*1 Patricia A. Hoefer, Plaintiffs IVAN HOEFER J. WILCKENS, E. v. LISOLETTE Respondents, Defendant Appellant. 83-77. No. Sept. 1983. Submitted May Decided 1984. 468. 684 P.2d *2 Murray, Kaufman, Gordon, & ar- Vidal John R. Gordon gued, Poison, Kalispell, Bridenstine, K. M. for defendant appellant. and
Christian, Wold, McCurdy argued, & H. Matthew O’Neill Poison, plaintiffs respondents.
MR. JUSTICE SHEA Court. Opinion delivered the Wilckens, an Defendant, E. as a codefendant Liselotte by plaintiffs, Hoefer, A. Ivan Hoefer and Patricia action J. ap- malpractice, estate broker for slander peals title and real finding County from a Lake District Court sup- findings are her liable ported by both counts. Because evidence, we reverse. substantial controversy in- a real estate transaction The arises from promissory volving note, as- deed, and an a contract for a plaintiff purchasers signment. dispute is between defendants, who estate broker and and the real not involved. handled the The sellers are transaction. downpayment pay the could not entire taking money, them and the broker and loaned ostensibly day promissory Later, se- note in return. purchasers gave note, cure the an their interest purchasing. purchasers failed to When the promissory note, the broker recorded payments and he continued make *3 agent have The and to contract. sued the broker slan- for set aside and sued the broker malpractice. addition, der of title broker one and purchasers, Hoefer, to foreclose Ivan also sued the broker plumbing real done on a for work he had mechanic’s lien converting apartment estate office and broker Young to counterclaimed from a service station. Defendant attorney for fees. set aside the lien and mechanic’s held that aside and also The trial court set the plaintiff proved broker of title and slander malpractice against the broker and the participated proof agent in or even there was no that the properly knowledge omissions attributed of the acts or findings appears con- to the broker. It from the court’s agent title slander of held liable for clusions solely malpractice was associated because she and broker underlying estate transaction. real with the broker implicitly recognize the fact court to The seemed agent participated in of the had not the acts or omissions only against punitive damages broker when it assessed appeal, broker. The broker filed a notice of but he failed perfect it. malpractice
Based on the slander of title and broker claims, the trial court also ordered that both the broker pay attorney plaintiffs must fees the incurred prosecuting the case. The court ordered that attorney pay against could offset the fees she had to payments, paid contract taxes and assessments she had helping keep payments on the contract for deed cur- duty pay attorney rent. The fees, however, of the depends validity underlying judgment against malpractice. her for slander of title and broker argues findings supported by that the are not substantial process evidence, further, that she was denied due plaintiffs notify the failure of her before trial that she too was accused of slander of title and broker further claims that the is valid her as to representing security judgment as interest, and that pay- should have been entered her favor for the contract paid helping ments and taxes and assessments she keep the contract for deed current.
On issue, the mechanic’s lien the court invalidated the lien statutory deadline, because it was not filed within the but plaintiff, Hoefer, entered Ivan based on an open plumbing account for services rendered broker. to the plaintiff The court also ordered that must Hoefer attorney defending broker’s fees for lien the mechanic’s party appealed foreclosure suit. Neither the fore- has closure. The evidence as rendered services by plaintiff does, however, Hoefer to the broker bear on the question kept of whether the informed of *4 pay. bill he incurred and refused to
Agent presents First, two issues. whether there is substan- support judgment against tial evidence to her for slan- malpractice. Second, der of title and broker whether she bring- given purchasers was notice were adequate ing against a claim her as well of title and bro- for slander malpractice. ker we
We reverse judgment because However, we dispositive. find the substantial evidence issue due purchasers also determine denied the process by notify their failure to her before trial that were for of title seeking judgment against her also slander and broker We also determine Wilckens taxes payments, is entitled to for the contract in keeping payments paid assessments she contract for current. deed cir-
Although only we the facts and are concerned with in surrounding agent participation cumstances Wilckens’ sale, partic- place facts will her complete review the ipation in its proper context. bro- in estate Young
Defendant was a licensed real Poison, ker, De- Realty in Flathead Lake Montana. d/b/a/ employed by Flathead fendant Wilckens was at that time Realty was salesperson. Young Lake as a real estate in at that company licensed broker time. Christian, owners, for sale a listed Calvin and Marva plot Realty. acre Flathead After ten with Lake it purchase purchasers they agreed showed the site to Hoe- $15,500. Purchasers, by contract for Ivan and Patricia fer, money July agreed paid earnest $500 $1,500 the down- August by paying balance of close deed payment. Yearly payments the contract under $2,011.91. downpay- have did not the balance Sep- extended August ment date was closing so the again money When not have the tember. did time agreed at that September, the broker and com- with their downpayment the remainder of the show ex- $1,500. The record does bined commission of drawn, it appears but actly money where the account sellers payment cash made *5 Realty. Flathead Lake purchasers signed prom- then issory $1,500 advance, payable note for the to Flathead Lake in Realty days.
All necessary the papers signed by parties the 28, September pur- 1977. them was a notice of Among chaser’s signed by purchasers, interest the which was to be filed with the county give clerk and recorder to notice of their in duty interest the file The broker had a to protect interest, this notice to purchasers’ the but he failed to do hand, so. The on the other assumed that the broker had filed this notice and she did not learn that he had not filed it dispute until this arose.
The title company $15,500 also issued title commitment to the buyers, to be followed a title policy. insurance However, policy issued, when in being instead of names of purchasers, inwas the names of the broker and agent. Although fact, the broker knew this to be the did not know that she was a named insured on the policy dispute until always arose. She it assumed had been issued in purchasers. the names of the
After signing note, promissory of the another docu- ment, an assignment, picture. entered into the Before the promissory due, note was security the broker decided that note, was needed 31, 1977, on the and on or about October purchasers gave the broker and agent assignment an their in interest the property. The they broker testified that necessity discussed the assignment of an security as at the time the promissory signed, purchasers note was but denied purchasers this. The signed without having it acknowledged, fact there was no acknowl- edgment jurat document when it. How- signed ever, after purchasers given signed document broker, taped an acknowledgment paragraph onto the bottom document. He took this document notary public. to a notary, acting contrary (Sections 1-5-201, -206, -207, MCA), the law 70-20-106, ac- knowledged purchasers’ signatures purchasers’ absence. in late December
When the note fell due note, possession addition to the (which filed purchasers’ notice of he should have interest), previous September protect does illegally and the The record acknowledged assignment. any made de- Realty not disclose whether Flathead Lake due. note it fell pay mands of the when note still later, six months June Re- Lake unpaid. dispute A exists as to whether Flathead note then alty made a demand on the be upon or them failure the would notified *6 their interest divesting recorded of in June he wrote a letter property. The broker testified that days within 5 purchasers telling pay them to the note of divesting or that be filed them assignment would in- in A of letter was copy their however, purchasers, in testified troduced evidence. trial Although the they did not receive this letter. mailed finding court no as to whether the broker made letter, receive find did not the court did the letter. 1978, assignment and
In the broker recorded June purchasers were notice interest. The summer until late aware of this recorded hay on the cutting someone 1978. At that time noticed records, re- land, found checking and courthouse corded to the broker and dispute into mechanic’s lien digress bring We here to pur- relationship between picture, for bears it on it broker, and chaser, Hoefer, Young, Donald Ivan Wilckens, was Liselotte tends to show that ob- the broker was kept that at the same time informed he also taining purchasers, work plumbing Ivan Hoefer disputing purchaser with broker. that Hoefer had done started litigation lien history the mechanic’s shortly before the real estate transaction involved here. Hoefer, Ivan one purchasers, plumber by is a trade who owned the Shop August, Plumb Poison. parties deal, before the closed the real estate the broker contracted with Ivan Hoefer to do plumbing work on an old gasoline station that the broker was remodeling for an office apartment. an open Work was to be done on an ac- count, time and material cost basis. The agent, Liselotte Wilckens, knew nothing about plumbing details of the contract between Hoefer and the broker.
Hoefer started early work August worked off and on until completing April the work 1978. He billed $2,221.24, the broker for but the broker did not pay. Hoefer then suggested that apply plumbing bill as an offset on the prom- amount due on the issory note. That would have left a balance of due $721.72 Hoefer. refused, The broker however, and the bill remained unpaid. result, As a Hoefer filed a mechanic’s lien the property on which he had worked.
We have already noted the result of the mechanic’s lien foreclosure suit. disallowed, The lien but Hoefer was given a judgment on open an plumb- account based on the ing he did for the and Hoefer was ordered to attorney broker’s fees for defending the mechanic’s lien foreclosure suit. emphasize, however, We Wilck- ens had no knowledge that the broker still owed Hoefer for *7 bill, plumbing and had no knowledge that Hoefer had filed a mechanic’s lien on the broker’s service prop- station erty for plumbing services rendered.
The basis for the slander of judgment against title the agent is a ruling that the broker and acted mali- ciously in obtaining and recording assignment divesting the purchasers of their in Although supports (and evidence the judgment against the broker the broker has not appealed), findings trial court’s the agent wholly are unsupported by the evidence.
To
title,
establish
slander of
required
were
Security
prove
malice, First
that the
with
acted
(1976),
422, Bank
Bozeman
169 Mont.
v. Tholkes
of
right.
justification
P.2d
and without reasonable
or
(1975),
Jumping
v.
167 Mont.
Rainbow Ranch Conklin
clearly
The evidence with light on slander and claimed mechanic’s lien sheds also plumbing of the issue. The did not know the details broker, did contract and the and she between Hoefer know at the was recorded that time (Hoefer) purchaser already a mechanic’s lien on filed plumbing he had the broker’s for the work that fact, owed done. she that the broker still did know money This Hoefer on contract. evidence charge of tends establish that the broker was alone filing, he not inform and its did bearing important other factors of the details or of purchasers. relationship The evidence his with the pro agent’s she acted to involvement establishes assign perceived right record the tect she was her what default on ment after the were six months far of establish falls short note. Such evidence ing malice. malpractice claim, court made the trial
On the broker specific findings the broker and acts or omissions six findings constituting required largely on of care violations are the standard based County the Code Ethics of realtors Lake under of Real Association Standards of Practice of National appropriate may Although findings as to have been tors. not as to acts or omissions of implied findings as- on an seem to be based *8 all sumption the acts and agent responsible was broker, omissions of the but this is the case. First, agent trial broker and con- the court found that the notice of cealed the fact that the broker failed to file the However, agent interest. that she the testified immediately did not know required the broker was to file notice, further, the that he that she did not know contrary. not done to so. There is no evidence the Third, the trial the and agent court found that broker supply failed purchasers copy assign- to the with a of the ment, required 37-51-321, by as Section MCA. the agent position give purchasers copy no to a the of the assignment purchasers the sign because did not the as- signment the at same time. The testified that Mrs. Hoefer the signed presence the of but present. Mr. Hoefer was not turned then partially signed document over to the and the bro- broker ker arranged and at conducted all the business the later meeting when Mr. signed assignment. Hoefer There is no to contrary. Clearly, evidence was on duty broker provide purchasers copy assign- with a ment, complete for the was not Mr. Hoefer until signed presence it in the of the broker.
Fourth, the court found acceptance promis- that the sory by note the broker and purchasers cre- ated a conflict of imposed a duty on and agent purchasers legal advise the to seek counsel. Although may broker, as be true only salesperson at this time and was not familiar with law, duty duties of broker under as a Montana such legal advise clients to seek advice in the event a conflict of interest.
Fifth, the trial court found that the broker and acted to wrongfully title divest ob- taining recording assignment. may While this also be true as only evidence in the record is protect acted her interest ob- payment taining note, the time and at were months was filed the six default. No ulterior motives can be attributed to obtaining re- She did not know the broker’s intent cording assignment, did know that bro- and she *9 ker bill and that as a still owed Hoefer for the against the lien bro- result Hoefer had filed a mechanic’s ker’s finally, the broker and
Sixth and trial court found that the agent it was after altered the document signed by paragraph taping acknowledgment doc- notary illegally presenting for an ac- ument and it to a acknowledged notary illegally knowledgment, and presence. signatures requiring without their responsi- However, admitted that he alone was the broker doing is the record that ble for this. There no evidence agent approved had done. what the broker knew or of support judgment summary, In does evidence malpractice. agent of title or broker slander finding agent action, the trial on of liable both causes independently consider evaluate court failed to agent’s opposed omissions of the to the acts and conduct as agent lia- was found We led to assume that the broker. are solely But the broker. of her association with ble because agent responsible make the innocent association does not wrongful acts for the of broker.
The Issue Due Process Notice
Although holding evidence issue by on the substantial our disposes ignore procedure case, we cannot agent the claims of slander which the was found liable question, title and Without seeking plaintiffs inadequate were also notice that the judgment against her on these claims. was be- first such a was notified that being
ing sought against
as an
examined
her while she
plaintiffs’
counsel.
nature
adverse witness
questions brought
this information.
forth
agent’s
inquiry
object
counsel did not
into these mat-
to the
Perhaps
object
ters and should have done so.
he did not
important
because he did not see that it was
because the
complaint
Perhaps
agent.
did not seek such
from the
relief
rep-
existed,
it was because
a conflict of interest
that he
resented both the broker and the
Although
circumstances
the broker and
re-
taining
attorney
record,
the same
are not
it is fair to
retained,
assume that when he was
attorney
being sought
and the
assumed that the
relief
was a nullification of the
which
party.
she was a
Had the
received notice that she also
charged
malpractice,
with slander of title and broker
attorney
likely
would most
have told her that he could
represent
both her and the broker. Had the
might
advance,
known of these
facts
she
have of her own
separate
represent
volition retained
counsel to
her interests.
procedural
surprising
Given
facts,
these
it is not
that her
object
agent’s alleged
counsel did not
evidence of
*10
complicity
malpractice
in the slander and
claims.
purchasers argue
agent implicitly
that the
consented
agent’s
to the trial of these issues because the
counsel did
object
questions seeking
complicity
to establish her
wrongful
ques-
However,
acts of the broker.
once the
tioning
readily apparent.
started, a conflict of interest was
attorney representing
Was the
or the broker? If
attorney
paid primarily by
it would un-
doubtedly have been in the broker’s interest to have the
agent also
embroiled
the slander of
mal-
title
practice
Clearly,
attorney may
issues.
not have been
representing
agent’s
best
interests once he became
seeking judgment against
aware that the
her also for slander of title and broker
Assuming, furthermore, that no conflict of interest ex
enough
appears
isted, it is not
that it
consented
appear
issues;
the trial of the
it must also
that the
adequate
notice that the issues would be tried. Here
adequacy
no
of notice is not an issue. The
notice
Implied
at all.
trial
issues not raised
consent
apparent
con-
pleadings will
be effective where
party
adequate
that new issues
senting
has received
notice
will
question
be raised at trial. It is a fundamental
of due
Gallatin Trust & Sav-
process
right
of law: the
to notice.
ings
Bank v. Darrah
(1968),
152 Mont.
Rights The Parties
Because of our reversal of the slander of title and broker malpractice the award of attor- judgment against ney fees must also fall. The broker alone responsible purchasers’ attorney is fees. is judgment voiding
The trial court’s perfected no time a docu affirmed. The was at ac ment because of the failure to obtain If an issue assignment. simply it were knowledgment by the bro of whether a valid could be enforced 70-21-102, device, Section security ker and as a then MCA, result, par third for there are no permit would here, law an acknowl requires ties involved and Montana if recorded. edgment only the document is to be conveyances specific Montana has a statute that controls 70-20-106, MCA, persons. real Section property by married provides: person married
“. . . No in the real of a estate acknowl- to be executed or passes by any grant purporting instrument is ac- person grant such unless the or edged by 1- prescribed in the manner knowledged by grantor 5-206 and 1-5-207.” MCA, 1-5-206, -207, among other require,
Sections *11 the no- before grantor appear married must things, that the conveyance. This was tary properly acknowledge even as be- assignment, done. We therefore hold parties, convey tween the even a was invalid and could security perform- the contract for deed to secure signed by purchasers. ance of the note security Therefore, neither the broker nor the have a property subject interest in the that is the of the contract for deed. good making however, inwas faith in
payments subject on the that is the of the contract pay for deed. For some time now she has made the annual paid ments and the taxes and assessments as became payment due. She is entitled to of these items. She is enti paid. tled to for the amounts she has portions judgment concerning agent All other of the trial opinion Wilckens and not inconsistent with this are af- hereby firmed. This cause is remanded to the trial court judgment against purchasers with instructions to enter paid in favor of Wilckens all amounts she has prop- the contract and for the taxes and assessments on the erty. by any This amount shall be reduced amounts the actually haying operations has received from
MR. HARRISON, JUSTICES SHEEHY and GUL- BRANDSON concur. special opinion. concurring
MR. JUSTICE WEBER files a specially concurring: MR. WEBER, JUSTICE majority opinion, emphasize While I concur in the I strange requirement persons distinguished for married as persons from unmarried 70-20-106, under Section MCA. Generally, acknowledgment required of an instrument is prerequisite recording as a instrument, Sec- 70-21-203, tion 70-20-106, MCA, MCA. Section general inapplicable persons makes these rules to married upon assumptions longer based historical which are no valid. conveyances by law,
At common married women were void *12 for lack of Ill capacity. Prop- contractual American Law of erty 12.73, 338, (1982). p method of alienation of § a married apparently by pro- woman’s title was the judicial Id. ceedings known as recovery.” “fine” and “common incapacity to contract was to a limited ex- tent by removed jurisdictions statutes various which al- conveyance lowed by specified married women under conditions:
“A number of require acknowledgment states of a woman, married whether as to her own or of her rights dower property, separately her husband’s be taken from her pro- husband. These statutes are intended for the tection of married women influence the undue their husbands is based on the old fable that the male dom- woman, In conveyance by inant. a her land married statutes, acknowledgment, part under such is an essential the execution. Unless her deed is substan- acknowledged tially by statute, absolutely prescribed mode it is void .... Such [acknowledgment] procedure judicial is nature designed proceedings and as a substitute for the at by recovery. common law fine and When the certificate apart shows that a her married woman was examined husband, import explained the officer to her the deed, freely and effect of the and she declared that she voluntarily was her act and acknowledged executed it and it deed, purpose Thompson of the law is . ...” 7 attained (Footnotes (1962) Property pp. Real 564-566 § omitted.) interest,
Beyond protection of the married woman’s seeking also intended to se- acknowledgment proceedings such “sure, indefeasible, transfer of unquestionable cure a 80. rights.” Acknowledgments her C.J.S. § married requirement for acknowledgment Montana this it modified applied many years women for until was all married That amend- persons. apply 19875 so as to Montana statutes part general ment of a revision of After amend- discrimination. designed to eliminate sexual applies except to a that it ment, the statute was identical person” “married woman.” than a “married rather originally requirement acknowledgment for enacted incapacity presumed upon some based married woman was faulty part. foundation, statute of that on her Because Unfortunately repealed. been it has now should have been incapacity presumed both as to there is a extended so that and women. married men unacknowl- an is to invalidate
The effect of the statute ap- person. edged conveyance rule is No such a married proper plied single persons. be a area I believe this to legislative review.