Court Opinion

ID: 885449
Source: CourtListenerOpinion
Date Created: 2013-06-05 03:33:48.78049+00
Date Added: 2024-06-11T12:06:54.168625
License: Public Domain

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                                                               No. 99-154

                          IN THE SUPREME COURT OF THE STATE OF MONTANA

                                                             2000 MT 137N

                                           BOYD IRVIN BROELL, an Individual,

                                                      Plaintiff and Respondent,

                                                                      v.

                                        ESTATE OF IRVIN C. BROELL, Deceased;

                                             J.E. BURKE, in his capacity as Public

                                       Administrator of the Estate of Irvin C. Broell,

                                       Deceased; MARY A. BROELL, an Individual;

                                      CARLA BROELL WILLIAMS, an Individual;

                                        ELLEN BROELL ARTHUN, an Individual;

                                       FIRST NATIONAL PARK BANK; and ALL

                                       OTHER PERSONS, UNKNOWN, claiming or

                                          who might claim any right, title, estate, or

                                      interest in or lien or encumbrance upon the real

                                       property described in the Complaint adverse to

                                            Plaintiff's ownership or any cloud upon

                                        Plaintiff's title thereto, whether such claim or

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                                             possible claim be present or contingent,

                                                     Defendants and Appellants.

                             APPEAL FROM: District Court of the Sixth Judicial District,

                                                   In and for the County of Park,

                                    The Honorable Wm. Nels Swandal, Judge presiding.

                                                      COUNSEL OF RECORD:

                                                              For Appellants:

                                  Larry Jent, Williams & Jent, LLP, Bozeman, Montana

                                                             For Respondent:

                              Jeannette Ellen Berry, Berry Law Office, Bozeman Montana

                                             Submitted on Briefs: February 10, 2000

                                                        Decided: May 25, 2000

                                                                    Filed:

                                    __________________________________________

                                                                     Clerk

Justice Jim Regnier delivered the opinion of the Court.

¶1 Pursuant to Section I, Paragraph 3(c), Montana Supreme Court 1996 Internal Operating
Rules, the following decision shall not be cited as precedent but shall be filed as a public
document with the Clerk of the Supreme Court and shall be reported by case title,
Supreme Court cause number and result to the State Reporter Publishing Company and to

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West Group in the quarterly table of noncitable cases issued by this Court.

¶2 Boyd's mother, Mary A. Broell, and his sister, Ellen Broell Arthun, (Mary and Ellen)
appeal from the Amended Judgment entered by the Sixth Judicial District Court, Park
County, in favor of Boyd Irvin Broell (Boyd). The sole issue presented on appeal is
whether the District Court erred by imposing a purchase money resulting trust in favor of
Boyd Broell. We affirm.

                              FACTUAL AND PROCEDURAL BACKGROUND

¶3 Boyd's paternal grandparents purchased a ranch near Wilsall, Montana, in the 1940s.
As a child, Boyd spent his summers working on the ranch. In June 1979 Boyd moved to
the ranch permanently to help his grandmother keep the ranch operating. In August 1979
Boyd entered into a common law marriage with Marguerite Lorene McIntosh (Lori) and
she and the couple's son moved into Boyd's mobile home located on the ranch. At that
time, Boyd's grandfather was ill and subsequently died in November 1979. Boyd's
grandmother inherited the ranch upon her husband's death.

¶4 In 1983 Boyd's parents, Irvin and Mary Broell, permanently separated but did not get
divorced. Mary resided in a home in Livingston purchased during the marriage while Irvin
continued to work for the highway department in various locations around the state until
his retirement in 1989. Irvin paid all the bills associated with the house in Livingston, paid
for Mary's pharmacy bills, and provided Mary with money for living expenses. At the time
of his separation from his wife, Irvin named Boyd as a joint signatory of his checking
account.

¶5 Just prior to his retirement, Irvin began renting a room in the home of a friend in East
Helena. Irvin continuously rented from his friend until his death in 1995. While he
primarily resided in East Helena, Irvin frequently spent time at the ranch assisting in its
operation.

¶6 Boyd's grandmother died in the spring of 1989 and Irvin Broell was appointed as the
personal representative of her estate. With the financial assistance of his wife Lori and his
father Irvin, as well as a purchase money loan, Boyd purchased the ranch from his
grandmother's estate for the sum of $69,500. As a result of the sale, the heirs of the estate,
including Irvin, Boyd, and Boyd's two sisters Ellen and Carla, each received $8000. Irvin
gifted his share to Boyd to help facilitate Boyd's purchase of the ranch.

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¶7 Boyd and his wife Lori separated in 1989. While Boyd continued to work the ranch, he
moved out of the mobile home allowing his wife and son to continue living there. On
January 18, 1990, Boyd was arrested for driving under the influence and was later charged
and convicted of criminal possession of dangerous drugs with intent to sell and criminal
possession of dangerous drugs. Boyd was sentenced to seven years in prison with five
years suspended. Following his appeal of the court's denial of his motion to suppress,
Boyd was remanded to the Montana State Prison in June 1991 to begin serving his
sentence.

¶8 Boyd and his wife Lori personally had made all the mortgage payments for the ranch
until mid-1991. Following his son's conviction and incarceration, Irvin spent more time at
the ranch and stayed with Lori and his grandson to help them keep the ranch operating in
Boyd's absence.

¶9 At about the same time, Lori retained an attorney and commenced dissolution
proceedings. Based on Lori's petition for dissolution and Boyd and Irvin's fear that the
State might attempt to confiscate the ranch due to Boyd's drug activity, Boyd and Lori
executed a mortgage to Irvin in August 1991 in the amount of $37,850, representing the
amount of equity in the property. The Broells' reasoning behind this transaction was to
fully encumber the property to protect it from division by the dissolution court or
forfeiture by the State. Irvin did not loan Boyd and Lori $37,850 in exchange for the
mortgage. In fact, no consideration was ever exchanged between the parties for this
transaction. It was the intent of the parties that the property be transferred back to Boyd
following the resolution of his criminal proceedings.

¶10 Upon Boyd's default for failure to make an appearance, a final decree of dissolution
was entered dissolving Boyd and Lori's marriage in November 1991. The decree required
the ranch to continue to be held jointly by Boyd and Lori until sold, at which time the
proceeds were to be divided equally between them. Fearing that the court would require
the ranch to be sold, Boyd convinced Lori to accept $6500, the amount she contributed
toward purchase of the ranch, and to transfer the property to Irvin so that it would appear
to the court that the ranch had already been sold before any further action by the
dissolution court.

¶11 In early 1992, Boyd and Lori deeded the ranch to Irvin by Warranty Deed. Irvin
recorded this Warranty Deed in March 1992. Again, no money was ever exchanged
between the parties for this transaction. The recording of this deed prompted the bank that

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had financed Boyd's purchase of the ranch to require Irvin to assume the existing
mortgage.

¶12 Irvin refinanced the mortgage with no additional consideration paid to Boyd and the
bank granted Boyd and Lori a Satisfaction of Mortgage in April 1992. Thereafter, the
mortgage payments on the ranch loan were made from the ranch earnings and/or were
gifts from Irvin to Boyd.

¶13 Boyd was paroled from prison in May 1992. Following his parole, Boyd returned to
the ranch and resumed its operation. While Irvin resided in East Helena, he continued to
spend time at the ranch helping Boyd. In fact, when Boyd was jailed for 30 days due to a
parole violation, Irvin assumed operation of the ranch during that time.

¶14 Due to Boyd's continuing criminal legal problems, Boyd and Irvin decided to wait to
transfer the ranch back to Boyd until these problems were resolved. However, Irvin died
unexpectedly in 1995 before Boyd was formally released from probation. Consequently,
the ranch was still in Irvin's name at the time of his death.

¶15 As a result, Boyd brought this suit involving claims for resulting trust, cancellation of
the mortgage and deed, declaration that the mortgage and deed were void, and to quiet title
to the ranch. Following a nonjury trial, the District Court entered findings of fact and
conclusions of law. The court concluded that the clear and convincing evidence
established that a resulting trust should be imposed entitling Boyd to judgment quieting
title to the ranch, subject to the bank mortgage and payments made by Mary Broell.

¶16 Mary Broell and Ellen Broell Arthun appeal from the Amended Judgment entered in
favor of Boyd Broell. However, it is important to note that after the Notice of Appeal had
been filed, Mary filed a Satisfaction of Judgment acknowledging receipt of the payments
she had made in the amount of $8546.10. In addition, First National Park Bank, now
known as First Interstate Bank, filed a Satisfaction of Judgment acknowledging receipt of
$19,318.43 constituting full and final payment of the principal, interest, and penalties due
and owing pursuant to the mortgage and note.

                                                             DISCUSSION

¶17 Whether the District Court erred by imposing a purchase money resulting trust in
favor of Boyd Broell?

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¶18 "The standard of review governing proceedings in equity is codified at § 3-2-204(5),
MCA, which directs the appellate court to review and determine questions of fact as well
as questions of law." Gitto v. Gitto (1989), 239 Mont. 47, 50, 778 P.2d 906, 908. Trusts
must be established by clear and convincing evidence that is practically free from doubt.
See Hilliard v. Hilliard (1992), 255 Mont. 487, 492, 844 P.2d 54, 57 (citation omitted).

¶19 Mary and Ellen contend that the statutory criteria for a purchase money resulting trust
do not exist in this case, requiring reversal of the District Court's decision. Specifically,
Mary and Ellen allege that the prerequisite factual situation involving a transfer of
property made to one person and the purchase price paid by another does not exist in this
case. They argue that the facts presented cannot establish a resulting trust as a matter of
law.

¶20 Boyd asserts that the District Court correctly concluded that the ranch was subject to a
resulting trust from Irvin, as trustee, to Boyd, as beneficiary. In addition, Boyd contends
that clear and convincing evidence establishes Irvin Broell's intent to hold the title to the
ranch for the benefit of his son, Boyd, until such time that he could deed it back to his son
upon the resolution of Boyd's criminal proceedings.

¶21 In its findings of fact and conclusions of law, the District Court determined that Irvin
did not expect payment for his work on the ranch or other contributions to the ranch, but
that his labor and contributions were gifts designed to help Boyd keep the ranch and
eventually pass it on to Irvin's grandchildren. Further, the District Court concluded that the
testimony presented established by clear and convincing evidence that a resulting trust
should be imposed and that Boyd was entitled to judgment quieting title to the ranch,
subject only to the existing bank mortgage and payments made by Mary Broell.

¶22 Resulting trusts and constructive trusts arise by operation of law. See § 72-33-220,
MCA (1991). Section 72-33-218, MCA, with regard to purchase money resulting trusts
provides:

        (1) Where a transfer of property is made to one person and the purchase price is paid
        by another, a resulting trust arises in favor of the person who paid the purchase
        price.

        ¶23 Boyd's grandmother's estate and personally made the mortgage payments until
        mid-1991. In addition, the testimony at trial as well as the affidavits submitted in

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        support of Boyd's motion for summary judgment establish that Boyd did not intend
        to gift the ranch to his father by the transfer. To the contrary, the evidence
        demonstrates that the transfer was performed to protect the ranch from division in
        the dissolution action and from possible forfeiture by the State and was to be
        transferred back to Boyd once his legal problems were resolved.

¶24 Moreover, there is clear and convincing evidence that indicates while Boyd was
incarcerated Irvin made the mortgage payments primarily from the income generated by
the ranch and that any personal contributions made by Irvin to keep the ranch operating
were intended as gifts to Boyd to ensure that the ranch would remain in the Broell name to
be passed on to his grandchildren. Accordingly, we conclude that the District Court did
not err by imposing a purchase money resulting trust in favor of Boyd Broell.

¶25Affirmed.

                                                    /S/ JAMES C. NELSON

                                                               We Concur:

                                                        /S/ J. A. TURNAGE

                                                    /S/ JAMES C. NELSON

                                               /S/ W. WILLIAM LEAPHART

                                                /S/ TERRY N. TRIEWEILER

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