Drug Fair Northwest v. Hooper Enterprises, Inc., 86-445

• Decision Date: 06 March 1987
• Docket Number: No. 86-445,86-445
• Court: Montana Supreme Court
• Parties: DRUG FAIR NORTHWEST, Plaintiff and Appellant, v. HOOPER ENTERPRISES, INC., a Montana corporation, Collier, Heinz & Associates, and Gateway West Shopping Center Associates, Defendants and Respondents.

Page 1285

733 P.2d 1285

226 Mont. 31

DRUG FAIR NORTHWEST, Plaintiff and Appellant, v. HOOPER ENTERPRISES, INC., a Montana corporation, Collier,

Heinz & Associates, and Gateway West Shopping

Center Associates, Defendants and Respondents.

No. 86-445.

Supreme Court of Montana.

Submitted on Briefs Dec. 11, 1986.

Decided March 6, 1987.

Murray, Kaufman, Vidal & Gordon, Daniel W. Hileman, Kalispell, for plaintiff and appellant.

Church, Harris, Johnson & Williams, Don A. LaBar, Great Falls, Murphy, Robinson, Heckathorn & Phillips, Debra D. Parker, Kalispell, for defendants and respondents.

WEBER, Justice.

The District Court of the Eleventh Judicial District, Flathead County, concluded that a letter between the parties was not an enforceable lease agreement upon which Drug Fair Northwest (Drug Fair) could bring a contract action. Summary judgment was granted to the defendants. Drug Fair appealed. We affirm.

The issue is whether the District Court erred in granting summary judgment.

In February 1973 Gateway West Shopping Center (then known as Sky River Enterprises and herein called Gateway West) negotiated with tenants for rental spaces in a Kalispell shopping center then being constructed. Drug Fair negotiated with Gateway West for two areas, a large lease for its drug store and a smaller lease for a tires, batteries, and accessories (TBA) store. In mid-February a leasing agent for Gateway West wrote a two paragraph letter to Drug Fair which Drug Fair contends is a lease agreement.

Gateway West and Drug Fair executed a written lease agreement of considerable length for the drug store. It contained various provisions appropriate to a shopping center lease. This lease provided for a 20 year term with two 5 year options for renewal at specified rents. For reasons which do not appear in the record, no similar written lease was executed between the parties covering the TBA area. Commencing in 1973 Drug Fair did occupy the TBA area, and paid rent on a monthly basis which was accepted by Gateway West for a period of approximately 10 years. In 1979 Drug Fair leased the TBA area to Hooper Enterprises, Inc. (Hooper Enterprises). In 1983 the managers of Gateway West notified Drug Fair by letter that it did not have a lease on the TBA area and that a month-to-month lease was in effect. The letter also gave Drug Fair a 30-day notice to vacate the TBA premises. A second notice of termination was sent to Drug Fair in February 1984. Thereafter, Gateway West leased the TBA area directly to Hooper Enterprises.

The District Court concluded that the February 1973 letter was not sufficient to constitute a binding and enforceable lease and that any tenancy by Drug Fair was terminated by the 1983 letter from the manager of Gateway West to Drug Fair. As a result, the District Court granted the summary judgment motions of the defendants and dismissed Drug Fair's suit which was based upon a termination of the lease of the TBA area. Drug Fair appealed.

Did the District Court err in granting summary judgment?

A motion for summary judgment should be granted if there is no genuine issue of a material fact and the moving party is entitled to judgment as a matter of law. Rule 56(c), M.R.Civ.P. This Court has held that:

In order to determine whether summary judgment was proper, we review the pleadings, affidavits, answers to interrogatories and admissions on file to establish whether any genuine issues of material fact are presented. If there is no genuine issue as to any material fact, then the moving party is entitled to summary judgment as a matter of law. (Cite omitted.)

Westmont Tractor Company v. Continental I, Inc. (Mont.1986) 731 P.2d 327, 328, 43 St.Rep. 2380, 2381.

Drug Fair contends there were issues of material fact which were decided by the District Court so that the summary judgment was improper. In substance Drug Fair argues that the District Court erred when it entered findings of fact and conclusions of law based upon a summary judgment motion. Because summary judgment is appropriate only where there are no issues of material fact, normally the making of findings of fact would indicate improper procedure on the part of the District Court. In the making of its findings of fact in this case, the District Court pointed out that the facts appeared to be undisputed or admitted. In connection with those facts, Drug Fair argues that the facts alleged in its complaint must be accepted as correct. That is not correct. As pointed out in Mayer Brothers v. Daniel Richard Jewelers, Inc. (Mont.1986), 726 P.2d 815, 43 St.Rep. 1821, a party opposing a motion for summary judgment may not rest upon the mere allegations of pleadings, and has an affirmative duty to respond by affidavits or sworn testimony with specific facts that show there is a genuine issue of fact for trial. We have carefully reviewed the record and conclude that the District Court was correct and that there was not a genuine issue of material fact so that summary judgment was...