Court Opinion

ID: 881796
Source: CourtListenerOpinion
Date Created: 2013-06-05 00:46:20.431774+00
Date Added: 2024-06-11T15:23:56.726084
License: Public Domain

No.       89-440

              IN THE SUPREME COURT OF THE STATE OF MONTANA
                                      199 0

    WHITEFISH CREDIT UNION ASSOCIATION, INC.
         Plaintiff and Appellant,
    -vs-
    GLACIER WILDERNESS RANCH, INC., JAMES B. CURTIS,
    ROBERT E. FOSTER, MARLENE F. FOSTER, DONALD E. HEDMAN,
    JAMES H. BURNS, THE FEDERAL LAND BANK OF SPOKANE,
    AND MOUNTAIN BANK OF WHITEFISH,
         Defendants,
    and
    GLACIER WILDERNESS RANCH OWNERS ASSOCIATION, INC.,
         Intervenor and Respondent.

    APPEAL FROM:   District Court of the Twelfth Judicial District,
                   In and for the County of Liberty,
                   The Honorable John A. Warner, Judge presiding.

    COUNSEL OF RECORD:
              For Appellant:
                   James C. Bartlett,          Hash,    OIBrien    &   Bartlett,
                   Kalispell, Montana
              For Respondent:
                   F. Woodside Wright, -   ,
                                           n           Wrkqbk,  Helena,
       c--         Montana
      i.3          E. Eugene Atherton, Kalispell, Montana
      L   3        Donald Hedman, Hedman, Hileman & LaCosta, Whitefish,
      r-i
      I---
                   Montana
.-
'     c::
1 .
       -1
L

                                               Submitted:     January 11, 1 9 8 9
                                                   Decided:   May 8, 1990

                                      d
                                  Clerk
Justice John C. Sheehy delivered the Opinion of the Court.

     Whitefish Credit Union, Inc. (WCU), plaintiff and appellant,
initiated a mortgage foreclosure action in the District Court,
Twelfth Judicial District, Liberty County, seeking to enforce the
provisions of a promissory note secured by a real estate mortgage
on property in Liberty County.
     While the mortgage foreclosure was pending, Glacier Wilderness
Ranch Owners1 Association (GWROA) filed a motion to intervene for
the purpose of filing a counterclaim in intervention against WCU.
The counterclaim sought to collect outstanding dues and assessments
or alternatively to foreclose a real estate lien on property
situated in Flathead County. The District Court granted GWROA1s
motion pursuant to Rule 24 (b), M.R. Civ. P. WCU then moved to change
venue, in the intervention claim, from Liberty County, Montana to
Flathead County, Montana. The District Court denied WCU1s motion
to change venue. WCU now appeals the District Court order denying
change of venue. We affirm.
     WCU raises two issues on appeal:
     1) Did the District Court err in granting GWROA1s motion to
intervene?
     2)   Did the District Court err in denying WCU1s motion to
change venue?
     Glacier Wilderness Ranch is a time-share condominium located
at Nyack, Montana.    Glacier Wilderness Ranch was developed by
Glacier Wilderness Ranch, Inc. In 1983, Glacier Wilderness Ranch,
Inc. filed Chapter 11 bankruptcy proceedings. WCU was a creditor
in the Glacier Wilderness Ranch bankruptcy. The Bankruptcy Court,
on May 6, 1985, entered its order confirming the reorganization
plan of Glacier Wilderness Ranch, Inc. GWROA accepted control of
Glacier Wilderness Ranch, Inc. Through the bankruptcy proceedings
WCU obtained 80 time-share units at Glacier Wilderness Ranch.
     On February 19, 1987, WCU filed its mortgage foreclosure
action in Liberty County, Montana, seeking to enforce the
provisions of a promissory note secured by a real estate mortgage
on property in Liberty County. The money had been used to develop
the time-share condominiums in Nyack. The action also asserted
unsecured promissory notes.
     On March 14, 1988, the defendants, Robert E. Foster and
Marlene F. Foster, filed their answer, asserting as their third
affirmative defense, the bankruptcy proceedings of defendant,
Glacier Wilderness Ranch, Inc.      Similarly, on April 15, 1988,
defendant, Donald E. Hedman, entered his answer, asserting as his
first affirmative defense, the Chapter 11 reorganization plan
confirmed by the court. Hedman alleged that WCU negotiated for and
received assets of the Glacier Wilderness Ranch sufficient in value
to satisfy WCU1s claims under the promissory notes.
     On March 31, 1989, GWROA filed a motion to intervene. GWROA
claimed that Count I1 and I11 of WCU's complaint pertained to money
lent by WCU for the development of the time-share project in Nyack,
Flathead County; that the time-share was known as Glacier Ranch,
and was now operated, post bankruptcy, by GWROA.       In addition,
GWROA contended WCU, through the bankruptcy proceeding obtained 80
time units, and was refusing to pay the regular assessments for
the units due to GWROA. WCU claimed that under the Chapter 11
rehabilitation plan it was not responsible for those assessments.
To enforce its claim GWROA filed a lien in Flathead County, against
the time-share units owned by WCU.
     GWROA sought to intervene pertaining to Count I1 and Count
I11 of WCUfs complaint on the grounds its lfcounterclaim relates to
the original transaction."       Furthermore, GWROA stated that
individual defendants had raised the bankruptcy proceeding as a
defense to plaintiff's claims. GWROA argued that the District
Court in Liberty County would be expected to "make a determination
as to the effect of the Chapter 11 bankruptcy for Glacier
Wilderness Ranch, Inc." and if it did so, this could possible
impair GWROA1s position with regard to collecting time-share
assessments from WCU. WCU resisted GWROA1s motion to intervene.
      The District Court entered its order on ~ p r i l 26, 1989,
granting permissive intervention and authorizing the filing of a
counterclaim in intervention. The District Court determined that
permissive intervention was appropriate in the "interest of
judicial economy1I and because of I1a common question of law or
fact." Rule 24 (b), M.R.Civ.P.
      After the ~istrict Court granted GRWOA1smotion to intervene,
WCU moved to change venue for the counterclaim of GWROA from
Liberty County to Flathead County. The District Court denied WCU1s
motion finding that the claims by the intervenor were incidental
and subordinate to the main action, and thus venue properly belong
in Liberty County.
                                  I
      Did the District Court err in granting G W R O A B s motion to
intervene?
     WCU contends the District Court erred by permitting the
intervention since the question of whether WCU owes GWROA any money
in time-share assessment fees has nothing to do with the main
action of WCU against the individual defendants who signed the
promissory notes.
      In response, GWROA raises the question of whether the ~istrict
Court order granting intervention, pursuant to Rule 24(b),
M.R.Civ.P., is an interlocutory order, and thus not appealable.
State, Etc. v. District Court, Etc. (1980), 189 Mont. 20, 22, 614,
P.2d 1050, 1051; Schultz v. Adams (1973), 161 Mont. 463, 465, 507
P.2d 530, 532. Having examined the record and the law on this
issue, we find the order is interlocutory and improperly before
this Court on appeal. Rule l(b), M.R.App.P., authorizes an appeal
from a lljudgmentll   or I1order, "final judgmentl1 and certain
interlocutory judgments. A review of Rule l(b), M.R.App.P. reveals
no authority to appeal an order granting intervention under Rule
24(b), M.R.Civ.P. See Continental Ins. Co. v. Bottomly (1988), 233
Mont. 277, 279, 760 P.2d 73, 75.
     We are not alone in holding grants of intervention are
interlocutory, and thus not appealable. The Ninth Circuit has long
held that an order permitting intervention is not a final order and
not appealable.    Van Hoomissen v. Xerox Corporation (9th Cir.
1974), 497 F.2d 180, 181; Kris Petroleum v. Stoddard (9th Cir.
1955), 221 F.2d 801, 802. Accordingly, the grant of intervention
is an interlocutory order and improperly before this Court on
appeal.
                                I1
       Did the District Court err in denying WCUls motion to change
venue?
     WCU contends that the venue statutes prevent GWROA from filing
in Liberty County in order to foreclose on property situated in
Flathead County. WCU relies on 5 25-2-123, MCA, which states in
pertinent part:
     25-2-123. Real Property. (1) The proper place of trial
     for the following actions is the county in which the
     subject of the action or some part thereof is situated:
     (a)   * * *
     (b)   * * *
     (c)   * * *
     (d) for the foreclosure of all liens and mortgages on
     real property.

     (3)   The proper place of trial for all actions for
     recovery of the possession of, quieting the title to, or
     the enforcement of liens upon real property is the county
     in which the real property, or any part thereof, affected
     by such action or actions is situated.
     According to WCU, venue for GWROA1s counterclaim is properly
in Flathead County. WCU contends that GWROA1s claim against it is
independent, separable and distinct from the foreclosure action
between WCU   and the defendants, and thus the general venue
provisions (5 25-2-123, MCA) governing an independent action apply.
WCU1sargument misses the mark, because GWROAtscounterclaim is not
independent of the main action, but ancillary or incidental to
WCU's foreclosure action.   77 Am.Jur.2d Venue 5 27, sets forth the
following general rule when determining venue for an ancillary
cause of action:

     The general rule is that when the determination of a
     matter is incident to a principle action, the court
     having jurisdiction ofthe principle action may determine
     the ancillary or incidental proceedings, notwithstanding
     the venue of such an action as to such matter would,
     under other circumstances, be in another county.

     The District Court in its order denying WCU1s motion for
change of venue, clearly followed the above general rule for
determining venue for ancillary causes of action:
     Intervenor was allowed into this action as its claim for
     relief is related to plaintiff Is claim against the
     defendants because of the Chapter 11 bankruptcy
     proceedings concerning Glacier Wilderness Ranch in which
     all parties are involved. The individual defendants have
     raised the bankruptcy proceeding as a defense to
     plaintiff's claims.     It is best to have all these
     questions resolved as far as possible in one proceeding.
     The claims of intervenor against plaintiff are separate
     from plaintiff's claims against the defendants, which
     fact possibly justifies a change of venue. However, the
     main purpose of the action is to litigate the questions
     concerning the debt allegedly owed by the individual
     defendants to plaintiff and to foreclose a mortgage on
     Liberty County property. The claims of intervenor are
     incidental and subordinate to this purpose. The action
     belongs in Liberty County.
     A review of the facts clearly supports the finding in the
District Court order.   The facts clearly show that GWROA1s claim
is incidental to WCU1s foreclosure action. Through the Chapter 11
proceeding WCU obtained 80 time-share units at Glacier Wilderness
Ranch. WCU still retains ownership over a majority of those units.
A dispute has arisen between WCU and GWROA over whether or not WCU
is required pay assessment fees for the time-share units belonging
to WCU.   WCU asserts under the bankruptcy rehabilitation plan it
is not responsible for those assessments.        If we consider just
these   facts alone GWROAts claim may       be   independent of    the
foreclosure action. However, the affirmative defenses of the prior
bankruptcy proceedings tie GWROAts claim of intervention in with
the main action.      Defendants Robert Foster, Marlene Foster and
Donald Hedman raise the Chapter 11 bankruptcy as an affirmative
defense to WCU1s complaint.       Since GWROA now operates Glacier
Wilderness Ranch post-bankruptcy, it has an interest to protect in
the outcome of the foreclosure action.      It is clear the GWROA1s
counterclaim is only held to the foreclosure action because the
possibility of an adverse decision in the interpretation of the
effect of the Chapter 11 bankruptcy as related to the answers of
the Fosters and the answer of Hedman         in response to WCUts
foreclosure action.
     Despite the ancillary nature of the GWROAts claim, WCU seeks
to characterize the GWROA's counterclaim and intervention as a
cross-claim in an interpleader action and thereby bootstrap itself
into the position addressed in State Bank of Townsend v. Worline
(1987), 227 Mont. 315, 738 P.2d 1295.     WCUts reliance on Worline,
is   inappropriate    because   Worline   involved   an   action   for
interpleader not, as in this case, an action for intervention.
Intervention differs from interpleader.     59 Am.Jur.2d Parties,
125 describes the basic differences as follows:
     Unlike intervention, which is the coming into a
     litigation already pending between parties for the
     purpose of assisting one or the other, or acting in
     hostility to both, interpleader is the institution of a
     suit against parties not then in court for the purpose
     of compelling them to litigate between themselves the
     right to property or performance of an obligation, and
     he who compels them to interplead does not assist either,
     nor can he claim in hostility to either.
     In its interpretation of our ruling in Worline, WCU misapplies
the rules of interpleader to those of intervention.          However,
interpleader is not the method by which GWROA became a party in the
main action in Liberty County.     GWROA filed a counterclaim in
intervention, pursuant to Rule 24 (b), M.R. Civ.P., to enter the WCU
foreclosure action.
     Accordingly, we affirm the District Court's order denying
WCU1s motion for a change of venue.

                                                e. Justice
We Concur: