*1 COWAN, L. ELMER M. PAULINE COWAN M. SMITH, TWILA Appellants, Plaintiffs v.
KATHY C. KATHY COWAN, a/k/a COUCHOIS and KELLEY FLOYD, DAN and Respondents.
Defendants
No. 03-164.
July 10,
on Briefs
Submitted
April 20,
Decided
For Evonne Smith Respondents: (K. Cowan); Markette, Attorney Law, T. Hamilton Missoula David (Floyds). of Opinion
JUSTICE LEAPHART delivered the the Court. the District Court’s dismissal of issue on is whether as and Twila’s incorrect a matter law? Cowans’ was We affirm. Background
Factual and Procedural (the Cowans) Elmer Pauline are the of Twila parents and Cowan (Arden). (Twila) Kathy Arden was married to Smith and Arden Cowan Kathy separated eventually Arden in 2000 and (Kathy). Cowan years eleven The Cowans approximately marriage. divorced after trustee Kathy certain for property contend that polio. from The District the care of their son Arden who is disabled Kathy’s they challenged Court dismissed which Kelley Floyd to Dan and proposed sale (the Floyds). Larson) proceedings, (Judge awarded issue, 170 acres located Ravalli
Kathy approximately the land at agreement antenuptial Larson County. Judge parties’ decided meeting regarding there was no minds was not enforceable because attempted Arden had Noting meant. agreement what having support from the he was dispute insulate child his former disclaiming property, wife court cited the of unclean hands the doctrine principle that he judicial estoppel estopped concluded subsequently claiming an same Kauffman- MT 238, 307 v. Kauffman, Harmon P.3d 408. Judge give validity Larson observed that such a scheme would violate public policy encouraging facilitating child support payments. Kathy gifted Since Arden’s during the marriage, property Kathy. awarded Subsequent proceedings, to the dissolution the Cowans filed declaratory relief, seeking to have District Court determine the ownership rights Cowans’ Twila’s in the property constructive, They and whether an or express, resulting trust existed. requested restraining a temporary prohibiting order sale until declaratory judgment. issued a Attached to their complaint declaratory warranty deed, relief were (dated document describing property, Kathy’s 9,1991), will March a document Kathy signed granting general Arden power attorney, handwritten, signed by undated document the Cowans that stated the Cowans were transferring for Arden’s *3 maintenance, and and the Findings Fact and Conclusions of Law and Decree of Dissolution of and Kathy’s marriage. Judge sale, When did prohibit Floyds Larson not act to the the
purchased the property Kathy. completed, The sale was and the Floyds are now the record of the property. Kathy owners and the both Floyds declaratory moved dismiss to for McLean) judgment preliminary injunctive and (Judge relief. The court granted Floyds’ the they purchased motion to dismiss because had the under property protection of a court order after this Court declined a supervisory to issue writ of stopping control the sale. The District Court also stated that Cowans’ and Twila’s for a request temporary restraining injunction order preliminary and was moot because the Floyds sale completed to under Larson’s direction in the proceeding. Kathy’s similarly dissolution motion for dismissal was determined, granted because the court based upon complaint, answer, documents, and the attached that neither the Cowans nor Twila had ownership enforceable interests in the at issue. The court examined the attached documents and determined that the deed to contained no restrictions or ownership an Similarly, conditions Twila interest. Kathy, they that when the Cowans deeded
concluded The court any ownership reserve themselves. did not had that Cowans Twila no enforceable concluded Any property. their own to the ownership right disputed interests in they dependent upon rights arguably that were The duly adjudicated in the action. interest which was dissolution proceeding in the noted that distribution dissolution that matter but could not “be challenged could be on in guise [Cowans Twila] under that the relitigated this action legally ownership enforceable interests separate and distinct Floyds Kathy statutory costs property.” The court awarded the recently We request attorneys’ and denied their for fees. suit Cowan, in Cowan v. proceeding affirmed order in the 68, 320 2004 MT appeal, On the Cowans and contend the court’s dismissal Twila They matter of claim have was incorrect as a law.
alleged finding facts sufficient a the Cowans were benefit that Twila is a trustors of trust created for Arden’s that, beneficiary They contend successor trustee and/or trust. facts, declaratory based on these stated claim They their property as to the existence of trust. assert that judgment separate and distinct from Arden’s in the property. interests They that Arden current action. point party out is not this The Cowans and Twila claim it was error for the District Court to make a factual determination that the handwritten document to create a enforceable legally Cowans executed was insufficient allege Twila reviewing apply appropriate failed standard motion They because it did not take all factual as true. allegations if all their are taken as true and all facts contend them, light they clearly set forth facts viewed most favorable to sufficient to was held trust and therefore establish likewise be held in proceeds from the sale of the should trust for Arden’s benefit.
Discussion *4 Whether the District dismissal of the Cowans’ and Twila’s ¶9 Court’s as a of law? complaint was incorrect matter ruling We review a district on a motion dismiss court’s 12(b)(6), M.R.Civ.P., de v. Salvation pursuant to Rule novo. Powell (1997), 1352, “This Court 287 951 Army
17
a motion
an
from a district court’s order
reviews
Powell,
sufficiency
complaint.”
on the
287 Mont.
dismiss based
(citation omitted).
a
at
Powell, 287 Mont. at The only considering relevant document when motion to is the complaint incorporates by it Bank, City reference. Cut 20. The mere fact that ¶ documents are to complaint attached does automatically require not that the motion to dismiss be summary converted into a Rule motion for judgment. 12(b)(6) Bank, City Cut 20. We previously upheld have a Rule motion to dismiss when the trial court upon based its decision complaint and information City contained attached documents. (the Bank, Cut court considered the well as the documents). attached contract allege The Cowans the District Court considered matters
outside the pleadings given thus the court should have notice parties being the motion was converted to Rule 56 motion summary judgment fully with all sides afforded an opportunity to brief the issues as such. We find no indication that the court considered matters outside Bank, City
the record. accept Cut 20. We value the face court’s ruling order that it on motions to dismiss and that the court’s upon order was based on complaint and based Bank, City information in the attached documents. Cut true, The Cowans if all allege facts taken as they clearly stated a claim the court entitling them relief and erred However, dismissing complaint. are incorrect as take as Facts viewed in light what must true. must be however, plaintiff, duty most favorable to the under no is *5 18 allegations that factual basis
take as true conclusions or have no Powell, already adjudicated. 287 contrary to what has or been matter, 102, at In Mont. 951 at 1354. repeatedly previously Arden testified that Larson noted that had properties; had no thus the court concluded that he interest in via a constructive Arden’s claim of a beneficial by judicial unclean and was trust must fail as Arden had hands barred estoppel. judicial estoppel “The purpose protect fundamental of is to system estop party playing from
integrity judicial thus to system.” with the court v. ‘fast loose’ Kauffman-Harmon 15, 408, 307 Kauffman, ¶ Mont. 36 P.3d 15. ¶ ¶ judicial doctrine to his or her judicial estoppel party “[T]he binds declarations, inconsistent precludes party taking position from made declarations in a action or previously subsequent Kauffman-Harmon, In we Kauffman-Harmon, 15. proceeding.” ¶ resulting judicial estoppel applies it examined the doctrine case, In that determined that when Dr. constructive trusts. we previous legal Kauffman claimed in a action that he had no interest corporation, he barred certain assets that he had transferred to a was subsequent claiming proceeding. an interest in the assets in a Kauffman-Harmon, 17. ¶ The doctrine of unclean court also determined This “provides
hands barred Arden’s interest in
doctrine
come
‘parties
expect
equity,
must not
relief in
unless
into
” Kauffman-Harmon,
with clean
19. Under this
hands.’
doctrine,
caused
we have stated that we “will not aid one who has
title
purpose
or
another
to his
her
be
defrauding
Kauffman-Harmon,
creditors.”
ruling
on the motions to
Twila’s
(as
McLean
assume
complaint, Judge
was not bound to
held
benefit.
complaint)
in trust
We
sufficiency
complaint including
reviewed the
of the
attached
have
Powell,
determine
judgment, had. The and the attached may and sister City the court’s the motions dismiss. Cut Bank, affirm. 20. We GRAY, WARNER, CHIEF JUSTICE COTTER and JUSTICE REGNIER concur. dissenting.
JUSTICE RICE I dissent. Court granted Kathy’s District motion to dismiss on the
following grounds: language
[T]he deed contains no legally enforceable Furthermore, parents. reserved the deed language contains no conditions or restrictions under which *6 sister, Twila, claim Arden’s can an ownership interest. Accordingly, have no Twila enforceable interests in their own the ownership right property. Rather the seek solely to enforce arise out of Arden’s interest....
This is an erroneous statement of the several respects. law in First, issue, the Cowans’ raises a trust a property not ownership language referencing issue. absence deed a trust is dispositive not the issue by of whether a trust was created the A parties’ may actions. trust “a by be created transfer of property by during the owner trustee,” the person owner’s lifetime to another § 72-33-201(2), MCA, may also be created “an enforceable 72-33-201(5) promise to create a trust” at a future time. Sections 72-33-209, Thus, question MCA. is whether the language not document, deed, within a property trust, transfer here a references a but whether there is evidence which “manifests an intention to trust,” 72-33-202, MCA, create a including § evidence outside of the Obviously, trust, created, transfer document itself. once can receive properties necessity various without of the reiterating transfer purpose. trust Here, it is Cowans’ that discussions trust; between the Cowans and led to an agreement create that, pursuant agreement, to the the Cowans created a handwritten and gratuitously Kathy; trust document and that Kathy, pursuant agreement, executed a Will and Attorney Power of favor. These address issue created, therefore, properly of whether a trust was manifested and solely upon the District Court’s dismissal based action language deed was reversible error. Further, concluding the District Court erred in that the Cowans’ trustors, interest.” As “solely of Arden’s arose out 72- Section property. independent separate
have a gratuitously MCA, “the owner 33-216, that where provides estate fails, the trust transferee holds trust it... but the transfers Here, accordance ....” the transferor resulting trust for as a proceeding, Kathy’s dissolution in Arden and Larson’s order Consequently, Court, trust has failed. by this affirmed which was statute, resulting that, pursuant complaint alleges been created. trust has holds, that the dissolution However, essentially the Court However, Kathy’s judicata
decree is res must privies or their parties to lie... judicata error. “For res that is ...” Lee v. Musselshell the same “the issues must be the same” and be 423, 20. The 320 Mont. County, 2004 Arden were resolved Kathy and as between ownership issues as between trust-related issues but proceeding, in the dissolution therein, not and should were not determined Kathy and the Cowans pleadings. on the by a dismissal be avoided proceedings. for further and remand I would reverse RICE. joins in the dissent of JUSTICE JUSTICE NELSON