Estate of Kinnaman v. Mountain West Bank, N.A.
2016 MT 25
| Mont. | 2016Background
- Development of Lakeside Village condominiums involved Cherrad, LLC (developer), Mountain West Bank (lender), and Craig Kinnaman (general contractor); Kinnaman later died and his estate (the Estate) pursued claims.
- Disputes over loan proceeds, subordination of Kinnaman’s interest, and distribution from condo sales produced multiple contracts and three lawsuits (Interpleader, Foreclosure, and this third action).
- In the Foreclosure Action the Bank sought foreclosure and lien priority; the Estate counterclaimed for lien superiority and crossclaimed against Cherrad for breach/unjust enrichment; the court invalidated the Estate’s construction lien but awarded the Estate a limited recovery; that judgment was affirmed on appeal.
- In March 2012 the Estate filed this separate civil action asserting eight claims against the Bank (fraud, deceit, interference, breach of contract, unjust enrichment, and breach of covenant of good faith).
- The Bank moved for change of venue and summary judgment, asserting improper venue and that the Estate’s claims were barred by compulsory counterclaim rules or claim preclusion.
- The District Court transferred venue to Lewis and Clark County, took judicial notice of prior records, granted summary judgment for the Bank (on claim-preclusion grounds), and denied the Estate’s Rule 60(b)(6) motion; the Supreme Court of Montana affirmed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| 1. Change of venue | Venue proper in Gallatin because Estate’s probate was there | Venue proper in Lewis & Clark: defendant Bank resides/does business there and contracts to be performed there | Affirmed: Lewis & Clark proper under §§25-2-118, 25-2-121; transfer appropriate |
| 2. Summary judgment (all claims) | Claims not litigated previously against Bank; not precluded | Claims arose from same transaction and could/should have been litigated in Foreclosure Action; claim preclusion/compulsory counterclaim bar | Affirmed: claims barred by claim preclusion (res judicata) against relitigation |
| 3. Judicial notice of prior records | Court improperly adopted factual findings from prior records under Rule 201 | Rule 202 permits judicial notice of records of other courts; needed to assess preclusion issues | Affirmed: no abuse of discretion taking judicial notice under M. R. Evid. 202 |
| 4. Rule 60(b)(6) relief | Court should vacate judgment due to improper judicial notice and unfairness | No extraordinary circumstances; motion is mere request to relitigate merits | Affirmed: denial proper—no extraordinary circumstances; movant failed burden |
Key Cases Cited
- Mt. West Bank, N.A. v. Cherrad, LLC, 369 Mont. 492 (2013) (prior foreclosure opinion resolving central disputes in the same transaction)
- Touris v. Flathead County, 361 Mont. 172 (2011) (explains policy and elements of claim preclusion)
- Brilz v. Metropolitan General Insurance Co., 366 Mont. 78 (2012) (applies Restatement (Second) of Judgments § 24—transactional test for claim preclusion)
- Baltrusch v. Baltrusch, 331 Mont. 281 (2006) (res judicata bars relitigation and enforces finality)
- Wiser v. Montana Board of Dentistry, 360 Mont. 1 (2011) (elements and application of claim preclusion)
- Wittich Law Firm, P.C. v. O’Connell, 370 Mont. 103 (2013) (standards for extraordinary circumstances under Rule 60(b)(6))