Estate of Kinnaman v. Mountain W. Bank, N.A.

• Decision Date: 02 February 2016
• Docket Number: No. DA 15–0305.,DA 15–0305.
• Citation: 365 P.3d 486,382 Mont. 153
• Parties: ESTATE OF Craig Michael KINNAMAN and Nancy Kinnaman, as Personal Representative of the Estate of Craig Michael Kinnaman, Plaintiff and Appellant, v. MOUNTAIN WEST BANK, N.A., and John Does 1 through 10, Defendants and Appellees.
• Court: Montana Supreme Court

382 Mont. 153

365 P.3d 486

ESTATE OF Craig Michael KINNAMAN and Nancy Kinnaman, as Personal Representative of the Estate of Craig Michael Kinnaman, Plaintiff and Appellant,

v.MOUNTAIN WEST BANK, N.A., and John Does 1 through 10, Defendants and Appellees.

No. DA 15–0305.

Supreme Court of Montana.

Submitted on Briefs Dec. 9, 2015.

Decided Feb. 2, 2016.

For Appellant: James M. Kommers, Kommers Law Firm, P.C., Bozeman, Montana.

For Appellees: Dean A. Stensland, Thomas J. Leonard, Boone Karlberg P.C., Missoula, Montana.

Justice PATRICIA COTTER delivered the Opinion of the Court.

¶ 1 The underlying case is the third lawsuit arising from a project to develop condominiums at Lakeside Village on Hauser Lake in Lewis and Clark County (the condos). The project's developer, Cherrad, LLC (Cherrad), its lender, Mountain West Bank (the Bank), and the estate of its general contractor, Craig Kinnaman (the Estate), were all parties to the second lawsuit. In this third suit, the Estate brought eight claims against the Bank that the Bank argued were barred by the compulsory counterclaim rule or the doctrine of claim preclusion. The District Court found that the Estate's claims were barred, and granted summary judgment to the Bank on all claims. The Estate appeals the District Court's order granting summary judgment to the Bank. The Estate also appeals the District Court's denial of the Estate's motion for relief from judgment, the District Court's order changing venue, and the District Court's taking of judicial notice of the record in previous actions. We affirm.

ISSUES

¶ 2 We address the following issues on appeal:

1. Did the District Court err in granting Mountain West Bank's motion to change venue?

2. Did the District Court err in granting summary judgment in favor of Mountain West Bank on all claims?

3. Did the District Court abuse its discretion by taking judicial notice of the record in previous actions?

4. Did the District Court abuse its discretion by denying the Estate's motion under Montana Rule of Civil Procedure 60(b)(6) to vacate the order of summary judgment?

FACTUAL AND PROCEDURAL BACKGROUND

¶ 3 This is the third of three lawsuits stemming from the development of condominiums at Lakeside Village on Hauser Lake in Lewis and Clark County. Conrad and Cheryl Hale owned several limited liability companies, including Cherrad, that were involved in developing the condos. CK Design and Construction was the sole proprietorship of Craig Kinnaman (Kinnaman), who was the general contractor on the project. Craig Kinnaman committed suicide in 2007, and his wife, Nancy Kinnaman, is the personal representative of his estate. Mountain West Bank loaned money to the Hales and their LLCs for the development of the condos and other unrelated ventures in Lakeside Village, including a bar and restaurant. Cherrad agreed to pay the Bank the first $200,000 of proceeds from the sale of each condo unit. The Hales, through Cherrad, then formed an agreement with Kinnaman whereby Kinnaman would fund the construction of the condos in exchange for $350,000 from the proceeds of the sale of each condo. Kinnaman agreed to subordinate his interest in the condos to the Bank's interest. The parties entered into several other contracts between and among themselves regarding the development, construction, and financing of the condo units.

¶ 4 The unravelling of the Lakeside Village project in 2007 spawned three lawsuits. The first lawsuit (the Interpleader Action) resulted in a final judgment in district court that was not appealed. We resolved the second lawsuit (the Foreclosure Action) in 2013. See Mt. West Bank, N.A. v. Cherrad, LLC, 2013 MT 99, 369 Mont. 492, 301 P.3d 796. We set forth most of the background facts relevant to this third lawsuit in that opinion, Cherrad, ¶¶ 5–15, and we will not repeat them here. We recount only the facts essential to this appeal.

¶ 5 On March 28, 2012, the Estate filed this action in Gallatin County and asserted eight claims against the Bank: (1) breach of covenant of good faith and fair dealing, (2) tortious interference with contract, (3) fraudulent inducement, (4) constructive fraud, (5) actual fraud, (6) deceit, (7) breach of contract, and (8) unjust enrichment. The thrust of the Estate's claims was that the Bank misrepresented to Craig Kinnaman how the proceeds from the infrastructure loans to Cherrad would be used, that it fraudulently induced Kinnaman into subordinating his interest in the condo units to the Bank's interest, and that it unjustly enriched itself on profits from the sale of several condo units. The contracts on which the Estate bases its claims against the Bank in this case are the same contracts that were at issue in the Foreclosure Action.

¶ 6 The Bank moved for summary judgment on all the Estate's claims on the grounds that the claims were barred by the compulsory counterclaim rule or the doctrine of claim preclusion. The Bank asserted that all the facts upon which the Estate relies in the present action were in existence during the pendency of the Foreclosure Action, and that the Estate should have litigated any claims it had against the Bank during the Foreclosure Action. The District Court agreed with the Bank and granted summary judgment on all claims. The Estate appeals both the District Court's order granting summary judgment and the District Court's denial of the Estate's motion for relief from judgment. The Estate also appeals the order changing venue from Gallatin County to Lewis and Clark County, and the District Court's taking judicial notice in this action of the records from the previous actions. We affirm the District Court.

STANDARD OF REVIEW

¶ 7 A district court's ruling on a motion for change of venue to a proper county is a question of law that we review for correctness. Lockhead v. Weinstein, 2001 MT 132, ¶ 5, 305 Mont. 438, 28 P.3d 1081 (citing Sprinkle v. Burton, 280 Mont. 358, 361, 935 P.2d 1094, 1096 (1996) ).

¶ 8 We review a district court's entry of summary judgment de novo. McClue v. Safeco Ins. Co., 2015 MT 222, ¶ 8, 380 Mont. 204, 354 P.3d 604 (citing Albert v. City of Billings, 2012 MT 159, ¶ 15, 365 Mont. 454, 282 P.3d 704 ). "Summary judgment is appropriate when the moving party demonstrates both the absence of any genuine issues of material fact and entitlement to judgment as a matter of law." Albert, ¶ 15. "A material fact is a fact that involves the elements of the cause of action or defenses at issue to an extent that necessitates resolution of the issue by a trier of fact." Williams v. Plum Creek Timber Co., 2011 MT 271, ¶ 14, 362 Mont. 368, 264 P.3d 1090 (internal quotation marks omitted) (citing Arnold v. Yellowstone Mountain Club, LLC, 2004 MT 284, ¶ 15, 323 Mont. 295, 100 P.3d 137 ).

¶ 9 Evidentiary rulings by a district court, including a decision to take judicial notice of facts or law, are reviewed for abuse of discretion. In re Marriage of Carter–Scanlon, 2014 MT 97, ¶ 15, 374 Mont. 434, 322 P.3d 1033 ; In re Marriage of Steab, 2013 MT 124, ¶ 11, 370 Mont. 125, 300 P.3d 1168. We also review for abuse of discretion a district court's ruling on a motion for relief from judgment brought under Rule 60(b)(6) of the Montana Rules of Civil Procedure. Hall v. Heckerman, 2000 MT 300, ¶ 12, 302 Mont. 345, 15 P.3d 869 (citing In re Marriage of Laskey, 252 Mont. 369, 371, 829 P.2d 935, 937 (1992) ).

DISCUSSION

¶ 10 1. Did the District Court err in granting Mountain West Bank's motion to change venue?

¶ 11 The Estate filed this lawsuit on March 28, 2012, in Gallatin County.¹ On May 31, 2012, the Bank filed a motion for change of venue pursuant to § 25–2–201(1), MCA, and requested that the District Court transfer the matter to Lewis and Clark County. Following full briefing, the District Court granted the Bank's motion to change venue on July 10, 2012, and transferred the matter to Lewis and Clark County. The Estate did not appeal that order.

¶ 12 On May 14, 2015, the Estate appealed the District Court's order granting summary judgment to the Bank, and the District Court's order denying the Estate's motion under Montana Rule of Civil Procedure 60(b)(6) for an order vacating summary judgment. In its appellate brief, the Estate argued, inter alia, that the Eighteenth Judicial District Court, Gallatin County erred in granting the Bank's motion for change of venue to the First Judicial District Court, Lewis and Clark County, because venue in the present action is proper in Gallatin County, where the Estate's probate was filed. The Bank responded that "[i]t is unclear how venue of the probate proceeding could inform the venue analysis here," and that the District Court did not err in transferring this matter to Lewis and Clark County. We conclude the Bank's argument is correct.

¶ 13 Section 25–2–201, MCA, provides, "[t]he court or judge must, on motion, change the place of trial in the following cases: (1) when the county designated in the complaint is not the proper county." The Bank made such a motion, and the District Court was required to change the venue from Gallatin County if Gallatin County was not the proper place of trial. "[T]he proper place of trial for all civil actions is the county in which the defendants or any of them reside at the commencement of the action." Section 25–2–118(1), MCA. This is the "principal rule" of venue. Tit. 25, ch. 2, Mont. Code Ann., Annotations, Official Comments at 128 (2012). The Bank is the only defendant in this action, and it is undisputed that the Bank is authorized to do business in Montana and that its principal place of business in Montana is Lewis and Clark County. Additionally, "[t]he proper place of trial for actions upon contracts is either: (a) the county in which the defendants, or any of them, reside at the commencement of the action; or (b) the county in which the contract was to be performed." Section 25–2–121(1), MCA. The contracts at issue in this case were all to be performed in Lewis and Clark County, making Lewis and Clark...