Erickson v. Croft
| Decision Date | 05 August 1988 |
| Docket Number | No. 88-86,88-86 |
| Citation | 233 Mont. 146,760 P.2d 706 |
| Parties | David ERICKSON, an individual, and Doreen Vair, an individual, f/d/b/a Starhaven Ranch, Ltd., a Montana corporation, Plaintiffs and Appellants, v. Burton CROFT, an individual, Shirley Croft, an individual, Larry Rule, an individual f/d/b/a Rule Realty; Ronald Schoen, an individual; John Warren, an individual, Schultz, Davis & Warren, a partnership, Defendants and Respondents. |
| Court | Montana Supreme Court |
O'Brien & Conrad, James P. O'Brien, Missoula, for plaintiffs and appellants.
Hooks & Budewitz, Patrick F. Hooks, Townsend, Garlington, Lohn & Robinson, Sherman V. Lohn, Missoula, for defendants and respondents.
David Erickson (Erickson) and Starhaven Ranch (Starhaven) appeal a Fifth Judicial District Court, Beaverhead County, grant of summary judgment to defendants real estate broker Larry Rule (Rule), attorney John Warren (Warren), and the Dillon, Montana law firm of Schultz, Davis & Warren. We affirm.
This case is related to the litigation involved in Erickson v. First National Bank of Minneapolis (Mont.1985), 697 P.2d 1332, 42 St.Rep. 423. In Erickson we determined that the First National Bank of Minneapolis had properly quieted title as against Erickson to certain ranch property located in Beaverhead County. Erickson, d/b/a Starhaven Ranch, Ltd., purchased the property on a contract for deed on January 15, 1981 from Burton and Shirley Croft who had in turn purchased the property on a contract for deed from Herman and Patricia Clarno in 1976. The Crofts borrowed money from the First Bank of Minneapolis (the Bank) and, on August 5, 1980, assigned their purchaser's interest in the Clarno-Croft contract for deed to the Bank as collateral security. The Crofts subsequently defaulted on their obligations to the Bank and on July 1, 1981, the Bank recorded a quitclaim deed previously executed by the Crofts. Erickson, as president of Starhaven, was unaware of the assignment to the Bank or the Bank's quitclaim deed at the time he purchased the property from the Crofts in January of 1981.
Under the Croft-Starhaven contract for deed, Starhaven was required to make a down payment and installment payments at specific dates to the Crofts who in turn were to deposit the money into an escrow account payable to the First National Bank of Minneapolis. In addition, Starhaven executed a quitclaim deed at closing which was placed in the escrow account. Starhaven failed to make the payments as required and the Bank sent a notice of default on July 24, 1981, to inform Starhaven that it had sixty days to cure the default or the property would be repossessed. The July notice from the Bank was Starhaven's first indication that the Bank was involved.
On February 16, 1982, the Bank filed Starhaven's quitclaim deed and, three days later, served Starhaven with notice to quit the property and notice of termination. Starhaven failed to quit the property and instead filed a quiet title action in Beaverhead County District Court. The Bank brought an unlawful detainer action against Starhaven and the two actions were subsequently consolidated. The trial court quieted title to the property in the Bank and Starhaven appealed to this Court. We reversed the District Court in our first opinion. The Bank subsequently petitioned for rehearing and, on rehearing, we affirmed that portion of the judgment quieting title in the Bank. Erickson, 697 P.2d at 1338.
Defendant Rule acted as the real estate broker for the Crofts and attorney John Warren of the law firm of Schultz, Davis & Warren drafted the buy/sell agreement and contract for deed in the transaction between Erickson and the Crofts. On January 15, 1986, Erickson filed this lawsuit against the Crofts et al. Erickson's complaint alleged separate counts of fraud, negligence, and breach of contract against real estate broker Rule and his realty company and counts of malpractice, constructive fraud, and breach of an implied oral contract against Warren and his law firm. Rule and Warren moved separately for summary judgment on the basis that the applicable statutes of limitation had run and that Erickson's causes of action were time barred.
On December 7, 1987, the District Court granted the motions for summary judgment on the grounds that no genuine issue of material fact existed as to the causes of action stated against Rule, Rule Realty, Warren and his law firm. Erickson appeals the order of summary judgment and raises the following issues:
1. Does the doctrine of equitable tolling permit plaintiffs to maintain an action in tort more than three years after the discovery of the alleged negligent act?
2. Did the District Court correctly rule that Count VII of plaintiff's complaint was a tort claim for purposes of the statute of limitations?
3. Must a cause of action for the breach of an implied contract of employment and conflicts of interest in the context of the attorney/client relationship be brought within the statutory period proscribed by Montana's attorney malpractice statute, § 27-2-206, MCA?
The first two issues above apply only to defendant Larry Rule and Rule Realty in this action while the last issue applies to defendants Warren and his law firm Schultz, Davis & Warren.
Summary judgment is proper only where there are no genuine issues of material fact. Rule 56(c), M.R.Civ.P. The facts material to this case are not disputed on appeal. The issues to be decided by this Court on appeal are questions of law and we are free to review the District Court's legal analysis to draw our own legal conclusions. Schneider v. Leaphart (Mont.1987), 743 P.2d 613, 616, 44 St.Rep. 1699, 1703.
Erickson's first issue relates to the statutes of limitation for fraud and negligence. Section 27-2-203, MCA, prescribes a two-year limitation in which to commence an action for fraud in Montana. Actions based on negligence must be commenced within three years. Section 27-2-204, MCA. Erickson admits that the statute of limitations has run on both of his actions for fraud and for negligence. However, Erickson urges this Court to adopt and apply a doctrine called "equitable tolling" to avoid the consequences of the statute of limitations in this case.
Erickson contends that his action in filing a complaint against Rule with the Montana Board of Realty Regulation (the Board) on November 29, 1983, serves to toll the applicable statutes of limitation until such time as the outcome of the complaint was determined by the Board. In the Board of Realty complaint, Erickson admits having knowledge of the facts which allegedly give rise to the causes of action against the defendants in this case as early as June of 1981. The Board investigated Erickson's complaint against Rule and on May 5, 1985, dismissed the complaint. The Board of Realty complaint was filed within two years of Erickson's discovery of Rule's alleged misrepresentations. The complaint in Beaverhead County District Court was filed nearly five years after Erickson's discovery of the facts which allegedly give rise to the causes of action against Rule.
Erickson relies on case law from California, Alaska, and Arizona to support his argument. The cases cited stand for the proposition that, in certain well-defined instances, the statute of limitations will not be available as a defense where equitable principles justify tolling of the statute. See e.g., Jones v. Tracy School District (1980), 27 Cal.3d 99, 165 Cal.Rptr. 100, 611 P.2d 441; Elkins v. Derby (Cal.1974), 12 Cal.3d 410, 115 Cal.Rptr. 641, 525 P.2d 81; Gudenau v. Sweeny Ins. Co. (Alaska 1987), 736 P.2d 763; Hosogai v. Kadota (1985), 145 Ariz. 227, 700 P.2d 1327. A California court summarized the doctrine of equitable tolling as follows:
[C]ourts have adhered to a general policy which favors relieving plaintiff from the bar of a limitations statute when, possessing several legal remedies he, reasonably and in good faith, pursues one designated to lessen the extent of his injuries or damage. (Citations omitted.)
Addison v. State (1978), 21 Cal.3d 313, 146 Cal.Rptr. 224, 578 P.2d 941, 943.
In Collier v. City of Pasadena (1983), 142 Cal.App.3d 917, 191 Cal.Rptr. 681, 685, the Second District California Court of Appeals listed the three requirements which a party seeking to avoid the consequences of a statute of limitations must meet to invoke the doctrine of equitable tolling:
(1) timely notice to the defendant [within the applicable statute of limitations] in filing the first claim;
(2) lack of prejudice to defendant in gathering evidence to defend against the second claim; and
(3) good faith and reasonable conduct by the plaintiff in filing the second claim. (Additions ours.)
Collier also notes the historic circumstances in which the doctrine of equitable tolling has been invoked:
Prior to the 1970's, statutes of limitation had been tolled when a plaintiff filed a case which promised to lessen damages or other harm that might have to be remedied through a second case. The statute for the second case was tolled while the plaintiff pursued the first, presumably for the purpose of minimizing harm ... Another line [of cases] tolled statutes of limitation when administrative remedies had to be exhausted before a court would consider the case ... Still a third line of cases tolled the limitation period of a second action during the pendency of a first action later found to be defective
* * *
Starting in 1974, the California Supreme Court weaved these earlier lines of cases in to a new, broader doctrine--"equitable tolling." This doctrine applies " '[w]hen an injured person has several legal remedies and, reasonably and in good faith, pursues one.' " (Citations omitted; additions ours.)
Collier, 191 Cal.Rptr. at 684.
Rule asserts that Erickson's complaint against him to the Board of Realty Regulation does not give him notice to begin investigating the facts...
To continue reading
Request your trial
-
Brilz v. Metro. Gen. Ins. Co.
...the action or proceeding.” Section 26–3–201(2), MCA. 4. Our equitable tolling jurisprudence can be traced to Erickson v. Croft, 233 Mont. 146, 150–51, 760 P.2d 706, 708–09 (1988), which in turn cites Addison, 146 Cal.Rptr. 224, 578 P.2d at 943, and Collier, 191 Cal.Rptr. at 684–85. 5.McDani......
-
Mountain Water Co. v. Mont. Dep't of Revenue
...equitable remedy not available in contravention or in lieu of express landlord-tenant act provision); Erickson v. Croft , 233 Mont. 146, 150, 760 P.2d 706, 708 (1988) (noting limited application of equitable tolling to statutes of limitation); LaForest v. Texaco, Inc. , 179 Mont. 42, 48, 58......
-
McGowen Precision Barrels, LLC v. Proof Research, Inc.
...Tolling The Court applies the equitable tolling framework set forth in supra § III(A)(1) to McGowen's tortious interference claim. In Erickson v. Croft, the Montana Supreme declined to equitably toll the statute of limitations for fraud and negligence claims against a real estate broker whe......
-
Blanton v. the Dep't of Pub. Health
...period to be applied.” Travelers Indem. Co. v. Andersen, 1999 MT 201, ¶ 15, 295 Mont. 438, 983 P.2d 999; Erickson v. Croft, 233 Mont. 146, 153, 760 P.2d 706, 710 (1988). The omission of any mention of the application for assistance in the complaint, much less the breach of any specific prov......