Aldrich & Co. v. Ellis

• Citation: 52 P.3d 388,311 Mont. 1,2002 MT 177
• Decision Date: 08 August 2002
• Docket Number: No. 01-424.,01-424.
• Parties: ALDRICH & CO., Plaintiff and Respondent, v. Tanner ELLIS and Rhonda M. Ellis, d/b/a Yellowstone Log Works, Defendants and Appellants.
• Court: United States State Supreme Court of Montana

52 P.3d 388

2002 MT 177

311 Mont. 1

ALDRICH & CO., Plaintiff and Respondent, v. Tanner ELLIS and Rhonda M. Ellis, d/b/a Yellowstone Log Works, Defendants and Appellants.

No. 01-424.

Supreme Court of Montana.

Submitted on Briefs December 20, 2001.

Decided August 8, 2002.

Gregory O. Morgan, Gregory O. Morgan, P.C., Bozeman, Montana, For Appellants.

Karl Knuchel, Karl Knuchel, P.C., Livingston, Montana, For Respondent.

Justice JIM REGNIER delivered the Opinion of the Court.

¶ 1 Aldrich & Company ("Aldrich") brought this action in the Montana Sixth Judicial District Court, Park County, seeking a judgment against Tanner Ellis and Rhonda M. Ellis, d/b/a/ Yellowstone Log Works ("the Ellises"), on accounts owing. Subsequently, Aldrich filed a motion for summary judgment. Thereafter, the Ellises filed a motion to amend the pleadings. The District Court granted Aldrich partial summary judgment and denied the Ellises' motion to amend the pleadings. Following a hearing to determine damages, the District Court granted Aldrich judgment against the Ellises in the amount of $81,914.20. The Ellises appeal. We affirm in part, reverse in part, and remand for further proceedings consistent with this Opinion.

¶ 2 We restate the issues presented on appeal as follows:

¶ 3 1. Did the District Court err in concluding that Aldrich was entitled to charge and collect a late payment charge from the Ellises without a written agreement pursuant to § 31-1-501, MCA?

¶ 4 2. Did the District Court err in concluding that Aldrich's statements of account comply with the requirements of § 31-1-502, MCA?

¶ 5 3. Did the District Court err in denying Ellises' motion to amend the pleadings?

BACKGROUND

¶ 6 Aldrich is a lumber company with its principal place of business located in Billings, Montana. It has a branch location in Livingston, Montana. The Ellises are residents of Livingston and do business therein as Yellowstone Log Works.

¶ 7 In November 1996, Tanner Ellis filled out Aldrich's commercial credit application, as guarantor, in the name of Yellowstone Log Works. The credit application was approved by Aldrich on November 30, 1996. Subsequently, the Ellises opened three accounts and purchased materials from Aldrich on numerous occasions.

¶ 8 On August 13, 1999, Aldrich filed a complaint in the District Court seeking judgment against the Ellises for the unpaid costs of materials provided to them in the amount of $67,370.94, with interest accruing thereon at the rate of 18% per annum. As litigation progressed, the District Court issued a Scheduling Order on October 5, 1999, which provided that all amendments to the pleadings must be filed by October 25, 1999, and all motions for summary judgment must be filed by February 4, 2000. Subsequently, Aldrich moved for summary judgment on January 3, 2001, alleging that a contractual relationship existed between the parties, and the Ellises breached that contractual relationship by failing to pay for the materials provided to them. The District Court held a hearing on Aldrich's motion on February 7, 2001. At the hearing, the Ellises moved to amend the pleadings to add a claim of usury. The court denied the motion.

¶ 9 On February 9, 2001, the Ellises filed a brief in opposition to summary judgment and a motion to amend the pleadings. Therein, the Ellises claimed Aldrich was not entitled to summary judgment because there was no written agreement between the parties providing for late payment charges as required by § 31-1-501, MCA. In addition, the Ellises alleged that Aldrich's statements of account did not comply with the requirements of § 31-1-502(1)(a), (e), and (f), MCA. The Ellises therefore argued Aldrich's motion for summary judgment should be denied and they should be allowed to amend the pleadings to add a claim for recovery of usurious interest pursuant to § 31-1-108, MCA. In their motion to amend the pleadings, the Ellises alleged Aldrich would not be prejudiced if they were permitted to amend the pleadings since a trial date had not been set and neither party had conducted discovery.

¶ 10 The District Court entered an Order on February 20, 2001, denying the Ellises' motion to amend the pleadings and granting Aldrich partial summary judgment. The court concluded that the Ellises' motion to amend the pleadings was untimely pursuant to its Scheduling Order. Additionally, the court concluded that a contractual relationship existed between the parties and the Ellises had breached that relationship by failing to pay amounts owing. The court further concluded that genuine issues of fact existed regarding damages.

¶ 11 The court held a hearing to determine damages on April 23, 2001. Thereafter, the court issued an Explanatory Comment Regarding Interest Rate on May 3, 2001, concluding that Aldrich was entitled to charge the Ellises 1½% interest per month on all amounts due and owing over thirty days. On the same day, the District Court granted Aldrich judgment against the Ellises in the amount of $81,914.20, including 18% interest per annum on the principal amount. The Ellises appeal.

STANDARD OF REVIEW

¶ 12 We review a district court's summary judgment ruling de novo and employ the same Rule 56, M.R.Civ.P., evaluation as applied by the district court. Andrews v. Plum Creek Manufacturing, 2001 MT 94, ¶ 5, 305 Mont. 194, ¶ 5, 27 P.3d 426, ¶ 5. Pursuant to Rule 56, M.R.Civ.P., we apply the following inquiry:

The movant must demonstrate that no genuine issues of material fact exist. Once this has been accomplished, the burden then shifts to the non-moving party to prove, by more than mere denial and speculation, that a genuine issue does exist. Having determined that genuine issues of fact do not exist, the court must then determine whether the moving party is entitled to judgment as a matter of law. We review the legal determinations made by a district court as to whether the court erred.

Bruner v. Yellowstone County (1995), 272 Mont. 261, 264, 900 P.2d 901, 903 (citations omitted). We review a district court's denial of a motion to amend the pleadings for an abuse of discretion. See Loomis v. Luraski, 2001 MT 223, ¶ 24, 306 Mont. 478, ¶ 24, 36 P.3d 862, ¶ 24 (citation omitted).

DISCUSSION

ISSUE ONE

¶ 13 Did the District Court err in concluding that Aldrich was entitled to charge and collect a late payment charge from the Ellises without a written agreement pursuant to § 31-1-501, MCA?

¶ 14 The Ellises argue that a retail seller who charges 1½% interest per month on delinquent accounts must have a written agreement with the retail buyer to do so pursuant to § 31-1-501(1), MCA. Specifically, the Ellises contend that reference to § 31-1-202, MCA, in § 31-1-501(1), MCA, refers to the definition of "retail seller" stated in § 31-1-202(1)(p), MCA, which requires that a retail seller have a written agreement with the retail buyer. The Ellises assert that a written agreement does not exist between the parties, and thus Aldrich is not entitled to charge and collect a late payment fee.

¶ 15 Aldrich maintains the District Court correctly determined that a written agreement is not required to charge and collect a late payment charge on any accounts thirty days past due in the retail sales arena when the sale is not anticipated to be on an installment basis. Aldrich asserts that the Ellises are misconstruing and misinterpreting the meaning of the statutory language in § 31-1-501, MCA, and reference therein to § 31-1-202, MCA. Namely, Aldrich alleges that reference to § 31-1-202, MCA, in § 31-1-501(1), MCA, pertains solely to the definition of "goods" as defined by § 31-1-202(1)(d), MCA. Aldrich further points out that § 31-1-202(1)(p), MCA, defines "retail seller" as "a person who sells goods or furnishes services to a retail buyer in a written retail installment contract or written retail installment transaction." However, § 31-1-501(3), MCA, expressly states that the provisions of § 31-1-501, MCA, do not apply to retail installment contracts or retail charge account agreements regulated under Title 31, chapter 1, part 2. Aldrich thus claims § 31-1-202(1)(p), MCA, is inapplicable. We agree.

¶ 16 Section 31-1-501, MCA, provides:

Late payment charges—accounts receivable for merchandise sold at retail. (1) Notwithstanding 31-1-106 or 31-1-107, a person who sells goods, as defined in 31-1-202, at retail to a retail buyer who promises to pay for such goods upon presentation of the bill therefor, may charge and collect a late payment charge not greater than 1½% per month on all money due on all accounts from 30 days after the date on which the obligation of the buyer to pay is incurred.

(2) The late payment charge provided in this section may be charged only if at the time the obligation was incurred the seller did not intend to extend any credit beyond 30 days and any late payment of the obligation was unintended.

(3) The provisions of this section do not apply to money due for intangible services, for services regulated by the public service commission, for real property, for health care services, or for retail installment sales contracts or retail charge account agreements regulated under Title 31, chapter 1, part 2. [Emphasis added.]

¶ 17 In interpreting a statute, we will "ascertain and declare what is in terms or in substance contained therein," and we will not "insert what has been omitted" or "omit what has been inserted." Section 1-2-101, MCA. Therefore, we will first look to the plain meaning of the words contained in the statute. See Gallatin County v. Montana Eighteenth Judicial District Court (1997), 281 Mont. 33, 40, 930 P.2d 680, 685 (citation omitted). "In the search for plain meaning, `the language used must be reasonably and logically interpreted, giving words their usual and ordinary meaning.'" See Gallatin County, 281 Mont. at 40, 930 P.2d at 685 (quoting In re Matter of McCabe (1975), 168 Mont. 334, 339, 544 P.2d 825, 828). If the language is clear and unambiguous, we...