Court Opinion

ID: 881605
Source: CourtListenerOpinion
Date Created: 2013-06-05 00:44:43.990422+00
Date Added: 2024-06-11T09:07:40.556047
License: Public Domain

NO.    90-029
            IN THE SUPREME COURT OF THE STATE OF MONTANA
                                    1990

A. DEAN BOHNSACK and DEBRA STETLER
BOHNSACK, husband and wife,
                                                                    --
            Plaintiffs, Appellants and Respondents,                 - '*-
                                                                    . 7
                                                                    (-,
                                                                            --
                                                                            -
     -vs-
HI-NOON PETROLEUM, INC., a Montana
corporation, and MARJEAN CHARLES,
            Defendants, Appellants, and Respondents.                f.-,
                                                                    --
                                                                     .--

APPEAL FROM:     District Court of the Fourth Judicial District,
                 In and for the County of Missoula,
                 The Honorable Ed McLean, Judge presiding.

COUNSEL OF RECORD:
            For Appellant:
                William L. Crowley, Boone,           Karlberg   &   Haddon,
                Missoula, Montana
            For Respondent:
                Brian J. Smith, Milodragovich, Dale & Dye, Missoula,
                Montana
                Milton Datsopoulos, Datsopoulos, MacDonald & Lind,
                Missoula, Montana

                                Submitted on Briefs: April 12, 1990
                                                  Decided: May 30, 1990
                                              0
Filed:
Justice Diane G. Barz delivered the Opinion of the Court.

     Hi-Noon Petroleum, Inc. (Hi-Noon) appeals from an order of the
District Court of the Fourth Judicial District, Missoula County.
The District Court granted Hi-Noon's motion for summary judgment,
although it declined to award Hi-Noon its attorney's fees and
costs. Plaintiffs below, Dean and Debra Bohnsack (Bohnsacks) filed
a notice of appeal based on the District Court's denial of their
motion for summary judgment.    At the outset, we note counsel for
the Bohnsacks improperly filed a notice of appeal rather than a
cross-appeal.   We will, however, treat Bohnsacks' appeal as a
cross-appeal.   We affirm in part and reverse and remand in part.
     Bohnsacks entered into a sub-lease and gasoline purchase
agreement with Hi-Noon on October 1, 1986.    Bohnsacks sub-leased
a gasoline station located on Brooks Avenue in Missoula and agreed
to purchase gasoline, diesel fuel and oil from Hi-Noon.        The
contract provided that ''payment for gasoline and diesel shall be

net 7 days from date of delivery." The parties further agreed that
Bohnsacks would not sell, assign or otherwise convey their interest
absent Hi-Noon's consent.      In an assignment executed in April,
1987, Bohnsacks transferred their interest to Marjean Charles
(Charles). Hi-Noon consented to the assignment, but, specifically
did not release Bohnsacks from their obligation under the sub-
lease and gasoline agreement.
     Hi-Noon made deliveries of gasoline and diesel to Charles for

which she failed to pay within the seven day period provided by
contract. Bohnsacks allege, and Hi-Noon appears to agree, that Hi-
                                  2
Noon continued to deliver gasoline and diesel to Charles after she
failed to pay for delivered loads within the required time period.
Charles ceased operations in March of 1988, and at that time owed
Hi-Noon     approximately   $23,729 for   gasoline,   diesel   and   oil
delivered to the station. Hi-Noon demanded payment on this account
from Bohnsacks and refused to consent to their second assignment
of   the    sub-lease and   gasoline agreement to Ronald       Malensek
(Malensek) until Bohnsacks made payment arrangements.
     Malensek gave Bohnsacks a $20,000 promissory note bearing 11%
interest and payable in installments of $485.26 per month as
partial consideration for the assignment. Bohnsacks assigned both
the note and the payments to Hi-Noon.     The assignment, release and
indemnity agreement executed by ~ i - ~ o o n ,
                                            Bohnsacks and Malensek on
March 31, 1988, provided as follows:
             In consideration of the foregoing assignment,
             Hi-Noon releases Bohnsack from any liability
             owing to Hi-Noon from Robert or Margean (sic)
             Charles and any other contractural (sic)
             liability to be performed by Bohnsack under
             the Asset Purchase Agreement between Bohnsack
             and Malensek.
      Bohnsacks filed suit against Hi-Noon and Charles on August 16,
1988.      Bohnsacks asserted in their complaint that Hi-Noon waived
its recourse against them for payment of Charles' debt by failing
to notify Bohnsacks of Charles' delinquency and by continuing to
make deliveries after Charles did not pay promptly.     Hi-Noon moved
for summary judgment claiming the assignment, release and indemnity
evidenced an accord and satisfaction between it and Bohnsacks.
Bohnsacks also moved for summary judgment.      After hearing on the
parties ' respective motions for summary judgment on March 24, 1989,
the District Court entered its opinion and order on May 15, 1989,
holding there was an accord and satisfaction between Hi-Noon and
Bohnsacks.
     Hi-Noon moved to amend the court's order to permit it to
collect attorney's fees and for certification pursuant to Rule
54 (b), M.R.Civ.P.     In an order dated July 17, 1989, the District
Court denied both motions.          Bohnsacks then moved for summary
judgment against Charles.      The District Court on October 31, 1989,
ordered that those proceedings be stayed pending the outcome of
Charles'    bankruptcy    case.     Hi-Noon     renewed   its   motion     for
certification    and     the   District   Court    subsequently        ordered
certification and      entered    its   final   judgment.       This    appeal
followed.
     The facts of this case are not in dispute, therefore the
District Court properly granted summary judgment. Benson v. Pyfer
(Mont. 1989), 783 P.2d 923, 924, 46 St.Rep 2033, 2035.             Prior to
Bohnsacks' assignment of their sub-lease to Malensek, they entered
into an     assignment, release and       indemnity agreement          whereby
Bohnsacks assigned to Hi-Noon payments due them on a $20,000
promissory note in satisfaction of the $23,729 debt owed by Charles
to Hi-Noon for which Bohnsacks acted as guarantor. Bohnsacks argue

they did not release their claims against Hi-Noon for wrongfully
delivering gasoline to Charles despite Charles' failure to pay for
loads previously delivered.
     Bohnsacks' argument is circular: Bohnsacks agreed to assign
the $20,000 promissory note to Hi-~oonas payment for amounts owed
Hi-Noon for gasoline delivered to Charles.       Now Bohnsacks contend
they may proceed against Hi-Noon for increasing Bohnsacks' exposure
to liability under their assignment to Charles by delivering
gasoline and not demanding payment. Hi-Noon's failure to terminate
delivery or notify Bohnsacks would be a defense to Hi-Noon's claim
against Bohnsacks.
     Section 28-1-1401, MCA, defines an accord as:
          [A]n agreement to accept in extinction of an
          obligation something different from or less
          than that to which the person agreeing to
          accept is entitled.
     Furthermore,     ll[a]cceptance by    the     creditor     of   the
consideration of an accord extinguishes the obligation and is
called satisfaction."    section 28-1-1402, MCA.     Hi-Noon accepted
$20,000 in settlement of a $23,729 debt.    Clearly, Hi-Noon agreed
to accept less than that to which it was entitled in          extinction
of Bohnsacks' debt.    Once Hi-Noon accepted payment, the debt was
extinguished by accord and satisfaction.          The District Court
properly found Bohnsacks' claims barred by accord and satisfaction.
     Section 28-3-704, MCA, provides as follows:
          Whenever, by virtue of the provisions of any
          contract or obligation in the nature of a
          contract . .   .one party to such contract or
          obligation has an express right to recover
          attorney fees from any other party to the
          contract or obligation in the event the party
          having that right shall bring an action upon
          the contract or obligation, then in any action
          on such contract or obligation all parties to
          the contract or obligation shall be deemed to
          have the same right to recover attorney fees
          and the prevailing party in any such action,
          whether by virtue of the express contractual
             right or by virtue of this section, shall be
             entitled to recover his reasonable attorney
             fees from the losing party or parties.
 The Assignment, Release and ~ndemnity Agreement executed by the
 Bohnsacks and Hi-Noon contains the substance of the parties' accord
 and   satisfaction and   specifically provides   for an    award   of
 attorney's fees to the prevailing party in the event of litigation.
 In light of that contractual agreement, the District Court erred
 in denying Hi-Noon recovery of its attorney's fees. We reverse and
 remand for an award of reasonable attorney's fees to Hi-Noon.
       Affirmed in part, reversed in part.

                                             rAk.
                                                J* Justice
We concur:

& ~ . f l ~ ~
         Chief Justi