McAtee v. Morrison & Frampton, PLLP, DA 20-0556

• Citation: DA 20-0556
• Case Date: September 07, 2021
• Court: United States State Supreme Court of Montana

2021 MT 227

DEANNA H. McATEE, Plaintiff and Appellant,
v.
MORRISON AND FRAMPTON, PLLP, Defendant and Appellee.

No. DA 20-0556

Supreme Court of Montana

September 7, 2021

Submitted on Briefs: July 14, 2021

APPEAL FROM: District Court of the Eleventh Judicial District, In and For the County of Flathead, Cause No. DV-14-1017 Honorable Dan Wilson, Presiding Judge

For Appellant: Mark M. Kovacich, Ben A. Snipes, Odegaard Kovacich Snipes, P.C., Great Falls, Montana

Michael J. McKeon, Jr., McKeon Law, PLLC, Butte, Montana

For Appellee: Fred Simpson, Jenks & Simpson, P.C., Missoula, Montana

OPINION

James Jeremiah Shea Justice

¶1 Plaintiff Deanna H. McAtee appeals from the orders of the Eleventh Judicial District Court, Flathead County, granting summary judgment in favor of Defendant Morrison and Frampton, PLLP, (M&F) and dismissing McAtee's malicious prosecution claim with prejudice. We restate and address the following issues on appeal:

1. Did the District Court err by granting summary judgment to M&F on McAtee's malicious prosecution claim upon determining the claim was judicially estopped?

2. Did the District Court err by granting summary judgment to M&F on McAtee's malicious prosecution claim upon its determination that McAtee could not demonstrate M&F lacked probable cause to bring the claim?

¶2 We affirm in part, reverse in part, and remand for further proceedings consistent with this Opinion.

FACTUAL AND PROCEDURAL BACKGROUND

¶3 In May 2007, McAtee owned The Mortgage Source (TMS), a mortgage company that brokered loans under a line of credit with Whitefish Credit Union (WCU). McAtee brokered a construction loan, managed by WCU employee Doug Johnson, on which the borrowers defaulted in 2008. McAtee was included on the loan as a personal guarantor, and TMS held a trust indenture on the property. TMS assigned its interest in the trust indenture to WCU. The assignment was not recorded.

¶4 When the borrowers defaulted on the loan, Johnson instructed McAtee to foreclose on the property to save WCU the foreclosure expenses. A trustee sale occurred in February 2010, at which time TMS obtained title to the property. TMS sought additional financing from WCU to complete the unfinished construction on the property and to enable the property's sale to satisfy a portion of the loan obligations owed to WCU. WCU refused, which prompted McAtee to obtain a loan from another source secured by the property.

¶5 In March 2011, M&F filed a civil complaint against McAtee on behalf of WCU, alleging that McAtee committed fraud when she foreclosed on the property and pledged WCU's collateral rather than TMS's collateral as security for the mortgage to the new lender, leaving WCU with an unsecured loan. M&F also reported the fraud allegations to federal law enforcement authorities, resulting in McAtee's indictment on two counts of federal banking fraud.

¶6 The criminal charges and civil fraud claims were ultimately dismissed against McAtee on September 19, 2012, and January 29, 2014, respectively. During the pendency of the civil and criminal fraud actions, on July 30, 2011, McAtee filed for bankruptcy and received a discharge from the bankruptcy court on November 9, 2011. The bankruptcy court closed its file on May 20, 2013.

¶7 In January 2015, McAtee filed a separate civil lawsuit against M&F alleging malicious prosecution (Count I), abuse of process (Count II), and constructive fraud (Count III), based on M&F's involvement in initiating the fraud proceedings against her. M&F moved for summary judgment on all claims, asserting McAtee was judicially estopped from pursuing her claims against M&F because she had failed to disclose the claims as assets in her personal bankruptcy. M&F also argued it was immune from the malicious prosecution claim based on federal law; that McAtee's abuse of process and constructive fraud claims were time-barred under the applicable statutes of limitations; and that McAtee failed to allege facts in her complaint establishing all elements of constructive fraud.

¶8 In its May 14, 2018 and January 31, 2019 orders, the District Court denied M&F summary judgment on McAtee's malicious prosecution claim upon determining that the claim was not barred by judicial estoppel. The District Court granted M&F summary judgment on each of McAtee's claims on other grounds and dismissed the claims with prejudice.

¶9 McAtee appealed the District Court's orders, and M&F cross-appealed. We dismissed the appeal without prejudice and remanded to the District Court for reconsideration in light of our intervening opinion, Kucera v. City of Billings, 2020 MT 34, 399 Mont. 10, 457 P.3d 952. See McAtee v. Morrison & Frampton, PLLP, No. DA 19-0278, Order (Mont. Mar. 10, 2020).

¶10 In its October 23, 2020 order on remand, the District Court granted summary judgment in favor of M&F on the issue of judicial estoppel and dismissed McAtee's malicious prosecution claim with prejudice. McAtee appeals.

STANDARDS OF REVIEW

¶11 "We conduct a de novo review of a district court's ruling on motions for summary judgment, using the same M. R. Civ. P. 56 criteria as the district court." Norbeck v. Flathead Cty., 2019 MT 84, ¶ 12, 395 Mont. 294, 438 P.3d 811. M. R. Civ. P. 56(c)(3) provides that summary judgment is only appropriate when "the pleadings, the discovery and disclosure materials on file, and any affidavits show that there is no genuine issue as to any material fact and that the movant is entitled to judgment as a matter of law." If the movant establishes no material factual dispute and entitlement to judgment as a matter of law, the burden then shifts to the non-movant "to prove, by more than mere denial and speculation, that a genuine issue of material fact does exist." Dovey v. BNSF Ry. Co., 2008 MT 350, ¶ 12, 346 Mont. 305, 195 P.3d 1223.

¶12 In deciding a motion for summary...