Farmers Plant Aid, Inc. v. Huggans

• Decision Date: 30 August 1994
• Docket Number: No. 94-057,94-057
• Citation: 266 Mont. 249,879 P.2d 1173
• Parties: FARMERS PLANT AID, INC., a Montana corporation, Plaintiff and Appellant, v. Millicent HUGGANS, Defendant and Respondent.
• Court: Montana Supreme Court

Page 1173

879 P.2d 1173

266 Mont. 249

FARMERS PLANT AID, INC., a Montana corporation, Plaintiff and Appellant, v. Millicent HUGGANS, Defendant and Respondent.

No. 94-057.

Supreme Court of Montana.

Submitted on Briefs June 23, 1994.

Decided Aug. 30, 1994.

John E. Bohyer, Phillips & Williams, P.C., Missoula, for appellant.

Michael G. Alterowitz and Larry Howell, Connell, Beers & Alterowitz, Missoula, for respondent.

TRIEWEILER, Justice.

Plaintiff Farmers Plant Aid, Inc. (FPA) filed an amended complaint in the Twenty-first Judicial District in Ravalli County against defendant Millicent Huggans. Counts I and II alleged tortious interference with contract and slander; Count III alleged tortious interference with access to FPA's mining resource located on the Huggans-Foss ranch land. The District Court ordered partial summary judgment in favor of Huggans on Count III and dismissed the tortious interference with access to mining claim based on Huggans' affirmative defense of collateral estoppel. The District Court further dismissed Counts I and II in a separate order. FPA appeals the District Court's dismissal of Count III. We affirm the order of the District Court.

The issue on appeal is whether the District Court erred when it granted partial summary judgment and dismissed plaintiff's tortious interference with mining access claim.

FACTUAL BACKGROUND

This appeal involves a parcel of land in the Bitterroot Valley that has been subject to a long-standing dispute between two families: the Smiths and their successors, Farmers Plant Aid, Inc., and the Huggans and Foss families. FPA owns the mineral rights to mine peat from the land, and the Hugganses and Fosses own and farm the surface. In State ex rel. Foss v. District Court (1968), 152 Mont. 73, 446 P.2d 707, this Court concluded that Sam T. Foss, as mortgagee and sheriff's sale purchaser under foreclosure, was entitled to possess the land subject to the right of the mortgagors (lessors to FPA and its predecessor, the Smith family) to extract peat and use the surface of the land as reasonably necessary to extract peat. Foss, 446 P.2d at 709. This Court has considered the respective rights of these parties on two occasions since that decision. Smith v. Foss (1978), 177 Mont. 443, 582 P.2d 329; State ex rel. Foss v. District Court (1985), 216 Mont. 327, 701 P.2d 342.

Before filing this action, FPA filed a motion on November 8, 1989, for a temporary restraining order and an application for order to show cause why Millicent Huggans, her mother, Alice I. Foss, and brother, John Foss, should not be held in contempt for violation of the District Court's October 21, 1985, order which enjoined them from interfering with FPA's access to the peat resource.

The District Court heard testimony in support of and in opposition to this motion on November 29, 1989, and on March 1, 1990, and issued its order on March 9, 1990. The District Court found John Foss to be in contempt of the court's October 21, 1985, order because he "deliberately interfered with the access to the peat resource on the Foss property by plowing up a road and around the peat, by removing culverts that the Smiths had placed in the road, and by flooding the peat resource." In the same order, the District Court found that Huggans had failed to prevent Foss's conduct, but held that "[t]hese omissions are insufficient to hold ... Millicent Huggans in contempt of court for the acts of John Foss."

On August 7, 1990, FPA filed a complaint against Huggans and alleged that she slandered FPA's product and attempted to interfere with its contractual relationship with a buyer. FPA amended its complaint on November 20, 1990, and added a claim for damages for intentional interference with the access to its peat resource. Huggans filed her answer and counterclaimed with a request for an accounting from FPA for the amount of material it removed from the property in its peat mining operation.

On November 19, 1992, Huggans moved to dismiss Count III on the grounds that there was no genuine issue of material fact and that as a matter of law the doctrine of collateral estoppel barred relitigation of the claim. The District Court granted Huggans' motion on June 15, 1993, and on November 5, 1993, denied FPA's motion to reconsider. The District Court granted Huggans summary judgment and dismissed Counts I and II on October 13, 1993. FPA appeals only the District Court's dismissal of Count III.

STANDARD OF REVIEW

When reviewing an order granting summary judgment, this Court applies the same standard of review applied by a district court. Holtman v. 4-G's Plumbing & Heating (1994), --- Mont. ----, 872 P.2d 318, 320, 51 St.Rep. 340, 341 (citing Emery v. Federated Foods (1993), 262 Mont. 83, 90, 863 P.2d 426, 431). 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 the district court's conclusions of law to determine whether they are correct. Holtman, 872 P.2d at 320 (citing Steer, Inc. v. Dep't of Revenue (1990), 245 Mont. 470, 474-75, 803 P.2d 601, 603).

On December 2, 1992, FPA, in its brief in opposition to Huggans' motion for partial summary judgment, attached an affidavit from FPA's counsel alleging that he received a phone call in the late summer of 1990 from Foss. According to the affidavit, Foss stated that Huggans hired him to "plow up her field where the Smiths were digging peat." FPA's counsel asked Foss to put this statement in writing, which Foss did on November 9, 1990. FPA suggests that this information, produced after the hearing, virtually proves Huggans' culpability and renders the District Court's decision not to hold her in contempt tainted by perjury and fraud. FPA further suggests that Foss's statement presents a "genuine issue of fact" with regard to Huggans' culpability, and therefore, precludes dismissal by summary judgment. The District Court found this argument to be without merit:

Newly discovered evidence has never been sufficient to require relitigation unless it can be established that the evidence could not have been discovered with due diligence. Rule 60(b)(2), M.R.Civ.Proc. The Court notes that three months transpired between the time of the November 29, 1989, contempt hearing and the March 1, 1990, continuation of that hearing allowing adequate time for [FPA] to discover the relevant facts regarding Huggans' participation in the ... plowing of the road.

We agree that the statement of Foss, even if presented in proper affidavit form, at most would have constituted new evidence to be considered by the District Court pursuant to Rule 60(b)(2). We conclude that the District Court properly ruled on its admissibility. Foss appeared pro se and was available to testify at the contempt hearings, but FPA did not call him as a witness. Huggans testified that she simply hired Foss to plow her farm, which did not violate the District Court's previous ruling, and that she was not aware of his efforts to interfere with FPA's access. The District Court, after listening to the evidence presented by FPA in the contempt proceedings, found a failure of proof that Huggans had actively interfered with FPA's peat mining operation.

Other than Foss's statement, FPA produced no evidence to contradict the District Court's previous finding. We conclude that the District Court correctly proceeded to consideration of the applicability of collateral estoppel.

We apply the following three-part test to decide when collateral estoppel will act as a bar to litigation:

1. The identical issue raised has been previously decided in a prior adjudication;

2. A final judgment on the merits was issued in the prior adjudication; and

3. The party against whom the plea is now asserted was a party or in privity with a party to the prior adjudication.

Boyd v. First Interstate Bank (1992), 253 Mont. 214, 218, 833 P.2d 149, 151 (citing In re Marriage of Stout (1985), 216 Mont. 342, 349, 701 P.2d 729, 733); Smith v. Schweigert (1990), 241 Mont. 54, 58, 785 P.2d 195, 197. See also Brault v. Smith (1984), 209 Mont. 21, 679 P.2d 236; Gessel v. Jones (1967), 149 Mont. 418, 427 P.2d 295.

FPA asserts that only two of three elements necessary to apply the doctrine are present, and that as a matter of law, its claim is not susceptible to dismissal.

FPA contends that the "identical issue" element of collateral estoppel is not met in this case because it did not have an opportunity to fully litigate Huggans' tort liability for damages in the previous contempt proceeding. However, FPA confuses the distinction between issue preclusion by collateral estoppel and res judicata. We have previously held that:

"Collateral estoppel" ... may be considered as a branch of the doctrine of res judicata but is distinguishable from the bar to litigation normally called res judicata. The distinction is that res judicata bars the same parties from relitigating the same cause of action while collateral estoppel bars the same parties from relitigating issues which were decided with respect to a different cause of action. The bar that arises from collateral estoppel extends to all questions essential to the judgment and actually determined by prior valid judgment.

Boyd, 833 P.2d at 151 (quoting Gessell, 149 Mont. at 421, 427 P.2d at 296) (citations omitted).

The issue considered by the District Court and which we review is not whether FPA had an opportunity to litigate Huggans' liability to it for civil damages, the issue is whether a fact issue, which is essential to FPA's recovery in this action, has already been adversely resolved in a prior action.

The fact that the controlling issue in this claim for damages had already been litigated and resolved in the previous resolution of FPA's motion to have Huggans held in contempt, is best illustrated by the District Court's thoughtful and well-reasoned order dated November 4, 1993,...