Federal Sav. and Loan Ins. Corp. v. Hamilton

• Decision Date: 15 February 1990
• Docket Number: No. 89-348,89-348
• Parties: FEDERAL SAVINGS AND LOAN INSURANCE CORPORATION, as Receiver for the Montana Federal Savings Bank, f/k/a Montana Savings and Loan Association, Plaintiff and Respondent, v. Darwin HAMILTON, Mary Hamilton, et al., Defendants and Appellants.
• Court: Montana Supreme Court

Page 1190

786 P.2d 1190

241 Mont. 367

FEDERAL SAVINGS AND LOAN INSURANCE CORPORATION, as Receiver

for the Montana Federal Savings Bank, f/k/a

Montana Savings and Loan Association, Plaintiff and Respondent, v. Darwin HAMILTON, Mary Hamilton, et al., Defendants and Appellants.

No. 89-348.

Supreme Court of Montana.

Submitted on Briefs Dec. 14, 1989.

Decided Feb. 15, 1990.

Patrick M. Springer, Kalispell, for defendants and appellants.

Debra D. Parker, Murphy, Robinson, Heckathorn & Phillips, Kalispell, for plaintiff and respondent.

WEBER Justice.

This appeal arises from an order by the District Court, Eleventh Judicial District, Flathead County, Montana, granting summary judgment in favor of plaintiff. Defendant appeals. We affirm.

The issues presented for our review are:

1. Did the Hamiltons present a timely appeal of the amended summary judgment?

2. Whether this case should be remanded for a determination of the adequacy of the sales price of land sold at a sheriff's sale.

Mr. and Mrs. Darwin Hamilton purchased property near Kalispell, Montana, in 1982, for development as a mobile home subdivision. The Hamiltons entered an agreement with the owners of the land, Mr. and Mrs. Long, to purchase the property for $250,000. The Longs took a mortgage on the land at this time.

That same year Mr. Hamilton borrowed $175,000 from Montana Savings and Loan Association for development costs. To secure this loan he executed a promissory note on March 16, 1982, and the Association also took a mortgage on the land. This promissory note stated that the note would come due on May 16, 1985. A year later, Mr. Hamilton borrowed an additional $44,000 from Montana Savings and Loan Association, which was used to purchase an additional seven acres adjoining the original property. He executed a promissory note for this amount, due May 16, 1985. At the same time he executed a deed of trust to the Association, naming it as beneficiary. On July 29, 1983, Mr. Hamilton executed a mortgage modification agreement and a promissory note for the additional amount of $144,000. Under this agreement, all three obligations were consolidated into an indebtedness in the amount of $359,000, secured by the mortgage. This agreement stated a due date of August 1, 1984, with a possible twelve month extension under certain conditions. The Hamiltons gave personal guarantees of each promissory note. The mortgage modification also contained an agreement whereby the Longs subordinated their interest in the property to the Association.

Mr. Hamilton began subdividing the property into mobile home lots, calling the subdivision "Green Tree Meadows." Seventeen of these lots were sold to individual parties; however, the development of the subdivision was not completed by the end of 1985, and the Hamiltons had not satisfied their obligations with the Bank.

Montana Savings and Loan Association became Montana Federal Savings Bank. On August 14, 1985, the Federal Savings and Loan Insurance Corporation (FSLIC) was appointed receiver for Montana Federal Savings Bank. On August 16, 1985, the receiver closed the Savings Bank and began liquidating the assets. On August 28, 1986 FSLIC filed a complaint to foreclose against Darwin and Mary Hamilton, alleging that they were in default under the terms of the three promissory notes, the Mortgage, the Deed of Trust, and the Mortgage Modification Agreement. The complaint stated a total amount owing, including principal and interest through June 30, 1986, of $429,557. The Hamiltons did not dispute that they were in default under the terms of the notes.

FSLIC moved for summary judgment on the issue of default, and moved for a deficiency judgment. On March 21, 1989, in an amended order granting summary judgment, the court awarded FSLIC a decree of foreclosure, and a judgment against Darwin and Mary Hamilton, jointly and severally, in the amount of $564,600 (which sum included interest through February 15, 1989). The order also stated:

In the event the proceeds of the sale are insufficient to pay the amounts due the Plaintiff, together with interest, costs and attorneys' fees, the Plaintiff shall have a deficiency judgment against the Defendants Darwin Hamilton and Mary Hamilton, jointly and severally, and shall have execution thereon.

On April 24, 1989, the sheriff of Flathead County held a public sale of the property. FSLIC, the only bidder at the sale, purchased the property for $475,000. On May 16, 1989, a deficiency judgment was granted to FSLIC against the Hamiltons in the amount of $99,306. Notice of entry of deficiency judgment was filed on May 19, 1989. The Hamiltons filed this appeal on June 16, 1989.

I

Did the Hamiltons present a timely appeal of the amended summary judgment?

This case involves two final orders. The amended summary judgment was a final order, notice of which was entered March 24, 1989. This order granted FSLIC a deficiency judgment. The entry of a deficiency judgment in the amount of $99,306, was also a final order, notice of which was entered May 19, 1989.

On appeal, Hamiltons contest both the propriety of the deficiency judgment and the amount of the deficiency judgment. The amount of the judgment will be discussed in Issue II.

In contesting the propriety of the deficiency judgment, the Hamiltons are appealing the validity of the amended...