide for attorney’s fees for the

prevailing party in a suit arising from an alleged violation of the covenants. Santacroce

did not cross-appeal but requests attorney’s fees and costs incurred by Ferron’s appeal.

Santacroce is entitled to reasonable attorney’s fees, including those incurred by this appeal.

We remand for a determination of Santacroce’s reasonable attorney’s fees and costs arising

from this appeal.

¶15    We have determined to decide this case pursuant to Section I, Paragraph 3(c) of our

Internal Operating Rules, which provides for memorandum opinions. In the opinion of the

Court, the case presents a question controlled by settled law or by the clear application of

applicable standards of review.

¶16    Affirmed, and remanded to the District Court for a determination of attorney’s fees

on appeal.

                                                  /S/ MIKE McGRATH

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We Concur:

/S/ JAMES JEREMIAH SHEA
/S/ LAURIE McKINNON
/S/ BETH BAKER
/S/ DIRK M. SANDEFUR

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