Bowen v. McDonald, 95-193

• Decision Date: 16 April 1996
• Docket Number: No. 95-193,95-193
• Citation: 276 Mont. 193,915 P.2d 201
• Parties: Janice BOWEN, Treasurer, Granite County, Montana, Plaintiff and Respondent, v. Lee McDONALD, Defendant and Respondent, and B. Dale Fayram, Defendant and Appellant.
• Court: Montana Supreme Court

Page 201

915 P.2d 201

276 Mont. 193

Janice BOWEN, Treasurer, Granite County, Montana, Plaintiff and Respondent, v. Lee McDONALD, Defendant and Respondent, and B. Dale Fayram, Defendant and Appellant.

No. 95-193.

Supreme Court of Montana.

Submitted on Briefs March 14, 1996.

Decided April 16, 1996.

Appeal from District Court of the Third Judicial District, In and for the County of Granite, The Honorable Ted. L. Mizner, Judge presiding.

James A. Rice, Jr., Jackson & Rice, Helena, for Appellant.

Nancy K. Moe, Byron W. Boggs, Missoula, for Respondent.

GRAY, Justice.

B. Dale Fayram (Fayram) appeals from the judgment entered by the Third Judicial District Court, Granite County, on its order granting Lee McDonald's (McDonald) motion for summary judgment and denying Fayram's motion to amend his answer to add a cross-claim against McDonald. We affirm.

Fayram raises the following issues on appeal:

1. Did the District Court err in granting McDonald's motion for summary judgment on the basis that Fayram had no right to redeem the mining properties?

2. Did the District Court abuse its discretion in denying Fayram's motion to amend his pleadings?

This case involves two parcels of land, known as the Iron Clad Lode # 1982 and the Non Pariel Lode # 2763, located in Granite County, Montana (mining properties). In 1982, Ripple Resources, Inc., a Colorado corporation, became the record owner of the mining properties when it acquired them by quitclaim deed from Boulder Creek, Inc. Ripple Resources, Inc. was a subsidiary of Ripple Resources, Ltd., a Canadian corporation.

The taxes on the mining properties were not paid for the years 1986 and 1987. In December of 1989, McDonald paid the delinquent taxes, penalties, costs and interest and Granite County assigned its tax sale certificate for the mining properties to him.

In May of 1991, McDonald published notice of the pending issuance of a tax deed to the mining properties in the local newspaper; the notice listed Ripple Resources, Inc. as the sole interested party. Approximately two months later, Fayram submitted a sworn affidavit to Janice Bowen (Bowen), the Granite County Treasurer, stating that he was a director of Ripple Resources, Inc., and was authorized to redeem the mining properties on behalf of the company. Based on the information in the affidavit, Bowen issued Fayram a certificate of redemption. In August of 1991, McDonald provided documents to Bowen indicating that Ripple Resources, Inc. had been dissolved prior to Fayram's redemption of the mining properties.

Bowen filed a complaint for declaratory relief in October of 1991, requesting the District Court to resolve the controversy between Fayram and McDonald and to direct her regarding the proper disposition of the mining properties. McDonald answered and requested the court to order issuance of the tax deed on the mining properties to him. In January of 1992, Fayram answered and counterclaimed against Bowen, realleging his authority to redeem on behalf of Ripple Resources, Inc. McDonald deposed Fayram in April of 1992; no further discovery took place.

In March of 1994, McDonald moved for summary judgment against Fayram on the basis that Fayram had no right to redeem the mining properties; Bowen joined in his motion. Fayram's brief and affidavit in opposition to McDonald's motion advanced an entirely different basis for redemption from that asserted in his 1991 sworn affidavit for redemption. In addition, Fayram moved to amend his answer to allege a cross-claim against McDonald for failing to comply with statutory requirements for obtaining a tax deed. His proposed amended pleading continued to affirmatively allege that he "was authorized" to redeem the mining properties on behalf of Ripple Resources, Inc.; Fayram proposed to add, as part of his prayer for relief, a request that the court determine that he had made a proper redemption.

The District Court granted McDonald's motion for summary judgment and denied Fayram's motion to amend his pleadings. The court subsequently entered judgment declaring Fayram's certificate of redemption void and vesting title to the mining properties in McDonald. Fayram appeals.

1. Did the District Court err in granting McDonald's motion for summary judgment on the basis that Fayram had no right to redeem the mining properties?

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. We review a district court's grant of summary judgment de novo, applying the same criteria used by that court initially under Rule 56(c), M.R.Civ.P. Brinkman & Lenon v. P & D Land Enterprises (1994), 263 Mont. 238, 241, 867 P.2d 1112, 1114 (citing Minnie v. City of Roundup (1993), 257 Mont. 429, 431, 849 P.2d 212, 214).

The moving party has the initial burden of establishing both the absence of genuine issues of material fact and entitlement to judgment as a matter of law. Brinkman & Lenon, 867 P.2d at 1115. Only where the moving party satisfies its initial burden does the burden shift to the party opposing summary judgment to present evidence raising a genuine issue of material fact. Matter of Estate of Lien (1995), 270 Mont. 295, 298, 892 P.2d 530, 532 (citing Owen v. Ostrum (1993), 259 Mont. 249, 255-56, 855 P.2d 1015, 1019).

The law governing tax liens on real property and tax sales, and redemption of, real property subject to a tax lien is codified in Title 15 of the Montana Code Annotated. In the instant case, no person paid the delinquent taxes on the mining properties when they were offered at a tax sale pursuant to § 15-17-211, MCA, and Granite County acquired a tax sale certificate for the properties under § 15-17-214, MCA. McDonald subsequently paid the delinquent taxes, penalties, interest and costs and Bowen assigned the tax sale certificate to him pursuant to § 15-17-323, MCA. McDonald published a notice of the pending issuance of a tax deed under § 15-18-212, MCA, and Fayram timely asserted an alleged right to redeem the mining properties pursuant to § 15-18-111, MCA.

McDonald contended in his motion for summary judgment that no genuine issue of material fact existed regarding whether Fayram had a right to redeem the mining properties under § 15-18-111, MCA, and, as a result, that he was entitled to judgment as a matter of law. Under § 15-18-111(1), MCA, redemption of a property tax lien acquired at a tax sale may only be made by "the owner, the holder of an unrecorded or improperly recorded interest, the occupant of the property, or any interested party...."

The right of redemption is wholly statutory and redemption statutes are construed liberally in favor of the redemptioner. Lowery v. Garfield County et al. (1949), 122 Mont. 571, 581, 208 P.2d 478, 484. Notwithstanding the principle of liberal construction, however, Montana law has long required that "the person seeking to redeem must bring himself within [the statutory] provisions." See State ex rel. Federal Land Bank of Spokane v. Hays (1929), 86 Mont. 58, 63, 282 P. 32, 34; State ex rel. Bell v. McCollough (1929), 85 Mont. 435, 438, 279 P. 246, 247.

In support of his motion for summary judgment, McDonald provided documentation from the State of Colorado indicating that Ripple Resources, Inc. had been involuntarily dissolved in 1989. McDonald also relied on Fayram's deposition testimony conceding that he only served as a director of Ripple Resources, Inc. from 1982 until 1984 and that Ripple Resources, Inc. had never issued stock. We conclude that McDonald established the absence of any genuine issue of material fact regarding Fayram's right to redeem the mining properties on the Ripple Resources, Inc.-related basis upon which Fayram originally asserted that right and received the certificate of redemption from Bowen.

McDonald also addressed a different basis for Fayram's alleged right to redeem which Fayram first referenced during his deposition: that he redeemed the mining properties on behalf of Ripple Resources, Ltd. Both during his deposition and in his response to McDonald's motion for summary judgment, Fayram contended that Ripple Resources, Ltd. was the true owner of the mining properties and that the references to Ripple Resources, Inc. in the quitclaim deed from Boulder Creek, Inc. and in his sworn affidavit to Bowen were errors. He argued that, as a shareholder of Ripple Resources, Ltd., he was entitled to redeem the mining properties on behalf of that company.

McDonald provided the District Court with a copy of the quitclaim deed in which Boulder Creek, Inc. granted its interest in the mining properties to "Ripple Resources, Inc." McDonald also submitted a timber purchase agreement under which Fayram, as "Director Ripple Resources, Inc.," granted Eagle Stud Mill, Inc. the right to conduct logging operations on the mining properties approximately one month after submitting his affidavit to Bowen.

We conclude that McDonald established that no genuine issue of material fact existed regarding ownership of the mining properties by Ripple Resources, Inc. and, therefore, that Fayram could not redeem on behalf of Ripple Resources, Ltd. The burden then shifted to Fayram to present affirmative evidence of a material and substantial nature to raise a genuine issue of material fact; he could not rest on the allegations or denials in his pleadings or on conclusory or speculative statements. See Estate of Lien, 892 P.2d at 532.

Fayram failed to come forward with any evidence whatsoever raising a genuine issue of material fact regarding his originally asserted right to redeem the mining properties on behalf of Ripple Resources, Inc., effectively conceding the issue. He then advanced the unpleaded theory that his right to redeem was premised on his shareholder status in Ripple Resources, Ltd., which he asserted was the true owner of the mining properties. As noted, the underpinnings of this new theory...