*1 — — THE TRUSTEES OF WASHINGTON IDAHO — EMPLOYERS MONTANA CARPENTERS TRUST RETIREMENT FUND Trustees and the Montana, —A.G.C. Laborers Pension Trust Plaintiffs/ Respondents Appellants, v. GALLERIA Transfer, Storage PARTNERSHIP, Moving, al., et & Marble al., spondents. Defendants/Appellants Re et Third-Party PARTNERSHIP, al., GALLERIA et Plaintiffs OF THE Appellants, TRUSTEES v. The — — IDAHO CARPENTERS WASHINGTON MONTANA — FUND, al., EMPLOYERS RETIREMENT TRUST et Third-Party Respondents. Defendants No. 89-29.
Submitted
June
1989.
Briefs
Sept.
Decided
1989.
Rehearing Denied Oct.
Jardine, Schwanke, Weaver; Stephenson, & Dale Great Blewett K. Falls for Galleria. Falls,
Cure, Davis, Hatley, Gregory Borer for Estate & J. Great Tice. Anderson, Shanahan, Waterman, He-
Gough, O. & Jock Johnson Group, Compass lena for etc.
Linnell, Martin, & Falls Dees. Newhall Great *3 Strause, Howard Great Falls for Marbles. Falls, Ostrem,
Graybill, Crotty, for Patterson. Warner & Great Kuhr, Best, Buskirk, Bosch, et Falls, Mary Elizabeth Great Van Havre, al., for Estate Lund. Opinion the Court.
JUSTICE SHEEHY delivered partner- of the Galleria and the individual members appeal in the Dis- ship judgment against final them from a entered Court, District, County, in favor and Eighth Judicial Cascade trict — — Carpenters Washington Idaho Montana of the Trustees of — La- Employers Trustees of the Retirement Trust Fund and the Trustees). (hereafter AGC Pension Trust of Montana borers $1,308,193.35is $1,505,368.35 judgment is of which the sum for foreclosure, with rest be- judgment for after attorneys fees. ing and recoverable costs entered summary judgment appeal final The Trustees from a Gordon Estate of same and favor of the against them the court P. Tice. District appears remain for decision
It that other issues action, Court arising original jurisdic- out of this has but Court 54(b) tion appeal proper reason of direct and a rule certification from the District Court.
I. portion opinion uphold of the we of the judgment Dis- trict Court that the Trustees are entitled fees, Partnership, attorneys Galleria and costs and but re- mand the amount to the District Court prop- reexamination the issue of the fair market value of erty given security as at the the indebtedness time of foreclo- sure sale. Propriety Deficiency Judgment
A. aof Falls, Montana, On made, March in Great 16 individuals $1,200,000.00 executed promissory payable delivered note for to the Trustees terms set out in the written note. The note was signed by partners the individuals not as of the Galleria Partner- ship, except capacity, in their individual three indi- signed viduals partners also as in Great Falls Investors. Under the note, terms promissory jointly the individuals undertook severally principal sum of the note and accru- the interest ing thereon. time,
At or about same but effective March Partnership, composed signed of 10 of the individuals who note, promissory persons comprising three additional Great made, Falls Investors executed and delivered to Title Insur- Safeco Company trustee, ance security agreement, as a trust indenture and beneficiaries, prin- wherein the trustees to secure the were named cipal $1,200,000.00 sum according thereon interest promissory terms of the above referred to. note The real subject which was the the trust indenture was pur- location of remodeled for the warehouse had been pose leasing building had been various business tenants. purchased beginning prior partnership, remodeled *4 Associates, Galleria managed one Dan Cook. $1,950,000.00
Cook appraisal building had obtained in its a get pay remodeled so off long-term state he could a loan to Galleria purpose ap- Associate’s interim Cook construction loan. For proached defendant, party specializes in Compass, third which han- pension servicing
dling of union trust and then those funds loans Compass wholly organization de- is a owned third loans. fendant, Bancorporation.
Old was advised Com- National Cook pass Associates could not borrow from the Trustees that Galleria disqualified provisions Cook of the Federal was the because (ERISA) Security Employee statutes. 29 Act Income Retirement seq. Thereupon, 1001 et Cook set about the formation of §§ U.S.C. eventually Partnership, to Galleria Associates Galleria which would building, qualify would the and the Galleria sell developed project, prospectus borrower under ERISA. Cook on up that even- lined the 13 individuals and Great Falls Investors part- signed agreement. The tually the trust individuals who became varying interest in ners in the held fractions of partnership. Compass procuring was such inter- knew Cook est; representations agents Compass Cook had no idea what Galleria, making Partnership, prospective was of investors ask. not and did Cook, himself, through or were act- seems clear that others that
It information, represented persons ing who ulti- on his each of signed loan to be nonre- mately the loan documents that the was investors, each lawyers among At least three course. not be could re- was view that a whom covered the foreclosure of trust indenture. documents, including a commitment
Cook hand-carried the loan loan, security Compass as to the terms of the which stated that from thus building he repayment was to a first lien was signatures of the borrowers. Each borrowers secured Only attorney one read note loan nonrecourse. told indenture, contrary nothing he in them that was found trust loan view that was nonrecourse. to his closed, then, that the capsule, it turned out after the loan building were businesses Cook bulk of the the Galleria tenants in, Compass when loan an which had been known to had interest deteriorated, made. economic situation Cook’s commitment various tenants ultimately resulted in failure of using those timely The Galleria Partners were rents basis. their monthly loan expenses and make the operation to cover rents $14,916.00 fell rents into payments each. As the tenants’ which were arrears, progressively monthly payments on the were made loan payments late from Compass reason for the was aware of the later.
255 partnership accept together with payments to continued charges. late November, early paid by
The payment 1984 loan had not De- been year. dispute cember of that a in as There is the evidence to whether CPA, Compass appellant keeping Bloomgren, advised who was bills, Compass required both paying books and its that payments together. November and be made December to Bloomgren Compass denies contact from at the time. Neverthe- less, 11, 1984,Compass sent a to Bloom- December default notice gren, accelerating $1,225,668.81 the entire and de- loan balance of manding in payment days. its The nine default notice crossed November, mail the payment Bloomgren had forwarded Compass. received, Compass When the payment November returned it a letter reiterating the demand the entire balance. proposals
Thereafter there were for settlement which never time, reached period Compass building fruition. that of had the appraised in appraisal the summer of 1985 and the came at $1,100,000.00. unwilling accept The Trustees that sum an appraisal deficiency and no settlement for was arrived at parties. 12, April
On an Trustees filed action the District Court purpose for the foreclosing lengthy on the trust indenture. After discovery complex proceedings, the District on October Court 29, 1987, summary judgment determined that the trust inden- ture constituted a first upon the real Part- lien of Galleria nership, and its order for The di- issued decree foreclosure. order County, Montana, rected the Sheriff of Cascade to sell the real parcel public governing estate one at auction the laws sale of real upon proper being given; estate under execution notice and to deliver a purchaser. deed to the order foreclosure specifically question any deficiency reserves judgment. No return of the sale the Sheriff under the foreclosure sale can be found in the District file been to us. which has forwarded Court statutes, appears Under the foreclosure “if it from the proceeds sheriff’s return that the still are insufficient and balance due, judgment remains can be docketed for such balance then against” the defendants debt. us raises liable No before any contentions as return in the District lack of sheriff’s file, Court deficiency judg- view of relating our decision unimportant ment it is here. It is reflected in the order of the Dis- Court, deficiency judgment trict dated October when the Partnership, the Sheriff’s sale rendered the Galleria place price took the bid obtained December $565,000.00. parties there assume that at was The briefs all sole bid at the sale was that the Trustees. Sheriff’s leading background up judgment.
So much for validity contesting the The Galleria several issues raised up. which we will now take Chunkapura 1. The decision. partners Forsyth v. State Bank contend that under First the case
Chunkapura 226 Mont. because indenture, before trust *6 us involves a improper. Chunkapura, question for first the
In this Court the time faced deficiency inden- a could be obtained on a trust whether ture where the lender chose to foreclose the indebtedness mortgage sale under the foreclosure statutes rather than trustee’s Financing Small Tract Act. Chunkapura, pointed there prior
In we out that statutory provision mortgages, that one for of and the foreclosure permitted possession during the right those a of statutes debtor occupied land period redemption personally while of the debtor 71-1-229,MCA), (§ family and further as a home for himself and his permitted right redemption the same all debtors a of execution 71-1-228, (§ permitted sales manner as to debtors under execution -321, MCA). 71-1-301, (§§ Financing The Small Tract Act of MCA) inclusive, permits trust trust indentures the use of deeds of upon performance obligations; provides default of that secure the foreclosure, occupation of real obligee’sright and of (§ beyond days date the sale 71-1- does ten from the not extend 319, MCA); redemption; fur- provision right of and makes no deficiency when a trust provides judgments not allowed ther that (§ is sale indenture foreclosed advertisement Financing MCA). Small Tract Chunkapura, In we noted that the indus- banking lending Act enacted the instance of the at mortgage try. They rule” of foreclo- that the “one action contended possession sure, right redemption right and the attendant rules, improvements on small tracts hampered financing of unwilling to invest and investors were Montana banks because up during the be tied mortgages when default their funds would on period redemption. quid quo pro relating This Court noted a legislation, up new give that the would their lenders default, judgment rights give up borrowers their would possession rights redemption. Chunkapura, 734 P.2d 1205. at problem 71-1-304(3), MCA, Chunkapura arose because § provides conformity that a trust indenture executed with the Financing Small Tract “by Act foreclosed be advertisement and or, option beneficiary [lender], by sale ... judicial pro- at the provided by as mortgages cedure law for real the foreclosure of Chunkapura, property.” opted the bank to foreclose under the mortgage provisions of the it was law and insisted that entitled to deficiency judgment as there authorized. Chunkapura
Our decision in to the effect judgment would not be allowed when trust indentures are executed conformity Financing Small Tract because to Act allow deficiency judgment provisions would be inconsistent with rehearing, that Act. On holding we modified that so that Chunkapura precedent only “is to considered for trust deeds occupied, single related to family property.” at residential Although in Chunkapura ambiguity we noted existing be- tween the Small Tract Financing provisions Act and the standard legal problems, foreclosure created and we recom- same, mended the attention of the legislature legislature regular met Chunkapura has twice in session and has under- since taken no regarding subject. action appeal contention here before Partners us on that the Chunkapura limited, statutory modification is too has no source and expanded should be prevent us to in this *7 case, since development expansion,” the Galleria was a “business one of Financing the for reasons the enactment of the Tract Small (Section 71-1-302, MCA). Act. can difficulty Partnership
We the understand the Galleria has accepting Chunkapura rehearing. as on The decision modified they trust indenture which executed is conformance with the Financing Small provides Tract Act Act and that foreclosure deficiency proceedings there should be no judgment. Foreclosure mortgage permitted deficiency under a judgments. laws When holding lender security a trust as indenture chooses to foreclose laws, except mortgage Chunkapura under the as modified holds that occupied family single property, for can residential lenders obtain 258 This judgment even result became on trust indentures.
necessary industry, penchant lending after because of Act, al- passage Financing of use deeds of trust the Small Tract to fact, to exclusively. limited original most In Act which once was acres, acres, to 30 to and in 1989 tracts of three amended acres. easily resolving am Chunkapura, we have held could of
biguity that a foreclosure between the two modes of foreclosure laws nevertheless a foreclo trust indenture under the “by deficiency judg and sure advertisement and sale” therefore under This result however ments barred MCA. § industry. majority in have havoc in loan would created Chunkapura prohibition against defi instead to limit the decided ciency security financing of judgments trust as for the deeds used (the type financing single dwelling, occupied for which homes of Financing argued legislature). Tract Act The whole Small attention, legis problem legislative of until course deserves act, deficiency judgments preclusion does lature we will limit the security deeds of as accordance trust used instruments Partners, That, Chunkapura. course, who excludes the Galleria question, relating to commercial without instruments executed loan. An- Savings v. In First Federal and Loan Association Missoula (1989) we 296,] St.Rep.
derson Mont. [238 occupied single family, upheld Chunkapura so far it relates to qualify not property. residential Galleria does Chunkapura Gal- since preclusion of a loan. purely leria involves a commercial Judgment Language Deficiency Remedy Operative Documents. contention, Partnership argue that under Under this deficiency judg- indenture, possible there is mention á trust ment, no foreclosed, entitled the lender is and when a trust indenture to the foreclosure only expenses costs incident recover its attorneys a reasonable fee. part: provides Trust case
Section 7.2 of the Indenture Beneficiary hereunder, upon “. . . default the occurrence of hereby immedi- all sums secured option shall have the declare in ately Trust Indenture payable due and foreclose this real mortgages on provided by law the foreclosure manner *8 property, Beneficiary pro- shall be entitled to recover such ceedings thereto, all expenses costs and including incident a reason- attorney’s able fees such amount as shall be fixed the court We do not find that the foregoing language upon is a limitation damages may mortgage be recovered in a foreclosure conducted 71-1-222, MCA, specifically provides deficiency § judgments if the proceeds sheriff’s return shows that the are insuffi- cient to the balance then due. We find no merit the Partner- ship’s point. contention this
It is true that body no reference is made of the Trust Inden- ture in possibility case of the aof on fore- closure, as regular would be the case if form had been used. The lack of a judgment mention of in the instru- 1895, ments is long ago immaterial. As this Court in First Na- Pardee, tional Bank Butte v. held that judgment may properly be grantor entered given a deed of trust payment to secure note, promissory though of a there was noth- ing in the terms of the possibility deed itself to warn of the of a deficiency. for a First National Bank Butte v. Pardee (1895), 16 Mont. 41 P. 3. Did the Right Trustees Waive Their to Accelerate the Balance They Due or Estopped Doing Were From So?
Galleria contends that from the time of the execu tion of the note in 1982 until the notice of default in December 1984, when the Trustees sent notice of default and accelerated the due, balance Galleria Partnership customarily making was late in monthly payments. contends that cus tomary acceptance by payments, payments by the lender of late charges Galleria of payments, late in connection with its late had the effect lulling the Partnership security into a sense of false because thereof the right Trustees either their waived to accelerate remaining they balance estopped due without notice or from doing so.
This Court has held
“voluntary
that waiver is the
and intentional
relinquishment
right,
of a
v.
privilege,”
known
or claim or
Thiel
Johnson
219 Mont.
831. We also held
in Thiel
proved
by expressed
“waiver
declarations or
a course of action and conduct so as to induce the belief that the
Thiel,
purpose
intention and
was to waive.”
Galleria relies on 537, 1300, provi- Or. held that such nonwaiver P.2d prevent the sions as are found in the trust here do not indenture by his con- promissor waiving from of the contract the conditions by Partnership sent duct. Galleria claims that the sudden notice case, payments, long acceptance Trustees in this of the late after trustees, contract, in itself a as a breach- breach of the perform, relying ing party, upon party cannot now call the other (Mont. 1988), 480,] Western Media Inc. v. Merrick Mont. [232 757 P.2d 1311. impres- point first Partnership
The that is one of the contends this can in which the non- sion Montana. While we conceive cases applied, provisions facts waiver a contract not be here should only show a do not warrant such a result. must the evidence Not obliga- party course of which one the contractual conduct waived us, party, additionally, it the evi- tions of the other seems to rely any right to dence should that the same also waived show words, provisions this nonwaiver of his contract. other instance, voluntary relinquishment of a since is a known and waiver appear right, least from known those elements of waiver at have right of non- the evidence it can be that the contractual before held waiver has been waived. Judgment a Purchase Deficiency Is Barred Because this is
Money Mortgage? State, deficiency mortgage this
Under the foreclosure laws of purchase price mort judgment is not on the allowed foreclosure this gage. MCA. contends Section Galleria money, knowing that the Trustees lent the case because the Partnership to off proceeds of the loan would used Associates, purchase of the prior partnership, for the Galleria purchase property, arrangement in effect was that of a real deficiency judgment barred price mortgage so a statute. language
The the contention. It of the statute itself defeats provides:
“Upon any vendor or any mortgage, the foreclosure of executed to executors, administrators, heirs, assigns real or to his or purchase price property, mortga- the balance of the of such real gee shall not be entitled to a on account of such obligation or note or secured the same.” case, they
Plainly, vendor in the Trustees are not the nor assignee language simply not fit the vendor. The does prevent obtaining deficiency judgment. Trustees so as to their vendor, standing Where the lender is not the nor the vendor’s shoes, Aetna prevent judgment. the statute does not (Mont. 1988), Insurance Co. v. Slack 232 Mont. Life 1140, 1144. Illegal? the Loan
5. Was contends that under the federal ERISA laws directly it illegal pension to utilize labor funds for benefit indirectly “party U.S.C., of a in interest.” 29 Section 1106. prior Associates, partnership, disquali- reason the borrowing pension fied from trust funds was that both Dan Cook *10 Patterson, Associates, partner and Robert in another Galleria were “parties they employers by in interest” because were covered “a plan subject Security to the Retirement Act.” 29 U.S.C. Income § 1002(14)(c). indirectly
Galleria contends that the loan here benefited both Pat- Cook, they partners prior partnership terson and because as of the probably loan, proceeds proceeds received from the since the purchase building. used to the interest of Galleria Associates in the summary judgment, The District in in disposing Court of this issue fact, Partnership findings did not set forth contends and Galleria by any ruling failing provide court erred rationale for its this issue. therefore, Partnership pen-
The contends that the loan from instance, through Compass illegal sion trust in first funds was illegal equity parties and a court an will not enforce between contract. simple by in re- answer to this issue is that made Trustees
sponse. “disqualified the bor- This was not a transaction” because Partnership Associates. rower this case was the and the Galleria We find no merit in this contention. 6. Did the Terms the Loan Lender Bar Commitment from
Deficiency Judgment? provided
When making, Compass the loan this case Partners, letter dated December addressed to relating making which contained terms of the loan. This letter by obtaining signatures of commitment was used Cook from the Among special require- Partners. conditions for the loan was the by ment that the loan was to be secured a deed of trust. The Part- letter, along ners contends that the use of the commitment with the alleged representations Cook, by personal that there would be no liability Partnership, for the created a reasonable belief the minds potential partners they personally would not be liable deficiencyjudgment. disposed The District Court of the issue on the theory misrepresentation, saying misrepresentation made, duty diligence the other use nevertheless has respect made, here, borrowers, representation such documents; part, they for the most did not read the loan and if had they payments required read the note would that the have seen phrased personal liability. them were in terms of Partnership appears duty diligence to concede the on the part borrowers, but contends that the District Court missed the issue of lack consideration. The contends that no for, bargained in the and because minds of loan, the borrowers a deed of there is no trust secured a nonrecourse deficiency judg- point consideration to which the for a court could Again ment. that the trust indenture itself contends specifically recovery in Trustees’ limited the event of default to the attorneys fees, costs, expenses incident to the foreclosure. course, representations superseded
Of all made Cook were instruments, note, promissory the written and the deed of promissory validity trust. Section 28-2-904 MCA. The of neither dispute, note nor the trust indenture is in and there is no claim here imperfection of a mistake in those in their writ instruments an vary ings, so the terms extrinsic evidence not be considered to of those written instruments. Section MCA. specifications We in the com do no find this case the loan promissory *11 mitment to-be different in essence note and the from eventually trust This court held in indenture which were executed. v. that Warner Johns Mont. expressed where the in the written instrument is con consideration nature, a differ- tractual its oral evidence is inadmissible to show changes legal ent consideration effect of the in- because then it here, applies although question strument. That rule is not one of interpretation. evidence but rather a contractual The fact that defi- ciency judgment expressly change was not mentioned does not legal effect of the instruments when executed. Representation by Did the
7. Cook that the Loan be Nonre- Would Deficiency Judgment? course Bar a issue,
On Partnership impute seeks to to the Trustees agency grounds responsibility alleged misrepresentations for the by securing made Cook in signatures of the borrowers to the promissory note and the trust indenture. principals cites involving numerous cases
agents to the principals rep- effect that the are bound the acts or agents. applicable resentation of the None of those cases is here. rejected District Curt saying this contention there was no evi- any dence of kind that would make Cook either an actual or an os- agent Compass tensible procuring signa- or the Trustees in tures. Since representing evidence that Cook was either Compass or procuring signatures totally the Trustees in lack- ing, imputations no by any Compass can be made court that either responsible the Trustees alleged misrepresentations for the made A deficiency judgment Cook. cannot be barred on this contention. Disposition foregoing shows,
As question discussion there is no jointly severally promis- members are liable on the sory they that, note which signed individually, and after foreclosure property given security the real obligation, the individual Partners deficiency judgment. are also liable for The size of the defi- ciency judgment in original relation to matter note is however a of concern.
It is uncontroverted in the evidence here that when Dan Cook arranging loan, was first appraisal for a he obtained an property $1,950,000.00. appraisal remodeled at In had validity justify extending sufficient the Trustees a loan of $1,200,000.00 Partnership. Trustees, after the default notice had been served
they appraisal they obtained an ac- did not
cept, but apparently property valued the remodeled at $1,100,000.00. sale,
At the Trustees, sheriff’s beneficiary under the indenture, trust property submitted a bid on the real as remodeled $565,000.00. principal District Court found that the amount obligation $1,185,655.49. due on November Ac- interest, crued attorneys brought fees and recoverable costs deficiency $1,500,368.35. eventual judgment to The fact that the real property was bid in at approximately the sheriff’s sale for suma at original appraised 30% of is value is the basis for what must be a catastrophic deficiency judgment for the Partners.
Montana’s
provisions
statutes have no direct
under the
procedures
foreclosure
to determine the fair market value at the
time of the forced
property subject
sale of the
to foreclosure. We
pointed
in Chunkapura
out
surrounding
that several of the states
us
statutory provisions
have
protect
which serve
judgment
debtors
when foreclosure
property
satisfy
of their
judgments.
is made to
Our
states,
examination
surrounding
of the statutes of
and of the
interpretations
respective
concerning
of their
courts
those statutes
show
predominantly,
judgment
is limited to the
difference between
property
the fair market value of the secured
at
sale,
the time
regardless
of the foreclosure
of a lesser amount real-
sale,
ized at
outstanding
property
debt for which the
California,
Chunkapura expressly
secured. We set
forth
Washington, Arizona, Utah, Idaho,
Oregon,
are states with such
protective provisions, with
being
exception.
Alaska
the sole
Chunkapura,
In case, connection provisions with this we have looked at the Dakota, additional In states. South the amount realized at sheriff’s sale must be the property. “fair market value” of the S.D. Codified (1989). Dakota, Laws Ann. 21-47-16 In North there is a fair mar- § provision ket value jury. which if contested must be submitted to a (1987). N.D. statutory Cent. Code 32-19-06 Colorado has no re- § determine, judgments, strictions on as far as we can provide its by pub- laws that trust indentures are to be foreclosed (not lic private) trustee and that all others must be foreclosed as a mortgage. Wyoming, mortgage is construed as a covenant for payment secured, specific of the sum and unless there is cove- mortgage, nant on foreclosure the are limited to the remedies (1989). Wyo. lands mortgage. mentioned Stat. 34-1-136 § (9th 1975), In U.S. v. MacKenzie Cir. 510 F.2d it was noted purpose relating that the to de- and Arizona statutes Nevada ficiency prevent when a judgments injustice is to that occurs price significantly debtor’s is sold on foreclosure sale for a less than its fair market value. surrounding provisions relating
Some us states also have other protection Wyoming, Thus in the mort- debtor. gagee to whom debt is owed bid in at the sheriff’s sale, Wyo. “fairly good but his must bid be made faith.” Stat. (1989). 34-4-108 § said, silent,
As we the Montana statutes are both as to the right mortgagor sale, to the sheriff’s as to bid duty of a court determine the sheriffs sale the fair reflects mar *13 ket property. value proceedings, of the A foreclosure how ever, equity is in jurisdiction the courts. Court of the This is en joined statute, by equity proceedings cases and in matters or of equitable nature, an questions arising to all of on review fact the presented record, evidence in the determine the same. Sec and to 3-2-204(5), tion MCA. sitting equity empowered Courts to de questions termine all complete the involved in case do the and to justice; power equitable this includes to an Mad the fashion result. (1983), dox 1, 14, 230, v. Norman equity 206 Mont. P.2d An 669 237. court jurisdiction whose equitable purpose, has been for an invoked proceed will equities existing determine other between the parties suit, subject grant connected with main of the the all necessary relief adjustment Tiffany to the subject. entire v. 507, 512-513, 375, Uhde 123 Mont. 378. property Had the sole bid at the sheriffs sale here been $1,000, undoubtedly by equity $100 or we would moved inquire $565,000.00 only as to its The fairness. actual bid of is degree. therefore, matter equity jurisdiction of of exercise our we proper deem it Court to remand District determine fair property market value of the time at the of the sheriff’s sale. The “fair property market” is the intrinsic the real value of its improvements foreclosure, at judicial the time sale without of of impact proceedings consideration on the foreclosure fair Chunkapura, market value. at P.2d 1207. determining method fair value we will leave to the market Court, though opposing
District appropriate it seems that each party present opinion appraisers should be allowed to selected by respectively. them by
When the fair market is value determined Court, figure for the determination District would be the basis any. judgment of a
II. summary appeal The Trustees entered from a P. holding District Court in this the estate of Gordon cause arising Tice is not liable to the Trustees for a out of the instruments above described. promissory Tice note and the trust indenture
Gordon executed the 17, He litigation 1982. subject which is the of this effective March Tice, appointed per- July 16, spouse, Mary died on 1984. His C. 9,1985. representative January Notice to sonal of the estate on cred- publication January with final published itors first is on 31, occurring January complaint P. Tice defend- naming
The Trustees’ Gordon 12,1985. April that service ant was filed The District Court found May complaint the summons and was made publication of first notice more four months than after the facts, January the District Court creditors on 1985. Under the precluding personal representative summary judgment granted any deficiency against the of Gordon estate Trustees from claim P. Tice. April complaint was filed on Trustees’ however MCA, 72-3-804(1), provides period.
within the four month Section presented on the first that a claim an is deemed estate personal claim receipt occur of a written statement representative filing the court. Section 72-3- of a claim of *14 804, MCA, proceed- a may commence provides also that a claimant payment against 'personal representative to of claim ing a obtain must estate, proceeding the against commencement of the the claim. The Trustees presenting limit for -the occur within the time by proceeding” met of contend that the term “commencement the of complaint, by of the summons filing the the and not the service of complaint upon the defendant. 10, 1985, copy of appears April on
It from that also the record Tice, Mary complaint forwarded counsel Trustees’ represented all of the personal representative, but said counsel also attorney April that other defendants. On acknowledg- Trustees, attorney suggesting that an wrote for the all the sent cover ment of service of blank form be
267 April 24, by This defendants. was done counsel for the Trustees on not, however, May 1985. It after until two weeks Tice, personal statutory period Mary nonclaim expired had as Tice, representative, signed of the estate of P. the acknowl- Gordon edgment of service. appears
It relating from an to credi- examination statutes against tors’ claims an estate that the claim of the Trustees was not properly 72-3-803(l)(a), MCA, presented. provides Section claims, basis, including if legal those founded on contract or other limitations, not against barred other statutes of are barred presented estate unless within four months after the date of first publication properly given. of notice creditors that notice is presentation The manner of the claims is covered § MCA, as follows:
“(1) personal representative The claimant shall mail to the return receipt requested indicating a written statement of the claim its ba- sis, claimant, the name and address of the and the amount claimed or claim, file a written prescribed statement of the in the form by rule, presented with clerk of the court. The claim is deemed on receipt first occur written statement of claimed personal representative filing or the of the claim the court appears, it contract,
Thus that a claim founded case, presented be personal representative, must either to the or filing the same filing pro with the court. The suit of a outside the proceedings, bate though even period, the four month does within not to properly Hence, suffice against submit a claim an estate. claim of the Trustees the Gordon P. Tice is time- estate barred. so,
Even argue process implications Trustees that there are due which have not been met the matter of notice that followed rely the Tice estate. The Tulsa Collec- Trustees Professional Services, tion Pope Inc. v. Executrix the Estate H. Everett Pope, Jr. 485 U.S. S.Ct. L.Ed.2d This provision case probate requiring involved a of Oklahoma’s laws arising upon presented claims a contract to to the executor estate publication within two months of of notice to creditors creditor, hospital, else be barred. The rendered ser- had medical death, vices Pope Upon his decedent five months. about hospital, through assignee, its Tulsa Ser- Professional Collection vices, Inc., presented had not to the executor of the estate claim
268 Tulsa, period. relied instead on an Oklahoma within the two months expenses provided which must of statute that the executrix the last ruled failure to illness. The Oklahoma trial court that the present required a denial period the claim within the two month of Ap- of the claim. result was Oklahoma Court This affirmed peals Supreme The Court of Oklahoma. latter Court rea- purpose probate proceedings is not soned that the to notice notify him proceedings, make a but rather to creditor may that he one if wishes. become he pro- Supreme due
The United in Tulsa reversed on States Court grounds. Supreme unpaid cess The Court determined that the medi- protected by Amend- cal bill was interest the Fourteenth process due ment that under the Fourteenth Amendment the Supreme applied if The Court fur- clause state action were involved. action, probate proceedings ther found did involve state es- that executor, pecially probate appointed since and ordered court given creditors, required publication proof notice to be that court, filed filed with the claims also be court period. within time case, duty Supreme that a such a the United States Court held probate providing proceedings actual notice and of ne-
cessity
creditors,
reasonably
present
ascertain-
claims to known
or
creditors,
required
satisfy
process.
able
was
due
step-out
Supreme
The
in Tulsa is a
decision of the United States
cases,
Trust
earlier
Mullane v. Central Hanover Bank and
Co.
from
(1950),
306,
652,
339
70
III.
Conclusion judgment
1. The of the granting judgment District Court the Trustees is the Court affirmed. The cause is remanded for a determination proper District Court of the amount of defi- ciency judgment, depending upon the fair market value of the fore- property closed at the time sheriffs sale. Neither Galleria attorneys nor the Trustees shall recover fees or other respect costs appeal. remand, If this the fair market value $565,000.00 is Court, determined to be a sum more than the District in calculating any, judgment shall not allow interest from the date of the judgment sheriffs sale to the date the new entered. attorneys The Trustees are entitled to fees and costs proceedings relating value, to the establishment of fair market ex- cept party that each shall appraisers. the cost of its own respect appeal With to the judgment of the Trustees from the favoring Tice, the estate of judgment Gordon P. is affirmed. The estate is appeal entitled to recoverable costs on and to attor- neys reciprocal fees under the statute.
3. This cause is proceed- remanded to the District Court further ings of the court opinion. accordance with this
CHIEF JUSTICE TURNAGE and JUSTICES HARRISON and HUNT concur.
JUSTICE participate. WEBER did not McDONOUGH, JUSTICE concurring dissenting: I dissent to the remand to the District Court to determine the fair market property sale, value of the at the time of the sheriffs and the use of that deficiency judgment. value for the I determination of a concur with the majority opinion. balance of the
Section governs MCA proceedings as to such foreclosure suits. The section is as follows:
“(1) recovery There is but one action for the of debt or the enforce- any right estate, ment of by mortgage upon secured real which ac- provisions part. tion such must be accordance with the may, by action court its direct: judgment, (or “(a) may as property of the much thereof a sale encumbered so necessary); “(b) sale; application proceeds of “(c) court, sale, expenses payment of the costs of the plaintiff. and the amount due the
“(2) proceeds appears If it from the sheriff’s return that due, judgment can then be insufficient and a balance still remains per- against such or defendants docketed for balance defendant debt, sonally upon the real estate liable for and it becomes a lien debtor, judgment cases execution such other on which be issued.
“(3) conveyance mortgagor person holding from under the No or thereon, convey- having a lien mortgaged or appear proper not record office at the ance or lien does action, party made a time of the commencement of the need be proceedings such and the action. therein rendered party holding such therein had are as unre- conclusive conveyance if he had made a corded lien as been *17 action.” (1) sale of
It that the directs the is noted Subsection court payment property, proceeds, applies the and directs encumbered prescribe details of the sale it- costs. This section does not thereof, self, etc.; are set forth the de- notice these details to be governed by equity. judgment of and are rules cree or foreclosure appraisement of the statutory requirement has no of an Montana sold, or after to be either before the sale. However, (2) section, provide for a of said it does Subsection If specific proceeds terms. sale remains, due, judg- still insufficient to and a balance debt against the defendants ment can then be docketed for such balance personally. provide for calculation a de- The statute does not value, ficiencyjudgment by applying fair as determined market Rather, court, it to the amount due. directs by applying proceeds of the sale judgment should be calculated clearly deficiency is forth how a the amount due. This statute sets law, 1- any see prevails over common be calculated. statute § (1987). 1-108, MCA, and MCA § deficiency, of the cover the calculation Even the statute did not state inequitable require it such a determination would be of this record. never the issue in the The defendants have raised Court, although they They court lower could have done so. represented by suit, competent stages were at all counsel law, attorneys appear three defendants are at and all to be knowledgeable If investors. defendants dissatisfied proceeds of they petitioned the sheriff’s sale could have the District Court to set grounds inadequacy, aside the sale on of unfairness and appraised guidance and asked to have it of the court in deter- mining whether or not to set the sale aside and order new sheriff’s equitable options sale. Other might have been available. de- fendants options. chose not avail I themselves of of these would affirm in toto.
JUSTICE foregoing GULBRANDSON concurs dissent.