Court Opinion

ID: 1040033
Source: CourtListenerOpinion
Date Created: 2013-09-05 22:29:23.615013+00
Date Added: 2024-06-11T15:33:51.480862
License: Public Domain

FILED
                                                            SEP 05 2013
 1
                                                        SUSAN M SPRAUL, CLERK
                                                          U.S. BKCY. APP. PANEL
 2                                                        OF THE NINTH CIRCUIT

 3                  UNITED STATES BANKRUPTCY APPELLATE PANEL
 4                            OF THE NINTH CIRCUIT
 5   In re:                        )        BAP No.   MT-12-1364-JuTaPa
                                   )
 6   JOHN TRAVIS ALDRICH and       )        Bk. No.   11-60839-RBK
     ALDORA JUNE ALDRICH,          )
 7                                 )        Adv. No. 11-00054-RBK
                    Debtors.       )
 8   ______________________________)
     JOHN TRAVIS ALDRICH;          )
 9   ALDORA JUNE ALDRICH,          )
                                   )
10                  Appellants,    )
                                   )
11   v.                            )        M E M O R A N D U M*
                                   )
12   ALBERT STEVEN JUNKERT,        )
                                   )
13                  Appellee.      )
     ______________________________)
14
                     Argued and Submitted on July 25, 2013
15                             at Butte, Montana
16                         Filed - September 5, 2013
17             Appeal from the United States Bankruptcy Court
                         for the District of Montana
18
      Honorable Ralph B. Kirscher, Chief Bankruptcy Judge, Presiding
19                        _______________________
20   Appearances:     Craig D. Martinson, Esq., of Patten, Peterman,
                      Bekkedahl & Green, PLLC argued for appellants
21                    Aldora and John Aldrich; Jack E. Sands, Esq., of
                      Sands Law Office, argued for appellee Albert
22                    Steven Junkert.
                           _________________________
23
     Before:   JURY, TAYLOR, and PAPPAS, Bankruptcy Judges.
24
25
26        *
            This disposition is not appropriate for publication.
27   Although it may be cited for whatever persuasive value it may
     have (see Fed. R. App. P. 32.1), it has no precedential value.
28   See 9th Cir. BAP Rule 8013-1.

                                      -1-
 1            Appellee, Albert Steven Junkert (Steve), filed an adversary
 2   proceeding against chapter 71 debtors, Aldora and John Aldrich,
 3   seeking to quiet title to real property, referred to as Tract 2,
 4   that was listed in debtors’ Schedule A.         After a trial, the
 5   bankruptcy court entered judgment in favor of Steve, finding an
 6   enforceable oral contract between the parties for the transfer
 7   of Tract 2 and ordering debtors to quitclaim the property to
 8   Steve upon payment of $27,956.25.          This appeal followed.   We
 9   AFFIRM.
10                                  I.    FACTS2
11            This is a dispute among family members.      Aldora Aldrich is
12   Steve’s sister.     Tract 2, consisting of 62 acres, was part of
13   320 acres located in Huntley, Montana, that were owned by Steve
14   and Aldora’s father and mother, Albert and Julia Junkert.
15   Albert and Julia had five children: Steve, Aldora, Krista
16   Junkert, Adella Hammerstrom and Allena Junkert.
17            In 1985, Albert and Julia deeded 20 acres from their
18   320-acre parcel to debtors.3        Debtors currently reside on the
19   20-acre parcel.     For the past forty to forty-five years, Steve
20   lived on a 19.809-acre parcel of Albert and Julia’s property
21   (Tract 1).     For thirty-five or so years, Steve operated a gravel
22
          1
23          Unless otherwise indicated, all chapter and section
     references are to the Bankruptcy Code, 11 U.S.C. §§ 101-1532 and
24   “Rule” references are to the Federal Rules of Bankruptcy
25   Procedure.
          2
26          Many of the facts are taken from the bankruptcy court’s
     Memorandum of Decision and Order entered June 22, 2012.
27
          3
            It is unclear from the record how the 20 acres was deeded
28   to debtors when the 320 acres was not yet subdivided.

                                          -2-
 1   and dump truck business on Tract 2.   Tracts 1 and 2 comprise the
 2   northern portion of the 320-acre parcel and debtors’ 20-acre
 3   parcel lies just to the south of Tract 2.
 4        Steve, who is developmentally disabled, graduated from high
 5   school receiving a special education certificate.    Julia, while
 6   alive, kept the books for Steve’s business and before 2003,
 7   Steve did not have a checking account in his name.   Prior to her
 8   death, Julia would invoice Steve’s customers, deposit the income
 9   from Steve’s business into her personal checking account and pay
10   all Steve’s bills.   Steve never had a loan in his own name and
11   when he needed a loan for his business, the loan was obtained in
12   Julia’s name.   Julia also oversaw the preparation and filing of
13   Steve’s income tax returns.   After Julia passed away in 2000,
14   Allena Junkert and Aldora took over Steve’s books.   They would
15   deposit Steve’s business income into their personal checking
16   accounts and would pay Steve’s bills from their personal
17   accounts.
18        Pursuant to a Last Will and Testament dated June 6, 2002,
19   Albert provided for the division of his personal assets and his
20   300 remaining acres.   Under the Last Will and Testament, debtors
21   were not left any property, other than the 20 acres they
22   received in 1985.    Debtors’ three children (Travis, Alicia and
23   Andrea) were willed a combined sum of 42 acres.   Steve was
24   awarded 62 acres per Albert’s Last Will and Testament; Allena
25   Junkert was awarded 62 acres, which included Albert’s residence;
26   Krista Junkert was awarded 62 acres; and Adella Hammerstrom and
27   her children were awarded a total of 62 acres.
28        At the time of his death, Albert’s 300 remaining acres were

                                     -3-
 1   not subdivided, the acreage was encumbered by a mortgage4 and
 2   Albert had other miscellaneous debts.     In an effort to satisfy
 3   the mortgage and debts, Albert’s Estate sold approximately 65
 4   acres to Gabel Construction, receiving net proceeds of
 5   $58,887.00.     The two representatives of Albert’s Estate were
 6   also contemplating selling additional acreage to Gabel
 7   Construction to fully satisfy the mortgage and debts and to pay
 8   for the expenses associated with dividing the 300 acres.     Had
 9   the Estate followed through with its plan, debtors’ 20 acres
10   would be surrounded on three sides by property owned by Gabel
11   Construction.     Aldora opposed the second sale to Gabel
12   Construction and instead wanted to keep the property together,
13   with her children receiving the property surrounding debtors’ 20
14   acres.
15            A dispute arose between Steve and Albert’s Estate over some
16   personal assets, a claim Steve was asserting against the Estate,
17   and a claim the Estate was asserting against Steve for gravel
18   extracted by Steve from the property.     Steve hired an attorney
19   to help him with the dispute.     At some point, Aldora joined
20   Steve in the action against Albert’s Estate, although she did
21   not have a dispute under Albert’s Will.     According to Aldora,
22   she wanted to help Steve with his claims and the paperwork.
23            Steve, Aldora and Albert’s Estate eventually reached a
24   resolution, which was reflected in a Stipulation dated July 20,
25   2004.     Per the Stipulation, Steve’s claim against the Estate was
26
          4
27          The mortgage payments between January 16, 2003, and
     May 2, 2005, and the final payoff made by the Estate totaled
28   approximately $63,214.00.

                                       -4-
 1   disallowed in full, the Estate’s claim against Steve was
 2   disallowed in full, and personal property was divided.
 3   As for the real property, the parties agreed that Aldora and
 4   Steve could purchase property that would have been sold to Gabel
 5   Construction.
 6           On March 31, 2005, debtors and Albert’s Estate entered into
 7   a Contract for the Sale and Purchase of Real Estate, whereby
 8   debtors agreed to purchase 129.3 acres which was identified as
 9   Tracts 1 through 5:    Tract 1 (Steve’s residence), Tract 2
10   (Steve’s gravel pit), Tract 3 consisting of 17.306 acres, Tract
11   4 consisting of 17.306 acres and Tract 5 consisting of 12.853
12   acres.    Albert’s Estate and debtors agreed on a purchase price
13   of $119,040.00 for the entire 129.3 acres and from the purchase
14   price, debtors were given a credit for the inheritance Steve,
15   Travis, Alicia and Andrea would have otherwise been entitled to
16   and for funds debtors had already advanced to the Estate.
17   However, debtors would still need approximately $41,404 to close
18   the sale.    Someone would need to obtain a loan for this amount.
19   In addition, Steve, Travis, Alicia and Andrea would have to
20   waive their respective inheritances of $36,863, $8,324, $8,324,
21   and $8,324 (the values attributed to the parcels willed to them
22   by Albert).
23           Although Steve had never had a loan in his own name, he
24   explored financing for Tract 2 from friends and acquaintances
25   (Kathleen Barnes and Vick Reichenbach).    However, he did not
26   follow through with his efforts, instead agreeing to waive his
27   inheritance so debtors could procure financing to close the
28   sale.    Steve and debtors orally agreed that if Steve waived his

                                      -5-
 1   inheritance, debtors would purchase Tracts 1 through 5 and as
 2   soon as Steve repaid what he owed, Tracts 1 and 2 would be
 3   transferred to Steve.     Consistent with their oral agreement,
 4   Steve waived his inheritance and debtors obtained a loan from
 5   Yellowstone Bank to complete the purchase of Tracts 1 through 5.
 6            The sale closed on or about May 2, 2005.    The settlement
 7   statement reflected a total purchase price of $119,040.        In
 8   addition to the purchase price, debtors paid settlement charges
 9   of $687.00, property taxes of $3,609.74, and county taxes from
10   May 2, 2005, to January 1, 2006, of $646.62.        From the gross
11   amount due of $123,983.36, debtors were given a $61,835.00
12   credit for the inheritances waived by Steve, Travis, Alicia and
13   Andrea.     Debtors were also given a credit of $15,801,
14   representing funds previously advanced by debtors to keep
15   Albert’s Estate liquid during the probate period.       The balance
16   owed of $46,347.36 was paid with proceeds from a Yellowstone
17   Bank loan.5     The sum of the earnest money and the loan is
18   $62,148.36, but of the foregoing amount, $3,609.74 was for
19   property taxes owed on debtors’ property.     After subtracting the
20   inheritance waivers and the property taxes, $58,538.62 of the
21   total funds advanced were paid to purchase Tracts 1 through 5.
22   Of the foregoing amount, $1,333.62 was attributable to
23   settlement charges and county taxes, leaving funds due to the
24   Estate of $57,205.00.
25
26        5
            The loan bore interest at 7.5% and called for 35 monthly
27   payments of $429.75 with a balloon of $41,141.32 on May 1, 2008.
     Debtors gave Yellowstone Bank Tracts 1, 2, 3, 4 and 5 and their
28   separate 20 acres as collateral for the $46,347.36 loan.

                                       -6-
 1            In 2007, debtors refinanced the Yellowstone Bank
 2   obligation, releasing all the real property collateral except
 3   their own 20 acres.     Debtors then transferred Tracts 3, 4 and 5
 4   to Alicia, Travis and Andrea.     Debtors also formed TAA, LLC in
 5   February 2009.     The Articles of Organization show Kevin and
 6   Alicia Remington as the members of TAA, LLC.     Debtors
 7   transferred four of their acres, and Tracts 1 and 2 to TAA, LLC
 8   on or about February 24, 2010.
 9            In February of 2011, TAA, LLC transferred Tract 1 to
10   Steve.6     At this same time, TAA, LLC transferred debtors’
11   original 20 acres and Tract 2 back to debtors.
12            As previously noted, Steve’s home is located on Tract 1.
13   Steve temporarily left his property from August 2, 2010, to
14   February 1, 2011, to attend an alcohol treatment program.       Steve
15   allowed a friend, Kenny, to stay at his home while Steve was
16   away for treatment.     Steve anticipated that Kenny would operate
17   the gravel pit during Steve’s absence.     Debtors, however, would
18   not allow Kenny access to Tract 2 and when Steve returned from
19   treatment in February 2011, he discovered debtors had posted no
20   trespassing signs and had installed chains across the gates on
21   Tract 2.     Steve contacted the sheriff, but was advised that he
22   would have to consult with a civil attorney because title to
23   Tract 2 was in debtors’ name.     Debtors have not allowed Steve to
24   operate his gravel business since his return from alcohol
25   treatment.
26
          6
27          Steve was entitled to Tract 1 free and clear as part of
     his inheritance. Aldora failed to explain why Tract 1 was not
28   transferred to Steve any sooner.

                                       -7-
 1        Steve has a screener plant and other personal property
 2   located on Tract 2.    Steve was advised by debtors’ attorney in
 3   January 2012 that he could remove his personal property from
 4   Tract 2.    However, given the time of the year, it was impossible
 5   for Steve to remove his personal property, including the
 6   screener plant, from Tract 2.
 7        While Steve was away for alcohol treatment, debtors
 8   attempted to operate Steve’s gravel business by holding
 9   themselves out as the new owners of Steve’s business and
10   identifying their daughter, Andrea Aldrich, as business manager.
11   Debtors’ efforts failed.
12                         The Bankruptcy Proceedings
13        On April 29, 2011, debtors filed their chapter 7 petition.
14   Debtors listed Tract 2 in Schedule A.      Debtors filed a homestead
15   declaration for their entire 20 acres plus Tract 2.
16        The Adversary Proceeding
17        On August 25, 2011, Steve commenced an adversary proceeding
18   against debtors seeking to quiet title to Tract 2 and gain
19   immediate possession of Tract 2.       Steve also sought damages for
20   conversion, fraud, breach of fiduciary duty and breach of
21   contract.   Steve alleged that he had a contract with debtors and
22   that upon payment of a purchase price, they were to convey
23   Tract 2 to him.   On December 12, 2011, debtors answered the
24   complaint and asserted affirmative defenses, including the
25   statute of frauds.    Pursuant to stipulation and an order,
26   debtors filed an amended answer on February 6, 2012, asserting a
27   statute of limitations defense to Steve’s claims for fraud,
28   breach of fiduciary duty, conversion and breach of oral

                                      -8-
 1   contract.         That defense was based in part on a claim for adverse
 2   possession under 70-19-401, MCA.7
 3              On April 26, 2012, the bankruptcy court conducted a trial.
 4   The court took the matter under advisement and on June 22, 2012,
 5   entered a Memorandum of Decision and Order finding in favor of
 6   Steve.          The court found that there was an enforceable oral
 7   contract between the parties and that the balance owing on the
 8   contract was $27,956.25.          The court entered judgment on the same
 9   day.       Debtors appealed.
10              On October 29, 2012, the clerk’s office issued an order
11   regarding the Panel’s jurisdiction over the claims for breach of
12   fiduciary duty, fraud and punitive damages which were not ruled
13   upon.       On November 30, 2012, the bankruptcy court entered an
14   amended judgment which dismissed those claims.         Accordingly, the
15   Panel issued an order finding that the finality problem had been
16   cured.
17                                  II.   JURISDICTION
18              The bankruptcy court had jurisdiction over this proceeding
19   under 28 U.S.C. §§ 1334 and 157(b)(2)(A) and (O).         We have
20   jurisdiction under 28 U.S.C. § 158.
21                                     III.    ISSUES
22              A.     Whether the bankruptcy court erred in finding an
23
            7
24              This statute states:
25          An action for the recovery of real property or for the
26          possession of real property may not be maintained
            unless it appears that the plaintiff or the plaintiff’s
27          ancestor, predecessor, or grantor was seized or
            possessed of the property in question within 5 years
28          before the commencement of the action.

                                              -9-
 1   enforceable oral contract between Steve and debtors for the sale
 2   of Tract 2;
 3         B.   Whether the bankruptcy court erred in calculating the
 4   balance due from Steve to debtors for the purchase of Tract 2;
 5   and
 6         C.   Whether the bankruptcy court erred in not awarding
 7   debtors ten percent interest on the balance due from Steve.
 8                        IV.   STANDARDS OF REVIEW
 9         We review the bankruptcy court’s findings of fact for clear
10   error and its conclusions of law de novo.    Korneff v. Downey
11   Reg’l Med. Ctr.-Hosp., Inc. (In re Downey Reg’l Med. Ctr.-Hosp.,
12   Inc.), 441 B.R. 120, 127–28 (9th Cir. BAP 2010).
13         A factual determination is clearly erroneous if the
14   appellate court, after reviewing the record, has a definite and
15   firm conviction that a mistake has been committed.   Anderson v.
16   City of Bessemer City, N.C., 470 U.S. 564, 573 (1985).      Where
17   there are two plausible views of the evidence, “the factfinder’s
18   choice between them cannot be clearly erroneous.”    Id. at 574.
19   “A court’s factual determination is clearly erroneous if it is
20   illogical, implausible, or without support in the record.”     Retz
21   v. Samson (In re Retz), 606 F.3d 1189, 1196 (9th Cir. 2010)
22   (citing United States v. Hinkson, 585 F.3d 1247, 1261–62 & n.21
23   (9th Cir. 2009) (en banc).
24                              V.   DISCUSSION
25         Montana law determines the parties’ ownership interest in
26   Tract 2.   Butner v. United States, 440 U.S. 48, 55 (1979).
27   Debtors admit that there was an oral contract which required
28   Steve to pay them for Tract 2.    Therefore, our discussion

                                      -10-
 1   focuses on the enforceability of the contract.
 2   A.   The Statute of Frauds
 3        Debtors first contend that the oral contract is
 4   unenforceable due to the statute of frauds.   The statute of
 5   frauds is codified in 28–2–903 and 70–20–101, MCA.    Pursuant to
 6   28–2–903(1)(d), MCA, “an agreement for the leasing for a longer
 7   period than 1 year or for the sale of real property . . . is
 8   invalid unless the authority of the agent is in writing and
 9   subscribed by the party sought to be charged.”   Additionally,
10   70–20–101, MCA, provides that an interest in real property may
11   not be transferred unless there is an instrument in writing,
12   subscribed by the party transferring it or by the party’s lawful
13   agent authorized by writing.   Hayes v. Hartelius, 697 P.2d 1349,
14   1353 (Mont. 1985).
15        Here, there is no dispute that the agreement between the
16   parties was not in writing and therefore it could not be
17   enforced under 28-2-903(d), MCA, and the bankruptcy court so
18   found.   Debtors argue that “for this reason alone” there is no
19   contract that Steve has a right to enforce.   We are not
20   persuaded.
21        The Montana Supreme Court has held that the statute of
22   frauds is inapplicable when the parties have admitted the
23   existence of a contract.   Hayes, 697 P.2d at 1353.    The court
24   reasoned that “it would be a fraud on the defendant to allow
25   plaintiffs to admit to the contract, and then allow them to
26   avoid its obligations by asserting the statute of frauds.”     Id.;
27   see also Hillstrom v. Gosnay, 614 P.2d 466, 470 (Mont. 1980)
28   (stating that “in cases involving admitted contracts, we have

                                    -11-
 1   construed the statute of frauds less technically, refusing to
 2   allow the statute to be used so as to defeat its purpose to
 3   prevent the commission of a fraud.”).   Because Aldora testified
 4   that an oral agreement existed between the parties, debtors
 5   cannot now attempt to invoke the statute of frauds to deny the
 6   existence of such an agreement.   Hayes, 697 P.2d at 1353.
 7        Additional factors also defeat debtors’ statute of frauds
 8   defense.   Debtors acknowledge that partial performance may take
 9   an oral contract outside the statute of frauds.   The statute of
10   frauds does not abridge the power of any court to compel the
11   specific performance of an agreement, in case of partial
12   performance of the agreement.   70-20-102(3), MCA; Hayes,
13   697 P.2d 1349 (Mont. 1985).   The sufficiency of acts to
14   constitute part performance can be decided as a matter of law.
15   Quirin v. Weinberg, 830 P.2d 537, 541 (Mont. 1992) (citing
16   Schwedes v. Romain, 587 P.2d 388, 391 (1978)).    For an act to be
17   sufficient to constitute part performance, it “must be
18   unequivocally referable to the contract.”   Quirin, 830 P.2d at
19   541 (quoting Schwedes, 587 P.2d at 391).    In addition, “a court
20   has the power to compel the specific performance of one party to
21   an oral contract for the sale of real property in the case of
22   part-performance by the other party.”   Luloff v. Blackburn,
23   906 P.2d 189, 191 (Mont. 1995).
24        Debtors ignore this settled case law and fail to specify on
25   appeal why they think that the bankruptcy court erred in finding
26   that Steve’s payments to debtors of over $12,000 constituted
27   partial performance of the oral contract.   Issues not
28   specifically raised and argued in a party’s opening brief are

                                     -12-
 1   waived.     Martinez–Serrano v. INS, 94 F.3d 1256, 1259–60 (9th
 2   Cir. 1996).     Because the record supports the bankruptcy court’s
 3   finding that Steve partially performed the oral contract, we
 4   conclude the court properly found that the contract was outside
 5   the statute of frauds.8     As a result, debtors’ assignment of
 6   error on the statute of frauds ground fails.
 7   B.       Termination of the Contract for Nonpayment
 8            Debtors next contend that they terminated the contract
 9   because Steve stopped making payments to them in August 2008
10   despite their repeated demands.     Debtors   argue that because
11   Steve had a duty to make regular monthly payments on this
12   obligation and did not make any for over four years, by law this
13   contract should have been deemed to have terminated.
14            To support their argument, debtors cite Montana case law
15   that sets forth two rules.     “When the purchase price of property
16   under a contract for deed is paid in installments, ‘default in
17   the payment of any installment is a distinct breach and gives
18   the vendor the right to declare a forfeiture.’”       Liddle v.
19   Petty, 816 P.2d 1066, 1069-70 (Mont. 1991).      Debtors also argue
20   that “[i]f a contracting party materially breaches the contract,
21   the injured party is entitled to suspend his performance, and
22   the determination of whether a material breach exists is a
23   question of fact.”     Sjoberg v. Kravki, 759 P.2d 966, 969 (Mont.
24   1988).     Debtors contend that the facts showed that Steve failed
25   to make the payments he was required to make and, therefore,
26
27
          8
            The record shows that Aldora gave Steve credit for some of
28   the payments he made to debtors towards the purchase.

                                       -13-
 1   there was a material breach of the oral contract.   Accordingly,
 2   debtors maintain they have no further obligation to convey title
 3   to Tract 2 to Steve.
 4        The rules in Liddel and Sjoberg have no application under
 5   the facts developed at trial.   Steve’s testimony shows that he
 6   was willing to tender performance, but debtors never told him
 7   how much he owed.   They then refused his payments and declared
 8   Tract 2 as part of their homestead so it would be protected when
 9   they filed bankruptcy.
10        The bankruptcy court found that debtors never told Steve he
11   was in default under the oral agreement.   Yet, debtors contend
12   on appeal that they took “appropriate action” to terminate the
13   contract when Steve failed to make the payments.    Without
14   citation to the record, they argue that they made a demand on
15   Steve to cure his arrearage and that he was given sufficient
16   notice to do so.
17        We have combed the record, but find no evidence to support
18   debtors’ contentions.    When asked whether she ever told Steve
19   that he was in default, Aldora testified “I don’t recall at this
20   moment whether I specifically said ‘you are in default.’”     She
21   further testified that she never sent Steve a default notice.
22   Aldora later stated that although Tract 1 and 2 were transferred
23   to TAA, LLC in 2010, if Steve “would have made up the payments
24   and caught them up and paid off the original Yellowstone Bank
25   loan” he could have gotten the property back.   When asked
26   whether she told Steve how much he owed at that point, she said:
27   “I did not know how much he owed because he was already in
28   arrears with everything.”

                                     -14-
 1        Moreover, the record shows that Steve attempted to tender
 2   payment, which debtors refused.   Steve testified that he offered
 3   debtors a complete payoff for the property and they wouldn’t
 4   take it.   Steve also stated that debtors would not take any
 5   further payments from him because they were going to file
 6   bankruptcy.   At one point, Aldora testified that she asked Steve
 7   to make additional payments “many times” in 2007 and 2008.
 8   However, Aldora later admitted that she did tell Steve she could
 9   not take any more money from him because debtors were filing
10   bankruptcy.   Steve’s friend, Rick Althoff, testified that
11   sometime after Steve returned from the alcohol treatment center,
12   Rick spoke to John about working something out for a payoff.
13   Rick said that John responded “no.”   This testimony was
14   uncontroverted.
15        Given this testimony, the bankruptcy court reasonably could
16   have concluded that the oral contract was not terminated or
17   forfeited due to debtors’ failure to give Steve notice of the
18   alleged default coupled with Steve’s good faith attempt to
19   tender payment, which debtors refused.   Further, by imposing a
20   constructive trust over the property, the bankruptcy court
21   implicitly found that a forfeiture would result in unjust
22   enrichment to debtors due to Steve’s partial performance.
23   Debtors have not pointed to, nor have we found, any facts in the
24   record at variance with the bankruptcy court’s findings.     Given
25   the absence of such evidence, the bankruptcy court’s
26   interpretation of the facts was not implausible on its face.
27   For these reasons, debtors’ termination of contract argument
28   fails.

                                    -15-
 1   C.       Adverse Possession Claim
 2            Debtors next contend that they obtained title to Tract 2 by
 3   adverse possession.     Because they paid all the real estate taxes
 4   since 2005, debtors argue that Steve has no right to a claim or
 5   interest in the property as a matter of law.
 6            The bankruptcy court did not rule on debtors’ adverse
 7   possession claim9 and nowhere in the trial was the issue of
 8   adverse possession raised.     We need not consider arguments
 9   raised for the first time on appeal.         See Brown v. Gen. Tel. Co.
10   of Cal., 108 F.3d 208, 210 n.1 (9th Cir. 1997) (per curiam).
11            However, if we address this argument, it fails.      The record
12   does not support a claim for adverse possession.         Under Montana
13   law, the party asserting a claim for adverse possession must
14   prove each element by clear and convincing evidence.         Wareing v.
15   Schreckendgust, 930 P.2d 37, 43 (Mont. 1996).          In addition to
16   paying the taxes, the claimant must show use that is open,
17   notorious, exclusive, adverse, continuous, and uninterrupted for
18   the statutory five-year period.       Burlingame v. Marjerrison,
19   665 P.2d 1136, 1139 (Mont. 1983).          Here, the testimony of the
20   parties shows that Steve had use and possession of Tract 2 until
21   debtors locked him out in the summer of 2010 when he left the
22   property for alcohol treatment.       Steve commenced the adversary
23   proceeding against debtors to quiet title to Tract 2 on
24   August 25, 2011.     On these facts, debtors have not shown their
25   open, notorious, exclusive, adverse, continuous, and
26
27
          9
            Debtors did raise adverse possession in connection with
28   their statute of limitation defense in their amended answer.

                                         -16-
 1   uninterrupted use for the statutory five-year period by clear
 2   and convincing evidence.    Debtors’ adverse possession claim thus
 3   fails as a matter of law.
 4   D.   Amount Owed by Steve
 5        Debtors contend that the bankruptcy court abused its
 6   discretion when it determined the amount Steve needed to pay to
 7   debtors before transferring Tract 2 to Steve.   Debtors maintain
 8   that the court erred in determining the amount of principal owed
 9   and the amount of credit given for payments made by Steve.
10        The bankruptcy court’s Memorandum of Decision includes
11   extensive factual findings supporting its calculation of the
12   amount owed: (1) the parties had a contract, but they never
13   discussed the exact amount Steve would need to pay in order to
14   secure title to the property nor did they discuss a repayment
15   plan; (2) Steve testified that he understood he could make
16   payments to Aldora as he had funds available; (3) Steve did not
17   keep accounting records and Aldora was, to some extent, in
18   charge of Steve’s records; (4) Aldora did not have a complete
19   accounting of the bills she allegedly paid on Steve’s behalf;
20   (5) Steve testified that he thought he owed $35,000 to debtors;
21   and (6) Aldora testified that the sole purpose of the
22   Yellowstone Bank loan was to allow Steve to purchase Tracts 1
23   and 2.
24        On this last point, the bankruptcy court found that the
25   evidence did not necessarily support Aldora’s testimony.    The
26   court determined that debtors’ primary motive when they entered
27   into the Contract for the Sale and Purchase of Real Estate with
28   Albert’s Estate was to secure title to Tracts 3 and 4 and

                                     -17-
 1   preclude Gabel Construction from purchasing this land.    The
 2   bankruptcy court supported its finding by reference to the
 3   Contract for the Sale and Purchase of Real Estate, which
 4   specifically referred to Tracts 1 through 5, and the settlement
 5   statement.   The court concluded that although debtors had
 6   advanced $15,801 to the Estate, they could not have secured
 7   Tracts 3 and 4 without obtaining the loan from Yellowstone Bank
 8   because their deal with the Estate was an all or nothing deal
 9   that tied Tracts 3 and 4 to the purchase of Tracts 1 and 2.
10        Based on this evidence, the bankruptcy court concluded that
11   Steve was originally obligated to pay debtors $39,293.42 plus
12   property taxes of $1307.82 for a total of $40,601.25.10    The
13   court further found that Steve was entitled to a credit of
14   $12,645 based on payments made as shown in Exhibit S.
15   Accordingly, the court concluded that the total owed by Steve to
16   debtors for the purchase of Tract 2 was $27,956.25.
17        The bankruptcy court thoroughly considered the relevant
18   evidence and issued detailed findings of fact based on this
19   evidence.    On appeal, rather than show how the evidence fails to
20   support the bankruptcy court’s factual findings, debtors simply
21   reargue the facts of the case to convince us they should have
22   prevailed.   This is not an appellate function.   It is debtors’
23   burden to point out where the findings are clearly erroneous.
24
         10
            The court calculated the $39,293.42 amount by taking
25   43.009 acres x $913.61 per acre. The 43.009 number represents
26   the acreage over and above which Steve would have received free
     and clear under Albert’s Will. The court arrived at the $913.61
27   per acre by dividing $58,538.62 (the amount debtors’ paid the
     Estate at closing) by Steve’s excess acreage (43.009) and
28   debtors’ children’s excess acreage (21.065).

                                     -18-
 1        An appellant’s mere challenge of a finding does not
          cast the onus of justifying it on this court. The
 2        party seeking to overthrow findings has the burden of
          pointing out specifically wherein the findings are
 3        clearly erroneous. Appellant has not carried the
          burden as to any particular challenged finding
 4        sufficiently to require or justify a detailed analysis
          of the evidence. . . .
 5
 6   Glen Falls Indem. Co. v. United States, 229 F.2d 370, 373 (9th
 7   Cir. 1955).
 8        Debtors have not carried their burden to show specifically
 9   where the bankruptcy court clearly erred.   Nothing more is
10   required of us than to compare the bankruptcy court’s findings
11   to the record to see if they are clearly erroneous.   See id.     We
12   conclude they are not.   Where there are two plausible views of
13   the evidence, “the factfinder’s choice between them cannot be
14   clearly erroneous.”   Anderson, 470 U.S. at 574.
15   E.   Interest on the Amount Owed
16        Last, debtors contend that the bankruptcy court erred by
17   not awarding them interest on the amount owed by Steve.    We
18   review de novo whether an award of interest is authorized under
19   state law.    See Oak Harbor Freight Lines, Inc. v. Sears Roebuck
20   & Co., 513 F.3d 949, 954 (9th Cir. 2008).
21        Debtors argue that they are entitled to ten percent
22   interest based on 31-1-106, MCA, which provides the legal
23   interest rate for breach of contract:
24        (1) Except as otherwise provided by the Uniform
          Commercial Code, 31-1-111 and 31-1-112, or 31-1-817,
25        unless there is an express contract in writing fixing
          a different rate or a law or ordinance or resolution
26        of a public body fixing a different rate on its
          obligations, interest is payable on all money at the
27        rate of 10% a year after it becomes due on:
          . . .
28

                                     -19-
 1        (b) an account stated;
 2        (c) money lent or due on any settlement of accounts
          from the date on which the balance is ascertained
 3        . . . .
 4        Debtors fail to show they qualify for interest under this
 5   statute.   First, subsection (b) is inapplicable.   An “account
 6   stated” is a final adjustment of demands and amounts due.
 7   Holmes v. Potts, 319 P.2d 232, 238 (Mont. 1957).
 8        ‘An account stated presupposes an absolute
          acknowledgment or admission of a certain sum due, or
 9        an adjustment of accounts between the parties, the
          striking of a balance, and an assent, express or
10        implied, to the correctness of the balance. If the
          acknowledgment or admission is qualified, and not
11        absolute there is no account stated.’ Id.
12   See also Nelson v. Mont. Iron Mining Co., 371 P.2d 874, 876
13   (Mont. 1962).   There was no account stated in this case.
14        Second, subsection (c) does not apply under these facts.
15   Black’s Dictionary defines a “loan” as “1.   An act of lending; a
16   grant of something for temporary use - Turner gave the laptop as
17   a loan, not a gift.   2.   A thing lent for the borrower’s
18   temporary use; esp., a sum of money lent at interest - Hull
19   applied for a car loan.”   The record does not show that debtors
20   made a loan to Steve.   Further, there was no money due on any
21   “settlement of accounts from the date on which the balance is
22   ascertained.”   Debtors never made a demand on Steve, never gave
23   him notice of default, and never did the parties agree on the
24   amount Steve was to pay.   Ultimately, it was up to the
25   bankruptcy court to decide that there was an oral contract,
26   liquidate the claim and enter judgment.   We conclude that
27   debtors were not entitled to interest under 31-1-106, MCA.
28        We also examined 27-1-211, MCA, entitled “Right to

                                     -20-
 1   interest,” which states:
 2        Each person who is entitled to recover damages certain
          or capable of being made certain by calculation and
 3        the right to recover that is vested in the person upon
          a particular day is entitled also to recover interest
 4        on the damages from that day except during the time
          that the debtor is prevented by law or by the act of
 5        the creditor from paying the debt. (Emphasis added.)
 6   By its terms, this statute applies to any conduct by the
 7   creditor that prevents the debtor from complying with his or her
 8   obligation to pay.
 9        The case of Kosena v. Eck, 635 P.2d 1287 (Mont. 1981)
10   illustrates the point.   There, the landlords refused to accept
11   the tenant’s monthly rent payment.     Because of their refusal,
12   the tenant had no choice but to file a lawsuit and tender the
13   monthly rent payment into court.   The trial court awarded the
14   landlords interest on rental payments due from the tenant at the
15   rate of six percent per annum from the due date of each payment
16   as rent on the premises.    The Montana Supreme Court reversed,
17   finding that 27-1-211, MCA, clearly released the tenant from any
18   obligation to pay interest:
19        Because the landlords were entitled to no more than
          $650 per month, it was their own refusal to accept the
20        tendered payment, which resulted in the tenant filing
          a lawsuit and prevented them from receiving each
21        payment as it became due. By any standards, the
          conduct of the landlords prevented the tenant from
22        making the required payments. The tenant should not
          be penalized for attempting to comply with the terms
23        of the lease agreement, nor should the landlords be
          rewarded for unjustifiably refusing to accept the
24        payments. The order allowing interest is reversed.
25        For the same reasons, debtors’ argument for an award of
26   interest at the contract rate of ten percent from 2005 is
27   flawed.   The record shows they contributed to Steve’s delay in
28   the payment of the funds.   After Steve partially performed,

                                     -21-
 1   debtors refused to tell him how much he owed.    They also told
 2   him not to pay since they were filing bankruptcy and, when Steve
 3   attempted a complete payoff for the property, they wouldn’t take
 4   it.   Therefore, Steve’s tender was excused and the payment of
 5   interest, if any, was suspended.   See Sunray DX Oil Co. v. Great
 6   Lakes Carbon Corp., 476 P.2d 329, 344 (Okl. 1970) (a party
 7   cannot act in a manner which will tend to cause the other party
 8   to default under a contract and benefit therefrom).
 9         Finally, interest as an element of damages is not allowable
10   until the exact amount due is ascertained or is ascertainable.
11   In re Marriage of Gerhart, 800 P.2d 698, 701 (Mont. 1990).
12   “Liquidated claims” include indebtedness which is capable of
13   ascertainment by reference to agreement or simple mathematical
14   computation.   Kelleher Law Office v. State Compensation Ins.
15   Fund, 691 P.2d 823, 826 (Mont. 1984).    Here, there is no
16   agreement to refer to.   Further, Aldora admitted that she did
17   not know how much Steve owed and there was a dispute between the
18   parties as to the exact amount.    Therefore, the bankruptcy court
19   had to liquidate the claim and enter judgment.   Under these
20   circumstances, at best, debtors would be entitled to interest at
21   the ten percent rate only from the date of the judgment until
22   Steve paid over the funds.   See Callihan v. Burlington N. Inc.,
23   654 P.2d 972, 977 (Mont. 1982) (statute governing right to
24   interest allows interest only from date of judgment, as that is
25   date damages are capable of being made certain).
26         In sum, we conclude that the relevant Montana statutory and
27   case law does not support an award of interest when debtors
28   refused to take Steve’s payments and on a contract that debtors

                                    -22-
 1   claimed did not exist.   Accordingly, we find no error with the
 2   bankruptcy court’s decision not to award interest on the amount
 3   owed by Steve to debtors.
 4                            VI.   CONCLUSION
 5        For the reasons stated, we AFFIRM.
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