Justia Contracts Opinion Summaries

Gary Hoff filed a complaint alleging contract and negligence claims against Countrywide Home Loans, Inc. and Lake County Abstract & Title Company. Countrywide failed to appear or answer within the 20 days permitted by Mont. R. Civ. P. 12(a), after which Hoff moved for entry of default against Countrywide. Countrywide later attempted to reverse the default proceedings with a motion to set aside the default pursuant to Mont. R. Civ. P. 55(c) and then a Mont. R. Civ. P. 60(b) motion to set aside the entry of default for mistake or excusable neglect. The court denied the motions and entered a default judgment against Countrywide. Countrywide appealed and Hoff cross-appealed. The Supreme Court affirmed, holding (1) the district court did not err in its judgment against Countrywide because pursuant to Cribb v. Matlock Commc'n, Inc., good cause did not exist to set aside the entry of default, and (2) the district court did not err as Countrywide's 60(b) motion was procedurally defective. Lastly, the Court concluded the district court correctly denied Hoff's request for attorneys fees because the contract did not entitle either party to attorneys fees under the circumstances.

Michael Clark owns property on which he stores unused, abandoned, or broken vehicles. Joseph Doyle owns surrounding properties. After attempting for several years to get Clark to clean up the portion of Clark's property that was visible from Doyle's property, Doyle sued Clark and others, claiming that Clark breached a written and oral contract and created a public and private nuisance. A jury ruled in favor of Clark and the other defendants. Following the trial, the district court awarded costs to the defendants. Doyle appealed. The Supreme Court held that the district court did not abuse its discretion (1) in excluding certain exhibits and testimony, (2) in refusing to give Doye's jury instructions on breach of contract and negligence theories, and (3) by limiting Doyle's counsel's closing argument with threats of a mistrial. The Court, however, found the court abused its discretion by awarding Clark his costs. The Court affirmed the judgment of the district court but with instructions to vacate the award of costs to Clark.

Dennis Deschamps purchased a mobile home park from the estate of Larry Rasmussen. Deschamps financed part of the purchase price through the estate in the form of an indenture note. In the previous case, Deschamps sued the estate, and a jury found the estate was not liable for negligent non-disclosure. In 2007 the estate began the proceedings for a nonjudicial foreclosure on the park after Deschamps stopped making payments on the note. In the instant case, Deschamps again sued the estate, seeking a temporary injunction barring the estate's sale of the property. The district court granted the estate's motion for summary judgment. Deschamps appealed, arguing (1) that the estate is barred from conducting a nonjudicial foreclosure on the property because the nonjudicial foreclosure must have been pleaded as a compulsory counterclaim in the first case; and (2) Deschamps was entitled to raise the affirmative defense of fraud to defeat the estate's nonjudicial foreclosure. The Supreme Court affirmed, holding (1) the district court did not err in ruling that the estate was not required to assert nonjudicial foreclosure as a mandatory counterclaim in the first action; and (2) as a plaintiff, Deschamps cannot assert affirmative defenses.

Gregory Schindler purchased insurance from USAA for a house he owned. The house was destroyed by fire a year and a half later. USAA denied coverage on the basis that Schindler had committed fraud during his application conversation. Specifically, USAA determined that Greg had misrepresented that the house was his primary residence and a single family dwelling when instead it was a rental divided into eight apartment units. Schindler and his wife filed suit against USAA asserting breach of insurance contract and implied obligation of good faith and fair dealing. USAA defended on the basis of fraud. The jury found for USAA and awarded USAA the monies it had advanced to the Schindlers. The Schindlers appealed. The Supreme Court affirmed, holding (1) the district court did not err in denying the Schindlers' motion for summary judgment; (2) the district court did not abuse its discretion in allowing testimony from a USAA employee; (3) the district court did not abuse its discretion in denying the Schindlers' motion in limine to preclude USAA from introducing evidence of fraud; and (4) the district court did not abuse its discretion in requiring the Schindlers to order and pay for additional transcripts.

In 2000, Dick Anderson Construction (DAC) entered into a contract with Monroe Construction to do construction work on Paws Up Ranch, which was owned by Monroe Property. When each phase of the construction was completed, Monroe Construction sold that phase to Monroe Property. When DAC was not paid for the last $800,000 of its billings, it filed a construction lien to secure its claim. In 2001, DAC sued Monroe Property to foreclose the lien. On remand to the district court, Monroe Property argued since it was not a party to the construction contract with DAC, it was not a contracting owner against whom the lien could be foreclosed under the construction lien statutes. The district court granted Monroe Property's motion for summary judgment, and DAC appealed. The Supreme Court reversed, holding the facts of the case demonstrated that Monroe Construction was the actual agent of Monroe Property for the purpose of engaging DAC to complete construction work on the ranch. Therefore, under the statutes, Monroe Property, acting through its agent Monroe Construction, was a contracting owner with regard to the construction contract with DAC.

A jury in the district court concluded that plaintiff did not breach its homeowners insurance policy with defendants and that one defendant had committed fraud when applying for the policy. Defendants appealed a district court order denying their motion for summary judgment and motions in limine and granting plaintiff's motion that defendants order and pay for additional transcripts on appeal. The court held that defendants were not entitled to estopp plaintiff from defending itself because genuine issues of material fact existed regarding whether the one defendant applied for the policy in good faith. The court held that the district court appropriately permitted plaintiff's customer service representative to testify as to her recollection of the defendant's statements. The court further held that the district court acted within its discretion in permitting plaintiff to defend itself via section 33-15-403, MCA, by allowing the customer service representative to testify about the defendant's alleged fraudulent statements. Accordingly, the district court did not abuse its discretion in denying defendants' motion in limine. The court finally held that the district court did not abuse its discretion in ordering additional transcripts under Montana Rule of Appellate Procedure 8(3)(b).

Plaintiff alleged that the two vehicles that it purchased from defendant, a used Ford and a new 2008 Dodge, had mechanical problems and body damage. The parties disputed responsibilities for repairs. At issue was whether the court could rely upon testimony on appeal for a vacated default judgment hearing and whether the district court lacked personal jurisdiction over defendant. The court held that the district court afforded the parties sufficient opportunity to refute affidavits through depositions, interrogatories, and through witness testimony at a hearing. Defendant elected not to depose plaintiff's owner and opted not to cross-examine plaintiff's witnesses at a rescheduled hearing. Defendant waived its right to the hearing and presented its own evidence in the form of affidavits. Therefore, defendant's argument that the court must disregard certain testimony or any of plaintiff's affidavits presented to the district court was unconvincing. The court also held that the Montana court's exercise of personal jurisdiction over defendant through long-arm provisions did not offend traditional notions of fair play and substantial justice. Accordingly, the court reversed the district court's order and remanded for further proceedings.

Plaintiff filed a complaint alleging contract and negligence claims against defendants. Defendants subsequently appealed from a district court order denying its motion under M.R.Civ.P 55(c) to set aside an entry of default and its motion under M.R.Civ.P 60(b) for relief from default judgment. Plaintiff cross-appealed the court's denial of attorney fees. The court held that good cause did not exist to set aside the entry of default where defendants willfully disregarded the judicial process when it failed to answer after being served properly and where defendants had not established that it possessed a meritorious defense that would have completely eliminated its liability. The court also held that no default judgment existed when defendants moved for relief from judgment under Rule 60(b) where an interlocutory judgment did not constitute a final judgment order under the rule. The court declined to address the issue raised for the first time on appeal regarding default judgment against defendants. The court further held that the district court correctly denied plaintiff's request for attorney fees where the complaint raised no allegations related to a default on defendants' loan and the trust indenture provision did not entitle either party to attorney fees under these circumstances.

The State brought a complaint against BNSF Railway Co. ("BNSF") in November 2009 seeking a declaratory judgment requiring BNSF to abide by the terms of a 1984 agreement between them and a declaration that BNSF was in violation of that agreement; specific performance by BNSF of the agreement, and damages for BNSF's alleged breach of the agreement. The State subsequently filed an application for a preliminary injunction in June 2010 to prohibit BNSF from terminating the payment to the State and its short line operator per loaded car for each car handled in interchanges as required by Section 9 of the agreement. At issue was whether the district court's order granting the preliminary injunction was an abuse of discretion. The court held that the district court manifestly abused its discretion in issuing the preliminary injunction where it went beyond the State's requested relief and effectively ordered specific performance on the agreement under new terms substantially different than the prior agreed upon terms which severely limited termination of the new interchange agreement and was never part of the 1984 or 1986 agreements. Accordingly, the court reversed the order and resolved the injunction, remanding for further proceedings.

The Missoula City Counsel, the City of Missoula, and the Mayor, (collectively "City") and Muth-Hilberry, LLC ("developer") appealed a district court determination that found that the City was arbitrary and capricious in approving a zoning and preliminary plat for a subdivision known as Sonata Park located in Rattlesnake Valley, Montana. At issue was whether neighbors, several parties opposed to the subdivision, and the North Duncan Drive Neighborhood Association, Inc. ("Association") had standing. Also at issue was whether the district court erred in striking affidavits filed by the developer and the City in connection with their motions for summary judgment. Further at issue was whether the 1989 Sunshine Agreement between the City and the developer's predecessor in interest superseded the City's growth policy. Finally at issue was whether the City's decision in Sonata Park was arbitrary, capricious, or unlawful. The court held that the neighbors had standing to sue in their own right and that the Association had associational standing to proceed on behalf of its members. The court also held that any error made by the district court in granting the neighbor's motion to strike the developer's affidavit was harmless. The court further held that the Sunlight Agreement did not supersede the City's growth policy where the Sunlight Agreement could be void ab initio and did not appear to guarantee certain density. The court finally held that substantial compliance was still valid and that a government body must substantially comply with its growth policy in making zoning decisions and that the City's decision to approve Sonata Park was arbitrary, capricious, and unlawful.