Court Opinion

ID: 882375
Source: CourtListenerOpinion
Date Created: 2013-06-05 01:11:06.588182+00
Date Added: 2024-06-11T15:35:48.965320
License: Public Domain

No.    91-395
           IN THE SUPREME COURT OF THE STATE OF MONTANA
                                   1992

C. JOHN MONTGOMERY and MARCELYN MONTGOMERY,
               Plaintiffs and Appellants,
                                                             4
    -vs-
ERNEST F. GOETTLICH, FLORENCE L. GOETTLICH,            k'ov g "
and TRENT D. GOETTLICH,
               Defendants and Respondents.

APPEAL FROM:   District Court of the Tenth Judicial District,
               In and for the County of Fergus,
               The Honorable Peter L. Rapkoch, Judge presiding.

COUNSEL OF RECORD:
           For Appellant:
                Jon A. Oldenburg, Attorney         at Law, Lewistown,
                Montana
           For Respondent:
                John L. Pratt, Ask    &   Pratt, Roundup, Montana

                               Submitted on Briefs:     April 15, 1992
                                               Decided: November 9, 1992
Filed:
Justice Terry N. Trieweiler delivered the opinion of the Court.
     plaintiffs appeal from the summary judgment of the District
Court of the Tenth ~udicial ~istrict, Fergus County, which
dismissed their claim       for expenses   incurred by    them   after
foreclosure and prior to the statutory redemption of certain real
estate.   We reverse the District Court.
     The issues for our determination are:
     1.    Whether a purchaser at a sheriff's sale is entitled to
recover expenses incurred to maintain and prevent waste upon real
property from a subsequent redemptioner.
     2.   Whether a purchaser is entitled to recover rents from the
subsequent redemptioner for storage of personal goods and the
pasturing of cattle prior to redemption.
     In 1988, an action to foreclose the property in question was
commenced. At that time, defendants were leasing the property from
the owner.   A sheriff's sale was conducted on February 24, 1989,
and the plaintiffs were the successful purchasers.       At that same
time, the original owner quit-claimed his statutory right of
redemption to the defendants.
     The plaintiffs took possession of the property immediately
following the sale and discovered that defendant Trent Goettlich
had left cattle and personal effects on the premises.            This
property remained on the premises until defendants redeemed the
property on May 25, 1989.
     During the period when plaintiffs resided on the property,
they performed   a number of services, including dam repair,
fertilization, and general maintenance.         During that period,
defendants refused to vacate the premises, and their herd of
approximately 140 head of cattle continued to pasture on the
property.
     Plaintiffs filedtheir complaint on November 22, 1989, seeking
compensation for their services, pasturing of cattle, lost rental
value, and interest.      Defendants moved for summary judgment,
contending that since plaintiffs were not statutorily entitled to
possession   of   the property   during   the   one year period   of
redemption, no action for loss of rents and profits, nor recovery
for improvements was available to them.          The District Court
concluded that plaintiffs were precluded from recovering the value
of improvements because they had full knowledge of defendants'
redemptive rights.    Also, since all rents and profits received by
a purchaser are a credit against money paid to redeem the property
under    25-13-822,   MCA, plaintiffs could not claim any losses
because no rents or profits were deducted from the redemption
price.
     From this judgment, plaintiffs appeal.
     Section 25-13-821, MCA, states that a purchaser of land at
execution sale is not entitled to the possession of that land
against the execution debtor if the debtor resides on the property
during the period of redemption.    Plaintiffs correctly point out
that defendants were not the execution debtors, and did not use the
property for their home.     Nonetheless, defendants continued in
their possession of the land by the pasturing of cattle and storing
personal property on the land. Plaintiffs were clearly entitled to
rents and profits during that period.       However, any rents or
profits would have been a credit against the amount paid to redeem
the property. The District Court was correct in its determination
that plaintiffs could not claim lost rents and profits.         This
conclusion also pertains to the pasturing of cattle, even though
defendants had no statutory right to continue to do so. Any rents
plaintiffs might have received for grazing would have been credited
to defendants' redemption price.     Since no rents were credited
against the redemption price, plaintiffs were not damaged by
defendants' failure to pay them.
     We do, however, find merit in plaintiffs' argument of unjust
enrichment. The theory of unjust enrichment requires that a person
who has been unjustly enriched at the expense of another must make
restitution to the other. Robertus v Candee (1983) 205 Mont. 403, 670
                                   .

P.2d 540. Nothing in Montana's statutory redemption laws precludes
a purchaser from receiving the fair value of services rendered or
expenses   reasonably   incurred to maintain    property   prior   to
redemption.   The measure of equitable restitution is either the
quantum meruit value of a plaintiff's labor, or the value of the

enhancement of a defendant's property.     Restatement (Second) of
Contracts 5 371 (1981): Williston, Contracts 5 1480 (1970).        We
hold that plaintiffs are entitled to recover expenses incurred to
maintain and prevent waste upon real property under the theory of
unjust enrichment, and that summary judgment on that issue was
improper.
     Accordingly, we affirm the judgment of the District Court,
dismissing Count I1 of plaintiffs' complaint, and we reverse the
judgment of the District Court which dismissed Count I This case
                                                      .
is remanded for further proceedings consistent with this opinion.
     Pursuant to Section I, Paragraph 3(c), Montana Supreme Court
1988 Internal Operating Rules, this decision shall not be cited as

precedent and shall be published by its filing as a public document
with the Clerk of the Supreme Court and by a report of its result
to Montana Law Week, State Reporter and West Publishing Company.

We concur:

     Chief Justice
Chief Justice Turnage concurring in part and dissenting in part:
     I agree with the majority that a purchaser of land at execu-
tion sale is not entitled to claim lost rents and profits because
those would be a credit against the amount paid to redeem the
property pursuant to 5 5   25-13-802 and -822, MCA.     However, I
respectfully disagree with the majority's reversal of summary
judgment and its remand of this case for determination of whether
the Montgomerys are entitled to recover expenses incurred to
maintain and prevent waste upon the property under a theory of
unjust enrichment.
     Unjust enrichment is an equitable theory which has been
recognized in Montana since at least 1922.   See Butler v. Peters
(l922), 62 Mont. 381, 205 P. 247.   This Court has, in the past,
recognized restrictions on application of the theory.
     In Butler, this Court held that unjust enrichment did not
apply to entitle a corporation to recover against its director for
incurring a debt on behalf of the corporation and failing to file
a required annual report. The Court noted that the director gained
nothing by failing to file the report and that the statute which
required the report to be filed did not require proof that the
director misled, imposed upon, or injured the corporation. Butler,
205 P. at 249.
     In Brown v. Thornton (1967), 150 Mont. 150, 156, 432 P.2d 386,
390, this Court held that the mere fact that defendants benefitted
by plaintiff's acts was not of itself sufficient to require
defendants to make restitution therefor under a theory of unjust
enrichment, absent some element of misconduct or fault of some sort
on the part of defendant.
     In Ruegsegger v. Welborn (1989), 237 Mont. 317, 773 P.2d 305,
this Court held that holdover tenants were not entitled, under a
theory   of unjust   enrichment, to the value    of planting   and
harvesting crops which they lost when the owners reentered the
property. The Court reasoned that the tenants were not holding the
property under color of title or under a reasonable mistaken belief
that they were entitled to ownership of the property.   Ruesseqqer,
773 P.2d at 308.
     In Randolph V. Peterson v. J.R. Simplot Co. (1989), 239 Mont.
1, 8-9, 778 P.2d 879, this Court again held that the theory of

unjust enrichment did not apply, because there was no advantage
gained and no wrongdoing shown on the part of the party which was
allegedly unjustly enriched.
     In the present case, the majority's holding expands the theory
of unjust enrichment to allow recovery for any expenses reasonably
incurred to maintain and prevent waste upon real property, regard-
less of whether defendants' wrongful acts caused the expenses and
regardless of whether plaintiffs reasonably believed that they were
entitled to ownership of the property (which they were not, until
the redemption period expired).    I would not so readily abandon
longstanding restrictions on application of the theory of unjust
enrichment.
    Section 25-13-802, MCA, provides:
    The judgment debtor or redemptioner may redeem the
    property from the purchaser any time within 1 year after
    the sale on paying the purchaser:
    (1) the amount of his purchase with interest at a rate
    established by the judgment in the action that led to the
    execution sale, up to the time of redemption;
    (2)   the amount of any assessment or taxes which the
    purchaser may have paid thereon after purchase and
    interest on such amount;
    (3) the amount of any repairs, maintenance expenses, or
    other expenditures that the purchaser may reasonably have
    made after purchase for the maintenance of the property,
    with interest on the amounts from the date of
    expenditure; and
    (4)  if the purchaser is also a creditor having a prior
    lien to that of the redemptioner other than the judgment
    under which such purchase was made, the amount of such
    lien with interest.
     There is absolutely no basis to inject a theory of unjust
enrichment in this case in order to reach a result that would
reward the Montgomerys.       Section   25-13-802(3),   MCA, provides a
basis under the redemption statute that has nothing to do with
unjust enrichment if the facts would support an award of repairs,
maintenance, or other expenditures. The District Court's decision
does not find or support the existence of any such facts in the
record, and, therefore,   §   25-13-802(3),   MCA, is not a basis for
rewarding the Montgomerys.      The District Court made its decision
upon substantial credible evidence and there has been no error at
law.    Therefore, under our standard of review, the District Court
should be affirmed.
        It must be further noted that the Montgomerys were fully aware
at the sheriff's sale of the right of redemption contained in the
statutes.     On the same date the sheriff's certificate of sale was
issued, the Montgomerys entered into a contract to sell a portion
of the redeemed property to a third party.          Their contract stated:
        That both parties acknowledge that there is a possibility
        that the subject property may be redeemed by the
        foreclosure debtor or his assigns. That should Sellers
        become dispossessed from the property, or the same be
        redeemed, they shall refund Buyers purchase price, plus
        interest at the rate of six percent (6%) per annum, minus
        any costs or expenses reasonably incurred by Sellers.
The Montgomerys were entitled to possession of the redeemed
property for a relatively short period of time, from February          28,

1989,    to May 25,   1989,   or fifty-six days.    During this period the
Montgomerys were well aware the property was subject to redemption.
        I would affirm the decision of the District Court.

                                           L
                                           '   "   Chief Justice
                                                                         -
                                   November 9, 1992

                             CERTIFICATE OF SERVICE

I hereby certify that the following order was sent by United States mail, prepaid, to the
following named:

JON A. OLDENBURG
Attorney at Law
309 Bank Electric Building
Lewistown, MT 59457

John L. Pratt
ASK & PRATT
226 Main Street
P.O. Box 685
Roundup, MT 59072

                                                ED SMITH
                                                CLERK O F THE SUPREME COURT