Sprunk v. First Bank System

• Decision Date: 27 April 1992
• Docket Number: No. 91-274,91-274
• Citation: 830 P.2d 103,252 Mont. 463
• Parties: Wes SPRUNK, Plaintiff and Appellant, v. FIRST BANK SYSTEM, a registered bank holding company, Defendant and Respondent.
• Court: Montana Supreme Court

Page 103

830 P.2d 103

252 Mont. 463

Wes SPRUNK, Plaintiff and Appellant, v. FIRST BANK SYSTEM, a registered bank holding company Defendant and Respondent.

No. 91-274.

Supreme Court of Montana.

Submitted March 5, 1992.

Decided April 27, 1992.

William A. Rossbach, argued, Rossbach & Whiston, Missoula, for plaintiff and appellant.

James A. Robischon, argued, Murphy, Robinson & Heckathorn, Kalispell, George D. Goodrich, Garlington, Lohn & Robinson, Missoula, for defendant and respondent.

HARRISON, Justice.

Wes Sprunk (Sprunk) appeals from an order of the Fourth Judicial District Court, Missoula County, Montana, which granted summary judgment in favor of First Bank System. This appeal stems from the same set of facts and circumstances stated in our opinion Sprunk v. First Bank Western Montana Missoula & First Bank System (1987), 228 Mont. 168, 741 P.2d 766 (Sprunk I ). We affirm.

The main issue is whether the District Court erred in granting respondent FBS's motion for summary judgment. This main issue is divided into three sub-issues as follows:

1. Whether the District Court erred in deciding that Sprunk had no cause of action against FBS when determining that First Bank Western Montana Missoula was not the agent, alter-ego or instrumentality of FBS?

2. Whether the District Court erred in determining that there was no fiduciary relationship or duty between Sprunk and FBS?

3. Whether the District Court erred in determining that Sprunk's claims are precluded by the doctrine of res judicata?

Sprunk owned an automobile dealership in Missoula that was backed financially by First Bank Western Montana Missoula (Bank), a subsidiary of First Bank System (FBS). During a downturn in the automobile industry in the early 1980's, Sprunk refinanced his debt with the Bank via a $500,000 guaranteed loan from the Small Business Administration (SBA). Later, Sprunk attempted to restructure the dealership by relocating to a smaller location and deeding over his prime real estate to the Bank. On May 27, 1982, Sprunk, the Bank and the SBA entered into an agreement to accept deeds in lieu of foreclosure on Sprunk's Missoula and Lake County real properties in order to discharge Sprunk's indebtedness to the Bank.

In Sprunk I, Sprunk alleged he entered into the agreement as a result of the Bank's fraudulent misrepresentations. He argued that the Bank pressured him into signing the agreement by overstating his debt and the losses it suffered due to liquidation. Sprunk's complaint alleged bad faith breach of a fiduciary duty, actual fraud and constructive fraud. The District Court granted the Bank's motion for summary judgment. Sprunk appealed and we affirmed. Subsequently, FBS filed a motion for summary judgment which was also granted by the District Court based on separate and independent grounds as well as the doctrine of res judicata. Sprunk now appeals that decision to this Court.

Summary judgment is proper when no genuine issues of material fact exist and the moving party is entitled to judgment as a matter of law. Rule 56(c), M.R.Civ.P.; also see Cecil v. Cardinal Drilling Co. (1990), 244 Mont. 405, 409, 797 P.2d 232, 234. The initial burden of proof is on the moving party to establish that no genuine issues of material fact exist. Westmont Tractor Co. v. Continental I, Inc. (1986), 224 Mont. 516, 521, 731 P.2d 327, 330. Once the moving party meets that burden, the burden shifts to the non-moving party to establish the existence of genuine issues of material fact. Simmons v. Jenkins (1988), 230 Mont. 429, 432, 750 P.2d 1067, 1069. We therefore confine our review on appeal to encompass only the determination of whether genuine issues of material fact exist that would require reversing the District Court's conclusion.

Sprunk asserts that the relationship between FBS and the Bank constituted an agency, alter-ego or instrumentality. Sprunk also contends that his dealings with the Bank, a wholly owned subsidiary of FBS, created a fiduciary relationship between Sprunk and FBS. Sprunk insists that due to the domination of FBS over the Bank, the Bank became an instrumentality of FBS which was used to commit fraud and bad faith. In support of these positions, Sprunk attaches to his brief a large appendix containing hundreds of pages of depositions, an annual report and other correspondence to illustrate actions that would amount to agency, alter-ego or instrumentality and the establishment of a fiduciary duty. The arguments are apparently meant to lead us to the conclusion that piercing the corporate veil is appropriate and necessary to obtain relief from FBS, since the Bank was previously dismissed from the case. We are not persuaded and harken back to our task on appeal which is to determine whether genuine issues of material fact exist.

The determination of the existence of genuine issues of material fact is one that is not always easily ascertained. Important in the determination is whether the material facts are actually disputed by the parties or whether the parties simply interpret the facts differently. It is well established that when material facts are in dispute, summary judgment is not a proper remedy. Kaiser v. Town of Whitehall (1986), 221 Mont. 322, 325, 718 P.2d 1341, 1342-43. However, mere disagreement about the...