ENGEBRETSON v PUTNAM
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No. 13679 IN THE SUPREME COURT OF THE STATE OF MONTANA 1977 GERALDINE T. ENGEBRETSON, Plaintiff and Respondent, BRYCE C. PUTNAM and BETTE J. PUTNAM, Defendants, Counter-claimants and Appellant. Appeal from: District Court of the Fourth Judicial District, Honorable E. Gardner Brownlee, Judge presiding. Counsel of Record: For Appellant: Boone, Karlberg and Haddon, Missoula, Montana Sam E. Haddon argued, Missoula, Montana For Respondent : Skelton and Knight, Missoula, Montana Robert Skelton argued, Missoula, Montana Submitted: Filed: IVC, -- ', ? U - ,, Decided: September 29, 1977 WGV - 4 1977 M r . J u s t i c e Frank I. Haswell delivered the Opinion of t h e Court. Defendants appeal from a summary judgment granted t o p l a i n t i f f by t h e D i s t r i c t Court, Missoula County, i n her s u i t on a promissory note. P l a i n t i f f Geraldine T. Engebretson was the owner of c e r t a i n r e a l property located i n Missoula County, Montana. O October n 29, 1970, she l i s t e d t h i s property f o r s a l e with T r a i l Realty owned by defendants Bryce C. and Bette J. Putnam. Defendants prepared a l i s t i n g agreement f o r the property using a standard form l i s t i n g contract which p l a i n t i f f signed. Defendants l a t e r decided t o purchase p l a i n t i f f ' s property f o r themselves. On January 18, 1971, defendant Bryce C , Putnam executed a promissory note i n p a r t payment, payable t o Geraldine T. Engebretson f o r $3,000 a t 8 percent i n t e r e s t due i n one year. P l a i n t i f f signed a warranty deed whereby she did "grant, bargain, s e l l and convey" her property t o the Putnams. By t h e same deed Engebretson convenanted t h a t she would: "* * * forever WARRANT and DEFEND a l l r i g h t , t i t l e and i n t e r e s t i n and t o the s a i d premises and the q u i e t and peaceable possession thereof unto the a g a i n s t a l l a c t s and deeds of [Enge[Putnams] bretson] and a l l and every person and persons whomsoever lawfully claiming o r t o claim the same," [Bracketed material paraphrased.] *** The warranty deed s t a t e d Engebretson's grant was subject t o a f i r s t mortgage i n favor of t h e Missoula F i r s t Federal Building & Loan Association, which mortgage the Putnams agreed t o assume and pay according t o i t s terms. A t t h e time Engebretson sold her property t o the Putnams, i t was subject t o the l i e n s of Special Improvement D i s t r i c t No. 296 f o r engineering fees and Special Improvement D i s t r i c t No. 304 f o r sewer. P r i o r t o t h e execution of t h e warranty deed, p l a i n t i f f had paid a l l matured s p e c i a l improvement d i s t r i c t installsreats, however $1,244 i n unmatured installments remained t o be paid. The l i s t i n g agreement which defendants prepared f o r p l a i n t i f f indicated \ the property was subject t o an annual s p e c i a l improvement d i s t r i c t payment of $21.50 f o r sewer i n s t a l l a t i o n . The warranty deed made no provision f o r the assumption of o r proration of t h e unmatured payments by e i t h e r party. Defendants l a t e r paid the $1,244 t o r e l e a s e the s p e c i a l improvement d i s t r i c t l i e n s from the property. A s compensation f o r paying these i n s t a l l m e n t s , Putnams claimed a s e t o f f against t h e amount owing on the $3,000 promissory note Bryce Putnam signed. Consequently, when t h e note matured on January 18, 1972, Putnams did not make any payment toward the amount due. I n M y 1972, they offered t o pay Engebreta son an amount l e s s than the $3,000 plus i n t e r e s t then due. She refused t o accept the l e s s e r amount. On June 2, 1972, Engebretson f i l e d a complaint a g a i n s t Bryce Putnam a l l e g i n g Putnam executed the promissory note; t h a t he f a i l e d t o pay t h e note upon maturity; and t h a t the note provided f o r a reasonable attorney f e e i n case of s u i t t o recover it. She prayed f o r judgment f o r $3,000, i n t e r e s t and a reasonable attorney fee. Putnam f i l e d an answer admitting t h e existence of t h e note and t h a t he had made no payment on i t , but a l l e g i n g , as a defense, t h a t the amount due on the note was subject t o a s e t o f f f o r t h e s p e c i a l improvement d i s t r i c t installments he had paid. He counterclaimed f o r a s e t o f f of $1,244 and f o r a reasonable attorney fee. He a l s o moved t o join h i s wife a s a defendant and counter- claimant i n the action. P l a i n t i f f f i l e d a reply t o defendants' counterclaim alleging,, among o t h e r things, t h a t Bryce Putnam was a r e a l e s t a t e broker; t h a t she had l i s t e d h e r r e a l property with him f o r s a l e ; t h a t a t t h e time p l a i n t i f f l i s t e d her r e a l property with the defendants and a t t h e time she sold the property t o them, they knew of the unnsatured s p e c i a l improvement d i s t r i c t installments previonaiy assessed on the property. Each s i d e moved f o r summary judgment. O t h e b a s i s of the n pleadings, the e x h i b i t s t h e r e t o , and t h e memoranda of law submitted by the p a r t i e s , the D i s t r i c t Court granted summary judgment i n p l a i n t i f f ' s favor and awarded her $1,450 i n attorney fees. De- f endant s appealed. Three i s s u e s developed on appeal: 1. Did t h e D i s t r i c t Court e r r i n granting summary judgment? 2. Did t h e D i s t r i c t Court e r r i n denying defendants' counterclaim? 3. Did the D i s t r i c t Court e r r i n awarding p l a i n t i f f attorney fees i n the amount of $1,450. The purpose of t h e summary judgment procedure i s t o encourage j u d i c i a l economy through the elimination of unnecessary t r i a l , delay and expense. 32, 33, 34 St.Rep. Bonawitz v. Bourke, Mont . , 567 P.2d 638, 640 (1977); Guthrie v. Dept. of Social & R e h a b i l i t a t i v e Services, St.Rep. 255, 257 (1977). M nt o . , 563 P.2d 555, Summary judgment i s n o t a s u b s t i t u t e f o r t r i a l , however, and i s inappropriate when genuine i s s u e s of material f a c t remain t o be l i t i g a t e d . Duncan v. Rockwell Manufacturing Co., 938, 34 St.Rep. Rule 56(c), M.R.Civ.P. ; Mont .-, 567 P.2d 936, 821, 823 (1977). Additionally, whether a court should grant a motion f o r summary judgment or require a t r i a l r e s t s i n t h e sound d i s c r e t i o n of the court even though the movant may have made out a case f o r summary judgment. 6 P t . 2 Moore's Federal P r a c t i c e 156.15[6] ; John B l a i r & Co. v. Walton, 47 F.R.D. 196 (1969). I f there i s any doubt a s t o t h e propriety of a motion f o r summary judgment, the court should deny i t . Fulton v. Clark, 167 Mont. 399, 403, 538 P.2d 1371, 1373 (1975); Kober & Kyriss v. B i l l i n g s Deaconess Hospital, 148 Mont. 1 1 7 , 122, 123, 417 P.2d 476, 479 (1966). During o r a l argument on appeal, c e r t a i n f a c t s were brought t o l i g h t making i t apparent t h a t genuine i s s u e s of material f a c t remained t o be l i t i g a t e d . Summarizing from the pleadings and o r a l argument, p l a i n t i f f ' s a l l e g a t i o n s a r e : (a) t h a t p l a i n t i f f l i s t e d her property with the defendant r e a l t o r s f o r s a l e , thus c r e a t i n g a principal/agent r e l a t i o n s h i p between plaint i f f and defendants a t t h e time of t h e l i s t i n g ; (b) t h a t defendants prepared both the l i s t i n g agreement and, a f t e r they decided t o purchase the property themselves, the warranty deed; and (c) t h a t a t a l l times defendants knew of the unmatured s p e c i a l improvement d i s t r i c t installments, y e t no mention was made of them i n the warranty deed. The p r e t r i a l proceedings l e f t undecided such i s s u e s a s : 1. Did the principaI/agent r e l a t i o n s h i p between p l a i n t i f f and defendants s t i l l e x i s t a t the time p l a i n t i f f sold her property t o defendants? 2. What was the i n t e n t of the p a r t i e s regarding payment of the unmatured s p e c i a l improvement d i s t r i c t installments? 3. Did defendants breach any f i d u c i a r y duty they may have owed p l a i n t i f f ? This Court has previously held t h a t summary judgment i s usually inappropriate where the i n t e n t of the contracting p a r t i e s is an important consideration. Fulton v. Clark, supra; Kober & Kyriss v. Billings Deaconess Hospital, supra. Because this and other questions heretofore mentioned remain at issue, we hold summary judgment was improperly granted in this case. Because this case must be remanded, we feel some direction to the District Court on the remaining two issues is appropriate. The first issue in essence is whether unmatured installments of a special improvement district assessment constitute an encumbrance upon the real property upon which they are assessed from the date the special improvement district assessment was levied, or from the date the individual installments of the assessment mature. By statute, a special improvement district assessment "shall constitute a lien upon and against the property upon which such assessment is made and levied" and the assessment attaches as a lien to the property assessed "from and after the date of the passage of the resolution levying such assessment 11-2229, R.C.M. * * * " Section . 1947. The only way in which the lien created by the assessment can be extinguished is by payment of the assessment including all penalties, costs and interest. R.C.M. Section 11-2229, 1947. Clark v. Demers, 78 Mont. 287, 254 P. 162 (1927) and State ex rel. Malott v. Board of Commissioners, 89 Mont. 37, 296 P. 1 (1931), relied on by plaintiff, do not stand for the proposition that special improvement district assessment installments become liens upon the property assessed only upon maturity of the installments. Clark and Malott are distinguishable from the instant case in that they dealt with irrigation district assessments rather than special improvement district assessments. Both kinds of assess- ments a r e s t a t u t o r i l y controlled; thus, one must look t o t h e s t a t u t e s c r e a t i n g them t o determine the time the l i e n of assessment a t t a c h e s . The s t a t u t o r y provisions regarding s p e c i a l improvement d i s t r i c t s a r e s e t out i n sections 11-2201 through 11-2288, R.C.M. 1947. To c r e a t e a s p e c i a l improvement d i s t r i c t , the c i t y council must f i r s t pass a resolution of i n t e n t and give public n o t i c e .thereof. After the p r o t e s t time has elapsed, the council must pass a resolution a c t u a l l y c r e a t i n g the s p e c i a l improvement district. Section 11-2207, R.C.M. 1947. The council then determines the e n t i r e c o s t of the proposed improvements and e s t a b l i s h e s a method by t h i c h i t s h a l l a s s e s s the c o s t o f - the improvements a g a i n s t t h e property owners who a r e subject t o the assessment. Section 11-2214, R.C.M. 1947. B a separate resolution, t h e council l e v i e s and assesses a y tax upon a l l taxable property i n the s p e c i a l improvement d i s trict. This resolution contains a d e s c r i p t i o n of each l o t and parcel of land with the name of the owner i f known, the amount of each payment t o be made, and the d a t e when it becomes delinquent. The assessment may be paid i n equal annual installments spread over a term n o t exceeding twenty years. Section 11-2222, R.C.M. 1947. The s t a t u t e under which i r r i g a t i o n d i s t r i c t assessments i n Clark were made, provided t h a t the board of d i r e c t o r s of each i r r i g a t i o n d i s t r i c t should make a y e a r l y determination of t h e t o t a l amount of money needed f o r t h a t year f o r the administrative expenses of the d i s t r i c t . The board would then levy a proportionate amount of t h e yearly c o s t a g a i n s t each landowner i n the d i s t r i c t . The t a x thus determined would become a l i e n upon the land and the l i e n would a t t a c h "as of the f i r s t Monday of March of t h a t year". Laws of Montana 1921, Ch. 153, 522 (repealed 1929). The s t a t u t o r y schemes f o r s p e c i a l improvement d i s t r i c t s and f o r i r r i g a t i o n d i s t r i c t s thus d i f f e r e d i n two important ways: (1) t h e e n t i r e c o s t of the s p e c i a l improvement d i s t r i c t i s made i n one determination and assessed accoedingly, whereas the i r r i g a t i o n d i s t r i c t assessment i s determined yearly and t h e amount of t h e yearly assessment f l u c t u a t e s according t o t h e needs of t h e d i s t r i c t ; and (2) the s p e c i f i c s t a t u t o r y times a t which the ass-nts a t t a c h t o the property a s l i e n s , i . e . , t h e assessment date of the resolution levying the s p e c i a l improvement d i s t r i c t / versus "the f i r s t ~ & d a ~March of [each] year." of Section 67-1617, R.C.M. 1947, provides t h a t the term "encumbrances" includes taxes, assessments, and a l l l i e n s upon r e a l property, Therefore, a l i e n created by a. s p e c i a l improve- ment d i s t r i c t assessment i s an encumbrance upon the property which d a t e s from the passage of the resolution c r e a t i n g the assessment. The remaining i s s u e involves what evidence i s s u f f i c i e n t t o support an award of attorney fees. The promissory note upon which p l a i n t i f f sued provided f o r recovery of a reasonable attorney f e e i n case s u i t was brought t o recover on t h e note, The only e d d e n c e p l a i n t i f f presented t o e s t a b l i s h a reasonable attorney f e e was a copy of her r e t a i n e r agreement with her attorney. This was a contingent f e e agreement authorizing her attorney t o r e t a i n one-third of any monies received a s compensat i o n f o r h i s services. On the b a s i s of t h i s agreement alone, the court awarded p l a i n t i f f $1,450 a s a reasonable attorney fee. W disapprove of an award of attorney f e e s based on t h i s e type of documentation. f o r such an award. W have previously approved guidelines e Crncevich v. Georgetown Recreation Corp., 168 Mont. 113, 541 P.2d 56 (1975). Those zguidelines, which enumerated the items to be considered in making an award, include: "*** the amount and character of the services rendered, the labor, time, and trouble involved, the character and importance of the litigation in which the services were rendered, the amount of money or the value of property to be affected, the professional skill and experience called for, the character and standing in the profession of the attorneys. * * * The result secured by the services of the attorneys may be considered as an important element in determining their value . 168 Mont 119,120. " . The retainer agreement between plaintiff and her attorney does not conform to the above requirements. The result of the negotiations between an attorney and his client as to their fee agreement is not controlling in fixing a reasonable attorney fee to assess against the opposing party. Such an award must be determined in accordance with the guidelines enumerated in Crncevich. The cause is reversed and remanded with instructions to proceed in accordance with this Opinion. Justice
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